<PAGE> 1
As filed with the Securities and Exchange Commission on March 27, 1997
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIB FINANCIAL CORP.
(Name of Small Business Issuer in Its Charter)
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Florida 6711 65-0655973
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(State of Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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99451 Overseas Highway
Key Largo, FL 33037-7808
(305) 451-4660
(Address and Telephone Number of Principal Executive Offices)
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<S> <C>
Edward V. Lett With a copy to:
President and Chief Executive Officer Stanley H. Pollock, Esq.
TIB Financial Corp. V. Richard Hoyt, Esq.
99451 Overseas Highway Holland & Knight LLP
Key Largo, FL 33037-7808 Suite 2000, One Atlantic Center
(305) 451-4660 1201 West Peachtree Street
(Name, address and telephone number of agent for service) Atlanta, Georgia 30309-3400
</TABLE>
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Approximate date of proposed sale to the public: As soon as practicable
following effectiveness of this Registration Statement.
If the securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [__]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [__]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [__]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Class of Amount Offering Price Aggregate Amount of
Securities To Be Registered To Be Registered Per Share(1) Offering Price(1) Registration Fee(1)
- ---------------------------------------------------------------------------------------------------------------------------
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Common Stock 1,178,124 $5.35 $6,302,963 $1,910
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(1)Estimated solely for the purpose of calculating the registration fee on the
basis of the book value of $5.35 per share of common stock on February 28,
1997.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
CROSS REFERENCE TABLE
LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY PART I
OF FORM S-1
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ITEM NUMBER AND CAPTION LOCATION OR HEADING IN PROSPECTUS
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1. Forepart of the Registration Statement and Forepart of the Registration Statement Outside Front
Outside Front Cover Page of Prospectus . . . . Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . Inside Front and Outside Back Cover Pages of Prospectus
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges . . . . . . . . . . Prospectus Summary; Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . Plan of Distribution
6. Dilution . . . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders . . . . . . . . . . . Selling Shareholders
8. Plan of Distribution . . . . . . . . . . . . . Plan of Distribution
9. Description of Securities to be Registered . . Description of Capital Stock
10. Interests of Named Experts and Counsel . . . . Legal Matters; Experts
11. Information with Respect to the Registrant . . Prospectus Summary; Risk Factors; The Company;
Capitalization; Market Information and Dividends;
Management's Discussion and Analysis of Financial
Condition and Results of Operations; Business;
Management and Principal Shareholders; Supervision and
Regulation; Description of Capital Stock; Legal Matters;
Financial and Statistical Information; Financial
Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities Management and Principal Shareholders
</TABLE>
<PAGE> 3
PROSPECTUS
TIB FINANCIAL CORP.
UP TO 1,178,124 SHARES OF COMMON STOCK OFFERED BY SELLING SHAREHOLDERS
This Prospectus relates to 1,178,124 shares (the "Shares") of the $0.10
par value common stock ("Common Stock") of TIB Financial Corp. (the "Company")
that may be offered for sale from time to time by certain shareholders of the
Company. See "Selling Shareholders." The Shares are either presently
outstanding shares of Common Stock owned by Company directors (the "Selling
Shareholders") or shares of Common Stock subject to options held by them. No
period of time has been fixed during which the Shares must be sold, and each
Selling Shareholder may determine to sell all, none or any number of the Shares
specified as available for sale by him pursuant to this offering.
INVESTMENT IN THE SHARES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE ___ OF THIS PROSPECTUS. Prospective purchasers should
recognize that an investment in Shares involves certain risks. In particular,
there is no established public trading market or market maker for the Common
Stock, the Company's financial performance is dependent on the performance of
the tourism industry in the Florida Keys, regulatory and other restrictions
limit the dividends payable by the Company's wholly owned subsidiary, TIB Bank
of the Keys (the "Bank") to the Company and by the Company to shareholders, and
the high level of competition in the financial institutions industry.
The Selling Shareholders have advised the Company that they (or their
successors-in-interest) may sell their respective Shares from time to time at
negotiated prices in individually negotiated transactions, through securities
broker-dealers at market prices prevailing at the time of the sale if a market
for the Common Stock develops, in a future underwritten public offering or
otherwise. Sales may be made pursuant to this Prospectus to or through
broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders or the purchasers of
Common Stock for whom such broker-dealers may act as agent or to whom they may
sell as principal or both (which compensation as to a particular broker-dealer
may be in excess of customary commissions). One or more supplemental
prospectuses will be filed pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Securities Act"), to describe any material arrangements
for the sales of the Shares when such arrangements are entered into by any of
the Selling Shareholders and any broker-dealers that participate in the sale of
the Shares.
Any broker-dealers or other persons acting on behalf of the Selling
Shareholders in connection with the sale of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by them and any profit realized by them on the resale of the Shares as
principals may be deemed to be underwriting commissions under the Securities
Act. As of the date hereof, there are no special selling arrangements between
any broker-dealer or other person and any Selling Shareholder.
The Company will not receive any part of the proceeds of any sales of
Shares pursuant to this Prospectus. The Selling Shareholders will bear any
commissions or underwriting discounts incurred in connection with any sales of
Shares through broker-dealers or in any underwritten public offering. The
Company has agreed to pay the expenses of this offering, estimated to be $
*, and has indicated that it will keep the Registration Statement covering the
Shares effective until the Shares are sold. No other public offering of Shares
is currently contemplated. See "Plan of Distribution."
THESE SECURITIES ARE NOT SAVINGS DEPOSITS AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _________________, 1997
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT ANY INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE ANY
SECURITIES OTHER THAN THE SHARES TO WHICH IT RELATES OR AN OFFER TO ANY PERSON
IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR WOULD
BE UNLAWFUL.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement under the Securities Act
of 1933, as amended, with respect to the securities offered hereby with the
Securities and Exchange Commission (the "Commission"). As permitted by the
Rules and Regulations of the Commission, this Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits
filed therewith and reference is made to the Registration Statement and the
exhibits filed therewith for further information concerning the Company and the
securities offered hereby. Each statement contained in this Prospectus as to
the contents of a document filed as an exhibit to the Registration Statement is
qualified by reference to the exhibit for a complete statement of its terms and
conditions. Copies of such material, as well as periodic reports and
information filed by the Company, can be obtained upon payment of the fees
prescribed by the Commission, or may be examined at the offices of the
Commission without charge, at (i) the public reference facilities in
Washington, D.C. at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, (ii) the Northeast Regional Office in New York at 7
World Trade Center, Suite 1300, New York, New York 10048, and (iii) the Midwest
Regional Office in Chicago, Illinois at 500 West Madison Street, Suite 1400,
Chicago, Illinois 66661-2511. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission (the address
of such site is http://www.sec.gov).
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person,
a copy of any or all of the documents which are incorporated by reference
herein, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to the Company at its principal executive offices at 99451
Overseas Highway, Key Largo, Florida 33037-7808, Attention: Edward V. Lett,
President and Chief Executive Officer, telephone number (305) 451-4660.
The Company may not be required to deliver an annual report to
shareholders pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended. However, the Company intends to furnish its shareholders with annual
reports that include audited financial statements in any event. The Company
currently plans to apply to list the Company's common stock on the National
Market System of the NASDAQ Stock Market by the end of the second calendar
quarter.
