UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended ~~MARCH 31, 2005~~		Commission File Number
September 30, 2005		000-21329

~~TIB FINANCIAL CORP.~~

~~(Exact name of registrant as specified in its charter)~~

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

FLORIDA		65-0655973

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~599 9~~^th ~~STREET NORTH, SUITE 101, NAPLES, FLORIDA 34102-5624~~

599 9^th STREET NORTH, SUITE 101, NAPLES, FLORIDA 34102-5624

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (239) 263-3344

~~Not Applicable~~

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

~~if changed since last report)~~

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yesþ ~~or No~~o

Indicate by check mark whether the issuer is an accelerated filer (as defined in Rule 12b-2 of the Act).

x Yesþ ~~or No~~o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

o Yes x No

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


Common Stock, $0.10 Par Value		~~5,710,564~~
		5,762,262
Class		Outstanding as of ~~April 30,~~October 31, 2005

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

TIB FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)

March 31, 2005 December 31, 2004
(Unaudited)
ASSETS

Cash and due from banks $ 20,216 $ 27,410
Federal funds sold 62,391 15,528

Cash and cash equivalents 82,607 42,938

Investment securities available for sale 80,735 77,807
Loans, net of deferred loan costs and fees 719,285 655,678
Less: allowance for loan losses 6,541 6,243

Loans, net 712,744 649,435

Premises and equipment, net 27,141 27,559
Goodwill 155 155
Intangible assets, net 1,320 1,392
Accrued interest receivable and other assets 34,624 30,039

TOTAL ASSETS
$ 939,326 $ 829,325

LIABILITIES

Deposits:
Noninterest-bearing demand $ 185,012 $ 152,035
Interest-bearing 614,269 535,824

Total Deposits 799,281 687,859
Federal Home Loan Bank (FHLB) advances 25,000 35,000
Short-term borrowings 19,922 12,157
Long-term borrowings 17,000 18,250
Accrued interest payable and other liabilities 9,844 7,945

TOTAL LIABILITIES
871,047 761,211

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, 5,706,939
and 5,679,239 shares issued 571 568
Additional paid in capital 38,629 38,284
Retained earnings 29,859 28,968
Accumulated other comprehensive income (780 ) 294

TOTAL SHAREHOLDERS’ EQUITY
68,279 68,114

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 939,326 $ 829,325

	September 30, 2005			December 31, 2004
ASSETS	(Unaudited)
Cash and due from banks	$	17,981		$	27,410
Federal funds sold		61,164			15,528
Cash and cash equivalents		79,145			42,938

Investment securities available for sale		94,548			77,807

Loans, net of deferred loan costs and fees		828,081			655,678
Less: allowance for loan losses		7,153			6,243
Loans, net		820,928			649,435

Premises and equipment, net		26,718			27,559
Goodwill		155			155
Intangible assets, net		1,172			1,392
Accrued interest receivable and other assets		31,228			30,039
TOTAL ASSETS	$	1,053,894		$	829,325


LIABILITIES
Deposits:
Noninterest-bearing demand	$	166,821		$	152,035
Interest-bearing		746,524			535,824
Total deposits		913,345			687,859
Federal Home Loan Bank (FHLB) advances		25,000			35,000
Short-term borrowings		13,827			12,157
Long-term borrowings		17,000			18,250
Accrued interest payable and other liabilities		12,711			7,945
TOTAL LIABILITIES		981,883			761,211

SHAREHOLDERS’ EQUITY
Preferred stock - no par value: 5,000,000 shares authorized, no shares issued		-			-
Common stock - $.10 par value: 20,000,000 shares authorized, 5,761,746 and 5,679,239 shares issued		576			568
Additional paid in capital		40,096			38,284
Deferred compensation - restricted stock grants		(1,051	)		-
Retained earnings		32,778			28,968
Accumulated other comprehensive income (loss)		(388	)		294
TOTAL SHAREHOLDERS’ EQUITY		72,011			68,114

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,053,894		$	829,325

(See notes to consolidated financial statements)

TIB FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(dollars in thousands, except earnings per share amounts)

Three months ended
March 31,
2005 2004
INTEREST AND DIVIDEND INCOME

Loans, including fees $ 11,310 $ 8,601
Investment securities:
Taxable 636 410
Tax-exempt 160 153
Interest bearing deposits in other bank 4 1
Federal Home Loan Bank Stock 27 15
Federal funds sold 209 38

TOTAL INTEREST AND DIVIDEND INCOME
12,346 9,218

INTEREST EXPENSE

Deposits 3,101 1,892
Federal Home Loan Bank advances 175 94
Short-term borrowings 73 9
Long term borrowings 383 395

TOTAL INTEREST EXPENSE
3,732 2,390

NET INTEREST INCOME
8,614 6,828

PROVISION FOR LOAN LOSSES
586 369

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
8,028 6,459

NON-INTEREST INCOME

Service charges on deposit accounts 608 644
Investment securities gains, net — 44
Merchant bankcard processing income 1,896 1,760
Fees on mortgage loans sold 492 398
Other income 398 427

TOTAL NON-INTEREST INCOME
3,394 3,273

NON-INTEREST EXPENSE

Salaries and employee benefits 4,212 3,442
Net occupancy expense 1,276 1,122
Other expense 3,565 3,230

TOTAL NON-INTEREST EXPENSE
9,053 7,794

INCOME BEFORE INCOME TAX EXPENSE
2,369 1,938

INCOME TAX EXPENSE
822 665

NET INCOME
$ 1,547 $ 1,273

BASIC EARNINGS PER SHARE:
$ 0.27 $ 0.29
DILUTED EARNINGS PER SHARE:
$ 0.26 $ 0.27

	Three months ended September 30,				Nine months ended September 30,
INTEREST AND DIVIDEND INCOME	2005		2004		2005		2004
Loans, including fees	$	14,221	$	9,648	$	38,465	$	27,208
Investment securities:
Taxable		767		664		2,111		1,708
Tax exempt		160		173		481		498
Interest bearing deposits in other bank		2		4		8		9
Federal Home Loan Bank Stock		23		16		81		40
Federal funds sold		330		23		928		102
TOTAL INTEREST AND DIVIDEND INCOME		15,503		10,528		42,074		29,565

INTEREST EXPENSE
Deposits		4,674		2,231		11,670		6,103
Federal Home Loan Bank advances		227		95		595		259
Short-term borrowings		109		19		292		40
Long-term borrowings		399		402		1,173		1,193
TOTAL INTEREST EXPENSE		5,409		2,747		13,730		7,595

NET INTEREST INCOME		10,094		7,781		28,344		21,970

PROVISION FOR LOAN LOSSES		448		471		1,764		1,489

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		9,646		7,310		26,580		20,481

NON-INTEREST INCOME
Service charges on deposit accounts		601		619		1,776		1,900
Investment securities gains, net		1		7		1		103
Merchant bankcard processing income		1,261		1,221		4,919		4,515
Fees on mortgage loans sold		461		363		1,535		1,406
Other income		491		433		1,557		1,323
TOTAL NON-INTEREST INCOME		2,815		2,643		9,788		9,247

NON-INTEREST EXPENSE
Salaries and employee benefits		4,608		3,699		13,230		10,755
Net occupancy expense		1,386		1,212		4,011		3,525
Other expense		3,289		3,013		10,165		9,591
TOTAL NON-INTEREST EXPENSE		9,283		7,924		27,406		23,871

INCOME BEFORE INCOME TAX EXPENSE		3,178		2,029		8,962		5,857

INCOME TAX EXPENSE		1,124		692		3,177		1,990

NET INCOME	$	2,054	$	1,337	$	5,785	$	3,867

BASIC EARNINGS PER SHARE:	$	0.36	$	0.24	$	1.01	$	0.75
DILUTED EARNINGS PER SHARE:	$	0.35	$	0.23	$	0.98	$	0.72

(See notes to consolidated financial statements)

TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

(dollars in thousands, except per share amounts)

Additional Accumulated Other Total
Common Paid in Retained Comprehensive Shareholders’
Shares Stock Capital Earnings Income (Loss) Equity
Balance,January 1, 2005
5,679,239 $ 568 $ 38,284 $ 28,968 $ 294 $ 68,114
Comprehensive income:
Net income 1,547 1,547
Other comprehensive income, net of tax
benefit of $645:
Net market valuation adjustment on
securities available for sale (1,074 )
Other comprehensive income, net of tax (1,074 )

Comprehensive income 473

Exercise of stock options 27,700 3 280 283
Income tax benefit from stock options exercised 65 65
Cash dividends declared, $.115 per share — (656 ) (656 )

Balance,March 31, 2005
5,706,939 $ 571 $ 38,629 $ 29,859 $ (780 ) $ 68,279

Additional Accumulated Other Total
Common Paid in Retained Comprehensive Shareholders’
Shares Stock Capital Earnings Income (Loss) Equity
Balance,January 1, 2004
4,431,328 $ 443 $ 14,255 $ 26,203 $ 345 $ 41,246
Comprehensive income:
Net income 1,273 1,273
Other comprehensive income, net of tax
expense of $431:
Net market valuation adjustment on
securities available for sale 740
Less: reclassification adjustment for gains
included in net income (27 )
Other comprehensive income, net of tax 713

Comprehensive income 1,986

Exercise of stock options 57,736 6 420 426
Income tax benefit from stock options exercised 122 122
Cash dividends declared, $.1125 per share — (505 ) (505 )

Balance,March 31, 2004
4,489,064 $ 449 $ 14,797 $ 26,971 $ 1,058 $ 43,275

	Shares		Common Stock		Additional Paid in Capital		Deferred Compensation Restricted Stock Grants			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance, July 1, 2005		5,712,264	$	571	$	38,715	$	-		$	31,386		$	68		$	70,740
Comprehensive income:
Net income											2,054						2,054
Other comprehensive income, net of tax benefit of $273:
Net market valuation adjustment on securities available for sale														(456	)
Other comprehensive income, net of tax																	(456	)
Comprehensive income																	1,598
Restricted stock grants		35,000		3		1,087		(1,090	)								-
Amortization of deferred compensation - restricted stock grants								39									39
Exercise of stock options		14,482		2		197											199
Income tax benefit from stock options exercised						97											97
Cash dividends declared, $.115 per share											(662	)					(662	)
Balance, September 30, 2005		5,761,746	$	576	$	40,096	$	(1,051	)	$	32,778		$	(388	)	$	72,011

	Shares		Common Stock		Additional Paid in Capital		Deferred Compensation Restricted Stock Grants		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance, July 1, 2004		5,657,957	$	566	$	38,090	$	-	$	27,591		$	(1,081	)	$	65,166
Comprehensive income:
Net income										1,337						1,337
Other comprehensive income, net of tax expense of $913:
Net market valuation adjustment on securities available for sale													1,517
Less: reclassification adjustment for gains included in net income													(4	)
Other comprehensive income, net of tax																1,513
Comprehensive income																2,850
Exercise of stock options		14,245		1		98										99
Income tax benefit from stock options exercised						49										49
Cash dividends declared, $.1125 per share										(637	)					(637	)
Balance, September 30, 2004		5,672,202	$	567	$	38,237	$	-	$	28,291		$	432		$	67,527

