TIB FINANCIAL CORP.

/s/ Edward V. Lett

Edward V. Lett
President, Chief Executive Officer and Director

TIB Financial Corp. and Subsidiaries

Consolidated Balance Sheets
(dollars in thousands, except per share amounts)


December 31,	2004		2003

Assets
Cash and due from banks	$	27,410	$	17,197
Federal funds sold		15,528		16,484

Cash and cash equivalents		42,938		33,681

Investment securities available for sale		77,807		52,557

Loans, net of deferred loan costs and fees		655,678		540,413
Less: Allowance for loan losses		6,243		5,216

Loans, net		649,435		535,197

Premises and equipment, net		27,559		21,073
Goodwill		155		155
Intangible assets, net		1,392		1,687
Accrued interest receivable and other assets		30,039		24,948

Total Assets	$	829,325	$	669,298

Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing demand	$	152,035	$	121,728
Interest-bearing		535,824		432,085

Total deposits		687,859		553,813

Federal Home Loan Bank (FHLB) advances		35,000		45,000
Short-term borrowings		12,157		4,041
Long-term borrowings		18,250		18,250
Accrued interest payable and other liabilities		7,945		6,948

Total liabilities		761,211		628,052

Shareholders’ equity
Preferred stock – no par value: 5,000,000 and 0 shares authorized, 0 and 0 shares issued		—		—
Common stock – $.10 par value: 20,000,000 and 7,500,000 shares authorized, 5,679,239 and 4,431,328 shares issued		568		443
Additional paid in capital		38,284		14,255
Retained earnings		28,968		26,203
Accumulated other comprehensive income		294		345

Total shareholders’ equity		68,114		41,246


Total Liabilities and Shareholders’ Equity	$	829,325	$	669,298

See accompanying notes to consolidated financial statements.

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Income
(dollars in thousands, except per share amounts)


Years ended December 31,	2004		2003		2002

Interest and dividend income
Loans, including fees	$	37,720	$	31,664	$	27,783
Investment securities:
U.S. Treasury securities		124		7		124
U.S. Government agencies and corporations		2,023		2,003		2,309
States and political subdivisions, tax-exempt		406		329		260
States and political subdivisions, taxable		197		240		381
Other investments		251		59		46
Interest-bearing deposits in other banks		11		3		5
Federal Home Loan Bank stock		57		59		78
Federal funds sold		127		242		330

Total interest and dividend income		40,916		34,606		31,316

Interest expense
Interest-bearing demand and money market		1,519		1,321		2,057
Savings		174		170		223
Time deposits of $100,000 or more		3,507		3,165		2,721
Other time deposits		3,371		3,279		3,282
Long-term debt-subordinated debentures		1,119		1,109		1,140
Federal Home Loan Bank advances		475		276		383
Short-term borrowings		83		38		42
Notes payable		482		481		481

Total interest expense		10,730		9,839		10,329

Net interest income		30,186		24,767		20,987
Provision for loan losses		2,455		1,586		791

Net interest income after provision for loan losses		27,731		23,181		20,196

Non-interest income
Service charges on deposit accounts		2,547		2,452		2,240
Investment securities gains, net		106		289		218
Merchant bankcard processing income		5,757		4,953		4,387
Dividend income from ERAS Joint Venture		—		—		33
Gain on sale of investment in ERAS Joint Venture		—		202		211
Gain on sale of government guaranteed loans		—		117		28
Fees on mortgage loans sold		1,852		2,201		1,583
Retail investment services		333		420		206
Other income		1,468		1,403		1,522

Total non-interest income		12,063		12,037		10,428

Non-interest expense
Salaries and employee benefits		14,686		12,878		10,602
Net occupancy and equipment expense		4,964		4,326		3,680
Other expense		12,274		10,365		9,350

Total non-interest expense		31,924		27,569		23,632

Income before income tax expense		7,870		7,649		6,992
Income tax expense		2,672		2,672		2,386

Income from continuing operations		5,198		4,977		4,606

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Income
(dollars in thousands, except per share amounts)


Years ended December 31,	2004		2003		2002


Discontinued operations
Income from Keys Insurance Agency, Inc. operations		—		200		206
Income tax expense		—		75		77

Income from discontinued operations		—		125		129


Net income	$	5,198	$	5,102	$	4,735


Basic earnings per common share
Continuing operations	$	0.98	$	1.17	$	1.15
Discontinued operations		—		.03		.04

Basic earnings per share	$	0.98	$	1.20	$	1.19


Diluted earnings per common share
Continuing operations	$	0.95	$	1.12	$	1.11
Discontinued operations		—		.03		.03

Diluted earnings per share	$	0.95	$	1.15	$	1.14

See accompanying notes to consolidated financial statements.

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity
(dollars in thousands, except per share amounts)


										Accumulated
					Additional					Other			Total
			Common		Paid in		Retained			Comprehensive			Shareholders’
	Shares		Stock		Capital		Earnings			Income			Equity

Balance, January 1, 2002		3,946,100	$	395	$	8,222	$	20,019		$	36		$	28,672

Comprehensive income:
Net income								4,735						4,735
Other comprehensive income, net of tax expense of $650:
Unrealized holding gain on securities transferred into the available for sale category from the held to maturity category											271
Net market valuation adjustment on securities available for sale											944
Less: reclassification adjustment for gains included in net income											(136	)
Other comprehensive income, net of tax														1,079

Comprehensive income													$	5,814

Exercise of stock options		89,525		8		584								592
Income tax benefit from stock options exercised						160								160
Cash dividends declared, $.4325 per share								(1,732	)					(1,732	)

Balance, December 31, 2002		4,035,625	$	403	$	8,966	$	23,022		$	1,115		$	33,506

Comprehensive income:
Net income								5,102						5,102
Other comprehensive income, net of tax benefit of $464:
Net market valuation adjustment on securities available for sale											(590	)
Less: reclassification adjustment for gains included in net income											(180	)
Other comprehensive income, net of tax														(770	)

Comprehensive income													$	4,332

Exercise of stock options		115,050		12		723								735
Income tax benefit from stock options exercised						251								251
Private placement of common shares		280,653		28		4,315								4,343
Cash dividends declared, $.4425 per share								(1,921	)					(1,921	)

Balance, December 31, 2003		4,431,328	$	443	$	14,255	$	26,203		$	345		$	41,246

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity
(dollars in thousands, except per share amounts)


										Accumulated
					Additional					Other			Total
			Common		Paid in		Retained			Comprehensive			Shareholders’
	Shares		Stock		Capital		Earnings			Income			Equity

Balance, December 31, 2003		4,431,328	$	443	$	14,255	$	26,203		$	345		$	41,246
Comprehensive income:
Net income								5,198						5,198
Other comprehensive income, net of tax benefit of $32:
Net market valuation adjustment on securities available for sale											15
Less: reclassification adjustment for gains included in net income											(66	)
Other comprehensive income, net of tax														(51	)

Comprehensive income													$	5,147

Public offering of common shares		1,150,000		115		23,115								23,230
Exercise of stock options		97,911		10		668								678
Income tax benefit from stock options exercised						246								246
Cash dividends declared, $.4525 per share								(2,433	)					(2,433	)

Balance, December 31, 2004		5,679,239	$	568	$	38,284	$	28,968		$	294		$	68,114

See accompanying notes to consolidated financial statements.