<PAGE> 5
PROSPECTUS SUMMARY
THE FOLLOWING SELECTED INFORMATION IS QUALIFIED IN ITS ENTIRETY BY THE
MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS (INCLUDING THE NOTES
THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS, AND SHOULD BE READ TOGETHER
THEREWITH. PROSPECTIVE PURCHASERS SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY
BEFORE MAKING AN INVESTMENT DECISION.
THE COMPANY
TIB Financial Corp. is a Florida corporation that serves as the holding
company for TIB Bank of the Keys (the "Bank"), a Florida state-chartered
commercial bank engaged in a general commercial banking business with nine
banking offices located throughout the Florida Keys. The Company is registered
as a bank holding company with the Board of Governors of the Federal Reserve
System ("Federal Reserve") under the federal Bank Holding Company Act of 1956,
as amended ("BHC Act"). The Company was incorporated in February 1996 to
facilitate a reorganization (the "Reorganization") pursuant to which the
Company became the parent holding company for the Bank. The Reorganization was
completed on August 31, 1996. Through the Bank, the Company provides a broad
range of banking and financial services in Monroe County, Florida. See "The
Company" and "Business."
The Bank, which is currently the Company's only subsidiary, is a member
of the Federal Deposit Insurance Corporation ("FDIC") and its deposits are
insured by the Bank Insurance Fund (the "BIF") of the FDIC.
The Company maintains its principal executive offices at 99451 Overseas
Highway, Key Largo, Florida 33037-7808, and its telephone number is (305)
451-4660.
BUSINESS STRATEGY
The Company currently intends to expand and diversify its operations by
entering into new lines of business through the Bank and, potentially, other
Company subsidiaries, and by acquiring other financial institutions.
Management believes that this strategy, combined with continued growth of its
existing business, will result in more efficient operations and increase the
likelihood of sustained profitability. However, there can be no assurance that
the Company will be successful in implementing this strategy, attaining
anticipated efficiencies or sustaining profitable operations. See "The
Company -- Business Strategy."
THE OFFERING
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Securities offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to 1,178,124 Shares
Common Stock outstanding before and after sale of Shares . . . . . . . . . . . . . . . . . . . . . . . 4,334,364 Shares
</TABLE>
See "Plan of Distribution" and "Selling Shareholders."
RISK FACTORS
Prospective purchasers should recognize that an investment in Shares
involves certain risks. In particular, there is no established public trading
market or market maker for the Common Stock, the Company's financial
performance is dependent on the performance of the tourism industry in the
Florida Keys, regulatory and other restrictions limit the dividends payable by
the Bank to the Company and by the Company to shareholders, and the high level
of competition in the financial institutions industry. See "The Company;"
"Risk Factors;" "Determination of Offering Price;" "Business -- Competition;"
and "Supervision and Regulation."
<PAGE> 6
RISK FACTORS
The purchase of Shares involves various risks. Prospective purchasers
should consider the following factors, among others, before making a decision
to purchase Shares.
LACK OF ESTABLISHED TRADING MARKET FOR SHARES. There is no established
public trading market or market maker for the Common Stock, and trading of
Common Stock has been limited. There can be no assurance that an active
trading market for Common Stock will develop or be maintained in the future.
As a result, a purchaser of Shares may experience difficulty in selling
purchased Shares in a timely manner and may be required to sell their Shares at
a discount to the price that would be established in an active trading market.
See "Market Information and Dividends." However, the Company currently plans
to apply to list the Company's common stock on the National Market System of
the Nasdaq Stock Market by the end of the second calendar quarter.
REGIONAL ECONOMIC FACTORS. All of the Bank's offices are located in
Monroe County in the Florida Keys. As a result, the Company's financial
performance is substantially dependent on the strength of the economy in the
Florida Keys, which is directly and indirectly dependent on the tourism
industry. A downturn in the tourism industry could negatively impact the value
of collateral securing loans held in the Bank's portfolio, the ability of
borrowers to repay such loans in accordance with original terms and demand for
the Bank's loans, deposits and other products.
GENERAL ECONOMIC CONDITIONS. Economic conditions beyond the Company's
control may have a significant impact on the Company's operations, including
such matters as changes in net interest income from one period to another.
Examples of such conditions include: (i) the strength of credit demand by
customers; (ii) the percentage of deposits that must be held in the form of
non-earning cash reserves; (iii) the introduction and growth of new investment
instruments and transaction accounts by non-bank financial competitors; and
(iv) changes in the general levels of interest rates, including changes
resulting from Federal Reserve monetary activities.
RESTRICTIONS ON DIVIDENDS. Cash dividends will be payable on Shares
only when, as and if declared by the Company's Board of Directors from funds
available therefor. The principal potential source of the funds for any cash
dividend payments by the Company is currently any cash dividend that may be
paid in the future by the Bank. Both the Company and the Bank are subject to
statutory and regulatory restrictions on the payment of dividends and must
maintain adequate capital, which reduces the amount available for dividends.
See "Market Information and Dividends" and "Supervision and Regulation."
COMPETITION. The Company operates in highly competitive markets with
other banks, mortgage companies and other financial institutions, many of which
have greater financial and other resources than available to the Company. The
Company competes with institutions affiliated with much larger institutions
operating on a statewide, regional or national basis. The Company's long term
success will depend on its ability to compete successfully in its service
areas. See "Business -- Competition."
MONETARY POLICY. Like all regulated financial institutions, the Company
will be affected by monetary policies implemented by the Federal Reserve and
other federal instrumentalities. A primary instrument of monetary policy
employed by the Federal Reserve is the restriction or expansion of the money
supply through open market operations and changes in reserve requirements and
the discount rate. These operations sometimes cause wide fluctuations in
interest rates and can have direct, adverse effects on the operating results of
financial institutions. Future changes in fiscal and monetary policy may also
alter the competitive environment for financial services. The possibility and
nature of such changes cannot be assessed at this time. See "Supervision and
Regulation -- Monetary and Fiscal Policies."
GOVERNMENTAL REGULATION. The business of the Company and the Bank is
subject to extensive regulation. Various aspects of existing laws and
regulations, as well as laws enacted and regulations promulgated in the future,
may have adverse effects on the Company's profitability. See "Supervision and
Regulation."
<PAGE> 7
THE COMPANY
GENERAL
The Company is a Florida corporation that is registered as a bank
holding company with the Federal Reserve under the BHC Act. The Company was
incorporated in February 1996 to facilitate the Reorganization pursuant to
which the Company became the parent holding company of the Bank effective on
August 31, 1996. Through the Bank, the Company provides a broad range of
commercial banking and financial services through nine banking offices located
throughout the Florida Keys in Monroe County, Florida. The Company currently
engages in no significant operations other than the ownership of the Bank.
The Bank was incorporated under the laws of the State of Florida on
December 28, 1973, and began banking business on February 1, 1974. As of
December 31, 1996, the Company had total assets of approximately $241.0
million, total deposits of approximately $204.9 million and total shareholders'
equity of approximately $22.6 million.
