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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934



|                        |  |                       
|----------------------- |  | ----------------------
|For the fiscal year     |  | Commission file number
|ended December 31, 2002 |  | 000-21329             

TIB FINANCIAL CORP.

(Exact Name of Registrant as Specified in Its Charter)


|                                         |  |                    
|---------------------------------------- |  | -------------------
|Florida                                  |  | 65-0655973         
|(State of Incorporation)                 |  | (I.R.S. Employer   
|                                         |  | Identification No.)
|99451 Overseas Highway                   |  |                    
|Key Largo, Florida                       |  | 33037-7808         
|(Address of Principal Executive Offices) |  | (Zip Code)         

(305) 451-4660
(Registrants telephone number)

Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act: Common stock, par
value $0.10

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[ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K contained in this form, and will not be contained, to the best
of issuers knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [  ]

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant at March 3, 2003 was $49,821,794 based on $15.26 per share as of
March 3, 2003.

The number of shares outstanding of issuers class of common stock at March 3,
2003 was 4,038,925 shares of common stock.

Documents Incorporated By Reference: Portions of the Proxy Statement for the
2003 Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission within 120 days of the Registrants 2002 fiscal year end
are incorporated by reference into Part III of this report.





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|                    |                                                                                                                               |  |  |  |  |  |  | 
|------------------- | ----------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I             
|                    | ITEM 1.     BUSINESS                                                                                                         
|                    | ITEM 2.     PROPERTIES                                                                                                       
|                    | ITEM 3.     LEGAL PROCEEDINGS                                                                                                
|                    | ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                              
|PART II            
|                    | ITEM 5.     MARKET FOR REGISTRANTS COMMON EQUITY AND                      RELATED STOCKHOLDER MATTERS                       
|                    | ITEM 6. SELECTED FINANCIAL DATA                                                                                              
|                    | ITEM 7.     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            
|                    | ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                                      
|                    | ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                      
|                    | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                      ACCOUNTING AND FINANCIAL DISCLOSURE            
|PART III           
|                    | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                                  
|                    | ITEM 11. EXECUTIVE COMPENSATION                                                                                              
|                    | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                      AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
|                    | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                      
|                    | ITEM 14. CONTROLS AND PROCEDURES                                                                                             
|PART IV            
|                    | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                                                     
|SIGNATURES         
|Subsidiaries       
|BDO Seidman Consent
|CEO Certification  
|CFO Certification  



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TABLE OF CONTENTS

|         |  |                                                                                                 |  |     
|-------- |  | ----------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                 |  | Page
|         |  |                                                                                                 |  |     
|         |  | PART I                                                                                          |  |     
|ITEM 1.  |  | BUSINESS                                                                                        |  | 1   
|ITEM 2.  |  | PROPERTIES                                                                                      |  | 8   
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                               |  | 9   
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                             |  | 9   
|         |  | PART II                                                                                         |  |     
|ITEM 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS                           |  | 9   
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                                         |  | 10  
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION            |  | 11  
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                       |  | 33  
|ITEM 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                     |  | 35  
|ITEM 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE            |  | 76  
|         |  | PART III                                                                                        |  |     
|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                              |  | 76  
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                          |  | 76  
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS |  | 76  
|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                  |  | 76  
|ITEM 14. |  | CONTROLS AND PROCEDURES                                                                         |  | 76  





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|           |  |                                                                 |  |     
|---------- |  | --------------------------------------------------------------- |  | ----
|           |  |                                                                 |  | Page
|           |  |                                                                 |  |     
|           |  | PART IV                                                         |  |     
|ITEM 15.   |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K |  | 77  
|SIGNATURES |  | 78                                                             





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CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

Certain of the matters discussed under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations and elsewhere in
this Annual Report on Form 10-K 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.
(the Company) 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.




PART I

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).




ITEM 1.     BUSINESS

TIB Financial Corp., Key Largo, Florida, was incorporated as a Florida business
corporation in February 1996, for the purpose of becoming a bank holding
company by acquiring all of the common stock of TIB Bank of the Keys (the
Bank), Key Largo, Florida. Following the receipt of approval from the Board
of Governors of the Federal Reserve System (the Federal Reserve), the Company
became a bank holding company within the meaning of the Bank Holding Company
Act of 1956 (the Act) upon the acquisition of all of the Common Stock of the
Bank on August 31, 1996. Effective August 31, 2000, the Company became a
financial holding company.

We are authorized to engage in any activity permitted by law to a Florida
corporation, subject to applicable Federal regulatory restrictions on the
activities of financial holding companies.

The Bank was incorporated under the laws of the State of Florida on December
28, 1973, for the purpose of conducting the business of commercial banking.
The Bank commenced commercial banking operations on February 1, 1974. The
deposits at the Bank are insured up to applicable limits by the Federal Deposit
Insurance Corporation (the FDIC).

The Bank conducts a general commercial banking business in its primary service
area of Monroe, Miami-Dade, Collier and Lee counties, Florida, emphasizing the
banking needs of individuals, professionals and business customers. The main
office of the Company and the Bank is located at 99451 Overseas Highway, Key
Largo, Florida 33037. The Bank has a total of fourteen branch locations.
There are nine branch locations throughout the Florida Keys from Key Largo to
Key West. There are also two branch locations in Homestead, two branches in
Naples, and one branch in Bonita Springs, Florida.

The principal business of the Bank 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. As of December 31, 2002, the Bank had total assets of
approximately $564.2 million, total deposits of approximately $488.1 million
and total shareholders equity of approximately $49.0 million.

The Bank offers a full range of deposit services that are typically available
from financial institutions, including NOW accounts, money market checking
accounts, demand accounts, savings accounts, certificates of deposit and other
time

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deposits. In addition, retirement accounts such as Individual Retirement
Accounts are available from the Bank. The Bank pays interest on its deposit
accounts and certificates competitive with other financial institutions in its
primary service area.

The Bank seeks to concentrate its deposits and loan efforts within Monroe,
Collier, Lee, and Miami-Dade Counties, Florida, its primary service area. The
primary factors in competing for deposits are interest rates, the range of
financial services offered, service, convenience of office locations and
flexible office hours. Direct competition for such deposits comes from other
commercial banks, savings institutions, credit unions, brokerage firms and
money market funds.

The Banks lending philosophy is to make loans, taking into consideration the
safety of the Banks depositors funds, the preservation of the Banks
liquidity, the interest of our shareholders, the welfare of the community, and
other factors. Interest income from the Banks lending operations is a
principal component of the Banks income, therefore prudent lending is
essential for the prosperity of the Bank.

The primary factors in competing for loans are interest rates, loan origination
fees and the range of lending services offered. Competition for origination of
loans normally comes from other commercial banks, savings institutions, credit
unions and mortgage banking firms. Such entities may have competitive
advantages as a result of greater resources and higher lending limits (by
virtue of their greater capitalization). There are also smaller financial
institutions that compete for the same market. The Bank seeks to attract
customers with its products and services which are tailored to the needs of the
customers. Management seeks to emphasize a high degree of personalized client
service in order to be able to better meet the banking needs of its customers.

The Banks loan portfolio at December 31, 2002 contained approximately 79% real
estate mortgage loans, 11% commercial loans, 2% consumer loans, 4% indirect
auto dealer loans, and 4% home equity loans. The Banks gross loan to deposit
ratio at December 31, 2002, was approximately 90%.

In addition to interest income from the Banks lending operations, the other
major sources of income for the Bank are fees on mortgage loans sold, interest
on investment securities, service charges on deposit accounts, gains on sales
of government guaranteed loans, and merchant bankcard processing income. The
principal expenses of the Bank are interest paid on deposits, employee
compensation, office expenses, and other overhead expenses.

The Bank engages through a wholly-owned subsidiary, TIB Investment Center, Inc.
(TIB Investment), in the retail sale of nondeposit investment products such
as variable and fixed rate annuities, mutual funds and other products. The
Bank has entered into an agreement with Raymond James Financial Services, Inc.,
a third-party provider which trains and supervises employees of the Bank or TIB
Investment in the sale of these products from various offices of the Bank.

The Bank also engages through a wholly-owned subsidiary, TIB Government Loan
Specialists, Inc., in the origination and sale of the government guaranteed
portion of loans that qualify for government guaranteed loan programs such as
those offered by the Small Business Administration and the U.S. Department of
Agriculture Rural Development Business and Industry Program.

Prior to December 31, 2001, we had a 30% interest in ERAS JV, a company that
specializes in cash item processing for depository institutions and customized
software for the financial services industry. On December 31, 2001, we sold a
portion of our investment in this company, which reduced our ownership
percentage in ERAS JV to 10%. On October 4, 2002, we sold 5.1% of our 10%
interest in ERAS JV. This sale, accompanied by the additional transfer of
assets by other owners into the venture, reduced our ownership in the venture
to 4.53%.

In October 2000, we purchased Keys Insurance Agency of Monroe County, Inc.
Keys Insurance Agency, Inc. (the new name subsequent to the purchase) has three
offices in the Florida Keys and one office in Naples and brokers a full line of
commercial and residential hazard insurance coverages as well as life and
health insurance and annuities.

The Banks business plan relies principally upon local advertising and
promotional activity and upon personal contacts by its directors, officers and
shareholders to attract business and to acquaint potential customers with the
Banks personalized services. The Bank emphasizes a high degree of
personalized client service in order to be able to provide for each

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customers banking needs. The Banks marketing approach emphasizes
the advantages of dealing with an independent, locally-managed and state
chartered bank to meet the particular needs of consumers, professionals and
business customers in the community. All banking services are continually
evaluated with regard to their profitability and efforts are made to modify the
Banks business plan if deemed appropriate.

In 2002, the Bank began a program of buying loans that have been originated by
automobile dealerships. This is commonly referred to as indirect lending. 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.

Employees

As of December 31, 2002, the Bank employed 230 full-time employees and 15
part-time employees, and the insurance agency employed 23 full-time employees
and one part-time employee. Except for certain officers of the Bank who presently
serve as officers of the Company, the Company does not have any employees. The
Company and its subsidiaries are not a party to any collective bargaining
agreement, and management believes the Company and its subsidiaries enjoy
satisfactory relations with its employees.

Supervision and Regulation

Regulation of the Bank:The operations of the Bank are subject to state and
federal statutes applicable to state chartered banks whose deposits are insured
by the FDIC, and also to the regulations of the Florida Department of Financial
Services (the DBF) and the FDIC. Such statutes and regulations relate to,
among other things, reserves, investments, loans, mergers and consolidations,
branching, issuances of securities, payment of dividends, payment of interest
rates, establishment of branches and other aspects of the Banks operations.
Under the provisions of the Federal Reserve Act, the Bank is subject to certain
restrictions on any extensions of credit to the Company or, with certain
exceptions, other affiliates, and on the taking of such stock or securities as
collateral on loans to any borrower. In addition, the Bank is prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit or the providing of any property or service. Florida law permits banks
to branch on a statewide basis. Therefore, the Bank has the ability to expand
from its market presence in Monroe, Miami-Dade, Collier and Lee counties into
other markets in Florida.

The FDIC has adopted risk-based capital guidelines for all FDIC insured state
chartered banks that are not members of the Federal Reserve System. These
guidelines require all banks to maintain a minimum ratio of total capital to
risk weighted assets of 8 percent (of which at least 4 percent must consist of
Tier 1 capital). Tier 1 capital of state chartered banks (as defined in
regulations) generally consists of (i) common stockholders equity; (ii)
noncumulative perpetual preferred stock and related surplus; and (iii) minority
interests in the equity accounts of consolidated subsidiaries.

In addition, the FDIC adopted a minimum ratio of Tier 1 capital to total assets
of banks. This capital measure is generally referred to as the leverage
capital ratio. The FDIC has established a minimum leverage capital ratio of 4

percent if the FDIC determines that the institution is not anticipating or
experiencing significant growth and has well-diversified risk, including no
undue interest rate exposure, excellent asset quality, high liquidity, good
earnings and, in general, is considered a strong banking organization, rated
Composite 1 under the Uniform Financial Institutions Rating System. Other
financial institutions are expected to maintain leverage capital at least 100
to 200 basis points above the minimum level.

At December 31, 2002, the Bank exceeded these minimum Tier 1, risk-based and
leverage capital ratios. The table that follows sets forth certain capital
information for the Bank as of December 31, 2002.

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Capital Adequacy
(Dollars in thousands)
December 31, 2002

|                    |                      |  |        |        |         |  |  |      |  
|------------------- | -------------------- |  | ------ | ------ | ------- |  |  | ---- | -
|                    |                      |  | Amount |        | Percent
|                    |                      |  |        |        |        
|Leverage Ratio:     |                      |  |        |        |         |  |  |     
|                    | Actual               |  | $      | 45,739 |         |  |  | 8.3  | %
|                    | Minimum Required (1) |  | $      | 21,979 |         |  |  | 4.0  | %
|Risk-Based Capital: |                      |  |        |        |         |  |  |     
|Tier 1 Capital      |                      |  |        |        |         |  |  |     
|                    | Actual               |  | $      | 45,739 |         |  |  | 9.8  | %
|                    | Minimum Required     |  | $      | 18,659 |         |  |  | 4.0  | %
|Total Capital       |                      |  |        |        |         |  |  |     
|                    | Actual               |  | $      | 50,156 |         |  |  | 10.8 | %
|                    | Minimum Required     |  | $      | 37,318 |         |  |  | 8.0  | %

(1)  Represents the highest regular minimum requirement calculated by
multiplying the minimum required percentage by the actual average total assets
for leverage capital purposes. Institutions that are contemplating
acquisitions or anticipating or experiencing significant growth may be required
to maintain a substantially higher leverage ratio. See below regarding the
consequences of failing to meet specified capital standards.

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
contains prompt corrective action provisions which established among other
things, the following five capital standard categories for depository
institutions: (i) well capitalized, (ii) adequately capitalized, (iii)
undercapitalized, (iv) significantly undercapitalized and (v) critically
undercapitalized. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions depending on the category in
which an institution is classified. Each of the federal banking agencies has
issued uniform regulations, which, among other things, define the capital
levels described above. Under the regulations, a bank is considered well
capitalized if it (i) has a total risk-based capital ratio of 10% or greater,
(ii) has a Tier 1 risk-based capital ratio of 6% or greater, (iii) has a
leverage ratio of 5% or greater, and (iv) is not subject to any order or
written directive to meet and maintain a specific capital level for any capital
measure. An adequately capitalized bank is defined as one that has (i) a
total risk-based capital ratio of 8% or greater, (ii) a Tier 1 risk-based
capital ratio of 4% or greater and (iii) a leverage ratio of 4% or greater. An
undercapitalized bank is defined as one that has a total risk-based capital
ratio of less than 8%, (ii) a Tier I risk-based capital ratio of less than 4%
or (iii) a leverage ratio of less than 3%. A significantly undercapitalized
bank is defined as one that has a total risk-based capital ratio of less than
6%, a Tier 1 risk-based capital ratio of less than 3% or a leverage ratio of
less than 3% and a bank is critically undercapitalized if the bank has a
leverage ratio equal to or less than 2%. The applicable federal regulatory
agency for a bank that is well capitalized may reclassify it as adequately
capitalized or undercapitalized and subject the institution to the
supervisory actions applicable to the next lower capital category, if it
determines that the Bank is in an unsafe or unsound condition or deems the bank
to be engaged in an unsafe or unsound practice and not to have corrected the
deficiency. As of December 31, 2002, the Bank met the definition of a well
capitalized institution.

Undercapitalized depository institutions, among other things, are subject to
growth limitations, are prohibited, with certain exceptions, from making
capital distributions, are limited in their ability to obtain funding from a
Federal Reserve Bank and are required to submit a capital restoration plan.
The federal banking agencies may not accept a capital plan without determining,
among other things, that the plan is based on realistic assumptions and is
likely to succeed in restoring the depository institutions capital. In
addition, for a capital restoration plan to be acceptable, the depository
institutions parent holding company must guarantee that the institution will
comply with such capital
restoration plan and provide appropriate assurances of performance. If a
depository institution fails to submit an acceptable plan, including if

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the
holding company refuses or is unable to make the guarantee described in the
previous sentence, it is treated as if it is significantly undercapitalized.
Failure to submit or implement an acceptable capital plan also is grounds for
the appointment of a conservator or a receiver. Significantly
undercapitalized depository institutions may be subject to a number of
additional requirements and restrictions such as orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions, among other things, are prohibited
from making any payments of principal and interest on subordinated debt, and
are subject to the appointment of a receiver or conservator.

The Bank is also subject to, among other things, the provisions of the Equal
Credit Opportunity Act (the ECOA) and the Fair Housing Act (the FHA), both
of which prohibit discrimination based on race or color, religion, national
origin, sex, and familial status in any aspect of a consumer or commercial
credit or residential real estate transaction. The Department of Housing and
Urban Development, the Department of Justice (the DOJ), and all of the
federal banking agencies have issued an Interagency Policy Statement on
discrimination in Lending which provides guidance to financial institutions as
to what the agencies consider in determining whether discrimination exists, how
the agencies will respond to lending discrimination, and what steps lenders
might take to prevent discriminatory lending practices.

Regulation of the Company:The Company is a bank holding company within the
meaning of the Act. As a bank holding company, we are required to file with
the Federal Reserve an annual report and such additional information as the
Board may require pursuant to the Act. The Federal Reserve may also make
examinations of us and each of our subsidiaries. Bank holding companies are
required by the Act to obtain approval from the Federal Reserve prior to
acquiring, directly or indirectly, ownership or control of more than 5% of the
voting shares of a bank or merging with another bank holding company.

Legislation has significantly increased the right of an eligible bank holding
company, called a financial holding company, to engage in a full range of
financial activities, including insurance and securities activities, as well as
merchant banking and other financial services. On August 31, 2000, the Federal
Reserve Bank approved our election to become a financial holding company. We
thus have expanded financial affiliation opportunities as long as the Bank
remains a well-capitalized and well-managed depository institution and has
at least a satisfactory rating under the Community Reinvestment Act of 1997
(the CRA). As of December 31, 2002, the Bank met all three criteria for the
Companys continued qualification as a financial holding company.

As a bank holding company, we are subject to capital adequacy guidelines
established for bank holding companies by the Federal Reserve. The minimum
required ratio for total capital to risk weighted assets is 8 percent (of which
at least 4 percent must consist of Tier 1 capital). Tier 1 capital (as defined
in regulations of the Federal Reserve) consists of common and qualifying
preferred stock and minority interests in equity accounts of consolidated
subsidiaries, less goodwill and other intangible assets required to be deducted
under the Federal Reserves guidelines. The Federal Reserves guidelines apply
on a consolidated basis to bank holding companies, like ours, with total
consolidated assets of $150 million or more. For bank holding companies with
less than $150 million in total consolidated assets, the guidelines apply on a
bank only basis, unless the bank holding company is engaged in nonbanking
activity involving significant leverage or has significant amount of debt
outstanding that is held by the general public. The Federal Reserve has stated
that risk based capital guidelines establish minimum standards and that bank
holding companies generally are expected to operate well above the minimum
standards.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
Interstate Banking Act), subject to certain restrictions, allows adequately
capitalized and managed bank holding companies to acquire existing banks across
state lines, regardless of state statutes that would prohibit acquisitions by
out-of-state institutions. Further, a bank holding company may consolidate
interstate bank subsidiaries into branches and a bank may merge with an
unaffiliated bank across state lines to the extent that the applicable states
authorize such transactions. The Interstate Banking Act generally prohibits an
interstate acquisition (other than the initial entry into a state by a bank
holding company) that would result in either the control of more than (i) 10%
of the total amount of insured deposits in the United States, or (ii) 30% of
the total insured deposits in the home state of the target bank, unless such
30% limitation is waived by the home
state on a basis which does not discriminate against out-of-state institutions.
As a result of this legislation, we may become a candidate for acquisition by,
or may ourselves seek to acquire, banking organizations located in other
states.

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Florida has enacted the Florida Interstate Branching Act (the Florida
Branching Act), which permits interstate branching through merger transactions
under the Interstate Banking Act. Under the Florida Branching Act, with the
prior approval of the DBF, a Florida bank may establish, maintain and operate
one or more branches in a state other than the State of Florida pursuant to a
merger transaction in which the Florida bank is the resulting bank. In
addition, the Florida Branching Act provides that one or more Florida banks may
enter into a merger transaction with one or more out-of-state banks, and an
out-of-state bank resulting from such transaction may maintain and operate the
branches of the Florida bank that participated in such merger. An out-of-state
bank, however, is not permitted to acquire a Florida bank in a merger
transaction unless the Florida bank has been in existence and continuously
operated for more than three years.

Federal Reserve policy requires a bank holding company to act as a source of
financial strength and to take measures to preserve and protect bank
subsidiaries in situations where additional investments in a troubled bank may
not otherwise be warranted. In addition, under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 (FIRREA), where a bank holding
company has more than one bank or thrift subsidiary, each of the bank holding
companys subsidiary depository institutions is responsible for any losses to
the FDIC as a result of an affiliated depository institutions failure. As a
result, a bank holding company may be required to loan money to its
subsidiaries in the form of capital notes or other instruments which qualify as
capital under regulatory rules. However, any loans from the holding company to
such subsidiary banks likely will be unsecured and subordinated to such banks
depositors and perhaps to other creditors of the bank. In addition, a bank
holding company may be required to provide additional capital to any additional
banks it acquires as a condition to obtaining the approvals and consents of
regulatory authorities in connection with such acquisitions.

The Company and the Bank are subject to Section 23A of the Federal Reserve Act,
which limits a banks covered transactions (generally, any extension of
credit or purchase of assets) with any single affiliate to no more than 10% of
a banks capital and surplus. Covered transactions with all affiliates
combined are limited to no more than 20% of a banks capital and surplus. All
covered and exempt transactions between a bank and its affiliates must be on
terms and conditions consistent with safe and sound banking practices, and a
bank and its subsidiaries are prohibited from purchasing low quality assets
from the banks affiliates. Finally, Section 23A requires that all of a banks
extensions of credit to an affiliate be appropriately secured by collateral.
The Company and the Bank are also subject to Section 23B of the Federal Reserve
Act, which further limits transactions among affiliates. The Federal Reserve
Act and implementing regulations also prohibit extensions of credit by a state
non-member bank (such as the Bank) to its directors, executive officers and
controlling shareholders on terms which are more favorable than those afforded
other borrowers, and impose limits on the amounts of loans to individual
affiliates and all affiliates as a group.

The Company and the Bank are subject to the provisions of the CRA and the
federal banking agencies regulations issued thereunder. Under the CRA, all
banks and thrifts have a continuing and affirmative obligation, consistent with
its safe and sound operation to help meet the credit needs for their entire
communities, including low- and moderate-income neighborhoods. The CRA does
not establish specific lending requirements or programs for financial
institutions, nor does it limit an institutions discretion to develop the
types of products and services that it believes are best suited to its
particular community, consistent with the CRA. The CRA requires a depository
institutions primary federal regulator, in connection with its examination of
the institution, to assess the institutions record of assessing and meeting
the credit needs of the community served by that institution, including low-
and moderate-income neighborhoods. The regulatory agencys assessment of the
institutions record is made available to the public. In the case of a bank
holding company applying for approval to acquire a bank or other bank holding
company, or a bank applying for a merger or a branch office, the regulatory
agencies will take into account the CRA rating of each subsidiary depository
institution of the applicant bank holding company, and such records may be the
basis for denying the application. Generally, holding companies and banks are
required to have CRA ratings of satisfactory or better for purposes of approval
of such applications. As a result of the Banks most recent CRA examination in
May 2001, the Bank received a satisfactory CRA rating.

Enacted in 1999, the Gramm-Leach-Bliley Act reforms and modernizes certain
areas of financial services regulation.
As discussed above, the law permits the creation of new financial services
holding companies that can offer a full range of financial products under a
regulatory structure based on the principle of functional regulation. The
legislation eliminates the legal barriers to affiliations among banks and
securities firms, insurance companies, and other financial services

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companies.
The law also provides financial organizations with the opportunity to structure
these new financial affiliations through a holding company structure or a
financial subsidiary. The law reserves the role of the Federal Reserve Board
as the supervisor for bank holding companies. At the same time, the law also
provides a system of functional regulation which is designed to utilize the
various existing federal and state regulatory bodies. The law also sets up a
process for coordination between the Federal Reserve Board and the Secretary of
the Treasury regarding the approval of new financial activities for both bank
holding companies and national bank financial subsidiaries.

The law also includes a minimum federal standard of financial privacy.
Financial institutions are required to have written privacy policies that must
be disclosed to customers. The disclosure of a financial institutions privacy
policy must take place at the time a customer relationship is established and
not less than annually during the continuation of the relationship. The act
also provides for the functional regulation of bank securities activities. The
law provides for transitional repeals of the exemption that banks were afforded
from the definition of broker, and replaces it with a set of limited
exemptions that allow the continuation of some historical activities performed
by banks. In addition, the act amends the securities laws to include banks
within the general definition of dealer. Regarding new bank products, the law
provides a procedure for handling products sold by banks that have securities
elements. In the area of CRA activities, the law generally requires that
financial institutions address the credit needs of low-to-moderate income
individuals and neighborhoods in the communities in which they operate. Bank
regulators are required to take the CRA ratings of a bank or of the bank
subsidiaries of a holding company into account when acting upon certain branch
and bank merger and acquisition applications filed by the institution. Under
the law, financial holding companies and banks that desire to engage in new
financial activities are required to have satisfactory or better CRA ratings
when they commence the new activity.

Once a bank holding company has filed a declaration of its intent to be a
financial holding company, as long as there is no action by the Federal Reserve
Board giving notice that it is not eligible, the company may proceed to engage
in the activities and enter into the affiliations under an expanded authority
conferred by the law. The holding company does not need prior approval from
the Federal Reserve Board to engage in activities that the law identifies as
financial in nature or that the Federal Reserve Board has determined to be
financial in nature or incidental thereto by order or regulation. The law
retains the basic structure of the Bank Holding Company Act. Thus, a bank
holding company that is not eligible for the expanded powers of a financial
holding company, is subject to the provisions of the Bank Holding Company Act
which limits the activities that are authorized and defined as closely related
to banking activities. The law also addresses the consequences of when a
financial holding company that has exercised the expanded authority fails to
maintain its eligibility to be a financial holding company. The Federal
Reserve Board may impose such limitations on the conduct or activities of a
noncompliant financial holding company or any affiliate of that company as the
Board determines to be appropriate under the circumstances and consistent with
the purposes of the law.

The United States Congress and the Florida Legislature periodically consider
and adopt legislation that results in, and could further result in,
deregulation, among other matters, of banks and other financial institutions.
Such legislation could modify or eliminate current prohibitions with other
financial institutions, including mutual funds, securities brokerage firms,
insurance companies, banks from other states and investment banking firms. The
effect of any such legislation on the business of the Company or the Bank
cannot be accurately predicted. The Company cannot predict what legislation
might be enacted or what other implementing regulations might be adopted, and
if enacted or adopted, the effect thereof.

Competition

The banking business is highly competitive. The Bank competes with other
commercial banks that conduct operations in its primary service area.

Banks generally compete with other financial institutions through the banking
products and services offered, the pricing of services, the level of service
provided, the convenience and availability of services, and the degree of
expertise and the personal manner in which services are offered. The Bank
encounters strong competition from most of the financial
institutions in the Banks primary service area. In the conduct of certain
areas of its banking business, the Bank also competes with credit unions,
consumer finance companies, insurance companies, money market mutual funds and
other financial institutions, some of which are not subject to the same degree
of regulation and restrictions imposed upon the Bank. Many of these
competitors have substantially greater resources and lending limits than the
Bank has and offer

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certain services, such as trust services, that the Bank does
not provide presently. Management believes that personalized service and
competitive pricing will provide it with a method to compete effectively in the
primary service area.

Monetary Policy

Our earnings are affected by domestic and foreign economic conditions,
particularly by the monetary and fiscal policies of the United States
government and its agencies. The Federal Reserve has an important impact on
the operating results of banks and other financial institutions through its
power to implement national monetary policy. The methods used by the Federal
Reserve include setting the reserve requirements of banks, establishing the
discount rate on bank borrowings and conducting open market transactions in
United States Government securities.

FDIC Insurance Assessments

The FDIC has adopted a risk-based assessment system for insured depository
institutions that takes into account the risks attributable to different
categories and concentrations of assets and liabilities. The system assigns an
institution to one of three capital categories: (a) well capitalized, (b)
adequately capitalized, and (c) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the undercapitalized category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institutions primary
federal regulator and information which the FDIC determines to be relevant to
the institutions financial condition and the risk posed to the deposit
insurance funds (which may include, if applicable, information provided by the
institutions state supervisor). An institutions insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned.

The FDIC may terminate insurance of deposits upon a finding that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.

Based on the Banks risk classification, the Bank was not required to pay an
assessment for deposit insurance in 2002, nor will it be required to pay a
deposit insurance assessment in 2003. The Bank was required to pay the special
interim Bank Insurance Fund Financing Corporation (FICO) assessments in 2002
and will also be required to pay this assessment in 2003.

Statistical Information

Certain statistical information is found in Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations of this Annual Report
on Form 10-K.




ITEM 2.     PROPERTIES

We conduct our business operations through the principal executive and
operations office of the Company and the Bank located on an approximately 1.3
acre site at 99451 Overseas Highway, Key Largo, Monroe County, Florida. The
main offices of the Bank at 99451 Overseas Highway are housed in a two-story
building, owned by the Bank and containing approximately 13,275 square feet of
finished space used for offices and operations and seven teller windows in the
Bank lobby. The building also has two drive-up teller windows and an automated
teller machine with 24-hour a day access.

The Banks other thirteen branches are located at 600 North Homestead Boulevard
in Homestead, 777 North Krome Avenue in Homestead, 103330 Overseas Highway in
Key Largo, 91980 Overseas Highway in Tavernier, 80900 Overseas Highway in
Islamorada, 11401 Overseas Highway in Marathon Shores, 2348 Overseas Highway in
Marathon, 30400 Overseas Highway in Big Pine Key, 330 Whitehead Street in Key
West, 3618 N. Roosevelt Drive in Key West, 8100

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Health Center Boulevard in
Bonita Springs, 599 Ninth Street North in Naples, and 1720 J & C Boulevard in
Naples, Florida. The main office and branch properties are owned by the Bank,
with the exception of the 8100 Health Center Boulevard and 1720 J & C Boulevard
locations which are leased. The Bank owns the first floor of the building
located at 599 Ninth Street North, but does not own the land.

The Bank also owns three other properties. The Bank owns a one-story building
containing approximately 5,000 square feet on a one-half acre lot located at
100210 Overseas Highway, Key Largo. This building is partly leased to Keys
Insurance Agency and the remainder of the building is used by the Bank as a
training center and office space. The Bank owns a three-story building at 228
Atlantic Boulevard, Key Largo, Florida that is utilized by the Bank primarily
for its loan operations and human resources departments. The Bank owns a
building located at 28 N.E. 18th Street in Homestead that is used for office
space.

The Bank leases office space at 9915 Tamiami Trail North in Naples, and at 1119
US 27 South in Sebring, Florida for the Banks residential lending operations.
Office space is also leased at 5800 Overseas Highway in Marathon, Florida for
its commercial lending department.

The insurance agency leases its four locations located at 100210 Overseas
Highway in Key Largo, 5800 Overseas Highway in Marathon, 805 Peacock Plaza in
Key West, and 8100 Health Center Boulevard in Bonita Springs. The Key Largo
and Bonita Springs locations are leased from the Bank.




ITEM 3.     LEGAL PROCEEDINGS

While the Company and the Bank are from time to time parties to various legal
proceedings arising in the ordinary course of their business, management
believes after consultation with legal counsel that there are no proceedings
threatened or pending against the Company or the Bank that will, individually
or in the aggregate, have a material adverse effect on the consolidated results
of operations or financial condition of the Company.




ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the Companys
fourth quarter of the fiscal year ended December 31, 2002.




PART II




ITEM 5.     MARKET FOR REGISTRANTS COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

Our common stock trades on the Nasdaq National Market under the symbol TIBB.
As of December 31, 2002, there were 372 registered shareholders of record and
4,035,625 shares of our common stock outstanding. The following table sets
forth, for the periods indicated, the high and low sale prices per share for
our common stock on the Nasdaq National Market:

|              |  |      |       |      |  |      |       |     |  |   |       |  |  |   |       | 
|------------- |  | ---- | ----- | ---- |  | ---- | ----- | --- |  | - | ----- |  |  | - | ----- | 
|Quarter Ended |  | 2002 |       | 2001
|              |  |      |       |     
|              |  | High |       | Low  |  | High |       | Low
|              |  |      |       |      |  |      |       |    
|March 31      |  | $    | 12.95 |      |  | $    | 11.16 |     |  | $ | 13.25 |  |  | $ | 9.56  | 
|June 30       |  |      | 15.00 |      |  |      | 12.15 |     |  |   | 15.20 |  |  |   | 12.81 | 
|September 30  |  |      | 15.00 |      |  |      | 13.00 |     |  |   | 15.00 |  |  |   | 9.00  | 
|December 31   |  |      | 16.25 |      |  |      | 12.38 |     |  |   | 12.10 |  |  |   | 9.80  | 

For the year ended December 31, 2002, we paid cash
dividends to our shareholders in the amount of $.1075 per share for the first
three quarters and $.11 per share for the last quarter ($.4325 in the
aggregate). For the year ended December 31, 2001, we paid cash dividends to our
shareholders in the amount of $.1075 per share for each of the four quarters
($.43 in the aggregate).

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Our ability to continue to pay cash dividends to our shareholders
is primarily dependent on the earnings of the Bank. Payment of dividends by
the Bank to us is limited by dividend restrictions in capital requirements
imposed by Bank regulators. Information regarding restrictions on the ability
of the Bank to pay dividends to us is contained in Note 13 of the Notes to
Consolidated Financial Statements contained in Item 8 hereof. In general,
future dividend policy is subject to the discretion of the board of directors
and will depend upon a number of factors, including the future earnings,
capital requirements, regulatory constraints, and our financial condition as
well as that of the Bank.

In the first quarter of 2000, we repurchased 5,000 shares of common stock at an
average cost of $10.32. In July 2000, we repurchased 525,000 shares of common
stock from our largest shareholder at a cost of $10 per share.




