<PAGE>   1
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

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

For the fiscal year                                     Commission file number
ended December 31, 1999                                              000-21329


                              TIB FINANCIAL CORP.
             (Exact Name of Registrant as Specified in Its Charter)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes X   No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant at March 1, 2000 was $29,828,756 based on $ 10.125 per share as of
March 1, 2000.

The number of shares outstanding of issuer's class of common stock at March 1,
2000 was 4,392,337 shares of common stock.

Documents Incorporated By Reference: Portions of the Proxy Statement for the
2000 Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission within 120 days of the Registrant's 1999 fiscal year end
are incorporated by reference into Part III of this report.


<PAGE>   2


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
                                                   PART I


<S>               <C>                                                             <C>
ITEM 1.           BUSINESS..........................................................1

ITEM 2.           PROPERTIES........................................................8

ITEM 3.           LEGAL PROCEEDINGS.................................................9

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS..................................................9

                                                  PART II


ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS.......................................9

ITEM 6.           SELECTED FINANCIAL DATA..........................................10

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION.....................11

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK....... 28

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......................29

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH
                  ACCOUNTANTS ON ACCOUNTING AND
                  FINANCIAL DISCLOSURE.............................................65

                                                 PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS
                  OF THE REGISTRANT................................................65

ITEM 11.          EXECUTIVE COMPENSATION...........................................65

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN
                  BENEFICIAL OWNERS AND MANAGEMENT.................................65

ITEM 13.          CERTAIN RELATIONSHIPS AND
                  RELATED TRANSACTIONS.............................................65
</TABLE>


                                       i
<PAGE>   3


<TABLE>
                                          PART IV


<S>               <C>                                                              <C>
ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                  AND REPORTS ON FORM 8-K..........................................66

SIGNATURES        .................................................................67
</TABLE>


                                      ii
<PAGE>   4


CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

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

                                     PART I

ITEM 1.  BUSINESS

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

The Company is authorized to engage in any activity permitted by law to a
Florida corporation, subject to applicable Federal regulatory restrictions on
the activities of bank holding companies.

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

The Bank conducts a general commercial banking business in its primary service
area of Monroe County and Dade County, Florida, emphasizing the banking needs
of individuals, professionals and business customers. The Company and the Bank
conduct business from the main office of the Bank located at 99451 Overseas
Highway, Key Largo, Florida 33037. The Bank also conducts business from its ten
branch locations throughout the Florida Keys from Key Largo to Key West and
South Dade County Florida.

The principal business of the Bank is to attract deposits from the public and
to use such deposits to make real estate, business and consumer loans in its
primary service area. As of December 31, 1999, the Bank had total assets of
approximately $390.8 million, total deposits of approximately $346.9 million
and total shareholders' equity of approximately $27.6 million.

The Bank offers a full range of deposit services that are typically available
from financial institutions, including NOW accounts, money market checking
accounts, demand accounts, savings accounts, certificates of deposit and other
time deposits. In addition, retirement accounts such as Individual Retirement
Accounts are available from the Bank. The Bank pays interest on its deposit
accounts and certificates competitive with other financial institutions in its
primary service area.

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


                                       1
<PAGE>   5


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

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

The Bank's loan portfolio at December 31, 1999 contained approximately 31% real
estate loans, 63% commercial loans and 6% consumer loans. At that date,
approximately 87% of all loans outstanding were secured by real estate. The
Bank's gross loan to deposit ratio at December 31, 1999 was approximately
83.8%.

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

The Bank engages through a wholly-owned subsidiary, TIB Investment & Insurance
Center, Inc. ("TIB Investment"), in the retail sale of nondeposit investment
products such as variable and fixed rate annuities, mutual funds and other
products. The Bank has entered into an agreement with Linsco/Private Ledger
Corp., a third-party provider which trains and supervises employees of the Bank
or TIB Investment in the sale of these products from various offices of the
Bank.

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

The Company has a 30% interest in ERAS JV, a company that specializes in cash
item processing for depository institutions and customized software for the
financial services industry.

The Bank's business plan relies principally upon local advertising and
promotional activity and upon personal contacts by its directors, officers and
shareholders to attract business and to acquaint potential customers with the
Bank's personalized services. The Bank emphasizes a high degree of personalized
client service in order to be able to provide for each customer's banking
needs. The Bank's marketing approach emphasizes the advantages of dealing with
an independent, locally-owned and managed state chartered bank to meet the
particular needs of consumers, professionals and business customers in the
community. All banking services are continually evaluated with regard to their
profitability and efforts are made to modify the Bank's business plan if deemed
appropriate.

EMPLOYEES

As of December 31, 1999, the Bank employed 187 full-time employees and 10
part-time employees. Except for the officers of the Bank who presently serve as
officers of the Company, the Company does not have any employees. Neither the
Company nor the Bank is a party to any collective bargaining agreement, and
management believes the Bank enjoys satisfactory relations with its employees.


                                       2
<PAGE>   6


SUPERVISION AND REGULATION

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

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

In addition, the FDIC adopted a minimum ratio of Tier 1 capital to total assets
of banks. This capital measure is generally referred to as the leverage capital
ratio. The FDIC has established a minimum leverage capital ratio of 3 percent
if the FDIC determines that the institution is not anticipating or experiencing
significant growth and has well-diversified risk, including no undue interest
rate exposure, excellent asset quality, high liquidity, good earnings and, in
general, is considered a strong banking organization, rated Composite 1 under
the Uniform Financial Institutions Rating System. Other financial institutions
are expected to maintain leverage capital at least 100 to 200 basis points
above the minimum level. At December 31, 1999, the Bank exceeded the minimum
Tier 1, risk-based and leverage capital ratios. The table which follows set
forth certain capital information for the Bank as of December 31, 1999.

                                CAPITAL ADEQUACY
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                         December 31, 1999
                                         -----------------
                                 Amount                  Percent
                                 ------                  -------
<S>                             <C>                      <C>
Leverage Ratio:
---------------
     Actual                     $ 26,406                    7.1%
     Minimum Required (1)       $ 11,185                    3.0%

Risk-Based Capital:
-------------------

Tier 1 Capital
--------------
     Actual                     $ 26,406                    9.2%
     Minimum Required           $ 11,531                    4.0%

Total Capital
-------------
     Actual                     $ 29,403                   10.2%
     Minimum Required           $ 23,062                    8.0%
</TABLE>

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


                                       3
<PAGE>   7


The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
contains "prompt corrective action" provisions which established among other
things, the following five capital standard categories for depository
institutions: (i) well capitalized, (ii) adequately capitalized, (iii)
undercapitalized, (iv) significantly undercapitalized and (v) critically
undercapitalized. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions depending on the category in
which an institution is classified. Each of the federal banking agencies has
issued uniform regulations, which, among other things, define the capital
levels described above. Under the regulations, a bank is considered "well
capitalized" if it (i) has a total risk-based capital ratio of 10% or greater,
(ii) has a Tier 1 risk-based capital ratio of 6% or greater, (iii) has a
leverage ratio of 5% or greater, and (iv) is not subject to any order or
written directive to meet and maintain a specific capital level for any capital
measure. An "adequately capitalized" bank is defined as one that has (i) a
total risk-based capital ratio of 8% or greater, (ii) a Tier 1 risk-based
capital ratio of 4% or greater and (iii) a leverage ratio of 4% or greater. An
"undercapitalized" bank is defined as one that has a total risk-based capital
ratio of less than 8%, (ii) a Tier I risk-based capital ratio of less than 4%
or (iii) a leverage ratio of less than 3%. A "significantly undercapitalized"
bank is defined as one that has a total risk-based capital ratio of less than
6%, a Tier 1 risk-based capital ratio of less than 3% or a leverage ratio of
less than 3% and a bank is "critically undercapitalized" if the bank has a
leverage ratio equal to or less than 2%. The applicable federal regulatory
agency for a bank that is "well capitalized" may reclassify it as "adequately
capitalized" or "undercapitalized" and subject the institution to the
supervisory actions applicable to the next lower capital category, if it
determines that the Bank is in an unsafe or unsound condition or deems the bank
to be engaged in an unsafe or unsound practice and not to have corrected the
deficiency. As of December 31, 1999, the Bank met the definition of a "well
capitalized" institution.

"Undercapitalized" depository institutions, among other things, are subject to
growth limitations, are prohibited, with certain exceptions, from making
capital distributions, are limited in their ability to obtain funding from a
Federal Reserve Bank and are required to submit a capital restoration plan. The
federal banking agencies may not accept a capital plan without determining,
among other things, that the plan is based on realistic assumptions and is
likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan and provide appropriate assurances of
performance. If a depository institution fails to submit an acceptable plan,
including if the holding company refuses or is unable to make the guarantee
described in the previous sentence, it is treated as if it is "significantly
undercapitalized". Failure to submit or implement an acceptable capital plan
also is grounds for the appointment of a conservator or a receiver.
"Significantly undercapitalized" depository institutions may be subject to a
number of additional requirements and restrictions such as orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions, among other things, are
prohibited from making any payments of principal and interest on subordinated
debt, and are subject to the appointment of a receiver or conservator.

Under FDICIA, the FDIC is permitted to provide financial assistance to an
insured bank before appointment of a conservator or receiver only if (i) such
assistance would be the least costly method of meeting the FDIC's insurance
obligations, (ii) grounds for appointment of a conservator or a receiver exist
or are likely to exist, (iii) it is unlikely that the bank can meet all capital
standards without assistance and (iv) the bank's management has been competent,
has complied with applicable laws, regulations, rules and supervisory
directives and has not engaged in any insider dealing, speculative practice or
other abusive activity.

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

REGULATION OF THE COMPANY. The Company is a bank holding company within the
meaning of the Act. As a bank holding company, the Company is required to file
with the Federal Reserve an annual report and such additional information as
the Board may require pursuant to the Act. The Federal Reserve may also make
examinations of the Company and each of its subsidiaries. Bank holding
companies are required by the Act to obtain approval from the Federal


                                       4
<PAGE>   8


Reserve prior to acquiring, directly or indirectly, ownership or control of
more than 5% of the voting shares of a bank.

The Act also prohibits bank holding companies, with certain exceptions, from
acquiring more than 5% of the voting shares of any company that is not a bank
and from engaging in any nonbanking business (other than a business closely
related to banking as determined by the Federal Reserve) or from managing or
controlling banks and other subsidiaries authorized by the Act or furnishing
services to, or performing services for, its subsidiaries without the prior
approval of the Federal Reserve. The Federal Reserve is empowered to
differentiate between activities that are initiated de novo by a bank holding
company or a subsidiary and activities commenced by acquisition of a going
concern.

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

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

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

The Riegle Community Development and Regulatory Improvement Act of 1994 (the
"Improvement Act") provides for the creation of a community development
financial institutions' fund to promote economic revitalization in community
development. Banks and thrift institutions are allowed to participate in such
community development banks. The Improvement Act also contains (i) provisions
designed to enhance small business capital formation and to enhance disclosure
with regard to high cost mortgages for the protection of consumers, and (ii)
more than 50 regulatory relief provisions that apply to banks and thrift
institutions, including the coordination of examinations by various federal
agencies, coordination of frequency and types of reports financial institutions
are required to file and reduction of examinations for well capitalized
institutions.

Federal Reserve policy requires a bank holding company to act as a source of
financial strength and to take measures to preserve and protect bank
subsidiaries in situations where additional investments in a troubled bank may
not otherwise be warranted. In addition, under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), where a bank holding
company has more than one bank or thrift subsidiary, each of the bank holding
company's subsidiary


                                       5
<PAGE>   9


depository institutions is responsible for any losses to the FDIC as a result
of an affiliated depository institution's failure. As a result, a bank holding
company may be required to loan money to its subsidiaries in the form of
capital notes or other instruments which qualify as capital under regulatory
rules. However, any loans from the holding company to such subsidiary banks
likely will be unsecured and subordinated to such bank's depositors and perhaps
to other creditors of the bank. In addition, a bank holding company may be
required to provide additional capital to any additional banks it acquires as a
condition to obtaining the approvals and consents of regulatory authorities in
connection with such acquisitions.

The Federal Reserve has adopted certain provisions implementing The Economic
Growth and Regulatory Paperwork Reduction Act of 1996. Among other things,
these provisions reduce the notice and application requirements applicable to
bank and nonbank acquisitions and de novo expansion by well-capitalized and
well-managed bank holding companies; expand the list of nonbanking activities
permitted to bank holding companies; reduce certain limitations on previously
permitted activities; and amend Federal Reserve anti-tying restrictions to
allow banks greater flexibility to package products and services with their
affiliates.

The Company and the Bank are subject to Section 23A of the Federal Reserve Act,
which limits a bank's "covered transactions" (generally, any extension of
credit or purchase of assets) with any single affiliate to no more than 10% of
a bank's capital and surplus. Covered transactions with all affiliates combined
are limited to no more than 20% of a bank's capital and surplus. All covered
and exempt transactions between a bank and its affiliates must be on terms and
conditions consistent with safe and sound banking practices, and a bank and its
subsidiaries are prohibited from purchasing low quality assets from the bank's
affiliates. Finally, Section 23A requires that all of a bank's extensions of
credit to an affiliate be appropriately secured by collateral. The Company and
the Bank are also subject to Section 23B of the Federal Reserve Act, which
further limits transactions among affiliates. Sections 22(g) and 22(h) of the
Federal Reserve Act and implementing regulations also prohibit extensions of
credit by a state non-member bank (such as the Bank) to its directors,
executive officers and controlling shareholders on terms which are more
favorable than those afforded other borrowers, and impose limits on the amounts
of loans to individual affiliates and all affiliates as a group.

The Company and the Bank are subject to the provisions of the Community
Reinvestment Act of 1977 (the "CRA") and the federal banking agencies'
regulations issued thereunder. Under the CRA, all banks and thrifts have a
continuing and affirmative obligation, consistent with its safe and sound
operation to help meet the credit needs for their entire communities, including
low- and moderate-income neighborhoods. The CRA does not establish specific
lending requirements or programs for financial institutions, nor does it limit
an institution's discretion to develop the types of products and services that
it believes are best suited to its particular community, consistent with the
CRA. The CRA requires a depository institution's primary federal regulator, in
connection with its examination of the institution, to assess the institution's
record of assessing and meeting the credit needs of the community served by
that institution, including low- and moderate-income neighborhoods. The
regulatory agency's assessment of the institution's record is made available to
the public. In the case of a bank holding company applying for approval to
acquire a bank or other bank holding company, the Federal Reserve will assess
the records of each subsidiary depository institution of the applicant bank
holding company, and such records may be the basis for denying the application.

The evaluation system used to judge an institution's CRA performance consists
of three tests: a lending test; an investment test; and a service test. Each of
these tests will be applied by the institution's primary federal regulator
taking into account such factors as: (i) demographic data about the community;
(ii) the institution's capacity and constraints; (iii) the institution's
product offerings and business strategy; and (iv) data on the prior performance
of the institution and similarly-situated lenders.

In addition, a financial institution has the option of having its CRA
performance evaluated based on a strategic plan of up to five years in length
that it had developed in cooperation with local community groups. In order to
be rated under a strategic plan, the institution is required to obtain the
prior approval of its federal regulator.

The interagency CRA regulations provide that an institution evaluated under a
given test will receive one of five ratings for the test: outstanding, high
satisfactory, low satisfactory, needs to improve, or substantial
non-compliance. An institution will receive a certain number of points for its
rating on each test, and the points are combined to produce an overall
composite rating of either outstanding, satisfactory, needs to improve, or
substantial non-compliance. Under the agencies'


                                       6
<PAGE>   10


rating guidelines, an institution that receives an "outstanding" rating on the
lending test will receive an overall rating of at least "satisfactory", and no
institution can receive an overall rating of "satisfactory" unless it receives
a rating of at least "low satisfactory" on its lending test. In addition,
evidence of discriminatory or other illegal credit practices would adversely
affect an institution's overall rating. Under the new regulations, an
institution's CRA rating would continue to be taken into account by its primary
federal regulator in considering various types of applications. As a result of
the Bank's most recent CRA examination in July 1998, the Bank received an
"outstanding" CRA rating.

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

On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley
Act which reforms and modernizes certain areas of financial services
regulation. The law permits the creation of new financial services holding
companies that can offer a full range of financial products under a regulatory
structure based on the principle of functional regulation. The legislation
eliminates the legal barriers to affiliations among banks and securities firms,
insurance companies, and other financial services companies. The law also
provides financial organizations with the opportunity to structure these new
financial affiliations through a holding company structure or a financial
subsidiary. The new law reserves the role of the Federal Reserve Board as the
supervisor for bank holding companies. At the same time, the law also provides
a system of functional regulation which is designed to utilize the various
existing federal and state regulatory bodies. The law also sets up a process
for coordination between the Federal Reserve Board and the Secretary of the
Treasury regarding the approval of new financial activities for both bank
holding companies and national bank financial subsidiaries.

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

Most of the provisions of the law take effect on November 12, 1999, with other
provisions being phased in over a one to two year period thereafter. It is
anticipated that the effects of the law, while providing additional flexibility
to bank holding companies and banks, may result in additional affiliation of
different financial services providers, as well as increased competition,
resulting in lower prices, more convenience, and greater financial products and
services available to consumers.

COMPETITION

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

Banks generally compete with other financial institutions through the banking
products and services offered, the pricing of services, the level of service
provided, the convenience and availability of services, and the degree of
expertise and the personal manner in which services are offered. The Bank
encounters strong competition from most of the financial


                                       7
<PAGE>   11


institutions in the Bank's primary service area. In the conduct of certain
areas of its banking business, the Bank also competes with credit unions,
consumer finance companies, insurance companies, money market mutual funds and
other financial institutions, some of which are not subject to the same degree
of regulation and restrictions imposed upon the Bank. Many of these competitors
have substantially greater resources and lending limits than the Bank has and
offer certain services, such as trust services, that the Bank does not provide
presently. Management believes that personalized service and competitive
pricing will provide it with a method to compete effectively in the primary
service area.

MONETARY POLICY

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

FDIC INSURANCE ASSESSMENTS

The FDIC has regulations that provide for a risk-based premium system which
requires higher assessment rates for banks which the FDIC determines pose
greater risks to the BIF.

Under the regulations, banks pay an assessment depending upon risk
classification. Although the regulations were adopted by the FDIC as final
regulations, the Board of the FDIC will consider whether changes in economic
and industry conditions require adjustments in the range of assessment rates to
be charged in future years.

To arrive at risk-based assessments, the FDIC places each bank in one of nine
risk categories using a two step process based on capital ratios and on other
relevant information. Each bank is assigned to one of three groups (well
capitalized, adequately capitalized, or under capitalized) based on its capital
ratios. The FDIC has also assigned each bank to one of three subgroups based
upon an evaluation of the risk posed by the bank. The three subgroups include
(i) banks that are financially sound with only a few minor weaknesses, (ii)
those banks with weaknesses which, if not corrected, could result in
significant deterioration of the bank and increased risk to the BIF, and (iii)
those banks that pose a substantial probability of loss to the BIF unless
corrective action is taken. These supervisory evaluations modify premium rates
within each of the three capital groups with the result being the nine risk
categories and assessment rates based on a summary multiplier.