The Company's principal executive offices are located at 99451 Overseas
Highway, Key Largo, Florida 33037-7808. The Company's mailing address is P.O.
Box 2808, Key Largo, Florida, 33037-7808. Its telephone number is (305)
451-4660.
THE REORGANIZATION
The Company became the parent holding company for the Bank as a result
of a corporate reorganization (the "Reorganization") on August 31, 1996.
Pursuant to the Reorganization, each of the 1,426,488 shares of the Bank's
common stock outstanding on that date was converted into the right to receive
one share of Common Stock. In addition, each outstanding Bank employee and
director stock option was replaced with a Company stock option with
substantially equivalent terms, except that such options apply on a one-for-one
basis to shares of Common Stock rather than shares of the common stock of the
Bank.
BUSINESS STRATEGY
The Company currently intends to expand and diversify its operations by
entering into new lines of business through the Bank and, potentially, other
Company subsidiaries, and by acquiring other financial institutions located in
Florida. Management believes that this strategy, combined with continued
growth of its existing business, will result in more efficient operations and
increase the likelihood of sustained profitability. See "Business". However,
there can be no assurance that the Company will be successful in implementing
this strategy or attaining anticipated efficiencies or profitability.
SELLING SHAREHOLDERS
With respect to each Selling Shareholder, the following table sets forth
the Selling Shareholder's name, positions with the Company, the number of
shares of Common Stock owned beneficially as of the date of this Prospectus,
the maximum number of Shares that may be offered for sale by that Selling
Shareholder pursuant to this offering, and the number of shares of Common Stock
that such Selling Shareholder will own after this offering if all of the Shares
are sold. See also "Plan of Distribution" and "Management and Principal
Shareholders."
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SHARES MAXIMUM SHARES COMMON STOCK
POSITION WITH BENEFICIALLY OFFERED OWNED AFTER
NAME THE COMPANY OWNED OFFERING*
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W. Kenneth Meeks Director and 896,802 896,802 0
Chairman
Joseph H. Roth, Jr. Director 281,322 281,322 0
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* Assumes the sale of all Shares eligible to be sold by the
respective Selling Shareholder, who may determine not to sell any
Shares.
<PAGE> 8
PLAN OF DISTRIBUTION
The 1,178,124 Shares covered by this Prospectus are either presently
issued and outstanding shares of Common Stock which are owned by the Selling
Shareholders, or are Shares of Common Stock subject to options held by the
Selling Shareholders. Each Selling Shareholder will determine the number of
Shares, if any, that he will sell from time to time pursuant to this offering.
The maximum number of Shares that each Selling Shareholder may sell pursuant to
this offering is set forth opposite the respective Selling Shareholder's name
in the table in the "Selling Shareholders" section of this Prospectus above.
The Shares represent approximately 27.1% of the issued and outstanding shares
of the Company's common stock. This Prospectus does not restrict the
availability of any exemption under the securities laws or the regulations
under those laws pursuant to which the Selling Shareholders may sell or
otherwise dispose of the Shares, including Rule 144 under the Securities Act of
1933, as amended (the "Securities Act").
The Selling Shareholders have advised the Company that they (or their
pledgees, donees, transferees or other successors in interest) may sell their
respective Shares from time to time at negotiated prices in individually
negotiated transactions, through securities broker-dealers at market prices
prevailing at the time of the sale if a market for the Common Stock develops,
in a future underwritten public offering or otherwise. The Shares may be sold
through broker-dealers by one or more of the following methods: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary unsolicited brokerage transactions; or (d)
transactions in which the broker solicits purchasers. Sales may be made
pursuant to this Prospectus to or through broker-dealers who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders or the purchasers of Common Stock for whom such
broker-dealer may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). One or more supplemental prospectuses will be filed
pursuant to Rule 424 under the Securities Act to describe any material
arrangements for the sales of the Shares when such arrangements are entered
into by any of the Selling Shareholders and any other broker-dealers that
participate in the sale of the Shares.
Any broker-dealers or other persons acting on behalf of the Selling
Shareholders in connection with the sale of the Shares may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit realized by them on the resale
of the Shares as principals may be deemed to be underwriting commissions under
the Securities Act. As of the date hereof, there are no special selling
arrangements between any broker-dealer or other person and any Selling
Shareholder. In order to comply with the securities laws of certain states, if
applicable, the Shares may be required to be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Shares may not be sold unless exempt or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available.
The Selling Shareholders will bear any commissions or underwriting
discounts incurred in connection with any sales of Shares through
broker-dealers or in any underwritten public offering. The Company has agreed
to pay the expenses of this offering, estimated to be $ * and has
indicated that it will keep the Registration Statement covering the Shares
effective until the Shares are sold. In addition, certain Selling Shareholders
have agreed to indemnify the Company, its directors, officers, agents and
control persons against certain liabilities incurred as a result of information
provided by the Selling Shareholders for use in this Prospectus. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
USE OF PROCEEDS
The Shares offered hereby will be sold by the Selling Shareholders. The
Company will not receive any of the proceeds from the sale of the Shares by the
Selling Shareholders. See "Selling Shareholders."
<PAGE> 9
BUSINESS
As of the date of this Prospectus, the Company had not conducted any
business except its ownership of the Bank. The Bank has conducted commercial
banking operations in Florida since opening for business in 1974.
COMMERCIAL BANKING OPERATIONS
The Bank is a state-chartered commercial bank headquartered in Key
Largo, Florida. The Bank's deposits are insured by the FDIC. The primary
business of the Bank is attracting deposits from the public and using such
deposits to make real estate, business and consumer loans. As of December 31,
1996, the Bank had total assets of approximately $241.0 million, total deposits
of approximately $204.9 million and total shareholders' equity of approximately
$22.6 million. The Bank's primary service area consists of Monroe County,
Florida.
BANKING OFFICES
The Bank's business is conducted at its main banking office at 99451
Overseas Highway, Key largo, Florida, where the Company's principal executive
offices are also located. The Bank maintains eight additional branches located
at: 10330 Overseas Highway, Key Largo, Florida; 91980 Overseas Highway,
Tavernier, Florida; 80900 Overseas Highway, Islamorada, Florida; 11401 Overseas
Highway, Marathon Shores, Florida; 2315 Overseas Highway, Marathon, Florida;
Mile Marker 30.4, Big Pine Key, Florida; 330 Whitehead Street, Key West,
Florida; and 3322 N. Roosevelt Boulevard, Key West, Florida.
BANKING SERVICES
The Bank offers a full range of commercial banking services to
individual, professional and business customers in its primary service area.