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows
(in thousands)


Years ended December 31,	2004			2003			2002

Cash flows from operating activities
Net income	$	5,198		$	5,102		$	4,735
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of investments		62			59			100
Amortization of intangible assets		295			292			297
Depreciation of premises and equipment		1,950			1,756			1,528
Loss on sale of servicing rights		—			—			3
Loss on sale of assets of Keys Insurance Agency, Inc.		—			15			—
Gain on sale of investment in ERAS Joint Venture		—			(202	)		(211	)
Provision for loan losses		2,455			1,586			791
Provision for losses on unfunded loan commitments		47			39			25
Deferred income tax benefit		(90	)		(852	)		(249	)
Deferred net loan costs and fees		(342	)		(1,031	)		(941	)
Investment securities net gains		(106	)		(289	)		(218	)
Gain on sales/disposition of premises and equipment, net		(2	)		(2	)		(8	)
Gains on sales of government guaranteed loans, net		—			(117	)		(28	)
Gain on sale of Investment Center intangible		(50	)		—			—
Mortgage loans originated for sale		(108,543	)		(111,011	)		(83,233	)
Proceeds from sales of mortgage loans		108,543			119,345			85,096
Fees on mortgage loans sold		(1,852	)		(2,201	)		(1,583	)
Increase in accrued interest receivable and other assets		(1,756	)		(1,690	)		(3,309	)
Increase (decrease) in accrued interest payable and other liabilities		992			(1,225	)		2,533


Net cash provided by operating activities		6,801			9,574			5,328


Cash flows from investing activities
Purchases of investment securities available for sale		(38,368	)		(27,846	)		(24,404	)
Sales of investment securities available for sale		9,281			4,000			14,343
Repayments of principal and maturities of investment securities available for sale		3,797			24,553			9,994
Net (purchase) sale of FHLB stock		(660	)		(890	)		140
Proceeds from sales of government guaranteed loans		569			2,241			542
Proceeds from sale of Investment Center intangible		50			—			—
Proceeds from sale of investment in ERAS JV		—			327			340
Proceeds from sale of assets of Keys Insurance Agency, Inc.		—			184			—
Payment on note receivable from sale of option		—			—			300
Net proceeds received from servicing rights sales		—			—			33
Loans originated or acquired, net of principal repayments		(115,910	)		(97,599	)		(63,348	)
Purchase of life insurance policies		(700	)		(250	)		(1,795	)
Purchases of premises and equipment		(9,495	)		(3,492	)		(3,375	)
Sales of premises and equipment		100			5			31


Net cash used by investing activities		(151,336	)		(98,767	)		(67,199	)

-Continued-

TIB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows
(in thousands)


Years ended December 31,	2004			2003			2002

Cash flows from financing activities
Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase		8,116			(538	)		3,845
Net increase (decrease) in FHLB short-term advances		(5,000	)		15,000			(5,000	)
Proceeds from FHLB long-term advances		25,000			30,000			—
Repayments of FHLB long-term advances		(30,000	)		(20,000	)		—
Net increase in demand, money market and savings accounts		87,894			25,716			39,081
Net increase in time deposits		46,152			45,414			27,866
Proceeds from exercise of stock options		678			735			592
Proceeds from public offering of common stock		23,230			—			—
Proceeds from private placement of common stock		—			4,343			—
Cash dividends paid		(2,278	)		(1,866	)		(1,713	)


Net cash provided by financing activities		153,792			98,804			64,671


Net increase in cash and cash equivalents		9,257			9,611			2,800

Cash and cash equivalents at beginning of year		33,681			24,070			21,270


Cash and cash equivalents at end of year	$	42,938		$	33,681		$	24,070


Supplemental disclosures of cash paid:
Interest	$	10,542		$	9,211		$	10,790
Income taxes		1,945			3,775			2,741

See accompanying notes to consolidated financial statements.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 1 - Summary of Significant Accounting Policies

Principles of Consolidation and Nature of Operations

TIB Financial Corp. is a financial holding company headquartered in Naples, Florida. The consolidated financial statements include the accounts of TIB Financial Corp. (Parent Company) and its wholly-owned subsidiaries, TIB Bank (Bank), Keys Insurance Agency, Inc. (assets sold in August 2003 – see Note 20), and TIB Software and Services, Inc. (assets sold in 2003 – see Note 2), collectively known as the “Company.” All significant intercompany accounts and transactions have been eliminated in consolidation. TIBFL Statutory Trust I and TIBFL Statutory Trust II were formed in conjunction with the issuance of trust preferred securities as further discussed in Note 10.

TIB Bank is the Company’s primary operating subsidiary. The Bank provides banking services from its sixteen branch locations in Monroe, Miami-Dade, Collier and Lee counties, Florida.

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

Use of Estimates and Assumptions

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. A material estimate that is particularly susceptible to significant change in the near term is the allowance for loan losses. Another material estimate is the fair value of financial instruments. Changes in assumptions or in market conditions could significantly affect the fair value estimates.

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold, and interest-bearing deposits at the Federal Home Loan Bank of Atlanta. Net cash flows are reported for loan and deposit transactions.

Investment Securities

Investment securities which management has the ability and intent to hold to maturity are reported at amortized cost. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income. Other securities such as Federal Home Loan Bank stock are carried at cost.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method based on the amortized cost of the security sold.

Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than temporary losses, management considers: (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, and (3) the Company’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Loans

Loans are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. If the collectibility of interest appears doubtful, the accrual of interest is discontinued and all unpaid interest is reversed. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Gains on sales of government guaranteed loans are recognized as income when the sales occur.

Loans Held for Sale

The majority of fixed rate mortgage loans are originated by the Bank and sold servicing released to a third party immediately without recourse. All fees are recognized as income at the time of the sale. Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses, which is increased by the provision for loan losses and decreased by charge-offs less recoveries. Loan losses are charged against the allowance when management believes the uncollectiblity of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required based on factors including past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors.

A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. Individual commercial and commercial real estate loans exceeding certain size thresholds established by management are individually evaluated for impairment. If a loan is considered to be impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer, indirect, and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Premises and Equipment

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

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Costs after acquisition are expensed.

Goodwill and Other Intangible Assets

Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Upon adopting new accounting guidance in 2002, the Company ceased amortizing goodwill. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Other intangible assets include amounts for servicing rights on government guaranteed loans and core deposit base premiums arising from branch acquisitions and are initially measured at fair value. Servicing rights are being amortized over the expected life of the related loan. The deposit base premiums are being amortized using the straight–line method over an estimated life of 10 years.

Long-term Assets

Long-lived assets, including premises and equipment, core deposit and other intangible assets, are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Company Owned Life Insurance

The Company has purchased life insurance polices on certain key executives. Company owned life insurance is recorded at its cash surrender value, or the amount that can be realized, and included in other assets on the balance sheet.

Income Taxes

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws.

Earnings Per Common Share

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under stock options.

Earnings per share have been computed based on the following for the years ended December 31:


	2004		2003		2002

Weighted average number of common shares outstanding:
Basic		5,309,860		4,257,224		3,992,775
Dilutive effect of options outstanding		169,836		178,637		152,080

Diluted		5,479,696		4,435,861		4,144,855

Stock options for 29,720, 5,027, and 152,955 shares of common stock were not considered in computing diluted earnings per common share for 2004, 2003, and 2002 because they were anti-dilutive. The effect of stock options, as described in Note 15, is the sole common stock equivalent for purposes of calculating diluted earnings per common share.

Stock-Based Compensation

Employee compensation expense under stock options is reported using the intrinsic value method. No stock-based compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation.”


	2004		2003		2002

Net income, as reported	$	5,198	$	5,102	$	4,735
Stock-based compensation expense determined under fair value based method, net of tax		215		173		157

Pro forma net income		4,983	$	4,929	$	4,578


Basic earnings per share as reported	$	0.98	$	1.20	$	1.19
Pro forma basic earnings per share		0.94		1.16		1.15
Diluted earnings per share as reported		0.95		1.15		1.14
Pro forma diluted earnings per share		0.91		1.11		1.10

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


	2004			2003			2002

Dividend yield		2.3	%		2.7	%		3.2	%
Risk-free interest rate	4.0% to 4.1%			4.0% to 4.2%			4.4% to 5.4%
Expected option life	9 years			9 years			9.2 years
Volatility		.33			.31			.29
Weighted average fair value of options granted during year	$	8.16		$	5.83		$	3.69

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are now such matters that will have a material effect on the financial statements.

Operating Segments

Internal financial information is primarily reported and aggregated in three lines of business: community banking, merchant bankcard, and parent and other.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 18. Fair value estimates include uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Recent Accounting Pronouncements

During 2004, the FASB revised Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123R”) which established accounting requirements for share-based compensation to employees and carries forward prior guidance on accounting for awards to non-employees. The provisions of this statement will become effective for reporting periods beginning after June 15, 2005 for all equity awards granted after the effective date and for the subsequent vesting of previously granted awards. SFAS 123R requires an entity to recognize compensation expense based on an estimate of the fair value and number of awards expected to actually vest, exclusive of awards expected to be forfeited. Currently, the Company accounts for stock options granted to employees according to the provisions of APB Opinion No. 25, whereby compensation expense is recorded based upon the intrinsic value method. The stock-based compensation table on the previous page illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation. The Company is required to and will adopt SFAS 123R on July 1, 2005.

