##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM
10-K/A
 (Amendment No. 2)
 Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the fiscal year
ended December 31, 2004
    
    Commission file number
000-21329
 TIB FINANCIAL CORP.
  Florida
    
    65-0655973(State of Incorporation)
    
    (I.R.S. EmployerIdentification No.)
 599 9th Street NorthNaples, Florida
    
    34102(Address of Principal Executive Offices)
    
    (Zip Code)
 
   þ o
 þ
 þ o




---



TABLE OF CONTENTS  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMSIGNATURESEX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTEX-31.1: SECTION 302 CERTIFICATIONEX-31.2: SECTION 302 CERTIFICATIONEX-32.1: SECTION 906 CERTIFICATIONEX-32.2: SECTION 906 CERTIFICATION    Table of Contents  EXPLANATORY NOTE
  
    
    To refile the Report of Crowe Chizek and Company LLC, Independent Registered
Public Accounting Firm, to include the conformed signature of the firm and a
reference to the (United States) Public Company Accounting Oversight Board in
the report, which were inadvertently omitted and to correct the city of the
Companys principal executive offices, Naples, Florida.




---



##### Table of Contents



/s/ Crowe Chizek and Company LLCCrowe Chizek and Company LLC




---



##### Table of Contents



TIB Financial Corp. and Subsidiaries 
 Consolidated Balance
Sheets
(dollars in thousands, except per share amounts) December 31,
    
    2004
    
    
    2003AssetsCash and due from banks
    
    $
    27,410
    
    
    $
    17,197Federal funds sold
    
    
    15,528
    
    
    
    16,484Cash and cash equivalents
    
    
    42,938
    
    
    
    33,681Investment securities available for sale
    
    
    77,807
    
    
    
    52,557Loans, net of deferred loan costs and fees
    
    
    655,678
    
    
    
    540,413Less: Allowance for loan losses
    
    
    6,243
    
    
    
    5,216Loans, net
    
    
    649,435
    
    
    
    535,197Premises and equipment, net
    
    
    27,559
    
    
    
    21,073Goodwill
    
    
    155
    
    
    
    155Intangible assets, net
    
    
    1,392
    
    
    
    1,687Accrued interest receivable and other assets
    
    
    30,039
    
    
    
    24,948Total Assets
    
    $
    829,325
    
    
    $
    669,298Liabilities and Shareholders EquityLiabilitiesDeposits:Noninterest-bearing demand
    
    $
    152,035
    
    
    $
    121,728Interest-bearing
    
    
    535,824
    
    
    
    432,085Total deposits
    
    
    687,859
    
    
    
    553,813Federal Home Loan Bank (FHLB) advances
    
    
    35,000
    
    
    
    45,000Short-term borrowings
    
    
    12,157
    
    
    
    4,041Long-term borrowings
    
    
    18,250
    
    
    
    18,250Accrued interest payable and other liabilities
    
    
    7,945
    
    
    
    6,948Total liabilities
    
    
    761,211
    
    
    
    628,052Shareholders equityPreferred stock  no par value: 5,000,000 and 0 shares
authorized, 0 and 0 shares issued
    
    
    
    
    
    
    Common stock
 $.10 par value: 20,000,000 and
7,500,000 shares authorized, 5,679,239 and
4,431,328 shares issued
    
    
    568
    
    
    
    443Additional paid in capital
    
    
    38,284
    
    
    
    14,255Retained earnings
    
    
    28,968
    
    
    
    26,203Accumulated other comprehensive income
    
    
    294
    
    
    
    345Total shareholders equity
    
    
    68,114
    
    
    
    41,246Total Liabilities and Shareholders Equity
    
    $
    829,325
    
    
    $
    669,298
 See accompanying notes to consolidated financial statements.    Table of Contents  TIB Financial Corp. and Subsidiaries 
 Consolidated Statements
of Income
(dollars in thousands, except per share amounts) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Interest and dividend incomeLoans, including fees
    
    $
    37,720
    
    
    $
    31,664
    
    
    $
    27,783Investment securities:U.S. Treasury securities
    
    
    124
    
    
    
    7
    
    
    
    124U.S. Government agencies and corporations
    
    
    2,023
    
    
    
    2,003
    
    
    
    2,309States and political subdivisions, tax-exempt
    
    
    406
    
    
    
    329
    
    
    
    260States and political subdivisions, taxable
    
    
    197
    
    
    
    240
    
    
    
    381Other investments
    
    
    251
    
    
    
    59
    
    
    
    46Interest-bearing deposits in other banks
    
    
    11
    
    
    
    3
    
    
    
    5Federal Home Loan Bank stock
    
    
    57
    
    
    
    59
    
    
    
    78Federal funds sold
    
    
    127
    
    
    
    242
    
    
    
    330Total interest and dividend income
    
    
    40,916
    
    
    
    34,606
    
    
    
    31,316Interest expenseInterest-bearing demand and money market
    
    
    1,519
    
    
    
    1,321
    
    
    
    2,057Savings
    
    
    174
    
    
    
    170
    
    
    
    223Time deposits of $100,000 or more
    
    
    3,507
    
    
    
    3,165
    
    
    
    2,721Other time deposits
    
    
    3,371
    
    
    
    3,279
    
    
    
    3,282Long-term debt-subordinated debentures
    
    
    1,119
    
    
    
    1,109
    
    
    
    1,140Federal Home Loan Bank advances
    
    
    475
    
    
    
    276
    
    
    
    383Short-term borrowings
    
    
    83
    
    
    
    38
    
    
    
    42Notes payable
    
    
    482
    
    
    
    481
    
    
    
    481Total interest expense
    
    
    10,730
    
    
    
    9,839
    
    
    
    10,329Net interest income
    
    
    30,186
    
    
    
    24,767
    
    
    
    20,987Provision for loan losses
    
    
    2,455
    
    
    
    1,586
    
    
    
    791Net interest income after provision for loan losses
    
    
    27,731
    
    
    
    23,181
    
    
    
    20,196Non-interest incomeService charges on deposit accounts
    
    
    2,547
    
    
    
    2,452
    
    
    
    2,240Investment securities gains, net
    
    
    106
    
    
    
    289
    
    
    
    218Merchant bankcard processing income
    
    
    5,757
    
    
    
    4,953
    
    
    
    4,387Dividend income from ERAS Joint Venture
    
    
    
    
    
    
    
    
    
    
    33Gain on sale of investment in ERAS Joint Venture
    
    
    
    
    
    
    202
    
    
    
    211Gain on sale of government guaranteed loans
    
    
    
    
    
    
    117
    
    
    
    28Fees on mortgage loans sold
    
    
    1,852
    
    
    
    2,201
    
    
    
    1,583Retail investment services
    
    
    333
    
    
    
    420
    
    
    
    206Other income
    
    
    1,468
    
    
    
    1,403
    
    
    
    1,522Total non-interest income
    
    
    12,063
    
    
    
    12,037
    
    
    
    10,428Non-interest expenseSalaries and employee benefits
    
    
    14,686
    
    
    
    12,878
    
    
    
    10,602Net occupancy and equipment expense
    
    
    4,964
    
    
    
    4,326
    
    
    
    3,680Other expense
    
    
    12,274
    
    
    
    10,365
    
    
    
    9,350Total non-interest expense
    
    
    31,924
    
    
    
    27,569
    
    
    
    23,632Income before income tax expense
    
    
    7,870
    
    
    
    7,649
    
    
    
    6,992Income tax expense
    
    
    2,672
    
    
    
    2,672
    
    
    
    2,386Income from continuing operations
    
    
    5,198
    
    
    
    4,977
    
    
    
    4,606
    Table of Contents  TIB Financial Corp. and Subsidiaries Consolidated Statements
of Income
(dollars in thousands, except per share amounts) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Discontinued operationsIncome from Keys Insurance Agency, Inc. operations
    
    
    
    
    
    
    200
    
    
    
    206Income tax expense
    
    
    
    
    
    
    75
    
    
    
    77Income from discontinued operations
    
    
    
    
    
    
    125
    
    
    
    129Net income
    
    $
    5,198
    
    
    $
    5,102
    
    
    $
    4,735Basic earnings per common shareContinuing operations
    
    $
    0.98
    
    
    $
    1.17
    
    
    $
    1.15Discontinued operations
    
    
    
    
    
    
    .03
    
    
    
    .04Basic earnings per share
    
    $
    0.98
    
    
    $
    1.20
    
    
    $
    1.19Diluted earnings per common shareContinuing operations
    
    $
    0.95
    
    
    $
    1.12
    
    
    $
    1.11Discontinued operations
    
    
    
    
    
    
    .03
    
    
    
    .03Diluted earnings per share
    
    $
    0.95
    
    
    $
    1.15
    
    
    $
    1.14
 See accompanying notes to consolidated financial statements.    Table of Contents  TIB Financial Corp. and Subsidiaries 
 Consolidated Statements
of Changes in Shareholders Equity
(dollars in thousands, except per share amounts) AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance,January 1, 2002
    
    
    3,946,100
    
    
    $
    395
    
    
    $
    8,222
    
    
    $
    20,019
    
    
    $
    36
    
    
    $
    28,672Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,735
    
    
    
    
    
    
    
    4,735Other comprehensive income, net of tax expense of $650:Unrealized holding gain on securities transferred into the available for
sale category from the held to maturity category
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    944Less: reclassification adjustment for gains
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,079Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,814Exercise of stock options
    
    
    89,525
    
    
    
    8
    
    
    
    584
    
    
    
    
    
    
    
    
    
    
    
    592Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    160
    
    
    
    
    
    
    
    
    
    
    
    160Cash dividends declared, $.4325 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,732
    )
    
    
    
    
    
    
    (1,732
    )Balance,December 31, 2002
    
    
    4,035,625
    
    
    $
    403
    
    
    $
    8,966
    
    
    $
    23,022
    
    
    $
    1,115
    
    
    $
    33,506Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,102
    
    
    
    
    
    
    
    5,102Other comprehensive income, net of tax
benefit of $464:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (590
    )Less: reclassification adjustment for gains
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (180
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (770
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,332Exercise of stock options
    
    
    115,050
    
    
    
    12
    
    
    
    723
    
    
    
    
    
    
    
    
    
    
    
    735Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    251
    
    
    
    
    
    
    
    
    
    
    
    251Private placement of common shares
    
    
    280,653
    
    
    
    28
    
    
    
    4,315
    
    
    
    
    
    
    
    
    
    
    
    4,343Cash dividends declared, $.4425 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,921
    )
    
    
    
    
    
    
    (1,921
    )Balance,December 31, 2003
    
    
    4,431,328
    
    
    $
    443
    
    
    $
    14,255
    
    
    $
    26,203
    
    
    $
    345
    
    
    $
    41,246
    Table of Contents  TIB Financial Corp. and Subsidiaries Consolidated Statements
of Changes in Shareholders Equity
(dollars in thousands, except per share amounts) AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance,December 31, 2003
    
