Forward-looking Statements

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

The following discussion addresses the factors that have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated statement of condition as of March 31, 2009, and statements of operations for the three months ended March 31, 2009. Operating results for the three months ended March 31, 2009 are not necessarily indicative of trends or results to be expected for the year ended December 31, 2009. TIB Financial's results of operations during 2009 include the operations of The Bank of Venice and Naples Capital Advisors subsequent to their acquisitions on April 30, 2007 and January 2, 2008, respectively, as well as the operations of nine former branches of Riverside Bank of the Gulf Coast ("Riverside") subsequent to their assumption on February 13, 2009.

Quarterly Summary

For the first quarter of 2009, the Company reported a net loss before dividends on preferred stock of $3.5 million compared to a net loss of $1.4 million for the first quarter of 2008. The net loss allocated to common shareholders was $4.2 million, or $0.29 per share, for the first quarter of 2009, compared to a net loss of $0.11 per share for the comparable 2008 quarter.

The higher net loss for the first quarter of 2009 compared to net loss during the first quarter of 2008 was due to the increased provision for loan losses, higher non-interest expenses and a lower net interest margin, net interest income and non-interest income.

In response to the increase in non-performing loans and further contraction of economic activity in local markets and increased net charge-offs, the first quarter results include a provision for loan losses of $5.3 million. The provision reflects net charge-offs of $3.6 million and an increase in the reserve for loan losses of $1.7 million, to $25.5 million, or 2.09% of loans at March 31, 2009.

Of the loans placed on nonaccrual during the quarter, $4.8 million related to one commercial land development loan which we currently have reviewed and determined that no specific reserve is necessary at this time. The balance of the loans placed on nonaccrual are comprised of seventeen smaller commercial, commercial real estate and residential loans.

TIB Financial also reported total assets of $1.84 billion as of March 31, 2009, representing 14% asset growth from December 31, 2008. Total loans remained flat at $1.22 billion as a $10.2 million decline in indirect auto loans offset increases in our commercial and residential portfolios. Total deposits of $1.44 billion as of March 31, 2009 increased $300.8 million, or 26%, from December 31, 2008 due to the assumption of approximately $317 million of deposits and the operations of nine branches of the former Riverside from the FDIC.

The assumption of the deposits of the former Riverside presented a highly attractive strategic opportunity that significantly increased our Southwest Florida presence, market share and franchise value. The acquisition strengthens our presence in the Naples, Fort Myers and Venice markets and provides a strong entrance into the contiguous Cape Coral community. The Riverside transaction deployed a significant portion of the capital we raised through the issuance of preferred stock to the United States Treasury in December last year. The transaction also generated a substantial increase in liquidity which allowed us to reduce our wholesale funding by $114 million by paying off maturing FHLB borrowings and brokered deposits.

As we aggressively address the challenges presented by the current economic and operating environment we continue to focus on new business initiatives, improvement of operating performance and resolution of non-performing assets. Significant developments are outlined below.

· Under challenging and declining investment markets, Naples Capital Advisors and TIB Bank's trust department continued to establish new investment management and trust relationships increasing the market value of assets under management to $99 million as of quarter end while TIB private bankers developed new deposit relationships during the quarter of $14 million.

· Our indirect auto loan portfolio declined $10.2 million during the quarter to $71.9 million, or 6% of total loans. Non-performing loans in this business segment decreased to $1.7 million in comparison to $1.9 million at December 31, 2008 and charge-offs during the quarter declined to $2.2 million compared to $2.3 million in the fourth quarter. Unsold repossessed vehicles declined to $407,000 from $601,000 at year end. Additionally, delinquency of indirect auto loans declined to 7% at quarter end down from 9% at year end.

· The net interest margin declined to 2.65% during the quarter in comparison to the 2.85% in the fourth quarter of 2008 due primarily to the impact of the acquisition of the Riverside deposits. Initially, approximately $280 million of cash was received in the transaction which was temporarily invested in short-term and cash equivalent investments. $114 million was later utilized in March to pay down maturing wholesale funding and approximately $160 million was invested in higher yielding investment securities. Only $1 million of loans were acquired in the initial transaction. The impact of nonaccrual loans reduced the margin by approximately 15 basis points.

Results of Operations

For the first quarter of 2009, our operations resulted in a net loss before dividends on preferred stock of $3.5 million compared to a net loss of $1.4 million in the previous year's quarter. Loss allocated to common shareholders was $0.29 per share for the 2009 quarter as compared a net loss of $0.11 per share for the comparable 2008 quarter.