ITEM 6.     SELECTED FINANCIAL DATA

The selected consolidated financial data presented below as of and for the
years ended December 31, 2002, 2001, 2000, 1999, and 1998 is unaudited and has
been derived from our Consolidated Financial Statements and from our records.
The information presented below should be read in conjunction with the
Consolidated Financial Statements and related notes, and Managements
Discussion and Analysis of Financial Condition and Results of Operations.

|                                            |  |      |         |      |  |      |         |      |  |      |         |  |  |                    |         |  |  |   |         | 
|------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | ------------------ | ------- |  |  | - | ------- | 
|DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |  |      |         |      |  |      |         |      |  |      |         |  |  | AS OF DECEMBER 31,
|                                           
|Balance Sheet Data                          |  | 2002 |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                            |  |      |         |      |  |      |         |      |  |     
|Total Assets                                |  | $    | 567,005 |      |  | $    | 493,992 |      |  | $    | 439,320 |  |  | $                  | 392,129 |  |  | $ | 355,476 | 
|Investment Securities                       |  |      | 55,754  |      |  |      | 53,980  |      |  |      | 69,208  |  |  |                    | 60,362  |  |  |   | 66,001  | 
|Gross Loans                                 |  |      | 441,744 |      |  |      | 379,104 |      |  |      | 315,574 |  |  |                    | 290,614 |  |  |   | 246,668 | 
|Allowance for loan losses                   |  |      | 4,416   |      |  |      | 3,794   |      |  |      | 3,268   |  |  |                    | 2,997   |  |  |   | 2,517   | 
|Deposits                                    |  |      | 482,683 |      |  |      | 415,736 |      |  |      | 392,427 |  |  |                    | 346,904 |  |  |   | 325,057 | 
|Stockholders Equity                        |  |      | 33,506  |      |  |      | 28,672  |      |  |      | 26,237  |  |  |                    | 28,302  |  |  |   | 26,568  | 



|                                                                        |  |      |        |      |  |      |        |      |  |                         |        |  |  |   |        |   |  |   |        | 
|----------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | ----------------------- | ------ |  |  | - | ------ | - |  | - | ------ | 
|                                                                        |  |      |        |      |  |      |        |      |  | YEAR ENDED DECEMBER 31,
|                                                                        | 
|Statement of Income Data                                                |  | 2002 |        | 2001 |  | 2000 |        | 1999 |  | 1998                   
|                                                                        |  |      |        |      |  |      |        |      |  |                        
|Interest income                                                         |  | $    | 31,316 |      |  | $    | 33,717 |      |  | $                       | 32,189 |  |  | $ | 27,906 |   |  | $ | 23,706 | 
|Interest expense                                                        |  |      | 10,329 |      |  |      | 15,797 |      |  |                         | 14,775 |  |  |   | 11,299 |   |  |   | 9,915  | 
|Net interest income                                                     |  |      | 20,987 |      |  |      | 17,920 |      |  |                         | 17,414 |  |  |   | 16,607 |   |  |   | 13,791 | 
|Provision for loan losses                                               |  |      | 816    |      |  |      | 1,124  |      |  |                         | 332    |  |  |   | 540    |   |  |   | 360    | 
|Net interest income after provision for loan losses                     |  |      | 20,171 |      |  |      | 16,796 |      |  |                         | 17,082 |  |  |   | 16,067 |   |  |   | 13,431 | 
|Non-interest income                                                     |  |      | 11,998 |      |  |      | 11,289 |      |  |                         | 7,638  |  |  |   | 7,167  |   |  |   | 6,376  | 
|Non-interest expense                                                    |  |      | 24,970 |      |  |      | 22,161 |      |  |                         | 18,035 |  |  |   | 16,741 |   |  |   | 14,480 | 
|Income tax expense                                                      |  |      | 2,464  |      |  |      | 2,030  |      |  |                         | 2,463  |  |  |   | 2,327  |   |  |   | 1,886  | 
|Cumulative effect of change in accounting
principle, net of tax benefit |  |      |       |      |  |      |       |      |  |                         |       |  |  |   | (47    | ) |  |   |       | 
|Net Income                                                              |  |      | 4,735  |      |  |      | 3,894  |      |  |                         | 4,222  |  |  |   | 4,119  |   |  |   | 3,441  | 

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|                                                              |  |                         |           |      |  |      |           |      |  |      |           |  |  |   |           |  |  |   |           | 
|------------------------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | --------- | 
|                                                              |  | YEAR ENDED DECEMBER 31,
|                                                              |  |                        
|Per Share Data                                                |  | 2002                    |           | 2001 |  | 2000 |           | 1999 |  | 1998
|                                                              |  |                         |           |      |  |      |           |      |  |     
|Book value per share at year end                              |  | $                       | 8.30      |      |  | $    | 7.27      |      |  | $    | 6.72      |  |  | $ | 6.44      |  |  | $ | 6.04      | 
|Basic earnings per share                                      |  |                         | 1.19      |      |  |      | 0.99      |      |  |      | 1.02      |  |  |   | 0.94      |  |  |   | 0.78      | 
|Diluted earnings per share                                    |  |                         | 1.14      |      |  |      | 0.95      |      |  |      | 0.99      |  |  |   | 0.91      |  |  |   | 0.74      | 
|Basic weighted average common equivalent
shares outstanding   |  |                         | 3,992,775 |      |  |      | 3,923,763 |      |  |      | 4,140,234 |  |  |   | 4,388,336 |  |  |   | 4,415,949 | 
|Diluted weighted average common equivalent
shares outstanding |  |                         | 4,144,855 |      |  |      | 4,096,767 |      |  |      | 4,274,155 |  |  |   | 4,543,784 |  |  |   | 4,624,380 | 
|Dividends declared                                            |  | $                       | 0.4325    |      |  | $    | 0.43      |      |  | $    | 0.4225    |  |  | $ | 0.4125    |  |  | $ | 0.4025    | 

|                                                                 |  |      |        |      |  |      |       |      |  |      |        |   |  |  |        |   |  |  |        |   | 
|---------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ----- | ---- |  | ---- | ------ | - |  |  | ------ | - |  |  | ------ | - | 
|Ratios (1)                                                       |  | 2002 |        | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                                 |  |      |        |      |  |      |       |      |  |     
|Return on average assets                                         |  |      | 0.89   | %    |  |      | 0.82  | %    |  |      | 1.05   | % |  |  | 1.07   | % |  |  | 1.10   | %
|Return on average equity                                         |  |      | 15.21  | %    |  |      | 14.15 | %    |  |      | 15.54  | % |  |  | 15.05  | % |  |  | 13.31  | %
|Average equity/average assets                                    |  |      | 5.82   | %    |  |      | 5.79  | %    |  |      | 6.74   | % |  |  | 7.11   | % |  |  | 8.23   | %
|Net interest margin                                              |  |      | 4.39   | %    |  |      | 4.22  | %    |  |      | 4.74   | % |  |  | 4.78   | % |  |  | 4.88   | %
|Dividend payout ratio                                            |  |      | 36.47  | %    |  |      | 43.32 | %    |  |      | 41.43  | % |  |  | 43.95  | % |  |  | 51.65  | %
|Non-performing assets/total loans and other real
estate          |  |      | 0.81   | %    |  |      | 1.16  | %    |  |      | 0.80   | % |  |  | 0.71   | % |  |  | 0.21   | %
|Allowance for loan losses/total loans                            |  |      | 1.00   | %    |  |      | 1.00  | %    |  |      | 1.04   | % |  |  | 1.03   | % |  |  | 1.02   | %
|Allowance for loan losses/nonperforming assets                   |  |      | 122.19 | %    |  |      | 85.62 | %    |  |      | 129.85 | % |  |  | 145.25 | % |  |  | 483.28 | %
|Non-interest expense/net interest income and non-interest income |  |      | 75.70  | %    |  |      | 75.87 | %    |  |      | 71.99  | % |  |  | 70.42  | % |  |  | 71.80  | %

(1)  Averages are derived from daily balances.






ITEM 7.     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


Introduction

During 1996, TIB Financial Corp. was formed providing for a reorganization
whereby TIB Bank of the Keys became our wholly-owned subsidiary. In 1997, the
Bank formed two subsidiaries, the first on June 13, 1997, when the Bank
acquired the assets of Small Business Consultants, Inc., a Florida corporation
specializing in the government guaranteed loan consulting business. On July
31, 1997, the Bank formed TIB Investment & Insurance Center, Inc. for the
purpose of selling investment products to the public. Effective January 14,
2002, the name of this subsidiary was changed to TIB Investment Center, Inc.
Prior to December 31, 2001, we had a 30% interest in ERAS JV, a joint venture
computer software, item processing, and network management company. We reduced
our ownership percentage to 10% on December 31, 2001, though a partial sale of
our ownership interest. On October 4, 2002, we sold 5.1% of our 10% interest in
ERAS JV. This sale, accompanied by the additional transfer of assets by other
owners into the venture, reduced our ownership in the venture to 4.53%. ERAS
JV currently processes the cash items and provides computer software services
for the Bank. In October 2000, we purchased Keys Insurance Agency of Monroe
County, Inc. Keys Insurance Agency (the new name subsequent to the purchase),
brokers a full line of commercial and residential hazard insurance coverages as
well as life and health insurance and annuities.

During 2002, economic activity in our primary markets reflected the national
trend of the economy as expanding but at a slow rate. This in turn saw the
Federal Reserve keeping short term interest rates at low levels all year.
Specifically, the target Federal Funds Rate began 2002 at 1.75% and remained
there until November when it was decreased to 1.25%. The Prime lending rate
continued its recent pattern of staying 300 basis points, 3%, above the Federal
Funds Rate.

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These low rates pressure our net interest margins in two ways. First, clearly
a low Prime rate directly affects yields on loans tied to that index and even
loans not indexed to Prime are priced reflective of overall low asset yields.
Second, deposit liabilities in many cases can only be priced down so far before
it is simply too low to attract the volume of required funding. The net effect
of this is asset yields generally decreasing faster, and to a greater extent,
than liability costs.

We have been able to mitigate this effect in 2002 for the following reasons.
First, even though we are at low relative levels of interest rates, the decline
at least stabilized somewhat this year and we were able to decrease liability
costs to a similar extent that asset yields contracted. Second, we had
instituted a practice of requiring an interest rate floor on new commercial
loans. This proved very useful in slowing the average declines in loan yields.
Finally, we began to change the mix of assets to create slightly higher
percentages of better yielding loans.

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 to put together a department that we feel could safely
acquire and service this type of product. By the end of 2002, we were buying
approximately $4 million per month of indirect automobile paper and as of
December 31, 2002, we had approximately $16.9 million of indirect loans
outstanding. With the appropriate safeguards, we feel this product offers us a
compelling risk versus reward tradeoff especially in an overall low rate
environment.

In other areas, the favorable rates for residential mortgages helped to
contribute to another record year for us in residential loan production. Fees
on these loans sold increased almost 50% to $1,583,000. Merchant bankcard
processing revenue also increased from $4,010,000 in 2001 to $4,387,000 in
2002.

We opened one additional banking office in 2002. On November 25, 2002, we
opened our headquarters office for Southwest Florida at 599 Ninth Street North
in Naples, Florida. We own the first floor of a new three story office
building near the downtown area. This investment was done as part of our
general plan to expand our market share over time by de novo branching into
growth markets. Even though new branches take about three years to break even,
when they are profitable the accumulated losses that were incurred from the
opening should be less than the premium the branch and its related assets and
deposits might otherwise realize.

Performance Overview

We achieved net income of $4.7 million in 2002 representing an $840,932 or a
21.6% increase from the prior year.

Basic earnings per share for 2002 was $1.19 compared to $0.99 in 2001. Basic
weighted-average common equivalent shares outstanding in 2002 were 3,992,775
compared to 3,923,763 in 2001. This increase resulted from exercise of stock
options.

Diluted earnings per share for 2002 was $1.14 compared to $0.95 in 2001.
Diluted weighted-average common equivalent shares outstanding in 2002 were
4,144,855 compared to 4,096,767 in 2001.

Total assets at December 31, 2002 were $567.0 million compared to $494.0
million at the previous year end, reflecting an increase of 14.8%. Asset
growth was funded by an increase in deposits of 16.1%, or $66.9 million in
2002. Our total loan volume increased 16.5%, or $62.6 million, to $441.7
million at year end 2002 compared to $379.1 million at December 31, 2001. In
2002, we began originating indirect auto dealer loans. This accounted for
$16.9 million of the increase in total loans in 2002.

Net interest income in 2002 increased 17.1%, or $3,066,979, to $21.0 million
from $17.9 million reported in 2001.
Our interest margin increased from 4.22% in 2001 to 4.39% in 2002.
Non-performing assets decreased to 0.81% of total loans at December 31, 2002
from 1.16% at year end 2001.

Non-interest income increased $709,000 to $12.0 million in 2002. The increase
in other income is attributed to an

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increase of $377,000 in merchant bankcard
processing income; an increase of $15,000 in service charges on deposit
accounts; a $167,000 increase in other income; a $509,000 increase in fees on
mortgage loans sold; a $28,000 increase in commissions on retail investment
services; a $343,000 increase in commissions on sales by Keys Insurance Agency,
Inc.; a $268,000 increase from equity in income, net of goodwill amortization,
and dividend income from our investment in ERAS Joint Venture; offset by a
$68,000 decrease in gain on sale of government guaranteed loans; a $66,000
decrease in net security gains; a $255,000 decrease in gain on sale of
servicing rights, and a $609,000 decrease in gain on sale of investment in
ERAS Joint Venture.

We experienced an increase in non-interest expenses of $2.8 million in 2002, or
12.7 % over 2001. The increased expenses primarily related to the expansions
costs associated with the entrance into the Southwest Florida market.

RESULTS OF OPERATIONS

The following table summarizes the balance sheet and results of operations
including selected financial performance ratios for the three years ended
December 31:

|                                            |  |                    |         |      |  |      |         |  |  |   |         | 
|------------------------------------------- |  | ------------------ | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |  | AS OF DECEMBER 31,
|                                            |  |                   
|Balance Sheet Data                          |  | 2002               |         | 2001 |  | 2000
|                                            |  |                    |         |      |  |     
|Total Assets                                |  | $                  | 567,005 |      |  | $    | 493,992 |  |  | $ | 439,320 | 
|Investment Securities                       |  |                    | 55,754  |      |  |      | 53,980  |  |  |   | 69,208  | 
|Gross Loans                                 |  |                    | 441,744 |      |  |      | 379,104 |  |  |   | 315,574 | 
|Allowance for loan losses                   |  |                    | 4,416   |      |  |      | 3,794   |  |  |   | 3,268   | 
|Deposits                                    |  |                    | 482,683 |      |  |      | 415,736 |  |  |   | 392,427 | 
|Stockholders Equity                        |  |                    | 33,506  |      |  |      | 28,672  |  |  |   | 26,237  | 



|                                                              |  |                         |           |      |  |      |           |  |  |   |           | 
|------------------------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|                                                              |  | YEAR ENDED DECEMBER 31,
|                                                              |  |                        
|Statement of Income Data                                      |  | 2002                    |           | 2001 |  | 2000
|                                                              |  |                         |           |      |  |     
|Interest income                                               |  | $                       | 31,316    |      |  | $    | 33,717    |  |  | $ | 32,189    | 
|Interest expense                                              |  |                         | 10,329    |      |  |      | 15,797    |  |  |   | 14,775    | 
|Net interest income                                           |  |                         | 20,987    |      |  |      | 17,920    |  |  |   | 17,414    | 
|Provision for loan losses                                     |  |                         | 816       |      |  |      | 1,124     |  |  |   | 332       | 
|Net interest income after provision for loan losses           |  |                         | 20,171    |      |  |      | 16,796    |  |  |   | 17,082    | 
|Non-interest income                                           |  |                         | 11,998    |      |  |      | 11,289    |  |  |   | 7,638     | 
|Non-interest expense                                          |  |                         | 24,970    |      |  |      | 22,161    |  |  |   | 18,035    | 
|Income tax expense                                            |  |                         | 2,464     |      |  |      | 2,030     |  |  |   | 2,463     | 
|Net Income                                                    |  |                         | 4,735     |      |  |      | 3,894     |  |  |   | 4,222     | 
|Per Share Data                                                |  |                         |           |      | 
|Book value per share at year end                              |  | $                       | 8.30      |      |  | $    | 7.27      |  |  | $ | 6.72      | 
|Basic earnings per share                                      |  |                         | 1.19      |      |  |      | 0.99      |  |  |   | 1.02      | 
|Diluted earnings per share                                    |  |                         | 1.14      |      |  |      | 0.95      |  |  |   | 0.99      | 
|Basic weighted average common equivalent shares outstanding   |  |                         | 3,992,775 |      |  |      | 3,923,763 |  |  |   | 4,140,234 | 
|Diluted weighted average common equivalent shares outstanding |  |                         | 4,144,855 |      |  |      | 4,096,767 |  |  |   | 4,274,155 | 
|Dividends declared                                            |  | $                       | 0.4325    |      |  | $    | 0.43      |  |  | $ | 0.4225    | 

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|                                                                 |  |                         |       |      |  |      |       |   |  |  |       |  
|---------------------------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                 |  | YEAR ENDED DECEMBER 31,
|                                                                 |  |                        
|Ratios (1)                                                       |  | 2002                    |       | 2001 |  | 2000
|                                                                 |  |                         |       |      |  |     
|Return on average assets                                         |  |                         | 0.89  | %    |  |      | 0.82  | % |  |  | 1.05  | %
|Return on average equity                                         |  |                         | 15.21 | %    |  |      | 14.15 | % |  |  | 15.54 | %
|Average equity/average assets                                    |  |                         | 5.82  | %    |  |      | 5.79  | % |  |  | 6.74  | %
|Net interest margin                                              |  |                         | 4.39  | %    |  |      | 4.22  | % |  |  | 4.74  | %
|Dividend payout ratio                                            |  |                         | 36.47 | %    |  |      | 43.32 | % |  |  | 41.43 | %
|Non-performing assets/total loans and other real estate          |  |                         | 0.81  | %    |  |      | 1.16  | % |  |  | 0.80  | %
|Allowance for loan losses/total loans                            |  |                         | 1.00  | %    |  |      | 1.00  | % |  |  | 1.04  | %
|Non-interest expense/net interest income and
non-interest income |  |                         | 75.70 | %    |  |      | 75.87 | % |  |  | 71.99 | %

(1)  Averages are derived from daily balances.

NET INTEREST INCOME

Net interest income, our primary source of revenue, is a function of the yield
earned on average interest-earning assets and the rate paid on average
interest-bearing liabilities. Changes in net interest income from period to
period reflect the increases or decreases in average interest-earning assets,
interest-bearing liabilities and the interest rate spread which is affected by
the degree of mismatch in maturity and repricing characteristics of our
interest-earning assets and interest-bearing liabilities.

2002 compared with 2001

The prime rate as published in the Wall Street Journal began 2002 at 4.75%
where it remained until November when it declined to 4.25%. Many of the Banks
loans are indexed to this floating rate. Offsetting this decline in interest
income, we have 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 declined 137
basis points in 2002 to 6.54% from 7.91% in 2001. The average cost of interest
bearing deposits declined from 4.12% in 2001 to 2.30% in 2002 or 182 basis
points and the rate of all interest-bearing liabilities decreased 181 basis
points, from 4.38% in 2001 to 2.57% in 2002. Net interest margin increased
from 4.22% in 2001 to 4.39% in 2002.

2001 compared with 2000

The prime rate as published in the Wall Street Journal began 2001 at 9.5% and
by December it had declined to 4.75%. With many of the Banks loans indexed to
this floating rate, this decrease in rate resulted in decreasing yields in the
loan portfolio in 2001 which were not entirely matched by decreased funding
costs. The average yield on interest earning assets declined 82 basis points
in 2001 to 7.91% from 8.73% in 2000. The average cost of interest bearing
deposits declined from 4.87% in 2000 to 4.12% in 2001 or 75 basis points and
the rate of all interest-bearing liabilities decreased 63 basis points, from
5.01% in 2000 to 4.38% in 2001. Net interest margin decreased from 4.74% in
2000 to 4.22% in 2001.

The following table sets forth information with respect to the average
balances, interest income and average yield by major categories of assets; the
average balances, interest expense and average rate by major categories of
liabilities; the average balances of noninterest-earning assets,
noninterest-bearing liabilities and stockholders equity; and net interest
income, interest rate spread, and net interest margin for the years ended
December 31, 2002, 2001 and 2000.

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|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |       |      |   |  | 
|--------------------------------------------------------------- | --------------------------------------- | ---------------------------------------- | ------- | ------- | ------- | ------- | ------ | -------- | ------ | ------- | ---- | ------- | ---- | ------- | ------- | ------ | ------- | - | ------ | ---- | ------ |  | ---- | ----- | ---- | - |  | 
|AVERAGE BALANCE SHEETS                                          |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        | 2002    |      |         |      |         |         |        |         |   |        | 2001 |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |     
|                                                                |                                         |                                          |         |         |         | AVERAGE |        | INCOME/  |        | YIELDS  |      | AVERAGE |      | INCOME/ |         | YIELDS
|(Dollars in thousands)                                          |                                         | BALANCES                                 |         | EXPENSE |         | RATES   |        | BALANCES |        | EXPENSE |      | RATES  
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |        
|ASSETS                                                          |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                | Interest-earning assets:                |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |       |     
|                                                                |                                         | Loans (1)(2)                             |         | $       | 402,575 |         |        | $        | 27,803 |         |      |         | 6.91 | %       |         | $      | 348,128 |   |        | $    | 29,112 |  |      |       | 8.36 | %
|                                                                |                                         | Investment securities - taxable          |         |         | 52,630  |         |        |          | 2,939  |         |      |         | 5.58 | %       |         |        | 55,021  |   |        |      | 3,463  |  |      |       | 6.29 | %
|                                                                |                                         | Investment
securities - tax exempt (2)   |         |         | 5,458   |         |        |          | 393    |         |      |         | 7.21 | %       |         |        | 5,739   |   |        |      | 421    |  |      |       | 7.34 | %
|                                                                |                                         | Interest bearing deposits in other banks |         |         | 302     |         |        |          | 5      |         |      |         | 1.69 | %       |         |        | 112     |   |        |      | 3      |  |      |       | 2.72 | %
|                                                                |                                         | Federal funds sold                       |         |         | 20,180  |         |        |          | 330    |         |      |         | 1.64 | %       |         |        | 19,630  |   |        |      | 895    |  |      |       | 4.56 | %
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total interest-earning assets                                   |                                         |                                          | 481,145 |         |         |         | 31,470 |          |        |         | 6.54 | %       |      |         | 428,630 |        |         |   | 33,894 |      |        |  | 7.91 | %    
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Non-interest-earning assets:                                    |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                | Cash and due from banks                 |                                          |         | 13,297  |         |         |        |          |        |         |      |         |      |         |         | 12,284 |         |   |        |      |        |  |      |       |     
|                                                                | Investment in ERAS                      |                                          |         | 227     |         |         |        |          |        |         |      |         |      |         |         | 885    |         |   |        |      |        |  |      |       |     
|                                                                | Premises and equipment, net             |                                          |         | 17,429  |         |         |        |          |        |         |      |         |      |         |         | 16,533 |         |   |        |      |        |  |      |       |     
|                                                                | Allowances for loan losses              |                                          |         | (3,932  | )       |         |        |          |        |         |      |         |      |         |         | (3,274 | )       |   |        |      |        |  |      |       |     
|                                                                | Other assets                            |                                          |         | 26,330  |         |         |        |          |        |         |      |         |      |         |         | 20,602 |         |   |        |      |        |  |      |       |     
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total non-interest earning assets                               |                                         |                                          | 53,351  |         |         |         |        |          |        |         |      |         |      |         | 47,030  |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total assets                                                    |                                         | $                                        | 534,496 |         |         |         |        |          |        |         |      |         |      | $       | 475,660 |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|LIABILITIES & STOCKHOLDERS EQUITY                              |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                | Interest-bearing liabilities:           |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |       |     
|                                                                |                                         | Interest bearing deposits:               |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |       |      |  
|                                                                |                                         | NOW accounts                             |         |         | 50,481  |         |        |          | 266    |         |      |         | 0.53 | %       |         |        | 42,461  |   |        |      | 505    |  |      |       | 1.19 | %
|                                                                |                                         | Money market                             |         |         | 131,384 |         |        |          | 1,791  |         |      |         | 1.36 | %       |         |        | 128,056 |   |        |      | 4,679  |  |      |       | 3.65 | %
|                                                                |                                         | Savings deposits                         |         |         | 29,891  |         |        |          | 223    |         |      |         | 0.75 | %       |         |        | 24,619  |   |        |      | 443    |  |      |       | 1.80 | %
|                                                                |                                         | Other time deposits                      |         |         | 149,061 |         |        |          | 6,003  |         |      |         | 4.03 | %       |         |        | 143,230 |   |        |      | 8,298  |  |      |       | 5.79 | %
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total interest-bearing deposits                                 |                                         |                                          | 360,817 |         |         |         | 8,283  |          |        |         | 2.30 | %       |      |         | 338,366 |        |         |   | 13,925 |      |        |  | 4.12 | %    
|                                                                | Other interest-bearing liabilities:     |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |       |     
|                                                                | Other borrowings                        |                                          |         |        |         |         |        |         |        |         |      |        |      |         |         |       |         |   |        |     |        |  |      |      |     
|                                                                | Notes payable                           |                                          |         | 5,250   |         |         |        | 481      |        |         |      | 9.16    | %    |         |         | 5,250  |         |   |        | 694  |        |  |      | 13.22 | %   
|                                                                | Short-term borrowings and
FHLB advances |                                          |         | 22,855  |         |         |        | 425      |        |         |      | 1.86    | %    |         |         | 6,565  |         |   |        | 175  |        |  |      | 2.67  | %   
|Trust preferred securities                                      |                                         |                                          | 13,000  |         |         |         | 1,140  |          |        |         | 8.77 | %       |      |         | 10,820  |        |         |   | 1,003  |      |        |  | 9.27 | %    
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total interest-bearing liabilities                              |                                         |                                          | 401,922 |         |         |         | 10,329 |          |        |         | 2.57 | %       |      |         | 361,001 |        |         |   | 15,797 |      |        |  | 4.38 | %    
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Non-interest bearing liabilities and stockholders equity:      |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|                                                                | Demand deposits                         |                                          |         | 95,324  |         |         |        |          |        |         |      |         |      |         |         | 80,382 |         |   |        |      |        |  |      |       |     
|                                                                | Other liabilities                       |                                          |         | 6,121   |         |         |        |          |        |         |      |         |      |         |         | 6,748  |         |   |        |      |        |  |      |       |     
|                                                                | Stockholders equity                    |                                          |         | 31,129  |         |         |        |          |        |         |      |         |      |         |         | 27,529 |         |   |        |      |        |  |      |       |     
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total non-interest bearing liabilities and stockholders
equity |                                         |                                          | 132,574 |         |         |         |        |          |        |         |      |         |      |         | 114,659 |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Total liabilities and stockholders equity                      |                                         | $                                        | 534,496 |         |         |         |        |          |        |         |      |         |      | $       | 475,660 |        |         |   |        |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Interest rate spread                                            |                                         |                                          |         |         |         |         |        |          |        |         | 3.97 | %       |      |         |         |        |         |   |        |      |        |  | 3.53 | %    
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Net interest income                                             |                                         |                                          |         |         |         | $       | 21,141 |          |        |         |      |         |      |         |         |        |         | $ | 18,097 |      |        |  |      |      
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      
|Net interest margin (3)                                         |                                         |                                          |         |         |         |         |        |          |        |         | 4.39 | %       |      |         |         |        |         |   |        |      |        |  | 4.22 | %    
|                                                                |                                         |                                          |         |         |         |         |        |          |        |         |      |         |      |         |         |        |         |   |        |      |        |  |      |      

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |       |      |   |  | 
|--------------------------------------------------------------- | --------------------------------------- | ---------------------------------------- | ------- | ------- | ------- | ------- | ------ | ------- | ------ | ------ | ----- | ----- | ---- | - |  | 
|AVERAGE BALANCE SHEETS                                          |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        | 2000   |       |       |      |  
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         | AVERAGE |        | INCOME/ |        | YIELDS
|(Dollars in thousands)                                          |                                         | BALANCES                                 |         | EXPENSE |         | RATES  
|                                                                |                                         |                                          |         |         |         |        
|ASSETS                                                          |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                | Interest-earning assets:                |                                          |         |         |         |         |        |         |        |        |       |       |     
|                                                                |                                         | Loans (1)(2)                             |         | $       | 307,511 |         |        | $       | 28,394 |        |       |       | 9.23 | %
|                                                                |                                         | Investment securities - taxable          |         |         | 49,494  |         |        |         | 3,015  |        |       |       | 6.09 | %
|                                                                |                                         | Investment
securities - tax exempt (2)   |         |         | 6,380   |         |        |         | 486    |        |       |       | 7.61 | %
|                                                                |                                         | Interest bearing deposits in
other banks |         |         | 63      |         |        |         | 4      |        |       |       | 6.26 | %
|                                                                |                                         | Federal funds sold                       |         |         | 7,275   |         |        |         | 456    |        |       |       | 6.27 | %
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total interest-earning assets                                   |                                         |                                          | 370,723 |         |         |         | 32,355 |         |        |        | 8.73  | %    
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Non-interest-earning assets:                                    |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                | Cash and due from banks                 |                                          |         | 12,948  |         |         |        |         |        |        |       |       |     
|                                                                | Investment in ERAS                      |                                          |         | 995     |         |         |        |         |        |        |       |       |     
|                                                                | Premises and equipment, net             |                                          |         | 14,176  |         |         |        |         |        |        |       |       |     
|                                                                | Allowances for loan losses              |                                          |         | (3,243  | )       |         |        |         |        |        |       |       |     
|                                                                | Other assets                            |                                          |         | 7,705   |         |         |        |         |        |        |       |       |     
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total non-interest earning assets                               |                                         |                                          | 32,581  |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total assets                                                    |                                         | $                                        | 403,304 |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|LIABILITIES & STOCKHOLDERS EQUITY                              |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                | Interest-bearing liabilities:           |                                          |         |         |         |         |        |         |        |        |       |       |     
|                                                                |                                         | Interest bearing deposits:               |         |         |         |         |        |         |        |        |       |       |      |  
|                                                                |                                         | NOW accounts                             |         | $       | 34,814  |         |        |         | 508    |        |       |       | 1.46 | %
|                                                                |                                         | Money market                             |         |         | 112,519 |         |        |         | 5,957  |        |       |       | 5.29 | %
|                                                                |                                         | Savings deposits                         |         |         | 22,719  |         |        |         | 524    |        |       |       | 2.31 | %
|                                                                |                                         | Other time deposits                      |         |         | 116,107 |         |        |         | 6,938  |        |       |       | 5.98 | %
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total interest-bearing deposits                                 |                                         |                                          | 286,159 |         |         |         | 13,927 |         |        |        | 4.87  | %    
|                                                                | Other interest-bearing
liabilities:     |                                          |         |         |         |         |        |         |        |        |       |       |     
|                                                                | Other borrowings                        |                                          |         | 114     |         |         |        | 14      |        |        |       | 12.25 | %   
|                                                                | Notes payable                           |                                          |         | 2,639   |         |         |        | 350     |        |        |       | 13.25 | %   
|                                                                | Short-term borrowings and
FHLB advances |                                          |         | 3,306   |         |         |        | 213     |        |        |       | 6.45  | %   
|Trust preferred securities                                      |                                         |                                          | 2,536   |         |         |         | 272    |         |        |        | 10.71 | %    
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total interest-bearing liabilities                              |                                         |                                          | 294,754 |         |         |         | 14,776 |         |        |        | 5.01  | %    
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Non-interest bearing liabilities
and stockholders equity:      |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|                                                                | Demand deposits                         |                                          |         | 76,089  |         |         |        |         |        |        |       |       |     
|                                                                | Other liabilities                       |                                          |         | 5,298   |         |         |        |         |        |        |       |       |     
|                                                                | Stockholders equity                    |                                          |         | 27,163  |         |         |        |         |        |        |       |       |     
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total non-interest bearing
liabilities and stockholders
equity |                                         |                                          | 108,550 |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Total liabilities and
stockholders equity                      |                                         | $                                        | 403,304 |         |         |         |        |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Interest rate spread                                            |                                         |                                          |         |         |         |         |        |         |        |        | 3.72  | %    
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Net interest income                                             |                                         |                                          |         |         |         | $       | 17,579 |         |        |        |       |      
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      
|Net interest margin (3)                                         |                                         |                                          |         |         |         |         |        |         |        |        | 4.74  | %    
|                                                                |                                         |                                          |         |         |         |         |        |         |        |        |       |      

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(1)  Average loans include non-performing loans. Interest on loans
includes loan fees of $116,187 in 2002, $56,343 in 2001, and $58,494 in 2000.

(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.

CHANGES IN NET INTEREST INCOME

The table below details the components of the changes in net interest income
for the last two years. 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.

|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|---------------------------------------- |  | ------------------------- | ----- | ------------------------- |  | ---------- | ----------------- | ------- |  | ------- | ------ | ---------- |  | - | ----- | - | ----------------- | - | ------ | --- |  | - | ------ | -
|                                         |  | 2002 compared to 2001 (1) |       | 2001 compared to 2000 (1)
|                                         |  |                           |       |                           |  |            | Due to changes in |         |  |         |        |            |  |   |       |   | Due to changes in |   |        |     | 
|                                         |  |                           |       |                          
|(In thousands)                           |  |                           |       |                           |  |            |                   |         |  | Net     |        |            |  |   |       |   |                   |   |        | Net
|                                         |  | Average                   |       | Average                   |  | Increase   |                   | Average |  | Average |        | Increase  
|INTEREST INCOME                          |  | Volume                    |       | Rate                      |  | (Decrease) |                   | Volume  |  | Rate    |        | (Decrease)
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |           
|Loans (2)                                |  | $                         | 4,167 |                           |  | $          | (5,476            | )       |  | $       | (1,309 | )          |  | $ | 3,541 |   |                   | $ | (2,823 | )   |  | $ | 718    |  
|Investment Securities (2)                |  |                           | (166  | )                         |  |            | (386              | )       |  |         | (552   | )          |  |   | 314   |   |                   |   | 69     |     |  |   | 383    |  
|Interest bearing deposits in other
banks |  |                           | 3     |                           |  |            | (1                | )       |  |         | 2      |            |  |   | 2     |   |                   |   | (3     | )   |  |   | (1     | )
|Federal Funds sold                       |  |                           | 24    |                           |  |            | (589              | )       |  |         | (565   | )          |  |   | 592   |   |                   |   | (153   | )   |  |   | 439    |  
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|Total interest income                    |  |                           | 4,028 |                           |  |            | (6,452            | )       |  |         | (2,424 | )          |  |   | 4,449 |   |                   |   | (2,910 | )   |  |   | 1,539  |  
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|INTEREST EXPENSE                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|NOW Accounts                             |  |                           | 81    |                           |  |            | (320              | )       |  |         | (239   | )          |  |   | 101   |   |                   |   | (104   | )   |  |   | (3     | )
|Money Market                             |  |                           | 118   |                           |  |            | (3,006            | )       |  |         | (2,888 | )          |  |   | 743   |   |                   |   | (2,021 | )   |  |   | (1,278 | )
|Savings deposits                         |  |                           | 80    |                           |  |            | (300              | )       |  |         | (220   | )          |  |   | 42    |   |                   |   | (123   | )   |  |   | (81    | )
|Other time deposits                      |  |                           | 325   |                           |  |            | (2,620            | )       |  |         | (2,295 | )          |  |   | 1,586 |   |                   |   | (226   | )   |  |   | 1,360  |  
|Other time deposits                      |  |                           |      |                           |  |            |                  |         |  |         |       |            |  |   | (7    | ) |                   |   | (7     | )   |  |   | (14    | )
|Notes payable                            |  |                           |      |                           |  |            | (213              | )       |  |         | (213   | )          |  |   | 345   |   |                   |   | (1     | )   |  |   | 344    |  
|Trust preferred securities               |  |                           | 193   |                           |  |            | (56               | )       |  |         | 137    |            |  |   | 773   |   |                   |   | (42    | )   |  |   | 731    |  
|Short-term borrowings                    |  |                           | 317   |                           |  |            | (67               | )       |  |         | 250    |            |  |   | 133   |   |                   |   | (171   | )   |  |   | (38    | )
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|Total interest expense                   |  |                           | 1,114 |                           |  |            | (6,582            | )       |  |         | (5,468 | )          |  |   | 3,716 |   |                   |   | (2,695 | )   |  |   | 1,021  |  
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  
|Change in net interest income            |  | $                         | 2,914 |                           |  | $          | 130               |         |  | $       | 3,044  |            |  | $ | 733   |   |                   | $ | (215   | )   |  | $ | 518    |  
|                                         |  |                           |       |                           |  |            |                   |         |  |         |        |            |  |   |       |   |                   |   |        |     |  |   |        |  

(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.