    
    4,431,328
    
    
    $
    443
    
    
    $
    14,255
    
    
    $
    26,203
    
    
    $
    345
    
    
    $
    41,246Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,198
    
    
    
    
    
    
    
    5,198Other comprehensive income, net of tax
benefit of $32:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Less: reclassification adjustment for gains
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,147Public offering of common shares
    
    
    1,150,000
    
    
    
    115
    
    
    
    23,115
    
    
    
    
    
    
    
    
    
    
    
    23,230Exercise of stock options
    
    
    97,911
    
    
    
    10
    
    
    
    668
    
    
    
    
    
    
    
    
    
    
    
    678Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    246
    
    
    
    
    
    
    
    
    
    
    
    246Cash dividends declared, $.4525 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,433
    )
    
    
    
    
    
    
    (2,433
    )Balance,December 31, 2004
    
    
    5,679,239
    
    
    $
    568
    
    
    $
    38,284
    
    
    $
    28,968
    
    
    $
    294
    
    
    $
    68,114
 See accompanying notes to consolidated financial statements.    Table of Contents  TIB Financial Corp. and Subsidiaries 
 Consolidated Statements of Cash Flows
(in thousands) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Cash flows from operating activitiesNet income
    
    $

    5,198
    
    
    $
    5,102
    
    
    $
    4,735Adjustments to reconcile net income to net cash provided by
operating activities:Net amortization of investments
    
    
    62
    
    
    
    59
    
    
    
    100Amortization of intangible assets
    
    
    295
    
    
    
    292
    
    
    
    297Depreciation of premises and equipment
    
    
    1,950
    
    
    
    1,756
    
    
    
    1,528Loss on sale of servicing rights
    
    
    
    
    
    
    
    
    
    
    3Loss on sale of assets of Keys Insurance Agency, Inc.
    
    
    
    
    
    
    15
    
    
    
    Gain on sale of investment in ERAS Joint Venture
    
    
    
    
    
    
    (202
    )
    
    
    (211
    )Provision for loan losses
    
    
    2,455
    
    
    
    1,586
    
    
    
    791Provision for losses on unfunded loan commitments
    
    
    47
    
    
    
    39
    
    
    
    25Deferred income tax benefit
    
    
    (90
    )
    
    
    (852
    )
    
    
    (249
    )Deferred net loan costs and fees
    
    
    (342
    )
    
    
    (1,031
    )
    
    
    (941
    )Investment securities net gains
    
    
    (106
    )
    
    
    (289
    )
    
    
    (218
    )Gain on sales/disposition of premises and equipment, net
    
    
    (2
    )
    
    
    (2
    )
    
    
    (8
    )Gains on sales of government guaranteed loans, net
    
    
    
    
    
    
    (117
    )
    
    
    (28
    )Gain on sale of Investment Center intangible
    
    
    (50
    )
    
    
    
    
    
    
    Mortgage loans originated for sale
    
    
    (108,543
    )
    
    
    (111,011
    )
    
    
    (83,233
    )Proceeds from sales of mortgage loans
    
    
    108,543
    
    
    
    119,345
    
    
    
    85,096Fees on mortgage loans sold
    
    
    (1,852
    )
    
    
    (2,201
    )
    
    
    (1,583
    )Increase in accrued interest receivable and other assets
    
    
    (1,756
    )
    
    
    (1,690
    )
    
    
    (3,309
    )Increase (decrease) in accrued interest payable and
other liabilities
    
    
    992
    
    
    
    (1,225
    )
    
    
    2,533Net cash provided by operating activities
    
    
    6,801
    
    
    
    9,574
    
    
    
    5,328Cash flows from investing activitiesPurchases of investment securities available for sale
    
    
    (38,368
    )
    
    
    (27,846
    )
    
    
    (24,404
    )Sales of investment securities available for sale
    
    
    9,281
    
    
    
    4,000
    
    
    
    14,343Repayments of principal and maturities of investment
securities available for sale
    
    
    3,797
    
    
    
    24,553
    
    
    
    9,994Net (purchase) sale of FHLB stock
    
    
    (660
    )
    
    
    (890
    )
    
    
    140Proceeds from sales of government guaranteed loans
    
    
    569
    
    
    
    2,241
    
    
    
    542Proceeds from sale of Investment Center intangible
    
    
    50
    
    
    
    
    
    
    
    Proceeds from sale of investment in ERAS JV
    
    
    
    
    
    
    327
    
    
    
    340Proceeds from sale of assets of Keys Insurance Agency, Inc.
    
    
    
    
    
    
    184
    
    
    
    Payment on note receivable from sale of option
    
    
    
    
    
    
    
    
    
    
    300Net proceeds received from servicing rights sales
    
    
    
    
    
    
    
    
    
    
    33Loans originated or acquired, net of principal repayments
    
    
    (115,910
    )
    
    
    (97,599
    )
    
    
    (63,348
    )Purchase of life insurance policies
    
    
    (700
    )
    
    
    (250
    )
    
    
    (1,795
    )Purchases of premises and equipment
    
    
    (9,495
    )
    
    
    (3,492
    )
    
    
    (3,375
    )Sales of premises and equipment
    
    
    100
    
    
    
    5
    
    
    
    31Net cash used by investing activities
    
    
    (151,336
    )
    
    
    (98,767
    )
    
    
    (67,199
    )
 -Continued-    Table of Contents  TIB Financial Corp. and Subsidiaries Consolidated Statements of Cash Flows
(in thousands) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Cash flows from financing activitiesNet increase (decrease) in federal funds purchased
and securities sold under agreements to repurchase
    
    
    8,116
    
    
    
    (538
    )
    
    
    3,845Net increase (decrease) in FHLB short-term advances
    
    
    (5,000
    )
    
    
    15,000
    
    
    
    (5,000
    )Proceeds from FHLB long-term advances
    
    
    25,000
    
    
    
    30,000
    
    
    
    Repayments of FHLB long-term advances
    
    
    (30,000
    )
    
    
    (20,000
    )
    
    
    Net increase in demand, money market and savings
accounts
    
    
    87,894
    
    
    
    25,716
    
    
    
    39,081Net increase in time deposits
    
    
    46,152
    
    
    
    45,414
    
    
    
    27,866Proceeds from exercise of stock options
    
    
    678
    
    
    
    735
    
    
    
    592Proceeds from public offering of common stock
    
    
    23,230
    
    
    
    
    
    
    
    Proceeds from private placement of common stock
    
    
    
    
    
    
    4,343
    
    
    
    Cash dividends paid
    
    
    (2,278
    )
    
    
    (1,866
    )
    
    
    (1,713
    )Net cash provided by financing activities
    
    
    153,792
    
    
    
    98,804
    
    
    
    64,671Net increase in cash and cash equivalents
    
    
    9,257
    
    
    
    9,611
    
    
    
    2,800Cash and cash equivalents at beginning of year
    
    
    33,681
    
    
    
    24,070
    
    
    
    21,270Cash and cash equivalents at end of year
    
    $
    42,938
    
    
    $
    33,681
    
    
    $
    24,070Supplemental disclosures of cash paid:Interest
    
    $
    10,542
    
    
    $
    9,211
    
    
    $
    10,790Income taxes
    
    
    1,945
    
    
    
    3,775
    
    
    
    2,741
 See accompanying notes to consolidated financial statements.    Table of Contents  TIB Financial Corp. and Subsidiaries 
 Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 1 - Summary of Significant Accounting Policies Principles of Consolidation and Nature of Operations TIB Financial Corp. is a financial holding company
headquartered in Naples, Florida. The
consolidated financial statements include the
accounts of TIB Financial Corp. (Parent Company)
and its wholly-owned subsidiaries, TIB Bank (Bank), Keys Insurance Agency, Inc. (assets
sold in August 2003  see Note 20), and TIB
Software and Services, Inc. (assets sold in 2003 
see Note 2), collectively known as the Company.
All significant intercompany accounts and
transactions have been eliminated in
consolidation. TIBFL Statutory Trust I and TIBFL
Statutory Trust II were formed in conjunction with
the issuance of trust preferred securities as
further discussed in Note 10. TIB Bank is the Companys primary
operating subsidiary. The Bank provides banking
services from its sixteen branch locations in
Monroe, Miami-Dade, Collier and Lee counties,
Florida. 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 To prepare financial statements in conformity with
accounting principles generally accepted in the
United States of America, management makes
estimates and assumptions based on available
information. These estimates and assumptions
affect the amounts reported in the financial
statements and the disclosures provided, and
actual results could differ. A material estimate
that is particularly susceptible to significant
change in the near term is the allowance for loan
losses. Another material estimate is the fair
value of financial instruments. Changes in
assumptions or in market conditions could
significantly affect the fair value estimates. Cash and Cash Equivalents For purposes of the consolidated statements of
cash flows, cash and cash equivalents include cash
on hand, amounts due from banks, federal funds
sold, and interest-bearing deposits at the Federal
Home Loan Bank of Atlanta. Net cash flows are
reported for loan and deposit transactions. Investment Securities Investment securities which management has the
ability and intent to hold to maturity are
reported at amortized cost. Securities available
for sale are carried at fair value, with
unrealized holding gains and losses reported in
other comprehensive income. Other securities such
as Federal Home Loan Bank stock are carried at
cost. Interest income includes amortization of purchase
premium or discount. Premiums and discounts on
securities are amortized on the level-yield method
without anticipating prepayments. Gains and losses
on sales are recorded on the trade date and
determined using the specific identification
method based on the amortized cost of the security
sold. Declines in the fair value of securities below
their cost that are other than temporary are
reflected as realized losses. In estimating
other-than temporary losses, management considers:
(1) the length of time and extent that fair value
has been less than cost, (2) the financial
condition and near term prospects of the issuer,
and (3) the Companys ability and intent to hold
the security for a period sufficient to allow for
any anticipated recovery in fair value.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Loans Loans are reported at the principal balance
outstanding, net of deferred loan fees and costs,
and an allowance for loan losses. Interest income
is reported on the interest method and includes
amortization of net deferred loan fees and costs
over the loan term. If the collectibility of
interest appears doubtful, the accrual of interest
is discontinued and all unpaid interest is
reversed. Loans are returned to accrual status
when all the principal and interest amounts
contractually due are brought current and future
payments are reasonably assured.