Annualized loss on average assets allocated to common shareholders for the first quarter of 2009 was 0.95% compared to a loss on average assets of 0.39% for the first quarter of 2008. Loss on average shareholders' equity was 11.56% for the first quarter of 2009 compared to a loss of 5.83% for the same quarter of 2008.

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 and securities purchased under agreements to resell, interest-bearing deposits in other banks and investment securities. Our interest-bearing liabilities include deposits, federal funds purchased, subordinated debentures, advances from the FHLB and other short term borrowings.

Net interest income was approximately $10.8 million for the three months ended March 31, 2009, a decrease from the $10.9 million reported for the same period last year, due principally to the decline in the net interest margin to 2.65% from 3.13%. The decline in net interest margin is primarily due to the impact of the acquisition of the deposits and operations of nine former Riverside branches and associated assets combined with the higher levels of non-performing loans and cash, cash equivalents and short-term, highly liquid and lower yielding securities maintained during the first quarter of 2009. Upon closing of the transaction, execution of our investment plan included purchasing intermediate maturity investment securities and maintaining a significant balance of lower yielding money market and cash equivalent securities to reduce wholesale funding. The intermediate term investments are intended to maintain available liquidity to redeploy as loans to local consumers and businesses. The maintenance of this higher level of lower yielding short-term liquid assets and intermediate investment securities has reduced the net interest margin. We estimate that the assumption of the Riverside deposits and the initial investment of the significant cash proceeds generated no net interest income during the first quarter because the interest cost of the deposits exceeded the yield of the initial investments made. As a result of our repricing of a portion of the assumed deposits, the $114 million reduction of wholesale funding in March and the income from our investment strategy, we estimate that net interest income will be generated from the Riverside transaction beginning in the second quarter.

The $2.1 million decrease in interest and dividend income for the first quarter of 2009 compared to the first quarter of 2008 was mainly attributable to decreased average rates on loan balances due primarily to the 400 basis point decrease in the prime and fed funds sold rates combined with a higher level of non-performing loans. Offsetting this decline were decreases in the interest cost of transaction accounts and borrowings due to commensurate decreases in deposit interest rates. Increases in balances led to an increase in interest expense on time and savings deposits. The decrease in interest expense on short term borrowings was partially offset by increased balances.

Interest rates during the first quarter of 2009 were significantly lower than the prior year period due to highly stimulative monetary policies undertaken by the Federal Reserve beginning in the third quarter of 2007. As a result of the actions taken by the Federal Reserve, the prime rate declined from 7.25% in the first quarter of 2008 to 3.25% in first quarter of 2009.

Due to the rapid and significant decline in the prime rate and the overall interest rate environment, the yield on our loans declined 122 basis points and the yield of our interest earning assets declined 148 basis points in the first quarter of 2009 compared to the first quarter of 2008.

The lower interest rate environment also resulted in a significant decline in the interest cost of interest bearing liabilities. The average interest cost of interest bearing deposits declined 110 basis points and the overall cost of interest bearing liabilities declined by 121 basis points compared to the first quarter of 2008. Due to the rapidly declining interest rate environment and highly competitive deposit pricing on a local and national basis, we were not able to reduce the cost of our deposits as quickly and to the same extent as the decline in our earning asset yield.

Going forward, we expect short-term market interest rates to remain low for an extended period of time. We expect deposit costs to continue to decline but they may decrease more slowly or to a lesser extent than loan and investment yields, or they could increase due to strong demand in the financial markets and banking system for liquidity which may be reflected in elevated pricing competition for deposits. In the current interest rate environment, we believe that our interest margin will continue to be under pressure. The predominant drivers to increase net interest income are the composition of earning assets and the overall growth of our balance sheet. Although the timing and possible effects of future changes in interest rates could be significant, we expect any such impact to continue to be less in extent than the changes in earning asset composition and overall balance sheet size.