These services include savings accounts, money market checking accounts and NOW
accounts, certificates of deposit and other time deposits, commercial, real
estate and installment loans, and safe deposit facilities. Customer deposits
are insured to the maximum extent provided by law through the BIF. The Bank
pays interest on its accounts and certificates competitive with other financial
institutions in its primary service area. The Bank seeks to attract deposits
from the public and uses such deposits, together with borrowings and other
sources of funds, to make real estate, business and consumer loans. The Bank
seeks to concentrate its deposits and loan efforts primarily within its primary
service competition in attracting deposits and in making real estate, business
and consumer loans in its primary service area. The primary factors in
competing for deposits are interest rates, the range of financial services
offered, convenience of office locations and flexible office hours. Direct
competition for such deposits comes from other commercial banks, savings
institutions, credit unions, brokerage firms and money market funds. The
primary factors in competing for loans are interest rates, loan origination
fees and the range of lending services offered. Competition for origination of
loans normally comes from other commercial banks, savings institutions, credit
unions and mortgage banking firms. Such entities may have competitive
advantages as a result of greater resources and higher lending limits (by
virtue of their greater capitalization). However, the Bank seeks to attract
customers in its primary service area with its products and services which are
tailored to the needs of the customers. Management seeks to emphasize a high
degree of personalized client service in order to be able to better meet the
banking needs of its customers.
EMPLOYEES
At December 31, 1996, the Bank had 159 full-time and 14 part-time
employees. The Bank considers its relationship with its employees to be good.
PROPERTIES
The Bank conducts its commercial banking business through the principal
executive office of the Company and the Bank located on an approximately 1.3
acre site at 99451 Overseas Highway, Key Largo, Monroe County, Florida. The
main offices of the Bank are housed in a two-story building, owned by the Bank
and containing approximately 13,275 square feet of finished space used for
offices and operations and seven teller windows in the Bank lobby. The
building also has two drive-up teller windows and an automated teller machine
with 24-hour a day access. The Bank's eight branches are located in Key Largo,
Tavernier, Islamorada, Marathon Shores, Marathon, Big Pine Key and Key West,
Florida. Two of the Bank's eight branch locations are leased under
<PAGE> 10
operating leases and the main office and the remaining branch properties are
owned by the Bank. The lease on the Bank's Marathon branch expires October 31,
1997 and the lease on the Key West branch located at Searstown expires on
September 1, 1998.
LEGAL PROCEEDINGS
While the Company and the Bank are from time to time parties to various
legal proceedings arising in the ordinary course of their business, management
believes after consultation with legal counsel that there are no proceedings
threatened or pending against the Company or the Bank that will, individually
or in the aggregate, have a material adverse effect on the business or
consolidated financial condition of the Company.
FINANCIAL AND STATISTICAL INFORMATION
SELECTED FINANCIAL DATA
The following table sets forth certain selected financial data
concerning the Company for the five years ended December 31, 1996. The
selected financial data for, and as of the end of, each of the years in the
five-year period ended December 31, 1996, has been derived from the
Consolidated Financial Statements of the Company which have been audited for
the years ended 1992, 1993, 1994, 1995 by KPMG Peat Marwick LLP, independent
auditors and for the year ended December 31, 1996, by Bricker and Melton, P.A.,
independent auditors.
<PAGE> 11
SELECTED FINANCIAL DATA
The selected consolidated financial data presented below as of and for the years
ended December 31, 1996, 1995, 1994, 1993, and 1992 is unaudited and has been
derived from the Consolidated Financial Statements of the Company and its
subsidiary, and from records of the company. During 1996, TIB Financial Corp.
("Company") was formed providing for a reorganization whereby TIB Bank of the
Keys ("Bank") became a wholly-owned subsidiary of TIB Financial Corp. The
transaction was accounted for on a historical cost basis similar to a pooling
of interests and, accordingly, the following selected consolidated financial
data was prepared as if the reorganization occurred January 1, 1992. The
information presented below should be read in conjunction with the Consolidated
Financial Statements and related notes, and "Management's discussion and
analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
Dollars in thousands, except per share data As of December 31,
- -----------------------------------------------------------------------------------------------------
Balance Sheet Data 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Assets $241,051 $219,567 $208,607 $199,529 $203,604
Investment Securities 50,878 60,961 65,347 64,641 73,071
Loans 165,151 139,061 124,199 110,363 106,162
Allowances for loan losses 1,930 1,701 1,567 1,449 1,292
Deposits 204,984 192,458 190,147 179,409 184,877
Stockholders' equity 22,621 21,063 16,888 16,837 15,465
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31,
- -----------------------------------------------------------------------------------------------------
Statement of Income Data 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income 18,503 17,525 15,179 14,531 15,605
Interest expense 6,507 6,253 4,959 4,871 6,076
Net interest income 11,996 11,272 10,220 9,660 9,529
Provision for loan losses 240 135 120 240 816
Net interest income after
provision for loan losses 11,756 11,137 10,100 9,420 8,713
Non-interest income 2,594 2,365 1,643 1,320 969
Non-interest expense 9,558 8,910 7,684 7,289 7,101
Income tax expense 1,589 1,591 1,373 1,130 838
Net Income 3,203 3,001 2,686 2,321 1,743
Per Share Data
- ---------------------------
Book value per share at year end 5.23 4.95 4.03 4.11 3.77
Net income (loss) per share 0.72 0.69 0.65 0.57 0.43
Weighted-average common equivalent
shares outstanding 4,424,676 4,352,838 4,160,994 4,096,848 4,096,848
Dividends declared 0.39 0.25 0.21 0.23 0.21
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Year ended December 31,
- ------------------------------------------------------------------------------------
Ratios 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Return on average assets 1.40% 1.40% 1.31% 1.15% 0.89%
Return on average equity 15.89% 17.00% 17.11% 14.37% 11.60%
Average equity/average assets 8.79% 8.23% 7.67% 8.01% 7.72%
Net interest margin 5.83% 5.85% 5.53% 5.43% 5.50%
Non-performing assets/total loans
and other real estate 0.26% 0.06% 0.31% 1.60% 5.41%
Allowance for loan losses/total loans 1.17% 1.22% 1.26% 1.31% 1.22%
Non-interest expense/net
Interest income and non-interest income 65.51% 65.34% 64.77% 66.38% 67.64%
</TABLE>
(1) Stock splits in 1997 and 1996 have been retroactively
reflected in per share data and weighted-average common equivalent
shares outstanding as if they occurred January 1, 1992.
Averages are derived from daily balances.
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's results of
operations and financial condition should be read in conjunction with the
consolidated financial and related notes included elsewhere in this Prospectus.
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
INTRODUCTION
During 1996, TIB Financial Corp. ("Company") was formed providing for a
reorganization whereby TIB Bank of the Keys ("Bank") became a wholly-owned
subsidiary of TIB Financial Corp. The transaction was accounted for on a
historical cost basis similar to a pooling of interests and, accordingly,
Selected Financial Data, Management's Discussion and Analysis of Financial
Condition and Results of Operations, and the Consolidated Financial Statements
have been restated to reflect the reorganization as occurring at the beginning
of the first period presented.
In March 1996, TIB Bank of the Keys declared a two-for-one stock split which
was distributed on May 14, 1996, to shareholders of record on May 2, 1996. On
February 25, 1997, TIB Financial Corp. declared a three-for-one stock spilt
distributable on March 18, 1997, to shareholders of record February 25, 1997.
In the Selected Financial Data, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and the Consolidated Financial
Statements, all per share amounts, number of shares outstanding and market
prices have been restated to reflect these stock splits as if they occurred at
the beginning of the first period presented.