(continued)

	Shares		Common Stock		Additional Paid in Capital		Deferred Compensation Restricted Stock Grants			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance, January 1, 2005		5,679,239	$	568	$	38,284	$	-		$	28,968		$	294		$	68,114
Comprehensive income:
Net income											5,785						5,785
Other comprehensive income, net of tax benefit of $409:
Net market valuation adjustment on securities available for sale														(682	)
Other comprehensive income, net of tax																	(682	)
Comprehensive income																	5,103
Restricted stock grants		35,000		3		1,087		(1,090	)								-
Amortization of deferred compensation - restricted stock grants								39									39
Exercise of stock options		47,507		5		535											540
Income tax benefit from stock options exercised						190											190
Cash dividends declared, $.345 per share											(1,975	)					(1,975	)
Balance, September 30, 2005		5,761,746	$	576	$	40,096	$	(1,051	)	$	32,778		$	(388	)	$	72,011

	Shares		Common Stock		Additional Paid in Capital		Deferred Compensation Restricted Stock Grants		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance, January 1, 2004		4,431,328	$	443	$	14,255	$	-	$	26,203		$	345		$	41,246
Comprehensive income:
Net income										3,867						3,867
Other comprehensive income, net of tax expense of $54:
Net market valuation adjustment on securities available for sale													151
Less: reclassification adjustment for gains included in net income													(64	)
Other comprehensive income, net of tax																87
Comprehensive income																3,954
Public offering of 1,150,000 shares		1,150,000		115		23,115										23,230
Exercise of stock options		90,874		9		624										633
Income tax benefit from stock options exercised						243										243
Cash dividends declared, $.3375 per share										(1,779	)					(1,779	)
Balance, September 30, 2004		5,672,202	$	567	$	38,237	$	-	$	28,291		$	432		$	67,527

(See notes to consolidated financial statements)

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

(dollars in thousands)

For the three month period ended
March 31,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES

Net Income $ 1,547 $ 1,273
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 617 527
Provision for loan losses 586 369
Deferred income tax benefit (120 ) (115 )
Investment securities net gains — (44 )
Net gain on sale/disposal of premises, equipment and intangibles (32 ) (1 )
Mortgage loans originated for sale (45,679 ) (27,195 )
Proceeds from sale of mortgage loans 43,153 24,901
Fees on mortgage loans sold (492 ) (398 )
Increase in accrued interest receivable and other assets (818 ) (109 )
Increase (decrease) in accrued interest payable and other liabilities 1,960 (581 )

NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES
722 (1,373 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of investment securities available for sale (5,000 ) —
Repayments of principal and maturities of investment securities available for sale 332 1,199
Sales of investment securities available for sale — 2,046
Net sale of FHLB stock 129 1,250
Proceeds from sales of government guaranteed loans — 569
Loans originated or acquired, net of principal repayments (63,988 ) (11,854 )
Purchases of premises and equipment (186 ) (1,525 )
Sales of premises, equipment and intangibles 93 2

NET CASH USED BY INVESTING ACTIVITIES
(68,620 ) (8,313 )

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase in federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings 7,765 1,306
Net decrease in FHLB short-term advances (10,000 ) (15,000 )
Repayments of FHLB long-term advances — (10,000 )
Repayments of notes payable (1,250 ) —
Net increase in demand, money market and savings accounts 55,564 54,250
Net increase in time deposits 55,858 9,370
Proceeds from exercises of stock options 283 426
Cash dividends paid (653 ) (499 )

NET CASH PROVIDED BY FINANCING ACTIVITIES
107,567 39,853

NET INCREASE IN CASH AND CASH EQUIVALENTS
39,669 30,167
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
42,938 33,681

CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 82,607 $ 63,848

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:

Cash paid for:
Interest $ 3,655 $ 3,621

Income taxes $ — $ —

~~(See notes to consolidated financial statements)~~

	For the nine month period ended September 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	5,785		$	3,867
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,864			1,615
Provision for loan losses		1,764			1,489
Deferred income tax benefit		(561	)		(98	)
Investment securities net gains		(1	)		(103	)
Other		(392	)		-
Mortgage loans originated for sale		(93,875	)		(83,534	)
Proceeds from sale of mortgage loans		96,495			83,117
Fees on mortgage loans sold		(1,535	)		(1,406	)
Increase in accrued interest receivable and other assets		(1,005	)		(531	)
Increase in accrued interest payable and other liabilities		4,986			364
NET CASH PROVIDED BY OPERATING ACTIVITIES		13,525			4,780

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale		(10,000	)		(38,368	)
Repayments of principal and maturities of investment securities available for sale		614			3,149
Sales of investment securities available for sale		-			9,281
Net sale of FHLB stock		129			1,000
Purchase of life insurance policies		-			(700	)
Proceeds from sales of loans		60			569
Loans originated or acquired, net of principal repayments		(181,024	)		(79,872	)
Purchases of premises and equipment		(2,208	)		(8,276	)
Sales of premises and equipment		630			98
NET CASH USED BY INVESTING ACTIVITIES		(191,799	)		(113,119	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in federal funds purchased and securities sold under agreements to repurchase		1,670			5,312
Net increase (repayment) of FHLB short-term advances		(10,000	)		10,000
Repayments of FHLB long-term advances		-			(30,000	)
Repayments of notes payable		(1,250	)		-
Net increase in demand, money market and savings accounts		30,359			43,562
Net increase in time deposits		195,127			40,924
Proceeds from exercise of stock options		540			633
Proceeds from public offering of common stock		-			23,230
Cash dividends paid		(1,965	)		(1,640	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		214,481			92,021

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		36,207			(16,318	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		42,938			33,681
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	79,145		$	17,363

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Cash paid for:
Interest	$	12,466		$	8,276
Income taxes		3,530			2,265

TIB FINANCIAL CORP.
UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
~~March 31,~~
September 30, 2005

(In thousands except for share and per share amounts)

NOTE 1 —- BASIS OF PRESENTATION & ACCOUNTING POLICIES

TIB Financial Corp. is a financial holding company headquartered in Naples, Florida. TIB Financial Corp. owns and operates TIB Bank, which has a total of sixteen branches in Florida that are located in Monroe, Miami-Dade, Collier and Lee counties.

The accompanying unaudited consolidated financial statements for TIB Financial Corp. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. For further information and an additional description of the Company’s accounting policies, refer to the Company’s annual report for the year ended December 31, 2004.

The consolidated statements include the accounts of TIB Financial Corp. and its wholly-owned subsidiary, TIB Bank, and the Bank’s subsidiary, TIB Investment Center Inc. (this corporation was dissolved in January 2005 —- see Note 2), collectively known as the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain amounts previously reported on have been reclassified to conform to the current period presentation.

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

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted within the United States of America and conform to general practices within the banking industry.

Allowance for Loan Losses

Accounting and reporting policies for the allowance for loan losses are deemed critical since they involve the use of estimates and require significant management judgments. Losses on loans result from a broad range of causes from borrower specific problems, to industry issues, to the impact of the economic environment. The identification of these factors that lead to default or non-performance under a borrower loan agreement and the estimation of loss in these situations are very subjective. In addition, a dramatic change in the performance of one or a small number of borrowers can have a significant impact on the estimate of losses. Management has implemented a process that has been applied consistently to systematically consider ~~the~~ many variables that impact the estimation of the allowance for loan losses.

Earnings Per Common Share

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

Additional information with regard to the Company’s methodology and reporting of the allowance for loan losses and earnings per common share is included in the 2004 Annual Report and 10-K.

NOTE 2 —- ACQUISITIONS AND DIVESTITURES

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. On January 7, 2005, the Company filed Articles of Dissolution dissolving TIB Investment Center, Inc.

Consistent with prior period disclosures regarding segments, the Company does not consider the divestiture of the investment center operations a significant event.

NOTE 3 —- INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities available for sale at ~~March 31,~~September 30, 2005 and December 31, 2004 are presented below:

March 31, 2005
(dollars in thousands) Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
U.S. Treasury securities $ 5,179 $ 2 $ 142 $ 5,039
U.S. Government agencies and corporations 59,208 47 1,814 57,441
States and political subdivisions-tax-exempt 9,595 156 76 9,675
States and political subdivisions-taxable 2,691 10 13 2,688
Marketable equity securities 3,000 521 — 3,521
Mortgage-backed securities 2,311 60 — 2,371

$ 81,984 $ 796 $ 2,045 $ 80,735

									September 30, 2005
	December 31, 2004								Amortized		Unrealized		Unrealized		Estimated
(dollars in thousands)	Amortized		Unrealized		Unrealized		Estimated		Cost		Gains		Losses		Fair Value
	Cost		Gains		Losses		Fair Value
U.S. Treasury securities	$	5,178	$	5	$	29	$	5,154	$	5,181	$	2	$	116	$	5,067
U.S. Government agencies and corporations		54,228		104		869		53,463		64,166		20		1,373		62,813
States and political subdivisions-tax-exempt		9,596		246		26		9,816		9,594		129		45		9,678
States and political subdivisions-taxable		2,862		17		23		2,856		2,655		21		-		2,676
Marketable equity securities		3,000		987		—		3,987		3,000		419		-		3,419
Mortgage-backed securities		2,473		58		—		2,531		10,573		322		-		10,895
									$	95,169	$	913	$	1,534	$	94,548
	$	77,337	$	1,417	$	947	$	77,807

	December 31, 2004
	Amortized		Unrealized		Unrealized		Estimated
(dollars in thousands)	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 subdivisions-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

NOTE 4 —- LOANS

Major classifications of loans are as follows:

(dollars in thousands) March 31, 2005 December 31, 2004
Real estate mortgage loans:
Commercial $ 393,362 $ 351,346
Residential 70,490 67,204
Farmland 4,825 4,971
Construction and vacant land 67,552 49,815
Commercial and agricultural loans 57,647 64,622
Indirect auto dealer loans 98,633 91,890
Home equity loans 14,637 13,856
Other consumer loans 10,075 9,817

Total loans 717,221 653,521
Net deferred loan costs 2,064 2,157

Loans, net of deferred loan costs $ 719,285 $ 655,678

(dollars in thousands)	September 30, 2005		December 31, 2004

Real estate mortgage loans:
Commercial	$	428,314	$	351,346
Residential		73,474		67,204
Farmland		3,991		4,971
Construction and vacant land		106,015		49,815
Commercial and agricultural loans		74,202		64,622
Indirect auto dealer loans		113,639		91,890
Home equity loans		17,220		13,856
Other consumer loans		9,428		9,817
Total loans		826,283		653,521
Net deferred loan costs		1,798		2,157
Loans, net of deferred loan costs and fees	$	828,081	$	655,678