In December 2004, the FASB issued Statement No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions.” This statement amends the principle of APB No. 29 that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged and more broadly provides for exceptions regarding exchanges of nonmonetary assets that do not have commercial substance. This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of this standard is not expected to have a material impact on the financial condition, the results of operations, or liquidity of the Company.

In March 2004, the FASB Emerging Issues Task Force (EITF) released Issue 03-1, “Meaning of Other Than Temporary Impairment and Its Application to Certain Investments,” which addressed other-than-temporary impairment for certain debt and equity investments. The recognition and measurement requirements of Issue 03-1, and other disclosure requirements not already implemented, were effective for periods beginning after June 15, 2004. In September 2004, the FASB staff issued FASB Staff Position (FSP) EITF 03-1-1, which delayed the effective date for certain measurement and recognition guidance contained in Issue 03-1. The FSP requires the application of pre-existing other-than-temporary guidance during the period of delay until a final consensus is reached. Management does not anticipate the issuance of the final consensus will have a material impact on the financial condition, the results of operations, or liquidity of the Company.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

In March 2004, the SEC issued Staff Accounting Bulletin No. 105, “Application of Accounting Principles to Loan Commitments” (SAB 105). This bulletin was issued to inform registrants of the SEC’s view that the fair value of the recorded loan commitments, which are required to follow derivative accounting under FAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” should not consider the expected future cash flows related to the associated servicing of the future loan. The provisions of SAB 105 must be applied to loan commitments accounted for as derivatives that are entered into after March 31, 2004. The adoption of this Staff Accounting Bulletin did not have a material impact on the financial condition, the results of operations, or liquidity of the Company.

In December 2003, The American Institute of Certified Public Accountants issued Statement of Position (SOP) 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer.” SOP 03-3 requires acquired loans, including debt securities and loans acquired in a business combination, to be recorded at the amount of the purchaser’s initial investment and prohibits carrying over valuation allowances from the seller for these loans that have evidence of deterioration in credit quality since origination, and it is probable all contractual cash flows on the loan will be unable to be collected. The provisions of this SOP are effective for loans acquired in fiscal years beginning after December 15, 2004 and their adoption is not expected to have a material impact on the financial condition, the results of operations, or liquidity of the Company.

Reclassifications

Some items in the prior year financial statements were reclassified to conform to the current presentation.

Note 2 - Acquisitions and Divestitures

In 1998, the Parent Company’s subsidiary, TIB Software and Services, Inc., acquired a 30 percent interest in ERAS Joint Venture (the “Venture”), a general partnership, in exchange for consideration of $791. The Venture’s primary business is item processing and the design, development, installation and maintenance of accounting software for financial institutions. Goodwill associated with the transaction totaled $638 and was being amortized over a period of ten years through December 31, 2001, at which time the amortization was discontinued. Through December 31, 2001, the investment in the Venture was accounted for using the equity method. On December 31, 2001, the Company sold two thirds of its ownership interest in the Venture for $1,333. The Company recognized a gain of $820 on the transaction. This sale reduced the Company’s ownership in the Venture to 10%. Beginning January 1, 2002, the investment in the Venture was accounted for using the cost method. On October 4, 2002, the Company sold 5.1% of the Company’s 10% interest in the Venture for $340. The Company recognized a gain of $211 on the transaction. This sale, accompanied by the additional transfer of assets by other owners into the Venture, reduced the Company’s ownership in the Venture to 4.53%. The Venture also made a dividend distribution to the Company in 2002 in the amount of $33. On May 29, 2003, TIB Software and Services, Inc. sold its remaining interest in the Venture for $327. The Company recognized a pretax gain of $202 on the transaction. In March 2004, the Company filed Articles of Dissolution dissolving TIB Software and Services, Inc.

ERAS Joint Venture is the Bank’s item processor. Payments of approximately $577, $579 and $483 were made by the Bank to the Venture in 2004, 2003, and 2002, respectively. Of the amount paid in 2003, approximately $249 was paid to the Venture through the sale date of May 29, 2003.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

On October 31, 2000, the Company purchased Keys Insurance Agency of Monroe County, Inc. which was 100% owned by a company director. Keys Insurance Agency, Inc. (the new name subsequent to the purchase) had three offices in the Florida Keys and brokered a full line of commercial and residential hazard insurance coverages as well as life and health insurance and annuities. The purchase price for the net assets of the agency was $1,870 which consisted primarily of intangible assets. The consideration consisted of $220 of Company common stock (21,463 shares) and $1,650 in cash (paid at closing). Under the purchase agreement, annual cash payments of $110 were to be made following each of the first three anniversaries of the closing date, subject to the agency achieving certain earnings thresholds. Any of this additional consideration that was paid at the end of each contingency period would at that time be recorded as goodwill and increase the total recorded purchase price of the agency. No amount was required to be paid in 2002 or 2003. This acquisition was recorded using the purchase method of accounting.

On September 25, 2001, Keys Insurance Agency, Inc. purchased BonData Group Limited, Inc. a Ft Myers, Florida based insurance agency specializing in surety bond underwriting and placement. Total consideration paid at closing for the agency was $273. This was comprised of approximately $68 in the Company’s common stock (5,640 shares) and approximately $205 in cash. Under the purchase agreement, annual cash payments of $24 were to be made following each of the first two anniversaries of the closing date, subject to the agency achieving certain earnings thresholds. Any of this additional consideration that was paid at the end of each contingency period, would at that time be recorded as goodwill and increase the total recorded purchase price of the agency. No amount was required to be paid in 2002 or 2003. This acquisition was recorded using the purchase method of accounting.

On August 15, 2003, the Company closed the sale of Keys Insurance Agency, Inc., a wholly owned subsidiary of the Company, to Derek Martin-Vegue and his partner. Mr. Martin-Vegue is a former director of the Company and TIB Bank. The transaction was structured as a sale of the agency assets. The buyer paid $2,205 in cash at the closing. Of the cash payment at closing, proceeds of $2,021 were pursuant to a loan from TIB Bank (a subsidiary of the Company) to the buyer. The Company recognized a loss of $15 on the transaction. Therefore, the results of operations of Keys Insurance Agency, Inc. are included in the Consolidated Statements of Income as “discontinued operations” (Note 20). In March 2004, the Company filed Articles of Dissolution dissolving Keys Insurance Agency, Inc.

On December 15, 2004, the Company closed the sale of certain intangible assets which primarily comprised a book of business which served as the foundation of the Company’s investment center operations. The buyer paid $50 in cash at the closing. The Company recognized a gain of $50 on the transaction. Under the purchase agreement, additional cash payments totaling up to $60 may be paid to the Company subject to the achievement of certain production and customer and asset retention thresholds. Additionally, the Company will receive monthly cash payments of 10% of production related to new referrals made through December 31, 2005.

Note 3 - Cash and Due From Banks

Cash on hand or on deposit with the Federal Reserve Bank of $3,979 and $3,769 was required to meet regulatory reserve and clearing requirements at December 31, 2004, and December 31, 2003, respectively. These balances do not earn interest.

The Bank maintains an interest bearing account at the Federal Home Loan Bank of Atlanta. The total on deposit was approximately $203 and $170 at December 31, 2004 and December 31, 2003, respectively.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 4 - Investment Securities

The amortized cost, estimated fair value, and the related gross unrealized gains and losses recognized in accumulated other comprehensive income, are as follows for investment securities available for sale:


	Amortized		Unrealized		Unrealized		Estimated
*December 31, 2004*	Cost		Gains		Losses		Fair Value

U.S. Treasury securities	$	5,178	$	5	$	29	$	5,154
U.S. Government agencies and corporations		54,228		104		869		53,463
States and political subdivisions- tax exempt		9,596		246		26		9,816
States and political subdivision - taxable		2,862		17		23		2,856
Marketable equity securities		3,000		987		—		3,987
Mortgage-backed securities		2,473		58		—		2,531

	$	77,337	$	1,417	$	947	$	77,807


	Amortized		Unrealized		Unrealized		Estimated
*December 31, 2003*	Cost		Gains		Losses		Fair Value

U.S. Treasury securities	$	209	$	9	$	—	$	218
U.S. Government agencies and corporations		31,357		425		663		31,119
States and political subdivisions- tax exempt		8,838		378		59		9,157
States and political subdivision - taxable		3,559		42		101		3,500
Marketable equity securities		3,000		395		—		3,395
Mortgage-backed securities		5,041		128		1		5,168