                                                    2009                                                        2008
                             Average             Income/              Yields/             Average             Income/             Yields/
(Dollars in thousands)       Balances            Expense               Rates              Balances            Expense              Rates
Interest-earning
assets:
Loans (1)(2)               $  1,223,542       $       17,840                 5.91 %     $  1,137,388       $       20,150               7.13 %
Investment securities
(2)                             287,829                2,913                 4.10 %          157,773                1,939               4.94 %
Money Market Mutual
Funds                            84,409                  103                 0.49 %                -                    -                  -
Interest-bearing
deposits in other banks          38,393                   20                 0.21 %            1,382                   11               3.20 %
Federal Home Loan Bank
stock                            11,728                  (19 )              -0.67 %            8,489                  127               6.02 %
Federal funds sold and
securities sold under
agreements to resell              7,564                    3                 0.16 %           94,276                  744               3.17 %
Total interest-earning
assets                        1,653,465               20,860                 5.12 %        1,399,308               22,971               6.60 %

Non-interest-earning
assets:
Cash and due from banks          31,270                                                       20,269
Premises and equipment,
net                              38,205                                                       38,120
Allowance for loan
losses                          (23,352 )                                                    (14,668 )
Other assets                     70,076                                                       52,624
Total
non-interest-earning
assets                          116,199                                                       96,345
Total assets               $  1,769,664                                                 $  1,495,653

Interest-bearing
liabilities:
Interest-bearing
deposits:
NOW accounts               $    167,889       $          329                 0.79 %     $    183,982       $        1,117               2.44 %
Money market                    155,485                  661                 1.72 %          179,081                1,424               3.20 %
Savings deposits                 91,984                  408                 1.80 %           51,009                  180               1.42 %
Time deposits                   746,393                6,501                 3.53 %          536,065                6,405               4.81 %
Total interest-bearing
deposits                      1,161,751                7,899                 2.76 %          950,137                9,126               3.86 %

Other interest-bearing
liabilities:
Short-term borrowings
and FHLB advances               252,160                1,430                 2.30 %          210,659                2,035               3.89 %
Long-term borrowings             63,000                  736                 4.74 %           63,000                  905               5.78 %
Total interest-bearing
liabilities                   1,476,911               10,065                 2.76 %        1,223,796               12,066               3.97 %

Non-interest-bearing
liabilities and
shareholders' equity:
Demand deposits                 155,839                                                      153,579
Other liabilities                15,597                                                       18,676
Shareholders' equity            121,317                                                       99,602
Total
non-interest-bearing
liabilities and
shareholders' equity            292,753                                                      271,857
Total liabilities and
shareholders' equity       $  1,769,664                                                 $  1,495,653

Interest rate
spread (tax equivalent
basis)                                                                       2.36 %                                                     2.63 %
Net interest
income (tax equivalent
basis)                                        $       10,795                                               $       10,905
Net interest margin (3)
(tax equivalent basis)                                                       2.65 %                                                     3.13 %

_______

Changes in Net Interest Income

The table below details the components of the changes in net interest income for
the three months ended March 31, 2009 and March 31, 2008. 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.

                                                                         2009 Compared to 2008 (1)
                                                                             Due to Changes in
                                                            Average                 Average            Net Increase
(Dollars in thousands)                                      Volume                   Rate               (Decrease)
Interest income
Loans (2)                                              $           1,445        $        (3,755 )     $       (2,310 )
Investment securities (2)                                          1,366                   (392 )                974
Money Market Mutual Funds                                            103                      -                  103
Interest-bearing deposits in other banks                              29                    (20 )                  9
Federal Home Loan Bank stock                                          35                   (181 )               (146 )
Federal funds sold and securities purchased under
agreements to resell                                                (365 )                 (376 )               (741 )
Total interest income                                              2,613                 (4,724 )             (2,111 )

Interest expense
NOW accounts                                                         (90 )                 (698 )               (788 )
Money market                                                        (168 )                 (595 )               (763 )
Savings deposits                                                     173                     55                  228
Time deposits                                                      2,110                 (2,014 )                 96
Short-term borrowings and FHLB advances                              347                   (952 )               (605 )
Long-term borrowings                                                   -                   (169 )               (169 )
Total interest expense                                             2,372                 (4,373 )             (2,001 )

Change in net interest income                          $             241        $          (351 )     $         (110 )

________

Provision for Loan Losses

The provision for loan losses increased to $5.3 million in the first quarter of 2009 compared to $2.7 million in the comparable prior year period. The higher provision for loan losses in 2009 reflects the continued financial challenges of our consumer and commercial customers. While we continue to see an increase in the number of real estate unit sales as compared to the prior year period and even the prior quarter, the impact of foreclosures and distressed sales is evident in the value of real estate. Additionally, we experienced higher levels of non-performing loans and delinquencies and higher levels of net charge-offs. Net charge-offs were $3.6 million, or 1.19% of average loans on an annualized basis, during the three months ended March 31, 2009, compared to $1.8 million, or 0.63% of average loans on an annualized basis, for the same period in 2008. The charge-offs resulting from the indirect loan portfolio were $2.2 million and $1.7 million in the first quarter of 2009 and 2008, respectively.