NOTE 5 —- ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses for the ~~three~~nine months ended ~~March 31,~~September 30, 2005 and September 30, 2004 follows:

(dollars in thousands) 2005 2004
Balance, January 1 $ 6,243 $ 5,216
Provision for loan losses charged to expense 586 369
Loans charged off (307 ) (243 )
Recoveries of loans previously charged off 19 5

Balance, March 31 $ 6,541 $ 5,347

(dollars in thousands)	2005			2004
Balance, January 1	$	6,243		$	5,216
Provision for loan losses charged to expense		1,764			1,489
Loans charged off		(923	)		(654	)
Recoveries of loans previously charged off		69			38
Balance, September 30	$	7,153		$	6,089

NOTE 6 —- EARNINGS PER SHARE AND COMMON STOCK

Earnings per share have been computed based on the following weighted average number of common shares outstanding for the three months and nine months ended ~~March 31:~~September 30:

2005 2004
For the three months ended March 31:
Basic 5,686,233 4,462,493
Dilutive effect of options outstanding 179,866 196,901

Diluted 5,866,099 4,659,394

	2005		2004
For the three months ended September 30:
Basic		5,714,717		5,660,075
Dilutive effect of options outstanding		199,823		146,658
Diluted		5,914,540		5,806,733

For the nine months ended September 30:
Basic		5,703,907		5,187,456
Dilutive effect of options outstanding		186,715		168,830
Diluted		5,890,622		5,356,286

Stock options for ~~20,082~~32,500 and 28,786 shares of common stock were not considered in computing diluted earnings per common share for the three and nine months ended ~~March 31,~~September 30, 2004, respectively, because they were anti-dilutive. There were no anti-dilutive stock options outstanding for the three and nine months ended ~~March 31,~~September 30, 2005. For the three and nine months ended September 30, 2005, 35,000 unvested restricted shares of common stock were not considered in computing diluted earnings per share because they were anti-dilutive. The dilutive effect of stock options isand the ~~sole~~dilutive effect of unvested restricted shares are the only common stock ~~equivalent~~equivalents for purposes of calculating diluted earnings per common share.

NOTE 7 —- STOCK-BASED COMPENSATION

On July 25, 2005, the Company approved the issuance of shares of its common stock as restricted stock grants to each of the seven non-employee members of the Company’s Board of Directors. Each of these directors received an award of 5,000 restricted shares under the Company’s 2004 Equity Incentive Plan (the “Plan”) previously approved by Company shareholders in 2004. The grants to the directors were effective on July 28, 2005 and will vest 1,000 shares each year over the next five years, subject to accelerated vesting upon a change in control of the Company (as defined in the Plan) or the death of the director. The grant date market value of the 35,000 restricted shares, $1,090, will be recognized as an expense on a straight-line basis over the vesting period. During the three and nine months ended September 30, 2005, the Company recognized $39 as expense related to these restricted shares.

Total stock options granted, exercised, and expired/forfeited during the ~~three~~nine months ended ~~March 31,~~September 30, 2005, were 69,500, ~~27,700~~47,507, and ~~8,000,~~26,000, respectively. As of ~~March 31,~~September 30, 2005, there were ~~442,994~~405,187 options for shares outstanding.

Employee compensation expense under stock options is reported using the intrinsic value method. No stock-based compensation cost resulting from stock options 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.”

For the three months ended March 31,
(dollars in thousands, except per share amounts) 2005 2004

Net income, as reported $ 1,547 $ 1,273
Stock-based compensation expense determined under fair value based method, net of tax 63 72

Pro forma net income $ 1,484 $ 1,201

Basic earnings per share as reported $ 0.27 $ 0.29
Pro forma basic earnings per share 0.26 0.27
Diluted earnings per share as reported 0.26 0.27
Pro forma diluted earnings per share 0.25 0.26

For the three months ended September 30,
(dollars in thousands, except per share amounts)	2005		2004

Net income, as reported	$	2,054	$	1,337
Stock-based compensation expense determined under fair value based method, net of tax		57		48
Pro forma net income	$	1,997	$	1,289

Basic earnings per share as reported	$	0.36	$	0.24
Pro forma basic earnings per share		0.35		0.23
Diluted earnings per share as reported		0.35		0.23
Pro forma diluted earnings per share		0.34		0.22

For the nine months ended September 30,
(dollars in thousands, except per share amounts)	2005		2004

Net income, as reported	$	5,785	$	3,867
Stock-based compensation expense determined under fair value based method, net of tax		184		166
Pro forma net income	$	5,601	$	3,701

Basic earnings per share as reported	$	1.01	$	0.75
Pro forma basic earnings per share		0.98		0.71
Diluted earnings per share as reported		0.98		0.72
Pro forma diluted earnings per share		0.95		0.69

In December 2004, the FASB issued FAS 123 (revised 2004), Share-Based Payment. Under this promulgation, companies are required to reflect costs associated with employee stock options in their income statements at fair value. In April 2005, the SEC amended the date for compliance with FAS 123 (revised 2004) so that each registrant that is not a small business issuer is required to prepare financial statements in accordance with statement 123 (revised 2004) beginning with the first interim or annual reporting period of the registrant’s first fiscal year beginning on or after June 15, 2005. Accordingly, the Company will begin reflecting stock option costs under the fair value method commencing in the quarter beginning January 1, 2006 as required.

NOTE 8 —- CAPITAL ADEQUACY

Federal banking regulators have established certain capital adequacy standards required to be maintained by banks and bank holding companies. The ~~minimum~~ requirements established in the regulations for well and adequately capitalized banks are set forth in the table below, along with the actual ratios at ~~March 31,~~September 30, 2005 and December 31, 2004:

Well Adequately
Capitalized Capitalized March 31, 2005 December 31, 2004
Requirement Requirement Actual Actual
Tier 1 Capital (to Average Assets)
Consolidated ³5% ³4% 9.1% 10.0 %
Bank ³5% ³4% 9.5% 10.5 %

Tier 1 Capital (to Risk Weighted Assets)
Consolidated ³6% ³4% 9.9% 10.9 %
Bank ³6% ³4% 10.3% 11.4 %

Total Capital (to Risk Weighted Assets)
Consolidated ³10% ³8% 11.2% 12.6 %
Bank ³10% ³8% 11.1% 12.4 %

	Well Capitalized Requirement	Adequately Capitalized Requirement	September 30, 2005 Actual	December 31, 2004 Actual
Tier 1 Capital (to Average Assets)
Consolidated	>5%	>4%	8.3%	10.0%
Bank	>5%	>4%	8.7%	10.5%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	>6%	>4%	9.5%	10.9%
Bank	>6%	>4%	9.9%	11.4%

Total Capital (to Risk Weighted Assets)
Consolidated	>10%	>8%	10.8%	12.6%
Bank	>10%	>8%	10.7%	12.4%

Management believes, as of ~~March 31,~~September 30, 2005, that the Company and the Bank met all capital requirements to which they are subject. The Company has included the trust preferred securities that were issued in September 2000 and July 2001 in Tier 1 and Total capital.

NOTE 9 —- SEGMENT REPORTING

TIB Financial Corp. has two reportable segments: 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 includes the operations of the holding company and retail investment service operations of the Bank.

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.

The results of the Company’s segments are as follows (dollars in thousands):

Merchant Parent
Three months ended Community Bankcard And
March 31, 2005 Banking Processing Other Totals

Interest and dividend income $ 12,346 $ — $ — $ 12,346
Interest expense 3,349 — 383 3,732

Net interest and dividend income (expense) 8,997 — (383 ) 8,614
Other income 1,488 1,896 10 3,394
Depreciation and amortization 615 2 — 617
Other expense 7,295 1,575 152 9,022

Pretax segment profit (loss) $ 2,575 $ 319 $ (525 ) $ 2,369

Segment Assets $ 938,876 $ 34 $ 416 $ 939,326

Nine months ended September 30, 2005	Community Banking		Merchant Bankcard Processing		Parent And Other			Totals

Interest and dividend income	$	42,074	$	-	$	-		$	42,074
Interest expense		12,557		-		1,173			13,730
Net interest and dividend income		29,517		-		(1,173	)		28,344
Other income		4,841		4,919		28			9,788
Depreciation and amortization		1,858		6		-			1,864
Other expense		22,850		4,125		331			27,306
Pretax segment profit (loss)	$	9,650	$	788	$	(1,476	)	$	8,962

Segment Assets	$	1,052,947	$	548	$	399		$	1,053,894

Nine months ended September 30, 2004	Community Banking		Merchant Bankcard Processing		Parent and Other			Totals

Interest and dividend income	$	29,565	$	-	$	-		$	29,565
Interest expense		6,402		-		1,193			7,595
Net interest and dividend income		23,163		-		(1,193	)		21,970
Other income		4,435		4,515		297			9,247
Depreciation and amortization		1,580		32		3			1,615
Other expense		19,235		3,766		744			23,745
Pretax segment profit (loss)	$	6,783	$	717	$	(1,643	)	$	5,857

Segment Assets	$	765,241	$	20	$	425		$	765,686

Three months ended September 30, 2005	Community Banking		Merchant Bankcard Processing		Parent And Other			Totals

Interest and dividend income	$	15,503	$	-	$	-		$	15,503
Interest expense		5,010		-		399			5,409
Net interest and dividend income		10,493		-		(399	)		10,094
Other income		1,546		1,261		8			2,815
Depreciation and amortization		627		2		-			629
Other expense		7,906		1,090		106			9,102
Pretax segment profit (loss)	$	3,506	$	169	$	(497	)	$	3,178

Merchant Parent
Three months ended Community Bankcard and
March 31, 2004 Banking Processing Other Totals

Interest and dividend income $ 9,218 $ — $ — $ 9,218
Interest expense 1,995 — 395 2,390

Net interest and dividend income (expense) 7,223 — (395 ) 6,828
Other income 1,414 1,760 99 3,273
Depreciation and amortization 515 11 1 527
Other expense 6,009 1,433 194 7,636

Pretax segment profit (loss) $ 2,113 $ 316 $ (491 ) $ 1,938

Segment Assets $ 710,065 $ 37 $ 455 $ 710,557

Three months ended September 30, 2004	Community Banking		Merchant Bankcard Processing		Parent and Other			Totals

Interest and dividend income	$	10,528	$	-	$	-		$	10,528
Interest expense		2,345		-		402			2,747
Net interest and dividend income		8,183		-		(402	)		7,781
Other income		1,331		1,221		91			2,643
Depreciation and amortization		531		11		1			543
Other expense		6,640		1,021		191			7,852
Pretax segment profit (loss)	$	2,343	$	189	$	(503	)	$	2,029

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

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

The following discussion addresses the factors that have affected the financial condition and results of operations of TIB Financial Corp. (the “Company”) as reflected in the unaudited consolidated statement of condition as of ~~March 31,~~September 30, 2005, and statement of income for the three months and nine months ended ~~March 31,~~September 30, 2005. Operating results for the three months and nine months ended ~~March 31,~~September 30, 2005 are not necessarily indicative of trends or results to be expected for the year ended December 31, 2005.