The Bank has been informed by the FDIC that it has been classified as well
capitalized and in the lowest risk category and will be assessed accordingly
for 2000.

STATISTICAL INFORMATION

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


ITEM 2.  PROPERTIES

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

The Bank's ten branches are located at 28 N.E. 18th Street in Homestead; 777
Krome Avenue in Homestead; 103330 Overseas Highway in Key Largo; 91980 Overseas
Highway in Tavernier; 80900 Overseas Highway in Islamorada; 11401 Overseas
Highway in Marathon Shores; 2348 Overseas Highway in Marathon; 30400 Overseas
Highway in Big Pine Key;


                                       8
<PAGE>   12


330 Whitehead Street in Key West; and 3618 N. Roosevelt Drive in Key West;
Florida. The main office and branch properties are owned by the Bank.

The Bank also owns two other properties. The Bank owns a one-story building
containing approximately 5,000 square feet on a one-half acre lot located at
100210 Overseas Highway, Key Largo. This building is partly leased to another
business and the remainder of the building is being renovated for a training
center and office space. The Bank owns a three-story building at 228 Atlantic
Boulevard, Key Largo, Florida, consisting of approximately 3,000 square feet
that is utilized by the Bank primarily for the loan operations, human resources
and marketing departments.


ITEM 3.  LEGAL PROCEEDINGS

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


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

No matter was submitted to a vote of security holders during the Company's
fourth quarter of the fiscal year ended December 31, 1999.


                                    PART II


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

As of December 31, 1999, there were 409 registered shareholders of record and
4,395,137 shares of the Company's common stock outstanding. On June 18, 1997,
the Company's $0.10 par value common Stock became listed on the Nasdaq National
Market System under the symbol "TIBB." Prior thereto, the Company's common
stock had not been traded on an established trading market, so there had been
limited trading. The following table sets forth, for the periods indicated, the
high and low sale prices per share for the Company's common stock on the Nasdaq
National Market:

<TABLE>
<CAPTION>
Quarter Ended                 1999                             1998
-------------         ---------------------          ----------------------

                       High            Low            High             Low
                      ------         ------          ------          ------
<S>                   <C>            <C>             <C>             <C>
March 31              $11.38         $10.38          $14.38          $12.13
June 30                11.50          10.00           14.88           12.19
September 30           11.00           9.38           12.50           10.56
December 31            11.63           9.50           11.38           10.00
</TABLE>


For the year ended December 31, 1999, the Company paid cash dividends to
shareholders in the amount of $.1025 per share for the first three quarters and
$.1050 per share for the last quarter ($.4125 in the aggregate). For the year
ended December 31, 1998, the Company paid cash dividends to shareholders in the
amount of $.10 per share for the first three quarters and $.1025 per share for
the last quarter ($.4025 in the aggregate). The only source of funds presently
available to the Company for the payment of cash dividends is dividends from
the Bank. Certain regulatory requirements restrict the amount of dividends that
can be paid to the Company by the Bank without obtaining the prior approval of
the appropriate regulatory authorities. Information regarding restrictions on
the ability of the Bank to pay dividends to the Company is contained in Note 12
of the "Notes to Consolidated Financial Statements" contained in Item 8 hereof.
The Company expects that comparable cash dividends will continue to be paid in
the future, although no assurance can be given that further dividends will be
declared by the Company, or if declared, what the amount of the dividends will
be.


                                       9
<PAGE>   13


In the fourth quarter of 1998 the Company purchased 50,000 shares of common
stock through one of its market makers at an average price of $11.16 per share.
Also, the Company authorized the purchase of an additional 50,000 shares
beginning in the first quarter of 1999. In 1999, 45,000 of these shares were
repurchased at an average price of $10.97 per share. The remaining 5,000 shares
were repurchased in the first quarter of 2000 at an average cost of $10.32.


ITEM 6.  SELECTED FINANCIAL DATA

The selected consolidated financial data presented below as of and for the
years ended December 31, 1999, 1998, 1997, 1996, and 1995 is unaudited and has
been derived from the Consolidated Financial Statements of the Company and its
subsidiaries, and from records of the Company. During 1996, TIB Financial Corp.
("Company") was formed providing for a reorganization whereby TIB Bank of the
Keys ("Bank") became a wholly-owned subsidiary of TIB Financial Corp. The
transaction was accounted for on a historical cost basis similar to a pooling
of interest and, accordingly, the following selected consolidated financial
data was prepared as if the reorganization occurred January 1, 1995. The
information presented below should be read in conjunction with the Consolidated
Financial Statements and related notes, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA                                                               AS OF DECEMBER 31,
----------------------------------------------------------------------------------------------------------------------------

Balance Sheet Data                                           1999          1998          1997          1996          1995
----------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>           <C>           <C>           <C>           <C>
Total Assets                                               $392,129      $355,476      $277,959      $241,051      $219,567
Investment Securities                                        60,362        66,001        54,690        50,878        60,961
Gross Loans                                                 290,614       246,668       186,279       165,151       139,061
Allowance for loan losses                                     2,997         2,517         2,202         1,930         1,701
Deposits                                                    346,904       325,057       248,822       204,984       192,458
Stockholders' Equity                                         28,302        26,568        24,564        22,621        21,063

                                                                                                     YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------------------------------

Statement of Income Data                                   1999          1998          1997          1996          1995
----------------------------------------------------------------------------------------------------------------------------
Interest income                                              27,906        23,706        20,558        18,503        17,525
Interest expense                                             11,299         9,915         7,876         6,507         6,253
Net interest income                                          16,607        13,791        12,682        11,996        11,272
Provision for loan losses                                       540           360           300           240           135
Net interest income after provision for loan losses          16,067        13,431        12,382        11,756        11,137
Non-interest income                                           7,167         6,376         5,319         3,784         3,273
Non-interest expense                                         16,741        14,480        12,776        10,748         9,818
Income tax expense                                            2,327         1,886         1,719         1,589         1,591
Cumulative effect of change in accounting principle,
         net of tax benefit                                      47             -             -             -             -
Net Income                                                    4,119         3,441         3,206         3,203         3,001

Per Share Data (1)
------------------------------------------------------
Book value per share at year end                              $6.44         $6.04         $5.62         $5.23         $4.95
Basic earnings per share                                       0.94          0.78          0.74          0.75          0.71
Diluted earnings per share                                     0.91          0.74          0.70          0.72          0.69
Basic weighted average common equivalent shares
         outstanding                                      4,388,336     4,415,949     4,354,547     4,280,712     4,246,218
Diluted weighted average common equivalent shares
         outstanding                                      4,543,784     4,624,380     4,602,375     4,424,676     4,352,838
Dividends declared                                          $0.4125       $0.4025         $0.40         $0.39         $0.25
</TABLE>


                                      10
<PAGE>   14

<TABLE>

Ratios                                                        1999          1998          1997          1996          1995
----------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>           <C>           <C>           <C>         <C>
Return on average assets                                      1.07%         1.10%         1.25%         1.40%         1.40%
Return on average equity                                     15.05%        13.31%        13.52%        15.89%        17.00%
Average equity/average assets                                 7.11%         8.23%         9.22%         8.79%         8.23%
Net interest margin                                           4.78%         4.88%         5.42%         5.83%         5.85%
Dividend payout ratio                                        43.95%        51.65%        54.33%        52.12%        35.37%
Non-performing assets/total loans and other real
         estate                                               0.71%         0.21%         0.15%         0.26%         0.06%
Allowance for loan losses/total loans                         1.03%         1.02%         1.18%         1.17%         1.22%
Allowance for loan losses/nonperforming assets              145.25%       483.28%       806.73%       448.84%     2,074.39%
Non-interest expense/net interest income and
         non-interest income                                 70.42%        71.80%        70.98%        68.11%        67.50%
</TABLE>

(1)  Stock splits in 1997 and 1996 have been retroactively reflected in the per
     share data and weighted-average common equivalent and diluted shares
     outstanding as if they occurred January 1, 1995.


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

INTRODUCTION

During 1996, TIB Financial Corp. ("Company") was formed providing for a
reorganization whereby TIB Bank of the Keys ("Bank") became a wholly-owned
subsidiary of TIB Financial Corp. The transaction was accounted for on a
historical cost basis similar to a pooling of interests and, accordingly,
Selected Financial Data, Management's Discussion and Analysis of Financial
Condition and Results of Operations, and the Consolidated Financial Statements
have been restated to reflect the reorganization as occurring at the beginning
of the first period presented. In 1997, the Bank formed two subsidiaries, the
first on June 13, 1997, when the Bank acquired the assets of Small Business
Consultants, Inc., a Florida corporation specializing in the government
guaranteed loan consulting business. On July 31, 1997, the Bank formed TIB
Investment & Insurance Center, Inc. for the purpose of selling investment
products to the public. The Company has a 30% interest in ERAS JV, a joint
venture computer software, item processing, and network management company.
ERAS JV currently processes the cash items and provides network management
services for the bank.

In March 1996, TIB Bank of the Keys declared a two-for-one stock split which
was distributed on May 14, 1996, to shareholders of record on May 2, 1996. On
February 25, 1997, TIB Financial Corp. declared a three-for-one stock split
which was distributed on March 18, 1997, to shareholders of record on February
25, 1997. In the Selected Financial Data, Management's Discussion and Analysis
of Financial Condition and Results of Operations, and the Consolidated
Financial Statements, all per share amounts, number of shares outstanding and
market prices have been restated to reflect these stock splits as if they
occurred at the beginning of the first period presented.

In 1999, the Bank had a very successful year generating loans for the Bank's
portfolio. These loans were predominately residential and commercial real
estate secured. This additional leveraging of the balance sheet, from a loan to
deposit ratio of 75.9% at December 31, 1998 to a ratio of 83.8% at December 31,
1999, helped offset the continuing industry trend of declining net interest
margins.

The increasing interest rate environment slowed down the residential real
estate refinancing activity in 1999 versus 1998 and that lowered the fee income
generated in this area. A smaller number of transactions lowered the fees
generated in the government loan area along with the investment services
subsidiary. The Bank believes it is important to have a varied mix of
non-interest fee generating areas since unique factors can negatively affect
individual profit centers.


                                      11
<PAGE>   15


PERFORMANCE OVERVIEW

The Company achieved record net income of $4.1 million in 1999 representing a
$678,000 or a 19.7% increase over the prior year. Management attributes the
results to a 17.7% increase in interest income primarily caused by strong loan
growth, along with a 12.4% increase in non-interest income, offset by a 14.0%
increase in interest expense, and a 15.6% increase in non-interest expenses.
Net income of $3.4 million in 1998 represented a $235,000 or 7.3% increase over
1997.

Reported basic earnings per share for 1999 was $.94 compared to $.78 in 1998.
Basic weighted-average common equivalent shares outstanding in 1999 were
4,388,336 compared to 4,415,949 in 1998. This decrease resulted from the
Company stock repurchases, which were partially offset by the exercise of stock
options and the award of compensation paid through the issuance of common
stock.

Diluted earnings per share for 1999 was $0.91 compared to $0.74 in 1998.
Diluted weighted-average common equivalent shares outstanding in 1999 were
4,543,784 compared to 4,624,380 in 1998.

Total assets of the Company at December 31, 1999 were $392.1 million compared
to $355.5 million at the previous year end, reflecting an increase of 10.3%.
Asset growth was funded by an increase in deposits of 6.7%, or $21.8 million in
1999 and a $10 million advance from the Federal Home Loan Bank. The Company's
total loan volume increased 17.8%, or $43.9 million, to $290.6 million at year
end 1999 compared to $246.7 million at December 31, 1998. During the last four
years, the Company's loans outstanding have grown at a rate of 20.2% compounded
annually.

Net interest income in 1999 increased 20.4%, or $2.8 million, to $16.6 million
from $13.8 million reported in 1998. The Company's interest margin declined
from 4.88% to 4.78%. This decline resulted from the Company's decision to
remain aggressive in an increasingly competitive deposit and loan market.
Non-performing assets increased to 0.71% of total loans from 0.21% at year end
1998. Non-interest income increased $791,000 to $7.2 million in 1999. The
increase in other income is attributed to an increase of $654,000 in merchant
bankcard processing income; an increase of $220,000 in service charges on
deposit accounts; a $180,000 increase in revenues, net of goodwill amortization
from investment in ERAS Joint Venture; a $150,000 increase in other income; and
a one time gain on the sale of the insurance company option for $312,000;
offset by a $122,000 decrease in fees on mortgage loans sold at origination; a
$189,000 decrease in commissions on retail sales of investment products; a
$284,000 decrease in gain on sale of government guaranteed loans; and a
$130,000 decrease in net investment security gains.

Net interest income in 1998 increased 8.7%, or $1.1 million, to $13.8 million
from $12.7 million reported in 1997.

The Company experienced an increase in non-interest expenses of $2.3 million in
1999, or 15.6 % over 1998. The major areas of increased expenses relate to
interchange fees and other expenses for processing merchant bankcard
transactions, computer services, supplies, amortization of purchased deposits,
charge-off of unamortized leasehold improvements, and the additional operating
costs associated with the two new branches established in 1998.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
DOLLARS IN THOUSAND, EXCEPT PER SHARE DATA                                             AS OF DECEMBER 31,
----------------------------------------------------------------------------------------------------------
Balance Sheet Data                                                 1999             1998             1997
----------------------------------------------------------------------------------------------------------
<S>                                                            <C>              <C>              <C>
Total Assets                                                   $392,129         $355,476         $277,959
Investment Securities                                            60,362           66,001           54,690
Gross Loans                                                     290,614          246,668          186,279
Allowance for loan losses                                         2,997            2,517            2,202
Deposits                                                        346,904          325,057          248,822
Stockholders' Equity                                             28,302           26,568           24,564
</TABLE>


                                      12
<PAGE>   16


<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------------

Statement of Income Data                                           1999             1998             1997
----------------------------------------------------------------------------------------------------------
<S>                                                             <C>              <C>              <C>
Interest income                                                 $27,906          $23,706          $20,558
Interest expense                                                 11,299            9,915            7,876
Net interest income                                              16,607           13,791           12,682
Provision for loan losses                                           540              360              300
Net interest income after provision for loan losses              16,067           13,431           12,382
Non-interest income                                               7,167            6,376            5,319
Non-interest expense                                             16,741           14,480           12,776
Income tax expense                                                2,327            1,886            1,719
Cumulative effect of change in accounting principle,
         net of tax benefit                                          47                -                -
Net Income                                                        4,119            3,441            3,206

Per Share Data (1) (2)
------------------------------------------------------
Book value per share at year end                                   6.44             6.04             5.62
Basic earnings per share                                           0.94             0.78             0.74
Diluted earnings per share                                         0.91             0.74             0.70
Basic weighted average common equivalent shares
         outstanding                                          4,388,336        4,415,949        4,354,547
Diluted weighted average common equivalent shares
         outstanding                                          4,543,784        4,624,380        4,602,375
Dividends declared                                              $0.4125          $0.4025            $0.40

Ratios (2)
------------------------------------------------------
Return on average assets                                           1.07%            1.10%            1.25%
Return on average equity                                          15.05%           13.31%           13.52%
Average equity/average assets                                      7.11%            8.23%            9.22%
Net interest margin                                                4.78%            4.88%            5.42%
Dividend payout ratio                                             43.95%           51.65%           54.33%
Non-performing assets/total loans and other real
         estate                                                    0.71%            0.21%            0.15%
Allowance for loan losses/total loans                              1.03%            1.02%            1.18%
Non-interest expense/net interest income and
         non-interest income                                      70.42%           71.80%           70.98%
</TABLE>

(1)  Stock splits in 1997 have been retroactively reflected in per share data
     and weighted average common equivalent and diluted shares outstanding as
     if they occurred as of the earliest date presented.

(2)  Averages are derived from daily balances.

NET INTEREST INCOME

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

Net interest income on a tax equivalent basis increased 19.3% to $16.8 million
in 1999 as compared to 1998. Net interest margin decreased only 10 basis points
to 4.78%. The decrease in the yield in earning assets was similar to the


                                      13
<PAGE>   17


decrease in the cost of interest bearing liabilities. One factor that
restrained the decrease in yield of earning assets was a change in mix. A
relatively larger proportion of higher yielding loans in 1999 compared to 1998
helped moderate the overall yield decrease in these assets overall. Loan volume
representing the majority of the change in average earning assets increased
$58.8 million while average investment securities volumes increased $300,000.
Average interest-bearing liabilities increased 22.6% or $51.4 million over
1998. Average increases in time and savings deposits of $23.9 million were
accompanied by a large increase of $23.9 million in money market accounts.

Net interest income on a tax equivalent basis, increased 9.2% to $14.1 million
in 1998, as compared to 1997. Net interest margin decreased 54 basis points to
4.88%. In 1998, the Company continued to aggressively price both loan and
deposit products in order to gain market share and enhance overall customer
relationships. The Company's desire to provide one-stop shopping for a
customers' complete financial services needs requires competitive pricing for
all product offerings. The introduction of a high rate money market account in
1997, and its continued success in 1998 though increasing the average costs of
funds, continued to bring in substantial new deposits from both new and
existing customers of the Bank. These new deposits funded an average
interest-earning asset increase of 21.2%, or $50.6 million. Loan volume
represented the majority of this change in average earning assets increasing
$27.0 million while average investment securities volumes increased $17.6
million. Average interest-bearing liabilities increased 22.7%, or $42.1
million, over 1997. Average decreases in time and savings deposits of $6.4
million were more than offset by the large increase of $44.0 million in money
market accounts.

The following table sets forth information with respect to the average
balances, interest income and average yield by major categories of assets; the
average balances, interest expense and average rate by major categories of
liabilities; the average balances of noninterest-earning assets,
noninterest-bearing liabilities and stockholders' equity; and net interest
income, interest rate spread, and net interest margin for the years ended
December 31, 1999, 1998 and 1997.