PERFORMANCE OVERVIEW FOR 1996
TIB Financial Corp. ("Company") achieved record net income of $3.2 million in
1996 representing an increase of 6.7% over the prior year. Management
attributes the improvement to strong loan growth along with a 9.7% increase in
non-interest income. Net income for 1995 increased 11.7% to $3.0 million as
compared to $2.7 million in 1994.
Reported net income per share for 1996 was $.72 compared to $.69 in 1995, an
increase of 4.3%. Weighted-average common equivalent shares outstanding in
1996 were 4,424,676 compared to 4,352,838 in 1995. Earnings per share in 1995
of $.69 represented an increase of 6.2% over 1994.
Net interest income in 1996 increased 6.4%, or $724,000, to $12.0 million from
$11.3 million reported in 1995. The Company's interest margin declined
slightly from 5.85% to 5.83%. Non-performing assets increased slightly to .26%
of total loans from .06% at year-end 1995. The increase in the provision for
loan losses to $240,000 is a reflection of strong 18.8% growth in outstanding
loans in 1996, to $165.2 million. Non-interest income increased $229,000 to
$2.6 million in 1996 led by increasing volumes of overdraft and other service
charges on deposit accounts. Non-interest income rose $722,000 in 1995 from
$1.6 million in 1994. This was accomplished by strong growth in merchant
bankcard processing volume and the establishment of a department to originate
and sell conforming fixed rate Real Estate loans. Also in 1995, there was a
gain recognized of approximately $234,000 on the sale of a former branch
facility.
<PAGE> 15
The Company experienced an increase in non-interest expense of $648,000 in
1996, or 7.3% over 1995. Of this increase, $541,000, was attributable to
additional personnel expenses to support business expansion experienced in
1996. In 1995 the Company became very active in the origination of conforming
fixed rate residential real estate loans which are immediately sold in the
secondary market. This resulted in an increase in both non-interest income and
non-interest expense beginning in 1995.
The Company reported 1996 year-end total assets of $241.1 million, an increase
of 9.8% above 1995 year-end assets of $219.6 million. Loans increased 18.8%,
absorbing all the deposit growth and resulting in total loans of $165.2 million
at December 31, 1996. As loan growth substantially outpaced deposit growth,
maturing investment securities were reinvested in loans causing the securities
portfolio to decrease $10.1 million to $50.9 million. Total asset growth was
5.3% in 1995 as compared to 1994 total year-end assets of $208.6 million.
<PAGE> 16
RESULTS OF OPERATIONS
The following table summarizes the results of operations including selected
financial performance ratios of the Company for the three years ended December
31, 1996:
<TABLE>
<CAPTION>
DOLLARS IN THOUSAND, EXCEPT PER SHARE DATA AS OF DECEMBER 31,
- -----------------------------------------------------------------------------------
Balance Sheet Data 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Assets $241,051 $219,567 $208,607
Investment Securities 50,878 60,961 65,347
Loans 165,151 139,061 124,199
Allowances for loan losses 1,930 1,701 1,567
Deposits 204,984 192,458 190,147
Stockholders' equity 22,621 21,063 16,888
(AMOUNTS IN THOUSANDS) YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------
STATEMENT OF INCOME DATA 1996 1995 1994
- -----------------------------------------------------------------------------------
Interest income 18,503 17,525 15,179
Interest expense 6,507 6,253 4,959
Net interest income 11,996 11,272 10,220
Provision for loan losses 240 135 120
Net interest income after
provision for loan losses 11,756 11,137 10,100
Non-interest income 2,594 2,365 1,643
Non-interest expense 9,558 8,910 7,684
Income tax expense 1,589 1,591 1,373
Net Income 3,203 3,001 2,686
Per Share Data
- ----------------------------
Book value per share at year end 5.23 4.95 4.03
Net income (loss) per share 0.72 0.69 0.65
Weighted-average common equivalent
shares outstanding 4,424,676 4,352,838 4,160,994
Dividends declared 0.39 0.25 0.21
Ratios
- ----------------------------
Return on average assets 1.40% 1.40% 1.31%
Return on average equity 15.89% 17.00% 17.11%
Average equity/average assets 8.79% 8.23% 7.67%
Net interest margin 5.83% 5.85% 5.53%
Non-performing assets/total loans
and other real estate 0.26% 0.06% 0.31%
Allowance for loan losses/total loans 1.17% 1.22% 1.26%
Non-interest expense/net
interest income and non-interest income 65.51% 65.34% 64.77%
</TABLE>
(1) Stock splits in 1997 and 1996 have been retroactively reflected in per
share data and weighted-average common equivalent shares outstanding as if
they occurred as of the earliest date presented
Averages are derived from daily balances.
<PAGE> 17
NET INTEREST INCOME
Net interest income, the primary source of revenue for the Company, is a
function of the yield earned on average interest-earning assets and the rate
paid on average interest-bearing liabilities. Changes in net interest income
from period to period reflect the increases or decreases in average
interest-earning assets, interest-bearing liabilities and the interest rate
spread which is affected by the degree of mismatch in maturity and repricing
characteristics of the Company's interest-earning assets and interest-bearing
liabilities.
Net interest income, on a tax equivalent basis, increased 6.1% to $12.2 million
in 1996, as compared to last year. Net interest margin decreased 2 basis
points to 5.83%. This was attributed to prevailing loan rates becoming more
competitive in the local market. Average interest-earning assets increased
6.5%, or $12.9 million. Loan volume represented the majority of this change in
average earning assets increasing $21.0 million while average investment
securities volumes decreased $7.5 million. Average interest-bearing liabilities
increased 5.8%, or $9.2 million, over 1995. Average increase in short-term
borrowings and federal funds purchased, $4.1 million, time deposits, $2.4
million, and NOW accounts, $3.5 million, accounted for the majority of this
increase, with an $823,000 decrease in Money Market Accounts.
As competitive pressures intensify, the spread between loan yields obtainable
and the cost of interest-bearing deposits is narrowing. In 1996 the Company
basically maintained its net interest margin by allowing a shift in
interest-earning assets from relatively low earning securities to higher
yielding loans. However, the Company ended 1996 with a loan to deposit ratio
of 80.6%. This is near the maximum ratio that will be acceptable for
liquidity purposes, therefore, it is expected that the net interest margin will
decrease going forward. Management will attempt to minimize this decline in
spread margin by continued profitable growth in both deposit and loan volumes.
Net interest income, on a tax equivalent basis for 1995 increased 9.5% to $11.5
million from $10.5 million in 1994. Average earning assets increased $6.7
million from 1994 to 1995 while average interest-bearing liabilities increased
only $1.7 million. A generally higher interest rate environment in 1995 was
also a positive contributing factor to the increase in net interest income due
to the Company's asset sensitive interest risk profile. The Company recorded a
net interest margin in 1995 of 5.85%, an improvement of 32 basis points over the
5.53% interest margin for 1994.
The following table sets forth information with respect to the average
balances, interest income and average yield by major categories of assets; the
average balances, interest expense and average rate by major categories of
liabilities; the average balances of noninterest-earning assets,
noninterest-bearing liabilities and stockholders' equity; and net interest
income, interest rate spread, and net interest margin for the years ended
December 31, 1996, 1995, and 1994.