QUARTERLY SUMMARY

~~Our first~~

For the third consecutive quarter, ~~2005 net~~results demonstrate the continuing successful implementation of our strategic plan. Net income of ~~$1.5~~$2.05 million represents an increase of ~~22%~~54% over ~~$1.3~~$1.34 million reported for the quarter ended ~~March 31,~~September 30, 2004. On a per diluted share basis, earnings were ~~$0.26~~$0.35 for the ~~first~~third quarter of 2005 as compared to ~~$0.27~~$0.23 for the ~~first~~third quarter of ~~2004 due to dilution caused by a successful public offering in April 2004 of 1.15 million new common shares which provided the capital necessary to fuel our expansion strategy in southwest Florida.~~2004. Credit quality remains ~~excellent~~solid and we continue to see growth opportunities in our newer southwest Florida ~~markets as well as our traditional base in the Florida Keys.~~

~~The high-growth Naples-Fort Myers area~~markets. We believe merger-related market disruption continues to ~~reaffirm the exportability of our island banking culture as~~provide opportunities in gathering commercial, household and municipal relationships. We also believe TIB continues to gain name recognition and momentum in our new customers are rapidly discovering what our customers in the Florida Keys have known for years. Our continued focus on providing superior customer service is filling a much needed void in our local markets, which are realizing the effects of big bank mergers and acquisitions.

markets.

The increase in net income for the ~~first~~third quarter of 2005 over the respective prior-year period resulted primarily from a ~~26%~~30% increase in net interest income from ~~$6.8~~$7.78 million a year ago to ~~$8.6~~$10.09 million in the current quarter. The net interest margin on a tax equivalent basis for the three months ended ~~March 31,~~September 30, 2005 was ~~4.40%, compared with 4.50%~~4.37% which was a slight contraction from the 4.51% reported for the three months ended ~~March 31,~~September 30, 2004.

Non-interest expense for the ~~first~~third quarter of 2005 was ~~$9.1~~$9.28 million, compared with ~~$7.8~~$7.92 million for the ~~first~~third quarter of 2004. The increase in non-interest expense is primarily attributable to expenses associated with ~~increased regulatory compliance and~~ the Company’s ongoing growth and expansion activities in the southwest Florida ~~market, which included~~market. Considering the ~~addition~~percentage growth in net income and net interest income, net occupancy and other expenses for the third quarter of ~~two new branch offices and several key senior staff personnel.~~

2005 increased less than 11% over the third quarter of 2004, reflecting the Company’s continued focus on cost containment.

Credit quality remained solid during the ~~first~~third quarter of 2005 which ended with non-performing loans representing only ~~0.05%~~0.06% of gross loans. As of ~~March 31,~~September 30, 2005, the allowance for loan losses totaled ~~$6.5~~$7.15 million, or ~~0.91%~~0.87% of total loans and ~~1,673%~~1,345% of non-performing loans. These figures compare with ~~0.97%~~0.98% and ~~1,107%~~519%, respectively, as of ~~March 31,~~September 30, 2004.

Total assets ~~increased more than 32% to $939.3~~reached $1.05 billion compared with $829.3 million as of ~~March~~December 31, 2004 and $765.7 million as of September 30, 2004. Total loans increased 34% to $826.3 million as of September 30, 2005, versus $618.3 million the prior year. Total deposits increased 43% to $913.3 million as of September 30, 2005, compared with ~~$710.6~~$638.3 million a year ago. On a quarter over quarter basis, total assets increased more than 13%, which is reflective of the company’s solid organic growth since December 31, 2004. Total loans grew more than 30% to $717.2 million as of March 31, 2005, versus $549.6 million a year ago. Total deposits increased more than 29% to $799.3 million as of March 31, 2005, compared with $617.4 million a year ago.

THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2005 AND 2004

RESULTS OF OPERATIONS

Our net income of ~~$1.5~~$2.05 million for the ~~first~~third quarter of 2005 increased ~~21.5%,~~54% compared to ~~$1.3~~$1.34 million for the same period last year. Basic and diluted earnings per share for the ~~first~~third quarter of 2005 were ~~$0.27~~$0.36 and ~~$0.26,~~$0.35, respectively, as compared to ~~$0.29~~$0.24 and ~~$0.27~~$0.23 per share in the previous year’s quarter.

Annualized return on average assets was ~~0.72%~~0.82% and ~~0.76%~~0.70% for the ~~first~~third quarter of 2005 and 2004, respectively, while the annualized return on average shareholders’ equity was ~~9.20%~~11.45% and ~~12.04%~~8.06% for the same period. The decline in the return on average shareholders’ equity in the current year is primarily attributable to the 57.8% increase in shareholders’ equity from March 31, 2004 to March 31, 2005 due to the stock offering in the second quarter of 2004 and exercises of stock options.

periods.

NET INTEREST INCOME

Net interest income represents the amount by which interest income on interest-earning assets exceeds interest expense incurred on interest-bearing liabilities. Net interest income is the largest component of our income, and is affected by the interest rate environment, and the volume and the composition of interest-earning assets and interest-bearing liabilities. Our interest earning assets include loans, federal funds sold, interest bearing deposits in other banks, and investment securities. Our interest-bearing liabilities include deposits, federal funds purchased, notes payable related to Company shares repurchased, subordinated debentures, advances from the Federal Home Loan Bank, and other short term borrowings.

Net interest income increased ~~26.2%~~30%, to ~~$8.6~~$10.09 million in the three months ended ~~March 31,~~September 30, 2005 as compared to ~~$6.8~~$7.78 million in the same period last year. ~~While the~~The prime rate as published in the Wall Street Journal ~~remained at 4.00% for~~started the ~~first~~third quarter of 2004 itat 4.25% and increased ~~from 5.25% at the beginning of 2005~~ to ~~5.75%~~4.75% by the end of the ~~first~~quarter. At the beginning of the third quarter ~~2005.~~2005 it had risen to 6.25% and increased twice to end the quarter at 6.75%. Many of the Bank’s loans are indexed to this floating rate, although they ~~may~~ also include floors. The higher level of prime rate in the ~~first~~third quarter of 2005 compared to the ~~comparative period in~~third quarter of 2004 ~~is apparent in the~~had a positive impact on yields in the loan portfolio as ~~the effects of~~ the higher rates are reflected in variable loan re-pricings and new loan production. ~~Increased loan volume is the primary driver affecting the increased net interest income in the current period.~~

In April 2002, the Bank began a program to acquire indirect automobile loans. We predominantly buy loans from auto dealers in ~~Southwest~~southwest Florida which are for the purchase of new or late model used cars. We serve customers over a broad range of creditworthiness and the required terms and rates are reflective of those risk profiles. As of ~~March 31,~~September 30, 2005 we had ~~$98.6~~$113.6 million of indirect auto dealer loans outstanding, compared to ~~$66.8~~$83.7 million at ~~March 31,~~September 30, 2004. Coupled with the appropriate safeguards, we believe this product continues to offer us an opportunity to increase asset yields while not sacrificing our primary objective of maintaining strong asset quality.

The average yield on interest-earning assets for the ~~first three months~~third quarter of 2005 was ~~6.29%~~6.69% which was an increase of 2361 basis points compared to the ~~6.06%~~6.08% yield earned during the ~~first three months~~third quarter of 2004. The average cost of interest-bearing deposits increased 4492 basis points from ~~1.72%~~1.81% during the ~~first three months~~third quarter of 2004 to ~~2.16%~~2.73% for the comparable period in 2005, and the rate of all interest-bearing liabilities increased 4489 basis points, from ~~1.93%~~2.03% in 2004 to ~~2.37%~~2.92% in 2005. The Company’s net interest margin decreased slightly to ~~4.40%~~4.37% in the ~~first three months~~third quarter of 2005 compared to ~~4.50%~~4.51% in the ~~first three months~~third quarter of 2004. We anticipate interest rates to continue slowly trending up over the next ~~six~~three months. If this occurs or if rates remain stable, net interest margin should ~~be fairly consistent as~~decrease slightly due principally to a CD promotion we held late in the third quarter to lock in our ~~mix~~cost of ~~assets and liabilities should grow in roughly~~funds coupled with the ~~same proportions that exist currently~~effects of competitive pressure on ~~our balance sheet.~~new loan production at higher interest rates. Our margin is derived from the rate difference between our average yields on our current mix of assets in excess of our average cost of liabilities.

~~The following table presents average balances of the Company, the taxable-equivalent interest earned, and the rate paid thereon during the three months ended March 31, 2005 and March 31, 2004.~~

2005 2004
Average Income/ Yields/ Average Income/ Yields/
(dollars in thousands) Balances Expense Rates Balances Expense Rates
Interest-earning assets:
Loans (1)(2) $ 686,418 $ 11,312 6.68 % $ 546,516 $ 8,602 6.33 %
Investment securities (2) 74,022 779 4.27 % 49,093 553 4.53 %
Marketable equity securities — 90% tax
exempt (2) 3,680 96 10.58 % 3,000 87 11.74 %
Interest-bearing deposits in other banks 633 4 2.56 % 589 1 0.51 %
Federal Home Loan Bank stock 2,555 27 4.29 % 1,879 16 3.34 %
Federal funds sold 34,348 209 2.47 % 16,225 38 0.94 %

Total interest-earning assets 801,656 12,427 6.29 % 617,302 9,297 6.06 %

Non-interest-earning assets:
Cash and due from banks 22,560 18,568
Premises and equipment, net 27,414 20,433
Allowances for loan losses (6,358 ) (5,292 )
Other assets 30,159 26,076

Total non-interest-earning assets 73,775 59,785

Total assets $ 875,431 $ 677,087

Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 91,727 178 0.79 % $ 70,636 56 0.32 %
Money market 158,655 633 1.62 % 122,444 226 0.74 %
Savings deposits 46,537 52 0.45 % 41,277 40 0.39 %
Time deposits 284,232 2,238 3.19 % 209,305 1,570 3.02 %

Total interest-bearing deposits 581,151 3,101 2.16 % 443,662 1,892 1.72 %

Other interest-bearing liabilities:
Short-term borrowings and FHLB advances 39,814 248 2.53 % 35,109 103 1.18 %
Long-term borrowings 17,208 383 9.03 % 18,250 395 8.71 %

Total interest-bearing liabilities 638,173 3,732 2.37 % 497,021 2,390 1.93 %

Non-interest-bearing liabilities and
shareholders’ equity:
Demand deposits 158,525 129,855
Other liabilities 10,555 7,922
Shareholders’ equity 68,178 42,289

Total non-interest-bearing liabilities and shareholders’ equity 237,258 180,066

Total liabilities and shareholders’ equity $ 875,431 $ 677,087

Interest rate spread (tax equivalent basis) 3.92 % 4.13 %

Net interest income (tax equivalent basis) $ 8,695 $ 6,907

Net interest margin (3) (tax equivalent basis) 4.40 % 4.50 %

~~(1)~~   ~~Average loans include non-performing loans.~~
~~(2)~~   Interest income and rates include the effects of a tax equivalent adjustment using a Federal tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a fully taxable basis.
~~(3)~~   ~~Net interest margin is net interest income divided by average total interest-earning assets.~~

The table below details the components of the changes in net interest income for the three months ended March 31, 2005 and March 31, 2004. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volumes and 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.