                                      14
<PAGE>   18


AVERAGE BALANCE SHEETS

<TABLE>
<CAPTION>
                                                   1999                           1998                          1997
                                                   ----                           ----                          ----
                                       AVERAGE    INCOME/   YIELDS   AVERAGE    INCOME/   YIELDS   AVERAGE    INCOME/  YIELDS
(Dollars in thousands)                 BALANCES   EXPENSE   RATES    BALANCES   EXPENSE   RATES    BALANCES   EXPENSE  RATES
                                       --------   -------   ------   --------   -------   ------   --------   -------  ------

<S>                                    <C>        <C>       <C>      <C>        <C>       <C>      <C>        <C>      <C>
ASSETS
 Interest-earning assets:
 Loans (1)                             $264,124     22,926   8.68%   $205,319   $ 18,746   9.13%   $178,317   $ 17,019   9.54%
 Investment securities -
   taxable                               62,321      3,741   6.00%     59,136      3,676   6.22%     44,857      2,706   6.03%
 Investment securities -
    tax exempt (2)                        7,044        562   7.98%      9,929        851   8.57%      6,576        605   9.21%
 Interest bearing deposits
    in other banks                        6,494        316   4.86%         --         --     --          --         --     --
Federal funds sold                       11,420        552   4.84%     14,060        721   5.13%      8,054        433   5.38%
                                       --------    -------           --------   --------           --------   --------

Total interest-earning assets           351,403     28,097   8.00%    288,444     23,994   8.32%    237,804     20,763   8.73%
                                       --------    -------           --------   --------           --------   --------

Non-interest-earning assets:
   Cash and due from banks               14,925                        11,196                         7,307
   Investment in ERAS                       809                           165                            --
   Premises and equipment, net           13,105                        10,295                         8,754
   Allowances for loan losses           (2,751)                        (2,347)                       (2,058)
   Other assets                           7,321                         6,466                         5,261
                                       --------                      --------                      --------

Total non-interest earning assets        33,409                        25,775                        19,264
                                       --------                      --------                      --------

Total assets                            384,812                       314,219                       257,068
                                       --------                      --------                      --------

LIABILITIES &
STOCKHOLDERS' EQUITY
 Interest-bearing liabilities:
     Interest bearing deposits:
     NOW accounts                        35,247        436   1.24%     32,198        459   1.43%     28,122        393   1.40%
     Money market                       123,506      5,149   4.17%     99,567      4,832   4.85%     55,543      2,692   4.85%
     Savings deposits                    25,893        610   2.36%     23,005        570   2.48%     28,474        778   2.73%
     Other time deposits                 91,666      4,983   5.44%     70,671      3,976   5.63%     71,565      3,949   5.52%
                                       --------    -------           --------   --------           --------   --------

Total interest-bearing deposits         276,312     11,178   4.05%    225,441      9,837   4.36%    183,704      7,812   4.25%

   Other interest-bearing
    liabilities:
   Other borrowings                         422         37   8.68%         --         --     --          --         --     --
   Short-term borrowings                  1,685         84   4.99%      1,609         78   4.85%      1,274         64   5.02%
                                       --------    -------           --------   --------           --------   --------

Total interest-bearing liabilities      278,419     11,299   4.06%    227,050      9,915   4.37%    184,978      7,876   4.26%
                                       --------    -------           --------   --------           --------   --------

Non-interest bearing liabilities
   and stockholders' equity:
   Demand deposits                       74,806                        58,058                        46,323
   Other liabilities                      4,223                         3,248                         2,054
   Stockholders' equity                  27,364                        25,863                        23,713
                                       --------                      --------                      --------

Total non-interest bearing
    liabilities and
    stockholders' equity                106,393                        87,169                        72,090
                                       --------                      --------                      --------
Total liabilities and
    stockholders' equity                384,812                       314,219                       257,068
                                       ========                      ========                      ========

Interest rate spread                                         3.94%                         3.95%                         4.47%
                                                             ====                          ====                          ====

Net interest income                                $16,798                       $14,079                       $12,887
                                                   -------                       -------                       -------

Net interest margin (3)                                      4.78%                         4.88%                         5.42%
                                                             ====                          ====                          ====
</TABLE>


                                      15
<PAGE>   19


(1)  Average loans include non-performing loans. Interest on loans includes
     loan fees of $140,590 in 1999, $74,966 in 1998 and $83,918 in 1997.
(2)  Interest income and rates include the effects of a tax equivalent
     adjustment using a Federal tax rate of 34% in adjusting tax exempt
     interest on tax exempt investment securities to a fully taxable basis.
(3)  Net interest margin is net interest income divided by average total
     interest-earning assets.

CHANGES IN NET INTEREST INCOME

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

<TABLE>
<CAPTION>
                                                1999 compared to 1998 (1)              1998 compared to 1997 (1)
                                                   Due to changes in                       Due to changes in
                                     --------------------------------------------------------------------------------
(In thousands)                                                        Net                                       Net
                                          Average       Average     Increase      Average       Average       Increase
INTEREST INCOME                           Volume         Rate      (Decrease)      Volume         Rate       (Decrease)
----------------------------------------------------------------------------------------------------------------------

<S>                                       <C>           <C>        <C>            <C>           <C>          <C>
Loans                                     $5,143        $(963)       $4,180        $2,484        $(757)        $1,727
Investment Securities (2)                     20         (244)         (224)        1,153           63          1,216
Interest bearing deposits in
         other banks                         316            -           316             -            -              -
Federal Funds sold                          (130)         (39)         (169)          309          (21)           288

                                     -----------  -----------   -----------  ------------- -----------   ------------
Total interest income                      5,349       (1,246)        4,103         3,946         (715)         3,231
                                     -----------  -----------   -----------  ------------- -----------   ------------

INTEREST EXPENSE

NOW Accounts                                  41          (64)          (23)          58              8            66
Money Market                               1,056         (739)          317        2,140              -         2,140
Savings deposits                              69          (29)           40         (141)           (67)         (208)
Other time deposits                        1,145         (138)        1,007          (50)            77            27
Other borrowings                              37            -            37            -              -             -
Short-term borrowings                          4            2             6           20             (6)           14

                                     -----------  -----------   -----------  -----------   ------------  ------------
Total interest expense                     2,352         (968)        1,384        2,027             12         2,039
                                     -----------  -----------   -----------  -----------   ------------  ------------

Change in net interest income             $2,997        $(278)       $2,719       $1,919          $(727)       $1,192
                                     ===========  ===========   ===========  ===========   ============  ============
</TABLE>

(1)  The change in interest due to both rate and volume has been allocated to
     the volume and rate components in proportion to the relationship of the
     dollar amounts of the absolute change in each.
(2)  Interest income includes the effects of a tax equivalent adjustment using
     a federal tax rate of 34% in adjusting tax exempt interest on tax exempt
     investment securities to a fully taxable basis.


                                      16
<PAGE>   20


NON-INTEREST INCOME

The following table presents the principal components of non-interest income
for the years ended December 31, 1999, 1998, and 1997.

<TABLE>
<CAPTION>
(In thousands)                                                     1999            1998            1997
---------------------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>             <C>
Credit card processing income                                     $2,828          $2,174          $2,109
Gains on sales of mortgage loans                                       -               -             119
Gross gains on sales of government guaranteed loans                  704             988             440
Fees on mortgage loans sold at origination                           339             461             364
Revenues, net of goodwill amortization, from investment
         in ERAS Joint Venture                                       179             (1)               -
SBA servicing income                                                 106              94              58
Service charge income                                              1,951           1,732           1,640
Gain on sale of insurance company option                             312               -               -
Net gains on sales of investment securities                            1             131              11
Retail investment services income                                    230             419             319
Other                                                                517             378             259
                                                           =============  ==============  ===============
Total non-interest income                                         $7,167          $6,376          $5,319
                                                           =============  ==============  ===============
</TABLE>

The Company's continued emphasis on non-interest income remains a primary
focus. Over the past three years, the Company has increased non-interest income
from $5.3 million to $7.2 million or approximately 34.7%. 1999 growth in
non-interest income of $791,000 over 1998 resulted from the Company's sources
of this income coming from a broad range of individual profit centers that can
grow in total even when unique factors can limit the results from some areas.
In particular, fees on mortgage loans sold at origination declined in 1999 due
to the increased market interest rate environment which substantially reduced
the mortgage re-finance market that was strong in 1998. Also, gains on sales of
government guaranteed loans were reduced in 1999 versus 1998 due to several
factors including a decline in premiums paid on certain types of loans due to a
history of high prepayment rates for those borrowers. This category is
comprised of relatively small numbers of significant transactions. This causes
the gains recognized to vary widely on a quarter to quarter basis and even the
yearly results will fluctuate depending on the timing and size of just one or
two large transactions. Retail investment services income dropped $189,000 from
1998 to 1999 due to a change in investment advisors and the transitional period
that necessitated. More than offsetting these decreases were significant gains
in credit card processing income, revenues from our investment in ERAS Joint
Venture, service charge and servicing income, and other smaller categories that
include debit card and ATM fees.

The Bank began a program to originate and sell conforming fixed rate
residential mortgages to the secondary market in late 1994 and the Bank has
generated over $50 million in residential mortgages in 1997, 1998 and 1999.
Approximately 40% of the annual volume was conforming fixed rate residential
loans that are sold immediately to the secondary market. Approximately 60% of
the annual production represents conforming adjustable rate loans that are
placed in the Bank's portfolio. At the end of 1994 the Bank began to originate
these loans utilizing industry standards for documentation and procedures in
order for them to be suitable for sale as a back-up source for liquidity. From
time to time the Bank sells a portion of these loans to confirm their use as a
back up source of liquidity. In 1998 and 1999 none was sold. In 1997, $5.9
million of the Bank's portfolio of adjustable rate mortgages were sold in the
secondary market for a gain of $119,000. The Company may seek to retain most of
this portfolio production as the yield may be of benefit for years to come.
Additionally, effective cross-selling of other bank products around this and
other activities has contributed to the Bank's growth in its deposit base.

NON-INTEREST EXPENSES

The following table represents the principal components of non-interest
expenses for the years ended December 31, 1999, 1998, and 1997.


                                      17
<PAGE>   21


<TABLE>
<CAPTION>
(In thousands)                                            1999              1998             1997
--------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>              <C>
Salary and employee benefits                             7,592             7,159            6,505
Merchant bank card expenses                              2,085             1,592            1,501
Occupancy                                                1,381             1,130              918
Equipment                                                1,253             1,119              907
Accounting, legal, and other professional                  483               510              512
Computer services                                        1,395               861              597
Postage, courier and armored car                           421               325              285
Marketing and community relations                          458               496              417
Taxes - non building                                        62                45               41
Operating supplies                                         426               398              339
Director's fees                                            160               152              149
FDIC and state assessments                                 109                90               77
Charge-off of unamortized leasehold
         improvements                                      134                 -                -
Amortization of intangibles                                177                96               47
Other operating expenses                                   605               507              482
                                                       =======           =======         ========
Total non-interest expenses                            $16,741           $14,480         $ 12,777
                                                       =======           =======         ========
</TABLE>

The Company has over the three year periods of 1997, 1998, and 1999 expanded
non-interest expense in an effort to build an infrastructure which will
position the Bank in a quality customer service mode and a growth perspective.
The Company experienced an increase in non-interest expenses of $2.3 million in
1999, or 15.6 % over 1998. The major areas of increased expenses relate to
merchant bank card expenses for processing merchant bankcard transactions,
computer services, supplies, amortization of purchased deposits, charge-off of
unamortized leasehold improvements, and the additional operating costs,
including salary and employee benefits, associated with the new branches
established in July 1998 and September 1998. Bankcard costs are volume driven
and are more than offset by higher revenues reported in other income. Computer
services and supplies reflect the costs associated with the larger number and
activity in account relationships and approximately $41,000 in Y2K preparedness
testing. The premium paid in the acquisition of the branch deposits in
Homestead required $145,000 in current charges to intangible amortization
expense for the year ended December 31, 1999, compared to $36,000 in 1998.
Finally, there was a $134,000 charge taken in the second quarter of 1999
related to the write-off of the unamortized leasehold improvements associated
with the leased facility that was abandoned upon the opening of the newly
constructed branch in Key West.

In 1998, non-interest expense increased by 13.3% or $1.7 million as compared to
1997 due primarily to the costs of servicing a larger base of customers.
Specifically, the establishment of two branch offices in the Company's new
service area of South Dade County required expenditures for additional
personnel and occupancy related costs. Further, the overall growth in customers
to 36,995 accounts of all types at year end 1998 from 31,251 accounts at year
end 1997, required additional personnel and data processing type expenditures.
Equipment costs increased $212,000 in 1998 substantially resulting from
upgrades of computer workstations and network systems. These upgrades enhance
performance and capabilities while also being part of year 2000 preparedness.
The increase in computer services costs in 1998 was direclty attributable to
the significant increase in bank accounts processed.

PROVISION FOR INCOME TAXES

The provision for income taxes includes federal and state income taxes. The
effective income tax rates for the years ended December 31, 1999, 1998 and 1997
were 35.8%, 35.4%, and 34.9%, respectively. The fluctuations in effective tax
rates reflects the effect of the differences in timing or deductibility of
certain expenses.

LOAN PORTFOLIO

The Company is located in the Florida Keys and the primary industry is tourism.
Commercial loan demand


                                      18
<PAGE>   22


therefore is significant for resort, hotel, restaurant, marina and related real
estate secured property loans. The Company serves this market by offering
long-term adjustable rate financing to the owners of these types of properties
for acquisition and improvements thereon. These loans are often $1 million or
larger and are good candidates for government guarantee programs or traditional
participation agreements. The nature of government programs such as the Small
Business Administration is generally geared toward long term adjustable rate
financing.

Monroe County has the highest cost of living of any county in Florida and this
is driven in large part by the scarce and expensive real estate. This also
serves to maintain and enhance collateral values on loans secured by property
in this market. The Company has grown in commercial loans by aggressively
serving its market. The quality of the Company's credit administration along
with the stable real estate values have kept loan losses at low levels.

Loans are expected to produce higher yields than investment securities and
other interest earning assets (assuming that credit losses are not excessive).
Thus the absolute volume of loans and the volume as a percentage of total
earning assets are important determinants of the net interest margin. Net loans
outstanding increased to $286.9 million as compared to $243.8 million at year
end 1998, an increase of 17.7%. Of this amount, loans secured by real estate
increased from $212.3 million to $251.7 million. Commercial loans accounted for
much of this increase, growing from $164.4 million to $182.8 million at the
respective year ends. Consumer loans increased from $13.8 to $16.2 million at
December 31, 1999. The Company maintains a posture of originating commercial
loans with rates that fluctuate with the prime lending rate and residential
loans with rates that fluctuate with the one year treasury index. At December
31, 1999, 83.7% of the total loan portfolio had floating or adjustable rates.

The following table presents the composition of the Company's loan portfolio at
December 31:

<TABLE>
<CAPTION>
(Dollars in thousands)                             1999        1998         1997        1996        1995
------------------------------------------------------------------------------------------------------------
<S>                                              <C>          <C>         <C>         <C>          <C>
Commercial, financial & agricultural             $182,762     $164,354    $123,974    $115,110     $ 93,423
Construction loans                                  9,182        5,960      10,011       7,391        5,441
Residential real estate                            82,422       62,544      42,599      35,097       35,947
Consumer loans                                     16,248       13,810       9,695       7,554        4,250
Less:  unearned income                               (733)        (370)       (533)       (607)        (691)
Less:  allowance for loan loss                     (2,997)      (2,517)     (2,202)     (1,930)      (1,701)
                                                ============================================================
Net loans                                        $286,884     $243,781    $183,544    $162,615     $136,669
                                                ============================================================
</TABLE>

The maturity distribution of the Company's loan portfolio at December 31, 1999
was as follows:

<TABLE>
<CAPTION>
                                                                          Loans maturing
                                                            ------------------------------------------------
                                                              Within       1 to 5     After 5
(Dollars in thousands)                                        1 Year       Years       Years        Total
------------------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>        <C>          <C>
Commercial, financial & agricultural                            $29,539     $23,720    $129,503     $182,762
Construction Loans                                                9,182           -           -        9,182
Residential real estate                                             188         982      81,252       82,422
Consumer loans                                                    1,707       7,280       7,261       16,248
                                                            ------------------------------------------------
Total Loans                                                     $40,616     $31,982    $218,016     $290,614
                                                            ================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                          Loans maturing
                                                            ------------------------------------------------
                                                              Within       1 to 5     After 5
(Dollars in thousands)                                        1 Year       Years       Years        Total
------------------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>        <C>          <C>
------------------------------------------------------------------------------------------------------------
Loans with:
Predetermined interest rates                                     $6,880     $17,411     $23,117      $47,408
Floating or adjustable rates                                     33,736      14,571     194,899      243,206
                                                            ------------------------------------------------
Total Loans                                                     $40,616     $31,982    $218,016     $290,614
                                                            ================================================
</TABLE>


                                      19
<PAGE>   23

ALLOWANCE AND PROVISION FOR LOAN LOSSES

The allowance for loan losses represents a reserve for potential losses in the
loan portfolio. The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with particular
emphasis on non-accruing, past due, and other loans that management believes
require special attention.

For problem loans, management's review of the adequacy of the allowance for
loan losses consists of an evaluation of the financial strengths of the
borrower, the related collateral, and the effects of economic conditions.
General reserves against the remaining loan portfolio are based on analysis of
historical loan loss ratios, loan charge-offs, delinquency trends, and previous
collection experience, along with an assessment of the effects of external
economic conditions.

The provision for loan losses is a charge to income in the current period to
replenish the allowance and maintain it at a level that management has
determined to be adequate to absorb estimated losses in the loan portfolio. The
Company's provision for loan losses for 1999 was $540,000 as compared to
$360,000 in 1998, reflecting the Company's strong growth in loans outstanding
and negligible charge-offs. The Company's provision for loan losses for 1998
was $360,000 as compared to $300,000 in 1997.

The allowance for loan losses represented 1.03% of total loans at December 31,
1999 compared to 1.02% and 1.18% at year end 1998 and 1997, respectively. The
determination of the adequacy of the allowance for loan losses is based on
management's judgment about factors affecting loan quality; collectability and
assumptions about the economy. Management considers the year end allowance
appropriate and adequate to cover possible losses in the loan portfolio;
however, management's judgment is based upon a number of assumptions about
future events, which are believed to be reasonable, but which may or may not
prove valid. Thus, there can be no assurance that charge-offs in future periods
will not exceed the allowance for loan losses or that additional increases in
the allowance for loan losses will not be required. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Company's allowance for loan losses. Such agencies may
require the Company to recognize additions to the allowance based on their
judgments about information available to them at the time of their examination.

                                      20
<PAGE>   24

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

<TABLE>
<CAPTION>

(In thousands)                                1999         1998         1997         1996         1995
----------------------------------------     ------       ------       ------       ------       ------
<S>                                          <C>          <C>          <C>          <C>          <C>
Analysis of allowance for loan losses:

   Balance at beginning of year              $2,517       $2,202       $1,930       $1,701       $1,567

Charge-offs:
   Commercial, Financial & Agricultural          35           14           --           --           --
   Residential Real Estate                       --           14           --           --           --
   Consumer Loans                                73           54           40           12            1
                                             ------       ------       ------       ------       ------
     Total charge-offs                          108           82           40           12            1

Recoveries:
   Commercial, Financial & Agricultural          --            3           --           --           --
   Residential Real Estate                       --           --           --           --           --
   Consumer Loans                                48           34           12            1           --
                                             ------       ------       ------       ------       ------
     Total recoveries                            48           37           12            1           --
                                             ------       ------       ------       ------       ------

     Net charge-offs                             60           45           28           11            1
                                             ------       ------       ------       ------       ------

Provision for loan losses                       540          360          300          240          135
                                             ------       ------       ------       ------       ------

Allowance for loan
   losses at end of year                     $2,997       $2,517       $2,202       $1,930       $1,701
                                             ======       ======       ======       ======       ======

Ratio of net charge-offs to average
   net loans outstanding                       0.02%        0.02%        0.02%        0.01%        0.00%
                                             ======       ======       ======       ======       ======
</TABLE>

Management considers the adequacy of the allowance for loan losses in its
entirety, however, to comply with regulatory reporting requirements, management
has allocated the allowance for loans losses as shown in the table below into
components by loan type at each year end. Management does not intend to imply
that actual future charge-offs will necessarily follow the allocations
described below.