	$	52,004	$	1,377	$	824	$	52,557

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Securities with unrealized losses not recognized in income are as follows:


*December 31, 2004*	Less than 12 months				12 months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

U.S. Treasury securities	$	5,046	$	29	$	—	$	—	$	5,046	$	29
U.S. Government agencies and corporations		24,858		201		20,379		668		45,237		869
States and political subdivisions – tax exempt		2,421		22		230		4		2,651		26
States and political subdivision - taxable		2,312		19		131		4		2,443		23

Total temporarily impaired	$	34,637	$	271	$	20,740	$	676	$	55,377	$	947


*December 31, 2003*	Less than 12 months				12 months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

U.S. Government agencies and corporations	$	20,396	$	663	$	—	$	—	$	20,396	$	663
States and political subdivisions - tax exempt		3,055		59		—		—		3,055		59
States and political subdivision - taxable		3,000		101		—		—		3,000		101
Mortgage-backed securities		132		1		—		—		132		1

Total temporarily impaired	$	26,583	$	824	$	—	$	—	$	26,583	$	824

The Company views the unrealized losses in the above table to be temporary in nature for the following reasons. First, the decline in market values are mostly due to an increase in market rates and are not credit related. These securities are mostly AAA rated securities and have experienced no significant deterioration in value due to credit quality concerns. Second, the magnitude of the unrealized losses at about 2% of the fair value of those securities with losses is consistent with normal fluctuations of value due to the volatility of market interest rates. Finally, the nature of what makes up the security portfolio is determined by the overall balance sheet of the Company and currently it is suitable for the Company’s security portfolio to be primarily comprised of fixed rate securities. Fixed rate securities will by their nature react in price inversely to changes in market rates and that is liable to occur in both directions.

The amortized cost and estimated fair value of investment securities available for sale at December 31, 2004, by contractual maturity, are shown as follows. Expected maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)


	Investment Securities
	Available for Sale
	Amortized		Estimated
December 31, 2004	Cost		Fair Value

Due in one year or less	$	—	$	—
Due after one year through five years		41,010		40,807
Due after five years through ten years		26,184		25,860
Due after ten years		4,670		4,622
Marketable equity securities		3,000		3,987
Mortgage-backed securities		2,473		2,531

	$	77,337	$	77,807

At December 31, 2004, securities with a fair value of approximately $25,561 are subject to call during 2005.

Sales of available for sale securities were as follows:


	2004			2003		2002

Proceeds	$	9,281		$	4,000	$	14,343
Gross gains		146			280		200
Gross losses		(43	)		—		—

The tax provision related to net realized gains was $39, $105 and $75 during 2004, 2003 and 2002, respectively.

Maturities, principal repayments, and calls of investment securities available for sale during 2004, 2003 and 2002 were $3,797, $24,553 and $9,994, respectively. Net gains (losses) realized from calls and mandatory redemptions of securities during 2004, 2003 and 2002 were $3, $9 and $18, respectively.

Investment securities having carrying values of approximately $11,924 and $16,284 at December 31, 2004 and 2003, respectively, were pledged to secure public funds on deposit, securities sold under agreements to repurchase, and other purposes as required by law.

Note 5 - Loans

Major classifications of loans are as follows:


December 31,	2004		2003

Real estate mortgage loans:
Commercial	$	351,346	$	297,221
Residential		67,204		60,104
Farmland		4,971		2,317
Construction and vacant land		49,815		32,089
Commercial and agricultural loans		64,622		63,624
Indirect auto dealer loans		91,890		59,437
Home equity loans		13,856		12,574
Other consumer loans		9,817		11,232

Total loans		653,521		538,598
Net deferred loan costs		2,157		1,815


Loans, net of deferred loan costs	$	655,678	$	540,413

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

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

In 1998, the Bank made a $10,000 loan to construct a lumber mill in northern Florida. Of this amount, $6,400 had been sold by the Bank to other lenders. The loan was partially guaranteed as to principal and interest by the U.S. Department of Agriculture (USDA). In addition to business real estate and equipment, the loan was collateralized by the business owner’s interest in a trust. Under provisions of the trust agreement, beneficiaries cannot receive trust assets until November 2010.

During 2001, upon completion of foreclosure on the underlying collateral, the non-guaranteed portion of this loan and interest accrued through the foreclosure date was reclassified into other real estate ($550) and other assets (approximately $1,886) based on the fair value of the underlying-collateral. The portion of this loan guaranteed by the USDA was approximately $1,600 at December 31, 2004 and December 31, 2003, and is accruing interest. Accrued interest on this loan totals approximately $677 and $590 at December 31, 2004 and December 31, 2003, respectively.

The Bank is pursuing a sale of the property and equipment and has incurred various expenditures. The Bank capitalized the liquidation costs and the portion of the protective advances which it expects will be fully reimbursed by the USDA. Other real estate recorded on the Bank’s books totaled $190 and $192 at December 31, 2004 and December 31, 2003, respectively. The non-guaranteed principal and interest ($1,961 at December 31, 2004 and December 31, 2003) and the reimbursable capitalized liquidation costs and protective advance costs totaling approximately $704 and $511 at December 31, 2004 and December 31, 2003, respectively are included as “other assets” in the financial statements.

The Bank sold certain pieces of equipment associated with the lumber mill property. Proceeds from the sales were used to reduce the other real estate amount and liquidation cost amounts recorded on the Bank’s books. In 2003, the Bank wrote down the carrying amount of the other real estate by $262 based upon anticipated proceeds from the sale of the property and remaining equipment.

Florida law requires a bank to liquidate or charge off repossessed real property within five years, and repossessed personal property within six months. The Bank was awarded title to the real property on June 12, 2001, and an adjudicated interest in the owner’s trust proceeds. The time constraints imposed by Florida law required that the personal property be disposed of or charged off by December 2001. The Bank applied to the State of Florida for an extension to carry the personal property on the Bank’s books and was granted an extension to carry the personal property on its books until June 11, 2003. Since the property had not been liquidated as of June 11^th, the Bank charged-off the non guaranteed principal and interest totaling $1,961 at June 30, 2003, for regulatory purposes. Since the Company believes this amount is ultimately realizable, it did not write off this amount for financial statement purposes under generally accepted accounting principles.

Activity in the allowance for loan losses is as follows:


Years ended December 31,	2004			2003			2002

Balance, beginning of year	$	5,216		$	4,272		$	3,675

Provision for loan losses charged to expense		2,455			1,586			791
Loans charged off		(1,487	)		(667	)		(302	)
Recoveries of loans previously charged off		59			25			108

Balance, end of year	$	6,243		$	5,216		$	4,272

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Impaired loans are as follows:


Years ended December 31,	2004		2003

Year end loans with no allocated allowance for loan losses	$	2,018	$	2,737
Year end loans with allocated allowance for loan losses		—		—

Total	$	2,018	$	2,737


Amount of the allowance for loan losses allocated	$	—	$	—


	2004		2003		2002

Average of impaired loans during the year	$	1,005	$	1,088	$	416

Interest income recognized during impairment		64		72		6
Cash basis interest income recognized		—		—		3

Non-performing loans include nonaccrual loans and accruing loans contractually past due 90 days or more. Nonaccrual loans are comprised principally of loans 90 days past due as well as certain loans, which are current but where serious doubt exists as to the ability of the borrower to comply with the repayment terms. Interest previously accrued and not yet paid on nonaccrual loans is reversed during the period in which the loan is placed in a nonaccrual status. Non-performing loans are as follows:


Years ended December 31,	2004		2003

Nonaccrual loans	$	704	$	390

Loans past due over 90 days still on accrual (a)		—		—

Non-performing loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category.

(a) Non-performing loans at December 31, 2004 and 2003, excludes the $1,600 loan discussed previously that is guaranteed for both principal and interest by the USDA.