          Gains on sales of government guaranteed loans are
recognized as income when the sales occur. Loans Held for Sale The majority of fixed rate mortgage loans are
originated by the Bank and sold servicing released
to a third party immediately without recourse.
All fees are recognized as income at the time of
the sale. Mortgage loans originated and intended
for sale in the secondary market are carried at
the lower of aggregate cost or market, as
determined by outstanding commitments from
investors. Net unrealized losses, if any, are
recorded as a valuation allowance and charged to
earnings. Allowance for Loan Losses The allowance for loan losses is a valuation
allowance for probable incurred credit losses,
which is increased by the provision for loan
losses and decreased by charge-offs less
recoveries. Loan losses are charged against the
allowance when management believes the
uncollectiblity of a loan balance is confirmed.
Subsequent recoveries, if any, are credited to the
allowance. Management estimates the allowance
balance required based on factors including past
loan loss experience, the nature and volume of the
portfolio, information about specific borrower
situations and estimated collateral values,
economic conditions, and other factors.
Allocations of the allowance may be made for
specific loans, but the entire allowance is
available for any loan that, in managements
judgment, should be charged off. The allowance consists of specific and general
components. The specific component relates to
loans that are individually classified as impaired
or loans otherwise classified as substandard or
doubtful. The general component covers
non-classified loans and is based on historical
loss experience adjusted for current factors. A loan is considered impaired when it is probable
that not all principal and interest amounts will
be collected according to the loan contract.
Individual commercial and commercial real estate
loans exceeding certain size thresholds
established by management are individually
evaluated for impairment. If a loan is considered
to be impaired, a portion of the allowance is
allocated so that the loan is reported net, at the
present value of estimated future cash flows using
the loans existing rate or at the fair value of
collateral if repayment is expected solely from
the collateral. Large groups of smaller balance
homogeneous loans, such as consumer, indirect, and
residential real estate loans, are collectively
evaluated for impairment, and accordingly, they
are not separately identified for impairment
disclosures. Premises and Equipment Land is carried at cost. Premises and equipment
are reported at cost less accumulated
depreciation. For financial reporting purposes,
depreciation is computed using 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.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Foreclosed Assets Assets acquired through, or in lieu of, loan
foreclosure are held for sale and are initially
recorded at fair value when acquired, establishing
a new cost basis. If fair value declines
subsequent to foreclosure, a valuation allowance
is recorded through expense. Costs after
acquisition are expensed. Goodwill and Other Intangible Assets Goodwill results from business acquisitions and
represents the excess of the purchase price over
the fair value of acquired tangible assets and
liabilities and identifiable intangible assets.
Upon adopting new accounting guidance in 2002, the
Company ceased amortizing goodwill. Goodwill is
assessed at least annually for impairment and any
such impairment will be recognized in the period
identified. Other intangible assets include amounts for servicing
rights on government guaranteed loans and core deposit
base premiums arising from branch acquisitions and are
initially measured at fair value. 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. Long-term Assets Long-lived assets, including premises and
equipment, core deposit and other intangible
assets, are reviewed for impairment when events
indicate their carrying amount may not be
recoverable from future undiscounted cash flows.
If impaired, the assets are recorded at fair
value. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet
credit instruments, such as commitments to make
loans and letters of credit, issued to meet
customer financing needs. The face amount for
these items represents the exposure to loss,
before considering customer collateral or ability
to repay. Such financial instruments are recorded
when they are funded. Company Owned Life Insurance The Company has purchased life insurance polices
on certain key executives. Company owned life
insurance is recorded at its cash surrender value,
or the amount that can be realized, and included
in other assets on the balance sheet. Income Taxes Income tax expense is the total of the current
year income tax due or refundable and the change
in deferred tax assets and liabilities. Deferred
income tax assets and liabilities are determined
using the liability (or balance sheet) method.
Under this method, the net deferred tax asset or
liability is determined based on the tax effects
of the temporary differences between the book and
tax basis of the various balance sheet assets and
liabilities and gives current recognition to
changes in tax rates and laws.    Table of Contents  Earnings Per Common Share
  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Basic earnings per share is net income divided by
the weighted average number of common shares
outstanding during the period. Diluted earnings
per share includes the dilutive effect of
additional potential common shares issuable under
stock options. Earnings per share have been computed based on the following
for the years ended December 31: 2004
    
    
    2003
    
    
    2002Weighted average number of common shares outstanding:Basic
    
    
    5,309,860
    
    
    
    4,257,224
    
    
    
    3,992,775Dilutive effect of options outstanding
    
    
    169,836
    
    
    
    178,637
    
    
    
    152,080Diluted
    
    
    5,479,696
    
    
    
    4,435,861
    
    
    
    4,144,855
 Stock options for 29,720, 5,027, and 152,955
shares of common stock were not considered in
computing diluted earnings per common share for
2004, 2003, and 2002 because they were
anti-dilutive. The effect of stock options, as
described in Note 15, is the sole common stock
equivalent for purposes of calculating diluted
earnings per common share. Stock-Based Compensation Employee compensation expense under stock options
is reported using the intrinsic value method. No
stock-based compensation cost is reflected in net
income, as all options granted had an exercise
price equal to or greater than the market price of
the underlying common stock at date of grant. The
following table illustrates the effect on net
income and earnings per share if expense was
measured using the fair value recognition
provisions of FASB Statement No. 123, Accounting
for Stock-Based Compensation. 2004
    
    
    2003
    
    
    2002Net income, as reported
    
    $
    5,198
    
    
    $
    5,102
    
    
    $
    4,735Stock-based compensation expense determined under fair value
based method, net of tax
    
    
    215
    
    
    
    173
    
    
    
    157Pro forma net income
    
    
    4,983
    
    
    $
    4,929
    
    
    $
    4,578Basic earnings per share as reported
    
    $
    0.98
    
    
    $
    1.20
    
    
    $
    1.19Pro forma basic earnings per share
    
    
    0.94
    
    
    
    1.16
    
    
    
    1.15Diluted earnings per share as reported
    
    
    0.95
    
    
    
    1.15
    
    
    
    1.14Pro forma diluted earnings per share
    
    
    0.91
    
    
    
    1.11
    
    
    
    1.10
 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, : 2004
    
    
    2003
    
    
    2002Dividend yield
    
    
    2.3
    %
    
    
    2.7
    %
    
    
    3.2
    %Risk-free interest rate
    
    4.0% to 4.1%
    
    4.0% to 4.2%
    
    4.4% to 5.4%Expected option life
    
    9 years
    
    9 years
    
    9.2 yearsVolatility
    
    
    .33
    
    
    
    .31
    
    
    
    .29Weighted average fair value of options granted during year
    
    $
    8.16
    
    
    $
    5.83
    
    
    $
    3.69
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Comprehensive Income Comprehensive income consists of net income and
other comprehensive income. Other comprehensive
income includes unrealized gains and losses on
securities available for sale which are also
recognized as separate components of equity. Loss Contingencies Loss contingencies, including claims and legal
actions arising in the ordinary course of
business, are recorded as liabilities when the
likelihood of loss is probable and an amount or
range of loss can be reasonably estimated.
Management does not believe there are now such
matters that will have a material effect on the
financial statements. Operating Segments Internal financial information is primarily
reported and aggregated in three lines of
business: community banking, merchant bankcard,
and parent and other. Fair Value of Financial Instruments Fair values of financial instruments are estimated
using relevant market information and other
assumptions, as more fully disclosed in Note 18.
Fair value estimates include uncertainties and
matters of significant judgment regarding interest
rates, credit risk, prepayments, and other
factors, especially in the absence of broad
markets for particular items. Changes in
assumptions or in market conditions could
significantly affect these estimates. Recent Accounting Pronouncements During 2004, the FASB revised Statement No. 123,
Accounting for Stock-Based Compensation (SFAS
123R) which established accounting requirements
for share-based compensation to employees and
carries forward prior guidance on accounting for
awards to non-employees. The provisions of this
statement will become effective for reporting
periods beginning after June 15, 2005 for all
equity awards granted after the effective date and
for the subsequent vesting of previously granted
awards. SFAS 123R requires an entity to recognize
compensation expense based on an estimate of the
fair value and number of awards expected to
actually vest, exclusive of awards expected to be
forfeited. Currently, the Company accounts for
stock options granted to employees according to
the provisions of APB Opinion No. 25, whereby
compensation expense is recorded based upon the
intrinsic value method. The stock-based
compensation table on the previous page
illustrates the effect on net income and earnings
per share if we had applied the fair value
recognition provisions of SFAS 123 to stock-based
employee compensation. The Company is required to
and will adopt SFAS 123R on July 1, 2005. In December 2004, the FASB issued Statement No.
153, Exchanges of Nonmonetary Assets, an
amendment of APB Opinion No. 29, Accounting for
Nonmonetary Transactions. This statement amends
the principle of APB No. 29 that exchanges of
nonmonetary assets should be measured based on the
fair value of the assets exchanged and more
broadly provides for exceptions regarding
exchanges of nonmonetary assets that do not have
commercial substance. This Statement is effective
for nonmonetary asset exchanges occurring in
fiscal periods beginning after June 15, 2005. The
adoption of this standard is not expected to have
a material impact on the financial condition, the
results of operations, or liquidity of the
Company. In March 2004, the FASB Emerging Issues Task Force
(EITF) released Issue 03-1, Meaning of Other Than
Temporary Impairment and Its Application to
Certain Investments, which addressed
other-than-temporary impairment for certain debt
and equity investments. The recognition and
measurement requirements of Issue 03-1, and other
disclosure requirements not already implemented,
were effective for periods beginning after June
15, 2004. In September 2004, the FASB staff issued
FASB Staff Position (FSP) EITF 03-1-1, which
delayed the effective date for certain measurement
and recognition guidance contained in Issue 03-1. The FSP requires the application of pre-existing
other-than-temporary guidance during the period of
delay until a final consensus is reached.
Management does not anticipate the issuance of the
final consensus will have a material impact on the
financial condition, the results of operations, or
liquidity of the Company.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) In March 2004, the SEC issued Staff Accounting
Bulletin No. 105, Application of Accounting
Principles to Loan Commitments (SAB 105). This
bulletin was issued to inform registrants of the
SECs view that the fair value of the recorded
loan commitments, which are required to follow
derivative accounting under FAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities, should not consider the expected
future cash flows related to the associated
servicing of the future loan. The provisions of
SAB 105 must be applied to loan commitments
accounted for as derivatives that are entered into
after March 31, 2004. The adoption of this Staff
Accounting Bulletin did not have a material impact
on the financial condition, the results of
operations, or liquidity of the Company. In December 2003, The American Institute of
Certified Public Accountants issued Statement of
Position (SOP) 03-3, Accounting for Certain Loans
or Debt Securities Acquired in a Transfer. SOP
03-3 requires acquired loans, including debt
securities and loans acquired in a business
combination, to be recorded at the amount of the
purchasers initial investment and prohibits
carrying over valuation allowances from the seller
for these loans that have evidence of
deterioration in credit quality since origination,
and it is probable all contractual cash flows on
the loan will be unable to be collected. The
provisions of this SOP are effective for loans
acquired in fiscal years beginning after December
15, 2004 and their adoption is not expected to
have a material impact on the financial condition,
the results of operations, or liquidity of the
Company. Reclassifications Some items in the prior year financial statements
were reclassified to conform to the current
presentation. Note 2 - Acquisitions and Divestitures 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. The Ventures primary business is item processing and the
design, development, installation and maintenance of accounting software for financial
institutions. Goodwill associated with the transaction totaled $638 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. The Company recognized a gain
of $820 on the transaction. This sale reduced the Companys ownership in the Venture to
10%. Beginning January 1, 2002, the investment in the Venture was 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. The Company recognized a gain of $211 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 $33. On May 29, 2003, TIB Software
and Services, Inc. sold its remaining interest in the Venture for $327. The Company
recognized a pretax gain of $202 on the transaction. In March 2004, the Company filed
Articles of Dissolution dissolving TIB Software and Services, Inc. ERAS Joint Venture is the Banks item processor. Payments of approximately $577, $579 and
$483 were made by the Bank to the Venture in 2004, 2003, and 2002, respectively. Of the
amount paid in 2003, approximately $249 was paid to the Venture through the sale date of
May 29, 2003.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) 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) had three offices in the Florida Keys and brokered 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
which consisted primarily of intangible assets. The consideration consisted of $220 of
Company common stock (21,463 shares) and $1,650 in cash (paid at closing). Under the
purchase agreement, annual cash payments of $110 were 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 was paid at the end of
each contingency period would 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 or 2003.
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. This was
comprised of approximately $68 in the Companys common stock (5,640 shares) and
approximately $205 in cash. Under the purchase agreement, annual cash payments of $24 were
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 was paid at the end of each contingency period, would 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 or 2003. This acquisition was recorded using the purchase
method of accounting. On August 15, 2003, the Company closed the sale of Keys Insurance Agency, Inc., a wholly
owned subsidiary of the Company, to Derek Martin-Vegue and his partner. Mr. Martin-Vegue
is a former director of the Company and TIB Bank. The transaction was
structured as a sale of the agency assets. The buyer paid $2,205 in cash at the closing.
Of the cash payment at closing, proceeds of $2,021 were pursuant to a loan from TIB Bank
(a subsidiary of the Company) to the buyer. The Company recognized a loss of
$15 on the transaction. Therefore, the results of operations of Keys Insurance Agency,
Inc. are included in the Consolidated Statements of Income as discontinued operations
(Note 20). In March 2004, the Company filed Articles of Dissolution dissolving Keys
Insurance Agency, Inc. On December 15, 2004, the Company closed the sale of certain intangible assets which
primarily comprised a book of business which served as the foundation of the Companys
investment center operations. The buyer paid $50 in cash at the closing. The Company
recognized a gain of $50 on the transaction. Under the purchase agreement, additional cash
payments totaling up to $60 may be paid to the Company subject to the achievement of
certain production and customer and asset retention thresholds. Additionally, the Company
will receive monthly cash payments of 10% of production related to new referrals made
through December 31, 2005. Note 3 -  Cash and Due From Banks Cash on hand or on deposit with the Federal Reserve Bank of $3,979 and $3,769
was required to meet regulatory reserve and clearing requirements at December
31, 2004, and December 31, 2003, respectively. These balances do not earn
interest. The Bank maintains an interest bearing account at the Federal Home Loan Bank
of Atlanta. The total on deposit was approximately $203 and $170 at December
31, 2004 and December 31, 2003, respectively.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 4 - Investment
Securities The amortized cost, estimated fair value, and the related gross unrealized gains and
losses recognized in accumulated other comprehensive income, are as follows for investment
securities available for sale: Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedDecember 31, 2004
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueU.S. Treasury securities
    