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##### Table of Contents



NON-INTEREST INCOME

The following table presents the principal components of non-interest income
for the years ended December 31:

|                                                                                             |  |      |        |      |  |      |        |   |  |   |       | 
|-------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | 
|(In thousands)                                                                               |  | 2002 |        | 2001 |  | 2000
|                                                                                             |  |      |        |      |  |     
|Merchant bank card processing income                                                         |  | $    | 4,387  |      |  | $    | 4,010  |   |  | $ | 3,691 | 
|Commissions on sales by Keys Insurance Agency,
Inc.                                          |  |      | 1,801  |      |  |      | 1,458  |   |  |   | 154   | 
|Gain on sale of government guaranteed loans                                                  |  |      | 28     |      |  |      | 97     |   |  |   | 270   | 
|Fees on mortgage loans sold                                                                  |  |      | 1,583  |      |  |      | 1,075  |   |  |   | 400   | 
|Equity in income (loss), net of goodwill amortization,
from investment in ERAS Joint Venture |  |      |       |      |  |      | (235   | ) |  |   | 32    | 
|Dividend income from ERAS Joint Venture                                                      |  |      | 33     |      |  |      |       |   |  |   |      | 
|Servicing income                                                                             |  |      | 126    |      |  |      | 179    |   |  |   | 116   | 
|Service charges on deposit accounts                                                          |  |      | 2,240  |      |  |      | 2,225  |   |  |   | 2,054 | 
|Gain on sale of investment in ERAS Joint Venture                                             |  |      | 211    |      |  |      | 820    |   |  |   |      | 
|Gain on sale of servicing rights                                                             |  |      |       |      |  |      | 255    |   |  |   |      | 
|Investment securities gains, net                                                             |  |      | 218    |      |  |      | 284    |   |  |   |      | 
|Retail investment services                                                                   |  |      | 206    |      |  |      | 177    |   |  |   | 272   | 
|Debit card income                                                                            |  |      | 350    |      |  |      | 278    |   |  |   | 222   | 
|Net earnings on bank owned life insurance policies                                           |  |      | 118    |      |  |      | 144    |   |  |   |      | 
|Other                                                                                        |  |      | 697    |      |  |      | 522    |   |  |   | 427   | 
|                                                                                             |  |      |        |      |  |      |        |   |  |   |       | 
|Total non-interest income                                                                    |  | $    | 11,998 |      |  | $    | 11,289 |   |  | $ | 7,638 | 
|                                                                                             |  |      |        |      |  |      |        |   |  |   |       | 

Over the past three years, we have increased non-interest income from $7.6
million to $12.0 million.

2002 compared to 2001:

Non interest income increased $709,000 from 2001 to 2002. The increase in
merchant bankcard processing income, commissions on sale by Keys Insurance, and
retail investment services income is primarily a result of volume increases,
and also additional activity as a result of our expansion into Southwest
Florida. Fees on mortgage loans sold also increased due to increased volumes.
The increase in production can be attributed to historically low interest rates
that generated a dramatic surge in refinancings as well as stimulating the
purchase market, and the expansion of our sales staff in Southwest Florida.
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 2002, the
gain is primarily the result of the sale of two corporate securities which
netted a gain of approximately $65,000, the sale of two agency securities that
netted a gain of approximately $64,000, and the sale of a taxable muni that
netted a gain of approximately $71,000. We recognized a gain of $211,000 from
the sale of 5.1% of our 10% interest in ERAS Joint Venture.

2001 compared to 2000:

The 2001 growth in non-interest income of $3.6 million over 2000 was generated
from various sources. On December 31, 2001 we sold two thirds of our 30%
interest in ERAS JV, an item processing and software development company based
in Miami, Florida. This was an opportunity to realize some of the appreciation
of the value of our investment in ERAS and also decrease the future volatility
of earnings. The sale resulted in a pretax gain of approximately $820,000
that was recorded in 2001. Prior to the sale, the 30% interest required us to
recognize that percentage of ERASs income or loss on our income statement. A
net loss of $235,000 from ERASs operations was recorded in 2001, as compared
to $32,000 in net income in 2000. At the resulting 10% ownership, the
remaining investment in ERAS is accounted for under the cost method in 2002.
Low interest rates contributed to a growth in residential loan production.
The Bank generates both fixed and variable rate residential loans. Most of the
adjustable rate loans are placed in the Banks portfolio, and the majority of
the fixed rate residential loans are sold to the secondary market. Fees on
residential loans sold increased $675,000 from $400,000 in 2000 to $1,075,000
in 2001. In addition, $13.3 million of residential loans in the Banks
portfolio

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were securitized and the servicing rights for this group, and the
$23.2 million that were securitized in December of 2000, were sold resulting
in a combined gain of approximately $255,000 in 2001. This represents the first
year that the Bank has sold servicing rights. The continuing expansion of the
merchant credit card processing business also contributed to the overall
increase in non-interest income. Credit card processing income rose $319,000
in 2001 to approximately $4.0 million. There was also a $284,000 net gain on
sales and calls of investment securities recorded in 2001 as compared to none
in 2000. Insurance agency sales commissions increased $1.3 million over the
prior year due to the inclusion of a full year of agency operations in the year
2001, as compared to only two months in the year 2000.

NON-INTEREST EXPENSES

The following table represents the principal components of non-interest
expenses for the years ended December 31:

|                                                 |  |      |        |      |  |      |        |  |  |   |        | 
|------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|(In thousands)                                   |  | 2002 |        | 2001 |  | 2000
|                                                 |  |      |        |      |  |     
|Salary and employee benefits                     |  | $    | 11,574 |      |  | $    | 9,718  |  |  | $ | 7,854  | 
|Net occupancy expense                            |  |      | 3,933  |      |  |      | 3,489  |  |  |   | 2,718  | 
|Merchant bank card expenses                      |  |      | 3,242  |      |  |      | 3,043  |  |  |   | 2,746  | 
|Accounting, legal, and other professional        |  |      | 755    |      |  |      | 735    |  |  |   | 587    | 
|Computer services                                |  |      | 1,669  |      |  |      | 1,537  |  |  |   | 1,422  | 
|Postage, courier and armored car                 |  |      | 604    |      |  |      | 516    |  |  |   | 456    | 
|Marketing and community relations                |  |      | 952    |      |  |      | 780    |  |  |   | 565    | 
|Operating supplies                               |  |      | 451    |      |  |      | 518    |  |  |   | 390    | 
|Directors fees                                  |  |      | 199    |      |  |      | 167    |  |  |   | 169    | 
|FDIC and state assessments                       |  |      | 170    |      |  |      | 161    |  |  |   | 147    | 
|Charge-off of unamortized leasehold
improvements |  |      |       |      |  |      | 58     |  |  |   |       | 
|Amortization of intangibles                      |  |      | 297    |      |  |      | 539    |  |  |   | 207    | 
|Repossessed asset expenses                       |  |      | 177    |      |  |      | 57     |  |  |   | 1      | 
|Operational charge offs                          |  |      | 153    |      |  |      | 136    |  |  |   | 145    | 
|Other operating expenses                         |  |      | 794    |      |  |      | 706    |  |  |   | 628    | 
|                                                 |  |      |        |      |  |      |        |  |  |   |        | 
|Total non-interest expenses                      |  | $    | 24,970 |      |  | $    | 22,160 |  |  | $ | 18,035 | 
|                                                 |  |      |        |      |  |      |        |  |  |   |        | 

Over the past three years, non-interest expenses have increased from $18.0
million to $25.0 million.

2002 compared to 2001:

Non-interest expenses increased $2.8 million from 2001 to 2002. Approximately
$1.9 million of the increase was related to salary and employee benefits.
Officer and employee salaries and payroll taxes at the Bank increased
approximately $840,000 over the prior year due to additional employees and
annual merit increases in salaries. Commission expense at the Bank level also
increased approximately $193,000 over the prior year. The amount of commission
expense in the residential and investment center departments is related to the
income from these activities. Since the income in these areas outperformed the
prior year, so too did the commission expense. Bonuses at the Bank level also
increased $432,000 from the prior year. Bonuses in 2001 had been reduced to
only $203,000, whereas in 2002 they were $635,000. Salaries and employee
benefits at Keys Insurance increased $178,000 over the prior year. This was
due to additional employees and commissions that increased with the
corresponding increase in revenues. Net occupancy expense increased $444,000
over the prior year. Of this increase, $424,000, was attributable to the Bank
and $20,000 was attributable to Keys Insurance Agency. The majority of the
Banks increase is directly attributable to the expansion into the Southwest
Florida market in 2001 and 2002. A full year of expenses was included in 2002
for the two branches and residential lending office that opened in 2001. The
new Naples branch headquarters facility also opened in the fourth quarter of
2002.

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2001 compared to 2000:

We experienced an increase in non-interest expenses of $4.1 million in 2001, or
22.9% over 2000. Approximately $1.3 million of this increase is directly attributable to the operations of
Keys Insurance Agency (KIA). A full year of KIA operations was included in
2001, compared to the inclusion of only two months of operations in 2000.
Salaries and benefits of the Bank increased approximately $1.0 million from
2000 to 2001. Over the past three years, the Bank has opened additional
locations and hired appropriate additional personnel to build an infrastructure
to enhance the Banks customer service and facilitate growth. At December 31,
2001, the Bank had 220 full time employees and 15 part time employees, compared
to 193 full time employees and 13 part time employees at December 31, 2000.
Net occupancy expense increased approximately $771,000 from 2000 to 2001.
Approximately $207,000 of this amount is attributable to the operations of KIA
as discussed above. The remaining increase is at the Bank level and is caused
by the increase in the number of facilities. Two branches were opened in the
Southwest Florida market in 2001 which added to the overall occupancy costs.
The year 2001 also had a full year of occupancy costs relating to the two bank
branches acquired from Republic Security Bank in mid December 2000. One branch
was a stand alone facility and the other was an in store branch in an
Albertsons market. Albertsons subsequently closed its store during the fourth
quarter of 2001, and the branch was closed. This resulted in the write off of
approximately $58,000 in unamortized leasehold improvements. Merchant bank
card expenses increased approximately $297,000 over the prior year, and was
more than offset by income derived from this activity. Amortization of
intangibles increased $332,000 over the prior year. This is a result of
$233,000 in core deposit intangible amortization recorded in 2001 associated
with the Republic Security Bank branches acquired, and a full year of KIA
goodwill amortization recorded in 2001 that accounted for $98,000 of the
increase.

PROVISION FOR INCOME TAXES

The provision for income taxes includes federal and state income taxes. The
effective income tax rates for the years ended December 31, 2002, 2001, and
2000 were 34.2%, 34.3%, and 36.8%, respectively. The fluctuations in effective
tax rates reflect the effect of the differences in deductibility of certain
income and expenses. The decrease in the effective tax rate from 2000 to 2001
is due in part to an $87,500 state tax credit resulting from a charitable
contribution in 2001. In addition, bank owned life insurance policies
purchased in 2002, 2001, and December 2000 generate income not subject to
federal and state income taxes.

LOAN PORTFOLIO

Prior to our entrance into the Southwest Florida market in 2001, our primary
locations were in the Florida Keys (Monroe County) and south Miami-Dade County.
This regions primary industry is tourism. Commercial loan demand therefore
is primarily for resort, hotel, restaurant, marina and related real estate
secured property loans. We serve this market by offering long-term adjustable
rate financing to the owners of these types of properties for acquisition and
improvements thereon. These loans are often $1 million or larger and are
prospects for government guarantee programs or traditional participation
agreements. The nature of government programs such as the Small Business
Administration is generally geared toward long term adjustable rate financing.
As our business expands in Southwest Florida, we believe the loan portfolio
will benefit from this geographic diversification which will provide and also
broaden the types of lending we have typically originated previously. As of
December 31, 2002, we have approximately $34.4 million of loans outstanding
(excluding indirect auto loans) in southwest Florida, where we have also
generated approximately $23.0 million in total deposits.

Monroe County has the highest cost of living of any county in Florida and this
is driven in large part by the scarce and expensive real estate whose value is
supported by various construction restrictions and environmental
considerations. This also serves to maintain and enhance collateral values on
loans secured by property in this market. We have grown in commercial loans by
aggressively serving this market. The quality of our credit administration
along with the stable real estate values has kept loan losses at low levels.

Loans are expected to produce higher yields than investment securities and
other interest earning assets (assuming that credit losses are not excessive).
Thus the absolute volume of loans and the volume as a percentage of total
earning assets are important determinants of the net interest margin. Net
loans outstanding increased to $438.1

19



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##### Table of Contents



million at year end 2002 as compared to
$375.2 million at year end 2001, an increase of 16.8%. Of this amount, real
estate mortgage loans increased 13.3% from $307.8 million to $348.9 million.
Commercial real estate
mortgage loans accounted for much of this increase, growing from $232.8 million
to $265.1 million at the respective year ends. We maintain a posture of
originating commercial loans with rates that fluctuate with the prime lending
rate and residential loans with rates that fluctuate with the one year treasury
index. At December 31, 2002, 81.0% of the total loan portfolio had floating or
adjustable rates.

The following table presents the composition our loan portfolio at December 31:

|                                                   |              |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |         | 
|-------------------------------------------------- | ------------ | ---- | ------- | ------- |  | ---- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|(Dollars in thousands)                             |              | 2002 |         | 2001    |  | 2000 |         | 1999    |  | 1998
|                                                   |              |      |         |         |  |      |         |         |  |     
|Real estate mortgage loans:                        |              |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|                                                   | Commercial   |      | $       | 265,113 |  |      | $       | 232,759 |  |      | $       | 170,285 |  |   | $       | 150,371 |  |   | $       | 139,000 | 
|                                                   | Residential  |      |         | 68,389  |  |      |         | 68,373  |  |      |         | 76,980  |  |   |         | 82,786  |  |   |         | 62,544  | 
|                                                   | Farmland     |      |         | 443     |  |      |         | 267     |  |      |         |        |  |   |         |        |  |   |         |        | 
|                                                   | Construction |      |         | 14,893  |  |      |         | 6,434   |  |      |         | 7,619   |  |   |         | 9,182   |  |   |         | 5,960   | 
|Commercial loans                                   |              |      | 48,692  |         |  |      | 46,330  |         |  |      | 38,762  |         |  |   | 32,359  |         |  |   | 25,354  |        
|Consumer loans                                     |              |      | 9,364   |         |  |      | 9,637   |         |  |      | 9,115   |         |  |   | 6,569   |         |  |   | 5,560   |        
|Indirect auto dealer loans                         |              |      | 16,854  |         |  |      |        |         |  |      |        |         |  |   |        |         |  |   |        |        
|Agricultural production and
other loans to farmers |              |      | 520     |         |  |      | 597     |         |  |      |        |         |  |   |        |         |  |   |        |        
|Home equity loans                                  |              |      | 17,475  |         |  |      | 14,707  |         |  |      | 12,813  |         |  |   | 9,347   |         |  |   | 8,250   |        
|                                                   |              |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|                                                   | Subtotal     |      |         | 441,743 |  |      |         | 379,104 |  |      |         | 315,574 |  |   |         | 290,614 |  |   |         | 246,668 | 
|Less: deferred loan costs (fees)                   |              |      | 784     |         |  |      | (157    | )       |  |      | (488    | )       |  |   | (733    | )       |  |   | (370    | )      
|Less: allowance for loan losses                    |              |      | (4,416  | )       |  |      | (3,794  | )       |  |      | (3,268  | )       |  |   | (2,997  | )       |  |   | (2,517  | )      
|                                                   |              |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Net loans                                          |              | $    | 438,111 |         |  | $    | 375,153 |         |  | $    | 311,818 |         |  | $ | 286,884 |         |  | $ | 243,781 |        
|                                                   |              |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        

The maturity distribution of our loan portfolio at December 31, 2002 was as
follows:

|                                                   |                  |        |                |        |        |       |         |        |  |   |         |         |  |   |         |         | 
|-------------------------------------------------- | ---------------- | ------ | -------------- | ------ | ------ | ----- | ------- | ------ |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                                   |                  |        | Loans maturing
|                                                   |                  |        |               
|                                                   |                  |        | Within         |        | 1 to 5 |       | After 5 |        |  |   |        
|(Dollars in thousands)                             |                  | 1 Year |                | Years  |        | Years |         | Total 
|                                                   |                  |        |                |        |        |       |         |       
|Real estate mortgage loans:                        |                  |        |                |        |        |       |         |        |  |   |         |         |  |   |         |        
|                                                   | Commercial       |        | $              | 23,033 |        |       | $       | 22,778 |  |   | $       | 219,302 |  |   | $       | 265,113 | 
|                                                   | Residential      |        |                |       |        |       |         | 727    |  |   |         | 67,662  |  |   |         | 68,389  | 
|                                                   | Farmland         |        |                |       |        |       |         |       |  |   |         | 443     |  |   |         | 443     | 
|                                                   | Construction (a) |        |                | 432    |        |       |         | 910    |  |   |         | 13,551  |  |   |         | 14,893  | 
|Commercial loans                                   |                  |        | 22,521         |        |        |       | 17,750  |        |  |   | 8,421   |         |  |   | 48,692  |        
|Consumer loans                                     |                  |        | 927            |        |        |       | 5,364   |        |  |   | 3,073   |         |  |   | 9,364   |        
|Indirect auto dealer loans                         |                  |        | 16             |        |        |       | 11,225  |        |  |   | 5,613   |         |  |   | 16,854  |        
|Agricultural production
and other loans to farmers |                  |        | 503            |        |        |       | 17      |        |  |   |        |         |  |   | 520     |        
|Home equity loans                                  |                  |        | 2,665          |        |        |       | 586     |        |  |   | 14,224  |         |  |   | 17,475  |        
|                                                   |                  |        |                |        |        |       |         |        |  |   |         |         |  |   |         |        
|Total Loans                                        |                  | $      | 50,097         |        |        | $     | 59,357  |        |  | $ | 332,289 |         |  | $ | 441,743 |        
|                                                   |                  |        |                |        |        |       |         |        |  |   |         |         |  |   |         |        



|    |                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | $7,079 of this amount relates to residential real estate construction
loans that have been approved for permanent financing but are still under
construction. The remaining amount relates to commercial real estate
construction loans, some of which, have been approved for permanent
financing but are still under construction.

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|                             |  |                |        |        |  |         |        |       |  |   |         |  |  |   |         | 
|---------------------------- |  | -------------- | ------ | ------ |  | ------- | ------ | ----- |  | - | ------- |  |  | - | ------- | 
|                             |  | Loans maturing
|                             |  |               
|                             |  | Within         |        | 1 to 5 |  | After 5 |        |       |  |  
|(Dollars in thousands)       |  | 1 Year         |        | Years  |  | Years   |        | Total
|                             |  |                |        |        |  |         |        |      
|Loans with:                  |  |                |        |        |  |         |        |       |  |   |         |  |  |   |         | 
|Predetermined interest rates |  | $              | 15,123 |        |  | $       | 31,218 |       |  | $ | 37,396  |  |  | $ | 83,737  | 
|Floating or adjustable rates |  |                | 34,974 |        |  |         | 28,139 |       |  |   | 294,893 |  |  |   | 358,006 | 
|                             |  |                |        |        |  |         |        |       |  |   |         |  |  |   |         | 
|Total Loans                  |  | $              | 50,097 |        |  | $       | 59,357 |       |  | $ | 332,289 |  |  | $ | 441,743 | 
|                             |  |                |        |        |  |         |        |       |  |   |         |  |  |   |         | 

ALLOWANCE AND PROVISION FOR LOAN LOSSES

The allowance for loan losses represents a reserve for potential losses in the
loan portfolio. Our 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, we allocate an allowance for each risk
category. The allocations are based on factors including perceived economic
conditions (local, national and global), perceived strength of our 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 the various types of loans. As above, when appropriate, a
specific reserve will be established for individual loans. Otherwise, we
allocate an allowance for each loan classification. The allocations are based
on the same factors mentioned above.

Since most of the factors that we use in constructing our estimate for the
allowance have been relatively stable in recent years, the provisions we have
used to fund this allowance have been necessitated primarily by the overall
level of loan growth and to replenish the allowance for specific charge-offs.
Because we are principally a commercial bank and have a loan to deposit ratio
greater than 90%, any estimate that is used as a multiplier on loan balances
reflecting our best perception of a particular type of risk has the potential
to have significant income effects if these multipliers change.

Further, since the net result of our calculation for the allowance results in
this amount being approximately 1.0% of outstanding loans, the risks associated
with changes in the underlying factors of this calculation have an asymmetrical
risk to the extent of possible negative as opposed to positive consequences.
In other words, the current allowance reflects factors whose history has
indicated and justified a relatively low allowance in percentage terms. These
factors have limited capacity for improvement since associated risks cannot go
to zero. However, for example, factors such as economic conditions and loan
loss history could conceivably deteriorate dramatically. If that were to
happen, the effect on the allowance calculation would be significant and,
therefore, require a large provision to absorb higher potential losses.

Senior management and the Board of Directors review this calculation and the
underlying assumptions on a routine basis not less frequently than quarterly.

The allowance for loan losses amounted to $4,416,499 and $3,793,842 at December
31, 2002 and December 31, 2001, respectively. Based on an analysis performed
by management at December 31, 2002, the allowance for loan losses is considered
to be adequate to cover loan losses in the portfolio as of that date.
However, 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

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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.

The provision for loan losses is a charge to income in the current period to
replenish the allowance and maintain it at a level that management has
determined to be adequate to absorb estimated losses in the loan portfolio.
Our provision for loan losses was $816,000, $1,124,000, and $332,000 for the
years ended December 31, 2002, 2001, and 2000, respectively. The increase in
the provision for loan losses in 2001 was a result of providing for potential
losses inherent in the portfolio based on the current environment and certain
amounts needed to replenish the allowance as a result of significant charge
offs. In particular, there was approximately $493,000 charged off in 2001 that
was attributable to the nonguaranteed portion of two loans made to one
particular out of market customer.

The allowance for loan losses represented 1.00% of total loans at December 31,
2002 compared to 1.00% and 1.04% at year end 2001 and 2000, respectively.

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Transactions in the allowance for loan losses are summarized for the years
ended December 31,

|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |       |    |    |    | 
|--------------------------------------------------------- | ---------------------------- | ----------------- | -------------------------------------------------- | ------------ | --- | ---- | ----- | ----- | --- | ---- | ----- | ----- | -- | -- | ----- | ----- | --- | -- | ----- | ----- | -- | -- | -- | 
|(In thousands)                                            |                              | 2002              |                                                    | 2001         |     | 2000 |       | 1999  |     | 1998
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |     
|Analysis of allowance for loan losses:                    |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          | Balance at beginning of year |                   | $                                                  | 3,794        |     |      | $     | 3,268 |     |      | $     | 2,997 |    |    | $     | 2,517 |     |    | $     | 2,202 |   
|Charge-offs:                                              |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          |                              |                   | Real estate mortgage loans:                        |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |       |    |    |   
|                                                          |                              |                   |                                                    | Commercial   |     |      | 211   |       |     |      | 372   |       |    |    |      |       |     |    | 30    |       |    |    |   | 
|                                                          |                              |                   |                                                    | Residential  |     |      |      |       |     |      | 21    |       |    |    |      |       |     |    |      |       |    |    | 14 | 
|                                                          |                              |                   |                                                    | Farmland     |     |      |      |       |     |      |      |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   |                                                    | Construction |     |      |      |       |     |      |      |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   | Commercial loans                                   |              |     | 14   |       |       |     | 200  |       |       |    | 27 |       |       |     | 5  |       |       |    | 14 |   
|                                                          |                              |                   | Consumer loans                                     |              |     | 46   |       |       |     | 30   |       |       |    | 27 |       |       |     | 41 |       |       |    | 54 |   
|                                                          |                              |                   | Indirect auto dealer loans                         |              |     | 16   |       |       |     |     |       |       |    |   |       |       |     |   |       |       |    |   |   
|                                                          |                              |                   | Agricultural production and other
loans to farmers |              |     |     |       |       |     |     |       |       |    |   |       |       |     |   |       |       |    |   |   
|                                                          |                              |                   | Home equity loans                                  |              |     | 15   |       |       |     |     |       |       |    | 7  |       |       |     | 32 |       |       |    |   |   
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          |                              | Total charge-offs |                                                    |              | 302 |      |       |       | 623 |      |       |       | 61 |    |       |       | 108 |    |       |       | 82 |   
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|Recoveries:                                               |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          |                              |                   | Real estate mortgage loans:                        |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |       |    |    |   
|                                                          |                              |                   |                                                    | Commercial   |     |      | 84    |       |     |      |      |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   |                                                    | Residential  |     |      |      |       |     |      | 10    |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   |                                                    | Farmland     |     |      |      |       |     |      |      |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   |                                                    | Construction |     |      |      |       |     |      |      |       |    |    |      |       |     |    |      |       |    |    |   | 
|                                                          |                              |                   | Commercial loans                                   |              |     |      |       |       |     | 4    |       |       |    |   |       |       |     |   |       |       |    | 3  |   
|                                                          |                              |                   | Consumer loans                                     |              |     | 24   |       |       |     | 11   |       |       |    |   |       |       |     | 48 |       |       |    | 34 |   
|                                                          |                              |                   | Indirect auto dealer loans                         |              |     |     |       |       |     |     |       |       |    |   |       |       |     |   |       |       |    |   |   
|                                                          |                              |                   | Agricultural production and other
loans to farmers |              |     |     |       |       |     |     |       |       |    |   |       |       |     |   |       |       |    |   |   
|                                                          |                              |                   | Home equity loans                                  |              |     |     |       |       |     |     |       |       |    |   |       |       |     |   |       |       |    |   |   
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          |                              | Total recoveries  |                                                    |              | 108 |      |       |       | 25  |      |       |       | 0  |    |       |       | 48  |    |       |       | 37 |   
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|                                                          |                              | Net charge-offs   |                                                    |              | 194 |      |       |       | 598 |      |       |       | 61 |    |       |       | 60  |    |       |       | 45 |   
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|Provision for loan losses                                 |                              |                   | 816                                                |              |     |      | 1,124 |       |     |      | 332   |       |    |    | 540   |       |     |    | 360   |      
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|Allowance for loan losses at end of year                  |                              | $                 | 4,416                                              |              |     | $    | 3,794 |       |     | $    | 3,268 |       |    | $  | 2,997 |       |     | $  | 2,517 |      
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      
|Ratio of net charge-offs to average
net loans outstanding |                              |                   | 0.05                                               | %            |     |      | 0.17  | %     |     |      | 0.02  | %     |    |    | 0.02  | %     |     |    | 0.02  | %    
|                                                          |                              |                   |                                                    |              |     |      |       |       |     |      |       |       |    |    |       |       |     |    |       |      

The following table represents managements best estimate of the allocation of
the allowance for loan losses to the various segments of the loan portfolio
based on information available as of December 31. Due to the ongoing
evaluation and changes in the basis for the allowance for loan losses, actual
future charge offs will not necessarily follow the allocations described below.

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|                                                   |              |      |           |       |       |      |           |      |       |      |           |       |       |  |           |      |       |  |           |       |       |  |      |      |       |  |       |       |  |  |       |      |  |  |       |       |  |  |      |      | 
|-------------------------------------------------- | ------------ | ---- | --------- | ----- | ----- | ---- | --------- | ---- | ----- | ---- | --------- | ----- | ----- |  | --------- | ---- | ----- |  | --------- | ----- | ----- |  | ---- | ---- | ----- |  | ----- | ----- |  |  | ----- | ---- |  |  | ----- | ----- |  |  | ---- | ---- | 
|(In thousands)                                     |              | 2002 |           | 2001  |       | 2000 |           | 1999 |       | 1998
|                                                   |              |      |           |       |       |      |           |      |       |     
|                                                   |              |      |           |       |       |      | % of      |      |       |      |           |       | % of  |  |           |      |       |  | % of      |       |       |  |      |      | % of  |  |       |       |  |  | % of 
|                                                   |              |      |           |       |       |      | Loans     |      |       |      |           |       | Loans |  |           |      |       |  | Loans     |       |       |  |      |      | Loans |  |       |       |  |  | Loans
|                                                   |              |      |           |       |       |      | to        |      |       |      |           |       | to    |  |           |      |       |  | to        |       |       |  |      |      | to    |  |       |       |  |  | to   
|                                                   |              |      | Allowance |       | total |      | Allowance |      | total |      | Allowance |       | total |  | Allowance |      | total |  | Allowance |       | total
|                                                   |              |      | $         |       | Loans |      | $         |      | Loans |      | $         |       | Loans |  | $         |      | Loans |  | $         |       | Loans
|                                                   |              |      |           |       |       |      |           |      |       |      |           |       |       |  |           |      |       |  |           |       |      
|Real estate mortgage loans:                        |              |      |           |       |       |      |           |      |       |      |           |       |       |  |           |      |       |  |           |       |       |  |      |      |       |  |       |       |  |  |       |      |  |  |       |       |  |  |      |     
|                                                   | Commercial   |      |           | 2,656 |       |      |           | 60.0 |       |      |           | 2,120 |       |  |           | 61.4 |       |  |           | 1,778 |       |  |      | 54.0 |       |  |       | 1,700 |  |  |       | 51.7 |  |  |       | 1,567 |  |  |      | 56.3 | 
|                                                   | Residential  |      |           | 178   |       |      |           | 15.5 |       |      |           | 183   |       |  |           | 18.0 |       |  |           | 706   |       |  |      | 24.4 |       |  |       | 685   |  |  |       | 28.5 |  |  |       | 463   |  |  |      | 25.4 | 
|                                                   | Farmland     |      |           | 4     |       |      |           | 0.1  |       |      |           |      |       |  |           | 0.1  |       |  |           |      |       |  |      |     |       |  |       |      |  |  |       |     |  |  |       |      |  |  |      |     | 
|                                                   | Construction |      |           | 87    |       |      |           | 3.4  |       |      |           | 26    |       |  |           | 1.7  |       |  |           | 43    |       |  |      | 2.4  |       |  |       |      |  |  |       | 3.2  |  |  |       |      |  |  |      | 2.4  | 
|Commercial loans                                   |              |      | 734       |       |       |      | 11.0      |      |       |      | 917       |       |       |  | 12.2      |      |       |  | 414       |       |       |  | 12.3 |      |       |  | 366   |       |  |  | 11.1  |      |  |  | 286   |       |  |  | 10.3 |     
|Consumer loans                                     |              |      | 222       |       |       |      | 2.1       |      |       |      | 170       |       |       |  | 2.5       |      |       |  | 137       |       |       |  | 2.9  |      |       |  | 103   |       |  |  | 2.3   |      |  |  | 83    |       |  |  | 2.3  |     
|Indirect auto dealer loans                         |              |      | 169       |       |       |      | 3.8       |      |       |      |          |       |       |  |          |      |       |  |          |       |       |  |     |      |       |  |      |       |  |  |      |      |  |  |      |       |  |  |     |     
|Agricultural production
and other loans to
farmers |              |      | 6         |       |       |      | 0.1       |      |       |      |          |       |       |  | 0.2       |      |       |  |          |       |       |  |     |      |       |  |      |       |  |  |      |      |  |  |      |       |  |  |     |     
|Home equity loans                                  |              |      | 216       |       |       |      | 4.0       |      |       |      | 259       |       |       |  | 3.9       |      |       |  | 190       |       |       |  | 4.0  |      |       |  | 143   |       |  |  | 3.2   |      |  |  | 118   |       |  |  | 3.3  |     
|Unfunded commitments                               |              |      | 144       |       |       |      |          |      |       |      | 119       |       |       |  |          |      |       |  |          |       |       |  |     |      |       |  |      |       |  |  |      |      |  |  |      |       |  |  |     |     
|                                                   |              |      |           |       |       |      |           |      |       |      |           |       |       |  |           |      |       |  |           |       |       |  |      |      |       |  |       |       |  |  |       |      |  |  |       |       |  |  |      |      | 
|                                                   |              |      | 4,416     |       |       |      | 100       | %    |       |      | 3,794     |       |       |  | 100       | %    |       |  | 3,268     |       |       |  | 100  | %    |       |  | 2,997 |       |  |  | 100   | %    |  |  | 2,517 |       |  |  | 100  | %   
|                                                   |              |      |           |       |       |      |           |      |       |      |           |       |       |  |           |      |       |  |           |       |       |  |      |      |       |  |       |       |  |  |       |      |  |  |       |       |  |  |      |      | 

NON-PERFORMING ASSETS

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.

Non-performing assets for the five years ended December 31, were:

|                                                    |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |      |  
|--------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ---- | -
|(Dollars in thousands)                              |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                    |  |      |       |      |  |      |       |      |  |     
|Loans 90 days past due (a)                          |  | $    |      |      |  | $    |      |      |  | $    | 2,014 |   |  | $ | 1,993 |   |  | $ |     |  
|Loans on nonaccrual                                 |  |      | 546   |      |  |      | 1,590 |      |  |      | 503   |   |  |   | 70    |   |  |   | 521  |  
|Other real estate owned                             |  |      | 550   |      |  |      | 550   |      |  |      |      |   |  |   |      |   |  |   |     |  
|Other assets (b)                                    |  |      | 2,519 |      |  |      | 2,290 |      |  |      |      |   |  |   |      |   |  |   |     |  
|                                                    |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |      |  
|Total non-performing assets                         |  | $    | 3,615 |      |  | $    | 4,430 |      |  | $    | 2,517 |   |  | $ | 2,063 |   |  | $ | 521  |  
|                                                    |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |      |  
|Percentage of
nonperforming assets to
total loans * |  |      | 0.81  | %    |  |      | 1.16  | %    |  |      | 0.80  | % |  |   | 0.71  | % |  |   | 0.21 | %

*     Total loans for 2002 and 2001 include other real estate owned and other
assets.