Note 6 - Premises and Equipment

A summary of the cost and accumulated depreciation of premises and equipment follows:


							Estimated Useful
December 31,	2004			2003			Life

Land	$	9,668		$	5,999
Buildings and leasehold improvements		17,227			15,216			4 to 40 years
Furniture, fixtures and equipment		13,354			11,127			1 to 40 years
Construction in progress		151			691

		40,400			33,033
Less accumulated depreciation		(12,841	)		(11,960	)

Premises and equipment, net	$	27,559		$	21,073

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

The Bank is obligated under operating leases for office and banking premises which expire in periods varying from one to fourteen years. Future minimum lease payments, before considering renewal options that generally are present, are as follows at December 31, 2004:


Years ending December 31,

2005	$	591
2006		542
2007		499
2008		448
2009		312
Thereafter		660

	$	3,052

Rental expense for the years ended December 31, 2004, 2003 and 2002, was approximately $561, $443 and $430, respectively.

Note 7 - Goodwill and Intangible Assets

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


	2004		2003

Beginning of the year	$	155	$	2,234
Goodwill associated with sale of remaining interest of Investment in ERAS JV		—		(69	)
Goodwill associated with sale of Keys Insurance Agency, Inc.		—		(2,010	)

Balance at end of year	$	155	$	155

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


	2004						2003
	Gross						Gross
	Carrying		Accumulated		Net Book		Carrying		Accumulated		Net Book
	Amount		Amortization		Value		Amount		Amortization		Value

Core deposit intangible	$	2,941	$	1,569	$	1,372	$	2,941	$	1,284	$	1,657
Excess servicing fees		89		69		20		89		59		30

Total	$	3,030	$	1,638	$	1,392	$	3,030	$	1,343	$	1,687

Aggregate intangible asset amortization expense was $295, $292 and $297 for 2004, 2003, and 2002, respectively.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Estimated amortization expense for each of the next five years is as follows:


Years ending December 31,

2005	$	290
2006		290
2007		286
2008		249
2009		141

Note 8 - Time Deposits

Time deposits of $100 or more were $126,207 and $97,873 at December 31, 2004 and 2003, respectively.

At December 31, 2004, the scheduled maturities of time deposits are as follows:


Years ending December 31,

2005	$	168,385
2006		48,402
2007		10,324
2008		17,669
2009		6,397
Thereafter		5

	$	251,182

Note 9 – Short-Term Borrowings and Federal Home Loan Bank Advances

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

The Bank has an unsecured overnight federal funds purchased accommodation up to a maximum of $12,000 from its principal correspondent bank. The Bank also has securities sold under agreements to repurchase with commercial account holders whereby the Bank sweeps the customer’s accounts on a daily basis and pays interest on these amounts. These agreements are collateralized by investment securities chosen by the Bank.

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

The Bank invested in Federal Home Loan Bank stock for the purpose of establishing credit lines with the Federal Home Loan Bank. The credit availability to the Bank is equal to 20% of the Bank’s total assets as reported on the most recent quarterly financial information submitted to the regulators. The credit availability approximated $165,565 at December 31, 2004. At December 31, 2004, in addition to a $15,000 letter of credit used in lieu of pledging securities to the State of Florida, there was $35,000 in advances outstanding. At December 31, 2003, the amount of outstanding advances was $45,000. The outstanding amount at December 31, 2004 consists of one $10,000 daily advance and one $25,000 advance maturing in March 2006. On December 31, 2004 the rate on the daily advance was 2.44% and the rate on the long term advance was 2.38%, repricing quarterly. Advances are secured by the Bank’s one-to-four-family residential mortgage loans.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

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


Years ended December 31,	2004			2003

Federal funds purchased:
Balance:
Average daily outstanding	$	460		$	142
Year-end outstanding		—			—
Maximum month-end outstanding		4,519			—
Rate:
Weighted average for year		2.2	%		1.7	%
Weighted average interest rate at December 31		n/a			n/a

Securities sold under agreements to repurchase:
Balance:
Average daily outstanding	$	5,142		$	3,064
Year-end outstanding		9,947			2,943
Maximum month-end outstanding		9,947			4,579
Rate:
Weighted average for year		1.3	%		1.0	%
Weighted average interest rate at December 31		2.1	%		0.8	%

Treasury, tax and loan note option:
Balance:
Average daily outstanding	$	647		$	633
Year-end outstanding		2,210			1,098
Maximum month-end outstanding		2,210			1,700
Rate:
Weighted average for year		1.1	%		0.9	%
Weighted average interest rate at December 31		1.9	%		0.7	%

Advances from the Federal Home Loan Bank-Short Term:
Balance:
Average daily outstanding	$	9,090		$	4,647
Year-end outstanding		10,000			15,000
Maximum month-end outstanding		25,000			15,000
Rate:
Weighted average for year		1.8	%		1.3	%
Weighted average interest rate at December 31		2.4	%		1.2	%

Advances from the Federal Home Loan Bank-Long Term:
Balance:
Average daily outstanding	$	20,246		$	16,959
Year-end outstanding		25,000			30,000
Maximum month-end outstanding		25,000			30,000
Rate:
Weighted average for year		1.6	%		1.3	%
Weighted average interest rate at December 31		2.4	%		1.2	%

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 10 – Other Borrowings

Line of Credit

The Company has a $3,000 revolving line of credit with Independent Bankers’ Bank of Florida. Amounts outstanding under the line bear interest equal to the prime rate published in The Wall Street Journal minus one half percent, which is subject to change daily, and is subject to a 4.25% floor. Interest is payable monthly, and any principal is due on demand, or if no demand is made, at maturity on April 30, 2005. This credit facility is secured by 100 percent of the outstanding shares of the Bank and requires, among other things, that the Bank maintain a minimum Tier 1 capital ratio of 6 percent. There were no amounts outstanding under this line at December 31, 2004 or 2003.

Notes Payable

The Company entered into an agreement with the Company’s largest shareholder effective July 1, 2000, to purchase 525,000 shares of the Company’s common stock in exchange for four subordinated notes payable of the Company totaling $5,250. The interest rate on these notes was 13% per annum, with interest payments required quarterly. The principal balance was payable in full on October 1, 2010, the maturity date of the notes, and the notes could be prepaid by the Company at par any time after July 1, 2003. Effective January 1, 2002, the interest rate was reduced to 9%, the option to prepay was extended to January 1, 2007, and the maturity date was extended to January 1, 2012. On January 3, 2005 the Company repaid $1,250 of these notes at a 3% premium.

Subordinated Debentures

On September 7, 2000, the Company participated in a pooled offering of trust preferred securities. The Company formed TIBFL Statutory Trust I (the “Trust”) a wholly-owned statutory trust subsidiary for the purpose of issuing the trust preferred securities. The Trust used the proceeds from the issuance of $8,000 in trust preferred securities to acquire junior subordinated debentures of the Company. The trust preferred securities essentially mirror the debt securities, carrying a cumulative preferred dividend at a fixed rate equal to the 10.6% interest rate on the debt securities. The debt securities and the trust preferred securities each have 30-year lives. The trust preferred securities and the debt securities are callable by the Company or the Trust, at their respective option after ten years, and at varying premiums and sooner in specific events, subject to prior approval by the Federal Reserve Board, if then required. The Company has treated the trust preferred securities as Tier 1 capital up to the maximum amount allowed, and the remainder as Tier 2 capital for federal regulatory purposes (see Note 14).

On July 31, 2001, the Company participated in a pooled offering of trust preferred securities. The Company formed TIBFL Statutory Trust II (the “Trust II”) a wholly-owned statutory trust subsidiary for the purpose of issuing the trust preferred securities. The Trust II used the proceeds from the issuance of $5,000 in trust preferred securities to acquire junior subordinated debentures of the Company. The trust preferred securities essentially mirror the debt securities, carrying a cumulative preferred dividend at a variable rate equal to the interest rate on the debt securities (three month LIBOR plus 358 basis points). The initial rate in effect at the time of issuance was 7.29% and is subject to change quarterly. The rate in effect at December 31, 2004 was 5.74%. The debt securities and the trust preferred securities each have 30-year lives. The trust preferred securities and the debt securities are callable by the Company or the Trust, at their respective option after five years, and at varying premiums and sooner in specific events, subject to prior approval by the Federal Reserve Board, if then required. The Company has treated the trust preferred securities as Tier 1 capital up to the maximum amount allowed, and the remainder as Tier 2 capital for federal regulatory purposes (see Note 14).