<PAGE> 18
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEETS 1996 1995 1994
------- ------- --------
AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS AVERAGE INCOME/ YIELDS
(Dollars in thousands) BALANCES EXPENSE RATES BALANCES EXPENSE RATES BALANCES EXPENSE RATES
- ---------------------- --------- ------- ------- -------- ------- ------ --------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans(1) $151,212 $15,038 9.94% $130,236 $13,530 10.39% $115,486 $10,585 9.17%
Investment securities - taxable 51,751 3,022 5.84% 58,376 3,468 5.94% 64,474 3,985 6.18%
Investment securities - tax exempt (2) 5,354 598 11.17% 6,267 665 10.61% 7,446 806 10.82%
Federal funds sold 1,334 69 5.17% 1,911 111 5.81% 2,708 106 3.91%
------------------ ----------------- -------------------
Total interest-earning assets 209,651 18,727 8.93% 196,790 17,774 9.03% 190,114 15,482 8.14%
------------------ ----------------- -------------------
Noninterest-earning assets:
Cash and due from banks 8,981 7,389 7,333
Premises and equipment, net 8,441 7,289 5,816
Allowances for loan losses (1,809) (1,647) (1,505)
Other assets 4,060 4,740 2,896
Total noninterest-earning assets 19,673 17,771 14,540
-------- -------- --------
Total assets 229,324 214,561 204,654
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts 30,235 473 1.56% 26,752 527 1.97% 27,722 457 1.65%
Money market 13,256 335 2.53% 14,079 369 2.62% 17,747 380 2.14%
Savings deposits 41,380 1,231 2.97% 41,317 1,291 3.12% 46,366 1,230 2.65%
Other time deposits 75,689 4,170 5.51% 73,333 3,999 5.45% 59,742 2,775 4.64%
------------------ ----------------- -------------------
Total interest-bearing deposits 160,560 6,209 3.87% 155,481 6,186 3.98% 151,577 4,842 3.19%
Other interest-bearing liabilities:
Federal funds purchased 817 48 5.88% 199 11 5.53% 463 21 4.54%
Short-term borrowings and obligations
under capital lease 4,821 250 5.19% 1,359 55 4.05% 3,310 97 2.93%
------------------ ----------------- -------------------
Total interest-bearing liabilities 166,198 6,507 3.92% 157,039 6,252 3.98% 155,350 4,960 3.19%
------------------ ---------------- ------------------
Noninterest-bearing liabilities
and stockholder' equity:
Demand deposits 41,755 37,269 32,967
Other liabilities 1,214 2,596 636
Stockholders' equity 20,157 17,657 15,701
------ ------ ------
Total noninterest-bearing
liabilities and stockholders' equity 63,126 57,522 49,304
-------- -------- --------
Total liabilities and stockholders' equity 229,324 214,561 204,654
======== ======== ========
Interest rate spread 5.01% 5.05% 4.95%
===== ===== =====
Net interest income $12,220 $11,522 $10,522
======= ======= =======
Net interest margin (3) 5.83% 5.85% 5.53%
===== ===== =====
</TABLE>
(1) Average loans include non-performing loans. Interest on
loans includes loan fees of $27,813 in 1996 and $38,389 in 1995 and
$63,823 in 1994.
(2) Interest income and rates include the effects of a tax
equivalent adjustment using a tax rate of 37.6%, in adjusting tax
exempt interest on tax exempt investment securities to a fully
taxable basis.
(3) Net interest margin is net interest income divided by average
total interest-earning assets.
<PAGE> 19
CHANGES IN NET INTEREST INCOME
The table below details the components of the changes in net interest income
for the last two years. For each major category of interest-earning assets and
interest-bearing liabilities, information is provided with respect to changes
due to average volumes, changes due to rates, with the changes in both volumes
and rates allocated to these two categories based on the proportionate absolute
changes in each category.
<TABLE>
<CAPTION>
1996 compared with 1995 (1) 1995 compared with 1994 (1)
Due to changes In Due to changes in
--------------------------------- ----------------------------------
(In thousands) Net Net
Average Average Increase Average Average Increase
INTEREST INCOME Volume Rate (Decrease) Volume Rate (Decrease)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans $ 2,112 $ (604) $ 1,508 $ 1,442 $ 1,503 $ 2,945
Investment Securities (2) (481) (32) (513) (470) (188) (658)
Federal funds sold (31) (11) (42) (37) 42 5
-------------------------------- ---------------------------------
Total interest income 1,600 (647) 953 935 1,357 2,292
-------------------------------- ---------------------------------
INTEREST EXPENSE
NOW accounts 64 (118) (54) (16) 86 70
Money Market (21) (13) (34) (87) 76 (11)
Savings deposits 2 (62) (60) (143) 204 61
Other time deposits 127 44 171 693 531 1,224
Federal funds purchased 36 1 37 (14) 4 (10)
Short-term borrowings and
obligations under capital lease 176 19 195 (70) 28 (42)
-------------------------------- ---------------------------------
Total interest expense 384 (129) 255 363 929 1,292
-------------------------------- ---------------------------------
Change in net
Interest income $ 1,216 $ (518) $ 698 $ 572 $ 428 $ 1,000
================================ =================================
</TABLE>
(1) The change in interest due to both rate and volume has been
allocated to the volume and rate components in proportion to the
relationship of the dollar amounts of the absolute change in each.
(2) Interest income includes the effects of a tax equivalent
adjustment using a tax rate of 37.6%, in adjusting tax exempt
interest on tax exempt investment securities to a fully taxable
basis.
<PAGE> 20
NON-INTEREST INCOME
The following table presents the principal components of non-interest income
for the years ended December 31, 1996, 1995, and 1994.
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Credit card processing income $ 519 $ 462 $ 293
Gains on sales of loans 533 364 41
SBA sales and Servicing 70 134 38
Service charge income 1,336 1,093 982
Net gains on sales of investment securities 18 8 78
Gain on exchange of building 234
(Losses) Gains on sales of other real estate - net (29) 118
Other 118 99 93
---------------------------------------
Total non-interest income $2,594 $2,365 $1,643
=======================================
</TABLE>
The Company's emphasis on non interest income continues to be a primary focus.
Over a three year horizon the Company has increased non interest income from
$1.6 million to $2.6 million or approximately 62.5%. This was achieved by
introducing new areas of fee income generation and stimulating old areas of
non-interest income. Income from all types of bank service charges led this
improvement increasing $243,000 or 22.2% in 1996. This is a result of the
significant increase in the Bank's number of accounts and the increased
business volume the bank has established during its most recent fiscal year.
Recognizing the opportunities in a tourist driven economy the company has made
major inroads into merchant card processing. The Bank is currently one of the
top one hundred processors in the country measured by total volume of
transactions and processes credit card transactions for over five hundred local
merchants at year end 1996. This activity accounted for fee income of $519,000
or a 12.3% increase from $462,000 in 1995. This represents a 77.1% increase in
merchant card processing over a three year period. The Bank continues to be
aggressive in soliciting new merchants and providing quality customer service
with our existing customer base. The overall increase in non interest income
for 1996 compared to 1995 would have been more significant except that in 1995
the Company booked a gain on the sale of a former bank facility.