2005 compared to 2004(1)
Due to changes in
(dollars in thousands) Net
Average Average Increase
Volume Rate (Decrease)

Interest income
Loans (2) $ 2,289 $ 421 $ 2,710
Investment securities (2) 264 (38 ) 226
Marketable equity securities (2) 18 (9 ) 9
Interest-bearing deposits in other banks — 3 3
Federal Home Loan Bank Stock 7 4 11
Federal funds sold 70 101 171

Total interest income 2,648 482 3,130

Interest expense
NOW accounts 21 101 122
Money market 83 324 407
Savings deposits 5 7 12
Time deposits 587 81 668
Short-term borrowings and FHLB advances 15 130 145
Long-term borrowings (29 ) 17 (12 )

Total interest expense 682 660 1,342

Change in net interest income $ 1,966 $ (178 ) $ 1,788

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

PROVISION FOR LOAN LOSSES

The provision for loan losses represents the charge to income necessary to adjust the allowance for loan losses to an amount that represents management’s assessment of the estimated probable credit losses inherent in our loan portfolio which have been incurred at each balance sheet date.

The provision for loan losses ~~increased 58.8%~~decreased 5%, to ~~$0.6 million~~$448,000 in the ~~first~~third quarter of 2005 compared to ~~$0.4 million~~$471,000 in the comparable prior year quarter. The ~~higher~~lower provision for loan losses in 2005 was primarily attributable to the ~~continued growth and~~ change in composition of the loan portfolio coupled with ~~slightly higher charge offs.~~improvement in commercial real estate loan historical loss ratios and stabilization of indirect loans as a proportion of the total loan portfolio. As runoff continues to close in on new loan production, the growth rate of the indirect loan portfolio slowed to 5% during the third quarter of 2005 as compared with 9% during the third quarter of 2004. Total loans outstanding grew ~~$63.7~~$52.4 million, or ~~9.7%~~7%, to $826.3 million, during the ~~first~~third quarter of 2005, as compared to ~~$11.0~~growth of only $27.9 million, or ~~2.1%~~5%, during the ~~first~~third quarter of 2004. The largest dollar increase during the first quarter of 2005 occurred in commercial real estate loans which increased $42.0 million, or 12.0%. This compares to a $3.5 million, or 1.2% decrease in commercial real estate loans during the first quarter of 2004.

~~Total loans outstanding were $717.2 million at March 31, 2005, compared to $549.6 million at March 31,~~ 2004. Net charge-offs were ~~$0.3 million~~$308,000 during the three months ended ~~March 31,~~September 30, 2005 compared to ~~$0.2 million~~$188,000 for the same period in 2004.

Management will continue to monitor the credit quality of the lending portfolio and will recognize additional provisions in the future as necessary, in the opinion of management, to maintain the allowance for loan losses at an appropriate level.

NON-INTEREST INCOME

Non-interest income for the ~~first~~third quarter of 2005 was ~~$3.4~~$2.82 million. This represents a ~~3.7%~~7% increase over the prior year quarter which totaled ~~$3.3~~$2.64 million. The increase in non-interest income is primarily attributable to ~~an increase in Merchant bankcard processing income and in~~increased fees on ~~mortgage loans sold. The increase in merchant bankcard processing income is primarily a~~

~~result of volume increases. The increase in fees on~~residential mortgage loans sold ~~is primarily a result of increased pass through loan volume~~ during the ~~2005~~ quarter.

NON-INTEREST EXPENSE

Non-interest expense for the ~~first~~third quarter of 2005 was ~~$9.1~~$9.28 million. This represents a ~~16.2%,~~17% increase over the prior year quarter which totaled ~~$7.8~~$7.92 million. The increase in non-interest expense is primarily attributable to salaries and employee benefits increasing ~~$0.8 million.~~$909,000. At ~~March 31,~~September 30, 2005 the Bank had ~~308~~323 full-time employees and 1510 part-time employees, compared to ~~267~~303 full-time employees at September 30, 2004. The increases are primarily the result of costs associated with the growth of our business and continued expansion into the southwest Florida market. Considering the percentage growth in net income and net interest income, net occupancy and other expenses for the third quarter of 2005 increased less than 11% over the third quarter of 2004, reflecting the Company’s continued focus on cost containment.

INCOME TAXES

The provision for income taxes includes federal and state income taxes. The effective tax rates were 35.4% and 34.1% for the three months ended September 30, 2005 and 2004, respectively.

NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

RESULTS OF OPERATIONS

Our net income of $5.79 million for the first nine months of 2005 represents a 50% increase compared to $3.87 million for the same period last year. Basic and diluted earnings per share for the first nine months of 2005 were $1.01 and $0.98, respectively, as compared to $0.75 and $0.72 per share in the previous year’s period. Basic weighted average common equivalent shares outstanding for the nine months ended September 30, 2005 were 5,703,907 compared to 5,187,456 for the same period in 2004. This 10% increase in shares outstanding resulted from the issuance of an additional 1,150,000 shares in the second quarter of 2004 in connection with a public offering of our common stock that raised $23.2 million in new capital, and the exercise of stock options.

Annualized return on average assets was 0.82% and 0.71% for the first nine months of 2005 and 2004, while the annualized return on average shareholders’ equity was 11.11% and 9.15% for the same periods.

NET INTEREST INCOME

Net interest income increased 30%, to $26.58 million in the nine months ended September 30, 2005 as compared to $20.48 million in the same period last year. The prime rate as published in the Wall Street Journal began 2004 at 4.00% and increased three times to end the third quarter at 4.75%. At the beginning of 2005 the rate had risen to 5.25% and increased six times to end the third quarter of 2005 at 6.75%. Many of the Bank’s loans are indexed to this floating rate, although they also include floors. The higher level of prime rate in the first three quarters of 2005 compared to the comparable 2004 period had a positive impact on yields in the loan portfolio as the higher rates are reflected in variable loan re-pricings and new loan production.

The effect of rising interest rates to date has been to contract our net interest margin slightly in two ways. First, a relatively low prime rate directly affected yields on loans tied to that index and even loans not indexed to prime were priced reflective of overall low asset yields. Due to our practice of requiring an interest rate floor on many new commercial loans, many of these loans had been performing at their floors while interest rates were reaching historically low levels. This proved effective in slowing the average decline in loan yields as rates declined, however, it has had the opposite effect as rates increased, as these assets remained at their interest rate floors until just recently. Secondly, as deposit liabilities were priced as low as economically possible while attracting the volume of required funding, the net effect of this rising rate environment has been a larger increase in liability costs, generally, than the corresponding increase in asset yields during the current period. Due to the current level of prime rates and the impact of competitive pressure on new loan production, we expect this slight margin contraction to continue in the near term.

The average yield on interest-earning assets for the first nine months of 2005 was 6.49%, an increase of 45 basis points compared to the 6.04% yield earned during the first nine months of 2004. The average cost of interest-bearing deposits increased 72 basis points from 1.74% during the first nine months of 2004 to 2.46% for the comparable period in 2005, and the rate of all interest-bearing liabilities increased 70 basis points, from 1.96% in 2004 to 2.66% in 2005. The Company’s net interest margin decreased to 4.39% in the first nine months of 2005 compared to 4.50% in the first nine months of 2004. We anticipate interest rates slowly trending up over the next three months. If this occurs or if rates remain stable, net interest margin should decrease slightly due principally to a CD promotion we held late in the third quarter to lock in our cost of funds coupled with the effects of competitive pressure on new loan production at higher interest rates. Our margin is derived from the rate difference between our average yields on our current mix of assets in excess of our average cost of liabilities.

The following table presents average balances of the Company, the taxable-equivalent interest earned, and the rate paid thereon during the nine months ended September 30, 2005 and September 30, 2004.

				2005								2004
	Average			Income/		Yields/			Average			Income/		Yields/
(dollars in thousands)	Balances			Expense		Rates			Balances			Expense		Rates
Interest-earning assets:
Loans (1)(2)	$	743,018		$	38,468		6.92	%	$	574,003		$	27,212		6.33	%
Investment securities (2)		79,461			2,540		4.27	%		66,172			2,180		4.40	%
Marketable equity securities - 90% tax exempt (2)		3,560			289		10.85	%		3,395			272		10.70	%
Interest-bearing deposits in other banks		390			8		2.68	%		970			9		1.18	%
Federal Home Loan Bank stock		2,706			81		4.00	%		1,445			40		3.70	%
Federal funds sold		41,906			928		2.96	%		13,635			102		1.00	%
Total interest-earning assets		871,041			42,314		6.49	%		659,620			29,815		6.04	%

Non-interest-earning assets:
Cash and due from banks		21,863								18,803
Premises and equipment, net		26,925								21,209
Allowances for loan losses		(6,744	)							(5,564	)
Other assets		30,782								28,622
Total non-interest-earning assets		72,826								63,070
Total assets	$	943,867							$	722,690

Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts	$	90,598			561		0.83	%	$	75,193			214		0.38	%
Money market		167,428			2,597		2.07	%		128,056			793		0.83	%
Savings deposits		48,175			178		0.49	%		43,738			127		0.39	%
Time deposits		328,179			8,334		3.39	%		221,498			4,969		3.00	%
Total interest-bearing deposits		634,380			11,670		2.46	%		468,485			6,103		1.74	%

Other interest-bearing liabilities:
Short-term borrowings & FHLB advances		39,688			887		2.98	%		31,258			299		1.28	%
Long-term borrowings		17,069			1,173		9.19	%		18,250			1,193		8.73	%
Total interest-bearing liabilities		691,137			13,730		2.66	%		517,993			7,595		1.96	%

Non-interest-bearing liabilities and shareholders’ equity:
Demand deposits		171,108								139,733
Other liabilities		12,019								8,586
Shareholders’ equity		69,603								56,378
Total non-interest-bearing liabilities and shareholders’ equity		252,730								204,697

Total liabilities and shareholders’ equity	$	943,867							$	722,690

Interest rate spread (tax equivalent basis)							3.83	%							4.08	%
Net interest income (tax equivalent basis)				$	28,584							$	22,220
Net interest margin (3) (tax equivalent basis)							4.39	%							4.50	%

(1)

Average loans include non-performing loans.