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Contractual Maturities

At December 31, 2004, the contractual maturities of long-term debt were as follows:


	Fixed Rate		Floating Rate		Total
Due in 2005	$	—	$	—	$	—

Due in 2006		—		—		—
Due in 2007		—		—		—
Due in 2008		—		—		—
Due in 2009		—		—		—
Thereafter		13,250		5,000		18,250
Total long-term debt	$	13,250	$	5,000	$	18,250

Note 11- Income Taxes

Income tax expense (benefit) was as follows:


Years ended December 31,	2004			2003			2002

Current income tax provision:
Federal	$	2,331		$	3,049		$	2,290
State		431			550			422

		2,762			3,599			2,712

Deferred tax benefit:
Federal		(76	)		(722	)		(210	)
State		(14	)		(130	)		(39	)

		(90	)		(852	)		(249	)

Total	$	2,672		$	2,747		$	2,463

A reconciliation of income tax computed at the 34% Federal statutory income tax rate to total income taxes reported is as follows:


Years ended December 31,	2004			2003			2002

Pretax income	$	7,870		$	7,849		$	7,198

Income taxes computed at Federal statutory tax rate	$	2,676		$	2,669		$	2,448
Effect of:
Tax-exempt income, net		(340	)		(275	)		(213	)
State income taxes, net		275			277			253
Other, net		61			76			(25	)


Total	$	2,672		$	2,747		$	2,463

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Year end deferred tax assets and liabilities were due to the following:


December 31,	2004			2003

Allowance for loan losses	$	2,475		$	1,959
Core deposit intangible		212			179
Deferred compensation		555			339
Other		116			109

Total gross deferred tax assets		3,358			2,586


Accumulated depreciation		(871	)		(594	)
Deferred loan costs		(401	)		—
Goodwill		(17	)		(11	)
Gain on building swap		(68	)		(70	)
Net unrealized gains on securities available for sale		(177	)		(208	)

Total gross deferred tax liabilities		(1,534	)		(883	)


Net deferred tax asset	$	1,824		$	1,703

Note 12 – Employee Benefit Plans

The Bank maintains an Employee Stock Ownership Plan with 401(k) provisions that covers all employees who are qualified as to age and length of service. Three types of contributions can be made to the Plan by the Bank and participants: basic voluntary contributions which are discretionary contributions made by all participants; a matching contribution, whereby the Bank will match 50 percent of salary reduction contributions up to 4 percent of compensation, not to exceed a maximum contribution of $1 per employee; and an additional discretionary contribution which may be made by the Bank and allocated to the accounts of participants on the basis of total relative compensation. The Bank contributed $94, $69 and $202 to the plan in 2004, 2003 and 2002, respectively. As of December 31, 2004, the Plan contained approximately 151,000 shares of the Company’s common stock.

In 2001, the Bank entered into salary continuation agreements with three of its executive officers. Two additional executive officers entered into salary continuation agreements in 2003 and another in 2004. The plan is a nonqualified deferred compensation arrangement that is designed to provide supplemental retirement income benefits to participants. The Bank expensed $309, $254 and $173 for the accrual of future salary continuation benefits in 2004, 2003 and 2002, respectively. The Bank has purchased single premium life insurance policies on these individuals. Cash value income (net of related insurance premium expense) totaled $202, $225 and $161 in 2004, 2003 and 2002, respectively. Other assets included $5,729 and $4,827 in surrender value and other liabilities included salary continuation benefits payable of $860 and $551 at December 31, 2004 and 2003, respectively.

In 2001, the Bank established a non qualified retirement benefit plan for eligible Bank directors. Under the plan, the Company pays each participant, or their beneficiary, the amount of fees deferred and interest in 120 equal monthly installments, beginning the month following the director’s normal retirement date. The Bank expensed $273, $165 and $119 for the accrual of current and future retirement benefits in 2004, 2003 and 2002, respectively, which included $236, $146 and $102 in 2004, 2003 and 2002 related to the annual director retainer fees and monthly meeting fees that certain directors elected to defer. The Bank has purchased single premium split dollar life insurance policies on these individuals. Cash value income (net of related insurance premium expense) totaled $138, $152 and $147 in 2004, 2003 and 2002. Other assets included $3,854 and $3,716 in surrender value in other assets and other liabilities included retirement benefits payable of $616 and $351 at December 31, 2004 and 2003, respectively.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 13 – Related Party Transactions

The Bank had loans outstanding to certain of its executive officers, directors, and their related business interests as follows:


Beginning balance, January 1, 2004	$	2,020
New loans		596
Effect of changes in related parties		(14	)
Repayments		(697	)

Ending balance, December 31, 2004	$	1,905

Unfunded loan commitments to these individuals and their related business interests totaled $152 at December 31, 2004. Deposits from these individuals and their related interests were $3,008 and $3,583 at December 31, 2004 and 2003, respectively.

Note 14 – Shareholders’ Equity and Minimum Regulatory Capital Requirements

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

In order for the Bank to be considered well capitalized under the regulatory framework for prompt corrective action and for the Company and the Bank to be considered adequately capitalized under capital adequacy guidelines, minimum Tier 1 leverage, Tier 1 risk-based, and total risk-based ratios must be maintained. These minimum amounts and ratios along with the actual amounts and ratios for the Company and the Bank as of December 31, 2004 and 2003 are presented in the following tables.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)



	*Well Capitalized*					*Adequately Capitalized*
December 31, 2004	*Requirement*					*Requirement*					*Actual*
	Amount		Ratio			*Amount*		*Ratio*			*Amount*		*Ratio*

Tier 1 Capital (to Average Assets)
Consolidated		N/A		N/A			³$31,270		³ 4.0	%	$	78,048		10.0	%
Bank		39,069		³ 5.0	%		31,255		³ 4.0	%		81,780		10.5	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated		N/A		N/A			³$28,583		³ 4.0	%	$	78,048		10.9	%
Bank		42,857		³ 6.0	%		28,571		³ 4.0	%		81,780		11.4	%

Total Capital (to Risk Weighted Assets)
Consolidated		N/A		N/A			³$57,166		³ 8.0	%	$	89,772		12.6	%
Bank		71,428		³10.0	%		57,143		³ 8.0	%		88,254		12.4	%



	*Well Capitalized*					*Adequately Capitalized*
December 31, 2003	*Requirement*					*Requirement*					*Actual*
	Amount		Ratio			*Amount*		*Ratio*			*Amount*		*Ratio*

Tier 1 Capital (to Average Assets)
Consolidated		N/A		N/A			³$26,006		³ 4.0	%	$	50,807		7.8	%
Bank		32,483		³ 5.0	%		25,986		³ 4.0	%		55,472		8.5	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated		N/A		N/A			³$23,148		³ 4.0	%	$	50,807		8.8	%
Bank		34,676		³ 6.0	%		23,117		³ 4.0	%		55,472		9.6	%

Total Capital (to Risk Weighted Assets)
Consolidated		N/A		N/A			³$46,296		³ 8.0	%	$	61,456		10.6	%
Bank		57,793		³10.0	%		46,235		³ 8.0	%		60,871		10.5	%

At year end 2004 and 2003, the most recent regulatory notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.

Management believes, as of December 31, 2004, that the Company and the Bank meet all capital requirements to which it is subject. Tier 1 Capital includes the trust preferred securities that were issued in September 2000 and July 2001.

Under state banking law, regulatory approval will be required if the total of all dividends declared in any calendar year by the Bank exceeds the Bank’s net profits to date for that year combined with its retained net profits for the preceding two years. Retained earnings of the Bank available for payment of dividends to the Company without prior regulatory approval at December 31, 2004, is approximately $16,629.

On April 15, 2004, we closed the sale of 1,000,000 shares of our common stock at a price of $22.00 per share before commissions and expenses. The shares were sold on a firm commitment basis through Advest, Inc. Advest, Inc. also purchased an additional 150,000 shares from the Company on May 6, 2004, at $22.00 per share before commissions and expenses. The net proceeds of the offering, totaling $23,230 after $2,070 in offering costs, provided additional capital necessary to support continued loan and deposit growth.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 15 – Stock Options

As of December 31, 2004, the Company has one compensation plan under which shares of its common stock are issuable in the form of stock options, restricted shares, stock appreciation rights, performance shares or performance units. This is its 2004 Equity Incentive Plan (the “2004 Plan”), which was approved by the Company’s shareholders at the May 25, 2004 annual meeting. Previously, the Company had granted stock options under the 1994 Incentive Stock Option and Nonstatutory Stock Option Plan (the “1994 Plan”) as amended and restated as of August 31, 1996. Under the 2004 Plan, the Board of Directors of the Company may grant nonqualified stock options to any director, and incentive stock options or nonqualified stock options to any officer, key executive, administrative, or other employee including an employee who is a director of the Company. Subject to the provisions of the 2004 Plan, the maximum number of shares of common stock of the Company that may be optioned or sold through the 2014 expiration of the plan is 400,000 shares, no more than 133,000 of which may be issued pursuant to awards granted in the form of restricted shares. Such shares may be treasury, or authorized but unissued, shares of common stock of the Company. If options granted under the Plan expire or terminate for any reason without having been exercised in full, the shares not purchased shall again be available for option for the purposes of the Plan.