For the year 2002, interest income
that would have been recorded on nonaccrual loans if the loans had
been current in accordance with their original terms and had been
outstanding throughout the period or since origination, if held for
part of the period, was approximately $13,000. The amount of interest
income on these loans that was included in net income for the period
was approximately $14,000.

(a)  Loans 90 days past due exclude loans on nonaccrual that are reported
separately. The amounts reported 90 days past due in 2000 and 1999 relate to
one specific loan that is discussed in (b) below.

(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.

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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. In addition, the Bank has capitalized liquidation costs
and protective advances totaling approximately $558,000 and $404,000 at
December 31, 2002 and December 31, 2001, respectively, which the Bank expects
to be fully reimbursed for by the USDA. The non guaranteed principal and
interest ($1,961,000 at December 31, 2002 and $1,886,000 at December 31, 2001)
and the capitalized costs totaling approximately $558,000 and $404,000 at
December 31, 2002 and December 31, 2001, 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 December 31, 2002 and December 31, 2001,
respectively, and is accruing interest. Accrued interest on this loan totals
approximately $505,000 and $409,000 at December 31, 2002 and December 31, 2001,
respectively. 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 December 31, 2002, 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 December 31, 2002, the Bank and Company would have
remained well capitalized under the capital adequacy guidelines established by
the federal bank regulators as of that date.

LIQUIDITY AND RATE SENSITIVITY

Liquidity represents the ability to provide steady sources of funds for loan
commitments and investment activities, as well as to provide sufficient funds
to cover deposit withdrawals and payments of debt, off-balance sheet
obligations and operating obligations. Funds can be obtained from operations
by converting assets to cash, by attracting new deposits, by borrowing, by
raising capital and other ways.

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Major sources of increases in cash and cash equivalents are as follows for the
three years ending December 31:

|                                                     |  |      |             |      |  |      |             |   |  |   |             |  
|---------------------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|                                                     |  | 2002 |             | 2001 |  | 2000
|                                                     |  |      |             |      |  |     
|Provided (used) by operating activities              |  | $    | 5,326,190   |      |  | $    | (1,610,754  | ) |  | $ | 3,556,606   |  
|Used by investing activities                         |  |      | (67,199,321 | )    |  |      | (52,050,807 | ) |  |   | (19,932,203 | )
|Provided by financing activities                     |  |      | 64,672,881  |      |  |      | 51,365,976  |   |  |   | 17,776,719  |  
|                                                     |  |      |             |      |  |      |             |   |  |   |             |  
|Net increase (decrease) in cash and
cash equivalents |  | $    | 2,799,750   |      |  | $    | (2,295,585  | ) |  | $ | 1,401,122   |  
|                                                     |  |      |             |      |  |      |             |   |  |   |             |  

As discussed in Note 14 of the consolidated financial statements, the Company
had unfunded loan commitments and unfunded letters of credit totaling $59.2
million at December 31, 2002. The Company believes the likelihood of these
commitments either needing to be totally funded or funded at the same time is
low. However, should significant funding requirements occur, the Company has
available borrowing capacity from various sources as discussed below.

The Bank has an unsecured overnight federal funds purchased accommodation up to
a maximum of $7.5 million from its principal correspondent bank. Further, 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% of the Banks total assets as reported
on the December 31, 2002, financial information submitted to the Banks
regulators. The credit availability from the Federal Home Loan Bank
approximated $79.0 million at December 31, 2002 under which $20 million was
outstanding. Borrowings against this line of credit are collateralized by the
Banks one-to-four family residential mortgage loans.

Scheduled maturities and paydowns of loans and investment securities are a
continual source of liquidity. Also, many adjustable rate residential real
estate loans originated are salable in the secondary mortgage market at par or
better and therefore provide a secondary source for liquidity.

At December 31, 2002, our gross loan to deposit ratio was 91.5% compared to a
ratio of 91.2% at December 31, 2001. Management monitors and assesses the
adequacy of our liquidity position on a monthly basis to ensure that sufficient
sources of liquidity are maintained and available.

Under state banking law, regulatory approval will be required if the total of
all dividends declared in any calendar year by the Bank exceeds the Banks net
profits to date for that year combined with its retained net profits for the
preceding two years. Retained earnings of the Bank available for payment of
dividends to us without prior regulatory approval at December 31, 2002 is
approximately $8,749,000. These dividends represent TIB Financial Corps
primary source of liquidity.

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Our interest rate sensitivity position at December 31, 2002 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                                  |  | $        | 204,936 |        |  | $       | 26,015  |        |  | $      | 37,203  |       |  | $ | 110,751 |   |  | $ | 62,839 |   |  | $ | 441,744 |  
|Investment securities-taxable          |  |          | 5,832   |        |  |         |        |        |  |        | 10,360  |       |  |   | 15,956  |   |  |   | 18,052 |   |  |   | 50,200  |  
|Investment securities-tax exempt       |  |          |        |        |  |         |        |        |  |        | 368     |       |  |   | 1,942   |   |  |   | 3,244  |   |  |   | 5,554   |  
|Federal funds sold                     |  |          | 5,672   |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 5,672   |  
|Interest bearing deposit in other
bank |  |          | 263     |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 263     |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Total interest-bearing assets          |  |          | 216,703 |        |  |         | 26,015  |        |  |        | 47,931  |       |  |   | 128,649 |   |  |   | 84,135 |   |  |   | 503,433 |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Interest-bearing liabilities:          |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|NOW accounts (A)                       |  |          | 20,420  |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   | 30,630 |   |  |   | 51,050  |  
|Money Market                           |  |          | 135,377 |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 135,377 |  
|Savings Deposits (B)                   |  |          |        |        |  |         |        |        |  |        | 31,441  |       |  |   |        |   |  |   |       |   |  |   | 31,441  |  
|Other time deposits                    |  |          | 44,803  |        |  |         | 28,538  |        |  |        | 36,766  |       |  |   | 49,509  |   |  |   |       |   |  |   | 159,616 |  
|Notes payable                          |  |          |        |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   | 5,250  |   |  |   | 5,250   |  
|Trust preferred securities             |  |          | 5,000   |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   | 8,000  |   |  |   | 13,000  |  
|Other borrowings                       |  |          | 24,579  |        |  |         |        |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 24,579  |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Total interest-bearing liabilities     |  |          | 230,179 |        |  |         | 28,538  |        |  |        | 68,207  |       |  |   | 49,509  |   |  |   | 43,880 |   |  |   | 420,313 |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Interest sensitivity gap               |  | $        | (13,476 | )      |  | $       | (2,523  | )      |  | $      | (20,276 | )     |  | $ | 79,140  |   |  | $ | 40,255 |   |  | $ | 83,120  |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Cumulative interest sensitivity gap    |  |          | (13,476 | )      |  |         | (15,999 | )      |  |        | (36,275 | )     |  |   | 42,865  |   |  |   | 83,120 |   |  |   | 83,120  |  
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Cumulative sensitivity ratio           |  |          | (2.7    | %)     |  |         | (3.2    | %)     |  |        | (7.2    | %)    |  |   | 8.5     | % |  |   | 16.5   | % |  |   | 16.5    | %
|                                       |  |          |         |        |  |         |         |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  

(A)  40% of outstanding balance considered repricable immediately and 60%
repricable in the furthest time period.

(B)  Savings Deposits considered repricable in the one year time horizon.

We are cumulatively asset sensitive in the 1 to 5 years and over 5 years time
frame and cumulatively liability sensitive in each of the 3 month or less, 4 to
6 months, and 7 to 12 month timeframes. 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, we believe to
include the entire balance of these liability accounts in the earliest
repricing period would be unrealistic. To compensate for changes in general
market interest rates that will not be fully reflected in changes in NOW rates,
only 40% of NOW balances are included as immediately rate sensitive based on
our 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 our
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 should decrease. Conversely, if rates
increase, the net interest margin would over time increase and this is
particularly true over longer time horizons since we have more total assets
subject to rate changes than total liabilities that are rate sensitive.

Even in the near term, the $36,275 one year cumulative negative 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 any specific market rate and therefore offer us the opportunity to
delay or diminish any rate

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repricings. Second, a static gap model does not
factor the effects of growing volumes which would likely include greater
additional rate sensitive assets than rate sensitive liabilities. 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 due to the fact that these loans behave similar to fixed rate loans in
periods that have 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 we have experienced
steady growth in deposits, no net run off in any deposit category is assumed in
the interest rate sensitivity table. It is our policy to maintain its
cumulative one year gap ratio in the 20% to +10% range. At December 31, 2002,
the Company was within this range with a one year cumulative sensitivity ratio of -7.2%.

INVESTMENT PORTFOLIO

Contractual maturities of investment securities (amortized cost) at December
31, 2002 are shown below. Expected maturities differ from contractual
maturities because borrowers may have the right to call or repay obligations
without call or prepayment penalties.

|                               |                                                   |        |               |       |                |        |                 |       |                |        |              |        |               |        |      |       |   |        |        |        |  |  |          |      |   |   |       |       |  |  |      |      |   |   |        |        | 
|------------------------------ | ------------------------------------------------- | ------ | ------------- | ----- | -------------- | ------ | --------------- | ----- | -------------- | ------ | ------------ | ------ | ------------- | ------ | ---- | ----- | - | ------ | ------ | ------ |  |  | -------- | ---- | - | - | ----- | ----- |  |  | ---- | ---- | - | - | ------ | ------ | 
|                               |                                                   |        |               |       |                |        |                 |       |                |        | After 1 Year |        | After 5 Years |        |      |       |   |        |        |        |  |  | Mortgage
|                               |                                                   |        | Within 1 Year |       | Within 5 Years |        | Within 10 Years |       | After 10 Years |        | Backed      
|                               |                                                   |        |               |       |                |        |                 |       |                |        |             
|(Dollars in thousands)         |                                                   | Amount |               | Yield |                | Amount |                 | Yield |                | Amount |              | Yield  |               | Amount |      | Yield |   | Amount
|                               |                                                   |        |               |       |                |        |                 |       |                |        |              |        |               |        |      |       |   |       
|Securities Available for sale: |                                                   |        |               |       |                |        |                 |       |                |        |              |        |               |        |      |       |   |        |        |        |  |  |          |      |   |   |       |       |  |  |      |      |   |   |        |       
|                               | U.S. Treasury Securities                          |        | $             |      |                |        |                 |      |                |        | $            | 213    |               |        |      | 3.61  | % |        | $      |       |  |  |          |     |   |   | $     |      |  |  |      |     |   |   | $      |       | 
|                               | U.S. Govt agencies and
corporations              |        |               |      |                |        |                 |      |                |        |              | 15,230 |               |        |      | 3.89  | % |        |        | 13,103 |  |  |          | 5.89 | % |   |       |      |  |  |      |     |   |   |        |       | 
|                               | States and political
subdivisions  tax
exempt(A) |        |               |      |                |        |                 |      |                |        |              | 1,514  |               |        |      | 7.14  | % |        |        | 2,833  |  |  |          | 7.03 | % |   |       | 825   |  |  |      | 7.48 | % |   |        |       | 
|                               | States and political
subdivisions  taxable       |        |               |      |                |        |                 |      |                |        |              |       |               |        |      |      |   |        |        | 4,121  |  |  |          | 6.24 | % |   |       | 259   |  |  |      | 6.59 | % |   |        |        | 
|                               | Mortgage backed securities                        |        |               |      |                |        |                 |      |                |        |              |       |               |        |      |      |   |        |        |       |  |  |          |     |   |   |       |      |  |  |      |     |   |   |        | 14,383 | 
|                               | Other investments (B)                             |        |               |      |                |        |                 |      |                |        |              |       |               |        |      |      |   |        |        |       |  |  |          |     |   |   |       | 1,486 |  |  |      | 4.58 | % |   |        |       | 
|                               |                                                   |        |               |       |                |        |                 |       |                |        |              |        |               |        |      |       |   |        |        |        |  |  |          |      |   |   |       |       |  |  |      |      |   |   |        |        | 
|Total                          |                                                   | $      |              |       |                |        |                 |       |                | $      | 16,957       |        |               |        | 4.18 | %     |   | $      | 20,057 |        |  |  | 6.12     | %    |   | $ | 2,570 |       |  |  | 5.71 | %    |   | $ | 14,383 |       
|                               |                                                   |        |               |       |                |        |                 |       |                |        |              |        |               |        |      |       |   |        |        |        |  |  |          |      |   |   |       |       |  |  |      |      |   |   |        |       

Yield by classification of investment securities at December 31, 2002
(amortized cost) was as follows:

|                               |                                                    |       |      |        |   |   |        |        | 
|------------------------------ | -------------------------------------------------- | ----- | ---- | ------ | - | - | ------ | ------ | 
|(Dollars in thousands)         |                                                    | Yield |      | Totals
|                               |                                                    |       |      |       
|Securities Available for Sale: |                                                    |       |      |        |   |   |        |       
|                               | U.S. Treasury Securities                           |       |      | 3.61   | % |   | $      | 213    | 
|                               | U.S. Govt agencies and corporations               |       |      | 4.82   | % |   |        | 28,333 | 
|                               | States and political subdivisions - tax exempt (A) |       |      | 7.13   | % |   |        | 5,172  | 
|                               | States and political subdivisions - taxable        |       |      | 6.26   | % |   |        | 4,380  | 
|                               | Mortgage back securities                           |       |      | 6.18   | % |   |        | 14,383 | 
|                               | Other investments (B)                              |       |      | 4.58   | % |   |        | 1,486  | 
|                               |                                                    |       |      |        |   |   |        |       
|Total                          |                                                    |       | 5.50 | %      |   | $ | 53,967 |       
|                               |                                                    |       |      |        |   |   |        |       

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(A)    Weighted average yields on tax-exempt obligations have been computed by
grossing up actual tax-exempt income to a fully taxable equivalent basis
using a federal tax rate of 34%.




(B)    Represents investment in common stock of Independent Bankers Bank of
Florida stock which pays no dividends and an investment in the Federal
Home Loan Bank of Atlanta.


The following table presents the amortized cost, market value, unrealized
gains, and unrealized losses for the major categories of our investment
portfolio for each reported period:

(Dollars in thousands)

Available for Sale - December 31, 2002

|                                             |  |           |        |            |  |            |       |       |  |   |   |  |  |   |        | 
|-------------------------------------------- |  | --------- | ------ | ---------- |  | ---------- | ----- | ----- |  | - | - |  |  | - | ------ | 
|                                             |  | Amortized |        | Unrealized |  | Unrealized |       | Fair 
|                                             |  | Cost      |        | Gains      |  | Losses     |       | Value
|                                             |  |           |        |            |  |            |       |      
|U.S. Treasury Securities                     |  | $         | 213    |            |  | $          | 11    |       |  | $ |  |  |  | $ | 224    | 
|U.S. Government agencies and corporations    |  |           | 28,333 |            |  |            | 884   |       |  |   |  |  |  |   | 29,217 | 
|States and political subdivisions-tax
exempt |  |           | 5,172  |            |  |            | 382   |       |  |   |  |  |  |   | 5,554  | 
|States and political subdivisions-taxable    |  |           | 4,380  |            |  |            | 89    |       |  |   | 9 |  |  |   | 4,460  | 
|Mortgage backed securities                   |  |           | 14,383 |            |  |            | 430   |       |  |   |  |  |  |   | 14,813 | 
|Other investments                            |  |           | 1,486  |            |  |            |      |       |  |   |  |  |  |   | 1,486  | 
|                                             |  |           |        |            |  |            |       |       |  |   |   |  |  |   |        | 
|                                             |  | $         | 53,967 |            |  | $          | 1,796 |       |  |   | 9 |  |  | $ | 55,754 | 
|                                             |  |           |        |            |  |            |       |       |  |   |   |  |  |   |        | 

Held to Maturity - December 31, 2001

|                                          |  |           |        |            |  |            |     |       |  |   |   |  |  |   |        | 
|----------------------------------------- |  | --------- | ------ | ---------- |  | ---------- | --- | ----- |  | - | - |  |  | - | ------ | 
|                                          |  | Amortized |        | Unrealized |  | Unrealized |     | Fair 
|                                          |  | Cost      |        | Gains      |  | Losses     |     | Value
|                                          |  |           |        |            |  |            |     |      
|U.S. Treasury Securities                  |  | $         | 206    |            |  | $          | 4   |       |  | $ |  |  |  | $ | 210    | 
|U.S. Government
agencies and
corporations |  |           | 16,674 |            |  |            | 298 |       |  |   |  |  |  |   | 16,972 | 
|Other investments                         |  |           | 1,626  |            |  |            |    |       |  |   |  |  |  |   | 1,626  | 
|                                          |  |           |        |            |  |            |     |       |  |   |   |  |  |   |        | 
|                                          |  | $         | 18,506 |            |  | $          | 302 |       |  | $ |  |  |  | $ | 18,808 | 
|                                          |  |           |        |            |  |            |     |       |  |   |   |  |  |   |        | 

Available for Sale - December 31, 2001

|                                             |  |           |        |            |  |            |     |       |  |   |     |  |  |   |        | 
|-------------------------------------------- |  | --------- | ------ | ---------- |  | ---------- | --- | ----- |  | - | --- |  |  | - | ------ | 
|                                             |  | Amortized |        | Unrealized |  | Unrealized |     | Fair 
|                                             |  | Cost      |        | Gains      |  | Losses     |     | Value
|                                             |  |           |        |            |  |            |     |      
|U.S. Treasury Securities                     |  | $         | 3,017  |            |  | $          | 72  |       |  | $ |    |  |  | $ | 3,089  | 
|U.S. Government agencies and corporations    |  |           | 106    |            |  |            | 1   |       |  |   |    |  |  |   | 107    | 
|States and political subdivisions-tax
exempt |  |           | 5,743  |            |  |            | 90  |       |  |   | 1   |  |  |   | 5,832  | 
|States and political subdivisions-taxable    |  |           | 5,017  |            |  |            | 49  |       |  |   | 269 |  |  |   | 4,797  | 
|Corporate bonds                              |  |           | 3,173  |            |  |            | 37  |       |  |   |    |  |  |   | 3,210  | 
|Mortgage-backed securities                   |  |           | 18,360 |            |  |            | 84  |       |  |   | 5   |  |  |   | 18,439 | 
|                                             |  |           |        |            |  |            |     |       |  |   |     |  |  |   |        | 
|                                             |  | $         | 35,416 |            |  | $          | 333 |       |  | $ | 275 |  |  | $ | 35,474 | 
|                                             |  |           |        |            |  |            |     |       |  |   |     |  |  |   |        | 

Held to Maturity - December 31, 2000

|                                          |  |           |        |            |  |            |   |       |  |   |     |  |  |   |        | 
|----------------------------------------- |  | --------- | ------ | ---------- |  | ---------- | - | ----- |  | - | --- |  |  | - | ------ | 
|                                          |  | Amortized |        | Unrealized |  | Unrealized |   | Fair 
|                                          |  | Cost      |        | Gains      |  | Losses     |   | Value
|                                          |  |           |        |            |  |            |   |      
|U.S. Treasury Securities                  |  | $         | 101    |            |  | $          |  |       |  | $ |    |  |  | $ | 101    | 
|U.S. Government
agencies and
corporations |  |           | 33,164 |            |  |            |  |       |  |   | 661 |  |  |   | 32,503 | 
|Other investments                         |  |           | 1,189  |            |  |            |  |       |  |   |    |  |  |   | 1,189  | 
|                                          |  |           |        |            |  |            |   |       |  |   |     |  |  |   |        | 
|                                          |  | $         | 34,454 |            |  | $          |  |       |  | $ | 661 |  |  | $ | 33,793 | 
|                                          |  |           |        |            |  |            |   |       |  |   |     |  |  |   |        | 

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Available for Sale - December 31, 2000

|                                             |  |           |        |            |  |            |     |       |  |   |    |  |  |   |        | 
|-------------------------------------------- |  | --------- | ------ | ---------- |  | ---------- | --- | ----- |  | - | -- |  |  | - | ------ | 
|                                             |  | Amortized |        | Unrealized |  | Unrealized |     | Fair 
|                                             |  | Cost      |        | Gains      |  | Losses     |     | Value
|                                             |  |           |        |            |  |            |     |      
|U.S. Treasury Securities                     |  | $         | 3,039  |            |  | $          |    |       |  | $ | 5  |  |  | $ | 3,034  | 
|States and political subdivisions-tax
exempt |  |           | 5,738  |            |  |            | 90  |       |  |   |   |  |  |   | 5,828  | 
|States and political subdivisions-taxable    |  |           | 1,564  |            |  |            | 26  |       |  |   | 63 |  |  |   | 1,527  | 
|Mortgage-backed securities                   |  |           | 24,180 |            |  |            | 186 |       |  |   | 1  |  |  |   | 24,365 | 
|                                             |  |           |        |            |  |            |     |       |  |   |    |  |  |   |        | 
|                                             |  | $         | 34,521 |            |  | $          | 302 |       |  | $ | 69 |  |  | $ | 34,754 | 
|                                             |  |           |        |            |  |            |     |       |  |   |    |  |  |   |        | 

In June of 2002, the Company
transferred investment securities in the held to maturity category to
the available for sale category. The book value at the time of
transfer was $18,507,916 and the market value was $18,941,377.
Securities in the available for sale category allow for more
flexibility in managing the investments for the Bank. Since changes in
market value do not affect the regulatory capital ratios of the Bank
there is no compelling reason to not have the ability to sell
securities when appropriate. Securities maintained in the held to
maturity portfolio does limit the volatility of GAAP capital,
however, as the Bank has trended toward higher loan to deposit ratios
(therefore low investments to asset ratios) the probable amount of
this volatility has become much less significant relative to the size
of the Bank.

DEPOSITS

The following table presents the average amount outstanding and the average
rate paid on deposits by us for the years ended December 31, 2002, 2001, and
2000.

|                             |  |        |         |      |         |        |         |      |         |        |         |      |         |  |      |   |  |   |         |  |  |  |      |   | 
|---------------------------- |  | ------ | ------- | ---- | ------- | ------ | ------- | ---- | ------- | ------ | ------- | ---- | ------- |  | ---- | - |  | - | ------- |  |  |  | ---- | - | 
|                             |  |        | 2002    |      | 2001    |        | 2000    |      |         |        |        
|                             |  |        |         |      |         |        |        
|                             |  |        | Average |      | Average |        | Average |      | Average |        | Average |      | Average
|(Dollars in thousands)       |  | Amount |         | Rate |         | Amount |         | Rate |         | Amount |         | Rate
|                             |  |        |         |      |         |        |         |      |         |        |         |     
|Noninterest-bearing deposits |  | $      | 95,324  |      |         |        |         |      |         | $      | 80,382  |      |         |  |      |   |  | $ | 76,089  |  |  |  |      |  
|Interest-bearing
deposits   
|NOW Accounts                 |  |        | 50,481  |      |         |        | 0.53    | %    |         |        | 42,461  |      |         |  | 1.19 | % |  |   | 34,814  |  |  |  | 1.46 | %
|Money market                 |  |        | 131,384 |      |         |        | 1.36    | %    |         |        | 128,056 |      |         |  | 3.65 | % |  |   | 112,519 |  |  |  | 5.29 | %
|Savings deposit              |  |        | 29,891  |      |         |        | 0.75    | %    |         |        | 24,619  |      |         |  | 1.80 | % |  |   | 22,719  |  |  |  | 2.31 | %
|Other time deposits          |  |        | 149,061 |      |         |        | 4.03    | %    |         |        | 143,230 |      |         |  | 5.79 | % |  |   | 116,107 |  |  |  | 5.98 | %
|                             |  |        |         |      |         |        |         |      |         |        |         |      |         |  |      |   |  |   |         |  |  |  |      |  
|Total                        |  | $      | 456,141 |      |         |        | 1.82    | %    |         | $      | 418,748 |      |         |  | 3.32 | % |  | $ | 362,248 |  |  |  | 3.85 | %
|                             |  |        |         |      |         |        |         |      |         |        |         |      |         |  |      |   |  |   |         |  |  |  |      |  

The following table presents the maturity of our time deposits at December 31,
2002:

|                       |              |             |          |          |           |       |        |        |  |   |         |        | 
|---------------------- | ------------ | ----------- | -------- | -------- | --------- | ----- | ------ | ------ |  | - | ------- | ------ | 
|                       |              |             | Deposits |          | Deposits  |       |        |        | 
|                       |              |             | $100,000 |          | Less than |       |        |        | 
|(Dollars in thousands) |              | and Greater |          | $100,000 |           | Total
|                       |              |             |          |          |           |      
|Months to maturity:    |              |             |          |          |           |       |        |        |  |   |         |       
|                       | 3 or less    |             | $        | 23,257   |           |       | $      | 20,706 |  |   | $       | 43,963 | 
|                       | 4 to 6       |             |          | 11,811   |           |       |        | 16,878 |  |   |         | 28,689 | 
|                       | 7 through 12 |             |          | 16,141   |           |       |        | 20,761 |  |   |         | 36,902 | 
|                       | Over 12      |             |          | 22,300   |           |       |        | 27,762 |  |   |         | 50,062 | 
|                       |              |             |          |          |           |       |        |        |  |   |         |       
|Total                  |              | $           | 73,509   |          |           | $     | 86,107 |        |  | $ | 159,616 |       
|                       |              |             |          |          |           |       |        |        |  |   |         |       

CAPITAL ADEQUACY

There are various primary measures of capital adequacy for banks and financial
holding companies such as risk based capital guidelines and the leverage
capital ratio. See Business-Supervision and Regulation.

As of December 31, 2002, the Bank exceeded its required levels of capital for a
bank categorized by the FDIC as well capitalized under the regulatory framework
for prompt corrective action. The Banks risk-based capital ratio of Tier 1
capital to risk-weighted assets was 9.8%, its risk-based ratio of total capital
to risk-weighted assets was 10.8%, and its leverage ratio was 8.3%. See Note
13 to the Consolidated Financial Statements.

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INFLATION

Inflation has an important impact on the growth of total assets in the banking
industry and causes a need to increase equity capital higher than normal levels
in order to maintain an appropriate equity to assets ratio. We have been able
to maintain an adequate level of equity, as previously mentioned and cope with
the effects of inflation by managing our interest rate sensitivity gap position
through our asset/liability management program, and by periodically adjusting
our pricing of services and banking products to take into consideration current
costs.

RECENT ACCOUNTING PRONOUNCEMENTS

In October 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, a
replacement of SFAS No. 125. The new statement revises accounting criteria for
securitizations, other financial asset transfers, and collateral and introduces
new disclosures, but otherwise carries forward most of SFAS No. 125s
provisions without amendment. The statement is effective for reporting periods
beginning after March 31, 2001, and the disclosure provisions are effective for
fiscal years ending after December 15, 2000. The adoption of SFAS 140 has not
had a significant impact on our consolidated financial statements.

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 141, Business Combinations and SFAS
No.142, Goodwill and Other Intangible Assets. SFAS No. 141 addresses the
initial recognition and measurement of goodwill and other intangible assets
acquired in a business combination and SFAS No. 142 addresses the initial
recognition and measurement of intangible assets acquired outside of a business
combination whether acquired individually or with a group of other assets.
These standards require all future business combinations to be accounted for
using the purchase method of accounting. Goodwill will no longer be amortized
but instead will be subject to impairment tests at least annually. We adopted
SFAS No. 141 on July 1, 2001, and adopted SFAS 142 on a prospective basis as of
January 1, 2002.

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
addresses accounting and reporting for the impairment or disposal of long-lived
assets. SFAS No. 144 supersedes SFAS No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. SFAS No.
144 establishes a single accounting model for long-lived assets to be disposed
of by sale and expands on the guidance provided by SFAS No. 121 with respect to
cash flow estimations. SFAS No. 144 was effective for our fiscal year
beginning January 1, 2002. There was no current impact of adoption on our
financial position or results of operations.

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 our 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

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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 included in
their financial statements.

Critical Accounting Policies

In reviewing and understanding financial information for the Company, you are
encouraged to read and understand the significant accounting policies which are
used in preparing the consolidated financial statements of the Company. These
policies are described in Note 1 to the consolidated financial statements which
are included in Item 8 of this filing. Of these policies, Management believes
that the accounting for the allowance for loan losses is the most critical.

Losses on loans result from a broad range of causes from borrower specific
problems, to industry issues, to the impact of the economic environment. The
identification of these factors that lead to default or non-performance under a
borrower loan agreement and the estimation of loss in these situations are very
subjective. In addition, a dramatic change in the performance of one or a small
number of borrowers can have a significant impact on the estimate of losses. As
described above under the Allowance and Provision for Loan Losses heading,
management has implemented a process that has been applied consistently to
systematically consider the many variables that impact the estimation of the
allowance for loan losses.

If the allowance for loan losses had changed by five percent, the effect on net
income would have been approximately $221,000. This increase would not have
changed the Banks status as a well capitalized financial institution.

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SELECTED QUARTERLY DATA

The following is a summary of unaudited quarterly results for 2002 and 2001:



|                                                             |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|------------------------------------------------------------ |  | ------ | ----- | ----- |  | ------ | ------ | ----- |  | - | ------ |  |  | - | ------ | 
|                                                             |  | 2002  
|                                                             |  |       
|                                                             |  | Fourth |       | Third |  | Second |        | First
|                                                             |  |        |       |       |  |        |        |      
|Condensed income statements (dollars in thousands):          |  |        |       |       |  |        |        |      
|Net interest income                                          |  | $      | 5,588 |       |  | $      | 5,239  |       |  | $ | 5,198  |  |  | $ | 4,962  | 
|Provision for loan
losses                                    |  |        | 409   |       |  |        | 125    |       |  |   | 147    |  |  |   | 135    | 
|                                                             |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net interest income
after provision for loan losses          |  |        | 5,179 |       |  |        | 5,114  |       |  |   | 5,051  |  |  |   | 4,827  | 
|Other income                                                 |  |        | 3,245 |       |  |        | 2,732  |       |  |   | 2,927  |  |  |   | 3,094  | 
|Other expense                                                |  |        | 6,532 |       |  |        | 6,064  |       |  |   | 6,290  |  |  |   | 6,084  | 
|                                                             |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|Income before tax
expense                                    |  |        | 1,892 |       |  |        | 1,782  |       |  |   | 1,688  |  |  |   | 1,837  | 
|Income tax expense                                           |  |        | 670   |       |  |        | 561    |       |  |   | 587    |  |  |   | 646    | 
|                                                             |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net income                                                   |  | $      | 1,222 |       |  | $      | 1,221  |       |  | $ | 1,101  |  |  | $ | 1,191  | 
|                                                             |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|Per
share:                                                   |  |        |       |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net income - basic                                           |  | $      | 0.30  |       |  | $      | 0.30   |       |  | $ | 0.28   |  |  | $ | 0.30   | 
|Net income - diluted                                         |  | $      | 0.29  |       |  | $      | 0.29   |       |  | $ | 0.27   |  |  | $ | 0.29   | 
|Dividends                                                    |  | $      | 0.11  |       |  | $      | 0.1075 |       |  | $ | 0.1075 |  |  | $ | 0.1075 | 
|Average
common equivalent shares
outstanding (in thousands): |  |        |       |       |  |        |        |      
|Basic                                                        |  |        | 4,023 |       |  |        | 4,013  |       |  |   | 3,982  |  |  |   | 3,952  | 
|Diluted                                                      |  |        | 4,169 |       |  |        | 4,168  |       |  |   | 4,147  |  |  |   | 4,102  | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                             |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|------------------------------------------------------------ |  | ------ | ------ | ----- |  | ------ | ------ | ----- |  | - | ------ |  |  | - | ------ | 
|                                                             |  | 2001  
|                                                             |  |       
|                                                             |  | Fourth |        | Third |  | Second |        | First
|                                                             |  |        |        |       |  |        |        |      
|Condensed income statements (dollars in thousands):          |  |        |        |       |  |        |        |      
|Net interest income                                          |  | $      | 4,626  |       |  | $      | 4,628  |       |  | $ | 4,449  |  |  | $ | 4,217  | 
|Provision for loan
losses                                    |  |        | 519    |       |  |        | 335    |       |  |   | 135    |  |  |   | 135    | 
|                                                             |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net interest income
after provision for loan losses          |  |        | 4,107  |       |  |        | 4,293  |       |  |   | 4,314  |  |  |   | 4,082  | 
|Other income                                                 |  |        | 3,154  |       |  |        | 2,862  |       |  |   | 2,648  |  |  |   | 2,625  | 
|Other expense                                                |  |        | 5,598  |       |  |        | 5,564  |       |  |   | 5,560  |  |  |   | 5,439  | 
|                                                             |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|Income before tax
expense                                    |  |        | 1,663  |       |  |        | 1,591  |       |  |   | 1,402  |  |  |   | 1,268  | 
|Income tax expense                                           |  |        | 541    |       |  |        | 558    |       |  |   | 490    |  |  |   | 441    | 
|                                                             |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net income                                                   |  | $      | 1,122  |       |  | $      | 1,033  |       |  | $ | 912    |  |  | $ | 827    | 
|                                                             |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|Per
share:                                                   |  |        |        |       |  |        |        |       |  |   |        |  |  |   |        | 
|Net income - basic                                           |  | $      | 0.28   |       |  | $      | 0.26   |       |  | $ | 0.23   |  |  | $ | 0.21   | 
|Net income - diluted                                         |  | $      | 0.27   |       |  | $      | 0.25   |       |  | $ | 0.22   |  |  | $ | 0.20   | 
|Dividends                                                    |  | $      | 0.1075 |       |  | $      | 0.1075 |       |  | $ | 0.1075 |  |  | $ | 0.1075 | 
|Average
common equivalent shares
outstanding (in thousands): |  |        |        |       |  |        |        |      
|Basic                                                        |  |        | 3,943  |       |  |        | 3,930  |       |  |   | 3,916  |  |  |   | 3,906  | 
|Diluted                                                      |  |        | 4,091  |       |  |        | 4,114  |       |  |   | 4,122  |  |  |   | 4,056  | 




ITEM 7A.      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. We have assessed our market risk as predominately interest rate
risk.

The following interest rate sensitivity analysis information as of December 31,
2002 was developed using simulation analysis of our 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 our market under varying rate environments. The
imbedded options that our 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.

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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, we have 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% floor. We
currently have in excess of $121 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 our 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 our
overall rate sensitivity.