    $
    5,178
    
    
    $
    5
    
    
    $
    29
    
    
    $
    5,154U.S. Government agencies and
corporations
    
    
    54,228
    
    
    
    104
    
    
    
    869
    
    
    
    53,463States and political subdivisions-
tax exempt
    
    
    9,596
    
    
    
    246
    
    
    
    26
    
    
    
    9,816States and political subdivision -
taxable
    
    
    2,862
    
    
    
    17
    
    
    
    23
    
    
    
    2,856Marketable equity securities
    
    
    3,000
    
    
    
    987
    
    
    
    
    
    
    
    3,987Mortgage-backed securities
    
    
    2,473
    
    
    
    58
    
    
    
    
    
    
    
    2,531$
    77,337
    
    
    $
    1,417
    
    
    $
    947
    
    
    $
    77,807
 Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedDecember 31, 2003
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueU.S. Treasury securities
    
    $
    209
    
    
    $
    9
    
    
    $
    
    
    
    $
    218U.S. Government agencies and
corporations
    
    
    31,357
    
    
    
    425
    
    
    
    663
    
    
    
    31,119States and political subdivisions-
tax exempt
    
    
    8,838
    
    
    
    378
    
    
    
    59
    
    
    
    9,157States and political subdivision -
taxable
    
    
    3,559
    
    
    
    42
    
    
    
    101
    
    
    
    3,500Marketable equity securities
    
    
    3,000
    
    
    
    395
    
    
    
    
    
    
    
    3,395Mortgage-backed securities
    
    
    5,041
    
    
    
    128
    
    
    
    1
    
    
    
    5,168$
    52,004
    
    
    $
    1,377
    
    
    $
    824
    
    
    $
    52,557
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Securities with unrealized losses not recognized in income are as follows: December 31, 2004
    
    Less than 12 months
    
    
    12 months or longer
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Treasury securities
    
    $
    5,046
    
    
    $
    29
    
    
    $
    
    
    
    $
    
    
    
    $
    5,046
    
    
    $
    29U.S. Government agencies
and corporations
    
    
    24,858
    
    
    
    201
    
    
    
    20,379
    
    
    
    668
    
    
    
    45,237
    
    
    
    869States and political
subdivisions  tax exempt
    
    
    2,421
    
    
    
    22
    
    
    
    230
    
    
    
    4
    
    
    
    2,651
    
    
    
    26States and political
subdivision - taxable
    
    
    2,312
    
    
    
    19
    
    
    
    131
    
    
    
    4
    
    
    
    2,443
    
    
    
    23Total temporarily impaired
    
    $
    34,637
    
    
    $
    271
    
    
    $
    20,740
    
    
    $
    676
    
    
    $
    55,377
    
    
    $
    947
 December 31, 2003
    
    Less than 12 months
    
    
    12 months or longer
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Government agencies
and corporations
    
    $
    20,396
    
    
    $
    663
    
    
    $
    
    
    
    $
    
    
    
    $
    20,396
    
    
    $
    663States and political
subdivisions - tax exempt
    
    
    3,055
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    3,055
    
    
    
    59States and political
subdivision - taxable
    
    
    3,000
    
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    101Mortgage-backed securities
    
    
    132
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    132
    
    
    
    1Total temporarily impaired
    
    $
    26,583
    
    
    $
    824
    
    
    $
    
    
    
    $
    
    
    
    $
    26,583
    
    
    $
    824
 The Company views the unrealized losses in the above table to be temporary in nature for the
following reasons. First, the decline in market values are mostly due to an increase in market
rates and are not credit related. These securities are mostly AAA rated securities and have
experienced no significant deterioration in value due to credit quality concerns. Second, the
magnitude of the unrealized losses at about 2% of the fair value of those securities with
losses is consistent with normal fluctuations of value due to the volatility of market interest
rates. Finally, the nature of what makes up the security portfolio is determined by the
overall balance sheet of the Company and currently it is suitable for the Companys security
portfolio to be primarily comprised of fixed rate securities. Fixed rate securities will by
their nature react in price inversely to changes in market rates and that is liable to occur in
both directions. The amortized cost and estimated fair value of investment securities available for
sale at December 31, 2004, by contractual maturity, are shown as follows. Expected
maturities may differ from contractual maturities because borrowers may have the
right to call or repay obligations without call or prepayment penalties.
Securities not due at a single maturity date, primarily mortgage-backed
securities, are shown separately.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Investment SecuritiesAvailable for SaleAmortized
    
    
    EstimatedDecember 31, 2004
    
    Cost
    
    
    Fair ValueDue in one year or less
    
    $
    
    
    
    $
    Due after one year through five years
    
    
    41,010
    
    
    
    40,807Due after five years through ten years
    
    
    26,184
    
    
    
    25,860Due after ten years
    
    
    4,670
    
    
    
    4,622Marketable equity securities
    
    
    3,000
    
    
    
    3,987Mortgage-backed securities
    
    
    2,473
    
    
    
    2,531$
    77,337
    
    
    $
    77,807
 At December 31, 2004, securities with a fair value of approximately $25,561 are subject to call
during 2005. Sales of available for sale securities were as follows: 2004
    
    
    2003
    
    
    2002Proceeds
    
    $
    9,281
    
    
    $
    4,000
    
    
    $
    14,343Gross gains
    
    
    146
    
    
    
    280
    
    
    
    200Gross losses
    
    
    (43
    )
    
    
    
    
    
    
    
 The
tax provision related to net realized gains was $39, $105 and $75
during 2004, 2003 and 2002, respectively. Maturities, principal repayments, and calls of investment
securities available for sale during 2004, 2003 and 2002 were
$3,797, $24,553 and $9,994, respectively. Net gains (losses)
realized from calls and mandatory redemptions of securities during
2004, 2003 and 2002 were $3, $9 and $18, respectively. Investment securities having carrying values of approximately
$11,924 and $16,284 at December 31, 2004 and 2003, respectively,
were pledged to secure public funds on deposit, securities sold
under agreements to repurchase, and other purposes as required by
law. Note 5 -  Loans Major classifications of loans are as follows: December 31,
    
    2004
    
    
    2003Real estate mortgage loans:Commercial
    
    $
    351,346
    
    
    $
    297,221Residential
    
    
    67,204
    
    
    
    60,104Farmland
    
    
    4,971
    
    
    
    2,317Construction and vacant land
    
    
    49,815
    
    
    
    32,089Commercial and agricultural loans
    
    
    64,622
    
    
    
    63,624Indirect auto dealer loans
    
    
    91,890
    
    
    
    59,437Home equity loans
    
    
    13,856
    
    
    
    12,574Other consumer loans
    
    
    9,817
    
    
    
    11,232Total loans
    
    
    653,521
    
    
    
    538,598Net deferred loan costs
    
    
    2,157
    
    
    