The Bank began a program to originate and sell conforming fixed rate
residential mortgages to the secondary market in late 1994. By 1996 the Bank
had become the number one originator of residential mortgages in Monroe County
generating over $50 million in residential mortgages in 1996. Approximately
40% of the annual volume was conforming fixed rate residential loans that are
sold immediately to the secondary market. Approximately 60% of the annual
production represents conforming adjustable rate loans that are placed in the
Bank's portfolio. At the end of 1994 the Bank began to originate these loans
utilizing industry standards for documentation and procedures in order for them
to be suitable for sale as a back-up source of liquidity. To test the
assumption that these loans were readily marketable it was decided to liquidate
some of them and
<PAGE> 21
therefore during 1996 $11.5 million of the Bank's portfolio adjustable rate
mortgages were sold in the secondary market generating gains of $173,000. The
direct benefit of this mortgage production process is shown in the non interest
income categories. Additionally, effective cross-selling of other bank products
around this activity has contributed substantially to the Bank's growth in its
deposit base over the same three year horizon.
Non interest income increased $722,000 from 1994 to 1995 including the $234,000
gain on the sale of bank premises mentioned above. Other items accounting for
this improvement were a $66,000 increase in gains on sales of SBA loans and
$323,000 in increased fees on mortgage loans sold at origination. Additionally
in 1995, the Company increased merchant bankcard processing income $169,000 as
compared to 1994.
<PAGE> 22
The Company has addressed the potential for the application of government
guaranteed loans in the markets in which we serve. The Small Business
Administration (SBA) loans, in particular, have been targeted as loans having
specific applicability to the Company's market place. The decline in gain on
sales and servicing of SBA loans in 1996 can be attributed to lower loan
origination volume. Of those types of loans suitable for SBA financing, this
category of non interest income remains a focus of the Company, and commercial
loans suitable for government guarantees continue to be a source of fee income
for the Bank.
NON-INTEREST EXPENSES
The following table represents the principal components on non-interest
expenses for the years ended December 31, 1996, 1995, and 1994.
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Salaries and employee benefits $ 5,536 $ 4,995 $ 4,324
Occupancy 823 794 679
Equipment 869 800 579
Accounting, legal, and other professional 398 320 257
Operations services 572 403 239
Postage, freight, and courier 231 196 149
Marketing and Community relations 225 281 300
Taxes - non building 21 43 32
Supplies 290 239 203
Director's fees 150 170 144
FDIC Insurance 48 259 444
Amortization of Intangibles 60 27 6
Other operating expenses 335 383 328
---------------------------------
Total non-interest expenses $ 9,558 $ 8,910 $7,684
=================================
</TABLE>
The Company has over the three year reported periods of 1994, 1995, and 1996
expanded non interest expense in an effort to build an infrastructure which
will position the Bank in a quality customer service mode and a growth
perspective. Non interest expenses increased 7.3% in 1996 due primarily to
expansion of personnel costs to support the accelerated growth in account
generation and loans outstanding. With nine branch facilities spread over a
geographic market 106 miles long and at times only a quarter mile wide, it is
important to the company to have experienced decision making personnel in
distant branch locations. This strategy has allowed for the continuing high
quality asset generation and the expansion of the Bank's customer base over the
reported three year period.
While expanding the Bank's infrastructure several departmental functions have
been outsourced to gain the experience of outside professionals while at the
same time offering improved economic conditions on the Bank's operating
expenses. Such outsourced areas are check processing and main frame or data
processing services, as well as the Bank's internal audit function. This
outsource strategy has proven to control costs and add enhanced controls and/or
service levels. For example, outsourcing check processing
<PAGE> 23
entails a cost of approximately $20,000 per month and accounts for much of the
increase in operations services in 1995 and 1996. There are offsetting
reductions in personnel costs and all the savings associated with not having to
purchase a new check sorter and related equipment at a price of approximately
$500,000. Additionally, with rapid changes in technology, outsourcing this
function allows the Bank to remain competitive without expending large amounts
in additional hardware and software. The Company continues to improve its long
term operating efficiencies with outsourcing as a technique. This has resulted
in the avoidance by the Company of a significant investment in new or state of
the art hardware and software, as well as the personnel needed to support new
and/or expanding functions. FDIC insurance premiums decreased $211,000 in 1996
due to a reduction of the assessment rate.
As mentioned previously, at year end 1995 the Bank acquired a three story
office building on Atlantic Drive in Key Largo, Florida. This office building
is directly adjacent to the main operating branch of the Company and offers
additional space to house expanded departmental functions such as human
resources, loan processing, and support areas essential to the continuation of
high quality customer service. The Bank currently occupies most of the
building with the exception of one leased office to the State of Florida.
Previously, the Bank had leased approximately one half of this building.
Non-interest expenses increased $1.2 million in 1995 compared to 1994. This
increase was substantially the result of additional personnel costs associated
with the growth of overall accounts processed by the Bank along with
commissions related to originations of real estate loans. FDIC insurance
premiums decreased $185,000 in 1995 due to a reduction in the assessment rate.
PROVISION FOR INCOME TAXES
The provision for income taxes includes federal and state income taxes. For
1996, the provision was $1.6 million, a decrease of $2,000 from 1995. The
decrease in the provision for income taxes is the net of an increase in taxes
on higher income reduced by the benefit of a tax deduction for the exercise of
stock options.
For 1995, the tax provision was $1.6 million, an increase of $218,000 over
1994. Higher taxable income and lower tax-free income were responsible for the
increase.
LOAN PORTFOLIO
The Company is located in the Florida Keys and the primary industry is tourism.
Commercial loan demand therefore is significant for resort, hotel, restaurant,
marina and related real estate secured property loans. The Company serves this
market by offering long-term adjustable rate financing to the owners of these
type of properties for acquisition and improvements thereon. These loans are
often $1 million or larger and are good candidates for government guarantee
programs or traditional participation agreements. The nature of government
programs such as the Small Business Administration is generally geared toward
long term adjustable rate financing.
<PAGE> 24
Monroe County has the highest cost of living of any county in Florida and this
is driven in large part by the scarce and expensive real estate. This also
serves to maintain and enhance collateral values on loans secured by property
in this market. The Company has grown in commercial loans by aggressively
serving our market. The quality of the Company's credit administration along
with the stable real estate values has kept loan losses at low levels.
Loans are expected to produce higher yields than investment securities and
other interest earning assets (assuming that credit losses are not excessive).
Thus the absolute volume of loans and the volume as a percentage of total
earning assets are important determinants of the net interest margin. Net
loans outstanding increased to $162.6 million as compared to $136.7 million at
year end 1995, an increase of 18.9%. Commercial loans secured by real estate
accounted for much of this increase, growing from $85.3 million to $102.9
million at the respective year ends. Consumer loans increased from $4.3 to
$7.6 million at December 31, 1996. The Company maintains a posture of
originating commercial loans with rates that fluctuate with the prime lending
rate and residential loans with rates that fluctuate with the one year treasury
index. At December 31, 1996, 81.2% of the total loan portfolio had floating or
adjustable rates.