<TABLE>
<CAPTION>
(In thousands)                      1999                1998               1997                  1996                1995
------------------------      ------------------ ------------------ -------------------  ------------------- ------------------
                              Allowance   % of    Allowance  % of    Allowance    % of    Allowance   % of    Allowance    % of
                                  $       Loans       $      Loans       $       Loans       $        Loans       $       Loans
                              ---------- ------- ---------- ------- ----------- -------  ---------- -------  ----------- ------
<S>                           <C>        <C>     <C>        <C>     <C>         <C>      <C>        <C>      <C>         <C>
Commercial, Financial
    & Agricultural                2,066    62.8      1,853    66.6    1,631      66.5      1,456      69.6      1,318     67.2
Construction Loans                    -     3.2          0     2.4        0       5.4          0       4.5          0      3.9
Residential Real Estate             685    28.4        463    25.4      400      22.9        367      21.3        324     25.8
Consumer Loans                      246     5.6        201     5.6      171       5.2        107       4.6         59      3.1
                                 ======  ======    =======  ======  =======    ======    =======    ======    =======   ======
                                  2,997    100%      2,517    100%    2,202      100%      1,930      100%      1,701     100%
                                 ======  ======    =======  ======  =======    ======    =======    ======    =======   ======
</TABLE>

                                      21
<PAGE>   25

NON-PERFORMING ASSETS

<TABLE>
<CAPTION>

(Dollars in thousands)                                1999         1998       1997       1996      1995
-------------------------------------------------    ------       ------     ------     ------     ------
<S>                                                  <C>          <C>        <C>          <C>      <C>
Loans 90 days past due                                1,993         --         --         --        --
Loans on nonaccrual                                      70        521        273        430        82
Other Real Estate Owned                                  --         --         --         --        --

                                                     ======       ====       ====       ====       ===
Total non-performing assets                          $2,063       $521       $273       $430       $82
                                                     ======       ====       ====       ====       ===
Percentage of total loans and other real estate        0.71%      0.21%      0.15%      0.26%      0.06%
</TABLE>

If the collectibility of interest on a loan appears doubtful, the accrual
thereof is discontinued. Nonaccrual loans totaled $70,000, $521,000, $273,000,
$430,000 and $82,000 at December 31, 1999, 1998, 1997, 1996, and 1995,
respectively. If such loans had been on a full-accrual basis, interest income
would have been approximately $1,000, $32,000, $16,000, $16,000 and $3,000
higher in 1999, 1998, 1997, 1996 and 1995, respectively. Interest income
recognized on these loans totaled approximately $5,000, $21,000, $14,000,
$27,000 and $5,000, respectively. There were no restructured loans at December
31, 1999, 1998, 1997, 1996 or 1995.

The Company adopted the provisions of Statement of Financial Accounting
Standards No. 114 (SFAS 114) "Accounting by Creditors for Impairment of a Loan"
as amended by Statement of Financial Accounting Standards No. 118 (SFAS 118),
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosure" on January 1, 1995. The Company had no loans which were considered
impaired under the provisions of SFAS 114.

LIQUIDITY AND RATE SENSITIVITY

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

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

<TABLE>
<CAPTION>
                                             1999               1998               1997
                                         ------------       ------------       ------------
<S>                                      <C>                <C>                <C>
Provided by operating activities         $  7,434,885       $  3,303,781       $  4,745,371
Used by investing activities              (41,369,121)       (64,486,841)       (27,123,436)
Provided by financing activities           31,396,873         61,055,510         33,287,415
                                         ------------       ------------       ------------
Net increase (decrease) in cash and
         cash equivalents                $ (2,537,363)      $   (127,550)      $ 10,909,350
</TABLE>

The Bank has a $7.5 million line of credit from its principal correspondent and
a repurchase agreement with another financial institution which allows
borrowing up to 95% of the market valuation of securities pledged for this
purpose. The majority of the Company's unpledged securities could be used as
collateral for this agreement. Further, in 1997 the Bank invested in Federal
Home Loan Bank stock for the purpose of establishing credit lines with the
Federal Home Loan Bank. The credit availability to the Bank is equal to 14% of
the Bank's total assets as reported on the most recent quarterly financial
information submitted to the Bank's regulators. The credit availability
approximated $54.7 million at December 31, 1999. Borrowings against this line
of credit are collateralized by the Bank's one-to-four family residential
mortgage loans. In 1999, a $10 million advance was made which matured on
January 24, 2000.

Scheduled maturities and paydowns of loans and investment securities are a
continual source of liquidity. Also, many adjustable rate residential real
estate loans originated since 1995 are salable in the secondary mortgage market
at par or better and therefore provide a secondary source for liquidity.

                                      22
<PAGE>   26

At December 31, 1999, the Bank's gross loan to deposit ratio was 83.8% compared
to a ratio of 75.9% at December 31, 1998. Management monitors and assesses the
adequacy of the Company's liquidity position on a monthly basis to ensure that
sufficient sources of liquidity are maintained and available.

Under state banking law, regulatory approval will be required if the total of
all dividends declared in any calendar year by the Bank exceeds the Bank's net
profits to date for that year combined with its retained net profits for the
preceding two years. Retained earnings of the Bank available for payment of
dividends without prior regulatory approval at December 31, 1999 is
approximately $7,211,000. These dividends represent the Company's primary
source of liquidity.

The Company's interest rate sensitivity position at December 31, 1999 is
presented in the table below.

<TABLE>
<CAPTION>
                                          3 months         4 to 6         7 to 12         1 to 5          Over 5
(Dollars in thousands)                    or less          Months          Months          years           Years         Total
---------------------------------------  ---------        --------        --------        --------        -------       -------
<S>                                      <C>              <C>             <C>             <C>             <C>           <C>
Interest-earning assets:
Loans                                    $ 106,435        $ 22,775        $ 22,417        $ 79,134        $59,853       $290,614
Investment securities-taxable                   --           3,999           5,989          17,280         26,352         53,620
Investment securities-tax exempt                --             708             250             172          5,612          6,742
Federal funds sold                           2,658              --              --              --             --          2,658
Note receivable                                 --              --             264             438             --            702
                                         ---------        --------        --------        --------        -------       --------
Total interest-bearing assets              109,093          27,482          28,920          97,024         91,817        354,336
                                         ---------        --------        --------        --------        -------       --------

Interest-bearing liabilities:
NOW accounts (A)                            13,567              --              --              --         20,350         33,917
Money Market                               110,267              --              --              --             --        110,267
Savings Deposits (B)                            --              --          24,582              --             --         24,582
Other time deposits                         22,822          22,043          22,143          38,829             --        105,837
Short-term borrowings                       11,712              --              --              --             --         11,712
Other borrowings                               660              --              --              --             --            660
                                         ---------        --------        --------        --------        -------       --------
Total interest-bearing liabilities         159,028          22,043          46,725          38,829         20,350        286,975
                                         ---------        --------        --------        --------        -------       --------

Interest sensitivity gap                   (49,935)          5,439         (17,805)         58,195         71,467         67,361
                                         =========        ========        ========        ========        =======       ========

Cumulative interest sensitivity gap      $ (49,935)       $(44,496)       $(62,301)       $ (4,106)       $67,361       $ 67,361
                                         =========        ========        ========        ========        =======       ========

Cumulative sensitivity ratio                 (14.1%)         (12.6%)         (17.6%)          (1.2%)         19.0%          19.0%
                                         =========        ========        ========        ========        =======       ========
</TABLE>

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

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


The Company is cumulatively asset sensitive in the over 5 years time frame and
cumulatively liability sensitive in each of the 3 month or less, 4 to 6 months,
and 7 to 12 month timeframes. In the 1 to 5 year range the Company is very
close to neutral in cumulative rate sensitivity. Certain liabilities such as
NOW and passbook savings accounts, while technically subject to immediate
repricing in response to changing market rates, historically do not reprice as
quickly nor to the extent as other interest sensitive accounts. Therefore, to
include the entire balance of these liability accounts in the earliest
repricing method would be unrealistic. To compensate for the fact that changes
in general market interest rates will not be fully reflected in changes in NOW
rates, only 40% of NOW balances is included as immediately rate sensitive based
on the Company's own and industry repricing experience. Also, passbook savings
will not reprice as quickly as market rates and therefore the repricing of
savings deposits is

                                      23
<PAGE>   27

included in the 7 to 12 month repricing period, based on the Company's
repricing experience. Because of non-interest bearing liabilities, total
interest-earning assets are substantially greater than the total
interest-bearing liabilities and therefore over time the effects on net
interest income from changes in asset yield will be greater than the change in
expense from liability cost. Accordingly, if market interest rates should
eventually decrease, the net interest margin should decrease. Conversely, if
rates increase the net interest margin would over time increase.

Even in the near term, the $62,301,000 one year cumulative negative sensitivity
gap exaggerates the probable effects on earnings in a rising rate environment
for two reasons. First, the liabilities subject to repricing are predominately
not indexed to any specific market rate and therefore offers the Company the
opportunity to delay or diminish any rate repricings. Second, a static gap
model does not factor the effects of growing volumes which would likely include
greater additional rate sensitive assets than rate sensitive liabilities.

Interest-earning assets and other time deposits are presented based on their
contractual terms. It is anticipated that run off in any deposit category will
be approximately offset by new deposit generation. Since the Company has
experienced steady growth in deposits, no net run off in any deposit category
is assumed in the interest rate sensitivity table. It is the Company's policy
to maintain its cumulative one year gap ratio in the -15% to +15% range. At
year end 1999, the Company was slightly outside this range with a one year
cumulative sensitivity ratio of -17.6%. This reflected in part some special
circumstances related to Y2K, including a decrease in normal liquidity which
the Company believes to be a unique event.

INVESTMENT PORTFOLIO

Contractual maturities of investment securities (amortized cost) at December
31, 1999 are shown below. Expected maturities differ from contractual
maturities because borrowers may have the right to call or repay obligations
without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                                After 1 Year       After 5 Years                          Mortgaged
                                          Within 1 Year        Within 5 Years     Within 10 Years      After 10 Years       Backed
                                      -------------------- -------------------- -------------------- ------------------- ----------

(Dollars in thousands)                  Amount    Yield      Amount     Yield     Amount     Yield     Amount     Yield    Amount
------------------------------------- ---------- --------- ---------- --------- ---------- --------- ---------- -------- ----------
<S>                                   <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>      <C>
Securities Held to Maturity:
   U.S. Treasury Securities             $ 9,988     6.25%    $   101     5.50%
   U.S. Gov't Sponsored Agencies                               8,000     6.03%    $25,163     6.19%
   Other                                                                                                $1,189    6.74%
                                      ---------  -------   ---------  -------   ---------  -------   ---------  ------   ---------
        Total held to maturity            9,988     6.25%      8,101     6.02%     25,163     6.19%      1,189    6.74%         --
                                      ---------  -------   ---------  -------   ---------  -------   ---------  ------   ---------

Securities Available for sale:
   U.S. Treasury Securities                                    7,806     5.25%
   States and municipals (A)                943    10.91%        169     7.96%      3,579     7.07%      2,238    7.09%
   Mortgaged Backed Securities                                                                                              $1,644
                                      ---------  -------   ---------  -------   ---------  -------   ---------  ------   ---------
        Total available for sale            943    10.91%      7,975     5.31%      3,579     7.07%      2,238    7.09%      1,644
                                      ---------  -------   ---------  -------   ---------  -------   ---------  ------   ---------

Total                                   $10,931     6.65%    $16,076     5.67%    $28,742     6.30%     $3,427    6.97%     $1,644
                                      =========  =======   =========  =======   =========  =======   =========  ======   =========
</TABLE>

                                       24
<PAGE>   28

Yield by classification of investment securities at December 31, 1999
(amortized cost) was as follows:

<TABLE>
<CAPTION>
(Dollars in thousands)                           Yield           Totals
------------------------------------------    -----------     -----------
<S>                                           <C>             <C>
Securities Held to Maturity:
     U.S. Treasury Securities                      6.24%        $ 10,089
     U.S. Gov't Sponsored Agencies                 6.15%          33,163
     Other (B)                                     6.74%           1,189
                                              -----------      ----------
          Total held to maturity                   6.19%          44,441
                                              -----------      ----------

Securities Available for Sale:
     U.S. Treasury Securities                      5.25%           7,806
     States and municipals (A)                     7.62%           6,929
     Mortgaged Backed Securities                   5.58%           1,644
                                              -----------      ----------
          Total available for sale                 6.29%          16,379
                                              -----------      ----------

Total                                              6.21%        $ 60,820
                                              ===========      ==========
</TABLE>

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

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

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

(Dollars in thousands)

Held to Maturity  - December 31, 1999

<TABLE>
<CAPTION>
                                                                  Amortized    Unrealized       Unrealized    Market
                                                                    Cost          Gains           Losses      Value
                                                                  ---------    -----------      ----------   -------
<S>                                                                <C>          <C>             <C>          <C>
U.S. Treasury Securities                                           $10,089      $       18      $     3      $10,104
U.S. Government agencies and corporations                           33,163              --        2,164       30,999
Other investments                                                    1,189              --           --        1,189
                                                                   -------      ----------      -------      -------
                                                                   $44,441      $       18      $ 2,167      $42,292
                                                                   =======      ==========      =======      =======

Available for Sale - December 31, 1999
                                                                 Amortized     Unrealized      Unrealized    Market
                                                                    Cost          Gains          Losses       Value
                                                                 ---------     -----------     ----------    -------
U.S. Treasury Securities                                           $ 7,806      $       --      $   248      $ 7,558
States and political subdivisions                                    6,929              40          227        6,742
Mortgage-backed securities                                           1,644               1           23        1,622
                                                                   -------      ----------      -------      -------
                                                                   $16,379      $       41      $   498      $15,922
                                                                   =======      ==========      =======      =======
</TABLE>

                                      25
<PAGE>   29

<TABLE>
<CAPTION>

Held to Maturity  -  December 31, 1998
                                                 Amortized   Unrealized     Unrealized      Market
                                                    Cost        Gains         Losses        Value
                                                 ---------   ----------     ----------     -------
<S>                                              <C>         <C>            <C>            <C>
U.S. Treasury Securities                         $14,083        $248        $    --        $14,331
U.S. Government agencies and corporations         33,161         177            109         33,229
Other investments                                    908          --             --            908
                                                 -------        ----        -------        -------
                                                 $48,152        $425        $   109        $48,468
                                                 =======        ====        =======        =======
Available for Sale - December 31, 1998

                                                 Amortized   Unrealized     Unrealized      Market
                                                    Cost        Gains         Losses        Value
                                                 ---------   ----------     ----------     -------
U.S. Treasury Securities                         $ 5,022        $ 21        $    --        $ 5,043
States and political subdivisions                  8,114         219             --          8,333
Mortgage-backed securities                         4,022           4             12          4,014
Other debt securities                                450           8             --            458
                                                 -------        ----        -------        -------
                                                 $17,608        $252        $    12        $17,848
                                                 =======        ====        =======        =======
Held to Maturity - December 31, 1997

                                                 Amortized   Unrealized     Unrealized      Market
                                                    Cost        Gains         Losses        Value
                                                 ---------   ----------     ----------     -------

U.S. Treasury Securities                         $15,978        $157        $    --        $16,135
States and political subdivisions                  7,374         293             --          7,667
U.S. Government agencies and corporations         12,001          21             15         12,007
Other investments                                    865          --             --            865
                                                 -------        ----        -------        -------
                                                 $36,218        $471        $    15        $36,674
                                                 =======        ====        =======        =======
Available for Sale - December 31, 1997

                                                 Amortized   Unrealized     Unrealized      Market
                                                    Cost        Gains         Losses        Value
                                                 ---------   ----------     ----------     -------
U.S. Treasury Securities                         $ 9,044        $ --        $    34        $ 9,010
Mortgage-backed securities                         9,056          20             88          8,988
Other debt securities                                450          23             --            473
                                                 -------        ----        -------        -------
                                                 $18,550        $ 43        $   122        $18,471
                                                 =======        ====        =======        =======
</TABLE>

DEPOSITS

The following table presents the average amount outstanding and the average
rate paid on deposits by the Company for the years ended December 31, 1999,
1998, and 1997.

<TABLE>
<CAPTION>
                                               1999                     1998                    1997
                                        Average     Average     Average     Average     Average      Average
(Dollars in thousands)                   Amount       Rate       Amount       Rate       Amount       Rate
-----------------------------         ----------- ----------- ----------- ----------- ----------- ------------
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>
Noninterest-bearing deposits            $ 74,806                $ 58,058                $ 46,323

Interest-bearing deposits
   NOW Accounts                           35,247       1.24%      32,198       1.43%      28,122        1.40%
   Money market                          123,506       4.17%      99,567       4.85%      55,543        4.85%
   Savings deposit                        25,893       2.36%      23,005       2.48%      28,474        2.73%
   Other time deposits                    91,666       5.44%      70,671       5.63%      71,565        5.52%
                                      ----------  ----------  ----------  ----------  ----------  ----------
Total                                   $351,118       3.19%    $283,499       3.47%    $230,027        3.40%
                                      ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>

                                      26
<PAGE>   30

The following table presents the maturity of the Company's time deposits at
December 31, 1999:

<TABLE>
<CAPTION>
                                        Deposits        Deposits
                                        $100,000        Less than
(Dollars in thousands)                and Greater       $100,000          Total
----------------------               -------------     -----------     ----------
<S>                                  <C>               <C>             <C>
Months to maturity:
   3 or less                             $9,621           $12,324         $21,945
   4 to 6                                11,667            10,494          22,161
   7 through 12                           9,662            12,574          22,236
   Over 12                               15,024            24,471          39,495
                                      ---------        ----------     -----------
Total                                   $45,974           $59,863        $105,837
                                      =========        ==========     ===========
</TABLE>

CAPITAL ADEQUACY

There are various primary measures of capital adequacy for banks and bank
holding companies such as risk based capital guidelines and the leverage
capital ratio. See "Business-Supervision and Regulation Capital Regulations."

As of December 31, 1999, the Bank exceeded its required levels of capital for a
Bank categorized by the FDIC as well capitalized under the regulatory framework
for prompt corrective action. The Bank's risk-based capital ratio of Tier 1
capital to risk-weighted assets was 9.2%, its risk-based ratio of total capital
to risk-weighted assets was 10.2%, and its leverage ratio was 7.1%. See Note 12
to the Consolidated Financial Statements.


INFLATION

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


1999 ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
requires companies to recognize all derivatives contracts as either assets or
liabilities in the balance sheet and to measure them at fair value. If certain
conditions are met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of (i) the changes in the fair value of
the hedged asset or liability that are attributable to the hedged risk or (ii)
the earnings effect of the hedged forecasted transaction. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in income in
the period of change. SFAS 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000, however, early adoption is allowed.
Historically, the Company has not entered into derivatives contracts either to
hedge existing risks or for speculative purposes. The Company adopted the new
standard as of July 1, 1998. The effect on the financial statements at July 1,
1998 which resulted from the transfer of approximately $11.9 million in
investment securities from the held to maturity category to the available for
sale category was an increase in other comprehensive income market valuation
reserve of approximately $176,000.