    1,815Loans, net of deferred loan costs
    
    $
    655,678
    
    
    $
    540,413
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Substantially all loans are made to borrowers in the Banks primary market area of Monroe,
South Miami-Dade, Collier and Lee counties. In 1998, the Bank made a $10,000 loan to construct a lumber mill in northern Florida. Of
this amount, $6,400 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. 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) and other assets (approximately $1,886) based on
the fair value of the underlying-collateral. The portion of this loan guaranteed by the
USDA was approximately $1,600 at December 31, 2004 and December 31, 2003, and is accruing
interest. Accrued interest on this loan totals approximately $677 and $590 at December 31,
2004 and December 31, 2003, respectively. The Bank is pursuing a sale of the property and equipment and has incurred various
expenditures. The Bank capitalized the liquidation costs and the portion of the protective
advances which it expects will be fully reimbursed by the USDA. Other real estate recorded
on the Banks books totaled $190 and $192 at December 31, 2004 and December 31, 2003,
respectively. The non-guaranteed principal and interest ($1,961 at December 31, 2004 and
December 31, 2003) and the reimbursable capitalized liquidation costs and protective
advance costs totaling approximately $704 and $511 at December 31, 2004 and December 31,
2003, respectively are included as other assets in the financial statements. The Bank sold certain pieces of equipment associated with the lumber mill property.
Proceeds from the sales were used to reduce the other real estate amount and liquidation
cost amounts recorded on the Banks books. In 2003, the Bank wrote down the carrying
amount of the other real estate by $262 based upon anticipated proceeds from the sale of
the property and remaining equipment. Florida law requires a bank to liquidate or charge off repossessed real property within
five years, and repossessed personal property within six months. The Bank was awarded
title to the real property on June 12, 2001, and an adjudicated interest in the owners
trust proceeds. The time constraints imposed by Florida law required that the personal
property be disposed of or charged off by December 2001. The Bank applied to the State of
Florida for an extension to carry the personal property on the Banks books and was granted
an extension to carry the personal property on its books until June 11, 2003. Since the
property had not been liquidated as of June 11th, the Bank charged-off the non
guaranteed principal and interest totaling $1,961 at June 30, 2003, for regulatory
purposes. Since the Company believes this amount is ultimately realizable, it did not
write off this amount for financial statement purposes under generally accepted accounting
principles. Activity in the allowance for loan losses is as follows: Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Balance, beginning of year
    
    $
    5,216
    
    
    $
    4,272
    
    
    $
    3,675Provision for loan losses charged to expense
    
    
    2,455
    
    
    
    1,586
    
    
    
    791Loans charged off
    
    
    (1,487
    )
    
    
    (667
    )
    
    
    (302
    )Recoveries of loans previously charged off
    
    
    59
    
    
    
    25
    
    
    
    108Balance, end of year
    
    $
    6,243
    
    
    $
    5,216
    
    
    $
    4,272
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Impaired loans are as follows: Years ended December 31,
    
    2004
    
    
    2003Year end loans with no allocated allowance for loan losses
    
    $
    2,018
    
    
    $
    2,737Year end loans with allocated allowance for loan losses
    
    
    
    
    
    
    Total
    
    $
    2,018
    
    
    $
    2,737Amount of the allowance for loan losses allocated
    
    $
    
    
    
    $
    
 2004
    
    
    2003
    
    
    2002Average of impaired loans during the year
    
    $
    1,005
    
    
    $
    1,088
    
    
    $
    416Interest income recognized during impairment
    
    
    64
    
    
    
    72
    
    
    
    6Cash basis interest income recognized
    
    
    
    
    
    
    
    
    
    
    3
 Non-performing loans include nonaccrual loans and accruing loans contractually past due 90
days or more. Nonaccrual loans are comprised principally of loans 90 days past due as well as
certain loans, which are current but where serious doubt exists as to the ability of the borrower
to comply with the repayment terms. Interest previously accrued and not yet paid on nonaccrual
loans is reversed during the period in which the loan is placed in a nonaccrual status.
Non-performing loans are as follows: Years ended December 31,
    
    2004
    
    
    2003Nonaccrual loans
    
    $
    704
    
    
    $
    390Loans past due over 90 days still on accrual (a)
    
    
    
    
    
    
    
 Non-performing loans and impaired loans are defined differently. Some loans may be included
in both categories, whereas other loans may only be included in one category. (a) Non-performing loans at December 31, 2004 and 2003, excludes the $1,600 loan discussed
previously that is guaranteed for both principal and interest by the USDA. Note 6 -  Premises and Equipment A summary of the cost and accumulated depreciation of premises and equipment follows: Estimated UsefulDecember 31,
    
    2004
    
    
    2003
    
    
    LifeLand
    
    $
    9,668
    
    
    $
    5,999Buildings and leasehold improvements
    
    
    17,227
    
    
    
    15,216
    
    
    
    4 to 40 yearsFurniture, fixtures and equipment
    
    
    13,354
    
    
    
    11,127
    
    
    
    1 to 40 yearsConstruction in progress
    
    
    151
    
    
    
    69140,400
    
    
    
    33,033Less accumulated depreciation
    
    
    (12,841
    )
    
    
    (11,960
    )Premises and equipment, net
    
    $
    27,559
    
    
    $
    21,073
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) The Bank is obligated under operating leases for office and banking premises which expire in periods varying from one to
fourteen years. Future minimum lease payments, before considering renewal options that generally are present, are as follows at
December 31, 2004: Years ending December 31,2005
    
    $
    5912006
    
    
    5422007
    
    
    4992008
    
    
    4482009
    
    
    312Thereafter
    
    
    660$
    3,052
 Rental expense for the years ended December 31, 2004, 2003 and 2002, was approximately $561, $443 and $430, respectively. Note 7 -  Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the years ended December 31, are as follows: 2004
    
    
    2003Beginning of the year
    
    $
    155
    
    
    $
    2,234Goodwill associated with sale of remaining interest of Investment in ERAS JV
    
    
    
    
    
    
    (69
    )Goodwill associated with sale of Keys Insurance Agency, Inc.
    
    
    
    
    
    
    (2,010
    )Balance at end of year
    
    $
    155
    
    
    $
    155
 Amortized intangible assets at December 31, consist of the following: 2004
    
    
    2003Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Carrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueCore deposit intangible
    
    $
    2,941
    
    
    $
    1,569
    
    
    $
    1,372
    
    
    $
    2,941
    
    
    $
    1,284
    
    
    $
    1,657Excess servicing fees
    
    
    89
    
    
    
    69
    
    
    
    20
    
    
    
    89
    
    
    
    59
    
    
    
    30Total
    
    $
    3,030
    
    
    $
    1,638
    
    
    $
    1,392
    
    
    $
    3,030
    
    
    $
    1,343
    
    
    $
    1,687
 Aggregate intangible asset amortization expense was $295, $292 and $297 for 2004, 2003, and 2002, respectively.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Estimated amortization expense for each of the next five years is as follows: Years ending December 31,2005
    
    $
    2902006
    
    
    2902007
    
    
    2862008
    
    
    2492009
    
    
    141
 Note 8 - Time Deposits Time deposits of $100 or more were $126,207 and $97,873 at December 31, 2004 and 2003, respectively. At December 31, 2004, the scheduled maturities of time deposits are as follows: Years ending December 31,2005
    
    $
    168,3852006
    
    
    48,4022007
    
    
    10,3242008
    
    
    17,6692009
    
    
    6,397Thereafter
    
    
    5$
    251,182
 Note 9  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 $12,000
from its principal correspondent bank. The Bank also has securities sold under agreements to
repurchase with commercial account holders whereby the Bank sweeps the customers accounts on a daily
basis and pays interest on these amounts. These agreements are collateralized by investment
securities chosen by the Bank. 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 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
20% of the Banks total assets as reported on the most recent quarterly financial
information submitted to the regulators. The credit availability approximated $165,565
at December 31, 2004. At December 31, 2004, in addition to a $15,000 letter of credit
used in lieu of pledging securities to the State of Florida, there was $35,000 in
advances outstanding. At December 31, 2003, the amount of outstanding advances was
$45,000. The outstanding amount at December 31, 2004 consists of one $10,000 daily
advance and one $25,000 advance maturing in March 2006. On December 31, 2004 the rate
on the daily advance was 2.44% and the rate on the long term advance was 2.38%,
repricing quarterly. Advances are secured by the Banks one-to-four-family residential
mortgage loans.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) 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,
    
    2004
    
    
    2003Federal funds purchased:Balance:Average daily outstanding
    
    $
    460
    
    
    $
    142Year-end outstanding
    
    
    
    
    
    
    Maximum month-end outstanding
    
    
    4,519
    
    
    
    Rate:Weighted average for year
    
    
    2.2
    %
    
    
    1.7
    %Weighted average interest rate at December 31
    
    
    n/a
    
    
    
    n/aSecurities sold under agreements to repurchase:Balance:Average daily outstanding
    
    $
    5,142
    
    
    $
    3,064Year-end outstanding
    
    
    9,947
    
    
    
    2,943Maximum month-end outstanding
    
    
    9,947
    
    
    
    4,579Rate:Weighted average for year
    
    
    1.3
    %
    
    
    1.0
    %Weighted average interest rate at December 31
    
    
    2.1
    %
    
    
    0.8
    %Treasury, tax and loan note option:Balance:Average daily outstanding
    
    $
    647
    
    
    $
    633Year-end outstanding
    
    
    2,210
    
    
    
    1,098Maximum month-end outstanding
    
    
    2,210
    
    
    
    1,700Rate:Weighted average for year
    
    
    1.1
    %
    
    
    0.9
    %Weighted average interest rate at December 31
    
    
    1.9
    %
    
    
    0.7
    %Advances from the Federal Home Loan Bank-Short Term:Balance:Average daily outstanding
    
    $
    9,090
    
    
    $
    4,647Year-end outstanding
    
    
    10,000
    
    
    
    15,000Maximum month-end outstanding
    
    
    25,000
    
    
    
    15,000Rate:Weighted average for year
    
    
    1.8
    %
    
    
    1.3
    %Weighted average interest rate at December 31
    
    
    2.4
    %
    
    
    1.2
    %Advances from the Federal Home Loan Bank-Long Term:Balance:Average daily outstanding
    
    $
    20,246
    
    
    $
    16,959Year-end outstanding
    
    
    25,000
    
    
    
    30,000Maximum month-end outstanding
    
    
    25,000
    
    
    
    30,000Rate:Weighted average for year
    
    
    1.6
    %
    
    
    1.3
    %Weighted average interest rate at December 31
    
    
    2.4
    %
    
    
    1.2
    %
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 10  Other Borrowings Line of Credit The Company has a $3,000 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 Journal minus 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 the Bank 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, 2004 or 2003. 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. 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. On January 3,
2005 the Company repaid $1,250 of these notes at a 3% premium. Subordinated Debentures On September 7, 2000, the Company participated 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 $8,000 in trust preferred securities to
acquire junior subordinated debentures 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
14). On July 31, 2001, the Company participated 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 $5,000 in trust preferred securities
to acquire junior subordinated debentures 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, 2004 was 5.74%. 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 14).    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Contractual Maturities At December 31, 2004, the contractual maturities of long-term debt were as follows: Fixed Rate
    
    
    Floating Rate
    
    
    TotalDue in 2005
    
    $
    
    
    
    $
    
    
    
    $
    Due in 2006
    
    
    
    
    
    
    
    
    
    
    Due in 2007
    
    
    
    
    
    
    
    
    
    
    Due in 2008
    
    
    
    
    
    
    
    
    
    
    Due in 2009
    
    
    
    
    
    
    
    
    
    
    Thereafter
    
    
    13,250
    
    
    
    5,000
    
    
    
    18,250Total long-term debt
    
    $
    13,250
    
    
    $
    5,000
    
    
    $
    18,250
 Note 11- Income Taxes Income tax expense (benefit) was as follows: Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Current income tax provision:Federal
    
    $
    2,331
    
    
    $
    3,049
    
    
    $
    2,290State
    
    
    431
    
    
    
    550
    
    
    
    4222,762
    
    
    