(2)

Interest income and rates include the effects of a tax equivalent adjustment using a Federal tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a fully taxable basis.

(3)

Net interest margin is net interest income divided by average total interest-earning assets.

The table below details the components of the changes in net interest income for the nine months ended September 30, 2005 and September 30, 2004. 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.

	2005 compared to 2004 (1) Due to changes in
(dollars in thousands)	Average Volume			Average Rate			Net Increase (Decrease)
Interest income
Loans (2)	$	8,575		$	2,681		$	11,256
Investment securities (2)		426			(66	)		360
Marketable equity securities (2)		13			4			17
Interest-bearing deposits in other banks		(8	)		7			(1	)
Federal Home Loan Bank Stock		38			3			41
Federal funds sold		425			401			826
Total interest income		9,469			3,030			12,499

Interest expense
NOW accounts		51			296			347
Money market		306			1,498			1,804
Savings deposits		14			37			51
Time deposits		2,641			724			3,365
Short-term borrowings and FHLB advances		99			489			588
Long-term borrowings		(86	)		66			(20	)
Total interest expense		3,025			3,110			6,135

Change in net interest income	$	6,444		$	(80	)	$	6,364

(1)	The change in interest due to both rate and volume has been allocated to the volume and rate components in proportion to the relationship of the dollar amounts of the absolute change in each.

(2)	Interest income includes the effects of a tax equivalent adjustment using a federal tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a fully taxable basis.

PROVISION FOR LOAN LOSSES

The provision for loan losses increased 18% to $1.8 million in the first nine months of 2005 compared to $1.5 million in the comparable prior year period. The higher provision for loan losses in 2005 was primarily attributable to the growth in the loan portfolio and change in composition of the loan portfolio. Total loans outstanding grew $172.8 million, or 26%, during the first nine months of 2005, as compared to only $79.7 million, or 15%, during the first nine months of 2004. The largest dollar increase during the first nine months of 2005 occurred in commercial real estate loans which increased $77.0 million, or 22%. This compares to a $41.0 million, or 14%, increase in commercial real estate loans during the first nine months of 2004. The disproportionate increase in the growth rate of the loan portfolio as compared to the provision for loan losses results from improvement in commercial real estate loan historical loss ratios and stabilization of indirect loans as a proportion of the total loan portfolio. As runoff continues to close in on new loan production, the growth rate of the indirect loan portfolio slowed to 24% during the first nine months of 2005 as compared with 41% during the corresponding 2004 period.

Total loans outstanding were $826.3 million at September 30, 2005, compared to $618.3 million at September 30, 2004. Net charge-offs were $854,000 during the nine months ended September 30, 2005 compared to $616,000 for the same period in 2004. Management will continue to monitor the credit quality of the lending portfolio and will recognize additional provisions in the future as necessary, in the opinion of management, to maintain the allowance for loan losses at an appropriate level.

NON-INTEREST INCOME

Non-interest income for the first nine months of 2005 was $9.8 million. This represents a 6% increase over the prior year period which totaled $9.2 million. The increase in non-interest income is primarily attributable to an increase in merchant bankcard processing income.

NON-INTEREST EXPENSE

Non-interest expense for the first nine months of 2005 was $27.4 million. This represents a 15% increase over the prior year period which totaled $23.9 million. The increase in non-interest expense is primarily attributable to salaries and employee benefits increasing $2.5 million. At September 30, 2005 the Bank had 323 full-time employees and 1710 part-time employees, compared to 303 full-time employees at ~~March 31,~~September 30, 2004. The increased staffing was attributable to the opening of ~~two branches~~one branch in ~~Southwest~~southwest Florida induring the ~~second half~~fourth quarter of 2004, additions to manage growth throughout the Company and additions to assist in security and regulatory compliance. ~~Likewise, the~~The majority of the other increases in the non-interest expense category are the result of costs associated with the growth of our business.

INCOME TAXES

The provision for income taxes includes federal and state income taxes. The effective tax ~~rates were 34.7% and 34.3%~~rate was 35.4%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2005, and ~~2004, respectively.~~

34.0%, for the nine months ended September 30, 2004.

BALANCE SHEET

Total assets at ~~March 31,~~September 30, 2005 were ~~$939.3 million,~~$1.05 billion, up ~~13.3%~~27% from total assets of $829.3 million at December 31, 2004. Asset growth was primarily funded by an increase in deposits of ~~$111.4~~$225.5 million, or ~~16.2%~~33%. Loans net of deferred loan costs and fees increased ~~$63.6~~$172.4 million, or ~~9.7%~~26%, to ~~$719.3~~$828.1 million for the first ~~three~~nine months of 2005 from year end 2004. The largest dollar increase came in the commercial real estate loan category which increased ~~$42.0~~$77.0 million, or ~~12.0%~~22%. Although we have continued to expand our indirect dealer auto loan program, it has begun to ~~decrease~~stabilize in percentage in proportion to the loan portfolio as a whole. At ~~March 31,~~September 30, 2005, indirect auto loans accounted for ~~$98.6~~$113.6 million, or ~~13.8%~~14%, of our loan portfolio as compared to $91.9 million, or ~~14.1%~~14%, at December 31, 2004.

Also, in the same period, investment securities increased $16.7 million.

During the first ~~three~~nine months of 2005, we reduced our advances from the Federal Home Loan Bank by $10.0 million. Total advances outstanding were $25.0 million at ~~March 31,~~September 30, 2005 as compared to $35.0 million at December 31, 2004.

Shareholders’ equity totaled ~~$68.3~~$72.0 million at ~~March 31,~~September 30, 2005, increasing ~~from $68.1~~$3.9 million atfrom December 31, 2004. Book value per share ~~decreased~~increased to ~~$11.96~~$12.50 at ~~March 31,~~September 30, 2005 from $11.99 at December 31, 2004 due primarily to the decrease in accumulated other comprehensive income related to unrealized losses on investments available-for-sale. Such unrealized losses arose primarily from increases in market interest rates.2004. The Company declared a quarterly dividend of $0.115 per share in the first, ~~quarter~~second and third quarters of 2005 and $0.1125 per share in each of the first ~~quarter~~three quarters of 2004.

NON-PERFORMING ASSETS

Non-performing assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property, and other real estate. Loans are placed on nonaccrual status when management has concerns relating to the ability to collect the loan principal and interest and generally when such loans are 90 days or more past due. A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract.

Non-performing assets were as follows:

(dollars in thousands) March 31, 2005 December 31, 2004
Total nonaccrual loans $ 391 $ 704
Accruing loans delinquent 90 days or more (a) — —

Total non-performing loans $ 391 $ 704

Repossessed personal property (indirect auto dealer loans) 814 688
Other real estate owned (b) 190 882
Other assets (b) 2,688 2,665

Total non-performing assets $ 4,083 $ 4,939

Allowance for loan losses $ 6,541 $ 6,243

Non-performing assets as a percent of total assets 0.43 % 0.60 %
Non-performing loans as a percent of gross loans 0.05 % 0.11 %
Allowance for loan losses as a percent of non-performing loans 1,672.9 % 886.8 %

(dollars in thousands)	September 30, 2005			December 31, 2004
Total nonaccrual loans	$	532		$	704
Accruing loans delinquent 90 days or more (a)		-			-
Total non-performing loans	$	532		$	704

Repossessed personal property (indirect auto dealer loans)		858			688
Other real estate owned (b)		190			882
Other assets (b)		2,705			2,665
Total non-performing assets	$	4,285		$	4,939

Allowance for loan losses	$	7,153		$	6,243

Non-performing assets as a percent of total assets		0.41	%		0.60	%
Non-performing loans as a percent of gross loans		0.06	%		0.11	%
Allowance for loan losses as a percent of non-performing loans		1,344.5	%		886.8	%

	(a) ~~Excludes~~	Non-performing loans exclude the $1.6 million loan discussed below that is guaranteed for both principal and interest by the U.S. Department of Agriculture (USDA).

	(b)	The Bank made a $10.0 million loan to construct a lumber mill in northern Florida. Of this amount, $6.4 million had been sold by the Bank to other lenders. The loan was partially guaranteed as to principal and interest by the 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 ($550,000) and other assets (approximately $1.9 million) based on the fair value of the underlying-collateral. The portion of this loan guaranteed by the USDA was approximately $1.6 million at March 31, 2005 and December 31, 2004, and is accruing interest. Accrued interest on this loan totals approximately $703,000 and $677,000 at March 31, 2005 and December 31, 2004, respectively.

	The Bank is pursuing a sale of the property and equipment and has incurred various expenditures. The Bank capitalized the liquidation costs and a portion of the protective advances which it expects will be fully reimbursed by the USDA. Other real estate recorded on the Bank’s books related to this property totaled $190,000 at March 31, 2005 and December 31, 2004. The non-guaranteed principal and interest ($2.0 million at March 31, 2005 and December 31, 2004) and the reimbursable capitalized liquidation costs and protective advance costs totaling approximately $784,000 and $704,000 at March 31, 2005 and December 31, 2004, 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 $262,000 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 such date, the Bank charged-off the non guaranteed principal and interest totaling $2.0 million at June 30, 2003, for regulatory purposes. Since we believe this amount is ultimately realizable, we did not write off this amount for financial statement purposes under generally accepted accounting principles.

During 2001, upon completion of foreclosure on the underlying collateral, the non-guaranteed portion of this loan and interest accrued through the foreclosure date was reclassified into other real estate ($550,000) and other assets (approximately $1.9 million) based on the fair value of the underlying-collateral. The portion of this loan guaranteed by the USDA was approximately $1.6 million at September 30, 2005 and December 31, 2004, and is accruing interest. Accrued interest on this loan totals approximately $761,000 and $677,000 at September 30, 2005 and December 31, 2004, respectively.

The Bank is pursuing a sale of the property and equipment and has incurred various expenditures. The Bank capitalized the liquidation costs and a portion of the protective advances which it expects will be fully reimbursed by the USDA. Other real estate recorded on the Bank’s books related to this property totaled $190,000 at September 30, 2005 and December 31, 2004. The non-guaranteed principal and interest ($2.0 million at September 30, 2005 and December 31, 2004) and the reimbursable capitalized liquidation costs and protective advance costs totaling approximately $744,000 and $704,000 at September 30, 2005 and December 31, 2004, 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 $262,000 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 such date, the Bank charged-off the non guaranteed principal and interest totaling $2.0 million at June 30, 2003, for regulatory purposes. Since we believe this amount is ultimately realizable, we did not write off this amount for financial statement purposes under generally accepted accounting principles.