Effective January 1, 1999, the Company adopted American Institute of Certified
Public Accountants Statement of Position 98-5 (SOP 98-5), "Reporting the Costs
of Start-Up Activities." SOP 98-5 applies to all non-governmental entities and
requires that costs of start-up activities and organization costs be expensed
as incurred. Prior to 1999,

                                      27
<PAGE>   31

the Company capitalized organization costs and amortized them to expense over a
five year period. The Company recorded a charge net of tax of $47,047 in 1999
as the cumulative effect of this accounting change.


ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

The following interest rate sensitivity analysis information as of December 31,
1999 was developed using simulation analysis of the Bank's sensitivity to
changes in net interest income under varying assumptions for changes in market
interest rates. Specifically, the model derives expected interest income and
interest expense resulting from an immediate and parallel shift in the yield
curve in the amounts shown.

These rate changes are matched with known repricing intervals and assumptions
for new growth net of expected prepayments. The assumptions are based primarily
on experience in the Bank's market under varying rate environments. The
imbedded options that the Bank's loan customers possess, to refinance, are not
considered significant for purposes of this analysis given the large majority
of adjustable rate loans in the portfolio.

This analysis intentionally exaggerates interest sensitivity. For the sake of
simplicity and comparability, an immediate change in rates is assumed. However,
any significant change in actual market rates would probably be phased in over
an extended period of time. This phase in would reduce the net interest income
effects for any absolute change in rates.

The Bank attempts to retain interest rate neutrality by generating mostly
adjustable rate loans and managing the securities and Fed Funds positions to
offset the repricing characteristics of the deposit liabilities. This process
continues to be challenged by the continued popularity of the indexed money
market account. The growth of this account as an interest sensitive liability,
immediately repriceable, has caused the Bank to be liability sensitive in the
very short term and to a lesser extent cumulatively through a one year horizon.

<TABLE>
<CAPTION>
(Dollars in thousands)                         Interest Rates Decrease Interest Rates  Interest Rates  Increase
                                                200 BP      100 BP     Remain Constant    100 BP          200BP
                                                                           Budget
                                               -----------------------------------------------------------------
<S>                                            <C>          <C>           <C>            <C>            <C>
2000 Interest Income                           $29,118      $30,425       $31,735        $ 33,037       $ 34,344
2000 Interest Expense                           10,906       12,340        13,811          15,206         16,639
                                               -------      -------       -------        --------       --------
Net Interest Income                             18,212       18,085        17,924          17,831         17,705
                                               -------      -------       -------        --------       --------

Change in net income after tax vs. budget      $   180      $   101            --        $    (58)      $   (137)
</TABLE>

                                      28
<PAGE>   32

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

<TABLE>
<CAPTION>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                           <C>
Report of Independent Certified Public Accountants (BDO Seidman, LLP)............................................30

Independent Auditors Report (Bricker & Melton, PA)...............................................................31

Consolidated Balance Sheets for the Years
Ended December 31, 1999 and 1998 ................................................................................32

Consolidated Statements of Income for the
Years Ended December 31, 1999, 1998 and 1997..................................................................33-34

Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended December 31, 1999, 1998 and 1997 .................................................................35-36

Consolidated Statements of Cash Flows for the Years
Ended December 31, 1999, 1998 and 1997 .......................................................................37-38

Notes to Consolidated Financial Statements for
the Years Ended December 31, 1999, 1998 and 1997 .............................................................39-64
</TABLE>

                                      29
<PAGE>   33


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



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

We have audited the accompanying consolidated balance sheets of TIB Financial
Corp. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of TIB Financial Corp.'s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits. The consolidated financial statements of TIB Financial Corp. and
subsidiaries for the year ended December 31, 1997 were audited by Bricker &
Melton, P.A., whose practice was combined with our Firm and whose report dated
February 13, 1998 expressed an unqualified opinion on those statements.

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

In our opinion, the 1999 and 1998 consolidated financial statements referred to
above present fairly, in all material respects the consolidated financial
position of TIB Financial Corp. and subsidiaries as of December 31, 1999 and
1998, and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.


                                BDO SEIDMAN, LLP


February 18, 2000
Atlanta, Georgia



                                       30


<PAGE>   34
                          INDEPENDENT AUDITORS' REPORT



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


         We have audited the accompanying consolidated statements of income,
changes in stockholders' equity and cash flows of TIB Financial Corp. and
subsidiaries for the year ended December 31, 1997. These consolidated financial
statements are the responsibility of TIB Financial Corp.'s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

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

         In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated results of
operations and cash flows of TIB Financial Corp. and subsidiaries for the year
ended December 31, 1997, in conformity with generally accepted accounting
principles.


                             BRICKER & MELTON, P.A.




February 13, 1998
Duluth, Georgia



                                       31

<PAGE>   35

                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,                                                                                1999               1998
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                 <C>
ASSETS

Cash and due from banks (Note 2)                                                      $ 19,506,372       $ 18,136,735
Federal funds sold                                                                       2,658,000          6,565,000
Investment securities held to maturity (market value of
    $42,292,323 and $48,467,772, respectively) (Note 3)                                 44,440,836         48,152,543
Investment securities available for sale (Note 3)                                       15,921,641         17,848,010
Investment in ERAS Joint Venture                                                           968,760            789,752

Loans, net of deferred loan fees (Notes 4, 11 and 13)                                  289,880,721        246,298,179
Less: Allowance for loan losses (Note 4)                                                 2,996,532          2,517,234
-----------------------------------------------------------------------------------------------------------------------
Loans, net                                                                             286,884,189        243,780,945

Premises and equipment, net (Note 5)                                                    14,318,646         12,880,360
Intangible assets, net                                                                   1,534,509          1,791,780
Other assets (Note 9)                                                                    5,896,378          5,530,725
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                          $392,129,331       $355,475,850
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Deposits (Note 6):
     Noninterest-bearing demand                                                       $ 72,300,414       $  68,370,649
     Interest-bearing demand and money market                                          144,183,661         157,277,190
     Savings                                                                            24,582,207          24,245,585
     Time deposits of $100,000 or more                                                  45,974,452          24,693,379
     Other time deposits                                                                59,862,786          50,469,928
-----------------------------------------------------------------------------------------------------------------------
Total deposits                                                                         346,903,520         325,056,731

  Short-term borrowings (Note 7)                                                        11,712,056             669,569
  Other borrowings (Note 8)                                                                659,625                  --
  Other liabilities (Note 9)                                                             4,551,972           3,182,016
-----------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                      363,827,173         328,908,316
-----------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES (Note 13)

STOCKHOLDERS' EQUITY (Note 12)
  Common stock - $.10 par value: 7,500,000 shares authorized,
      4,490,137 and 4,449,795 shares issued                                                449,014             444,979
  Surplus                                                                                7,554,967           7,202,321
  Retained earnings                                                                     21,634,649          19,328,022
  Accumulated other comprehensive income (loss) - market
    valuation reserve on investment securities available for sale
    (Note 3)                                                                              (285,000)            150,000
  Less:  Treasury stock, 95,000 and 50,000 shares, at cost                              (1,051,472)           (557,788)
-----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                              28,302,158          26,567,534
-----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                            $392,129,331       $ 355,475,850
=======================================================================================================================
</TABLE>

                   See accompanying notes to consolidated financial statements.



                                       32
<PAGE>   36


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                    1999              1998              1997
-----------------------------------------------------------------------------------------------------------------------

<S>                                                                     <C>              <C>                <C>
INTEREST INCOME
  Loans, including fees                                                 $22,926,064      $18,745,954        $17,019,190
  Investment securities:
     U.S. Treasury securities                                             1,383,929        1,282,611          1,679,344
     U.S. Government agencies and corporations                            2,262,314        2,288,922            962,435
     States and political subdivisions, tax-exempt                          370,885          561,784            399,619
     Other investments                                                       94,633          105,386             63,886
  Interest-bearing deposits in other banks                                  315,380            1,204                 --
  Federal funds sold                                                        552,254          720,606            433,300
-----------------------------------------------------------------------------------------------------------------------
Total interest income                                                    27,905,459       23,706,467         20,557,774
-----------------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE
  Interest-bearing demand and money market                                5,585,313        5,291,184          3,084,772
  Savings                                                                   609,892          570,408            777,784
  Time deposits of $100,000 or more                                       1,895,312        1,428,832          1,371,237
  Other time deposits                                                     3,087,796        2,546,736          2,578,490
  Short-term borrowings                                                     120,575           78,114             63,873
-----------------------------------------------------------------------------------------------------------------------
Total interest expense                                                   11,298,888        9,915,274          7,876,156
-----------------------------------------------------------------------------------------------------------------------

NET INTEREST INCOME                                                      16,606,571       13,791,193         12,681,618

PROVISION FOR LOAN LOSSES (Note 4)                                          540,000          360,000            300,000
-----------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                      16,066,571       13,431,193         12,381,618
-----------------------------------------------------------------------------------------------------------------------

OTHER INCOME
  Service charges on deposit accounts                                     1,951,185        1,731,523          1,640,033
  Investment securities gains, net (Note 3)                                     643          130,985             10,664
  Merchant bank card processing income                                    2,827,876        2,174,057          2,109,363
  Equity in income (loss), net of goodwill amortization,
     from investment in ERAS Joint Venture                                  179,008           (1,465)                --
  Gain on sale of government guaranteed loans                               704,398          988,465            439,768
  Gain on sale of mortgage loans                                                 --               --            118,863
  Fees on mortgage loans sold at origination                                338,796          461,126            363,973
  Retail investment services                                                230,492          419,333            319,286
  Gain on sale of insurance company option (Note 13)                        312,375               --                 --
  Other income                                                              622,501          472,054            317,454
-----------------------------------------------------------------------------------------------------------------------
Total other income                                                        7,167,274        6,376,078          5,319,404
-----------------------------------------------------------------------------------------------------------------------
OTHER EXPENSE
  Salaries and employee benefits (Note 10)                                7,592,034        7,158,584          6,504,945
  Net occupancy expense                                                   2,634,230        2,248,425          1,825,207
  Other expense (Note 15)                                                 6,514,673        5,073,466          4,446,412
-----------------------------------------------------------------------------------------------------------------------
Total other expense                                                      16,740,937       14,480,475         12,776,564
-----------------------------------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAX EXPENSE                                          6,492,908        5,326,796          4,924,458

INCOME TAX EXPENSE (Note 9)                                               2,327,100        1,885,800          1,718,600
-----------------------------------------------------------------------------------------------------------------------

NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
  ACCOUNTING PRINCIPLE                                                  $ 4,165,808      $ 3,440,996        $ 3,205,858
=======================================================================================================================
</TABLE>
                                  (Continued)

                   See accompanying notes to consolidated financial statements.



                                       33
<PAGE>   37

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF INCOME (Continued)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                     1999             1998             1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>                <C>
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE                                                             $4,165,808       $3,440,996         $3,205,858

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE FOR DEFERRED
  ORGANIZATION COSTS, NET OF TAX BENEFIT OF $28,300 (Note 1)               (47,047)              --                 --
----------------------------------------------------------------------------------------------------------------------

NET INCOME                                                              $4,118,761       $3,440,996         $3,205,858
======================================================================================================================

BASIC EARNINGS PER COMMON SHARE (Note 1)

  INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
     PRINCIPLE                                                          $      .95       $      .78         $      .74

  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE FOR
     DEFERRED ORGANIZATION COSTS, NET OF TAX                                  (.01)              --                 --
----------------------------------------------------------------------------------------------------------------------

BASIC EARNINGS PER COMMON SHARE                                         $      .94       $      .78         $      .74
======================================================================================================================

DILUTED EARNINGS PER COMMON SHARE (Note 1)

  INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
     PRINCIPLE                                                          $       .92      $        .74       $      .70

  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE FOR
     DEFERRED ORGANIZATION COSTS, NET OF TAX                                   (.01)               --               --
----------------------------------------------------------------------------------------------------------------------

DILUTED EARNINGS PER COMMON SHARE                                       $       .91      $        .74       $      .70
======================================================================================================================
</TABLE>

                   See accompanying notes to consolidated financial statements.




                                       34
<PAGE>   38


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                          Accumulated Other
                                                                                            Comprehensive
                                                                                           Income (Loss)-
                                               Comprehensive    Retained    Treasury      Market Valuation    Common
                                    Total          Income       Earnings     Stock             Reserve         Stock       Surplus
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>           <C>             <C>         <C>                 <C>         <C>
BALANCE, December 31, 1996       $22,620,917                  $16,207,233     $   --      $(158,751)          $432,236    $6,140,199
Comprehensive income:
  Net income                       3,205,858    $3,205,858      3,205,858         --             --                 --            --
  Other comprehensive
    income, net of tax
    expense of $65,658:
      Net market valuation
        adjustment on
        securities available
        for sale                     112,372       112,372             --         --             --                 --            --
      Less: reclassification
         adjustment for
         gains included in
         net income                   (2,621)       (2,621)            --         --             --                 --            --
                                                ----------
Other comprehensive
  income, net of tax                      --       109,751             --         --        109,751                 --            --
                                                ----------
Comprehensive income                      --    $3,315,609             --         --             --                 --            --
                                                ==========
Exercise of stock options            273,266            --             --         --             --              4,959       268,307
Income tax benefit from
  stock  options exercised            98,566            --             --         --             --                 --        98,566
Cash dividends declared,
  $.40 per share                  (1,744,801)           --     (1,744,801)        --             --                 --            --
------------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 1997        24,563,557            --     17,668,290         --        (49,000)           437,195     6,507,072
Comprehensive income:
  Net income                       3,440,996    $3,440,996      3,440,996         --             --                --             --
  Other comprehensive
    income, net of tax
    expense of $120,000:
      Net market valuation
        adjustment on
        securities available
        for sale                     103,831       103,831             --         --             --                --             --
      Add: cumulative
        adjustment related
        to adoption of SFAS
        133 and related
        reclassification of
        certain securities
        from held-to-
        maturity to
    available-for-sale               176,000       176,000             --         --             --                --             --
  Less: reclassification
    adjustment for
    gains included in
    net income                       (80,831)      (80,831)            --         --             --                --             --
                                                ----------
Other comprehensive income,
  net of tax                              --       199,000             --         --        199,000                --             --
                                                ----------
Comprehensive income                      --    $3,639,996             --         --             --                --             --
                                                ==========

====================================================================================================================================
</TABLE>
                   See accompanying notes to consolidated financial statements.
                                  (Continued)



                                       35
<PAGE>   39

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (Continued)

<TABLE>
<CAPTION>
                                                                                       Accumulated Other
                                                                                           Comprehensive
                                                                                          Income (Loss)-
                                             Comprehensive       Retained     Treasury  Market Valuation     Common
                                      Total         Income       Earnings        Stock           Reserve      Stock     Surplus
------------------------------------------------------------------------------------------------------------------------------------

<S>                           <C>             <C>         <C>             <C>              <C>             <C>             <C>
Exercise of Stock Options     $   349,892                 $        --     $        --      $      --       $  6,117   $      343,775
Income Tax Benefit from
  stock options exercised         138,566                          --              --             --             --          138,566
Compensation paid through
  issuance of common stock        214,575                          --              --             --          1,667          212,908
Purchase of treasury stock       (557,788)                         --        (557,788)            --             --               --
Cash dividends declared,
  $.4025 per share             (1,781,264)                 (1,781,264)             --             --             --               --
------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998     26,567,534                  19,328,022        (557,788)       150,000        444,979        7,202,321
Comprehensive income:
  Net income                    4,118,761     $4,118,761    4,118,761
  Other comprehensive
    income, net of tax
    benefit of $262,000:
      Net market valuation
        adjustment on
        securities available
        for sale                 (434,599)      (434,599)          --              --             --             --               --
  Less: reclassification
        adjustment for
        gains included in
        net income                   (401)          (401)          --              --             --             --               --
                                              ----------
Other comprehensive income,
  net of tax                           --       (435,000)          --              --       (435,000)            --               --
                                              ----------
Comprehensive income                   --     $3,683,761           --              --             --             --               --
                                              ==========
Exercise of stock options         143,279                          --              --             --          2,368          140,911
Income tax benefit from
  stock options exercised          30,065                          --              --             --             --           30,065
Compensation paid through
  issuance of common stock        183,337                          --              --             --          1,667          181,670
Purchase of treasury stock       (493,684)                         --        (493,684)            --             --               --
Cash dividends declared,
  $.4125 per share             (1,812,134)                 (1,812,134)             --             --             --               --
------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999    $28,302,158                 $21,634,649     $(1,051,472)     $(285,000)    $  449,014       $7,554,967
====================================================================================================================================

</TABLE>

                   See accompanying notes to consolidated financial statements.



                                       36
<PAGE>   40

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years ended December 31,                                                    1999             1998              1997
------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                            $ 4,118,761      $  3,440,996       $ 3,205,858
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Net amortization of investments                                      208,576             6,309            81,707
       Amortization of intangible assets                                    176,957            96,487            46,833
       Depreciation of premises and equipment                             1,213,707         1,022,160           798,295
       Gain on sale of insurance company option                            (312,375)               --                --
       Proceeds from sale of insurance company option                       100,000                --                --
       Cumulative effect of change in accounting principle                   75,347                --                --
       Write-off of unamortized leasehold improvements                      133,546                --                --
       Provision for loan losses                                            540,000           360,000           300,000
       Deferred income tax (benefit)                                        (65,268)          (47,655)          (87,997)
       Deferred net loan fees                                              (127,054)         (162,260)          (74,024)
       Investment securities (gains), net                                      (643)         (130,985)          (10,664)
       Compensation paid through issuance of common stock                   183,337           214,575                --
       Equity in (income) loss, net of goodwill
         amortization from investment in ERAS Joint
         Venture                                                           (179,008)            1,465                --
       Gain on sales of premises and equipment                               (6,930)           (2,540)           (3,002)
       Gains on sales of government guaranteed loans, net                  (704,398)         (988,465)         (439,768)
       Gains on sales of mortgage loans                                          --                --          (118,863)
       (Increase) decrease in intangible assets                               4,967           (27,348)          (69,025)
       (Increase) decrease in other assets                                  685,853        (1,166,768)          810,778
       Increase in other liabilities                                      1,389,510           687,810           305,243
------------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                 7,434,885         3,303,781         4,745,371
------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of investment securities held to maturity                      (281,160)      (44,813,928)      (27,870,735)
  Purchases of investment securities available for sale                 (16,033,126)               --                --
  Sales of investment securities available for sale                      13,033,497         9,966,994         5,083,984
  Repayments of principal and maturities of
      investment securities available for sale                            4,013,932         2,979,575        13,004,356
  Maturities of investment securities held to maturity                    4,000,000        21,000,000         6,075,000
  Proceeds from sales of government guaranteed loans                      7,000,644        11,458,514         7,400,314
  Proceeds from sales of mortgage loans                                          --                --         6,062,024
  Investment in ERAS Joint Venture                                               --          (791,216)               --
  Purchase of Small Business Consultants, Inc.                                   --                --          (275,000)
  Net cash received in purchase of branch                                        --         9,665,577                --
  Loans originated or acquired, net of principal
      repayments                                                        (50,302,436)      (70,904,605)      (34,058,909)
  Purchases of premises and equipment                                    (2,818,385)       (3,053,387)       (2,578,505)
  Sales of premises and equipment                                            17,913             5,635            34,035
------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                  $(41,369,121)     $(64,486,841)     $(27,123,436)
========================================================================================================================
</TABLE>

                   See accompanying notes to consolidated financial statements.