    3,599
    
    
    
    2,712Deferred tax benefit:Federal
    
    
    (76
    )
    
    
    (722
    )
    
    
    (210
    )State
    
    
    (14
    )
    
    
    (130
    )
    
    
    (39
    )(90
    )
    
    
    (852
    )
    
    
    (249
    )Total
    
    $
    2,672
    
    
    $
    2,747
    
    
    $
    2,463
 A reconciliation of income tax computed at the 34% Federal statutory income tax rate to total income taxes
reported is as follows: Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Pretax income
    
    $
    7,870
    
    
    $
    7,849
    
    
    $
    7,198Income taxes computed at Federal statutory tax rate
    
    $
    2,676
    
    
    $
    2,669
    
    
    $
    2,448Effect of:Tax-exempt
income, net
    
    
    (340
    )
    
    
    (275
    )
    
    
    (213
    )State income
taxes, net
    
    
    275
    
    
    
    277
    
    
    
    253Other, net
    
    
    61
    
    
    
    76
    
    
    
    (25
    )Total
    
    $
    2,672
    
    
    $
    2,747
    
    
    $
    2,463
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Year end deferred tax assets and liabilities were due to the following: December 31,
    
    2004
    
    
    2003Allowance for loan losses
    
    $
    2,475
    
    
    $
    1,959Core deposit intangible
    
    
    212
    
    
    
    179Deferred compensation
    
    
    555
    
    
    
    339Other
    
    
    116
    
    
    
    109Total gross deferred tax assets
    
    
    3,358
    
    
    
    2,586Accumulated depreciation
    
    
    (871
    )
    
    
    (594
    )Deferred loan costs
    
    
    (401
    )
    
    
    Goodwill
    
    
    (17
    )
    
    
    (11
    )Gain on building swap
    
    
    (68
    )
    
    
    (70
    )Net unrealized gains on securities available for sale
    
    
    (177
    )
    
    
    (208
    )Total gross deferred tax liabilities
    
    
    (1,534
    )
    
    
    (883
    )Net deferred tax asset
    

    $
    1,824
    
    
    $
    1,703
 Note 12  Employee Benefit Plans The Bank maintains an Employee Stock Ownership Plan with 401(k) provisions that covers all employees who are
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 50 percent of salary reduction contributions up to 4 percent of compensation,
not to exceed a maximum contribution of $1 per employee; and an additional discretionary contribution which may be made
by the Bank and allocated to the accounts of participants on the basis of total relative compensation. The Bank
contributed $94, $69 and $202 to the plan in 2004, 2003 and 2002, respectively. As of December 31, 2004, the Plan
contained approximately 151,000 shares of the Companys common stock. In 2001, the Bank entered into salary continuation agreements with three of its executive officers. Two additional
executive officers entered into salary continuation agreements in 2003 and another in 2004. The plan is a nonqualified
deferred compensation arrangement that is designed to provide supplemental retirement income benefits to participants.
The Bank expensed $309, $254 and $173 for the accrual of future salary continuation benefits in 2004, 2003 and 2002,
respectively. The Bank has purchased single premium life insurance policies on these individuals. Cash value income
(net of related insurance premium expense) totaled $202, $225 and $161 in 2004, 2003 and 2002, respectively. Other
assets included $5,729 and $4,827 in surrender value and other liabilities included salary continuation benefits payable
of $860 and $551 at December 31, 2004 and 2003, respectively. In 2001, the Bank established a non qualified retirement benefit plan for eligible Bank directors. Under the plan, the
Company pays each participant, or their beneficiary, the amount of fees deferred and interest in 120 equal monthly
installments, beginning the month following the directors normal retirement date. The Bank expensed $273, $165 and
$119 for the accrual of current and future retirement benefits in 2004, 2003 and 2002, respectively, which included
$236, $146 and $102 in 2004, 2003 and 2002 related to the annual director retainer fees and monthly meeting fees that
certain directors elected to defer. The Bank has purchased single premium split dollar life insurance policies on these
individuals. Cash value income (net of related insurance premium expense) totaled $138, $152 and $147 in 2004, 2003 and
2002. Other assets included $3,854 and $3,716 in surrender value in other assets and other liabilities included
retirement benefits payable of $616 and $351 at December 31, 2004 and 2003, respectively.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 13  Related Party Transactions The Bank had loans outstanding to certain of its executive
officers, directors, and their related business interests as
follows: Beginning balance, January 1, 2004
    
    $
    2,020New loans
    
    
    596Effect of changes in related parties
    
    
    (14
    )Repayments
    
    
    (697
    )Ending balance, December 31, 2004
    
    $
    1,905
 Unfunded loan commitments to these individuals and their related
business interests totaled $152 at December 31, 2004. Deposits
from these individuals and their related interests were $3,008 and
$3,583 at December 31, 2004 and 2003, respectively. Note 14  Shareholders Equity and Minimum Regulatory Capital Requirements The Company (on a consolidated basis) 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. In order for the Bank to be considered well capitalized under the
regulatory framework for prompt corrective action and for the
Company and the Bank to be considered adequately capitalized under
capital adequacy guidelines, minimum Tier 1 leverage, Tier 1
risk-based, and total risk-based ratios must be maintained. These
minimum amounts and ratios along with the actual amounts and ratios
for the Company and the Bank as of December 31, 2004 and 2003 are
presented in the following tables.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Well Capitalized
    
    
    Adequately CapitalizedDecember 31, 2004
    
    Requirement
    
    
    Requirement
    
    
    ActualAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier 1 Capital (to Average Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$31,270
    
    
    
    3  4.0
    %
    
    $
    78,048
    
    
    
    10.0
    %Bank
    
    
    39,069
    
    
    
    3  5.0
    %
    
    
    31,255
    
    
    
    3  4.0
    %
    
    
    81,780
    
    
    
    10.5
    %Tier 1 Capital (to Risk Weighted Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$28,583
    
    
    
    3  4.0
    %
    
    $
    78,048
    
    
    
    10.9
    %Bank
    
    
    42,857
    
    
    
    3  6.0
    %
    
    
    28,571
    
    
    
    3  4.0
    %
    
    
    81,780
    

    
    
    11.4
    %Total Capital (to Risk Weighted Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$57,166
    
    
    
    3  8.0
    %
    
    $
    89,772
    
    
    
    12.6
    %Bank
    
    
    71,428
    
    
    
    310.0
    %
    
    
    57,143
    
    
    
    3  8.0
    %
    
    
    88,254
    
    
    
    12.4
    %
  Well Capitalized
    
    
    Adequately CapitalizedDecember 31, 2003
    
    Requirement
    
    
    Requirement
    
    
    ActualAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier 1 Capital (to Average Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$26,006
    
    
    
    3  4.0
    %
    
    $
    50,807
    
    
    
    7.8
    %Bank
    
    
    32,483
    
    
    
    3  5.0
    %
    
    
    25,986
    
    
    
    3  4.0
    %
    
    
    55,472
    
    
    
    8.5
    %Tier 1 Capital (to Risk Weighted Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$23,148
    
    
    
    3  4.0
    %
    
    $
    50,807
    
    
    
    8.8
    %Bank
    
    
    34,676
    
    
    
    3  6.0
    %
    
    
    23,117
    
    
    
    3  4.0
    %
    
    
    55,472
    
    
    
    9.6
    %Total Capital (to Risk Weighted Assets)Consolidated
    
    
    N/A
    
    
    
    N/A
    
    
    
    3$46,296
    
    
    
    3  8.0
    %
    
    $
    61,456
    
    
    
    10.6
    %Bank
    
    
    57,793
    
    
    
    310.0
    %
    
    
    46,235
    
    
    
    3  8.0
    %
    
    
    60,871
    
    
    
    10.5
    %
 At year end 2004 and 2003, the most recent regulatory notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. Management believes, as of December 31, 2004, that the Company and the Bank meet all capital requirements to which it is subject. Tier 1 Capital includes the trust preferred securities that
were issued in September 2000 and July 2001. 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, 2004, is approximately $16,629. On April 15, 2004, we closed the sale of 1,000,000 shares of our common stock at a price of $22.00 per share before commissions and expenses. The shares were sold on a firm commitment basis
through Advest, Inc. Advest, Inc. also purchased an additional 150,000 shares from the Company on May 6, 2004, at $22.00 per share before commissions and expenses. The net proceeds of the
offering, totaling $23,230 after $2,070 in offering costs, provided additional capital necessary to support continued loan and deposit growth.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 15  Stock Options As of
December 31, 2004, the Company has one compensation plan under which shares of its common stock are
issuable in the form of stock options, restricted shares, stock appreciation rights,
performance shares or performance units. This is its 2004 Equity Incentive Plan (the 2004 Plan),
which was approved by the Companys shareholders at the May 25, 2004 annual meeting.
Previously, the Company had granted stock options under the 1994 Incentive Stock Option and Nonstatutory Stock
Option Plan (the 1994 Plan) as amended and restated as of August 31, 1996. Under
the 2004 Plan, 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 2004 Plan, the maximum number of shares of common stock of
the Company that may be optioned or sold through the 2014 expiration of the plan is 400,000 shares, no more
than 133,000 of which may be issued pursuant to awards granted in the form of
restricted 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 must equal at least 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 after 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. A summary of the activity in the plans is as follows: Exercise Price
    
    
    Weighted AverageShares
    
    
    Range
    
    
    Exercise PriceBalance,December 31, 2001
    
    
    585,402
    
    
    $
    5.49
    
    
    
    
    
    
    $
    14.50
    
    
    $
    8.96Granted
    
    
    164,000
    
    
    
    11.21
    
    
    
    
    
    
    
    14.12
    
    
    
    12.54Exercised
    
    
    (89,525
    )
    
    
    5.49
    
    
    
    
    
    
    
    13.50
    
    
    
    6.63Expired or Forfeited
    
    
    (92,672
    )
    
    
    5.49
    
    
    
    
    
    
    
    13.55
    
    
    
    10.62Balance,December 31, 2002
    
    
    567,205
    
    
    
    5.49
    
    
    
    
    
    
    
    14.50
    
    
    
    10.09Granted
    
    
    44,500
    
    
    
    16.35
    
    
    
    
    
    
    
    19.40
    
    
    
    17.93Exercised
    
    
    (115,050
    )
    
    
    5.49
    
    
    
    
    
    
    
    14.12
    
    
    
    6.39Expired or Forfeited
    
    
    (19,150
    )
    
    
    5.49
    
    
    
    
    
    
    
    16.35
    
    
    
    11.46Balance,December 31, 2003
    
    
    477,505
    
    
    
    5.49
    
    
    
    
    
    
    
    19.40
    
    
    
    11.66Granted
    
    
    37,500
    
    
    
    22.74
    
    
    
    
    
    
    
    22.79
    
    
    
    22.76Exercised
    
    
    (97,911
    )
    
    
    5.49
    
    
    
    
    
    
    
    14.12
    
    
    
    6.92Expired or Forfeited
    
    
    (7,900
    )
    