Our provision for loan losses in future periods will be influenced by the loss potential of non-performing loans and net charge offs, which cannot be reasonably predicted.

The indirect loan portfolio experienced sharp increases, beyond our historical experience, in delinquencies beginning in the second half of 2007. This increase in delinquency reflects, in part, the significant increase in unemployment in the Fort Myers, Lee County area where our indirect auto loans are concentrated. In response, our collection and liquidation operations accelerated dramatically, resulting in substantially all of our vehicles being disposed of through wholesale rather than retail channels. Contemporaneously, the market for used vehicles became increasingly saturated and a surge in fuel prices reduced demand for used vehicles, and especially so for the less fuel efficient vehicles like light trucks and sport utility vehicles. These factors combined to lower our realization upon disposition on a per vehicle basis and increase the volume and severity of the losses incurred during 2008 and the first quarter of 2009.

                                    Indirect Loan Portfolio Statistics
                                                        As of or For the Quarter Ended
(Dollars in thousands)              Mar 2009       Dec 2008       Sept 2008       June 2008       Mar 2008
30-89 days delinquent              $    3,245     $    5,542     $     3,782     $     2,193     $    2,682
Non accrual                        $    1,677     $    1,878     $     1,317     $     1,220     $    3,543
Total delinquencies                      6.85 %         9.05 %          5.56 %          3.44 %         5.55 %
Net charge offs for the quarter    $    2,213     $    2,300     $     2,707     $     3,951     $    1,662
Net (gain)/loss on disposition
of vehicles                        $      (79 )   $       40     $       149     $       (55 )   $    1,208
Number of vehicles sold during
the quarter                               267            638             314             271            245
External collection costs
incurred during the quarter        $      104     $      464     $       331     $       306     $      240

We continuously monitor and actively manage the credit quality of the entire loan portfolio and will continue to recognize the provision required to maintain the allowance for loan losses at an appropriate level. Due to the economic slowdown discussed above, both individual and business customers are exhibiting increasing difficulty in timely payment of their loan obligations. We believe that this trend may continue in the near term. Consequently, we may experience higher levels of delinquent and non-performing loans, which may require higher provisions for loan losses, higher charge-offs and higher collection related expenses in future periods.

Excluding net gains on investment securities, non-interest income was $1.8 million in the first quarter of 2009 compared to $1.6 million in the first quarter of 2008. The increase is due primarily to higher deposit service charges and investment advisory fees, partially offset by lower fees due to lower sales of residential loans in the secondary market. The former Riverside operations contributed $357,000 of service charge and other income during the period.

The following table represents the principal components of non-interest income for the first quarter of 2009 and 2008:

(Dollars in thousands)                             2009         2008
Service charges on deposit accounts               $   966      $   722
Investment securities gains, net                      596          910
Fees on mortgage loans sold                           115          232
Investment advisory fees                              193          125
Debit card income                                     184          186
Earnings on bank owned life insurance policies        130          126
Other                                                 195          160
Total non-interest income                         $ 2,379      $ 2,461

Non-interest Expense

Non-interest expense for the first quarter of 2009 was $13.4 million. This represented a 3% increase over the prior year period which totaled $13.0 million. The first quarter non-interest expense includes approximately $905,000 attributable to the former Riverside operations.

Salaries and employee benefits increased $1.3 million in the first quarter of 2009 relative to the first quarter of 2008. Salaries and employee benefits of $316,000 in the first quarter of 2009 reflect the hiring of new employees in connection with the Riverside transaction. Unrelated severance costs accounted for approximately $674,000 of the first quarter 2009 increase. The balance of the increase reflects cost of living adjustments and merit increases for our employees.

For the first quarter of 2009, there was a $138,000 increase in occupancy expense as compared to the first quarter of 2008. Excluding the $213,000 of occupancy costs related to the operations of the former Riverside branch network and facilities, the Company would have had a $75,000 decrease in occupancy costs for the quarter. This decrease is a result of our continued focus on consolidating facilities and containing operating costs.

Other expenses declined $1.1 million in the first quarter of 2009 relative to the first quarter of 2008. The first quarter of 2008 included $1.2 million in . . .