                                       37
<PAGE>   41


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                   1999             1998               1997
------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in federal funds purchased and
     securities sold under agreements to repurchase                     $ 1,042,487      $ (1,337,609)      $(9,084,248)
  Net increase (decrease) in demand, money market and savings
     accounts                                                            (8,827,142)       61,394,697        56,341,652
  Advances on short-term borrowings                                      10,659,625                --                --
  Time deposits accepted, net of repayments                              30,673,931         2,973,798       (12,503,413)
  Proceeds from exercise of stock options                                   143,279           349,892           273,266
  Treasury stock repurchased                                               (493,684)         (557,788)               --
  Cash dividends paid                                                    (1,801,623)       (1,767,480)       (1,739,842)
------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                31,396,873        61,055,510        33,287,415
------------------------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                            (2,537,363)         (127,550)       10,909,350

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           24,701,735        24,829,285        13,919,935
------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                $22,164,372      $ 24,701,735       $24,829,285
========================================================================================================================

SUPPLEMENTAL DISCLOSURES OF CASH PAID:
   Interest                                                             $10,806,350      $  9,678,662       $ 7,871,906
   Income taxes                                                           2,591,041         1,745,000         1,637,000
</TABLE>



Subsequent to the adoption of Statement of Financial Accounting Standards No.
133 (SFAS 133), in July 1998, investment securities held to maturity totaling
$11,898,815 were transferred to investment securities available for sale.

In 1998, the Company purchased the banking facilities and assumed the deposit
base of another bank located in Homestead, Florida. Net cash received in
connection with the acquisition is calculated as follows:

<TABLE>

<S>                                                                    <C>
Deposit and other liabilities assumed                                  $11,919,139
Less cash paid for:
  Premises and equipment                                                  (818,140)
  Core deposit premium                                                  (1,435,422)
------------------------------------------------------------------------------------------------------------------------
                                                                       $ 9,665,577
========================================================================================================================
</TABLE>
                   See accompanying notes to consolidated financial statements.



                                       38
<PAGE>   42


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

TIB Financial Corp. and subsidiaries provide full-service commercial banking
services in Monroe and South Dade 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

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

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of TIB Financial
Corp. (Parent Company) and its wholly-owned subsidiaries, TIB Bank of the Keys
(Bank) and TIB Software and Services, Inc., collectively known as the Company.
All significant intercompany accounts and transactions have been eliminated in
consolidation.

In 1998, the Parent Company's subsidiary, TIB Software and Services, Inc.,
acquired a 30 percent interest in ERAS Joint Venture (the "Venture"), a general
partnership, in exchange for consideration of $791,216. Goodwill associated
with the transaction totaled $637,614 and is being amortized over a period of
ten years. The investment in the Venture is being accounted for using the
equity method. The Venture's primary business is item processing and the
design, development, installation and maintenance of accounting software for
financial institutions. ERAS Joint Venture is the Bank's item processor, and in
1999, payments of approximately $1,204,000 were made to the Venture.

INVESTMENT SECURITIES

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



                                       39
<PAGE>   43

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

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

LOANS

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

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

ALLOWANCE FOR LOAN LOSSES

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

The Bank accounts for impaired loans in accordance with Statement of Financial
Accounting Standards No. 114 (SFAS 114), "Accounting by Creditors for
Impairment of a Loan," as amended by Statement of Financial Accounting
Standards No. 118 (SFAS 118), "Accounting by Creditors for Impairment of a
Loan-Income Recognition and Disclosure." Management, considering current
information and events regarding the borrowers' ability to repay their
obligations, considers a loan to be impaired when it is probable that the Bank
will be unable to collect all amounts due according to the contractual terms of
the loan. When a loan is considered to be impaired, the amount of the
impairment is measured based on the present value of expected future cash flows
discounted at the note's effective interest rate. Impairment losses are
included in the allowance for loan losses through a charge to the provision.
Cash receipts on impaired



                                       40
<PAGE>   44

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



loans are applied to reduce the principal amount of such loans until the
principal has been recovered and are recognized as interest income, thereafter.

PREMISES AND EQUIPMENT

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

OTHER REAL ESTATE

Other real estate represents property acquired through in-substance
foreclosure, foreclosure, or in settlement of loans and is reported at the
lower of cost or fair value less estimated selling expenses. Losses incurred in
the acquisition of foreclosed properties are charged against the allowance for
loan losses at the time of foreclosure. Subsequent write-downs of other real
estate are charged against the current period's operations.

INTANGIBLE ASSETS

Intangible assets include amounts for excess servicing fees on government
guaranteed loans, organizational expenses, deposit base premiums and goodwill.
Excess servicing rights are being amortized over the expected life of the
related loan. Effective January 1, 1999, the Company changed its method of
accounting for organization costs to expense these costs in the period
incurred. Prior to 1999, the Company capitalized organization costs and
amortized them to expense over a five-year period. This change in accounting
method was made to comply with AICPA Statement of Position 98-5 (SOP 98-5). The
Company recorded a charge net of tax of $47,047 in 1999 as the cumulative
effect of this accounting change. The deposit base premium is being amortized
using the straight-line method over an estimated life of 10 years. Goodwill is
amortized over varying periods, from 10 to 15 years, using the straight-line
method.

Long-lived assets, including certain fixed assets and intangibles, are
evaluated regularly for other-than-temporary impairment. If circumstances
suggest that the value of such assets may be impaired and a write-down would be
material, an assessment of recoverability is performed prior to any write-down.
Impairment on intangibles is evaluated at each balance sheet date or whenever
events or changes in circumstances indicate that the carrying amount should be
assessed. Impairment, if any, is recognized through a valuation allowance with
a corresponding charge recorded in the income statement.

INCOME TAXES

The tax effects of transactions is recorded at current tax rates in the periods
the transactions are reported for financial statement purposes. Deferred income
taxes are established for the temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities at
enacted tax rates expected to be in effect when such amounts are realized or
settled. The Company files its tax returns on a consolidated basis.



                                       41
<PAGE>   45

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


EARNINGS PER COMMON SHARE

Basic earnings per common share has been computed based on the weighted average
number of common shares outstanding of 4,388,336, 4,415,949 and 4,354,547 in
1999, 1998 and 1997. Diluted earnings per share has been computed based upon
the weighted average number of equivalent common shares of 4,543,784, 4,624,380
and 4,602,375 in 1999, 1998 and 1997. The effect of stock options, as described
in Note 12, is the sole common stock equivalents for purposes of calculating
diluted earnings per common share.



                                       42
<PAGE>   46


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



STOCK-BASED COMPENSATION

As provided by SFAS 123, the Company has elected to continue applying the
provisions of APB 25 in determining its accounting relative to stock-based
compensation. Accordingly, when the price of an option granted is equal to its
fair market value on the date of grant, no compensation expense is recorded.
The Company has adopted the SFAS 123 requirement that a company disclose the
pro forma net income and pro forma earnings per share for the years ending
December 31, 1999, 1998 and 1997, as if the alternative fair-value-based
accounting method in SFAS 123 had been used in determining net income.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company uses the following methods and assumptions in estimating fair
values of financial instruments (see Note 16):

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

Investment securities - The fair value of investment securities held to
maturity and available for sale is estimated based on bid quotations received
from independent pricing services. The carrying amount of other investments
approximates fair value.

Loans - For variable rate loans that reprice frequently and have no significant
change in credit risk, fair values are based on carrying values. For all other
loans, fair values are calculated by discounting the contractual cash flows
using estimated market discount rates which reflect the credit and interest
rate risk inherent in the loan, or by using the current rates at which similar
loans would be made to borrowers with similar credit ratings and for the same
remaining maturities.

Deposits - The fair value of deposits with no stated maturity, such as demand,
NOW and money market, and savings accounts, is equal to the amount payable on
demand at year-end. The fair value of certificates of deposit is based on the
discounted value of contractual cash flows using the rates currently offered
for deposits of similar remaining maturities.

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

Off-balance-sheet instruments - The fair value of commitments to extend credit
to fund commercial, consumer, real estate-construction and real estate-mortgage
loans and to fund standby letters of credit is equal to the amount of
commitments outstanding at December 31, 1999. This is based on the fact that
the Company generally does not offer lending commitments or standby letters of
credit to its customers for long periods, and therefore, the underlying rates
of the commitments approximate market rates.

CASH AND CASH EQUIVALENTS

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


                                       43
<PAGE>   47


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


RECLASSIFICATIONS

Certain reclassifications have been made in the 1998 and 1997 financial
statements to conform with the 1999 presentation.

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 requires companies to recognize
all derivative contracts as either assets or liabilities in the balance sheet
and to measure them at fair value. Historically, the Company has not entered
into derivative contracts either to hedge existing risks or for speculative
purposes. The Company adopted the new standard as of July 1, 1998. The effect
on the consolidated financial statements at July 1, 1998, which resulted from
the transfer of investment securities, with an amortized cost of $11,898,815,
from the held-to-maturity category to the available-for-sale category, was an
increase in the other comprehensive income market valuation reserve of
approximately $176,000.


2.    CASH AND DUE FROM BANKS

A bank is required to maintain average reserve balances with the Federal
Reserve Bank, on deposit with national banks or in cash. The Bank's average
reserve requirement as of December 31, 1999, was approximately $1,500,000. The
Bank maintained cash balances which were adequate to meet this requirement.


3.    INVESTMENT SECURITIES

The amortized cost and estimated market value of investment securities held to
maturity are as follows:

<TABLE>
<CAPTION>
                                                  AMORTIZED         UNREALIZED          UNREALIZED             MARKET
 DECEMBER 31, 1999                                   COST              GAINS              LOSSES                VALUE
 -----------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                    <C>           <C>                    <C>
 U.S. Treasury securities                       $10,088,880            $17,913       $       2,508          $10,104,285
 U.S. Government agencies and
    corporations                                 33,162,696                  -           2,163,918           30,998,778
 Other investments                                1,189,260                  -                   -            1,189,260
 -----------------------------------------------------------------------------------------------------------------------

                                                $44,440,836            $17,913          $2,166,426          $42,292,323
=========================================================================================================================
</TABLE>



                                       44
<PAGE>   48

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                 AMORTIZED           UNREALIZED        UNREALIZED              MARKET
 DECEMBER 31, 1998                                  COST                GAINS            LOSSES                VALUE
 ----------------------------------------------------------------------------------------------------------------------

<S>                                             <C>                   <C>               <C>                 <C>
 U.S. Treasury securities                       $14,083,195           $247,542           $     --           $14,330,737
 U.S. Government agencies and
   corporations                                  33,161,248            177,062            109,375            33,228,935
 Other investments                                  908,100                 --                 --               908,100
-----------------------------------------------------------------------------------------------------------------------

                                                $48,152,543           $424,604           $109,375           $48,467,772
=======================================================================================================================
</TABLE>

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

<TABLE>
<CAPTION>
                                                  AMORTIZED         UNREALIZED           UNREALIZED            MARKET
 DECEMBER 31, 1999                                  COST               GAINS               LOSSES              VALUE
 ----------------------------------------------------------------------------------------------------------------------

<S>                                              <C>                <C>                   <C>               <C>
 U.S. Treasury securities                        $ 7,806,262            $    --           $248,432          $ 7,557,830
 States and political subdivisions                 6,929,169             39,690            226,861            6,741,998
 Mortgage-backed securities                        1,643,210              1,135             22,532            1,621,813
 ----------------------------------------------------------------------------------------------------------------------

                                                 $16,378,641            $40,825           $497,825          $15,921,641
 ======================================================================================================================
</TABLE>



<TABLE>
<CAPTION>
                                                  AMORTIZED         UNREALIZED         UNREALIZED              MARKET
 DECEMBER 31, 1998                                   COST              GAINS             LOSSES                VALUE
 -----------------------------------------------------------------------------------------------------------------------

<S>                                              <C>                   <C>                 <C>              <C>
 U.S. Treasury securities                        $ 5,021,513           $ 21,437            $    --          $ 5,042,950
 States and political subdivisions                 8,114,069            219,112                 --            8,333,181
 Mortgage-backed securities                        4,022,557              4,020             12,379            4,014,198
 Other debt securities                               449,871              7,810                 --              457,681
 -----------------------------------------------------------------------------------------------------------------------

                                                 $17,608,010           $252,379            $12,379          $17,848,010
 ======================================================================================================================
</TABLE>

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

The amortized cost and estimated market value of investment securities held to
maturity and available for sale at December 31, 1999, by contractual maturity,
are shown as follows. Expected maturities differ from contractual maturities
because borrowers may have the right to call or repay obligations without call
or prepayment penalties.



                                       45
<PAGE>   49

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                  INVESTMENT SECURITIES                    INVESTMENT SECURITIES
                                                    HELD TO MATURITY                         AVAILABLE FOR SALE
                                              -------------------------------        ---------------------------------
                                                 AMORTIZED             MARKET              AMORTIZED            MARKET
 DECEMBER 31, 1999                                  COST                VALUE                 COST               VALUE
 ---------------------------------------------------------------------------------------------------------------------

<S>                                           <C>                 <C>                  <C>               <C>
 Due in one year or less                      $  9,988,240        $10,005,660            $   943,194       $   958,254
 Due after one year through five
  years                                          8,100,103          7,937,695              7,975,543         7,729,530
 Due after five years through
  ten years                                     25,163,233         23,159,708              3,579,240         3,501,363
 Due after ten years                                    --                 --              2,237,454         2,110,681
 Other investments                               1,189,260          1,189,260                     --                --
 Mortgage-backed securities                             --                 --              1,643,210         1,621,813
 ---------------------------------------------------------------------------------------------------------------------

                                               $44,440,836        $42,292,323            $16,378,641       $15,921,641
 =====================================================================================================================
</TABLE>

Proceeds from sales of investment securities available for sale during 1999,
1998 and 1997, respectively, were $13,033,497, $9,966,994 and $5,083,984 with
gross gains of $643, $129,537 and $4,201 and no gross losses. Maturities and
principal repayments of investment securities available for sale during 1999,
1998 and 1997 were $4,013,932, $2,979,575 and $13,004,356, respectively. Gross
gains realized from calls and mandatory redemptions of held-to-maturity
securities during 1999, 1998 and 1997 were $0, $1,448 and $6,463, respectively.

Investment securities having carrying values of approximately $14,239,000 and
$13,261,000 at December 31, 1999 and 1998, respectively, were pledged to secure
public funds on deposit, securities sold under agreements to repurchase, and
other purposes as required by law. The Bank's pledged securities are held in
safekeeping.


4.    LOANS

Major classifications of loans are as follows:

<TABLE>
<CAPTION>
 DECEMBER 31,                                             1999               1998
 ------------------------------------------------------------------------------------

<S>                                                   <C>                <C>
 Commercial, financial and agricultural               $182,581,460       $163,798,992
 Real estate--construction                               9,182,378          5,960,092
 Real estate--individual                                82,421,833         62,544,350
 Installment and simple interest individual             16,248,303         13,810,146
 Other                                                     179,924            554,830
 ------------------------------------------------------------------------------------

 Total loans                                           290,613,898        246,668,410
 Net deferred loan fees                                    733,177            370,231
 ------------------------------------------------------------------------------------

 Loans, net of deferred loan fees                     $289,880,721       $246,298,179
 ====================================================================================
</TABLE>



                                       46
<PAGE>   50

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Substantially all loans are made to borrowers in the Bank's primary market area
of Monroe and South Dade counties, in which the primary industry is tourism. At
December 31, 1999 and 1998, the Bank had approximately $251,686,000 and
$212,269,000 of loans secured by real estate.

Nonaccrual loans and loans defined as impaired under SFAS 114 at December 31,
1999 and 1998 were not material.

The Bank has made a loan originally totaling $10,000,000 to construct a lumber
mill near Pensacola, Florida. $6,400,000 had been sold by the Bank to other
lenders. The loan was partially guaranteed as to principal and interest by the
U.S. Department of Agriculture (USDA). In addition to business real estate and
equipment, the loan is collateralized by the business owner's interest in a
trust. Under provisions of the trust agreement, beneficiaries cannot receive
trust assets until November 2010. At December 31, 1999, the loan was past due
greater than 90 days but is still maintained as an accruing loan because of the
USDA guarantee. Management believes the value of all assets pledged as
collateral for this loan substantially exceeds the unpaid amount. The loan is
in the process of foreclosure, and no loss is anticipated.

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

<TABLE>
<CAPTION>
 YEARS ENDED DECEMBER 31,                                  1999               1998               1997
 --------------------------------------------------------------------------------------------------------

 <S>                                                    <C>                <C>                 <C>
 Balance, beginning of year                             $2,517,234         $2,201,974          $1,929,719
 Provision charged to expense                              540,000            360,000             300,000
 Loans charged off                                        (108,413)           (82,020)            (39,514)
 Recoveries of loans previously charged off                 47,711             37,280              11,769
 --------------------------------------------------------------------------------------------------------

 Balance, end of year                                   $2,996,532         $2,517,234          $2,201,974
 ========================================================================================================
</TABLE>


5.    PREMISES AND EQUIPMENT

Premises and equipment consisted of the following:

<TABLE>
<CAPTION>
 DECEMBER 31,                                             1999                1998
 ------------------------------------------------------------------------------------

 <S>                                                  <C>                 <C>
 Land                                                 $ 4,994,840         $ 3,220,536
 Buildings                                              8,803,085           7,820,544
 Furniture, fixtures and equipment                      7,016,710           6,154,871
 Construction in progress                                  92,009           1,411,247
 ------------------------------------------------------------------------------------
                                                       20,906,644          18,607,198
 Less accumulated depreciation                         (6,587,998)         (5,726,838)
 ------------------------------------------------------------------------------------

 Premises and equipment, net                          $14,318,646         $12,880,360
 ====================================================================================
</TABLE>



                                       47
<PAGE>   51

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The Bank is obligated under operating leases for office and ATM location space.
The leases expire in periods varying from one to eighteen years, and some have
renewal options for subsequent periods. Future minimum lease payments are as
follows at December 31, 1999:

<TABLE>
<CAPTION>

 YEARS ENDING DECEMBER 31,
--------------------------------------------------------------------------------
<S>                                                      <C>
      2000                                               $  34,959
      2001                                                  26,359
      2002                                                  25,959
      2003                                                  18,276
      2004                                                  10,368
      Thereafter                                           124,417
--------------------------------------------------------------------------------

                                                         $ 240,338
================================================================================
</TABLE>

Rental expense for the years ended December 31, 1999, 1998 and 1997, was
approximately $66,000, $93,000 and $79,000, respectively.