We attempt 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.

|                                          |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        |  
|----------------------------------------- |  | ----------------------- | ------ | -------------- |  | ----------------------- | ------ | ------ |  | ----- | ------ |  |  | - | ------ | - |  | - | ------ | -
|                                          |  | Interest Rates Decrease |        | Interest Rates |  | Interest Rates Increase
|(Dollars in thousands)                    |  | 200 BP                  |        | 100 BP         |  | Remain Constant         |        | 100 BP |  | 200BP
|                                          |  |                         |        |                |  |                         |        |        |  |      
|2003 Interest Income                      |  | $                       | 31,227 |                |  | $                       | 33,429 |        |  | $     | 35,695 |  |  | $ | 37,760 |   |  | $ | 40,148 |  
|2003 Interest Expense                     |  |                         | 6,513  |                |  |                         | 7,528  |        |  |       | 9,807  |  |  |   | 12,323 |   |  |   | 14,839 |  
|                                          |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        |  
|Net Interest Income                       |  |                         | 24,714 |                |  |                         | 25,901 |        |  |       | 25,888 |  |  |   | 25,437 |   |  |   | 25,309 |  
|                                          |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        |  
|Change in net income after tax vs. budget |  | $                       | (733   | )              |  | $                       | 8      |        |  |       |        |  |  | $ | (281   | ) |  | $ | (361   | )

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ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements, notes thereto and report of independent
certified public accountants thereon included on the following pages are
incorporated herein by reference.

Index to Consolidated Financial Statements

|                                                                                                                |  |      
|--------------------------------------------------------------------------------------------------------------- |  | -----
|                                                                                                                |  | Page 
|Report of Independent Certified Public Accountants                                                              |  | 36   
|Consolidated Balance Sheets for
the Years Ended December 31, 2002 and 2001                                      |  | 37   
|Consolidated Statements of Income
for the Years Ended December 31, 2002, 2001 and 2000                          |  | 38-39
|Consolidated Statements of
Changes in Stockholders Equity for the Years Ended December 31, 2002, 2001 and 2000 |  | 40-41
|Consolidated Statements of Cash
Flows for the Years Ended December 31, 2002, 2001 and 2000                      |  | 42-44
|Notes to Consolidated Financial
Statements for the Years Ended December 31, 2002, 2001 and 2000                 |  | 45-75

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Report of Independent Certified Public Accountants

The Board of Directors and Stockholders
TIB Financial Corp.
Key Largo, Florida

We have audited the accompanying consolidated balance sheets of TIB Financial
Corp. and its subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of income, changes in stockholders equity and cash
flows for each of the three years in the period ended December 31, 2002. These
consolidated financial statements are the responsibility of TIB Financial
Corp.s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of TIB
Financial Corp. and its subsidiaries as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America.

/S/ BDO SEIDMAN,
LLP

---

February 21, 2003
Atlanta, Georgia

36



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##### Table of Contents



TIB Financial Corp. and Subsidiaries

Consolidated Balance Sheets

|                                                                |                                                                                                   |                                          |             |            |             |   |             |            |             | 
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------------------------------- | ----------- | ---------- | ----------- | - | ----------- | ---------- | ----------- | 
|December 31,                                                    |                                                                                                   | 2002                                     |             | 2001      
|                                                                |                                                                                                   |                                          |             |           
|Assets                                                          |                                                                                                   |                                          |             |            |             |   |             |           
|Cash and due from banks (Note 2)                                |                                                                                                   | $                                        | 18,397,659  |            |             | $ | 21,269,909  |           
|Federal funds sold                                              |                                                                                                   |                                          | 5,672,000   |            |             |   |            |           
|Investment securities held to maturity (Note 3)                 |                                                                                                   |                                          |            |            |             |   | 18,505,912  |           
|Investment securities available for sale (Note 3)               |                                                                                                   |                                          | 55,753,890  |            |             |   | 35,473,748  |           
|Loans, net of deferred loan costs and fees (Notes 4, 12 and 14) |                                                                                                   |                                          | 442,527,934 |            |             |   | 378,946,753 |           
|Less: Allowance for loan losses (Note 4)                        |                                                                                                   |                                          | 4,416,499   |            |             |   | 3,793,842   |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Loans, net                                                      |                                                                                                   |                                          | 438,111,435 |            |             |   | 375,152,911 |           
|Premises and equipment, net (Note 5)                            |                                                                                                   |                                          | 19,457,150  |            |             |   | 17,633,154  |           
|Goodwill (Note 6)                                               |                                                                                                   |                                          | 2,234,024   |            |             |   | 2,305,405   |           
|Intangible assets, net (Note 6)                                 |                                                                                                   |                                          | 1,978,918   |            |             |   | 2,276,006   |           
|Other assets (Note 10 and 11)                                   |                                                                                                   |                                          | 25,399,570  |            |             |   | 21,375,200  |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Total Assets                                                    |                                                                                                   | $                                        | 567,004,646 |            |             | $ | 493,992,245 |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Liabilities
and Stockholders Equity                           
|Liabilities                                                     |                                                                                                   |                                          |             |            |             |   |             |           
|                                                                | Deposits (Note 7):                                                                                |                                          |             |            |             |   |             |            |            
|                                                                |                                                                                                   | Noninterest-bearing demand               |             | $          | 105,199,483 |   |             | $          | 82,110,626  | 
|                                                                |                                                                                                   | Interest-bearing demand and money market |             |            | 186,426,703 |   |             |            | 175,742,070 | 
|                                                                |                                                                                                   | Savings                                  |             |            | 31,440,801  |   |             |            | 26,132,494  | 
|                                                                |                                                                                                   | Time deposits of $100,000 or more        |             |            | 73,509,232  |   |             |            | 56,345,992  | 
|                                                                |                                                                                                   | Other time deposits                      |             |            | 86,107,232  |   |             |            | 75,404,677  | 
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Total deposits                                                  |                                                                                                   |                                          | 482,683,451 |            |             |   | 415,735,859 |           
|                                                                | Federal Home Loan Bank advances (Note 8)                                                          |                                          |             | 20,000,000 |             |   |             | 25,000,000 |            
|                                                                | Short-term borrowings (Note 8)                                                                    |                                          |             | 4,578,959  |             |   |             | 733,760    |            
|                                                                | Notes payable (Note 9)                                                                            |                                          |             | 5,250,000  |             |   |             | 5,250,000  |            
|                                                                | Trust preferred securities (Note 9)                                                               |                                          |             | 13,000,000 |             |   |             | 13,000,000 |            
|                                                                | Other liabilities (Note 10 and 11)                                                                |                                          |             | 7,986,159  |             |   |             | 5,600,534  |            
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Total liabilities                                               |                                                                                                   |                                          | 533,498,569 |            |             |   | 465,320,153 |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Commitments and contingent liabilities (Notes 5 and 14)         |                                                                                                   |                                          |             |            |             |   |             |           
|Stockholders equity(Note 13)                                   |                                                                                                   |                                          |             |            |             |   |             |           
|                                                                | Common
stock - $.10 par value: 7,500,000 shares authorized,
4,035,625 and 3,946,100 shares issued |                                          |             | 403,563    |             |   |             | 394,610    |            
|                                                                | Additional paid in capital                                                                        |                                          |             | 8,965,816  |             |   |             | 8,221,937  |            
|                                                                | Retained earnings                                                                                 |                                          |             | 23,021,698 |             |   |             | 20,019,145 |            
|                                                                | Accumulated other comprehensive income                                                            |                                          |             | 1,115,000  |             |   |             | 36,400     |            
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Total stockholders equity                                      |                                                                                                   |                                          | 33,506,077  |            |             |   | 28,672,092  |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           
|Total Liabilities and Stockholders Equity                      |                                                                                                   | $                                        | 567,004,646 |            |             | $ | 493,992,245 |           
|                                                                |                                                                                                   |                                          |             |            |             |   |             |           

See accompanying notes to consolidated financial statements.

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TIB Financial Corp. and Subsidiaries

Consolidated Statements of Income

|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|--------------------------------------------------- | ----------------------------------------- | -------------------------------------------------------------------------------------------- | ---------- | ---------- | --------- | ---- | ---------- | ---------- | --------- | - | ---------- | ---------- | --------- | 
|Years ended December 31,                            |                                           | 2002                                                                                         |            | 2001       |           | 2000
|                                                    |                                           |                                                                                              |            |            |           |     
|Interest income                                     |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |           
|                                                    | Loans, including fees                     |                                                                                              | $          | 27,782,738 |           |      | $          | 29,078,461 |           |   | $          | 28,393,976 |          
|                                                    | Investment securities:                    |                                                                                              |            |            |           |      |            |            |           |   |            |            |          
|                                                    |                                           | U.S. Treasury securities                                                                     |            |            | 124,202   |      |            |            | 161,750   |   |            |            | 795,385   | 
|                                                    |                                           | U.S. Government agencies and corporations                                                    |            |            | 2,309,096 |      |            |            | 2,735,142 |   |            |            | 2,128,114 | 
|                                                    |                                           | States and political subdivisions,
tax-exempt                                                |            |            | 259,648   |      |            |            | 277,875   |   |            |            | 320,500   | 
|                                                    |                                           | States and political subdivisions,
taxable                                                   |            |            | 380,798   |      |            |            | 292,392   |   |            |            | 9,046     | 
|                                                    |                                           | Other investments                                                                            |            |            | 124,341   |      |            |            | 273,674   |   |            |            | 82,421    | 
|                                                    | Interest-bearing deposits in other banks  |                                                                                              |            | 5,102      |           |      |            | 3,044      |           |   |            | 3,958      |          
|                                                    | Federal funds sold                        |                                                                                              |            | 330,385    |           |      |            | 895,140    |           |   |            | 456,123    |          
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Total interest income                               |                                           |                                                                                              | 31,316,310 |            |           |      | 33,717,478 |            |           |   | 32,189,523 |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Interest expense                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |           
|                                                    | Interest-bearing demand and money market  |                                                                                              |            | 2,057,569  |           |      |            | 5,183,783  |           |   |            | 6,464,913  |          
|                                                    | Savings                                   |                                                                                              |            | 222,812    |           |      |            | 443,125    |           |   |            | 523,876    |          
|                                                    | Time deposits of $100,000 or more         |                                                                                              |            | 2,721,166  |           |      |            | 3,635,259  |           |   |            | 2,959,409  |          
|                                                    | Other time deposits                       |                                                                                              |            | 3,282,065  |           |      |            | 4,663,051  |           |   |            | 3,978,781  |          
|                                                    | Long-term debt-trust preferred securities |                                                                                              |            | 1,139,795  |           |      |            | 1,003,120  |           |   |            | 271,450    |          
|                                                    | Federal Home Loan Bank Advances           |                                                                                              |            | 382,692    |           |      |            | 115,457    |           |   |            | 126,097    |          
|                                                    | Short-term borrowings                     |                                                                                              |            | 42,121     |           |      |            | 59,656     |           |   |            | 100,998    |          
|                                                    | Notes payable                             |                                                                                              |            | 481,036    |           |      |            | 693,952    |           |   |            | 349,820    |          
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Total interest expense                              |                                           |                                                                                              | 10,329,256 |            |           |      | 15,797,403 |            |           |   | 14,775,344 |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Net interest income                                 |                                           |                                                                                              | 20,987,054 |            |           |      | 17,920,075 |            |           |   | 17,414,179 |           
|Provision for loan losses (Note 4)                  |                                           |                                                                                              | 816,000    |            |           |      | 1,124,000  |            |           |   | 332,000    |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Net interest income after provision for loan
losses |                                           |                                                                                              | 20,171,054 |            |           |      | 16,796,075 |            |           |   | 17,082,179 |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Other income                                        |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |           
|                                                    |                                           | Service charges on deposit accounts                                                          |            |            | 2,239,821 |      |            |            | 2,225,127 |   |            |            | 2,053,608 | 
|                                                    |                                           | Investment securities gains, net (Note 3)                                                    |            |            | 217,975   |      |            |            | 283,690   |   |            |            |          | 
|                                                    |                                           | Merchant bank card processing income                                                         |            |            | 4,387,095 |      |            |            | 4,009,664 |   |            |            | 3,690,789 | 
|                                                    |                                           | Equity in income (loss), net of goodwill
amortization,
from investment in ERAS Joint Venture |            |            |          |      |            |            | (235,490  | ) |            |            | 32,300    | 
|                                                    |                                           | Dividend income from ERAS Joint Venture
(Note 1)                                             |            |            | 32,616    |      |            |            |          |   |            |            |          | 
|                                                    |                                           | Commissions on sales by Keys Insurance
Agency, Inc.                                          |            |            | 1,801,297 |      |            |            | 1,458,299 |   |            |            | 153,639   | 
|                                                    |                                           | Gain on sale of government guaranteed
loans                                                  |            |            | 28,406    |      |            |            | 96,571    |   |            |            | 269,727   | 
|                                                    |                                           | Fees on mortgage loans sold                                                                  |            |            | 1,583,419 |      |            |            | 1,074,585 |   |            |            | 400,389   | 
|                                                    |                                           | Retail investment services                                                                   |            |            | 205,829   |      |            |            | 177,467   |   |            |            | 272,358   | 
|                                                    |                                           | Gain on sale of investment in ERAS Joint
Venture (Note 1)                                    |            |            | 210,654   |      |            |            | 820,126   |   |            |            |          | 
|                                                    |                                           | Gain on sale of servicing rights                                                             |            |            |          |      |            |            | 255,281   |   |            |            |          | 
|                                                    |                                           | Other income                                                                                 |            |            | 1,291,113 |      |            |            | 1,123,584 |   |            |            | 764,764   | 
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Total other income                                  |                                           |                                                                                              | 11,998,225 |            |           |      | 11,288,904 |            |           |   | 7,637,574  |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Other expense                                       |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |           
|                                                    | Salaries and employee benefits (Note 11)  |                                                                                              |            | 11,573,803 |           |      |            | 9,717,629  |           |   |            | 7,854,114  |          
|                                                    | Net occupancy expense                     |                                                                                              |            | 3,933,369  |           |      |            | 3,489,306  |           |   |            | 2,718,412  |          
|                                                    | Other expense (Note 16)                   |                                                                                              |            | 9,463,035  |           |      |            | 8,953,504  |           |   |            | 7,462,231  |          
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Total other expense                                 |                                           |                                                                                              | 24,970,207 |            |           |      | 22,160,439 |            |           |   | 18,034,757 |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Income before income tax expense                    |                                           |                                                                                              | 7,199,072  |            |           |      | 5,924,540  |            |           |   | 6,684,996  |           
|Income tax expense (Note 10)                        |                                           |                                                                                              | 2,463,800  |            |           |      | 2,030,200  |            |           |   | 2,462,700  |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |           | 
|Net income                                          |                                           | $                                                                                            | 4,735,272  |            |           | $    | 3,894,340  |            |           | $ | 4,222,296  |           
|                                                    |                                           |                                                                                              |            |            |           |      |            |            |           |   |            |            |          

See accompanying notes to consolidated financial statements.

38



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##### Table of Contents



TIB Financial Corp. and Subsidiaries

Consolidated Statements of
Income
(Continued)

|                                          |  |      |           |      |  |      |           |  |  |   |           | 
|----------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|Years ended December 31,                  |  | 2002 |           | 2001 |  | 2000
|                                          |  |      |           |      |  |     
|Net income                                |  | $    | 4,735,272 |      |  | $    | 3,894,340 |  |  | $ | 4,222,296 | 
|                                          |  |      |           |      |  |      |           |  |  |   |           | 
|Basic earnings per common share(Note 1)   |  | $    | 1.19      |      |  | $    | .99       |  |  | $ | 1.02      | 
|Diluted earnings per common share(Note 1) |  | $    | 1.14      |      |  | $    | .95       |  |  | $ | .99       | 
|                                          |  |      |           |      |  |      |           |  |  |   |           | 

See accompanying notes to consolidated financial statements.

39



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##### Table of Contents



TIB Financial Corp. and Subsidiaries

Consolidated Statements of
Changes in Stockholders Equity



|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |   |   |   | 
|------------------------------------------------------------------ | ----------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------------------------------- | --------- | ------ | ------- | ------------------- | --------- | ---------------- | ------- | ------------- | --------- | ------------------------------------------------------------------ | - | ----------- | - | ------------------------ | - | -------- | - | - | ------- | ------- | - | - | - | --------- | - | - | - | 
|                                                                   |                                                             |                                                                   |                                                                   |           | Total  |         | ComprehensiveIncome |           | RetainedEarnings |         | TreasuryStock |           | Accumulated OtherComprehensiveIncome (Loss)Market ValuationReserve |   | CommonStock |   | AdditionalPaid inCapital
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                         
|Balance, December 31, 1999                                         |                                                             | $                                                                 | 28,302,158                                                        |           |        |         |                     |           |                  | $       | 21,634,649    |           |                                                                    | $ | (1,051,472  | ) |                          | $ | (285,000 | ) |   |         | 449,014 |   |   |   | 7,554,967 |  
|Comprehensive income:                                              |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|                                                                   | Net income                                                  |                                                                   |                                                                   | 4,222,296 |        |         | $                   | 4,222,296 |                  |         |               | 4,222,296 |                                                                    |   |             |  |                          |   |          |  |   |         |         |  |   |   |           |  |  
|                                                                   | Other comprehensive
income, net of tax
expense of $260,000: |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |   |  
|                                                                   |                                                             |                                                                   | Net market valuation
adjustment on
securities available-
for-sale |           |        | 430,000 |                     |           |                  | 430,000 |               |           |                                                                    |  |             |   |                          |  |          |   |   | 430,000 |         |   |   |  |           |   |   |  | 
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Comprehensive income                                               |                                                             |                                                                   |                                                                   |           |        | $       | 4,652,296           |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Exercise of stock options                                          |                                                             |                                                                   | 93,138                                                            |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         | 1,581   |   |   |   | 91,557    |  
|Income tax benefit from
stock options exercised                    |                                                             |                                                                   | 21,669                                                            |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   | 21,669    |  
|Issuance of stock for Keys
Insurance Agency
acquisition            |                                                             |                                                                   | 220,000                                                           |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         | 2,146   |   |   |   | 217,854   |  
|Purchase of treasury
stock(Note 15)                                |                                                             |                                                                   | (5,301,590                                                        | )         |        |         |                     |           |                  |         |              |           |                                                                    |   | (5,301,590  | ) |                          |   |         |   |   |         |        |   |   |   |          |  
|Retirement of treasury stock                                       |                                                             |                                                                   |                                                                  |           |        |         |                     |           |                  |         | (6,290,562    | )         |                                                                    |   | 6,353,062   |   |                          |   |         |   |   |         | (62,500 | ) |   |   |          |  
|Cash dividends declared,
$.4225 per share                          |                                                             |                                                                   | (1,751,017                                                        | )         |        |         |                     |           |                  |         | (1,751,017    | )         |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Balance,December 31, 2000                                          |                                                             | $                                                                 | 26,236,654                                                        |           |        |         |                     |           |                  | $       | 17,815,366    |           |                                                                    | $ |            |   |                          | $ | 145,000  |   |   | $       | 390,241 |   |   | $ | 7,886,047 |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Comprehensive income:                                              |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|                                                                   | Net income                                                  |                                                                   |                                                                   | 3,894,340 |        |         | $                   | 3,894,340 |                  |         |               | 3,894,340 |                                                                    |   |             |  |                          |   |          |  |   |         |         |  |   |   |           |  |  
|                                                                   | Other comprehensive
income, net of tax
benefit of $66,100:  |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |   |  
|                                                                   |                                                             | Net market valuation
adjustment on
securities available-
for-sale |                                                                   |           | 68,423 |         |                     |           | 68,423           |         |               |           |                                                                   |   |             |   |                         |   |          |   |  |         |         |   |  |   |           |   |  |  
|Less: reclassification
adjustment for gains
included in net income |                                                             |                                                                   | (177,023                                                          | )         |        |         | (177,023            | )         |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Other comprehensive
income,
net of tax                             |                                                             |                                                                   |                                                                   |           |        |         | (108,600            | )         |                  |         |              |           |                                                                    |   |            |   |                          |   | (108,600 | ) |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Comprehensive income                                               |                                                             |                                                                   |                                                                   |           |        | $       | 3,785,740           |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Exercise of stock options                                          |                                                             |                                                                   | 221,623                                                           |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         | 3,805   |   |   |   | 217,818   |  
|Income tax benefit from
stock options exercised                    |                                                             |                                                                   | 50,392                                                            |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   | 50,392    |  
|Issuance of stock for
BonData Group Limited,
Inc. acquisition      |                                                             |                                                                   | 68,244                                                            |           |        |         |                     |           |                  |         |              |           |                                                                    |   |            |   |                          |   |         |   |   |         | 564     |   |   |   | 67,680    |  
|Cash dividends declared,
$.43 per share                            |                                                             |                                                                   | (1,690,561                                                        | )         |        |         |                     |           |                  |         | (1,690,561    | )         |                                                                    |   |            |   |                          |   |         |   |   |         |        |   |   |   |          |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  
|Balance,December 31, 2001                                          |                                                             | $                                                                 | 28,672,092                                                        |           |        |         |                     |           |                  | $       | 20,019,145    |           |                                                                    | $ |            |   |                          | $ | 36,400   |   |   | $       | 394,610 |   |   | $ | 8,221,937 |  
|                                                                   |                                                             |                                                                   |                                                                   |           |        |         |                     |           |                  |         |               |           |                                                                    |   |             |   |                          |   |          |   |   |         |         |   |   |   |           |  

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TIB Financial Corp. and Subsidiaries

Consolidated Statements of
Changes in Stockholders Equity

|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |   |  |   | 
|------------------------------------------------------------------ | ----------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------- | --------- | ----- | ------- | --------- | --------- | ------------- | ------- | ---------- | --------- | -------- | - | ---------------- | - | ------- | - | --------- | - | ----------------- | - | ------- | - |  | - | ---------- | - |  | - | 
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   | Accumulated Other |   |         |   |  |   |            |   | 
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   | Comprehensive     |   |         |   |  |   |            |   | 
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   | Income (Loss)     |   |         |   |  |   | Additional
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           | Comprehensive |         | Retained   |           | Treasury |   | Market Valuation |   | Common  |   | Paid in  
|                                                                   |                                                             |   |                                                                                                                           |           | Total |         | Income    |           | Earnings      |         | Stock      |           | Reserve  |   | Stock            |   | Capital
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |        
|Balance,December 31, 2001                                          |                                                             | $ | 28,672,092                                                                                                                |           |       |         |           |           |               | $       | 20,019,145 |           |          | $ |                 |   |         | $ | 36,400    |   |                   | $ | 394,610 |   |  | $ | 8,221,937  |  
|Comprehensive income:                                              |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|                                                                   | Net income                                                  |   |                                                                                                                           | 4,735,272 |       |         | $         | 4,735,272 |               |         |            | 4,735,272 |          |   |                  |  |         |   |           |  |                   |   |         |  |  |   |            |  | 
|                                                                   | Other comprehensive
income, net of tax
expense of $650,100: |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |   | 
|                                                                   |                                                             |   | Unrealized
holding gain on
securities
transferred
into the
available-for-sale category
from the
held-to-maturity category |           |       | 270,480 |           |           |               | 270,480 |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |   |  |   | 
|                                                                   |                                                             |   | Net market
valuation
adjustment on
securities
available-
for-sale                                                         |           |       | 944,136 |           |           |               | 944,136 |            |           |          |  |                  |   |         |  |           |   |                   |  |         |   |  |  |            |   |  |  | 
|Less: reclassification
adjustment for gains
included in net income |                                                             |   | (136,016                                                                                                                  | )         |       |         | (136,016  | )         |               |         |           |           |          |   |                 |   |         |   |          |   |                   |   |        |   |  |   |           |  
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|Other comprehensive
income,
net of tax                             |                                                             |   |                                                                                                                           |           |       |         | 1,078,600 |           |               |         |           |           |          |   |                 |   |         |   | 1,078,600 |   |                   |   |        |   |  |   |           |  
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|Comprehensive income                                               |                                                             |   |                                                                                                                           |           |       | $       | 5,813,872 |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|Exercise of stock options                                          |                                                             |   | 593,097                                                                                                                   |           |       |         |           |           |               |         |           |           |          |   |                 |   |         |   |          |   |                   |   | 8,953   |   |  |   | 584,144    |  
|Income tax benefit from
stock options exercised                    |                                                             |   | 159,735                                                                                                                   |           |       |         |           |           |               |         |           |           |          |   |                 |   |         |   |          |   |                   |   |        |   |  |   | 159,735    |  
|Cash dividends declared,
$.4325 per share                          |                                                             |   | (1,732,719                                                                                                                | )         |       |         |           |           |               |         | (1,732,719 | )         |          |   |                 |   |         |   |          |   |                   |   |        |   |  |   |           |  
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  
|Balance,December 31, 2002                                          |                                                             | $ | 33,506,077                                                                                                                |           |       |         |           |           |               | $       | 23,021,698 |           |          | $ |                 |   |         | $ | 1,115,000 |   |                   | $ | 403,563 |   |  | $ | 8,965,816  |  
|                                                                   |                                                             |   |                                                                                                                           |           |       |         |           |           |               |         |            |           |          |   |                  |   |         |   |           |   |                   |   |         |   |  |   |            |  

See accompanying notes to consolidated financial statements.

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TIB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

|                                                 |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |             |   |            |  
|------------------------------------------------ | ---------------------------------------------------------------------------------- | ---- | ------------------------------------------------------------------------------------------- | ----------- | - | ---------- | ----------- | ----------- | - | ---------- | ----------- | ----------- | - | ---------- | -
|Years ended December 31,                         |                                                                                    | 2002 |                                                                                             | 2001        |   | 2000      
|                                                 |                                                                                    |      |                                                                                             |             |   |           
|Cash flows from operating activities             |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |            
|                                                 | Net income                                                                         |      | $                                                                                           | 4,735,272   |   |            | $           | 3,894,340   |   |            | $           | 4,222,296   |  
|                                                 | Adjustments to reconcile net income to net cash
provided by operating activities:  |      |                                                                                             |             |   |            |             |             |   |            |             |             |  
|                                                 |                                                                                    |      | Net amortization of investments                                                             |             |   | 100,101    |             |             |   | 52,793     |             |             |   | 191,621    |  
|                                                 |                                                                                    |      | Amortization of intangible assets                                                           |             |   | 297,088    |             |             |   | 538,576    |             |             |   | 207,302    |  
|                                                 |                                                                                    |      | Depreciation of premises and equipment                                                      |             |   | 1,527,761  |             |             |   | 1,381,947  |             |             |   | 1,215,870  |  
|                                                 |                                                                                    |      | Loss (gain) on sale of servicing rights                                                     |             |   | 2,532      |             |             |   | (255,281   | )           |             |   |           |  
|                                                 |                                                                                    |      | Gain on sale of investment in ERAS JV                                                       |             |   | (210,654   | )           |             |   | (820,126   | )           |             |   |           |  
|                                                 |                                                                                    |      | Write-off of unamortized leasehold
improvements                                             |             |   |           |             |             |   | 57,990     |             |             |   |           |  
|                                                 |                                                                                    |      | Provision for loan losses                                                                   |             |   | 816,000    |             |             |   | 1,124,000  |             |             |   | 332,000    |  
|                                                 |                                                                                    |      | Deferred income tax (benefit)                                                               |             |   | (248,557   | )           |             |   | (323,399   | )           |             |   | (109,173   | )
|                                                 |                                                                                    |      | Deferred net loan costs and fees                                                            |             |   | (940,612   | )           |             |   | (332,144   | )           |             |   | (244,141   | )
|                                                 |                                                                                    |      | Investment securities (gains), net                                                          |             |   | (217,975   | )           |             |   | (283,690   | )           |             |   |           |  
|                                                 |                                                                                    |      | Equity in loss (income), net of goodwill
amortization from investment in ERAS Joint
Venture |             |   |           |             |             |   | 235,490    |             |             |   | (32,300    | )
|                                                 |                                                                                    |      | (Gain) loss on sales/disposition of premises
and equipment                                  |             |   | (7,519     | )           |             |   | (56,347    | )           |             |   | 16,678     |  
|                                                 |                                                                                    |      | Gains on sales of government guaranteed
loans, net                                          |             |   | (28,406    | )           |             |   | (96,571    | )           |             |   | (269,727   | )
|                                                 |                                                                                    |      | Increase in other assets                                                                    |             |   | (3,031,129 | )           |             |   | (6,290,419 | )           |             |   | (3,203,221 | )
|                                                 |                                                                                    |      | Increase (decrease) in other liabilities                                                    |             |   | 2,532,288  |             |             |   | (437,913   | )           |             |   | 1,229,401  |  
|                                                 |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |            
|Net cash (used) provided by operating activities |                                                                                    |      | 5,326,190                                                                                   |             |   |            | (1,610,754  | )           |   |            | 3,556,606   |            
|                                                 |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |            
|Cash flows from investing activities             |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |            
|                                                 | Purchases of investment securities held to maturity                                |      |                                                                                             |            |   |            |             | (542,609    | ) |            |             |            |  
|                                                 | Purchases of investment securities available for
sale                              |      |                                                                                             | (24,403,715 | ) |            |             | (21,757,766 | ) |            |             | (1,563,600  | )
|                                                 | Sales of investment securities available for sale                                  |      |                                                                                             | 14,482,492  |   |            |             | 17,382,719  |   |            |             | 4,562,500   |  
|                                                 | Repayments of principal and maturities of
investment securities available for sale |      |                                                                                             | 9,993,567   |   |            |             | 17,015,332  |   |            |             | 1,853,574   |  
|                                                 | Maturities of investment securities held to maturity                               |      |                                                                                             |            |   |            |             | 16,500,000  |   |            |             | 10,000,000  |  
|                                                 | Proceeds from sales of government guaranteed loans                                 |      |                                                                                             | 541,980     |   |            |             | 2,070,369   |   |            |             | 11,056,930  |  
|                                                 | Purchase of Keys Insurance Agency of Monroe County,
Inc. (see below)               |      |                                                                                             |            |   |            |             |            |   |            |             | (1,706,705  | )
|                                                 | Purchase of BonData Group Limited, Inc. (see below)                                |      |                                                                                             |            |   |            |             | (204,750    | ) |            |             |            |  
|                                                 | Payment on note receivable from sale of option                                     |      |                                                                                             | 300,000     |   |            |             | 300,000     |   |            |             | 300,000     |  
|                                                 | Net proceeds received from servicing rights sales                                  |      |                                                                                             | 33,079      |   |            |             | 219,670     |   |            |             |            |  
|                                                 | Proceeds from sale of investment in ERAS JV                                        |      |                                                                                             | 340,000     |   |            |             | 1,333,333   |   |            |             |            |  
|                                                 | Net cash received in purchase of branches (see
below)                              |      |                                                                                             |            |   |            |             |            |   |            |             | 12,089,842  |  
|                                                 | Loans originated or acquired, net of principal
repayments                          |      |                                                                                             | (63,347,486 | ) |            |             | (78,784,302 | ) |            |             | (50,976,108 | )
|                                                 | Purchase of life insurance policies                                                |      |                                                                                             | (1,795,000  | ) |            |             | (820,000    | ) |            |             | (4,715,000  | )
|                                                 | Purchases of premises and equipment (see below)                                    |      |                                                                                             | (3,374,823  | ) |            |             | (4,780,136  | ) |            |             | (863,080    | )
|                                                 | Sales of premises and equipment                                                    |      |                                                                                             | 30,585      |   |            |             | 17,333      |   |            |             | 29,444      |  
|                                                 |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |            
|Net cash used by investing activities            |                                                                                    |      | (67,199,321                                                                                 | )           |   |            | (52,050,807 | )           |   |            | (19,932,203 | )          
|                                                 |                                                                                    |      |                                                                                             |             |   |            |             |             |   |            |             |             |  

Continued

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TIB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

|                                                     |                                                                                                        |              |            |            |            |      |            |             |            |   |            |             |            | 
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------ | ---------- | ---------- | ---------- | ---- | ---------- | ----------- | ---------- | - | ---------- | ----------- | ---------- | 
|Years ended December 31,                             |                                                                                                        | 2002         |            | 2001       |            | 2000
|                                                     |                                                                                                        |              |            |            |            |     
|Cash flows from financing activities                 |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|                                                     | Net increase (decrease) in federal funds purchased and
securities sold under agreements to repurchase  |              | $          | 3,845,199  |            |      | $          | (308,039    | )          |   | $          | (670,257    | )         
|                                                     | Net (decrease) increase in FHLB advances                                                               |              |            | (5,000,000 | )          |      |            | 25,000,000  |            |   |            | (10,000,000 | )         
|                                                     | Net increase (decrease) in demand,
money market and savings accounts and
acquired deposits (see below) |              |            | 39,081,797 |            |      |            | 38,098,142  |            |   |            | (2,397,746  | )         
|                                                     | Net repayment of short-term borrowings                                                                 |              |            |           |            |      |            |            |            |   |            | (659,625    | )         
|                                                     | Proceeds from issuance of trust
preferred securities                                                   |              |            |           |            |      |            | 5,000,000   |            |   |            | 8,000,000   |           
|                                                     | Debt issuance costs paid                                                                               |              |            |           |            |      |            | (170,816    | )          |   |            | (301,858    | )         
|                                                     | Time deposits accepted, net of
repayments and acquired deposits (see
below)                            |              |            | 27,865,795 |            |      |            | (14,789,070 | )          |   |            | 25,557,655  |           
|                                                     | Proceeds from exercise of stock options                                                                |              |            | 593,097    |            |      |            | 221,623     |            |   |            | 93,138      |           
|                                                     | Treasury stock repurchased                                                                             |              |            |           |            |      |            |            |            |   |            | (51,590     | )         
|                                                     | Cash dividends paid                                                                                    |              |            | (1,713,007 | )          |      |            | (1,685,864  | )          |   |            | (1,792,998  | )         
|                                                     |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|Net cash provided by financing activities            |                                                                                                        |              | 64,672,881 |            |            |      | 51,365,976 |             |            |   | 17,776,719 |            
|                                                     |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|Net increase (decrease) in cash and cash
equivalents |                                                                                                        |              | 2,799,750  |            |            |      | (2,295,585 | )           |            |   | 1,401,122  |            
|Cash and cash equivalents at beginning of
year       |                                                                                                        |              | 21,269,909 |            |            |      | 23,565,494 |             |            |   | 22,164,372 |            
|                                                     |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|Cash and cash equivalents at end of year             |                                                                                                        | $            | 24,069,659 |            |            | $    | 21,269,909 |             |            | $ | 23,565,494 |            
|                                                     |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|Supplemental disclosures of cash paid:               |                                                                                                        |              |            |            |            |      |            |             |            |   |            |            
|                                                     |                                                                                                        | Interest     |            | $          | 10,789,755 |      |            | $           | 16,267,159 |   |            | $           | 13,446,046 | 
|                                                     |                                                                                                        | Income taxes |            |            | 2,741,000  |      |            |             | 2,241,000  |   |            |             | 2,360,000  | 

Continued

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TIB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

In 2001, the Company purchased BonData Group Limited, Inc. The
purchase price for the agency was $273,000 which consisted
primarily of intangible assets. The consideration consisted of
$68,244 of Company common stock (5,640 shares) and $204,750 in
cash (paid at closing). 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 2000, the Company purchased the banking facilities and assumed
the deposits at two branches of another bank in Homestead,
Florida. In addition, loans, primarily residential real estate,
were purchased from the seller. The acquisition was recorded
using the purchase method of accounting. Net cash received in
connection with the acquisition is calculated as follows:

|                                      |                                          |   |            |            |  
|------------------------------------- | ---------------------------------------- | - | ---------- | ---------- | -
|Deposit and other liabilities assumed |                                          | $ | 22,544,857 |           
|Less price of assets acquired:        |                                          |   |            |           
|                                      | Premises and equipment                   |   |            | (894,234   | )
|                                      | Core deposit premium                     |   |            | (1,495,589 | )
|                                      | Loans, accrued interest and other assets |   |            | (8,065,192 | )
|                                      |                                          |   |            |           
|                                      | Cash received                            |   | $          | 12,089,842 |  
|                                      |                                          |   |            |           

In 2000, the Company purchased 525,000 shares of the Companys
common stock in exchange for four subordinated notes payable of
the Company totaling $5,250,000 (see Note 9).