The allowance for loan losses amounted to ~~$6.5~~$7.2 million and $6.2 million at ~~March 31,~~September 30, 2005 and December 31, 2004, respectively.

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

Home equity loans, indirect auto dealer loans, residential loans and consumer loans generally are not analyzed individually. These loans are grouped into pools and assigned risk categories based on their current payment status and management’s assessment of risk inherent in the various types of loans. As above, when appropriate, a specific reserve will be established for individual loans. Otherwise, we allocate an allowance for each loan classification. The allocations are based on the same factors mentioned above.

Based on an analysis performed by management at ~~March 31,~~September 30, 2005, the allowance for loan losses is considered to be adequate to cover estimated loan losses in the portfolio as of that date. However, management’s judgment is based upon a number of assumptions about future events, which are believed to be reasonable, but which may or may not prove valid. Thus, there can

be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that significant additional increases in the allowance for loan losses will not be required. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require us to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

During 2004, as the indirect auto dealer loan portfolio began to mature, the loss history approached expected levels and the management processes, controls and monitoring and risk management tools implemented throughout recent years indicated that higher multipliers were necessary for the indirect loan portfolio. Contemporaneously, as the Florida economy has grown at an accelerated pace compared to other markets, real estate prices have escalated and local economies have benefited resulting in diminishing historical and expected loss factors. Analysis of these events resulted in these same tools indicating that lower multipliers were necessary for commercial loans collateralized by real estate. Looking forward, although the concentration of indirect auto dealer loan category has increased rapidly since the inception of this program, management believes that this growth has peaked slightly below 15% of the total loan portfolio composition. This category should continue to decrease as a percentage of the loan portfolio as we expect overall asset and loan growth to continue. As this occurs, if we make the assumption, however unlikely, that all other factors were to remain constant, we would expect that the allowance for loan losses would continue to decrease as a percentage of gross loans in the near term.

LIQUIDITY

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

In addition to maintaining a stable core deposit base, we maintain adequate liquidity primarily through the use of investment securities and unused borrowing capacity. The Bank has invested in Federal Home Loan Bank stock for the purpose of establishing credit lines with the Federal Home Loan Bank. The credit availability to the Bank is equal to 20 percent of the Bank’s total assets as reported on the most recent quarterly financial information submitted to the regulators subject to the pledging of sufficient collateral. At ~~March 31,~~September 30, 2005, there were $25.0 million in advances outstanding in addition to a $15 million letter of credit used in lieu of pledging securities to the State of Florida. In July 2004, new agreements were executed with the FHLB and a blanket floating lien pledge of the Bank’s residential 1-4 family mortgage and commercial real estate secured loans was done to bring the collateral availability up to approximately ~~$159.7~~$170.0 million.

The Bank has an unsecured overnight federal funds purchased accommodation up to a maximum of $12.0 million from its principal correspondent bank.

In the second quarter of 2004, we completed the sale of 1,150,000 shares of our common stock at a price of $22.00 per share before commissions and expenses. The net proceeds provided additional liquidity along with additional capital to the Company.

ASSET AND LIABILITY MANAGEMENT

Closely related to liquidity management is the management of interest-earning assets and interest-bearing liabilities. The Company manages its rate sensitivity position to avoid wide swings in net interest margins and to minimize risk due to changes in interest rates.

Our interest rate sensitivity position at ~~March 31,~~September 30, 2005 is presented in the table below:

3 months 4 to 6 7 to 12 1 to 5 Over 5
(dollars in thousands) or less Months Months years Years Total
Interest-earning assets:
Loans $ 309,484 $ 36,094 $ 44,479 $ 260,282 $ 66,882 $ 717,221
Investment securities-taxable 1,013 — — 42,184 24,342 67,539
Investment securities-tax exempt — — — 3,139 6,536 9,675
Marketable equity securities 3,521 — — — — 3,521
Federal Home Loan Bank stock 2,781 — — — — 2,781
Fed funds sold 62,391 — — — — 62,391
Interest bearing deposit in other bank 367 — — — — 367

Total interest-bearing assets 379,557 36,094 44,479 305,605 97,760 863,495

Interest-bearing liabilities:
NOW accounts 89,055 — — — — 89,055
Money Market 169,391 — — — — 169,391
Savings Deposits 48,783 — — — — 48,783
Time deposits 46,509 22,471 151,002 87,053 5 307,040
Notes payable — — — — 4,000 4,000
Subordinated debentures 5,000 — — — 8,000 13,000
Other borrowings 44,922 — — — — 44,922

Total interest-bearing liabilities 403,660 22,471 151,002 87,053 12,005 676,191

Interest sensitivity gap $ (24,103 ) $ 13,623 $ (106,523 ) $ 218,552 $ 85,755 $ 187,304

Cumulative interest sensitivity gap $ (24,103 ) $ (10,480 ) $ (117,003 ) $ 101,549 $ 187,304 $ 187,304

Cumulative sensitivity ratio (2.8 )% (1.2 )% (13.5 )% 11.8 % 21.7 % 21.7 %

	3 Months			4 to 6			7 to 12			1 to 5			Over 5
(dollars in thousands)	or Less			Months			Months			Years			Years			Total
Interest-earning assets:
Loans	$	368,616		$	31,913		$	50,706		$	300,830		$	74,218		$	826,283
Investment securities-taxable		907			-			5,239			49,908			25,397			81,451
Investment securities-tax exempt		-			-			-			3,115			6,563			9,678
Marketable equity securities		3,419			-			-			-			-			3,419
Federal Home Loan Bank stock		2,781			-			-			-			-			2,781
Federal funds sold		61,164			-			-			-			-			61,164
Interest bearing deposit in other bank		218			-			-			-			-			218
Total interest-bearing assets		437,105			31,913			55,945			353,853			106,178			984,994

Interest-bearing liabilities:
NOW accounts		88,570			-			-			-			-			88,570
Money market		164,007			-			-			-			-			164,007
Savings deposits		47,638			-			-			-			-			47,638
Time deposits		104,785			160,614			86,786			94,119			5			446,309
Notes payable		-			-			-			-			4,000			4,000
Subordinated debentures		5,000			-			-			-			8,000			13,000
Other borrowings		38,827			-			-			-			-			38,827
Total interest-bearing liabilities		448,827			160,614			86,786			94,119			12,005			802,351

Interest sensitivity gap	$	(11,722	)	$	(128,701	)	$	(30,841	)	$	259,734		$	94,173		$	182,643

Cumulative interest sensitivity gap	$	(11,722	)	$	(140,423	)	$	(171,264	)	$	88,470		$	182,643		$	182,643

Cumulative sensitivity ratio		(1.2	)%		(14.3	)%		(17.4	)%		9.0	%		18.5	%		18.5	%

We are cumulatively liability sensitive through the one year time period, and asset sensitive in the over one year timeframes above. Certain liabilities such as non-indexed 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. Accordingly, if market interest rates should decrease, it is anticipated that the net interest margin would decrease. Because of non-interest bearing liabilities, total interest-earning assets are substantially greater than the total interest-bearing liabilities and therefore it is anticipated that over time the effects on net interest income from changes in asset yield will be greater than the change in expense from liability cost. ~~Therefore,~~In the next three months, we anticipate interest rates increasing slowly and our net interest margin should decrease slightly due primarily to a CD promotion locking in our cost of funds late in the third quarter coupled with the effects of competitive pressure on new loan production at higher interest rates. Thereafter, if rates continue to increase it is anticipated that the net interest margin would ~~over time,~~ increase ~~and this is particularly true~~ over longer time horizons since the Company has more total assets subject to rate changes than total liabilities that are rate sensitive.

Even in the near term, we believe the ~~$117~~$171 million one year cumulative negative sensitivity gap may exaggerate the probable effects on earnings in a ~~changing~~rising rate environment for two reasons. First, the liabilities subject to repricing are predominately not indexed to any specific market rate and therefore offer the Company the opportunity to delay or diminish any rate repricings. Further, in this current rate environment, the Bank has been originating loans with interest rate floors. The effect of this has been to decrease the volatility of net interest margin and decrease asset sensitivity due to the fact that these loans behave similar to fixed rate loans in periods over a significant range of interest rate changes.

Interest-earning assets and other time deposits are presented based on their contractual terms. It is anticipated that run off in any deposit category will be approximately offset by new deposit generation. Since we have experienced steady growth in deposits, no net run off in any deposit category is assumed in the interest rate sensitivity table. It is our policy to maintain our cumulative one year gap ratio in the -20% to +10% range. At ~~March 31,~~September 30, 2005, we were within this range with a one year cumulative sensitivity ratio of ~~-13.5%~~-17.4%.

See also Item 3, “Quantitative and Qualitative Disclosures About Market Risk.”

COMMITMENTS

The Bank is a party to financial instruments with off-balance sheet risk ~~entered into~~ 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 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 other party to financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of these instruments. The Bank uses the same credit policies in making commitments to extend credit and generally uses the same credit policies for letters of credit as it does for on-balance sheet instruments.

Commitments to extend credit are legally binding agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since some of these commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. At ~~March 31,~~September 30, 2005, total unfunded loan commitments were approximately ~~$133.2~~$179.3 million.

Standby letters of credit are conditional commitments issued by the Bank to assure the performance or financial obligations of a customer to a third party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. The Bank generally holds collateral and/or obtains personal guarantees supporting these commitments. Since most of the letters of credit are expected to expire without being drawn upon, they do not necessarily represent future cash requirements. At ~~March 31,~~September 30, 2005, commitments under standby letters of credit aggregated approximately ~~$2.4~~$2.6 million.

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market risk is the risk that a financial institution’s earnings and capital, or its ability to meet its business objectives, will be adversely affected by movements in market rates or prices such as interest rates, foreign exchange rates, equity rates, equity prices, credit spreads and/or commodity prices. The Company has assessed its market risk as predominately interest rate risk.