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

A summary of the activity in the plans is as follows:


				*Exercise Price*					*Weighted Average*
	*Shares*			*Range*					*Exercise Price*



Balance, December 31, 2001		585,402		$	5.49	—	$	14.50	$	8.96
Granted		164,000			11.21	—		14.12		12.54
Exercised		(89,525	)		5.49	—		13.50		6.63
Expired or Forfeited		(92,672	)		5.49	—		13.55		10.62

Balance, December 31, 2002		567,205			5.49	—		14.50		10.09
Granted		44,500			16.35	—		19.40		17.93
Exercised		(115,050	)		5.49	—		14.12		6.39
Expired or Forfeited		(19,150	)		5.49	—		16.35		11.46

Balance, December 31, 2003		477,505			5.49	—		19.40		11.66
Granted		37,500			22.74	—		22.79		22.76
Exercised		(97,911	)		5.49	—		14.12		6.92
Expired or Forfeited		(7,900	)		11.25	—		22.74		19.47

Balance, December 31, 2004		409,194		$	8.33	—	$	22.79	$	13.66


Options exercisable at December 31, 2004			181,944
Options exercisable at December 31, 2003			236,405
Options exercisable at December 31, 2002			282,305

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Options outstanding at December 31, 2004 were as follows:


	Outstanding Options						Options Exercisable
			Weighted
			Average		Weighted				Weighted
Range of			Remaining		Average				Average
Exercise			Contractual		Exercise				Exercise
Price	Number		Life		Price		Number		Price

$8.33 – $10.50		66,800		3.75	$	9.64		34,900	$	9.42
11.00 – 11.75		29,150		4.05		11.35		11,050		11.39
12.40 – 12.40		105,800		6.48		12.40		23,600		12.40
12.65 – 13.45		17,500		5.03		13.24		14,000		13.32
13.50 – 13.50		74,000		2.73		13.50		49,900		13.50
13.55 – 14.50		40,944		5.71		13.82		34,744		13.76
16.35 – 19.40		42,500		8.57		18.00		8,750		18.10
22.74 – 22.74		7,500		9.15		22.74		—		—
22.76 – 22.76		20,000		9.11		22.76		—		—
22.79 – 22.79		5,000		9.07		22.79		5,000		22.79

$8.33 – $22.79		409,194		5.47	$	13.66		181,944	$	12.96

Note 16 – Loan Commitments and Other Related Activities

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The contractual amount of financial instruments with off-balance-sheet risk was as follows at December 31:


	2004				2003
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate

Commitments to make loans	$	7,866	$	26,567	$	15,190	$	4,593
Unfunded commitments under lines of credit		700		71,800		1,250		51,569

Commitments to make loans are generally made for periods of 30 days. The fixed rate loan commitments have interest rates ranging from 3.95% to 18.00% and maturities ranging from 6 months to 20 years.

At December 31, 2004 and 2003, commitments under standby letters of credit aggregated approximately $2,085 and $1,543, respectively.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 17 – Supplemental Financial Data

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


Years ended December 31,	2004		2003		2002

Merchant bankcard processing expenses	$	3,869	$	3,153	$	2,780
Other merchant charges		568		503		461
Operating supplies		553		495		428
Computer services		1,773		1,533		1,627
Legal and professional fees		1,223		845		749
Marketing and community relations		866		851		865
Postage, courier, and armored car		620		700		590

Note 18 – Fair Values of Financial Instruments

Carrying amount and estimated fair values of financial instruments were as follows at December 31:


	2004				2003
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value

Financial assets:
Cash and cash equivalents	$	42,938		42,938	$	33,681	$	33,681
Investment securities available for sale		77,807		77,807		52,557		52,557
Loans, net		649,435		650,119		535,197		537,099
Federal Home Loan Bank and Independent Bankers’ Bank stock		3,035		3,035		2,376		2,376
Accrued interest receivable		4,086		4,086		3,373		3,373

Financial liabilities:
Noncontractual deposits		436,677		436,677		348,783		348,783
Contractual deposits		251,182		251,159		205,030		209,085
Federal Home Loan Bank Advances		35,000		35,000		45,000		45,000
Short-term borrowings		12,157		12,157		4,041		4,041
Notes payable		5,250		5,388		5,250		5,546
Subordinated debentures		13,000		13,489		13,000		13,296
Accrued interest payable		3,692		3,692		3,504		3,504

The methods and assumptions used to estimate fair value are described as follows:

Carrying amount is the estimated fair value for cash and cash equivalents, Federal Home Loan Bank stock and other bankers’ bank stock, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values. Fair value of debt is based on current rates for similar financing. The fair value of off-balance sheet items that includes commitments to extend credit to fund commercial, consumer, real estate construction and real estate-mortgage loans and to fund standby letters of credit is considered nominal.

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 19 – Segment Reporting

TIB Financial Corp. has two reportable segments in their continuing operations: community banking and merchant bankcard processing. The community banking segment’s business is to attract deposits from the public and to use such deposits to make real estate, business and consumer loans in its primary service area. The merchant bankcard processing segment processes credit card transactions for local merchants. Parent and other is primarily comprised of the operations of the holding company.

The results of Keys Insurance Agency, Inc. are not included in the segment reporting as they are classified separately as discontinued operations in the consolidated financial statements (see Note 20).

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

Intercompany transactions have been eliminated in preparing the segment reporting amounts below.


Year ended	Community			Merchant			Parent and
December 31, 2004	Banking			Bankcard			Other			Total

Interest and dividend income	$	40,916		$	—		$	—		$	40,916
Interest expense		(9,129	)		—			(1,601	)		(10,730	)

Net interest and dividend income (expense)		31,787			—			(1,601	)		30,186

Other income		5,916			5,758			389			12,063
Depreciation and amortization		(2,202	)		(40	)		(3	)		(2,245	)
Other expense		(26,432	)		(4,828	)		(874	)		(32,134	)

Pretax segment profit (loss)	$	9,069		$	890		$	(2,089	)	$	7,870


Segment assets	$	828,886		$	32		$	407		$	829,325


Year ended	Community			Merchant			Parent and
December 31, 2003	Banking			Bankcard			Other			Total

Interest and dividend income	$	34,606		$	—		$	—		$	34,606
Interest expense		(8,249	)		—			(1,590	)		(9,839	)

Net interest and dividend income (expense)		26,357			—			(1,590	)		24,767

Other income		6,461			4,953			623			12,037
Depreciation and amortization		(1,963	)		(46	)		(4	)		(2,013	)
Other expense		(22,428	)		(3,982	)		(732	)		(27,142	)

Pretax segment profit (loss)	$	8,427		$	925		$	(1,703	)	$	7,649


Segment assets	$	668,495		$	37		$	766		$	669,298

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)


*Year ended*	Community			Merchant			Parent and
December 31, 2002	Banking			Bankcard			Other			Total

Interest and dividend income	$	31,287		$	—		$	29		$	31,316
Interest expense		(8,706	)		—			(1,623	)		(10,329	)

Net interest and dividend income (expense)		22,581			—			(1,594	)		20,987

Other income		5,594			4,387			447			10,428
Depreciation and amortization		(1,718	)		(44	)		(5	)		(1,767	)
Other expense		(18,486	)		(3,577	)		(593	)		(22,656	)

Pretax segment profit (loss)	$	7,971		$	766		$	(1,745	)	$	6,992


Segment assets	$	564,221		$	66		$	583		$	564,870

The Company discontinued separate reporting of its “Government Guaranteed Loan Sales and Servicing” segment in 2003. This segment is now included as part of the “Community Banking” segment above.