In 2000, the Company purchased Keys Insurance Agency of Monroe
County, Inc. The purchase price for the net assets of the agency
was $1,870,000 which consisted primarily of intangible assets.
The consideration consisted of $220,000 of Company common stock
(21,643 shares) 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. Net cash paid in connection with the acquisition is
calculated as follows:

|                                      |  |   |           |  
|------------------------------------- |  | - | --------- | -
|Contract purchase price               |  | $ | 1,650,000 |  
|Receivables and fixed assets acquired |  |   | 126,103   |  
|Liabilities assumed                   |  |   | (135,679  | )
|Capitalized acquisition costs         |  |   | 66,281    |  
|                                      |  |   |           |  
|Cash paid                             |  | $ | 1,706,705 |  
|                                      |  |   |           |  

Single family residential mortgage loans securitized and retained
in the Companys available for sale portfolio amounted to $0,
$13,313,239 and $23,199,518 in 2002, 2001 and 2000, respectively
(see Note 3).

See accompanying notes to
consolidated financial statements.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

1.     Summary of Significant Accounting Policies

TIB Financial Corp. and subsidiaries provide full-service commercial banking
and insurance agency services in Monroe, South Miami-Dade, Collier and Lee
counties, Florida. The Corporation is a Florida Corporation, a bank holding
company and effective August 31, 2000, a financial holding company.

The accounting and reporting policies of TIB Financial Corp. and subsidiaries
conform to generally accepted accounting principles and to general practices
within the banking industry. The following is a summary of the more significant
of these policies.

Use of Estimates and Assumptions

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America. In
preparing the consolidated financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and revenues and expenses for
the period. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change in
the near term relate to the determination of the allowance for loan losses.
Management believes that the allowance for loan losses is adequate. While
management uses available information to provide for losses on loans, future
additions to the allowance may be necessary based on changes in economic
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the allowance for loan losses.
Such agencies may require additions to the allowance for loan losses based on
their judgments about information available to them at the time of their
examination.

Basis of Presentation

The consolidated financial statements include the accounts of TIB Financial
Corp. (Parent Company) and its wholly-owned subsidiaries, TIB Bank of the Keys
(Bank), Keys Insurance Agency, Inc., TIB Software and Services, Inc., TIBFL
Statutory Trust I (see Note 9), and TIBFL Statutory Trust II (see Note 9)
collectively known as the Company. All significant intercompany accounts and
transactions have been eliminated in consolidation.

In 1998, the Parent Companys subsidiary, TIB Software and Services, Inc.,
acquired a 30 percent interest in ERAS Joint Venture (the Venture), a general
partnership, in exchange for consideration of $791,216. Goodwill associated
with the transaction totaled $637,614 and was being amortized over a period of
ten years through December 31, 2001, at which time the amortization was
discontinued. Through December 31, 2001, the investment in the Venture was
accounted for using the equity method. On December 31, 2001, the Company sold
two thirds of its ownership interest in the Venture for $1,333,333. The Company
recognized a gain of $820,126 on the transaction. This sale reduced the
Companys ownership in the Venture to 10%. Beginning January 1, 2002, the
investment in the Venture is accounted for using the cost method. On October
4, 2002, the Company sold 5.1% of the Companys 10% interest in the Venture for
$340,000. The Company recognized a gain of $210,654 on the transaction. This
sale, accompanied by the additional transfer of assets by other owners into the
Venture, reduced the Companys ownership in the Venture to 4.53%. The Venture
also made a dividend distribution to the Company in 2002 in the amount of
$32,616. The Ventures primary business is item processing and the design,
development, installation and maintenance of accounting software for financial
institutions. ERAS Joint Venture is the Banks item processor. Payments of
approximately $483,000, $621,000, and $868,000 were made by the Bank to the
Venture in 2002, 2001, and 2000, respectively.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

On October 31, 2000, the Company purchased Keys Insurance Agency of Monroe
County, Inc. which was 100% owned by a company director. Keys Insurance
Agency, Inc. (the new name subsequent to the purchase) has three offices in the
Florida Keys and brokers a full line of commercial and residential hazard
insurance coverages as well as life and health insurance and annuities. The
purchase price for the net assets of the agency was $1,870,000 which consisted
primarily of intangible assets. The consideration consisted of $220,000 of
Company common stock (21,463 shares) 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 achieving certain earnings 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. This
acquisition was recorded using the purchase method of accounting.

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 (5,640 shares) 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 achieving certain earnings 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. This acquisition was
recorded using the purchase method of accounting.

Investment Securities

Investment securities which management has the ability and intent to hold to
maturity are reported at cost, adjusted for amortization of premium and
accretion of discount. Investment securities available for sale are reported at
fair value, with unrealized gains and losses reported as a separate component
of stockholders equity, net of the related tax effect. Other investments are
reported at cost, and accordingly, earnings are reported when interest is
accrued or when dividends are received.

Premium and discount on all investment securities are amortized (deducted) and
accreted (added), respectively, to interest income on the effective-yield
method over the period to the earlier of a call date or the maturity of the
related securities. Premium and discount on mortgage-backed securities are
amortized (deducted) and accreted (added), respectively, to interest income on
the effective interest method over the period to maturity of the related
securities, taking into consideration assumed prepayment patterns.

Gains or losses on disposition are computed by the specific identification
method for all securities.

Loans

Loans are reported at the gross amount outstanding, reduced by net deferred
loan costs and fees and a valuation 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, net of direct loan origination costs, are deferred and
recognized as 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.

The majority of fixed rate mortgage loans are originated by the Bank and sold
to a third party immediately without recourse. All fees are recognized as
income at the time of the sale.

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

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

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.

The Bank accounts for impaired loans in accordance with Statement of Financial
Accounting Standards No. 114 (SFAS 114), Accounting by Creditors for
Impairment of a Loan, as amended by Statement of Financial Accounting
Standards No. 118 (SFAS 118), Accounting by Creditors for Impairment of a
Loan-Income Recognition and Disclosure. Management, considering current
information and events regarding the borrowers ability to repay their
obligations, generally considers a loan to be impaired when it is probable that
the Bank will be unable to collect all amounts due according to the contractual
terms of the loan. When a loan is considered to be impaired, the amount of the
impairment is measured based on the present value of expected future cash flows
discounted at the notes effective interest rate, observable market prices, or
for loans that are solely dependent on the collateral for repayment, the
estimated fair value of the collateral. Impairment losses are included in the
allowance for loan losses through a charge to the provision. Cash receipts on
impaired loans are applied to reduce the principal amount of such loans until
the principal has been recovered and are recognized as interest income,
thereafter. A loan is also considered impaired if it is in a nonaccruing
status.

Premises and Equipment

Premises and equipment are reported at cost less accumulated depreciation. For
financial reporting purposes, depreciation is computed using primarily the
straight-line method over the estimated useful lives of the assets.
Expenditures for maintenance and repairs are charged to operations as incurred,
while major renewals and betterments are capitalized. For Federal income tax
reporting purposes, depreciation is computed using primarily accelerated
methods.

Other Real Estate

Other real estate, acquired through partial or total satisfaction of loans, is
reported at the lower of cost or fair value less estimated selling expenses.
Losses incurred in the acquisition of foreclosed properties are charged against
the allowance for loan losses at the time of foreclosure. Subsequent
write-downs of other real estate are charged against the current periods
operations. Net costs of maintaining and operating foreclosed properties are
generally expensed as incurred.

Intangible Assets

Intangible assets include amounts for excess servicing fees on government
guaranteed loans, deposit base premiums and goodwill. Excess servicing rights
are being amortized over the expected life of the related loan. The deposit
base premiums are being amortized using the straight-line method over an
estimated life of 10 years. Prior to January 1, 2002, goodwill was amortized
over varying periods, from 10 to 15 years, using the straight-line method.

Impairment of Long-Lived Assets

Long-lived assets, including certain fixed assets and intangibles, are
evaluated annually or whenever events or changes in circumstances indicate that
the carrying amount should be assessed. Impairment, if any, is recognized
through a valuation allowance with a corresponding charge recorded in expense
regularly for other-than-temporary impairment.

Income Taxes

The tax effects of transactions are recorded at current tax rates in the
periods the transactions are reported for financial statement purposes.
Deferred income taxes are established for the temporary differences between the
financial reporting

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

basis and the tax basis of the Companys assets and liabilities at enacted tax rates expected to be in
effect when such amounts are realized or settled. The Company files its tax returns on a consolidated basis.

Earnings Per Common Share

Basic earnings per common share has been computed based on the weighted average number of common shares outstanding of 3,992,775, 3,923,763 and 4,140,234 in 2002, 2001 and 2000.
Diluted earnings per share has been computed based upon the weighted average number of equivalent common shares of 4,144,855, 4,096,767 and 4,274,155 in 2002, 2001 and 2000. The
effect of stock options, as described in Note 13, is the sole common stock equivalent for purposes of calculating diluted earnings per common share.

Stock-Based Compensation

The Company has a stock option plan which is more fully described in Note 13. 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 years ended December 31, 2002, 2001, and 2000.

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 year ended December 31:

|                                                                                                     |                       |   |           |      |      |   |           |      |  |   |           |      | 
|---------------------------------------------------------------------------------------------------- | --------------------- | - | --------- | ---- | ---- | - | --------- | ---- |  | - | --------- | ---- | 
|                                                                                                     |                       |   | 2002      |      | 2001 |   | 2000     
|                                                                                                     |                       |   |           |      |      |   |          
|Net income, as reported                                                                              |                       | $ | 4,735,272 |      |      | $ | 3,894,340 |      |  | $ | 4,222,296 |     
|Stock-based employee and
director compensation
expense determined under
fair value basis, net of tax |                       |   | 107,818   |      |      |   | 233,815   |      |  |   | 66,378    |     
|                                                                                                     |                       |   |           |      |      |   |           |      |  |   |           |     
|Pro forma net income                                                                                 |                       | $ | 4,627,454 |      |      | $ | 3,660,525 |      |  | $ | 4,155,918 |     
|                                                                                                     |                       |   |           |      |      |   |           |      |  |   |           |     
|Earnings per share:                                                                                  |                       |   |           |      |      |   |           |      |  |   |           |     
|                                                                                                     | Basic - as reported   |   | $         | 1.19 |      |   | $         | 0.99 |  |   | $         | 1.02 | 
|                                                                                                     | Basic - pro forma     |   |           | 1.16 |      |   |           | 0.93 |  |   |           | 1.00 | 
|                                                                                                     | Diluted - as reported |   |           | 1.14 |      |   |           | 0.95 |  |   |           | 0.99 | 
|                                                                                                     | Diluted - pro forma   |   |           | 1.12 |      |   |           | 0.89 |  |   |           | 0.97 | 

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 years ended December 31, :

|                                                           |  |              |      |              |  |              |      |   |  |   |      |  
|---------------------------------------------------------- |  | ------------ | ---- | ------------ |  | ------------ | ---- | - |  | - | ---- | -
|                                                           |  | 2002         |      | 2001         |  | 2000        
|                                                           |  |              |      |              |  |             
|Dividend yield                                             |  |              | 3.2  | %            |  |              | 3.5  | % |  |   | 4.2  | %
|Risk-free interest rate                                    |  | 4.4% to 5.4% |      | 4.9% to 5.4% |  | 5.6% to 5.8%
|Expected lives                                             |  | 9 years      |      | 9 years      |  | 9 years     
|Volatility                                                 |  |              | .29  |              |  |              | .44  |   |  |   | .40  |  
|Weighted average fair value of options granted during year |  | $            | 3.69 |              |  | $            | 5.19 |   |  | $ | 3.51 |  

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Fair Values of Financial Instruments

The Company uses the following methods and assumptions in estimating fair values of financial instruments (see Note 17):

Cash and cash equivalents -The carrying amount of cash and cash equivalents approximates fair value.

Investment securities -The fair value of investment securities held to maturity and available for sale is estimated based on bid quotations received from independent pricing
services. The carrying amount of other investments, which consists of stock in the Independent Bankers Bank of Florida and the Federal Home Loan Bank, approximates fair value.

Loans -The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities. The fair value of variable rate loans with frequent repricing and negligible credit risk approximates book value.

Deposits -For deposits with no stated maturity, such as demand, NOW, money market, and savings accounts, the carrying amount is considered to approximate fair value and does
not take into account the significant value of the cost advantage and stability of the Corporations long-term relationships with depositors. The fair value of certificates of
deposit is based on the discounted value of contractual cash flows using the rates currently offered for deposits of similar remaining maturities.

Short-term borrowings -The carrying amount of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings maturing within 30 days
approximates fair value.

Subordinated notes payable and trust preferred securities -The fair values of subordinated notes payable and fixed rate trust preferred securities are calculated by discounting
the future payments (considering call and prepayment options) using a spread to the 10 year and 30 year treasury note rates, respectively, in effect at December 31, 2002. The
fair value of variable rate trust preferred securities with frequent repricing approximates book value.

Off-balance-sheet instruments -The fair value of commitments to extend credit to fund commercial, consumer, real estate-construction and real estate-mortgage loans and to fund
standby letters of credit is equal to the amount of commitments outstanding at December 31, 2002. This is based on the fact that the Company generally does not offer lending
commitments or standby letters of credit to its customers for long periods, and therefore, the underlying rates of the commitments approximate market rates.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold.

Reclassifications

Certain reclassifications have been made in the 2001 and 2000 financial statements to conform with the 2002 presentation.

Recent Accounting Pronouncements

In October 2000, the FASB issued SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of SFAS No. 125.
The new statement revises accounting criteria for securitizations,
other financial asset transfers, and collateral and introduces new
disclosures, but otherwise carries

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

forward
most of SFAS No. 125s provisions without amendment. The statement is effective for reporting periods beginning after March 31, 2001, and the disclosure provisions are
effective for fiscal years ending after December 15, 2000. The adoption of SFAS 140 has not had a significant impact on the Companys consolidated financial statements.

In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 141, Business Combinations and SFAS No.142, Goodwill and
Other Intangible Assets. SFAS No. 141 addresses the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination and SFAS No.
142 addresses the initial recognition and measurement of intangible assets acquired outside of a business combination whether acquired individually or with a group of other
assets. These standards require all future business combinations to be accounted for using the purchase method of accounting. Goodwill will no longer be amortized but instead
will be subject to impairment tests at least annually. The Company adopted SFAS No. 141 on July 1, 2001, and adopted SFAS 142 on January 1, 2002.

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, addresses accounting and reporting for the impairment or disposal of long-lived assets. SFAS No.
144 supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. SFAS No. 144 establishes a single accounting model
for long-lived assets to be disposed of by sale and expands on the guidance provided by SFAS No. 121 with respect to cash flow estimations. SFAS No. 144 was effective for the
Companys fiscal year beginning January 1, 2002. There was no current impact of adoption on its financial position or results of operations.

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.

2.     Cash and Due From Banks

A bank is required to maintain average reserve balances with the Federal Reserve Bank, on deposit with national banks or in cash. The Banks average reserve requirement was
approximately $705,000 and $638,000 as of December 31, 2002, and December 31, 2001, respectively. The Bank maintained cash balances which were adequate to meet this
requirement.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

The Bank maintains an interest bearing account at the Federal Home Loan Bank of Atlanta. The total on deposit was approximately $263,000 and $445,000 at December 31, 2002 and
December 31, 2001, respectively.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

3.     Investment Securities

In June 2002, the Company transferred all investment 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.
The amortized cost and estimated market value of investment securities held to maturity are as follows:

|                                          |  |           |            |            |  |            |         |       |  |   |   |  |  |   |            | 
|----------------------------------------- |  | --------- | ---------- | ---------- |  | ---------- | ------- | ----- |  | - | - |  |  | - | ---------- | 
|                                          |  | Amortized |            | Unrealized |  | Unrealized |         | Fair 
|December 31, 2001                         |  | Cost      |            | Gains      |  | Losses     |         | Value
|                                          |  |           |            |            |  |            |         |      
|U.S. Treasury securities                  |  | $         | 205,897    |            |  | $          | 4,572   |       |  | $ |  |  |  | $ | 210,469    | 
|U.S. Government agencies and
corporations |  |           | 16,674,255 |            |  |            | 297,653 |       |  |   |  |  |  |   | 16,971,908 | 
|Other investments                         |  |           | 1,625,760  |            |  |            |        |       |  |   |  |  |  |   | 1,625,760  | 
|                                          |  |           |            |            |  |            |         |       |  |   |   |  |  |   |            | 
|                                          |  | $         | 18,505,912 |            |  | $          | 302,225 |       |  | $ |  |  |  | $ | 18,808,137 | 
|                                          |  |           |            |            |  |            |         |       |  |   |   |  |  |   |            | 

The amortized cost and estimated market value of investment securities
available for sale are as follows:

|                                             |  |           |            |            |  |            |           |       |  |   |       |  |  |   |            | 
|-------------------------------------------- |  | --------- | ---------- | ---------- |  | ---------- | --------- | ----- |  | - | ----- |  |  | - | ---------- | 
|                                             |  | Amortized |            | Unrealized |  | Unrealized |           | Fair 
|December 31, 2002                            |  | 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 subdivision -
taxable   |  |           | 4,380,149  |            |  |            | 88,347    |       |  |   | 8,521 |  |  |   | 4,459,975  | 
|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 | 
|                                             |  |           |            |            |  |            |           |       |  |   |       |  |  |   |            | 

|                                             |  |           |            |            |  |            |         |       |  |   |         |  |  |   |            | 
|-------------------------------------------- |  | --------- | ---------- | ---------- |  | ---------- | ------- | ----- |  | - | ------- |  |  | - | ---------- | 
|                                             |  | Amortized |            | Unrealized |  | Unrealized |         | Fair 
|December 31, 2001                            |  | Cost      |            | Gains      |  | Losses     |         | Value
|                                             |  |           |            |            |  |            |         |      
|U.S. Treasury securities                     |  | $         | 3,017,174  |            |  | $          | 71,896  |       |  | $ |        |  |  | $ | 3,089,070  | 
|U.S. Government agencies and
corporations    |  |           | 105,757    |            |  |            | 712     |       |  |   |        |  |  |   | 106,469    | 
|States and political subdivisions-tax exempt |  |           | 5,742,409  |            |  |            | 90,163  |       |  |   | 693     |  |  |   | 5,831,879  | 
|States and political subdivision -
taxable   |  |           | 5,016,978  |            |  |            | 49,216  |       |  |   | 269,075 |  |  |   | 4,797,119  | 
|Mortgage-backed securities                   |  |           | 18,359,772 |            |  |            | 84,675  |       |  |   | 5,236   |  |  |   | 18,439,211 | 
|Corporate bonds                              |  |           | 3,173,358  |            |  |            | 36,642  |       |  |   |        |  |  |   | 3,210,000  | 
|                                             |  |           |            |            |  |            |         |       |  |   |         |  |  |   |            | 
|                                             |  | $         | 35,415,448 |            |  | $          | 333,304 |       |  | $ | 275,004 |  |  | $ | 35,473,748 | 
|                                             |  |           |            |            |  |            |         |       |  |   |         |  |  |   |            | 

In 2002 and 2001, other investments consist of stock in the Independent Bankers Bank of Florida and the Federal

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Home Loan Bank of Atlanta.

At December 31, 2002, securities with a fair value of $18,735,431 are subject to call during 2003.

The amortized cost and estimated market value of investment securities available for sale at December 31, 2002, by contractual maturity, are shown as follows. Expected maturities differ from contractual maturities because borrowers may have the right
to call or repay obligations without call or prepayment penalties.

|                                       |  |                       |            |       |  |   |            | 
|-------------------------------------- |  | --------------------- | ---------- | ----- |  | - | ---------- | 
|                                       |  | Investment Securities
|                                       |  | Available for Sale   
|                                       |  |                      
|                                       |  | Amortized             |            | Fair 
|December 31, 2002                      |  | Cost                  |            | Value
|                                       |  |                       |            |      
|Due in one year or less                |  | $                     |           |       |  | $ |           | 
|Due after one year through five years  |  |                       | 16,956,228 |       |  |   | 17,573,363 | 
|Due after five years through ten years |  |                       | 16,453,860 |       |  |   | 17,127,180 | 
|Due after ten years                    |  |                       | 4,687,796  |       |  |   | 4,754,210  | 
|Other investments                      |  |                       | 1,486,060  |       |  |   | 1,486,060  | 
|Mortgage-backed securities             |  |                       | 14,382,946 |       |  |   | 14,813,077 | 
|                                       |  |                       |            |       |  |   |            | 
|                                       |  | $                     | 53,966,890 |       |  | $ | 55,753,890 | 
|                                       |  |                       |            |       |  |   |            | 

Proceeds from sales of investment securities available for sale during 2002, 2001 and 2000, respectively, were $14,482,492, $17,382,719 and $4,562,500 with net gains of $217,975, $275,090, and $0. Maturities and principal repayments of investment
securities available for sale during 2002, 2001 and 2000 were $9,993,567, $17,015,332 and $1,853,574, respectively. Net gains realized from calls and mandatory redemptions of held-to-maturity securities during 2002, 2001 and 2000 were $0, $8,600 and
$0, respectively.

Investment securities having carrying values of approximately $18,517,000 and $15,077,000 at December 31, 2002 and 2001, respectively, were pledged to secure public funds on deposit, securities sold under agreements to repurchase, and other purposes
as required by law.

Single family residential mortgage loans securitized and retained in the Companys available for sale portfolio amounted to $0 and $13,313,239 in 2002 and 2001, respectively. The investments were recorded at the unpaid principal balance of the
loans, an amount less than fair market value. Accordingly, no gain or loss was recognized.

4.     Loans

Major classifications of loans are as follows:

|                                                   |              |      |             |             |  |   |             |             | 
|-------------------------------------------------- | ------------ | ---- | ----------- | ----------- |  | - | ----------- | ----------- | 
|December 31,                                       |              | 2002 |             | 2001       
|                                                   |              |      |             |            
|Real estate mortgage loans:                        |              |      |             |             |  |   |             |            
|                                                   | Commercial   |      | $           | 265,112,947 |  |   | $           | 232,758,775 | 
|                                                   | Residential  |      |             | 68,389,247  |  |   |             | 68,372,957  | 
|                                                   | Farmland     |      |             | 442,707     |  |   |             | 267,212     | 
|                                                   | Construction |      |             | 14,892,626  |  |   |             | 6,433,674   | 
|Commercial loans                                   |              |      | 48,691,856  |             |  |   | 46,330,186  |            
|Consumer loans                                     |              |      | 9,364,144   |             |  |   | 9,636,806   |            
|Indirect auto dealer loans                         |              |      | 16,854,612  |             |  |   |            |            
|Agricultural production and other loans to farmers |              |      | 520,537     |             |  |   | 596,814     |            
|Home equity loans                                  |              |      | 17,475,539  |             |  |   | 14,707,222  |            
|                                                   |              |      |             |             |  |   |             |             | 
|Total loans                                        |              |      | 441,744,215 |             |  |   | 379,103,646 |            
|Net deferred loan costs (fees)                     |              |      | 783,719     |             |  |   | (156,893    | )          
|                                                   |              |      |             |             |  |   |             |             | 
|Loans, net of deferred loan costs and fees         |              | $    | 442,527,934 |             |  | $ | 378,946,753 |            
|                                                   |              |      |             |             |  |   |             |             | 

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Substantially all loans are made to borrowers in the Banks primary market area of Monroe, South Miami-Dade, Collier and Lee counties.

Nonaccrual loans and loans defined as impaired under SFAS 114 at December 31, 2002 and 2001 totaled $545,523 and $1,590,391, respectively.

The Bank had made a loan originally totaling $10,000,000 to construct a lumber mill in north 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.
In addition, the Bank has capitalized liquidation costs and protective advances totaling approximately $558,000 and $404,000 at December 31, 2002 and December 31, 2001, respectively, which the Bank expects to be fully reimbursed by the USDA. The
non guaranteed principal and interest ($1,961,000 at December 31, 2002 and $1,886,000 at December 31, 2001) and the capitalized costs totaling approximately $558,000 and $404,000 at December 31, 2002 and December 31, 2001, respectively are included
as other assets in the financial statements. The portion of this loan guaranteed by the USDA was approximately $1.6 million at December 31, 2002 and December 31, 2001, and is accruing interest. Accrued interest on this loan totals approximately
$505,000 and $409,000 at December 31, 2002 and December 31, 2001, 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 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 December 31, 2002, may need to be charged off for regulatory purposes in June 2003 if the property has not yet been
liquidated. Since the Company believes this amount is ultimately realizable, the Company does not anticipate that this amount will be required to be written off on its financial statements prepared under generally acceptable accounting principles.
Even if the amount was required to be charged off for regulatory purposes at December 31, 2002, the Bank and Company would have remained well capitalized under the capital adequacy guidelines established by the federal bank regulators as of that
date.

The following is an analysis of the allowance for loan losses:

|                             |  |      |           |      |  |      |           |  |  |   |           | 
|---------------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|Years ended December 31,     |  | 2002 |           | 2001 |  | 2000
|                             |  |      |           |      |  |     
|Balance, beginning of year   |  | $    | 3,793,842 |      |  | $    | 3,267,873 |  |  | $ | 2,996,532 | 
|Provision charged to expense |  |      | 816,000   |      |  |      | 1,124,000 |  |  |   | 332,000   | 

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Notes to Consolidated Financial Statements

|                                           |  |      |           |      |  |      |           |   |  |   |           |  
|------------------------------------------ |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|Years ended December 31,                   |  | 2002 |           | 2001 |  | 2000
|                                           |  |      |           |      |  |     
|Loans charged off                          |  |      | (301,561  | )    |  |      | (622,697  | ) |  |   | (61,063   | )
|Recoveries of loans previously charged off |  |      | 108,218   |      |  |      | 24,666    |   |  |   | 404       |  
|                                           |  |      |           |      |  |      |           |   |  |   |           |  
|Balance, end of year                       |  | $    | 4,416,499 |      |  | $    | 3,793,842 |   |  | $ | 3,267,873 |  
|                                           |  |      |           |      |  |      |           |   |  |   |           |  

5.     Premises and Equipment

Premises and equipment consisted of the following:

|                                     |  |      |             |      |  |   |            |  
|------------------------------------ |  | ---- | ----------- | ---- |  | - | ---------- | -
|December 31,                         |  | 2002 |             | 2001
|                                     |  |      |             |     
|Land                                 |  | $    | 4,924,198   |      |  | $ | 7,243,480  |  
|Buildings and leasehold improvements |  |      | 13,400,848  |      |  |   | 10,090,406 |  
|Furniture, fixtures and equipment    |  |      | 10,356,536  |      |  |   | 9,131,588  |  
|Construction in progress             |  |      | 1,206,909   |      |  |   | 149,200    |  
|                                     |  |      |             |      |  |   |            |  
|                                     |  |      | 29,888,491  |      |  |   | 26,614,674 |  
|Less accumulated depreciation        |  |      | (10,431,341 | )    |  |   | (8,981,520 | )
|                                     |  |      |             |      |  |   |            |  
|Premises and equipment, net          |  | $    | 19,457,150  |      |  | $ | 17,633,154 |  
|                                     |  |      |             |      |  |   |            |  

In 2002, the Company converted its ownership interest in land located in Naples, Florida with a net book value of $2,366,999, for an ownership interest in the first floor of the office building that was constructed on this site.

The Company is obligated under operating leases for office and ATM location space. The leases expire in periods varying from one to fifteen years, and some have renewal options for subsequent periods. Future minimum lease payments are as follows at
December 31, 2002:

|                          |      |   |           |         | 
|------------------------- | ---- | - | --------- | ------- | 
|Years ending December 31, |      |   |           |        
|                          |      |   |           |        
|                          | 2003 |   | $         | 434,666 | 
|                          | 2004 |   |           | 353,581 | 
|                          | 2005 |   |           | 332,148 | 
|                          | 2006 |   |           | 274,319 | 
|                          | 2007 |   |           | 221,064 | 
|Thereafter                |      |   | 922,885   |        
|                          |      |   |           |         | 
|                          |      | $ | 2,538,663 |        
|                          |      |   |           |         | 

Rental expense for the years ended December 31, 2002, 2001 and 2000, was approximately $430,000, $239,000 and $54,000, respectively (see Note 12).

6.     Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the year ended December 31, 2002, are as follows:

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Notes to Consolidated Financial Statements

|                                                                            |  |                |         |              |  |               |           |        |  |   |         |   |  |   |           |  
|--------------------------------------------------------------------------- |  | -------------- | ------- | ------------ |  | ------------- | --------- | ------ |  | - | ------- | - |  | - | --------- | -
|                                                                            |  | Government     |         |              |  |               |           |        |  |   |         |   |  |  
|                                                                            |  | Guaranteed     |         |              |  |               |           |        |  |   |         |   |  |  
|                                                                            |  | Loan Sales and |         | Insurance    |  | Investment in |           |        |  |  
|                                                                            |  | Servicing      |         | Agency Sales |  | ERAS JV (a)   |           | Totals
|                                                                            |  |                |         |              |  |               |           |       
|Balance at January 1, 2002                                                  |  | $              | 155,232 |              |  | $             | 2,010,211 |        |  | $ | 139,962 |   |  | $ | 2,305,405 |  
|Write off of goodwill associated with partial sale of Investment in ERAS JV |  |                |        |              |  |               |          |        |  |   | (71,381 | ) |  |   | (71,381   | )
|                                                                            |  |                |         |              |  |               |           |        |  |   |         |   |  |   |           |  
|Balance at December 31, 2002                                                |  | $              | 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 18.
|--- |  | --------------------------------------------------------------------------------------------------

The following table indicates what reported net income would have been had goodwill not been amortized:

|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |      | 
|------------------------------------------------- | --------------------- | - | ------------------------------- | ---- | ---- | - | --------- | ---- |  | - | --------- | ---- | 
|                                                  |                       |   | For the year ended December 31,
|                                                  |                       |   |                                
|                                                  |                       |   | 2002                            |      | 2001 |   | 2000     
|                                                  |                       |   |                                 |      |      |   |          
|Reported net income                               |                       | $ | 4,735,272                       |      |      | $ | 3,894,340 |      |  | $ | 4,222,296 |     
|Add back goodwill amortization, net of tax effect |                       |   |                                |      |      |   | 125,370   |      |  |   | 64,418    |     
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     
|Adjusted net income                               |                       | $ | 4,735,272                       |      |      | $ | 4,019,710 |      |  | $ | 4,286,714 |     
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     
|Basic earnings per share:                         |                       |   |                                 |      |      |   |           |      |  |   |           |     
|                                                  | Reported net income   |   | $                               | 1.19 |      |   | $         | 0.99 |  |   | $         | 1.02 | 
|                                                  | Goodwill amortization |   |                                 |     |      |   |           | 0.03 |  |   |           | 0.02 | 
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     
|                                                  | Adjusted net income   |   | $                               | 1.19 |      |   | $         | 1.02 |  |   | $         | 1.04 | 
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     
|Diluted earnings per share:                       |                       |   |                                 |      |      |   |           |      |  |   |           |     
|                                                  | Reported net income   |   | $                               | 1.14 |      |   | $         | 0.95 |  |   | $         | 0.99 | 
|                                                  | Goodwill amortization |   |                                 |     |      |   |           | 0.03 |  |   |           | 0.01 | 
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     
|                                                  | Adjusted net income   |   | $                               | 1.14 |      |   | $         | 0.98 |  |   | $         | 1.00 | 
|                                                  |                       |   |                                 |      |      |   |           |      |  |   |           |     

Amortized intangible assets at December 31, 2002 consist of the following:

|                        |       |   |                |           |              |   |           |           |  |   |           |           | 
|----------------------- | ----- | - | -------------- | --------- | ------------ | - | --------- | --------- |  | - | --------- | --------- | 
|                        |       |   | Gross Carrying |           | Accumulated  |   | Net Book 
|                        |       |   | Amount         |           | Amortization |   | Value    
|                        |       |   |                |           |              |   |          
|Core deposit intangible |       | $ | 2,941,234      |           |              | $ | 1,000,593 |           |  | $ | 1,940,641 |          
|Excess servicing fees   |       |   | 88,917         |           |              |   | 50,640    |           |  |   | 38,277    |          
|                        |       |   |                |           |              |   |           |           |  |   |           |          
|                        | Total |   | $              | 3,030,151 |              |   | $         | 1,051,233 |  |   | $         | 1,978,918 | 
|                        |       |   |                |           |              |   |           |           |  |   |           |          

Intangible amortization expense totaled $297,088 for the year ended December 31, 2002.

Estimated amortization expense is as follows:

|                          |  |   |         | 
|------------------------- |  | - | ------- | 
|Years ending December 31, |  |   |         | 
|                          |  |   |         | 
|2003                      |  | $ | 292,379 | 
|2004                      |  |   | 291,655 | 
|2005                      |  |   | 291,118 | 
|2006                      |  |   | 290,015 | 
|2007                      |  |   | 287,032 | 

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

7.     Time Deposits

At December 31, 2002, the scheduled maturities of time deposits are as follows:

|                          |  |   |            
|------------------------- |  | - | -----------
|Years ending December 31, |  |   |            
|                          |  |   |            
|2003                      |  | $ | 109,554,448
|2004                      |  |   | 19,486,756 
|2005                      |  |   | 21,791,769 
|2006                      |  |   | 2,107,068  
|2007                      |  |   | 6,676,423  
|                          |  |   |            
|                          |  | $ | 159,616,464
|                          |  |   |            

8.     Short-Term Borrowings and Federal Home Loan Bank Advances

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank, and a Treasury, tax and loan note option.

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. Borrowings under these agreements are collateralized by investment securities.

The Bank accepts Treasury, tax and loan deposits from certain commercial depositors and remits these deposits to the appropriate government authorities. The Bank can hold up to $1,700,000 of these deposits more than a day under a note option
agreement with its regional Federal Reserve bank and pay interest on those funds held. The Bank pledges certain investment securities against this account.

The Bank 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 $79.0 million at December 31, 2002. There was $20 million outstanding at December 31, 2002, and $25 million outstanding at December 31, 2001. The
outstanding amount at December 31, 2002 consists of $10 million maturing in January 2003 and $10 million maturing in February 2003. Upon maturity in 2003, $10 million was repaid by the Bank and $10 million was renewed until January 2004. Any
advances are secured by the Banks one-to-four-family residential mortgage loans.