    
    11.25
    
    
    
    
    
    
    
    22.74
    
    
    
    19.47Balance,December 31, 2004
    
    
    409,194
    
    
    $
    8.33
    
    
    
    
    
    
    $
    22.79
    
    
    $
    13.66
 Options exercisable at December 31, 2004
    
    
    181,944Options exercisable at December 31, 2003
    
    
    236,405Options exercisable at December 31, 2002
    
    
    282,305
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Options outstanding at December 31, 2004 were as follows: Outstanding Options
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    Remaining
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Contractual
    
    
    Exercise
    
    
    
    
    
    
    ExercisePrice
    
    Number
    
    
    Life
    
    
    Price
    
    
    Number
    
    
    Price$8.33    $10.50
    
    
    66,800
    
    
    
    3.75
    
    
    $
    9.64
    
    
    
    34,900
    
    
    $
    9.4211.00    11.75
    
    
    29,150
    
    
    
    4.05
    
    
    
    11.35
    
    
    
    11,050
    
    
    
    11.3912.40    12.40
    
    
    105,800
    
    
    
    6.48
    
    
    
    12.40
    
    
    
    23,600
    
    
    
    12.4012.65    13.45
    
    
    17,500
    
    
    
    5.03
    
    
    
    13.24
    
    
    
    14,000
    
    
    
    13.3213.50    13.50
    
    
    74,000
    
    
    
    2.73
    
    
    
    13.50
    
    
    
    49,900
    
    
    
    13.5013.55    14.50
    
    
    40,944
    
    
    
    5.71
    
    
    
    13.82
    
    
    
    34,744
    
    
    
    13.7616.35    19.40
    
    
    42,500
    
    
    
    8.57
    
    
    
    18.00
    
    
    
    8,750
    
    
    
    18.1022.74    22.74
    
    
    7,500
    
    
    
    9.15
    
    
    
    22.74
    
    
    
    
    
    
    
    22.76    22.76
    
    
    20,000
    
    
    
    9.11
    
    
    
    22.76
    
    
    
    
    
    
    
    22.79    22.79
    
    
    5,000
    
    
    
    9.07
    
    
    
    22.79
    
    
    
    5,000
    
    
    
    22.79$8.33    $22.79
    
    
    409,194
    
    
    
    5.47
    
    
    $
    13.66
    
    
    
    181,944
    
    
    $
    12.96
 Note 16  Loan Commitments and Other Related Activities Some financial instruments, such as loan commitments, credit lines, letters of credit, and
overdraft protection, are issued to meet customer financing needs. These are agreements to
provide credit or to support the credit of others, as long as conditions established in the
contract are met, and usually have expiration dates. Commitments may expire without being
used. Off-balance-sheet risk of credit loss exists up to the face amount of these
instruments, although material losses are not anticipated. The same credit policies are used
to make such commitments as are used for loans, including obtaining collateral at exercise of
the commitment.
The contractual amount of financial instruments with off-balance-sheet risk was as follows at December 31: 2004
    
    
    
    2003Fixed
    
    
    
    Variable
    
    
    
    Fixed
    
    
    
    VariableRate
    
    
    
    Rate
    
    
    
    Rate
    
    
    
    RateCommitments to make loans
    
    
    $
    7,866
    
    
    
    $
    26,567
    
    
    
    $
    15,190
    
    
    
    $
    4,593Unfunded commitments under lines of credit
    
    
    
    700
    
    
    
    
    71,800
    
    
    
    
    1,250
    
    
    
    
    51,569
 Commitments to make loans are generally made for periods of 30
days. The fixed rate loan commitments have interest rates ranging
from 3.95% to 18.00% and maturities ranging from 6 months to 20
years. At December 31, 2004 and 2003, commitments under standby letters of
credit aggregated approximately $2,085 and $1,543, respectively.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 17  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,
    
    2004
    
    
    2003
    
    
    2002Merchant bankcard processing expenses
    
    $
    3,869
    
    
    $
    3,153
    
    
    $
    2,780Other merchant charges
    
    
    568
    
    
    
    503
    
    
    
    461Operating supplies
    
    
    553
    
    
    
    495
    
    
    
    428Computer services
    
    
    1,773
    
    
    
    1,533
    
    
    
    1,627Legal and professional fees
    
    
    1,223
    
    
    
    845
    
    
    
    749Marketing and community relations
    
    
    866
    
    
    
    851
    
    
    
    865Postage, courier, and armored car
    
    
    620
    
    
    
    700
    
    
    
    590
 Note 18  Fair Values of Financial Instruments Carrying amount and estimated fair values of financial instruments were as follows at December 31: 2004
    
    
    2003Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedValue
    
    
    Fair Value
    
    
    Value
    
    
    Fair ValueFinancial assets:Cash and cash equivalents
    
    $
    42,938
    
    
    
    42,938
    
    
    $
    33,681
    
    
    $
    33,681Investment securities available for sale
    
    
    77,807
    
    
    
    77,807
    
    
    
    52,557
    
    
    
    52,557Loans, net
    
    
    649,435
    
    
    
    650,119
    
    
    
    535,197
    
    
    
    537,099Federal Home Loan Bank and Independent
Bankers Bank stock
    
    
    3,035
    
    
    
    3,035
    
    
    
    2,376
    
    
    
    2,376Accrued interest receivable
    
    
    4,086
    
    
    
    4,086
    
    
    
    3,373
    
    
    
    3,373Financial liabilities:Noncontractual deposits
    
    
    436,677
    
    
    
    436,677
    
    
    
    348,783
    
    
    
    348,783Contractual deposits
    
    
    251,182
    
    
    
    251,159
    
    
    
    205,030
    
    
    
    209,085Federal Home Loan Bank Advances
    
    
    35,000
    
    
    
    35,000
    
    
    
    45,000
    
    
    
    45,000Short-term borrowings
    
    
    12,157
    
    
    
    12,157
    
    
    
    4,041
    
    
    
    4,041Notes payable
    
    
    5,250
    
    
    
    5,388
    
    
    
    5,250
    
    
    
    5,546Subordinated debentures
    
    
    13,000
    
    
    
    13,489
    
    
    
    13,000
    
    
    
    13,296Accrued interest payable
    
    
    3,692
    
    
    
    3,692
    
    
    
    3,504
    
    
    
    3,504
 The
methods and assumptions used to estimate fair value are described as follows: Carrying amount is the estimated fair value for cash and cash equivalents, Federal Home Loan Bank stock and other bankers bank stock, accrued interest receivable
and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes,
and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans or deposits and for variable rate loans or deposits
with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair values for
impaired loans are estimated using discounted cash flow analysis or underlying collateral values. Fair value of debt is based on current rates for similar financing. The fair value of
off-balance sheet items that includes commitments to extend credit to fund commercial, consumer, real estate construction and real estate-mortgage loans and to fund standby letters of
credit is considered nominal.    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 19  Segment Reporting TIB Financial Corp. has two reportable segments in their continuing operations: community banking and merchant bankcard processing. The community banking segments business is to
attract deposits from the public and to use such deposits to make real estate, business and consumer loans in its primary service area. The merchant bankcard processing segment processes
credit card transactions for local merchants. Parent and other is primarily comprised of the operations of the holding company. The results of Keys Insurance Agency, Inc. are not included in the segment reporting as they are classified separately as discontinued operations in the consolidated financial statements
(see Note 20). 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. Intercompany transactions have been eliminated in preparing the segment reporting amounts below. Year ended
    
    Community
    
    
    Merchant
    
    
    Parent andDecember 31, 2004
    
    Banking
    
    
    Bankcard
    
    
    Other
    
    
    TotalInterest and dividend income
    
    $
    40,916
    
    
    $
    
    
    
    $
    
    
    
    $
    40,916Interest expense
    
    
    (9,129
    )
    
    
    
    
    
    
    (1,601
    )
    
    
    (10,730
    )Net interest and dividend
income (expense)
    
    
    31,787
    
    
    
    
    
    
    
    (1,601
    )
    
    
    30,186Other income
    
    
    5,916
    
    
    
    5,758
    
    
    
    389
    
    
    
    12,063Depreciation and amortization
    
    
    (2,202
    )
    
    
    (40
    )
    
    
    (3
    )
    
    
    (2,245
    )Other expense
    
    
    (26,432
    )
    
    
    (4,828
    )
    
    
    (874
    )
    
    
    (32,134
    )Pretax segment profit (loss)
    
    $
    9,069
    
    
    $
    890
    
    
    $
    (2,089
    )
    
    $
    7,870Segment assets
    
    $
    828,886
    
    
    $
    32
    
    
    $
    407
    
    
    $
    829,325
 Year ended
    
    Community
    
    
    Merchant
    
    
    Parent andDecember 31, 2003
    
    Banking
    
    
    Bankcard
    
    
    Other
    
    
    TotalInterest and dividend income
    
    $
    34,606
    
    
    $
    
    
    
    $
    
    
    
    $
    34,606Interest expense
    
    
    (8,249
    )
    
    
    
    
    
    
    (1,590
    )
    
    
    (9,839
    )Net interest and dividend
income (expense)
    
    
    26,357
    
    
    
    
    
    
    
    (1,590
    )
    
    
    24,767Other income
    
    
    6,461
    
    
    
    4,953
    
    
    
    623
    
    
    
    12,037Depreciation and amortization
    
    
    (1,963
    )
    
    
    (46
    )
    
    
    (4
    )
    
    
    (2,013
    )Other expense
    
    
    (22,428
    )
    
    
    (3,982
    )
    
    
    (732
    )
    
    
    (27,142
    )Pretax segment profit (loss)
    
    $
    8,427
    
    
    $
    925
    
    
    $
    (1,703
    )
    
    $
    7,649Segment assets
    
    $
    668,495
    
    
    $
    37
    
    
    $
    766
    
    
    $
    669,298
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Year ended
    
    Community
    
    
    Merchant
    
    
    Parent andDecember 31, 2002
    
    Banking
    
    
    Bankcard
    
    
    Other
    
    
    TotalInterest and dividend income
    
    $
    31,287
    
    
    $
    
    
    
    $
    29
    
    
    $
    31,316Interest expense
    
    
    (8,706
    )
    
    
    
    
    
    
    (1,623
    )
    
    
    (10,329
    )Net interest and dividend
income (expense)
    
    
    22,581
    
    
    
    
    
    
    
    (1,594
    )
    
    
    20,987Other income
    
    
    5,594
    
    
    
    4,387
    
    
    
    447
    
    
    
    10,428Depreciation and amortization
    
    
    (1,718
    )
    
    
    (44
    )
    
    
    (5
    )
    
    
    (1,767
    )Other expense
    
    
    (18,486
    )
    
    
    (3,577
    )
    
    
    (593
    )
    
    
    (22,656
    )Pretax segment profit (loss)
    
    $
    7,971
    
    
    $
    766
    
    
    $
    (1,745
    )
    