Note 20 – Discontinued Operations

On August 15, 2003, the Company closed the sale of Keys Insurance Agency, Inc., a wholly-owned subsidiary of the Company, to Derek Martin-Vegue and his partner. Mr. Martin-Vegue is a former director of the Company and TIB Bank. The transaction was structured as a sale of the agency assets. The buyer paid $2,205 in cash at the closing. Of the cash payment at closing, proceeds of $2,021 were pursuant to a loan from TIB Bank (a subsidiary of the Company) to the buyer. The Company recognized a loss of $15 on the transaction.

The results of Keys Insurance Agency, Inc. operations, which have been classified as discontinued operations in the accompanying consolidated financial statements, are summarized as follows:


Years ended December 31:	2004		2003			2002

Other income	$	—	$	1,255		$	1,801
Depreciation and amortization		—		(35	)		(57	)
Other expense		—		(1,020	)		(1,538	)

Pretax income from discontinued operations	$	—	$	200		$	206

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 21 – Condensed Financial Information of TIB Financial Corp.

Condensed Balance Sheets
(Parent Only)


December 31,	2004		2003

Assets
Cash on deposit with subsidiary	$	2,341	$	758
Dividends and other receivables from subsidiaries		10		10
Investment in bank subsidiary		84,845		58,910
Investment in TIBFL Statutory Trust I		248		248
Investment in TIBFL Statutory Trust II		155		155
Income tax receivable		—		338
Other assets		407		424


Total Assets	$	88,006	$	60,843


Liabilities and Shareholders’ Equity

Liabilities
Dividends payable	$	653	$	498
Interest payable		449		440
Notes payable		18,653		18,653
Other liabilities		137		6


Total liabilities		19,892		19,597


Shareholders’ equity
Common stock		568		443
Surplus		38,284		14,255
Retained earnings		28,968		26,203
Accumulated other comprehensive income		294		345


Total shareholders’ equity		68,114		41,246


Total Liabilities and Shareholders’ Equity	$	88,006	$	60,843

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

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

Condensed Statements of Income
(Parent Only)


Years ended December 31,	2004		2003			2002

Operating income
Dividend from bank subsidiary	$	3,708	$	832		$	782
Dividend from TIBFL Statutory Trust I		26		26			26
Dividend from TIBFL Statutory Trust II		8		8			8
Dividend from TIB Software & Services, Inc.		—		126			157
Interest income on note receivable		—		—			29
Other income		6		—			—


Total operating income		3,748		992			1,002


Operating expense
Interest expense		1,636		1,624			1,658
Other expense		553		345			305


Total operating expense		2,189		1,969			1,963


Income (loss) before income tax benefit and equity in undistributed earnings (losses) of subsidiaries		1,559		(977	)		(961	)

Income tax benefit		808		728			708


Income (loss) before equity in undistributed earnings (losses) of subsidiaries		2,367		(249	)		(253	)

Equity in undistributed earnings of bank subsidiary		2,831		5,226			4,865
Equity in undistributed losses of TIB Software & Services, Inc.		—		—			(6	)


Income from continuing operations		5,198		4,977			4,606

Discontinued operations:
Dividend from Keys Insurance Agency, Inc.		—		125			—
Equity in undistributed earnings of Keys Insurance Agency, Inc.		—		—			129

Income from discontinued operations		—		125			129


Net income	$	5,198	$	5,102		$	4,735

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

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

Condensed Statements of Cash Flows
(Parent Only)


Years ended December 31,	2004			2003			2002

Cash flows from operating activities
Net income	$	5,198		$	5,102		$	4,735
Equity in undistributed earnings of bank subsidiary		(2,831	)		(5,226	)		(4,865	)
Equity in undistributed losses of TIB Software & Services, Inc.		—			—			6
Equity in undistributed (earnings) loss of Keys Insurance Agency, Inc.		—			—			(129	)
Amortization of intangibles and other assets		17			17			37
Increase in other assets		—			(4	)		(29	)
Decrease in due to subsidiaries		—			(3	)		(147	)
Increase (decrease) in interest payable		9			(5	)		(58	)
Increase in other liabilities		6			3			3
Deferred income taxes		—			—			(89	)
Increase (decrease) in net income tax obligation		709			(3	)		(65	)

Net cash provided (used) by operating activities		3,108			(119	)		(601	)

Cash flows from investing activities
Investment in bank subsidiary		(23,155	)		(5,500	)		—
Payment on note receivable from sale of option		—			—			300
Return of capital from Keys Insurance Agency, Inc.		—			2,301			—
Return of capital from TIB Software & Services, Inc.		—			129			130

Net cash provided (used) in investing activities		(23,155	)		(3,070	)		430

Cash flows from financing activities
Proceeds from exercise of stock options		678			735			592
Proceeds from stock issuance		23,230			4,343			—
Cash dividends paid		(2,278	)		(1,866	)		(1,713	)

Net cash provided (used) by financing activities		21,630			3,212			(1,121	)

Net increase (decrease) in cash		1,583			23			(1,292	)
Cash, beginning of year		758			735			2,027

Cash, end of year	$	2,341		$	758		$	735

TIB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements
(in thousands except share and per share amounts)

Note 22 – Quarterly Financial Data (Unaudited)

The following is a summary of unaudited quarterly results for 2004 and 2003:


	2004								2003
	Fourth		Third		Second		First		Fourth		Third		Second		First

Condensed income statements:


Interest income	$	11,351	$	10,528	$	9,819	$	9,218	$	9,116	$	8,748	$	8,452	$	8,290
Net interest income		8,216		7,781		7,361		6,828		6,701		6,345		5,888		5,833
Income from continuing operations		1,331		1,337		1,257		1,273		1,464		1,141		1,210		1,162
Net income	$	1,331	$	1,337	$	1,257	$	1,273	$	1,464	$	1,163	$	1,286	$	1,189

Earnings per share:


Income from continuing operations - Basic	$	0.23	$	0.24	$	0.23	$	0.29	$	0.33	$	0.26	$	0.29	$	0.29
Income from continuing operations - Diluted	$	0.23	$	0.23	$	0.22	$	0.27	$	0.32	$	0.25	$	0.28	$	0.27

Due to the disposal of the assets of Keys Insurance Agency, Inc. in the third quarter of 2003, all previous reported quarterly financial data has been adjusted above to reflect the results of Keys Insurance Agency, Inc. as discontinued operations.

Exhibits

The following exhibits are filed with this report as indicated below:

Exhibit Numbers and Descriptions

	23.1		Consent of Independent Registered Public Accounting Firm

	31.1		Chief Executive Officer’s certification required under Section 302 of Sarbanes-Oxley Act of 2002.

	31.2		Chief Financial Officer’s certification required under Section 302 of Sarbanes-Oxley Act of 2002.

	32.1		Chief Executive Officer’s Certification required under Section 906 of Sarbanes-Oxley Act of 2002.

	32.2		Chief Financial Officer’s Certification required under Section 906 of Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 2 to Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on August 3, 2005.

TIB FINANCIAL CORP.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment No. 2 to Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on August 3, 2005.


Signature		Title

/s/ Edward V. Lett		President (Principal Executive Officer), Chief Executive Officer and Director

Edward V. Lett

/s/ Richard C. Bricker, Jr.		Director

Richard C. Bricker, Jr.

/s/ Gretchen K. Holland		Director

Gretchen K. Holland

/s/ Paul O. Jones, Jr., M.D.		Director

Paul O. Jones, Jr., M.D.

/s/ Thomas J. Longe		Director

Thomas J. Longe


Signature		Title

/s/ John G. Parks, Jr.		Director

John G. Parks, Jr.

/s/ Marvin F. Schindler		Director

Marvin F. Schindler

/s/ Otis T. Wallace		Director

Otis T. Wallace

/s/ David P. Johnson		Chief Financial and Accounting Officer

David P. Johnson


Florida		65-0655973
(State of Incorporation)		(I.R.S. Employer
		Identification No.)


599 9^th Street North
Naples, Florida		34102
(Address of Principal Executive Offices)		(Zip Code)


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SIGNATURES
EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
EX-31.1: SECTION 302 CERTIFICATION
EX-31.2: SECTION 302 CERTIFICATION
EX-32.1: SECTION 906 CERTIFICATION
EX-32.2: SECTION 906 CERTIFICATION


For the fiscal year ended December 31, 2004		Commission file number 000-21329


		/s/ Crowe Chizek and Company LLC

		Crowe Chizek and Company LLC