The following table reflects the average daily outstanding, year-end outstanding, maximum month-end outstanding and the weighted average rates paid for each of the four categories of short-term borrowings:

|                                                |          |                                               |  |      |     |   |  |   |           |  
|----------------------------------------------- | -------- | --------------------------------------------- |  | ---- | --- | - |  | - | --------- | -
|Years ended December 31,                        |          | 2002                                          |  | 2001
|                                                |          |                                               |  |     
|Federal funds purchased:                        |          |                                               |  |      |     |   |  |  
|                                                | Balance: |                                               |  |      |     |   |  |   |          
|                                                |          | Average daily outstanding                     |  | $    | 178 |   |  | $ | 457,066   |  
|                                                |          | Year-end outstanding                          |  |      |    |   |  |   | 65,000    |  
|                                                |          | Maximum month-end outstanding                 |  |      |    |   |  |   | 3,160,000 |  
|                                                | Rate:    |                                               |  |      |     |   |  |   |          
|                                                |          | Weighted average for year                     |  |      | 1.9 | % |  |   | 2.8       | %
|                                                |          | Weighted average interest rate at December 31 |  |      | n/a |   |  |   | 2.1       | %
|Securities sold under agreements to repurchase: |          |                                               |  |      |     |   |  |  
|                                                | Balance: |                                               |  |      |     |   |  |   |          

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Notes to Consolidated Financial Statements

|                                                     |          |                                               |  |      |            |   |  |   |            |  
|---------------------------------------------------- | -------- | --------------------------------------------- |  | ---- | ---------- | - |  | - | ---------- | -
|Years ended December 31,                             |          | 2002                                          |  | 2001
|                                                     |          |                                               |  |     
|                                                     |          | Average daily outstanding                     |  | $    | 1,975,932  |   |  | $ | 416,724    |  
|                                                     |          | Year-end outstanding                          |  |      | 3,003,839  |   |  |   | 418,993    |  
|                                                     |          | Maximum month-end outstanding                 |  |      | 3,923,438  |   |  |   | 571,474    |  
|                                                     | Rate:    |                                               |  |      |            |   |  |   |           
|                                                     |          | Weighted average for year                     |  |      | 1.5        | % |  |   | 3.4        | %
|                                                     |          | Weighted average interest rate at December 31 |  |      | 1.1        | % |  |   | 1.2        | %
|Treasury, tax and loan note option:                  |          |                                               |  |      |            |   |  |  
|                                                     | Balance: |                                               |  |      |            |   |  |   |           
|                                                     |          | Average daily outstanding                     |  | $    | 775,868    |   |  | $ | 789,959    |  
|                                                     |          | Year-end outstanding                          |  |      | 1,575,120  |   |  |   | 249,767    |  
|                                                     |          | Maximum month-end outstanding                 |  |      | 1,700,000  |   |  |   | 1,700,000  |  
|                                                     | Rate:    |                                               |  |      |            |   |  |   |           
|                                                     |          | Weighted average for year                     |  |      | 1.3        | % |  |   | 3.6        | %
|                                                     |          | Weighted average interest rate at December 31 |  |      | 1.0        | % |  |   | 1.4        | %
|Advances from the Federal Home Loan Bank-Short Term: |          |                                               |  |      |            |   |  |  
|                                                     | Balance: |                                               |  |      |            |   |  |   |           
|                                                     |          | Average daily outstanding                     |  | $    | 82,192     |   |  | $ | 986,301    |  
|                                                     |          | Year-end outstanding                          |  |      |           |   |  |   | 5,000,000  |  
|                                                     |          | Maximum month-end outstanding                 |  |      |           |   |  |   | 10,000,000 |  
|                                                     | Rate:    |                                               |  |      |            |   |  |   |           
|                                                     |          | Weighted average for year                     |  |      | 1.9        | % |  |   | 2.4        | %
|                                                     |          | Weighted average interest rate at December 31 |  |      | n/a        |   |  |   | 1.8        | %
|Advances from the Federal Home Loan Bank-Long Term:  |          |                                               |  |      |            |   |  |  
|                                                     | Balance: |                                               |  |      |            |   |  |   |           
|                                                     |          | Average daily outstanding                     |  | $    | 20,000,000 |   |  | $ | 3,917,808  |  
|                                                     |          | Year-end outstanding                          |  |      | 20,000,000 |   |  |   | 20,000,000 |  
|                                                     |          | Maximum month-end outstanding                 |  |      | 20,000,000 |   |  |   | 20,000,000 |  
|                                                     | Rate:    |                                               |  |      |            |   |  |   |           
|                                                     |          | Weighted average for year                     |  |      | 1.9        | % |  |   | 2.3        | %
|                                                     |          | Weighted average interest rate at December 31 |  |      | 1.7        | % |  |   | 2.3        | %

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

9.     Other Borrowings



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Line of Credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The Company has a $3,000,000 revolving line of credit with Independent Bankers Bank of Florida. Amounts outstanding under the line bear interest equal to the prime rate published in The Wall Street Journalminus one half percent, which is subject to change daily,
and is subject to a 4.25% floor. Interest is payable monthly, and any principal is due on demand, or if no demand is made, at maturity on April 30, 2005. This credit facility is secured by 100 percent of the outstanding shares of TIB Bank of the Keys and
requires, among other things, that the Bank maintain a minimum Tier 1 capital ratio of 6 percent. There were no amounts outstanding under this line at December 31, 2002 or 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Subordinated Notes Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | The Company entered into an agreement with the Companys largest shareholder effective July 1, 2000, to purchase 525,000 shares of the Companys common stock in exchange for four subordinated notes payable of the Company totaling $5,250,000. The interest rate on
these notes was 13% per annum, with interest payments required quarterly. The principal balance was payable in full on October 1, 2010, the maturity date of the notes, and the notes could be prepaid by the Company at par any time after July 1, 2003. Effective
January 1, 2002, the interest rate was reduced to 9%, the option to prepay was extended to January 1, 2007, and the maturity date was extended to January 1, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Trust Preferred Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | On September 7, 2000, the Company participated, at an amount of $8,000,000, in a pooled offering of trust preferred securities. The Company formed TIBFL Statutory Trust I (the Trust) a wholly-owned statutory trust subsidiary for the purpose of issuing the trust
preferred securities. The Trust used the proceeds from the issuance of the trust preferred securities to acquire junior subordinated notes of the Company. The trust preferred securities essentially mirror the debt securities, carrying a cumulative preferred
dividend at a fixed rate equal to the 10.6% interest rate on the debt securities. The debt securities and the trust preferred securities each have 30-year lives. The trust preferred securities and the debt securities are callable by the Company or the Trust, at
their respective option after ten years, and at varying premiums and sooner in specific events, subject to prior approval by the Federal Reserve Board, if then required. The Company has treated the trust preferred securities as Tier 1 capital up to the maximum
amount allowed, and the remainder as Tier 2 capital for federal
regulatory purposes (see Note 13).   
On July 31, 2001, the Company participated, at an amount of $5,000,000, in a pooled offering of trust preferred securities. The Company formed TIBFL Statutory Trust II (the Trust II) a wholly-owned statutory trust subsidiary for the purpose of issuing the trust
preferred securities. The Trust II used the proceeds from the issuance of the trust preferred securities to acquire junior subordinated notes of the Company. The trust preferred securities essentially mirror the debt securities, carrying a cumulative preferred
dividend at a variable rate equal to the interest rate on the debt securities (three month LIBOR plus 358 basis points). The initial rate in effect at the time of issuance was 7.29% and is subject to change quarterly. The rate in effect at December 31, 2002 was
5.34%. The debt securities and the trust preferred securities each have 30-year lives. The trust preferred securities and the debt securities are callable by the Company or the Trust, at their respective option after five years, and at varying premiums and sooner
in specific events, subject to prior approval by the Federal Reserve Board, if then required. The Company has treated the trust preferred securities as Tier 1 capital up to the maximum amount allowed, and the remainder as Tier 2 capital for federal regulatory
purposes (see Note 13).

10.     Income Taxes

The following are the components of income tax expense as provided:

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Notes to Consolidated Financial Statements

|                                              |         |      |           |           |  |      |           |           |  |   |           |           | 
|--------------------------------------------- | ------- | ---- | --------- | --------- |  | ---- | --------- | --------- |  | - | --------- | --------- | 
|Years ended December 31,                      |         | 2002 |           | 2001      |  | 2000
|                                              |         |      |           |           |  |     
|Current
income tax provision                  |        
|                                              | Federal |      | $         | 2,305,929 |  |      | $         | 2,125,299 |  |   | $         | 2,199,293 | 
|                                              | State   |      |           | 406,428   |  |      |           | 228,300   |  |   |           | 372,580   | 
|                                              |         |      |           |           |  |      |           |           |  |   |           |          
|                                              |         |      | 2,712,357 |           |  |      | 2,353,599 |           |  |   | 2,571,873 |          
|Deferred federal and state income tax benefit |         |      | (248,557  | )         |  |      | (323,399  | )         |  |   | (109,173  | )        
|                                              |         |      |           |           |  |      |           |           |  |   |           |          
|                                              |         | $    | 2,463,800 |           |  | $    | 2,030,200 |           |  | $ | 2,462,700 |          
|                                              |         |      |           |           |  |      |           |           |  |   |           |          

A reconciliation of income tax computed at the Federal statutory income tax rate to total income taxes is as follows:

|                                                    |                    |      |           |          |   |      |           |          |   |   |           |          |  
|--------------------------------------------------- | ------------------ | ---- | --------- | -------- | - | ---- | --------- | -------- | - | - | --------- | -------- | -
|Years ended December 31,                            |                    | 2002 |           | 2001     |   | 2000
|                                                    |                    |      |           |          |   |     
|Pretax income                                       |                    | $    | 7,199,072 |          |   | $    | 5,924,540 |          |   | $ | 6,684,996 |         
|                                                    |                    |      |           |          |   |      |           |          |   |   |           |         
|Income taxes computed at Federal statutory tax rate |                    | $    | 2,447,700 |          |   | $    | 2,014,300 |          |   | $ | 2,272,900 |         
|Increase (decrease) resulting from:                 |                    |      |           |          |   |      |           |          |   |   |           |         
|                                                    | Tax-exempt income  |      |           | (213,400 | ) |      |           | (208,700 | ) |   |           | (113,500 | )
|                                                    | State income taxes |      |           | 253,500  |   |      |           | 150,700  |   |   |           | 245,900  |  
|                                                    | Other, net         |      |           | (24,000  | ) |      |           | 73,900   |   |   |           | 57,400   |  
|                                                    |                    |      |           |          |   |      |           |          |   |   |           |         
|                                                    |                    | $    | 2,463,800 |          |   | $    | 2,030,200 |          |   | $ | 2,462,700 |         
|                                                    |                    |      |           |          |   |      |           |          |   |   |           |         

The following summarizes the tax effects of temporary differences which comprise the net deferred tax asset:

|                                                                  |  |      |            |      |  |   |           |  
|----------------------------------------------------------------- |  | ---- | ---------- | ---- |  | - | --------- | -
|December 31,                                                      |  | 2002 |            | 2001
|                                                                  |  |      |            |     
|Allowance for loan losses                                         |  | $    | 1,553,102  |      |  | $ | 1,282,521 |  
|Core deposit intangible                                           |  |      | 139,971    |      |  |   | 101,234   |  
|Goodwill                                                          |  |      |           |      |  |   | 9,095     |  
|Deferred compensation                                             |  |      | 182,419    |      |  |   | 72,666    |  
|Other                                                             |  |      | 6,515      |      |  |   | 28,129    |  
|                                                                  |  |      |            |      |  |   |           |  
|Total gross deferred tax assets                                   |  |      | 1,882,007  |      |  |   | 1,493,645 |  
|                                                                  |  |      |            |      |  |   |           |  
|Sale of option to acquire equity interest in an insurance company |  |      |           |      |  |   | (89,236   | )
|Accumulated depreciation                                          |  |      | (690,833   | )    |  |   | (519,104  | )
|Goodwill                                                          |  |      | (59,512    | )    |  |   |          |  
|Gain on building swap                                             |  |      | (72,613    | )    |  |   | (74,813   | )
|Unrealized gains on securities available for sale                 |  |      | (672,000   | )    |  |   | (21,900   | )
|                                                                  |  |      |            |      |  |   |           |  
|Total gross deferred tax liabilities                              |  |      | (1,494,958 | )    |  |   | (705,053  | )
|                                                                  |  |      |            |      |  |   |           |  
|Net deferred tax asset                                            |  | $    | 387,049    |      |  | $ | 788,592   |  
|                                                                  |  |      |            |      |  |   |           |  

11. Employee Benefit Plans

The Bank maintains an Employee Stock Ownership Plan with 401(k) provisions that covers all employees who are

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Notes to Consolidated Financial Statements

qualified as to age and length of service. Three types of contributions can be made to the Plan by the Bank and participants: basic voluntary contributions which
are discretionary contributions made by all participants; a matching contribution, whereby the Bank will match 25 percent of salary reduction contributions up to 4 percent of compensation, not to exceed a maximum contribution of $1,000 per employee; and an additional
discretionary contribution made by the Bank allocated to the accounts of participants on the basis of total relative compensation. The Bank contributed $202,000, $39,000 and $213,000 to the plan in 2002, 2001 and 2000, respectively. As of December 31, 2002, the Plan
contained approximately 157,000 shares of the Companys common stock.

In 2001, the Bank entered into salary continuation agreements with its three executive officers. The Bank expensed $173,390 and $123,707 for the accrual of future salary continuation benefits in 2002 and 2001, respectively. The Bank has elected to fund the salary
continuation liability with single premium life insurance policies. Cash value income (net of related insurance premium expense) totaled $160,681 and $156,100 in 2002 and 2001, respectively. The accompanying balance sheet included $3,181,781 and $3,021,100 in surrender
value and other liabilities included salary continuation benefits payable of $297,097 and $123,707 at December 31, 2002 and 2001, respectively.

In 2001, the Bank established a non qualified retirement benefit plan for eligible Bank directors. The Bank expensed $119,413 and $70,275 for the accrual of current and future retirement benefits in 2002 and 2001, respectively, which included $102,367 and $60,000 in
2002 and 2001 related to the annual director retainer fees and monthly meeting fees that certain directors elected to defer. The Bank has elected to fund the nonqualified plan with single premium split dollar life insurance polices. Cash value income (net of related
insurance premium expense) totaled $147,334 and $121,915 in 2002 and 2001. The accompanying balance sheet included $2,939,249 and $2,791,915 in surrender value and other liabilities included retirement benefits payable of $187,671 and $69,400 at December 31, 2002 and
2001, respectively.

In anticipation of entering into salary continuation agreements with two additional executive officers in 2003, and adding another director to the non qualified retirement benefit plan, the Bank purchased additional life insurance policies in December 2002 in the amount
of $1,795,000 which are included in other assets in the accompanying balance sheet.

12.     Related Party Transactions

As of December 31, 2002 and 2001, the Bank had loans outstanding to certain of its executive officers, directors and their related business interests which aggregated $8,706,936 and $7,320,720, respectively. During 2002, additions to such loans totaled $2,725,019. Loan
repayments totaled $1,338,803. Unfunded loan commitments to these individuals and their related business interests totaled $2,116,761 at December 31, 2002. These loans were made in the ordinary course of business with normal credit terms, including interest rates and
collateral requirements prevailing at the time for comparable
transactions with other borrowers. These individuals and their
related interests also maintain customary demand and time deposit
accounts with the Bank.
In July 2000, the Company purchased 525,000 shares of common stock
from the Companys largest shareholder (see Notes 9 and
15).
In October 2000, the Company purchased Keys Insurance Agency of
Monroe County, Inc. from a Company director (see Note 1).
The Company leases office space in a building owned by a company director. Annual rental expense is $37,410 under the lease (see Note 5).

13.     Stockholders Equity

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements result in certain discretionary actions by regulators that could have an effect on the
Companys operations. The regulations require the Company and the Bank to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The
Companys capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

As of December 31, 2002, the most recent notification from the Federal Deposit Insurance Corporation and the Federal Reserve Board categorized the Bank and the Company, respectively, as well capitalized under the regulatory framework for prompt corrective action. There
are no conditions or events since those notifications that management believes has changed the Companys or the Banks category. To be considered well capitalized and adequately capitalized (as defined) under the regulatory framework for prompt corrective action, the
Company and Bank must maintain minimum Tier 1 leverage, Tier 1 risk-based, and total risk-based ratios as set forth in the following tables. The actual capital amounts and ratios are also presented in the following tables.

(in thousands, except percentages)

|                                         |              |             |                  |         |       |  |        |             |             |  |        |         |       |        |   |     |   |  |   |        |  |  |  |      |  
|---------------------------------------- | ------------ | ----------- | ---------------- | ------- | ----- |  | ------ | ----------- | ----------- |  | ------ | ------- | ----- | ------ | - | --- | - |  | - | ------ |  |  |  | ---- | -
|                                         |              |             |                  |         |       |  |        |             | Adequately  |  |        |         |       |        |   |     |   |  |   |        | 
|                                         |              |             | Well Capitalized |         |       |  |        |             | Capitalized |  |        |         |       |        |   |     |   |  |   |        | 
|December 31, 2002                        |              | Requirement |                  |         |       |  |        | Requirement |             |  |        |         |       | Actual |   |     |   | 
|                                         |              |             |                  |         |       |  |        |             |             |  |        |         |       |        |   |     |   | 
|                                         |              |             | Amount           |         | Ratio |  | Amount |             | Ratio       |  | Amount |         | Ratio
|                                         |              |             |                  |         |       |  |        |             |             |  |        |         |      
|Tier 1 Capital (to Average Assets)       |              |             |                  |         |       |  |        |             |             |  |        |         |       |        |   |     |   |  |   |        |  |  |  |     
|                                         | Consolidated |             | 3                | $27,520 |       |  | 3      | 5.0         | %           |  | 3      | $22,016 |       |        | 3 | 4.0 | % |  | $ | 39,009 |  |  |  | 7.1  | %
|                                         | Bank         |             |                  | 27,474  |       |  | 3      | 5.0         | %           |  |        | 21,979  |       |        | 3 | 4.0 | % |  |   | 45,739 |  |  |  | 8.3  | %
|Tier 1 Capital (to Risk Weighted
Assets) |              |             |                  |         |       |  |        |             |             |  |        |         |       |        |   |     |   |  |   |        |  |  |  |     
|                                         | Consolidated |             | 3                | $28,035 |       |  | 3      | 6.0         | %           |  | 3      | $18,690 |       |        | 3 | 4.0 | % |  | $ | 39,009 |  |  |  | 8.3  | %
|                                         | Bank         |             |                  | 27,989  |       |  | 3      | 6.0         | %           |  |        | 18,659  |       |        | 3 | 4.0 | % |  |   | 45,739 |  |  |  | 9.8  | %
|Total Capital (to Risk Weighted
Assets)  |              |             |                  |         |       |  |        |             |             |  |        |         |       |        |   |     |   |  |   |        |  |  |  |     
|                                         | Consolidated |             | 3                | $46,725 |       |  | 3      | 10.0        | %           |  | 3      | $37,380 |       |        | 3 | 8.0 | % |  | $ | 50,879 |  |  |  | 10.9 | %
|                                         | Bank         |             |                  | 46,648  |       |  | 3      | 10.0        | %           |  |        | 37,318  |       |        | 3 | 8.0 | % |  |   | 50,156 |  |  |  | 10.8 | %

|                                         |              |             |                  |          |       |  |        |             |             |  |            |          |       |        |  |      |   |  |   |        |  |  |  |      |  
|---------------------------------------- | ------------ | ----------- | ---------------- | -------- | ----- |  | ------ | ----------- | ----------- |  | ---------- | -------- | ----- | ------ |  | ---- | - |  | - | ------ |  |  |  | ---- | -
|                                         |              |             |                  |          |       |  |        |             |             |  | Adequately |          |       |        |  |      |   |  |   |        |  |  | 
|                                         |              |             | Well Capitalized |          |       |  |        |             | Capitalized |  |            |          |       |        |  |      |   |  |   |        | 
|December 31, 2001                        |              | Requirement |                  |          |       |  |        | Requirement |             |  |            |          |       | Actual |  |      |   | 
|                                         |              |             |                  |          |       |  |        |             |             |  |            |          |       |        |  |      |   | 
|                                         |              |             | Amount           |          | Ratio |  | Amount |             | Ratio       |  | Amount     |          | Ratio
|                                         |              |             |                  |          |       |  |        |             |             |  |            |          |      
|Tier
1 Capital (to Average Assets)       |              |             |                  |          |       |  |        |             |             |  |            |          |       |        |  |      |   |  |   |        |  |  |  |     
|                                         | Consolidated |             |                  | 3$23,838 |       |  | 3      | 5.0         | %           |  |            | 3$19,070 |       |        |  | 34.0 | % |  | $ | 33,786 |  |  |  | 7.1  | %
|                                         | Bank         |             |                  | 23,749   |       |  | 3      | 5.0         | %           |  |            | 18,999   |       |        |  | 34.0 | % |  |   | 40,589 |  |  |  | 8.5  | %
|Tier 1 Capital
(to Risk Weighted
Assets) |              |             |                  |          |       |  |        |             |             |  |            |          |       |        |  |      |   |  |   |        |  |  | 
|                                         | Consolidated |             |                  | 3$24,019 |       |  | 3      | 6.0         | %           |  |            | 3$16,013 |       |        |  | 34.0 | % |  | $ | 33,786 |  |  |  | 8.4  | %
|                                         | Bank         |             |                  | 23,962   |       |  | 3      | 6.0         | %           |  |            | 15,974   |       |        |  | 34.0 | % |  |   | 40,589 |  |  |  | 10.2 | %
|Total Capital (to
Risk Weighted
Assets)  |              |             |                  |          |       |  |        |             |             |  |            |          |       |        |  |      |   |  |   |        |  |  | 
|                                         | Consolidated |             |                  | 3$40,032 |       |  | 3      | 10.0        | %           |  |            | 3$32,026 |       |        |  | 38.0 | % |  | $ | 46,285 |  |  |  | 11.6 | %
|                                         | Bank         |             |                  | 39,936   |       |  | 3      | 10.0        | %           |  |            | 31,949   |       |        |  | 38.0 | % |  |   | 44,383 |  |  |  | 11.1 | %

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Management believes, as of December 31, 2002, that the Company and the Bank meet all capital requirements to which it is subject.

Under state banking law, regulatory approval will be required if the total of all dividends declared in any calendar year by the Bank exceeds the Banks net profits to date for that year combined with its retained net profits for the preceding two years.
Retained earnings of the Bank available for payment of dividends to the Company without prior regulatory approval at December 31, 2002, is approximately $8,749,000.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Stock Option Plan

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 Board of
Directors of the Company 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 common stock of the Company 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.

The exercise price for common stock under each nonqualified stock option must
equal 100 percent of the fair market value of the stock at the time the option
is granted. The exercise price for stock under each incentive stock option
shall not be less than 100 percent of the fair market value of the stock at the
time the option is granted. The exercise price under an incentive stock option
granted to a person owning stock representing more than 10 percent of the
common stock must equal at least 110 percent of the fair market value at the
date of grant, and such option is not exercisable until five years from the
date the incentive stock option was granted. The Board of Directors may, at
its discretion, provide that an option not be exercised in whole or in part for
any period or periods of time as specified in the option agreements. No option
may be exercised after the expiration of ten years from the date it is granted.

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

A summary of the status of the Companys fixed stock option plan as of and for the three years ended December 31, 2002, is
presented below:

|                          |           |  |         |         |       |   |                |       |         |  |   |   |  |   |       |       |  |   |          |       | 
|------------------------- | --------- |  | ------- | ------- | ----- | - | -------------- | ----- | ------- |  | - | - |  | - | ----- | ----- |  | - | -------- | ----- | 
|                          |           |  |         |         |       |   |                |       |         |  |   |   |  |   |       |       |  |   | Weighted
|                          |           |  |         |         |       |   | Exercise Price |       | Average
|                          |           |  | Shares  |         | Range |   | Exercise Price
|                          |           |  |         |         |       |   |               
|Balance,December 31, 1999 |           |  | 592,410 |         |       | $ | 5.49           |       |         |  |  |   |  | $ | 14.50 |       |  | $ | 8.31     |      
|                          | Granted   |  |         | 46,500  |       |   |                | 10.50 |         |  |   |  |  |   |       | 10.50 |  |   |          | 10.50 | 
|                          | Exercised |  |         | (15,810 | )     |   |                | 5.49  |         |  |   |  |  |   |       | 9.00  |  |   |          | 5.89  | 
|                          | Expired   |  |         | (18,550 | )     |   |                | 9.00  |         |  |   |  |  |   |       | 13.50 |  |   |          | 10.31 | 
|                          |           |  |         |         |       |   |                |       |         |  |   |  
|Balance,December 31, 2000 |           |  | 604,550 |         |       |   | 5.49           |       |         |  |  |   |  |   | 14.50 |       |  |   | 8.48     |      
|                          | Granted   |  |         | 59,002  |       |   |                | 10.13 |         |  |   |  |  |   |       | 13.55 |  |   |          | 13.29 | 
|                          | Exercised |  |         | (38,050 | )     |   |                | 5.49  |         |  |   |  |  |   |       | 11.25 |  |   |          | 5.83  | 
|                          | Expired   |  |         | (40,100 | )     |   |                | 8.33  |         |  |   |  |  |   |       | 13.55 |  |   |          | 11.14 | 
|                          |           |  |         |         |       |   |                |       |         |  |   |  
|Balance,December 31, 2001 |           |  | 585,402 |         |       |   | 5.49           |       |         |  |  |   |  |   | 14.50 |       |  |   | 8.96     |      
|                          | Granted   |  |         | 164,000 |       |   |                | 11.21 |         |  |   |  |  |   |       | 14.12 |  |   |          | 12.54 | 
|                          | Exercised |  |         | (89,525 | )     |   |                | 5.49  |         |  |   |  |  |   |       | 13.50 |  |   |          | 6.63  | 
|                          | Expired   |  |         | (92,672 | )     |   |                | 5.49  |         |  |   |  |  |   |       | 13.55 |  |   |          | 10.62 | 
|                          |           |  |         |         |       |   |                |       |         |  |   |  
|Balance,December 31, 2002 |           |  | 567,205 |         |       |   | 5.49           |       |         |  |  |   |  |   | 14.50 |       |  | $ | 10.09    |      
|                          |           |  |         |         |       |   |                |       |         |  |   |  

|                                         |  |  |         | 
|---------------------------------------- |  |  | ------- | 
|Options exercisable at December 31, 2002 |  |  | 282,305 | 
|Options exercisable at December 31, 2001 |  |  | 345,802 | 
|Options exercisable at December 31, 2000 |  |  | 280,550 | 

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

The following table summarizes information about fixed stock options
outstanding:

|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       |  |  |          |         |  |  |   |       | 
|----------------- |  | -------- | ----- | ----------------- |  | ----------- | - | -------- |  | ----------------- | ----- | -------- |  | ------------------- | ------- | ------------------- |  | -------- | --- | -------- |  | - | ----- |  |  | -------- | ------- |  |  | - | ----- | 
|December 31, 2002
|                 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  | Outstanding Options |         | Options Exercisable
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                    
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Weighted |     |          |  |   |       |  |  |          |         |  |  |  
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Average  |     | Weighted |  |   |       |  |  | Weighted
|                  |  | Range of |       | Number            |  | Remaining   |   | Average  |  | Number            |       | Average 
|                  |  | Exercise |       | Outstanding at    |  | Contractual |   | Exercise |  | Exercisable at    |       | Exercise
|                  |  | Price    |       | December 31, 2002 |  | Life        |   | Price    |  | December 31, 2002 |       | Price   
|                  |  |          |       |                   |  |             |   |          |  |                   |       |         
|                  |  | $        | 5.49  |                   |  |             |  |          |  | $                 | 5.50  |          |  |                     | 147,475 |                     |  |          | 2.0 |          |  | $ | 5.49  |  |  |          | 114,175 |  |  | $ | 5.49  | 
|                  |  |          | 6.23  |                   |  |             |  |          |  |                   | 6.23  |          |  |                     | 30,000  |                     |  |          | 2.6 |          |  |   | 6.23  |  |  |          | 30,000  |  |  |   | 6.23  | 
|                  |  |          | 8.33  |                   |  |             |  |          |  |                   | 9.00  |          |  |                     | 50,300  |                     |  |          | 3.6 |          |  |   | 8.74  |  |  |          | 29,750  |  |  |   | 8.74  | 
|                  |  |          | 10.13 |                   |  |             |  |          |  |                   | 10.50 |          |  |                     | 40,000  |                     |  |          | 7.9 |          |  |   | 10.48 |  |  |          | 7,750   |  |  |   | 10.49 | 
|                  |  |          | 11.00 |                   |  |             |  |          |  |                   | 11.75 |          |  |                     | 32,500  |                     |  |          | 6.1 |          |  |   | 11.34 |  |  |          | 5,400   |  |  |   | 11.48 | 
|                  |  |          | 12.40 |                   |  |             |  |          |  |                   | 12.65 |          |  |                     | 112,000 |                     |  |          | 8.4 |          |  |   | 12.41 |  |  |          |        |  |  |   |      | 
|                  |  |          | 13.00 |                   |  |             |  |          |  |                   | 13.55 |          |  |                     | 127,930 |                     |  |          | 6.1 |          |  |   | 13.49 |  |  |          | 77,730  |  |  |   | 13.50 | 
|                  |  |          | 14.00 |                   |  |             |  |          |  |                   | 14.50 |          |  |                     | 27,000  |                     |  |          | 7.8 |          |  |   | 14.17 |  |  |          | 17,500  |  |  |   | 14.14 | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     | 567,205 |                     |  |          | 5.3 |          |  | $ | 10.09 |  |  |          | 282,305 |  |  | $ | 8.91  | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 

|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       |  |  |          |         |  |  |   |       | 
|----------------- |  | -------- | ----- | ----------------- |  | ----------- | - | -------- |  | ----------------- | ----- | -------- |  | ------------------- | ------- | ------------------- |  | -------- | --- | -------- |  | - | ----- |  |  | -------- | ------- |  |  | - | ----- | 
|December 31, 2001
|                 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  | Outstanding Options |         | Options Exercisable
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                    
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Weighted |     |          |  |   |       |  |  |          |         |  |  |  
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Average  |     | Weighted |  |   |       |  |  | Weighted
|                  |  | Range of |       | Number            |  | Remaining   |   | Average  |  | Number            |       | Average 
|                  |  | Exercise |       | Outstanding at    |  | Contractual |   | Exercise |  | Exercisable at    |       | Exercise
|                  |  | Price    |       | December 31, 2001 |  | Life        |   | Price    |  | December 31, 2001 |       | Price   
|                  |  |          |       |                   |  |             |   |          |  |                   |       |         
|                  |  | $        | 5.49  |                   |  |             |  |          |  | $                 | 5.50  |          |  |                     | 227,600 |                     |  |          | 3.0 |          |  | $ | 5.49  |  |  |          | 153,800 |  |  | $ | 5.49  | 
|                  |  |          | 6.23  |                   |  |             |  |          |  |                   | 6.23  |          |  |                     | 30,000  |                     |  |          | 3.6 |          |  |   | 6.23  |  |  |          | 30,000  |  |  |   | 6.23  | 
|                  |  |          | 8.33  |                   |  |             |  |          |  |                   | 9.00  |          |  |                     | 84,800  |                     |  |          | 4.5 |          |  |   | 8.58  |  |  |          | 50,300  |  |  |   | 8.56  | 
|                  |  |          | 10.13 |                   |  |             |  |          |  |                   | 10.50 |          |  |                     | 48,000  |                     |  |          | 8.9 |          |  |   | 10.48 |  |  |          | 4,550   |  |  |   | 10.50 | 
|                  |  |          | 10.75 |                   |  |             |  |          |  |                   | 13.45 |          |  |                     | 48,500  |                     |  |          | 7.5 |          |  |   | 12.11 |  |  |          | 18,950  |  |  |   | 12.71 | 
|                  |  |          | 13.50 |                   |  |             |  |          |  |                   | 14.50 |          |  |                     | 146,502 |                     |  |          | 6.8 |          |  |   | 13.57 |  |  |          | 88,202  |  |  |   | 13.57 | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     | 585,402 |                     |  |          | 5.1 |          |  | $ | 8.96  |  |  |          | 345,802 |  |  | $ | 8.53  | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 

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Notes to Consolidated Financial Statements

|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       |  |  |          |         |  |  |   |       | 
|----------------- |  | -------- | ----- | ----------------- |  | ----------- | - | -------- |  | ----------------- | ----- | -------- |  | ------------------- | ------- | ------------------- |  | -------- | --- | -------- |  | - | ----- |  |  | -------- | ------- |  |  | - | ----- | 
|December 31, 2000
|                 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  | Outstanding Options |         | Options Exercisable
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                    
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Weighted |     |          |  |   |       |  |  |          |         |  |  |  
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  | Average  |     | Weighted |  |   |       |  |  | Weighted
|                  |  | Range of |       | Number            |  | Remaining   |   | Average  |  | Number            |       | Average 
|                  |  | Exercise |       | Outstanding at    |  | Contractual |   | Exercise |  | Exercisable at    |       | Exercise
|                  |  | Price    |       | December 31, 2000 |  | Life        |   | Price    |  | December 31, 2000 |       | Price   
|                  |  |          |       |                   |  |             |   |          |  |                   |       |         
|                  |  | $        | 5.49  |                   |  |             |  |          |  | $                 | 5.50  |          |  |                     | 262,700 |                     |  |          | 4.0 |          |  | $ | 5.49  |  |  |          | 165,200 |  |  | $ | 5.49  | 
|                  |  |          | 6.23  |                   |  |             |  |          |  |                   | 6.23  |          |  |                     | 30,000  |                     |  |          | 4.6 |          |  |   | 6.23  |  |  |          | 30,000  |  |  |   | 6.23  | 
|                  |  |          | 8.33  |                   |  |             |  |          |  |                   | 9.00  |          |  |                     | 102,650 |                     |  |          | 5.5 |          |  |   | 8.56  |  |  |          | 42,350  |  |  |   | 8.58  | 
|                  |  |          | 10.50 |                   |  |             |  |          |  |                   | 10.50 |          |  |                     | 46,500  |                     |  |          | 9.9 |          |  |   | 10.50 |  |  |          |        |  |  |   |      | 
|                  |  |          | 10.75 |                   |  |             |  |          |  |                   | 13.25 |          |  |                     | 41,500  |                     |  |          | 7.8 |          |  |   | 11.72 |  |  |          | 6,100   |  |  |   | 11.97 | 
|                  |  |          | 13.50 |                   |  |             |  |          |  |                   | 14.50 |          |  |                     | 121,200 |                     |  |          | 6.8 |          |  |   | 13.56 |  |  |          | 36,900  |  |  |   | 13.61 | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     | 604,550 |                     |  |          | 5.6 |          |  | $ | 8.48  |  |  |          | 280,550 |  |  | $ | 7.25  | 
|                  |  |          |       |                   |  |             |   |          |  |                   |       |          |  |                     |         |                     |  |          |     |          |  |   |       | 

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Notes to Consolidated Financial Statements

14.     Commitments and Contingencies

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 December 31, 2002 and 2001, total commitments
to extend credit were approximately $56,468,000 and $49,349,000, respectively,
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 December 31, 2002 and 2001, commitments
under standby letters of credit aggregated approximately $2,728,000 and
$1,263,000, respectively. In 2002 and 2001, the Bank was not required to
perform on a standby letter of credit.