    $
    6,992Segment assets
    
    $
    564,221
    
    
    $
    66
    
    
    $
    583
    
    
    $
    564,870
 The Company discontinued separate reporting of its Government Guaranteed Loan Sales and
Servicing segment in 2003. This segment is now included as part of the Community Banking
segment above. Note 20  Discontinued Operations On
August 15, 2003, the Company closed the sale of Keys Insurance
Agency, Inc., a wholly-owned subsidiary of the Company, to Derek
Martin-Vegue and his partner. Mr. Martin-Vegue is a former
director of the Company and TIB Bank. The transaction
was structured as a sale of the agency assets. The buyer paid
$2,205 in cash at the closing. Of the cash payment at closing,
proceeds of $2,021 were pursuant to a loan from TIB Bank
(a subsidiary of the Company) to the buyer. The Company
recognized a loss of $15 on the transaction. The results of Keys Insurance Agency, Inc. operations, which have
been classified as discontinued operations in the accompanying
consolidated financial statements, are summarized as follows: Years ended December 31:
    
    2004
    
    
    2003
    
    
    2002Other income
    
    $
    
    
    
    $
    1,255
    
    
    $
    1,801Depreciation and amortization
    
    
    
    
    
    
    (35
    )
    
    
    (57
    )Other expense
    
    
    
    
    
    
    (1,020
    )
    
    
    (1,538
    )Pretax income from discontinued operations
    
    $
    
    
    
    $
    200
    
    
    $
    206
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 21  Condensed Financial Information of TIB Financial Corp. Condensed Balance Sheets
(Parent Only) December 31,
    
    2004
    
    
    2003AssetsCash on deposit with subsidiary
    
    $
    2,341
    
    
    $
    758Dividends and other receivables from subsidiaries
    
    
    10
    
    
    
    10Investment in bank subsidiary
    
    
    84,845
    
    
    
    58,910Investment in TIBFL Statutory Trust I
    
    
    248
    
    
    
    248Investment in TIBFL Statutory Trust II
    
    
    155
    
    
    
    155Income tax receivable
    
    
    
    
    
    
    338Other assets
    
    
    407
    
    
    
    424Total Assets
    
    $
    88,006
    
    
    $
    60,843Liabilities and Shareholders EquityLiabilitiesDividends payable
    
    $
    653
    
    
    $
    498Interest payable
    
    
    449
    
    
    
    440Notes payable
    
    
    18,653
    
    
    
    18,653Other liabilities
    
    
    137
    
    
    
    6Total liabilities
    
    
    19,892
    
    
    
    19,597Shareholders equityCommon stock
    
    
    568
    
    
    
    443Surplus
    
    
    38,284
    
    
    
    14,255Retained earnings
    
    
    28,968
    
    
    
    26,203Accumulated other comprehensive income
    
    
    294
    
    
    
    345Total shareholders equity
    
    
    68,114
    
    
    
    41,246Total Liabilities and Shareholders Equity
    
    $
    88,006
    
    
    $
    60,843
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) 21. Condensed Financial Information of TIB Financial Corp. (continued) Condensed Statements of Income
(Parent Only) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Operating incomeDividend from bank subsidiary
    
    $
    3,708
    
    
    $
    832
    
    
    $
    782Dividend from TIBFL Statutory Trust I
    
    
    26
    
    
    
    26
    
    
    
    26Dividend from TIBFL Statutory Trust II
    
    
    8
    
    
    
    8
    
    
    
    8Dividend from TIB Software & Services, Inc.
    
    
    
    
    
    
    126
    
    
    
    157Interest income on note receivable
    
    
    
    
    
    
    
    
    
    
    29Other income
    
    
    6
    
    
    
    
    
    
    
    Total operating income
    
    
    3,748
    
    
    
    992
    
    
    
    1,002Operating expenseInterest expense
    
    
    1,636
    
    
    
    1,624
    
    
    
    1,658Other expense
    
    
    553
    
    
    
    345
    
    
    
    305Total operating expense
    
    
    2,189
    
    
    
    1,969
    
    
    
    1,963Income (loss) before income tax benefit and
equity in undistributed earnings (losses) of
subsidiaries
    
    
    1,559
    
    
    
    (977
    )
    
    
    (961
    )Income tax benefit
    
    
    808
    
    
    
    728
    
    
    
    708Income (loss) before equity in undistributed earnings
(losses) of subsidiaries
    
    
    2,367
    
    
    
    (249
    )
    
    
    (253
    )Equity in undistributed earnings of bank subsidiary
    
    
    2,831
    
    
    
    5,226
    
    
    
    4,865Equity in undistributed losses of TIB Software &
Services, Inc.
    
    
    
    
    
    
    
    
    
    
    (6
    )Income from continuing operations
    
    
    5,198
    
    
    
    4,977
    
    
    
    4,606Discontinued operations:Dividend from Keys Insurance Agency, Inc.
    
    
    
    
    
    
    125
    
    
    
    Equity in undistributed earnings of Keys
Insurance Agency, Inc.
    
    
    
    
    
    
    
    
    
    
    129Income from discontinued operations
    
    
    
    
    
    
    125
    
    
    
    129Net income
    
    $
    5,198
    
    
    $
    5,102
    
    
    $
    4,735
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)  21.
    Condensed Financial Information of TIB Financial Corp. (continued) Condensed Statements of Cash Flows
(Parent Only) Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Cash flows from operating activitiesNet income
    
    $
    5,198
    
    
    $
    5,102
    
    
    $
    4,735Equity in undistributed earnings of bank subsidiary
    
    
    (2,831
    )
    
    
    (5,226
    )
    
    
    (4,865
    )Equity in undistributed losses of TIB Software &
Services, Inc.
    
    
    
    
    
    
    
    
    
    
    6Equity in undistributed (earnings) loss of Keys
Insurance Agency, Inc.
    
    
    
    
    
    
    
    
    
    
    (129
    )Amortization of intangibles and other assets
    
    
    17
    
    
    
    17
    
    
    
    37Increase in other assets
    
    
    
    
    
    
    (4
    )
    
    
    (29
    )Decrease in due to subsidiaries
    
    
    
    
    
    
    (3
    )
    
    
    (147
    )Increase (decrease) in interest payable
    
    
    9
    
    
    
    (5
    )
    
    
    (58
    )Increase in other liabilities
    
    
    6
    
    
    
    3
    
    
    
    3Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    (89
    )Increase (decrease) in net income tax obligation
    
    
    709
    
    
    
    (3
    )
    
    
    (65
    )Net cash provided (used) by operating activities
    
    
    3,108
    
    
    
    (119
    )
    
    
    (601
    )Cash flows from investing activitiesInvestment in bank subsidiary
    
    
    (23,155
    )
    
    
    (5,500
    )
    
    
    Payment on note receivable from sale of option
    
    
    
    
    
    
    
    
    
    
    300Return of capital from Keys Insurance Agency, Inc.
    
    
    
    
    
    
    2,301
    
    
    
    Return of capital from TIB Software & Services, Inc.
    
    
    
    
    
    
    129
    
    
    
    130Net cash provided (used) in investing activities
    
    
    (23,155
    )
    
    
    (3,070
    )
    
    
    430Cash flows from financing activitiesProceeds from exercise of stock options
    
    
    678
    
    
    
    735
    
    
    
    592Proceeds from stock issuance
    
    
    23,230
    
    
    
    4,343
    
    
    
    Cash dividends paid
    
    
    (2,278
    )
    
    
    (1,866
    )
    
    
    (1,713
    )Net cash provided (used) by financing activities
    
    
    21,630
    
    
    
    3,212
    
    
    
    (1,121
    )Net increase (decrease) in cash
    
    
    1,583
    
    
    
    23
    
    
    
    (1,292
    )Cash, beginning of year
    
    
    758
    
    
    
    735
    
    
    
    2,027Cash, end of year
    
    $
    2,341
    
    
    $
    758
    
    
    $
    735
    Table of Contents  TIB Financial Corp. and Subsidiaries Notes to Consolidated Financial Statements
(in thousands except share and per share amounts) Note 22  Quarterly Financial Data (Unaudited) The following is a summary of unaudited quarterly results for 2004 and 2003: 2004
    
    
    2003Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstCondensed income statements:Interest income
    
    $
    11,351
    
    
    $
    10,528
    
    
    $
    9,819
    
    
    $
    9,218
    
    
    $
    9,116
    
    
    $
    8,748
    
    
    $
    8,452
    
    
    $
    8,290Net interest income
    
    
    8,216
    
    
    
    7,781
    
    
    
    7,361
    
    
    
    6,828
    
    
    
    6,701
    
    
    
    6,345
    
    
    
    5,888
    
    
    
    5,833Income from
continuing
operations
    
    
    1,331
    
    
    
    1,337
    
    
    
    1,257
    
    
    
    1,273
    
    
    
    1,464
    
    
    
    1,141
    
    
    
    1,210
    
    
    
    1,162Net income
    
    $
    1,331
    
    
    $
    1,337
    
    
    $
    1,257
    
    
    $
    1,273
    
    
    $
    1,464
    
    
    $
    1,163
    
    
    $
    1,286
    
    
    $
    1,189Earnings per share:Income from
continuing
operations - Basic
    
    $
    0.23
    
    
    $
    0.24
    
    
    $
    0.23
    
    
    $
    0.29
    
    
    $
    0.33
    
    
    $
    0.26
    
    
    $
    0.29
    
    
    $
    0.29Income from
continuing
operations -
Diluted
    
    $
    0.23
    
    
    $
    0.23
    
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.32
    
    
    $
    0.25
    
    
    $
    0.28
    
    
    $
    0.27
 Due to the disposal of the assets of Keys Insurance Agency, Inc. in the third quarter of 2003,
all previous reported quarterly financial data has been adjusted above to reflect the results of
Keys Insurance Agency, Inc. as discontinued operations.    Table of Contents  Exhibits
  Exhibit Numbers and Descriptions
 23.1
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Chief Executive Officers certification required under Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officers certification required under Section 302 of Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officers Certification required under Section 906 of Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officers Certification required under Section 906 of Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
  TIB FINANCIAL CORP.
 By:
    
    /s/ Edward V. LettEdward V. Lett
President, Chief Executive Officer and Director
  Signature
    
    Title/s/ Edward V. Lett
    
    President (Principal Executive Officer), Chief Executive Officer and DirectorEdward V. Lett/s/ Richard C. Bricker, Jr.
    
    DirectorRichard C. Bricker, Jr./s/ Gretchen K. Holland
    
    DirectorGretchen K. Holland/s/ Paul O. Jones, Jr., M.D.
    
    DirectorPaul O. Jones, Jr., M.D./s/ Thomas J. Longe
    
    DirectorThomas J. Longe
    Table of Contents  Signature
    
    Title/s/ John G. Parks, Jr.
    
    DirectorJohn G. Parks, Jr./s/ Marvin F. Schindler
    
    DirectorMarvin F. Schindler/s/ Otis T. Wallace
    
    DirectorOtis T. Wallace/s/ David P. Johnson
    
    Chief Financial and Accounting OfficerDavid P. Johnson