~~The following interest~~

Interest rate sensitivity ~~analysis information~~ as of ~~March 31,~~September 30, 2005 was ~~developed~~analyzed using a simulation analysis of the Company’s sensitivity to changes in net interest income under varying assumptions for changes in market interest rates. Specifically, the model derives expected interest income and interest expense resulting from ~~an immediate~~gradual and parallel shift in the yield ~~curve in the amounts shown.~~

~~These rate~~curve. Rate changes are matched with known ~~repricing intervals and~~re-pricing intervals. The bank uses standardized assumptions ~~for new growth net~~run against bank data by an outsourced provider of ~~expected prepayments.~~Asset Liability reporting. The ~~assumptions are based primarily on experience in the Company’s market under varying rate environments. The imbedded options~~analysis indicates that the ~~Company’s loan customers possess~~bank is benefited in an increasing rate environment more than it is harmed by a decreasing rate environment. This is primarily due to ~~refinance are considered for purposes of this analysis along with scheduled and unscheduled principal reductions offset by anticipated loan originations.~~

~~This analysis intentionally exaggerates interest sensitivity. For~~ the sake of simplicity and comparability, an immediate change in rates is assumed. However, any significant change in actual market rates would probably be phased in over an extended period of time. This phase in would reduce the net interest income effects for any absolute change in rates. Also,fact that the Company has been originating adjustable rate commercial loans with interest rate floors that are currently at rates higher than the index and margin on the loans would indicate. An example would be a loan at Prime plus 1% but with a 7.0% floor. The Company currently has in excess of $188 million of these types of loans where the loan rates are at the floors. The effects of this are twofold. First, this has benefited our margins in the recent past and currently since we have had assets earning yields higher than would behave been the case absent the floor rates. Second, in a declining ~~rate environment and in a limited rising~~ rate environment, those “adjustable” rate loans act like fixed rate loans. This limits the Company’s loss of interest income when rates decline but does not constrain income gains in a rising rate ~~market. In general, having this significant amount of~~market once these loans athave moved past their ~~floors reduces the Company’s overall rate sensitivity.~~

floors.

The Company attempts to retain interest rate neutrality by generating mostly adjustable rate loans and managing the securities, wholesale funding, and Fed Funds positions to offset the ~~repricing~~re-pricing characteristics of the deposit liabilities.

Item 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the Corporation’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, they have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that material information related to the ~~Corporation~~Company is made known to them by others within the Corporation.

Part II. OTHER INFORMATION

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

Not applicable

Item 5. OTHER INFORMATION

Not applicable

Item 6. EXHIBITS

(a)
	~~(a)~~ Exhibits

		~~3.1~~	~~Amendment to Restated Articles of Incorporation of TIB Financial Corp.~~
		~~3.2~~	~~Amendment to Bylaws~~
		~~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~~

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

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

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			TIB FINANCIAL CORP.

					~~/s/~~
		/s/ Edward V. Lett
Date: ~~May 10,~~	November 9, 2005			Edward V. Lett
			President and Chief Executive Officer

					~~/s/~~
		/s/ David P. Johnson
			David P. Johnson
			Executive Vice President and Chief Financial Officer


	March 31, 2005			December 31, 2004
	(Unaudited)
ASSETS
Cash and due from banks	$	20,216		$	27,410
Federal funds sold		62,391			15,528

Cash and cash equivalents		82,607			42,938

Investment securities available for sale		80,735			77,807
Loans, net of deferred loan costs and fees		719,285			655,678
Less: allowance for loan losses		6,541			6,243

Loans, net		712,744			649,435

Premises and equipment, net		27,141			27,559
Goodwill		155			155
Intangible assets, net		1,320			1,392
Accrued interest receivable and other assets		34,624			30,039

TOTAL ASSETS	$	939,326		$	829,325


LIABILITIES
Deposits:
Noninterest-bearing demand	$	185,012		$	152,035
Interest-bearing		614,269			535,824

Total Deposits		799,281			687,859
Federal Home Loan Bank (FHLB) advances		25,000			35,000
Short-term borrowings		19,922			12,157
Long-term borrowings		17,000			18,250
Accrued interest payable and other liabilities		9,844			7,945

TOTAL LIABILITIES		871,047			761,211


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, 5,706,939
and 5,679,239 shares issued		571			568
Additional paid in capital		38,629			38,284
Retained earnings		29,859			28,968
Accumulated other comprehensive income		(780	)		294

TOTAL SHAREHOLDERS’ EQUITY		68,279			68,114

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	939,326		$	829,325


	Three months ended
	March 31,
	2005		2004
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	11,310	$	8,601
Investment securities:
Taxable		636		410
Tax-exempt		160		153
Interest bearing deposits in other bank		4		1
Federal Home Loan Bank Stock		27		15
Federal funds sold		209		38

TOTAL INTEREST AND DIVIDEND INCOME		12,346		9,218

INTEREST EXPENSE
Deposits		3,101		1,892
Federal Home Loan Bank advances		175		94
Short-term borrowings		73		9
Long term borrowings		383		395

TOTAL INTEREST EXPENSE		3,732		2,390


NET INTEREST INCOME		8,614		6,828

PROVISION FOR LOAN LOSSES		586		369

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,028		6,459

NON-INTEREST INCOME
Service charges on deposit accounts		608		644
Investment securities gains, net		—		44
Merchant bankcard processing income		1,896		1,760
Fees on mortgage loans sold		492		398
Other income		398		427

TOTAL NON-INTEREST INCOME		3,394		3,273

NON-INTEREST EXPENSE
Salaries and employee benefits		4,212		3,442
Net occupancy expense		1,276		1,122
Other expense		3,565		3,230

TOTAL NON-INTEREST EXPENSE		9,053		7,794


INCOME BEFORE INCOME TAX EXPENSE		2,369		1,938

INCOME TAX EXPENSE		822		665


NET INCOME	$	1,547	$	1,273


BASIC EARNINGS PER SHARE:	$	0.27	$	0.29
DILUTED EARNINGS PER SHARE:	$	0.26	$	0.27


					Additional					Accumulated Other			Total
			Common		Paid in		Retained			Comprehensive			Shareholders’
	Shares		Stock		Capital		Earnings			Income (Loss)			Equity
Balance,January 1, 2005		5,679,239	$	568	$	38,284	$	28,968		$	294		$	68,114
Comprehensive income:
Net income								1,547						1,547
Other comprehensive income, net of tax
benefit of $645:
Net market valuation adjustment on
securities available for sale											(1,074	)
Other comprehensive income, net of tax														(1,074	)

Comprehensive income														473

Exercise of stock options		27,700		3		280								283
Income tax benefit from stock options exercised						65								65
Cash dividends declared, $.115 per share						—		(656	)					(656	)

Balance,March 31, 2005		5,706,939	$	571	$	38,629	$	29,859		$	(780	)	$	68,279


	For the three month period ended
	March 31,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	1,547		$	1,273
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		617			527
Provision for loan losses		586			369
Deferred income tax benefit		(120	)		(115	)
Investment securities net gains		—			(44	)
Net gain on sale/disposal of premises, equipment and intangibles		(32	)		(1	)
Mortgage loans originated for sale		(45,679	)		(27,195	)
Proceeds from sale of mortgage loans		43,153			24,901
Fees on mortgage loans sold		(492	)		(398	)
Increase in accrued interest receivable and other assets		(818	)		(109	)
Increase (decrease) in accrued interest payable and other liabilities		1,960			(581	)

NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES		722			(1,373	)


CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale		(5,000	)		—
Repayments of principal and maturities of investment securities available for sale		332			1,199
Sales of investment securities available for sale		—			2,046
Net sale of FHLB stock		129			1,250
Proceeds from sales of government guaranteed loans		—			569
Loans originated or acquired, net of principal repayments		(63,988	)		(11,854	)
Purchases of premises and equipment		(186	)		(1,525	)
Sales of premises, equipment and intangibles		93			2

NET CASH USED BY INVESTING ACTIVITIES		(68,620	)		(8,313	)


CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings		7,765			1,306
Net decrease in FHLB short-term advances		(10,000	)		(15,000	)
Repayments of FHLB long-term advances		—			(10,000	)
Repayments of notes payable		(1,250	)		—
Net increase in demand, money market and savings accounts		55,564			54,250
Net increase in time deposits		55,858			9,370
Proceeds from exercises of stock options		283			426
Cash dividends paid		(653	)		(499	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		107,567			39,853


NET INCREASE IN CASH AND CASH EQUIVALENTS		39,669			30,167
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		42,938			33,681

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	82,607		$	63,848


SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Cash paid for:
Interest	$	3,655		$	3,621

Income taxes	$	—		$	—


	2005		2004
For the three months ended March 31:
Basic		5,686,233		4,462,493
Dilutive effect of options outstanding		179,866		196,901

Diluted		5,866,099		4,659,394


For the three months ended March 31,
(dollars in thousands, except per share amounts)	2005		2004

Net income, as reported	$	1,547	$	1,273
Stock-based compensation expense determined under fair value based method, net of tax		63		72

Pro forma net income	$	1,484	$	1,201


Basic earnings per share as reported	$	0.27	$	0.29
Pro forma basic earnings per share		0.26		0.27
Diluted earnings per share as reported		0.26		0.27
Pro forma diluted earnings per share		0.25		0.26


	Well	Adequately
	Capitalized	Capitalized	March 31, 2005	December 31, 2004
	Requirement	Requirement	Actual	Actual
Tier 1 Capital (to Average Assets)
Consolidated	³5%	³4%	9.1%		10.0	%
Bank	³5%	³4%	9.5%		10.5	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	³6%	³4%	9.9%		10.9	%
Bank	³6%	³4%	10.3%		11.4	%

Total Capital (to Risk Weighted Assets)
Consolidated	³10%	³8%	11.2%		12.6	%
Bank	³10%	³8%	11.1%		12.4	%


			Merchant		Parent
Three months ended	Community		Bankcard		And
March 31, 2005	Banking		Processing		Other			Totals

Interest and dividend income	$	12,346	$	—	$	—		$	12,346
Interest expense		3,349		—		383			3,732

Net interest and dividend income (expense)		8,997		—		(383	)		8,614
Other income		1,488		1,896		10			3,394
Depreciation and amortization		615		2		—			617
Other expense		7,295		1,575		152			9,022

Pretax segment profit (loss)	$	2,575	$	319	$	(525	)	$	2,369


Segment Assets	$	938,876	$	34	$	416		$	939,326

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

~~(2)~~	Interest income and rates include the effects of a tax equivalent adjustment using a Federal tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a fully taxable basis.

~~(3)~~	~~Net interest margin is net interest income divided by average total interest-earning assets.~~

	2005 compared to 2004(1)
	Due to changes in
(dollars in thousands)							Net
	Average			Average			Increase
	Volume			Rate			(Decrease)

Interest income
Loans (2)	$	2,289		$	421		$	2,710
Investment securities (2)		264			(38	)		226
Marketable equity securities (2)		18			(9	)		9
Interest-bearing deposits in other banks		—			3			3
Federal Home Loan Bank Stock		7			4			11
Federal funds sold		70			101			171

Total interest income		2,648			482			3,130


Interest expense
NOW accounts		21			101			122
Money market		83			324			407
Savings deposits		5			7			12
Time deposits		587			81			668
Short-term borrowings and FHLB advances		15			130			145
Long-term borrowings		(29	)		17			(12	)

Total interest expense		682			660			1,342


Change in net interest income	$	1,966		$	(178	)	$	1,788

~~(1)~~	~~The change in interest due to both rate and volume has been allocated to the volume and rate components in proportion to the relationship of the dollar amounts of the absolute change in each.~~

~~(2)~~	Interest income includes the effects of a tax equivalent adjustment using a federal tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a fully taxable basis.