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.

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Notes to Consolidated Financial Statements

As of December 31, 1998, the Parent Company had directly guaranteed to the Bank $3,000,000 of a $6,000,000 loan to Winter
Park Insurance Investments, Inc. In connection with this guarantee, the Parent Company had the option to purchase
$3,000,000 of the debt from the Bank and convert such debt to a 50 percent ownership in Winter Park Insurance
Investments, Inc. during a 36-month period beginning in October 1998. The loan originally matured in 2001, but has since
been modified and extended to July 2006. In November 1999, the Parent Company sold this option to Winter Park Insurance
Investments, Inc. and the parent company was released from its guaranty of the loan. The terms of the sale included a
$100,000 payment at closing and $300,000 annually at the anniversary date of the sale for each of the subsequent three
years, for a total of $1,000,000. For accounting purposes, $312,375 was recognized as income on the sale in 1999.

15.     Stock Repurchases

In 2000, the Company repurchased 5,000 shares at a cost of $51,590. In July 2000, the Company purchased 525,000 shares
of common stock from the Companys largest shareholder at a cost of $10 per share (see Note 9).

16.     Supplemental Financial Data

Components of other expense in excess of 1 percent of total interest and other income are as follows:

|                                       |  |      |           |      |  |      |           |  |  |   |           | 
|-------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|Years ended December 31,               |  | 2002 |           | 2001 |  | 2000
|                                       |  |      |           |      |  |     
|Merchant bank card processing expenses |  | $    | 2,780,454 |      |  | $    | 2,519,241 |  |  | $ | 2,291,886 | 
|Other merchant charges                 |  |      | 461,343   |      |  |      | 523,705   |  |  |   | 453,929   | 
|Operating supplies                     |  |      | 451,373   |      |  |      | 518,128   |  |  |   | 389,901   | 
|Computer services                      |  |      | 1,668,994 |      |  |      | 1,537,222 |  |  |   | 1,421,542 | 
|Legal and professional fees            |  |      | 755,216   |      |  |      | 734,851   |  |  |   | 587,267   | 
|Marketing and community relations      |  |      | 951,726   |      |  |      | 779,572   |  |  |   | 564,520   | 
|Postage, courier, and armored car      |  |      | 603,940   |      |  |      | 515,920   |  |  |   | 456,426   | 

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Notes to Consolidated Financial Statements

17.     Fair Values of Financial Instruments

The estimated fair values of the Companys financial instruments are as follows:

|                               |                                          |       |            |             |           |       |            |             |           |  |            |             |  |  |            |             | 
|------------------------------ | ---------------------------------------- | ----- | ---------- | ----------- | --------- | ----- | ---------- | ----------- | --------- |  | ---------- | ----------- |  |  | ---------- | ----------- | 
|                               |                                          |       | 2002       |             | 2001     
|                               |                                          |       |            |             |          
|                               |                                          |       | Carrying   |             | Estimated |       | Carrying   |             | Estimated
|December 31,                   |                                          | Value |            | Fair Value  |           | Value |            | Fair Value 
|                               |                                          |       |            |             |           |       |            |            
|Financial assets:              |                                          |       |            |             |           |       |            |             |           |  |            |             |  |  |            |            
|                               | Cash and cash equivalents                |       | $          | 24,070,000  |           |       | $          | 24,070,000  |           |  | $          | 21,270,000  |  |  | $          | 21,270,000  | 
|                               | Investment securities held to
maturity   |       |            |            |           |       |            |            |           |  |            | 18,506,000  |  |  |            | 18,808,000  | 
|                               | Investment securities available
for sale |       |            | 55,754,000  |           |       |            | 55,754,000  |           |  |            | 35,474,000  |  |  |            | 35,474,000  | 
|                               | Loans                                    |       |            | 438,111,000 |           |       |            | 445,811,000 |           |  |            | 375,153,000 |  |  |            | 378,420,000 | 
|Financial liabilities:         |                                          |       |            |             |           |       |            |             |           |  |            |             |  |  |            |            
|                               | Noncontractual deposits                  |       |            | 323,067,000 |           |       |            | 323,067,000 |           |  | $          | 283,985,000 |  |  | $          | 283,985,000 | 
|                               | Contractual deposits                     |       |            | 159,616,000 |           |       |            | 162,377,000 |           |  |            | 131,751,000 |  |  |            | 134,128,000 | 
|                               | Federal Home Loan Bank
Advances          |       |            | 20,000,000  |           |       |            | 20,000,000  |           |  |            | 25,000,000  |  |  |            | 25,000,000  | 
|                               | Short-term borrowings                    |       |            | 4,579,000   |           |       |            | 4,579,000   |           |  |            | 734,000     |  |  |            | 734,000     | 
|Notes payable                  |                                          |       | 5,250,000  |             |           |       | 4,945,000  |             |           |  | 5,250,000  |             |  |  | 5,315,000  |            
|Trust preferred securities     |                                          |       | 13,000,000 |             |           |       | 13,472,000 |             |           |  | 13,000,000 |             |  |  | 13,100,000 |            
|Off-balance-sheet instruments: |                                          |       |            |             |           |       |            |             |           |  |            |             |  |  |            |            
|                               | Undisbursed credit lines                 |       |            | n/a         |           |       | $          | 56,468,000  |           |  |            | n/a         |  |  | $          | 49,349,000  | 
|                               | Standby letters of credit                |       |            | n/a         |           |       |            | 2,728,000   |           |  |            | n/a         |  |  |            | 1,263,000   | 

18.     Segment Reporting

TIB Financial Corp. has four reportable segments: community banking, merchant bank card processing, insurance sales and government guaranteed loan
sales and servicing. 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 bank card 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. The government
guaranteed loan segment originates and sells the guaranteed portion of loans that qualify for such guarantees, such as those offered by the Small
Business Administration and the U.S. Department of Agricultural Rural Development Business and Industry Program.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates
performance based on profit or loss from operations before income taxes.

The Companys reportable segments are strategic business units that offer different products and services. They are managed separately because each
business requires different marketing strategies.

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Notes to Consolidated Financial Statements

|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |       |  |   |            |   |  |   |            |   |  |   |             |  
|-------------------------------------------------------------------------------------------- |  | --------- | ----------- | -------- |  | ------------- | ---------- | ------------ |  | ---------- | ------- | ----- |  | - | ---------- | - |  | - | ---------- | - |  | - | ----------- | -
|                                                                                             |  |           |             |          |  |               |            |              |  | Government |         |       |  |   |            |   |  |   |            |   |  |  
|                                                                                             |  |           |             |          |  |               |            |              |  | Guaranteed |         |       |  |   |            |   |  |   |            |   |  |  
|Year ended                                                                                   |  | Community |             | Merchant |  | Loan Sales    |            | Insurance    |  | Parent and |         |       |  |  
|December 31, 2002                                                                            |  | Banking   |             | Bankcard |  | and Servicing |            | Agency Sales |  | Other      |         | Total
|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |      
|Interest income                                                                              |  | $         | 31,287,177  |          |  | $             |           |              |  | $          |        |       |  | $ |           |   |  | $ | 29,133     |   |  | $ | 31,316,310  |  
|Interest expense                                                                             |  |           | (8,705,737  | )        |  |               |           |              |  |            |        |       |  |   |           |   |  |   | (1,623,519 | ) |  |   | (10,329,256 | )
|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |       |  |   |            |   |  |   |            |   |  |   |             |  
|Net interest income                                                                          |  |           | 22,581,440  |          |  |               |           |              |  |            |        |       |  |   |           |   |  |   | (1,594,386 | ) |  |   | 20,987,054  |  
|Other income                                                                                 |  |           | 5,222,115   |          |  |               | 4,387,095  |              |  |            | 140,189 |       |  |   | 1,801,297  |   |  |   | 447,529    |   |  |   | 11,998,225  |  
|Equity in income
(loss),
net of goodwill
amortization, from
investment in ERAS
Joint Venture |  |           |            |          |  |               |           |              |  |            |        |       |  |   |           |   |  |   |           |   |  |   |            |  
|Depreciation and
amortization                                                                |  |           | (1,709,810  | )        |  |               | (44,202    | )            |  |            | (8,312  | )     |  |   | (57,481    | ) |  |   | (5,044     | ) |  |   | (1,824,849  | )
|Other expense                                                                                |  |           | (18,162,148 | )        |  |               | (3,576,610 | )            |  |            | (92,005 | )     |  |   | (1,537,587 | ) |  |   | (593,008   | ) |  |   | (23,961,358 | )
|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |       |  |   |            |   |  |   |            |   |  |   |             |  
|Pretax segment profit                                                                        |  | $         | 7,931,597   |          |  | $             | 766,283    |              |  | $          | 39,872  |       |  | $ | 206,229    |   |  | $ | (1,744,909 | ) |  | $ | 7,199,072   |  
|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |       |  |   |            |   |  |   |            |   |  |   |             |  
|Segment assets                                                                               |  | $         | 563,918,991 |          |  | $             | 65,923     |              |  | $          | 157,986 |       |  | $ | 2,278,870  |   |  | $ | 582,876    |   |  | $ | 567,004,646 |  
|                                                                                             |  |           |             |          |  |               |            |              |  |            |         |       |  |   |            |   |  |   |            |   |  |   |             |  

|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |       |  |   |            |   |  |   |            |   |  |   |             |  
|-------------------------------------------------------------------------------------------- |  | --------- | ----------- | -------- |  | ------------- | ---------- | ------------ |  | ---------- | -------- | ----- |  | - | ---------- | - |  | - | ---------- | - |  | - | ----------- | -
|                                                                                             |  |           |             |          |  |               |            |              |  | Government |          |       |  |   |            |   |  |   |            |   |  |  
|                                                                                             |  |           |             |          |  |               |            |              |  | Guaranteed |          |       |  |   |            |   |  |   |            |   |  |  
|Year ended                                                                                   |  | Community |             | Merchant |  | Loan Sales    |            | Insurance    |  | Parent and |          |       |  |  
|December 31, 2001                                                                            |  | Banking   |             | Bankcard |  | and Servicing |            | Agency Sales |  | Other      |          | Total
|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |      
|Interest income                                                                              |  | $         | 33,655,796  |          |  | $             |           |              |  | $          |         |       |  | $ |           |   |  | $ | 61,682     |   |  | $ | 33,717,478  |  
|Interest expense                                                                             |  |           | (14,096,439 | )        |  |               |           |              |  |            |         |       |  |   |           |   |  |   | (1,700,964 | ) |  |   | (15,797,403 | )
|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |       |  |   |            |   |  |   |            |   |  |   |             |  
|Net interest income                                                                          |  |           | 19,559,357  |          |  |               |           |              |  |            |         |       |  |   |           |   |  |   | (1,639,282 | ) |  |   | 17,920,075  |  
|Other income                                                                                 |  |           | 4,852,406   |          |  |               | 4,009,664  |              |  |            | 206,432  |       |  |   | 1,458,299  |   |  |   | 997,593    |   |  |   | 11,524,394  |  
|Equity in income
(loss),
net of goodwill
amortization, from
investment in ERAS
Joint Venture |  |           |            |          |  |               |           |              |  |            |         |       |  |   |           |   |  |   | (235,490   | ) |  |   | (235,490    | )
|Depreciation and
amortization                                                                |  |           | (1,676,525  | )        |  |               | (42,158    | )            |  |            | (30,790  | )     |  |   | (166,061   | ) |  |   | (4,989     | ) |  |   | (1,920,523  | )
|Other expense                                                                                |  |           | (15,847,881 | )        |  |               | (3,405,858 | )            |  |            | (282,630 | )     |  |   | (1,365,018 | ) |  |   | (462,529   | ) |  |   | (21,363,916 | )
|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |       |  |   |            |   |  |   |            |   |  |   |             |  
|Pretax segment profit                                                                        |  | $         | 6,887,357   |          |  | $             | 561,648    |              |  | $          | (106,988 | )     |  | $ | (72,780    | ) |  | $ | (1,344,697 | ) |  | $ | 5,924,540   |  
|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |       |  |   |            |   |  |   |            |   |  |   |             |  
|Segment assets                                                                               |  | $         | 490,644,124 |          |  | $             | 85,231     |              |  | $          | 166,297  |       |  | $ | 2,285,331  |   |  | $ | 811,262    |   |  | $ | 493,992,245 |  
|                                                                                             |  |           |             |          |  |               |            |              |  |            |          |       |  |   |            |   |  |   |            |   |  |   |             |  

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Notes to Consolidated Financial Statements

|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |       |  |   |           |   |  |   |           |   |  |   |             |  
|------------------------------------------------------------------------------------- |  | --------- | ----------- | -------- |  | ------------- | ---------- | ------------ |  | ---------- | -------- | ----- |  | - | --------- | - |  | - | --------- | - |  | - | ----------- | -
|                                                                                      |  |           |             |          |  |               |            |              |  | Government |          |       |  |   |           |   |  |   |           |   |  |  
|                                                                                      |  |           |             |          |  |               |            |              |  | Guaranteed |          |       |  |   |           |   |  |   |           |   |  |  
|Year ended                                                                            |  | Community |             | Merchant |  | Loan Sales    |            | Insurance    |  | Parent and |          |       |  |  
|December 31, 2000                                                                     |  | Banking   |             | Bankcard |  | and Servicing |            | Agency Sales |  | Other      |          | Total
|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |      
|Interest income                                                                       |  | $         | 32,099,739  |          |  | $             |           |              |  | $          |         |       |  | $ |          |   |  | $ | 89,784    |   |  | $ | 32,189,523  |  
|Interest expense                                                                      |  |           | (14,140,169 | )        |  |               |           |              |  |            |         |       |  |   |          |   |  |   | (635,175  | ) |  |   | (14,775,344 | )
|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |       |  |   |           |   |  |   |           |   |  |   |             |  
|Net interest income                                                                   |  |           | 17,959,570  |          |  |               |           |              |  |            |         |       |  |   |          |   |  |   | (545,391  | ) |  |   | 17,414,179  |  
|Other income                                                                          |  |           | 3,102,276   |          |  |               | 3,690,789  |              |  |            | 386,212  |       |  |   | 153,639   |   |  |   | 272,358   |   |  |   | 7,605,274   |  
|Equity in income, net
of goodwill
amortization, from
investment in ERAS
Joint Venture |  |           |            |          |  |               |           |              |  |            |         |       |  |   |          |   |  |   | 32,300    |   |  |   | 32,300      |  
|Depreciation and
amortization                                                         |  |           | (1,305,042  | )        |  |               | (53,982    | )            |  |            | (30,441  | )     |  |   | (29,655   | ) |  |   | (4,052    | ) |  |   | (1,423,172  | )
|Other expense                                                                         |  |           | (12,826,376 | )        |  |               | (3,128,707 | )            |  |            | (262,482 | )     |  |   | (174,890  | ) |  |   | (551,130  | ) |  |   | (16,943,585 | )
|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |       |  |   |           |   |  |   |           |   |  |   |             |  
|Pretax segment profit                                                                 |  | $         | 6,930,428   |          |  | $             | 508,100    |              |  | $          | 93,289   |       |  | $ | (50,906   | ) |  | $ | (795,915  | ) |  | $ | 6,684,996   |  
|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |       |  |   |           |   |  |   |           |   |  |   |             |  
|Segment assets                                                                        |  | $         | 434,790,214 |          |  | $             | 96,527     |              |  | $          | 193,032  |       |  | $ | 2,387,937 |   |  | $ | 1,852,435 |   |  | $ | 439,320,145 |  
|                                                                                      |  |           |             |          |  |               |            |              |  |            |          |       |  |   |           |   |  |   |           |   |  |   |             |  

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

19.     Condensed Financial Information of TIB Financial Corp.

Condensed Balance Sheets
(Parent Only)

|                                                  |                                                                      |      |            |            |  |   |            |            | 
|------------------------------------------------- | -------------------------------------------------------------------- | ---- | ---------- | ---------- |  | - | ---------- | ---------- | 
|December 31,                                      |                                                                      | 2002 |            | 2001      
|                                                  |                                                                      |      |            |           
|Assets                                            |                                                                      |      |            |            |  |   |            |           
|Cash on deposit with subsidiary                   |                                                                      | $    | 734,863    |            |  | $ | 2,027,432  |           
|Dividends and other receivables from subsidiaries |                                                                      |      | 9,750      |            |  |   | 9,886      |           
|Investment in bank subsidiary                     |                                                                      |      | 48,954,471 |            |  |   | 43,010,282 |           
|Investment in TIB Software & Services, Inc.       |                                                                      |      | 129,370    |            |  |   | 264,826    |           
|Investment in TIBFL Statutory Trust I             |                                                                      |      | 248,000    |            |  |   | 248,000    |           
|Investment in TIBFL Statutory Trust II            |                                                                      |      | 155,000    |            |  |   | 155,000    |           
|Investment in Keys Insurance Agency, Inc.         |                                                                      |      | 2,301,298  |            |  |   | 2,172,568  |           
|Note receivable                                   |                                                                      |      |           |            |  |   | 264,317    |           
|Interest receivable                               |                                                                      |      |           |            |  |   | 6,550      |           
|Income tax receivable                             |                                                                      |      | 84,763     |            |  |   |           |           
|Other assets                                      |                                                                      |      | 436,700    |            |  |   | 473,861    |           
|                                                  |                                                                      |      |            |            |  |   |            |           
|Total Assets                                      |                                                                      | $    | 53,054,215 |            |  | $ | 48,632,722 |           
|                                                  |                                                                      |      |            |            |  |   |            |           
|Liabilities and Stockholders Equity              |                                                                      |      |            |            |  |   |            |           
|Liabilities                                       |                                                                      |      |            |            |  |   |            |           
|                                                  | Dividends payable                                                    |      | $          | 443,919    |  |   | $          | 424,206    | 
|                                                  | Interest payable                                                     |      |            | 445,017    |  |   |            | 503,211    | 
|                                                  | Due to subsidiaries                                                  |      |            | 3,252      |  |   |            | 150,369    | 
|                                                  | Notes payable                                                        |      |            | 18,653,000 |  |   |            | 18,653,000 | 
|                                                  | Deferred tax liability                                               |      |            |           |  |   |            | 89,236     | 
|                                                  | Income tax payable                                                   |      |            |           |  |   |            | 140,187    | 
|                                                  | Other liabilities                                                    |      |            | 2,950      |  |   |            | 421        | 
|                                                  |                                                                      |      |            |            |  |   |            |           
|Total liabilities                                 |                                                                      |      | 19,548,138 |            |  |   | 19,960,630 |           
|                                                  |                                                                      |      |            |            |  |   |            |           
|Stockholders equity                              |                                                                      |      |            |            |  |   |            |           
|                                                  | Common stock                                                         |      |            | 403,563    |  |   |            | 394,610    | 
|                                                  | Surplus                                                              |      |            | 8,965,816  |  |   |            | 8,221,937  | 
|                                                  | Retained earnings                                                    |      |            | 23,021,698 |  |   |            | 20,019,145 | 
|                                                  | Market valuation reserve on investment securities
available for sale |      |            | 1,115,000  |  |   |            | 36,400     | 
|                                                  |                                                                      |      |            |            |  |   |            |           
|Total stockholders equity                        |                                                                      |      | 33,506,077 |            |  |   | 28,672,092 |           
|                                                  |                                                                      |      |            |            |  |   |            |           
|Total Liabilities and Stockholders Equity        |                                                                      | $    | 53,054,215 |            |  | $ | 48,632,722 |           
|                                                  |                                                                      |      |            |            |  |   |            |           

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

19.     Condensed Financial Information of TIB Financial Corp. (continued)

Condensed Statements of Income
(Parent Only)

|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|------------------------ | ----------------------------------------------------------------------------------------------------- | ---- | --------- | --------- | - | ---- | --------- | --------- | - | - | --------- | --------- | -
|Years ended December 31, |                                                                                                       | 2002 |           | 2001      |   | 2000
|                         |                                                                                                       |      |           |           |   |     
|Operating income         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |          
|                         | Dividend from bank subsidiary                                                                         |      | $         | 781,604   |   |      | $         | 1,924,122 |   |   | $         | 4,505,740 |  
|                         | Dividend from TIBFL Statutory Trust I                                                                 |      |           | 26,288    |   |      |           | 26,288    |   |   |           | 8,325     |  
|                         | Dividend from TIBFL Statutory Trust II                                                                |      |           | 8,584     |   |      |           | 4,449     |   |   |           |          |  
|                         | Dividend from TIB Software & Services, Inc.                                                           |      |           | 156,810   |   |      |           | 511,526   |   |   |           |          |  
|                         | Interest income on note receivable                                                                    |      |           | 29,133    |   |      |           | 61,682    |   |   |           | 89,784    |  
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|Total operating income   |                                                                                                       |      | 1,002,419 |           |   |      | 2,528,067 |           |   |   | 4,603,849 |          
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|Operating expense        |                                                                                                       |      |           |           |   |      |           |           |   |   |           |          
|                         | Interest expense                                                                                      |      |           | 1,658,391 |   |      |           | 1,731,701 |   |   |           | 643,500   |  
|                         | Other expense                                                                                         |      |           | 305,166   |   |      |           | 259,617   |   |   |           | 274,641   |  
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|Total operating expense  |                                                                                                       |      | 1,963,557 |           |   |      | 1,991,318 |           |   |   | 918,141   |          
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|                         | (Loss) income before income tax benefit and
equity in undistributed earnings (losses) of
subsidiaries |      |           | (961,138  | ) |      |           | 536,749   |   |   |           | 3,685,708 |  
|                         | Income tax benefit                                                                                    |      |           | 708,200   |   |      |           | 701,300   |   |   |           | 295,300   |  
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|                         | (Loss) income before equity in undistributed earnings
(losses) of subsidiaries                        |      |           | (252,938  | ) |      |           | 1,238,049 |   |   |           | 3,981,008 |  
|                         | Equity in undistributed earnings of bank subsidiary                                                   |      |           | 4,865,590 |   |      |           | 2,848,561 |   |   |           | 252,893   |  
|                         | Equity in undistributed earnings (losses) of Keys
Insurance Agency, Inc.                              |      |           | 128,730   |   |      |           | (45,380   | ) |   |           | (31,750   | )
|                         | Equity in undistributed earnings (losses) of TIB
Software & Services, Inc.                            |      |           | (6,110    | ) |      |           | (146,890  | ) |   |           | 20,145    |  
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  
|Net income               |                                                                                                       | $    | 4,735,272 |           |   | $    | 3,894,340 |           |   | $ | 4,222,296 |          
|                         |                                                                                                       |      |           |           |   |      |           |           |   |   |           |           |  

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TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

19.     Condensed Financial Information of TIB Financial Corp. (continued)

Condensed Statements of Cash Flows
(Parent Only)

|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ---- | ---------- | ---------- | - | ---- | ---------- | ---------- | - | - | ---------- | ---------- | -
|Years ended December 31,                         |                                                                                   | 2002 |            | 2001       |   | 2000
|                                                 |                                                                                   |      |            |            |   |     
|Cash flows from operating activities             |                                                                                   |      |            |            |   |      |            |            |   |   |            |           
|                                                 | Net income                                                                        |      | $          | 4,735,272  |   |      | $          | 3,894,340  |   |   | $          | 4,222,296  |  
|                                                 | Equity in undistributed earnings of bank subsidiary                               |      |            | (4,865,590 | ) |      |            | (2,848,561 | ) |   |            | (252,893   | )
|                                                 | Equity in undistributed (earnings) loss of TIB
Software & Services, Inc.          |      |            | 6,110      |   |      |            | 146,890    |   |   |            | (20,145    | )
|                                                 | Equity in undistributed (earnings) loss of Keys
Insurance Agency, Inc.            |      |            | (128,730   | ) |      |            | 45,380     |   |   |            | 31,750     |  
|                                                 | Amortization of intangibles and other assets                                      |      |            | 37,161     |   |      |            | 52,652     |   |   |            | 43,908     |  
|                                                 | Increase in other assets                                                          |      |            | (29,133    | ) |      |            | (63,101    | ) |   |            | (91,769    | )
|                                                 | Decrease in due to subsidiaries                                                   |      |            | (147,117   | ) |      |            | (143,631   | ) |   |            | (147,000   | )
|                                                 | Increase (decrease) in interest payable                                           |      |            | (58,194    | ) |      |            | 51,937     |   |   |            | 451,274    |  
|                                                 | Increase in other liabilities                                                     |      |            | 2,529      |   |      |            | 421        |   |   |            |           |  
|                                                 | Deferred income taxes                                                             |      |            | (89,236    | ) |      |            | (4,402     | ) |   |            | 11,696     |  
|                                                 | Increase (decrease) in net income tax obligation                                  |      |            | (65,213    | ) |      |            | 218,662    |   |   |            | 89,539     |  
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Net cash (used) provided by operating activities |                                                                                   |      | (602,141   | )          |   |      | 1,350,587  |            |   |   | 4,338,656  |           
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Cash flows from investing activities             |                                                                                   |      |            |            |   |      |            |            |   |   |            |           
|                                                 | Net decrease in receivables from subsidiaries                                     |      |            | 136        |   |      |            | 516,190    |   |   |            | 27,734     |  
|                                                 | Investment in bank subsidiary                                                     |      |            |           |   |      |            | (4,000,000 | ) |   |            | (8,008,000 | )
|                                                 | Investment in insurance subsidiary                                                |      |            |           |   |      |            |           |   |   |            | (50,000    | )
|                                                 | Payment on note receivable from sale of option                                    |      |            | 300,000    |   |      |            | 300,000    |   |   |            | 300,000    |  
|                                                 | Purchase of Keys Insurance Agency of
Monroe County, Inc.                          |      |            |           |   |      |            |           |   |   |            | (1,706,705 | )
|                                                 | Investment in Keys Insurance Agency, Inc. to
purchase BonData Group Limited, Inc. |      |            |           |   |      |            | (204,750   | ) |   |            |           |  
|                                                 | Investment in TIBFL Statutory Trust I                                             |      |            |           |   |      |            |           |   |   |            | (248,000   | )
|                                                 | Investment in TIBFL Statutory Trust II                                            |      |            |           |   |      |            | (155,000   | ) |   |            |           |  
|                                                 | Return of capital from TIB Software & Services, Inc.                              |      |            | 129,346    |   |      |            | 510,380    |   |   |            |           |  
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Net cash provided (used) in investing activities |                                                                                   |      | 429,482    |            |   |      | (3,033,180 | )          |   |   | (9,684,971 | )         
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Cash flows from financing activities             |                                                                                   |      |            |            |   |      |            |            |   |   |            |           
|                                                 | Proceeds from exercise of stock options                                           |      |            | 593,097    |   |      |            | 221,623    |   |   |            | 93,138     |  
|                                                 | Cash dividends paid                                                               |      |            | (1,713,007 | ) |      |            | (1,685,864 | ) |   |            | (1,792,998 | )
|                                                 | Treasury stock repurchased                                                        |      |            |           |   |      |            |           |   |   |            | (51,590    | )
|                                                 | Repayment of line of credit                                                       |      |            |           |   |      |            |           |   |   |            | (659,625   | )
|                                                 | Proceeds from issuance of long-term debt                                          |      |            |           |   |      |            | 5,155,000  |   |   |            | 8,248,000  |  
|                                                 | Debt issuance costs                                                               |      |            |           |   |      |            | (170,816   | ) |   |            | (301,858   | )
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Net cash provided (used) by financing activities |                                                                                   |      | (1,119,910 | )          |   |      | 3,519,943  |            |   |   | 5,535,067  |           
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Net (decrease) increase in cash                  |                                                                                   |      | (1,292,569 | )          |   |      | 1,837,350  |            |   |   | 188,752    |           
|Cash, beginning of year                          |                                                                                   |      | 2,027,432  |            |   |      | 190,082    |            |   |   | 1,330      |           
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  
|Cash, end of year                                |                                                                                   | $    | 734,863    |            |   | $    | 2,027,432  |            |   | $ | 190,082    |           
|                                                 |                                                                                   |      |            |            |   |      |            |            |   |   |            |            |  

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ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE


None




PART III




ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information set forth under the caption Election of Directors,
Management, and Filings Under Section 16(A) Beneficial Ownership Reporting
Compliance in the Proxy Statement to be utilized in connection with the
Companys 2003 Annual Shareholders Meeting is incorporated herein by reference.




ITEM 11.     EXECUTIVE COMPENSATION

The information contained under the caption Compensation of Executive Officers
and Directors in the Proxy Statement to be utilized in connection with the
Companys 2003 Annual Shareholders Meeting is incorporated herein by reference.




ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

The information contained under the caption Principal Shareholders in the
Proxy Statement to be utilized in connection with the Companys 2003 Annual
Shareholders Meeting is incorporated herein by reference.




ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the caption Certain Relationships and Related
Transactions in the Proxy Statement to be utilized in connection with the
Companys 2003 Annual Shareholders Meeting is incorporated herein by reference.




ITEM 14.     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.

No fraud that involves management or other employees who have a significant
role in the Companys internal controls have been discovered.

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. There were no significant deficiencies and material
weaknesses that require corrective action.

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PART IV




ITEM 15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



|(a) |  | 1. Financial Statements                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The consolidated financial statements, notes thereto and independent
auditors report thereon, filed as part hereof, are listed in Item 8.                                                                                                  
|   
|    |  | 2. Financial Statement Schedules                                                                                                                                                                                                            
|   
|    |  | Financial Statement schedules have been omitted as the required
information is not applicable or the required information has been
incorporated in the consolidated financial statements and related notes
incorporated by reference herein.
|   
|    |  | 3. Exhibits                                                                                                                                                                                                                                 
|   
|    |  | Exhibit Numbers                                                                                                                                                                                                                             

| |       |  |                                                                                                                                                                                                                                                                                                                            
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1*  |  | Articles of Incorporation                                                                                                                                                                                                                                                                                                  
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 3.2*  |  | Bylaws                                                                                                                                                                                                                                                                                                                     
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 4.1*  |  | Specimen Stock Certificate                                                                                                                                                                                                                                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.2* |  | 401(K) Savings and Employee Stock Ownership Plan **                                                                                                                                                                                                                                                                        
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.3* |  | Employee Incentive Stock Option Plan **                                                                                                                                                                                                                                                                                    
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.4* |  | Employment Contract between Millard J. Younkers, Jr. and TIB Bank of the Keys **                                                                                                                                                                                                                                           
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.5* |  | Employment Contract between Edward V. Lett and TIB Bank of the Keys (as amended September 24, 1996) **                                                                                                                                                                                                                     
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.6  |  | Form of Director Deferred Fee Agreement**                                                                                                                                                                                                                                                                                  
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.7  |  | Form of Director Split Dollar Agreement**                                                                                                                                                                                                                                                                                  
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.8  |  | Form of Salary Continuation Agreement**                                                                                                                                                                                                                                                                                    
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 10.9  |  | Form of Executive Officer Split Dollar Agreement**                                                                                                                                                                                                                                                                         
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 21.1  |  | Subsidiaries of the Company                                                                                                                                                                                                                                                                                                
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 23.1  |  | Consent of BDO Seidman, LLP                                                                                                                                                                                                                                                                                                
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 99.1  |  | Certification of President and Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | 99.2  |  | Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                               
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | *     |  | Items 3.1 through 4.1, and 10.2 through 10.5, as listed
above, were previously filed by the Company as Exhibits (with the
same respective Exhibit Number as indicated herein) to the Companys
Registration Statements (Registration Nos. 333-03499 and 333-24101)
and such documents are incorporated herein by reference.
| |       |  |                                                                                                                                                                                                                                                                                                                            
| | **    |  | Represents a management contract or a compensation plan or
arrangement required to be filed as an exhibit.                                                                                                                                                                                                                 



|(b) |  | Reports on Form 8-K                                                                        
|--- |  | -------------------------------------------------------------------------------------------
|   
|    |  | The Company did not file any current reports on Form 8-K during the
fourth quarter of 2002.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on March 25, 2003.

TIB FINANCIAL CORP.

By:
    /s/ Edward V. Lett

Edward V. Lett
President, CEO, & Director


Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 25, 2003.

|                                                   |  |                                                          
|-------------------------------------------------- |  | ---------------------------------------------------------
|Signature                                          |  | Title                                                    
|                                                   |  |                                                          
|                                                   |  |                                                          
|/s/ Edward V. Lett

Edward V. Lett                 |  | President (Principal Executive Officer),
CEO and Director
|                                                   |  |                                                          
|/s/ Armando J. Henriquez

Dr. Armando J. Henriquez |  | Director                                                 
|                                                   |  |                                                          
|/s/ Gretchen K. Holland

Gretchen K. Holland       |  | Director                                                 
|                                                   |  |                                                          
|/s/ James R. Lawson

James R. Lawson               |  | Director                                                 
|                                                   |  |                                                          
|/s/ Thomas J. Longe

Thomas J. Longe               |  | Director                                                 
|                                                   |  |                                                          
|/s/ Derek D. Martin-Vegue

Derek D. Martin-Vegue   |  | Director                                                 
|                                                   |  |                                                          
|/s/ John G. Parks, Jr.

John G. Parks, Jr.         |  | Director                                                 
|                                                   |  |                                                          
|/s/ Joseph H. Roth, Jr.

Joseph H. Roth, Jr.       |  | Director                                                 

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|                                                       |  |                                       
|------------------------------------------------------ |  | --------------------------------------
|Signature                                              |  | Title                                 
|                                                       |  |                                       
|/s/ Otis T. Wallace

Otis T. Wallace                   |  | Director                              
|                                                       |  |                                       
|/s/ Marvin F. Schindler

Marvin F. Schindler           |  | Director                              
|                                                       |  |                                       
|/s/ Millard J. Younkers, Jr.

Millard J. Younkers, Jr. |  | Director                              
|                                                       |  |                                       
|/s/ Robert A. Zolten

Robert A. Zolten                 |  | Director                              
|                                                       |  |                                       
|/s/ David P. Johnson

David P. Johnson                 |  | Chief Financial and Accounting Officer

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CERTIFICATIONS

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

1.     I have reviewed this annual report on Form 10-K of TIB Financial Corp;

2.     Based on my knowledge, this annual 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 annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual 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 annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003

| |                                                                              
| | -----------------------------------------------------------------------------
| | /s/ Edward V. Lett
     Edward V. Lett,
President and Chief Executive Officer

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

1.     I have reviewed this annual report on Form 10-K of TIB Financial Corp;

2.     Based on my knowledge, this annual 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 annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual 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 annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003

| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | /s/ David P.
Johnson
David P. Johnson,
Executive Vice President and Chief Financial Officer

81