6.    TIME DEPOSITS

At December 31, 1999, the scheduled maturities of time deposits are as follows:

<TABLE>
<CAPTION>
 YEARS ENDING DECEMBER 31,
--------------------------------------------------------------------------------
<S>                                                      <C>
      2000                                               $  66,342,455
      2001                                                  20,647,909
      2002                                                  10,417,276
      2003                                                   4,656,337
      2004 and thereafter                                    3,773,261
--------------------------------------------------------------------------------

                                                         $105,837,238
================================================================================
</TABLE>

7.    SHORT-TERM BORROWINGS

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 unsecured lines of credit for federal funds purchased from other
banks totaling $7,500,000 at December 31, 1999. Securities sold under
agreements to repurchase include a wholesale agreement with a correspondent
bank which is collateralized by a U.S. Treasury note and agreements with
commercial account holders whereby the Bank sweeps the customer's



                                       48
<PAGE>   52

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


accounts on a daily basis and pays interest on these amounts. Borrowings under
these agreements are collateralized by investment securities.

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

In 1997, the Bank invested in Federal Home Loan Bank stock for the purpose of
establishing credit lines with the Federal Home Loan Bank. The credit
availability to the Bank is equal to 14 percent of the Bank's total assets as
reported on the most recent quarterly financial information submitted to the
regulators. The credit availability approximated $54.7 million at December 31,
1999. Any advances are secured by the Bank's one-to-four-family residential
mortgage loans. In 1999, a $10 million advance was made, which matured on
January 24, 2000. No advances were made on this credit line in 1998.

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:

<TABLE>
<CAPTION>
 Years ended December 31,                                                      1999               1998
--------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>
FEDERAL FUNDS PURCHASED:
   Balance:
     Average daily outstanding                                              $   204,123       $  334,398
     Year-end outstanding                                                            --               --
     Maximum month-end outstanding                                              455,000        3,169,000
   Rate:
     Weighted average                                                               5.9%             5.9%

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (WHOLESALE AND RETAIL):
   Balance:
     Average daily outstanding                                              $   472,657       $  466,813
     Year-end outstanding                                                       425,478          371,004
     Maximum month-end outstanding                                              596,504          371,004
   Rate:
     Weighted average                                                               4.5%             4.9%

TREASURY, TAX AND LOAN NOTE OPTION:
   Balance:
     Average daily outstanding                                              $   730,354       $  808,629
     Year-end outstanding                                                     1,286,578          298,565
     Maximum month-end outstanding                                            1,700,000        1,700,000
   Rate:
     Weighted average                                                               4.6%             4.4%

ADVANCE FROM THE FEDERAL HOME LOAN BANK:
   Balance:
     Average daily outstanding                                              $   277,778       $       --
     Year-end outstanding                                                    10,000,000               --
     Maximum month-end outstanding                                           10,000,000               --
   Rate:
     Weighted average                                                               6.1%              --
</TABLE>



                                       49
<PAGE>   53
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.    OTHER BORROWINGS

The Company has $2,000,000 available under a revolving line of credit with
Independent Bankers' Bank of Florida. At December 31, 1999, the Company had
$659,625 outstanding under this line of credit. Amounts outstanding under the
line of credit bear interest equal to the prime rate published in The Wall
Street Journal minus .5 percent, which is subject to change daily. The interest
rate in effect at December 31, 1999, was 8.0 percent. Interest is payable
quarterly, and the principal is due April 2001. This credit facility is secured
by 100 percent of the outstanding shares of TIB Bank of the Keys and requires,
among other things, that the Bank maintain a minimum Tier 1 capital ratio of 6
percent at all times throughout the term of the loan.


9.    INCOME TAXES

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

<TABLE>
<CAPTION>
 Years ended December 31,                                    1999              1998              1997
--------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>               <C>
Current income tax provision
  Federal                                                $ 2,075,781       $ 1,674,965       $ 1,569,264
  State                                                      288,287           258,490           237,333
--------------------------------------------------------------------------------------------------------
                                                           2,364,068         1,933,455         1,806,597
Deferred income tax provision (benefit)                      (65,268)          (47,655)          (87,997)
--------------------------------------------------------------------------------------------------------

                                                         $ 2,298,800       $ 1,885,800       $ 1,718,600
========================================================================================================
</TABLE>

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

<TABLE>
<CAPTION>
Years ended December 31,                                    1999               1998               1997
--------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>               <C>
Pretax income                                            $ 6,417,561       $ 5,326,796       $ 4,924,458
========================================================================================================
Income taxes computed at Federal statutory tax rate      $ 2,182,000       $ 1,811,000       $ 1,674,000
Increase (decrease) resulting from:
  Tax-exempt interest rate                                  (117,600)         (170,400)         (123,000)
  State income taxes                                         199,900           170,600           157,000
  Other, net                                                  34,500            74,600            10,600
--------------------------------------------------------------------------------------------------------
                                                         $ 2,298,800       $ 1,885,800       $ 1,718,600
========================================================================================================
</TABLE>



                                       50
<PAGE>   54
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

<TABLE>
<CAPTION>
December 31,                                                                1999           1998
--------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>
Allowance for loan losses                                              $   981,709       $ 801,493
Organization costs                                                          17,707              --
Unrealized losses on securities available for sale                         172,000              --
--------------------------------------------------------------------------------------------------
Total gross deferred tax assets                                          1,171,416         801,493
--------------------------------------------------------------------------------------------------

Sale of option to acquire equity interest in an insurance company          (99,649)             --
Accumulated depreciation                                                  (438,277)       (397,181)
Gain on building swap                                                      (79,151)        (81,349)
Unrealized gains on securities available for sale                               --         (90,000)
Other                                                                       (4,419)        (10,311)
--------------------------------------------------------------------------------------------------
Total gross deferred tax liabilities                                      (621,496)       (578,841)
--------------------------------------------------------------------------------------------------
Net deferred tax asset                                                 $   549,920       $ 222,652
==================================================================================================
</TABLE>


10.   EMPLOYEE BENEFIT PLAN

The Bank maintains an Employee Stock Ownership Plan 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 25 percent of salary
reduction contributions up to 4 percent of compensation, not to exceed a
maximum contribution of $1,000 per employee; and an additional discretionary
contribution made by the Bank allocated to the accounts of participants on the
basis of total relative compensation. The Bank contributed $181,000, $171,000
and $161,000 to the plan in 1999, 1998 and 1997, respectively. As of December
31, 1999, the Plan contained approximately 134,000 shares of the Company's
common stock.


11.   RELATED PARTY TRANSACTIONS

As of December 31, 1999 and 1998, the Bank had direct and indirect loans
outstanding to certain of its officers, directors and their related business
interests which aggregated $16,182,001 and $12,356,737, respectively. During
1999, additional loans and credit line extensions totaled $6,188,175. Loan
repayments totaled $2,362,911. These loans were made in the ordinary course of
business with normal credit terms, including interest rates and collateral
requirements prevailing at the time for comparable transactions with other
borrowers. These individuals and their related interests also maintain
customary demand and time deposit accounts with the Bank.




                                       51
<PAGE>   55
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12.   STOCKHOLDERS' EQUITY

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

As of December 31, 1999, the most recent notification from the Federal Deposit
Insurance Corporation and the Federal Reserve Board categorized the Bank and
the Company, respectively, as well capitalized under the regulatory framework
for prompt corrective action. There are no conditions or events since those
notifications that management believes has changed the Company's or the Bank's
category. To be considered well capitalized and adequately capitalized (as
defined) under the regulatory framework for prompt corrective action, the
Company and Bank must maintain minimum Tier 1 leverage, Tier 1 risk-based, and
total risk-based ratios as set forth in the following tables. The actual
capital amounts and ratios are also presented in the following tables.

<TABLE>
<CAPTION>

                                                                        ADEQUATELY
                                      WELL CAPITALIZED                  CAPITALIZED
 DECEMBER 31, 1999                       REQUIREMENT                    REQUIREMENT                   ACTUAL
-----------------------------------------------------------------------------------------------------------------------
                                          AMOUNT         RATIO            AMOUNT    RATIO             AMOUNT      RATIO
                                          ------         -----            ------    -----             ------      -----
<S>                                 <C>                <C>             <C>          <C>            <C>            <C>
Tier 1 Capital (to Average
    Assets)
      Consolidated                  => $18,721,000     =>  5.0%        $11,233,000     3.0%        $27,130,000     7.3%
      Bank                          =>  18,642,000     =>  5.0%         11,185,000     3.0%         26,406,000     7.1%

Tier 1 Capital (to Risk
    Weighted Assets)
      Consolidated                  => $17,378,000     =>  6.0%        $11,585,000     4.0%        $27,130,000     9.4%
      Bank                          =>  17,296,000     =>  6.0%         11,531,000     4.0%         26,406,000     9.2%

Total Capital (to Risk
    Weighted Assets)
      Consolidated                  => $28,963,000     => 10.0%        $23,170,000     8.0%        $30,127,000    10.4%
      Bank                          =>  28,827,000     => 10.0%         23,062,000     8.0%         29,403,000    10.2%
</TABLE>




                                       52
<PAGE>   56


                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        ADEQUATELY
                                      WELL CAPITALIZED                  CAPITALIZED
 DECEMBER 31, 1998                       REQUIREMENT                    REQUIREMENT                 ACTUAL
 -----------------------------------------------------------------------------------------------------------------------
                                          AMOUNT         RATIO             AMOUNT     RATIO          AMOUNT       RATIO
<S>                                 <C>                <C>              <C>           <C>          <C>            <C>
 Tier 1 Capital (to Average
    Assets)
      Consolidated                  => $15,711,000     =>  5.0%         $9,427,000     3.0%        $24,731,000     7.9%
      Bank                          =>  15,688,000     =>  5.0%          9,413,000     3.0%         23,676,000     7.6%

 Tier 1 Capital (to Risk
    Weighted Assets)
      Consolidated                  => $15,217,000     =>  6.0%        $10,145,000     4.0%        $24,731,000     9.8%
      Bank                          =>  15,163,000     =>  6.0%         10,108,000     4.0%         23,676,000     9.4%

 Total Capital (to Risk
    Weighted Assets)
      Consolidated                  => $25,362,000     => 10.0%        $20,290,000     8.0%        $27,248,000    10.7%
      Bank                          =>  25,271,000     => 10.0%         20,217,000     8.0%         26,193,000    10.4%
</TABLE>

Management believes, as of December 31, 1999, that the Company and the Bank
meet all capital requirements to which it is subject.

Under state banking law, regulatory approval will be required if the total of
all dividends declared in any calendar year by the Bank exceeds the Bank's net
profits to date for that year combined with its retained net profits for the
preceding two years. Retained earnings of the Bank available for payment of
dividends to the Company without prior regulatory approval at December 31,
1999, is approximately $7,211,000.

STOCK OPTION PLAN

Under the Bank's 1994 Incentive Stock Option and Nonstatutory Stock Option Plan
("the Plan"), the Company may grant stock options to persons who are now or who
during the term of the Plan become directors, officers, or key executives as
defined by the Plan. Stock options granted under the Plan may either be
incentive stock options or nonqualified stock options for federal income tax
purposes. The Board of Directors of the Company may grant nonqualified stock
options to any director, and incentive stock options or nonqualified stock
options to any officer, key executive, administrative, or other employee
including an employee who is a director of the Company. Subject to the
provisions of the Plan, the maximum number of shares of common stock of the
Company that may be optioned or sold is 978,000 shares. Such shares may be
treasury, or authorized but unissued, shares of common stock of the Company. In
no event shall the number of options outstanding at any time exceed 20 percent
of the Company's currently outstanding common stock.

The exercise price for common stock under each nonqualified stock option must
equal 100 percent of the fair market value of the stock at the time the option
is granted. The exercise price for stock under each incentive stock option
shall not be less than 100 percent of the fair market value of the stock at the
time the option is granted. The exercise price under an incentive stock option
granted to a person owning stock representing more than 10 percent of the
common stock must equal at least 110 percent of the fair market value at the
date of grant, and such option is not exercisable until five years from the
date the incentive stock option was granted.



                                       53
<PAGE>   57
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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.

The Company applies APB 25 and related Interpretations in accounting for its
stock-based compensation plan. Accordingly, no compensation cost has been
recognized. Had compensation cost for the Company's stock-based compensation
plan been determined based on the fair value at the grant dates for awards
under the plan consistent with the method of SFAS 123, the Company's net income
and earnings per share would have been the pro forma amounts indicated as
follows:

<TABLE>
<CAPTION>

 Years ended December 31,                     1999                 1998               1997
 -------------------------------------------------------------------------------------------
 <S>                                        <C>              <C>                <C>
 Net income
   As reported                              $4,118,761       $  3,440,996       $  3,205,858
   Pro forma                                 4,046,650          3,362,204          3,163,751

 Basic earnings per common share
   As reported                              $      .94                .78       $        .74
   Pro forma                                       .92                .76                .73

 Diluted earnings per common share
   As reported                              $      .91       $        .74       $        .70
   Pro forma                                       .89                .73                .69

</TABLE>

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 1999 and 1998:

<TABLE>
<CAPTION>
                                              1999                 1998               1997
 -------------------------------------------------------------------------------------------
 <S>                                      <C>                <C>                <C>
 Dividend yield                                   3.9%               3.3%               3.0%
 Risk-free interest rate                  4.7% TO 6.0%       4.7% to 5.6%       5.4% to 7.0%
 Expected lives                               9 YEARS            9 years            9 years
 Volatility                                       .38                .41                .48
</TABLE>



                                       54
<PAGE>   58
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



A summary of the status of the Company's fixed stock option plan as of and for
the three years ended December 31, 1999, is presented below:

<TABLE>
<CAPTION>
                                                                                  EXERCISE PRICE       WEIGHTED AVERAGE
                                                               SHARES                      RANGE         EXERCISE PRICE
-----------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>          <C>                   <C>
 BALANCE, December 31, 1996                                   606,300       $ 5.49  -    $ 9.00                $  6.11
   Granted                                                    125,300         9.00  -     14.50                  12.16
   Exercised                                                  (49,590)        5.49  -      8.33                   5.51
   Expired                                                    (42,000)        5.49  -      9.00                   6.57
----------------------------------------------------------------------------------------------------------------------

 BALANCE, December 31, 1997                                   640,010         5.49  -     14.50                   7.31
   Granted                                                     75,500        10.88  -     14.00                  13.10
   Exercised                                                  (61,175)        5.49  -      9.00                   5.72
   Expired                                                    (43,250)        5.49  -     13.50                   7.84
----------------------------------------------------------------------------------------------------------------------

 BALANCE, December 31, 1998                                   611,085         5.49  -     14.50                   8.15
   Granted                                                     23,000        10.75  -     11.25                  11.03
   Exercised                                                  (23,675)        5.49  -      9.00                   5.67
   Expired                                                    (18,000)        5.49  -     13.63                   9.90
----------------------------------------------------------------------------------------------------------------------

 BALANCE, December 31, 1999                                   592,410       $ 5.49  -    $14.50                   8.31
======================================================================================================================

Options exercisable at December 31, 1999                      247,760

Options exercisable at December 31, 1998                      221,985

Options exercisable at December 31, 1997                      224,510


Weighted average fair value of options granted during
    1999                                                     $   3.66

Weighted average fair value of options granted during
    1998                                                     $   5.05

Weighted average fair value of options granted during
    1997                                                     $   5.60
======================================================================================================================
</TABLE>



                                       55
<PAGE>   59
                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




The following table summarizes information about fixed stock options
outstanding:

<TABLE>
<CAPTION>
                                              DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------------------------
                                            OUTSTANDING OPTIONS                             OPTIONS EXERCISABLE
                            -----------------------------------------------------   ----------------------------------
                                                         Weighted
                                                          Average       Weighted                              Weighted
               Range of                   Number        Remaining        Average                   Number      Average
               Exercise           Outstanding at      Contractual       Exercise           Exercisable at     Exercise
                  Price        December 31, 1999             Life          Price        December 31, 1999        Price
----------------------------------------------------------------------------------------------------------------------
     <S>          <C>          <C>                    <C>               <C>             <C>                   <C>
     $5.49  -     $5.50                  276,710             5.0        $  5.49                  155,510       $  5.49
                   6.23                   30,000             5.6           6.23                   30,000          6.23
      8.33  -      9.00                  114,200             6.5           8.60                   34,400          8.62
     10.75  -     13.25                   47,500             8.8          11.62                    2,450         12.17
     13.50  -     14.50                  124,000             7.8          13.56                   25,400         13.64
----------------------------------------------------------------------------------------------------------------------

                                         592,410             6.2        $  8.31                  247,760       $  6.92
======================================================================================================================
</TABLE>

<TABLE>

                                                DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------------
                                            OUTSTANDING OPTIONS                             OPTIONS EXERCISABLE
                            -----------------------------------------------------   ----------------------------------
                                                         Weighted
                                                          Average       Weighted                              Weighted
               Range of                   Number        Remaining        Average                   Number      Average
               Exercise           Outstanding at      Contractual       Exercise           Exercisable at     Exercise
                  Price        December 31, 1998             Life          Price        December 31, 1998        Price
 ---------------------------------------------------------------------------------------------------------------------
     <S>          <C>          <C>                    <C>               <C>             <C>                   <C>
     $5.49  -     $5.50                  304,585             6.0        $  5.49                  153,985       $  5.49
                   6.23                   30,000             6.6           6.23                   30,000          6.23
      8.33  -      9.00                  120,200             7.6           8.62                   23,900          8.65
     10.88  -     13.25                   25,500             9.4          12.22                       --            --
     13.50  -     14.50                  130,800             8.8          13.56                   14,100         13.72
 ---------------------------------------------------------------------------------------------------------------------

                                         611,085             7.1        $  8.15                  221,985       $  6.45
 ---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       56
<PAGE>   60
                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                       DECEMBER 31, 1997
-------------------------------------------------------------------------------------------------------------------------------
                                          OUTSTANDING OPTIONS                                    OPTIONS EXERCISABLE
                        ---------------------------------------------------------     -----------------------------------------
                                                      WEIGHTED
                                                       AVERAGE            WEIGHTED                                     WEIGHTED
           RANGE OF                  NUMBER          REMAINING             AVERAGE                     NUMBER           AVERAGE
           EXERCISE          OUTSTANDING AT        CONTRACTUAL            EXERCISE             EXERCISABLE AT          EXERCISE
              PRICE       DECEMBER 31, 1997               LIFE               PRICE          DECEMBER 31, 1997             PRICE
-------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                     <C>                    <C>               <C>                        <C>
$ 5.49  -    $ 5.50                 380,610                7.0             $  5.49                    178,410           $  5.49
               6.23                  30,000                7.6                6.23                     30,000              6.23
  8.33  -      9.00                 142,600                8.5                8.60                     16,100              8.63
 13.50  -     14.50                  86,800                9.6               13.56                          -                 -
-------------------------------------------------------------------------------------------------------------------------------
                                    640,010                7.7             $  7.31                    224,510           $  5.82
===============================================================================================================================
</TABLE>


13.      COMMITMENTS AND CONTINGENCIES

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

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

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require the payment of a fee. At December 31, 1999 and 1998, total
commitments to extend credit were approximately $34,203,000 and $29,760,000,
respectively, in unfunded loan commitments.

Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers. Since most of the letters of credit
are expected to expire without being drawn upon, they do not necessarily
represent future cash requirements. At December 31, 1999 and 1998, commitments
under standby letters of credit aggregated approximately $858,000 and
$902,000, respectively. In 1999 and 1998, the Bank was not required to perform
on a standby letter of credit.



                                       57
<PAGE>   61

                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

As of December 31, 1998, the Parent Company had directly guaranteed to the
Bank $3,000,000 of a $6,000,000 loan to the Phoenix Group. In connection with
this guarantee, the Parent Company had the option to purchase $3,000,000 of
the debt from the Bank and convert such debt to a 50 percent ownership in the
Phoenix Group during a 36-month period beginning in October 1998. The loan
matures in October 2001. In November 1999, the Parent Company sold this option
to the Phoenix Group. The terms of the sale included a $100,000 payment at
closing and $300,000 annually at the anniversary date of the sale for each of
the next three years, for a total of $1,000,000. For accounting purposes,
$312,375 was recognized as income on the sale.


14.      STOCK REPURCHASES

On September 22, 1998, the Company's Board of Directors voted to repurchase
50,000 shares of the Company's stock in 1998. This repurchase resulted in
50,000 outstanding shares of treasury stock, at a cost of $557,788 at December
31, 1998. In addition, on December 15, 1998, the Company's Board of Directors
voted to repurchase up to 50,000 shares of the Company's stock in 1999. 45,000
of these shares were purchased in 1999 at a cost of $493,684.


15.      SUPPLEMENTAL FINANCIAL DATA

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

<TABLE>
<CAPTION>
 Years ended December 31,                             1999             1998               1997
 ----------------------------------------------------------------------------------------------
 <S>                                            <C>              <C>                <C>
 Merchant bank card processing expenses         $1,691,774       $1,269,411         $1,159,235
 Other merchant charges                            393,144          323,079            341,949
 Operating supplies                                425,902          397,543            338,541
 Computer services                               1,395,051          861,368            596,627
 Legal and professional fees                       482,802          510,356            511,964
 Marketing and community relations                 458,026          496,442            417,408
 Postage, courier, and armored car                 420,963          325,137            285,391
</TABLE>




                                       58
<PAGE>   62


                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


16.      FAIR VALUES OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                                          1999                                     1998
                                          --------------------------------------    ------------------------------------
                                                 CARRYING             ESTIMATED           Carrying           Estimated
 December 31,                                       VALUE            FAIR VALUE              Value          Fair Value
 -----------------------------------------------------------------------------------------------------------------------
 <S>                                      <C>                     <C>                <C>                 <C>
 Financial assets:
    Cash and cash equivalents               $  22,164,000         $  22,164,000      $  24,702,000       $  24,702,000
    Investment securities held
      to maturity                              44,441,000            42,292,000         48,153,000          48,468,000
    Investment securities
      available for sale                       15,922,000            15,922,000         17,848,000          17,848,000
    Loans                                     286,884,000           281,146,000        243,781,000         244,942,000
    Note receivable                               702,000               702,000                  -                   -

 Financial liabilities:
    Noncontractual deposits                  $241,066,000         $ 241,066,000      $ 249,893,000       $ 249,893,000
    Contractual deposits                      105,837,000           106,220,000         75,163,000          75,701,000
    Short-term borrowings                      11,712,000            11,713,000            670,000             670,000

 Off-balance-sheet
 instruments:
    Undisbursed credit lines                                      $  34,203,000                          $  29,760,000
    Standby letters of credit                                           858,000                                902,000
</TABLE>


17.      SEGMENT REPORTING

TIB Financial Corp. has three reportable segments: community banking, merchant
bank card processing, and government guaranteed loan sales and servicing. The
community banking segment's business is to attract deposits from the public
and to use such deposits to make real estate, business and consumer loans in
its primary service area. The merchant bank card processing segment processes
credit card transactions for local merchants. The government guaranteed loan
segment originates and sells the guaranteed portion of loans that qualify for
such guarantees, such as those offered by the Small Business Administration
and the U.S. Department of Agricultural Rural Development Business and
Industry Program.

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

The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different marketing strategies. The government guaranteed
loan segment was acquired as a unit, and management at the time of the
acquisition was retained.



                                       59
<PAGE>   63


                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        GOVERNMENT
                                                      MERCHANT          GUARANTEED
 YEAR ENDED                        COMMUNITY         BANK CARD          LOAN SALES             ALL
 DECEMBER 31, 1999                   BANKING        PROCESSING       AND SERVICING           OTHER               TOTAL
 ---------------------------------------------------------------------------------------------------------------------
 <S>                            <C>                <C>               <C>                 <C>              <C>
 Interest income                $ 27,905,459       $        --           $      --       $      --        $ 27,905,459
 Interest expense                (11,298,888)               --                  --              --         (11,298,888)
 ---------------------------------------------------------------------------------------------------------------------

 Net interest income              16,606,571                --                  --              --          16,606,571

 Other income                      3,119,910         2,827,876             809,988         230,492           6,988,266
 Equity in income,
    net of goodwill
    amortization,
    from investment
    in ERAS Joint
    Venture                               --                --                  --         179,008             179,008
 Depreciation and
    amortization                  (1,142,443)          (53,467)            (15,056)         (2,741)         (1,213,707)
 Other expense                   (13,054,372)       (2,366,535)           (398,299)       (248,024)       $(16,067,230)
 ---------------------------------------------------------------------------------------------------------------------

 Pretax segment
    profit (excluding
    effect of change
    in accounting
    principle)                  $  5,529,666       $   407,874           $ 396,633       $ 158,735        $  6,492,908
======================================================================================================================

 Segment assets                 $390,795,676       $   129,416           $ 223,472       $ 980,767        $392,129,331
======================================================================================================================
</TABLE>



                                       60
<PAGE>   64


                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        GOVERNMENT
                                                      MERCHANT          GUARANTEED
 YEAR ENDED                        COMMUNITY         BANK CARD          LOAN SALES             ALL
 DECEMBER 31, 1998                   BANKING        PROCESSING       AND SERVICING           OTHER               TOTAL
 ---------------------------------------------------------------------------------------------------------------------
 <S>                            <C>                <C>               <C>                 <C>              <C>
 Interest income                $ 23,706,467       $        --          $       --       $      --        $ 23,706,467
 Interest expense                 (9,915,274)               --                  --              --          (9,915,274)
 ---------------------------------------------------------------------------------------------------------------------
 Net interest
   income                         13,791,193                --                  --              --          13,791,193

 Other income                      2,701,247         2,174,057           1,082,906         419,333           6,377,543
 Equity in income,
    net of goodwill
    amortization,
    from Investment
    in ERAS Joint
    Venture                               --                --                  --          (1,465)             (1,465)
 Depreciation and
    amortization                    (956,062)          (50,312)            (13,728)         (2,058)         (1,022,160)
 Other expense                   (11,125,553)       (1,798,014)           (585,169)       (309,579)       $(13,818,315)
 ---------------------------------------------------------------------------------------------------------------------

 Pretax segment profit          $  4,410,825       $   325,731          $  484,009       $ 106,231        $  5,326,796
 ---------------------------------------------------------------------------------------------------------------------

 Segment assets                 $354,279,007       $   151,917          $  247,858       $ 797,068        $355,475,850
 ---------------------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
                                                                        GOVERNMENT
                                                      MERCHANT          GUARANTEED
 YEAR ENDED                        COMMUNITY         BANK CARD          LOAN SALES             ALL
 DECEMBER 31, 1997                   BANKING        PROCESSING       AND SERVICING           OTHER               TOTAL
 ---------------------------------------------------------------------------------------------------------------------
 <S>                            <C>                <C>               <C>                 <C>              <C>
 Interest income                $ 20,557,774       $        --          $       --       $      --        $ 20,557,774
 Interest expense                 (7,876,156)               --                  --               -          (7,876,156)
 ---------------------------------------------------------------------------------------------------------------------

 Net interest income              12,681,618                --                  --              --          12,681,618

 Other income                      2,392,795         2,109,363             497,960         319,286           5,319,404
 Depreciation and
    amortization                    (788,817)             (648)             (7,395)         (1,435)           (798,295)
 Other expense                   (10,096,971)       (1,650,157)           (277,440)       (253,701)        (12,278,269)
 ---------------------------------------------------------------------------------------------------------------------

 Pretax segment profit          $  4,188,625       $   458,558          $  213,125       $  64,150        $  4,924,458
 ---------------------------------------------------------------------------------------------------------------------

 Segment assets                 $277,651,788       $    29,003          $  270,208       $   7,821        $277,958,820
 ---------------------------------------------------------------------------------------------------------------------
</TABLE>

Revenues are almost exclusively derived from customers within the United
States. The Company does not have a single customer that accounts for 10
percent or more the Company's revenue.



                                       61
<PAGE>   65

                      TIB FINANCIAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



18.      CONDENSED FINANCIAL INFORMATION OF TIB FINANCIAL CORP.

                           CONDENSED BALANCE SHEETS
                                 (Parent Only)

<TABLE>
<CAPTION>
 December 31,                                                                                  1999                1998
 ----------------------------------------------------------------------------------------------------------------------
 <S>                                                                                    <C>                 <C>
 ASSETS

 Cash on deposit with subsidiary                                                        $     1,330         $   118,266
 Dividends and other receivables                                                            504,358             474,424
 Investment in bank subsidiary                                                           27,579,427          25,437,549
 Investment in ERAS Joint Venture                                                           968,760             789,752
 Note receivable                                                                            702,375                  --
 Organization expenses                                                                           --              75,347
 Other assets                                                                               111,719             123,175
 ----------------------------------------------------------------------------------------------------------------------

 TOTAL ASSETS                                                                           $29,867,969         $27,018,513
 ======================================================================================================================

 LIABILITIES AND STOCKHOLDERS' EQUITY

 LIABILITIES
    Dividends payable                                                                   $   461,490         $   450,979
    Due to bank subsidiary                                                                  441,000                  --
    Advances on line of credit                                                              659,625                  --
    Income taxes payable                                                                      3,696                  --
 ----------------------------------------------------------------------------------------------------------------------

 Total liabilities                                                                        1,565,811             450,979
 ----------------------------------------------------------------------------------------------------------------------

 STOCKHOLDERS' EQUITY
    Common stock                                                                            449,014             444,979
    Surplus                                                                               7,554,967           7,202,321
    Retained earnings                                                                    21,634,649          19,328,022
    Market valuation reserve on investment
      securities available for sale                                                        (285,000)            150,000
    Treasury stock, 95,000 and 50,000 shares, at cost                                    (1,051,472)           (557,788)
 ----------------------------------------------------------------------------------------------------------------------

 Total stockholders' equity                                                              28,302,158          26,567,534
 ----------------------------------------------------------------------------------------------------------------------

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                             $29,867,969         $27,018,513
 ======================================================================================================================
</TABLE>




                                       62
<PAGE>   66

                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                        CONDENSED STATEMENTS OF INCOME
                                 (Parent Only)
<TABLE>
<CAPTION>
 Years ended December 31,                                                   1999                1998               1997
 ----------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>                <C>
 OPERATING INCOME
    Dividend from bank subsidiary                                     $1,464,606          $2,414,915         $1,766,229
    Gain on sale of insurance company option                             312,375                   -                  -
    Interest income on note receivable                                    17,358                   -                  -
    Equity in income of ERAS Joint Venture, net
      of goodwill amortization                                           179,008              (1,465)                 -
 ----------------------------------------------------------------------------------------------------------------------

 Total operating income                                                1,973,347           2,413,450          1,766,229
 ----------------------------------------------------------------------------------------------------------------------

 OPERATING EXPENSE
    Amortization of intangibles                                                -              28,255             28,255
    Interest expense                                                      36,555                   -                  -
    Other expense                                                        251,763             285,351            269,752
 ----------------------------------------------------------------------------------------------------------------------

 Total operating expense                                                 288,318             313,606            298,007
 ----------------------------------------------------------------------------------------------------------------------

 Income before income tax benefit (expense)
    and equity in undistributed earnings of
    subsidiary                                                         1,685,029           2,099,844          1,468,222

 Income tax benefit (expense)                                            (96,100)            105,200            105,400
 ----------------------------------------------------------------------------------------------------------------------

 Income before equity in undistributed earnings
    of subsidiary                                                      1,588,929           2,205,044          1,573,622

 Equity in undistributed earnings of bank
    subsidiary                                                         2,576,879           1,235,952          1,632,236
 ----------------------------------------------------------------------------------------------------------------------

 NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
    CHANGE IN ACCOUNTING PRINCIPLE                                     4,165,808           3,440,996          3,205,858

 Cumulative effect of change in accounting
    principle for deferred organization costs, net
    of tax benefit of $28,300                                            (47,047)                  -                  -
 ----------------------------------------------------------------------------------------------------------------------

 NET INCOME                                                           $4,118,761          $3,440,996         $3,205,858
 ======================================================================================================================
</TABLE>



                                       63
<PAGE>   67


                     TIB FINANCIAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                      CONDENSED STATEMENTS OF CASH FLOWS
                                 (Parent Only)
<TABLE>
<CAPTION>
 Years ended December 31,                                                   1999                1998               1997
 ----------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                 <C>                <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                       $ 4,118,761         $ 3,440,996        $ 3,205,858
    Cumulative effect of change in accounting
       principle                                                          75,347                   -                  -
    Equity in undistributed earnings of bank
       subsidiary                                                     (2,576,879)         (1,235,952)        (1,632,236)
    Equity in income of ERAS Joint Venture, net
       of goodwill amortization                                         (179,008)              1,465                  -
    Proceeds from sale of insurance company
       option                                                            100,000                   -                  -
    Gain on sale of insurance company option                            (312,375)                  -                  -
    Amortization of intangibles                                                -              28,255             28,255
    Decrease (increase) in other assets                                   11,588             140,283            (30,752)
    Decrease in due to bank subsidiary                                   (49,000)                  -                  -
    Increase in income taxes payable                                       3,696                   -                  -
 ----------------------------------------------------------------------------------------------------------------------

 Net cash provided by operating activities                             1,192,130           2,375,047          1,571,125
 ----------------------------------------------------------------------------------------------------------------------

 CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from exercise of stock options                              143,279             349,892            273,266
    Cash dividends paid                                               (1,801,623)         (1,767,480)        (1,739,842)
    Treasury stock repurchased                                          (493,684)           (557,788)                 -
    Investment in ERAS Joint Venture                                           -            (791,216)                 -
    Compensation paid through issuance of
      common stock                                                       183,337             214,575                  -
    Advances on line of credit                                           659,625                   -                  -
 ----------------------------------------------------------------------------------------------------------------------

 Net cash used by financing activities                               $(1,309,066)         (2,552,017)        (1,466,576)
 ----------------------------------------------------------------------------------------------------------------------

 NET (DECREASE) INCREASE IN CASH                                        (116,936)           (176,970)           104,549

 CASH, BEGINNING OF YEAR                                                 118,266             295,236            190,687
 ----------------------------------------------------------------------------------------------------------------------

 CASH, END OF YEAR                                                   $     1,330         $   118,266        $   295,236
 ----------------------------------------------------------------------------------------------------------------------
</TABLE>




                                       64
<PAGE>   68


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

Not applicable

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information set forth under the caption "Election of Directors",
"Management", and "Filings Under Section 16(A) Beneficial Ownership Reporting
Compliance" in the Proxy Statement to be utilized in connection with the
Company's 2000 Annual Shareholders Meeting is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information contained under the caption "Compensation of Executive Officers
and Directors" in the Proxy Statement to be utilized in connection with the
Company's 2000 Annual Shareholders Meeting is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the caption "Principal Shareholders" in the
Proxy Statement to be utilized in connection with the Company's 2000 Annual
Shareholders Meeting is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the caption "Certain Relationships and Related
Transactions" in the Proxy Statement to be utilized in connection with the
Company's 2000 Annual Shareholders Meeting is incorporated herein by reference.


                                       65
<PAGE>   69

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)      1.  FINANCIAL STATEMENTS

         The consolidated financial statements, notes thereto and independent
         auditors' report thereon, filed as part hereof, are listed in Item 8.

         2.  FINANCIAL STATEMENT SCHEDULES

         Financial Statement schedules have been omitted as the required
         information is not applicable or the required information has been
         incorporated in the consolidated financial statements and related
         notes incorporated by reference herein.

         3.  EXHIBITS

         Exhibit Numbers

         3.1*     Articles of Incorporation
         3.2*     Bylaws
         4.1*     Specimen Stock Certificate
         10.1*    Employment Contract between Edward V. Lett and TIB Bank of the
                  Keys **

         10.2*    401(K) Savings and Employee Stock Ownership Plan **

         10.3*    Employee Incentive Stock Option Plan **

         10.4*    Employment Contract between Millard J. Younkers, Jr. and TIB
                  Bank of the Keys **

         10.5*    Employment Contract between Edward V. Lett and TIB Bank of the
                  Keys (as amended September 24, 1996) **

         21.1     Subsidiaries of the Company

         23.1     Consent of BDO Seidman, LLP

         23.2     Consent of Bricker & Melton, P.A.
         27       Financial Data Schedule

         *        Items 3.1 through 4.1, and 10.1 through 10.6, as listed
                  above, were previously filed by the Company as Exhibits (with
                  the same respective Exhibit Number as indicated herein) to
                  the Company's Registration Statements (Registration Nos.
                  333-03499 and 333-24101) and such documents are incorporated
                  herein by reference.

         **       Represents a management contract or a compensation  plan or
                  arrangement required to be filed as an exhibit.

(B)      REPORTS ON FORM 8-K

         Not Applicable


                                       66
<PAGE>   70

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 28, 2000.

TIB FINANCIAL CORP.

By: /s/ Edward V. Lett
   ----------------------------
   Edward V. Lett
   President, CEO, & Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 28, 2000.

<TABLE>
<CAPTION>
         SIGNATURE                                     TITLE
-------------------------------           ------------------------------------
<S>                                       <C>
 /s/ Edward V. Lett                       President (Principal Executive
-------------------------------           Officer), CEO and Director
Edward V. Lett


 /s/ B.G. Carter                                      Director
------------------------------
B.G. Carter


 /s/ Armando J. Henriquez                             Director
------------------------------
Dr. Armando J. Henriquez


 /s/ Gretchen K. Holland                              Director
------------------------------
Gretchen K. Holland


 /s/ James R. Lawson                                  Director
------------------------------
James R. Lawson


 /s/ Scott A. Marr                                    Director
------------------------------
Scott A. Marr


 /s/ Derek D. Martin-Vegue                            Director
------------------------------
Derek D. Martin-Vegue


 /s/ Joseph H. Roth, Jr.                              Director
------------------------------
Joseph H. Roth, Jr.
</TABLE>


                                       67
<PAGE>   71

<TABLE>

<S>                                                   <C>
 /s/ Marvin F. Schindler                              Director
------------------------------
Marvin F. Schindler


 /s/ Richard J. Williams                              Director
------------------------------
Richard J. Williams


 /s/ Millard J. Younkers, Jr.                         Director
------------------------------
Millard J. Younkers, Jr.


 /s/ David P. Johnson                                 Chief Financial Officer
------------------------------
David P. Johnson
</TABLE>


                                       68