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial, financial, and agricultural $109,372 $ 93,423 $ 94,388 $ 81,780 $ 70,381
Construction Loans 7,391 5,441 1,290 2,610 2,509
Residential real estate 40,835 35,947 27,885 25,736 32,929
Consumer loans 7,554 4,250 636 236 343
Less: unearned income (607) (691) (757) (799) (929)
Less: allowance for loan loss (1,930) (1,701) (1,566) (1,449) (1,292)
----------------------------------------------------
Net loans $162,615 $136,669 $ 121,876 $108,114 $103,941
====================================================
</TABLE>
<TABLE>
<CAPTION>
Loans Maturing
-----------------------------------------------------
Within 1 to 5 After 5
(Dollars in thousands) 1 Year Years Years Total
- ----------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Loans with:
Predetermined interest rates 2,471 11,586 16,979 31,036
Floating or adjustable rates 9,423 8,623 116,069 134,115
-----------------------------------------
Total loans $ 11,894 $ 20,209 $133,048 $165,151
=========================================
</TABLE>
ALLOWANCE AND PROVISION FOR LOAN LOSSES
The allowance for loan losses represents a reserve for potential losses in the
loan portfolio. The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with particular
emphasis on non-accruing, past due, and other loans that management believes
require special attention.
<PAGE> 25
For problem loans, management's review of the adequacy of the allowance for
loan losses consists of an evaluation of the financial strengths of the
borrower, the related collateral, and the effects of economic conditions.
General reserves against the remaining loan portfolio are based on analysis of
historical loan loss ratios, loan charge-offs, delinquency trends, and previous
collection experience, along with an assessment of the effects of external
economic conditions.
The provision for loan losses is a charge to income in the current period to
replenish the allowance and maintain it at a level that management has
determined to be adequate to absorb estimated losses in the loan portfolio.
The Company's provision for loan losses for 1996 was $240,000 as compared to
$135,000 in 1995, reflecting the Company's strong growth in loan outstandings
and negligible charge offs.
The allowance for loan losses represented 1.17% of total loans at December 31,
1996 compared to 1.22% at year end 1995. The determination of the adequacy of
the allowance for loan losses is based on management's judgment about factors
affecting loan quality; collectability and assumptions about the economy.
Management considers the year end allowance appropriate and adequate to cover
possible losses in the loan portfolio; however, management's judgment is based
upon a number of assumptions about future events, which are believed to be
reasonable, but which may or may not prove valid. Thus, there can be no
assurance that charge-offs in future periods will not exceed the allowance for
loan losses or that additional increases in the allowance for loan losses will
not be required. In addition, various regulatory agencies, as an integral part
of their examination process, periodically review the Company's allowance for
loan losses. Such agencies may require the company to recognize additions to
the allowance based on their judgments about information available to them at
the time of their examination.
<PAGE> 26
Transactions in the allowance for loan losses are summarized for the years ended
December 31,
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994 1993 1992
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Analysis of allowance
for loan losses:
Balance at beginning of year $ 1,701 $ 1,567 $ 1,449 $ 1,292 $ 923
Charge-offs:
Commercial, Financial & Agricultural - - - - 411
Residential Real Estate - - 3 92 59
Consumer Loans 12 1 - - -
---------------------------------------------------------------------
Total charge-offs 12 1 3 92 470
Recoveries:
Commercial, Financial & Agricultural - - - 9 -
Residential Real Estate - - 1 - 23
Consumer Loans 1 - - - -
---------------------------------------------------------------------
Total recoveries 1 - 1 9 23
---------------------------------------------------------------------
Net charge-offs 11 1 2 83 447
---------------------------------------------------------------------
Provision for loan losses 240 135 120 240 816
---------------------------------------------------------------------
Allowance for loan
losses at end of year $ 1,930 $ 1,701 $ 1,567 $ 1,449 $ 1,292
=====================================================================
Ratio of net charge-offs to average
net loans outstanding 0.01% 0.00% 0.01% 0.09% 0.40%
=====================================================================
</TABLE>
Management considers the adequacy of the allowance for loan losses in its
entirety, however, to comply with regulatory reporting requirements, management
has allocated the allowance for loan losses as shown in the table below into
components by loan type at each year end. Management does not intend to imply
that actual future charge-offs will necessarily follow the allocations
described below.
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994 1993 1992
----------------------------------------------------------------------------------------
Allowance % of Allowance % of Allowance % of Allowance % of Allowance % of
$ Loans $ Loans $ Loans $ Loans $ Loans
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, Financial & Agricultural 1,456 66.2 1,318 67.2 1,307 76.0 1,214 74.1 991 66.3
Construction Loans 0 4.5 0 3.9 0 1.0 0 2.4 0 2.4
Residential Real Estate 367 24.7 324 25.8 250 22.5 232 23.3 296 31.0
Consumer Loans 106 4.6 59 3.1 10 0.5 3 0.2 5 0.3
--------------- --------------- --------------- --------------- ----------------
1,930 100% 1,701 100% 1,567 100% 1,449 100% 1,292 100%
================ =============== =============== =============== ===============
</TABLE>
<PAGE> 27
NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans 90 days past due - - - - 45
Loans on nonaccrual 430 82 0 311 46
Other Real Estate Owned 386 1,458 5,974
----------------------------------
Total non-performing assets 430 82 386 1,769 6,065
----------------------------------
Percentage of total loans and other real estate 0.26% 0.06% 0.31% 1.60% 5.41%
</TABLE>
If the collectibility of interest on a loan appears doubtful, the accrual
thereof is discontinued. Nonaccrual and restructured loans totaled $430,000
and $82,000 at December 31, 1996 and 1995, respectively. If such loans had been
on a full-accrual basis, interest income would have been approximately $16,000
and $3,000 higher in 1996 and 1995, respectively. Interest income recognized
on these loans totaled approximately $27,000 and $5,000, respectively.
In 1994 there were no nonaccrual loans. However, interest lost on in-substance
foreclosures and other real estate owned amounted to $30,000. No interest
income was recorded on these loans in 1994 since they were also in the same
status at the end of 1993.
Nonaccrual and restructured loans totaled $1.8 million and $6.1 million at
December 31, 1993 and 1992, respectively. If such loans had been on a
full-accrual basis interest income would have been approximately $94,000 and
$507,000 higher in 1993 and 1992 respectively. Interest income recognized on
these loans totaled approximately $39,000 and $30,000 respectively.
LIQUIDITY AND RATE SENSITIVITY
Liquidity represents the ability to provide steady sources of funds for loan
commitments and investment activities, as well as to provide sufficient funds
to cover deposit withdrawals and payments of debt, off-balance sheet
obligations and operating obligations. These funds can be obtained by
converting assets to cash or by attracting new deposits. The Bank has a $5
million line of credit from its principal correspondent and a repurchase
agreement with another financial institution which allows borrowing up to 95%
of the market valuation of securities pledged for this purpose. The majority
of our unpledged securities could be used as collateral for this agreement.
Scheduled maturities and paydowns of loans and investment securities are a
continual source of liquidity. Also, adjustable rate residential real estate
loans originated since 1995, as shown with the 1996 sales, are salable in the
secondary mortgage market at par or better and therefore provide a further
back-up source for liquidity.
<PAGE> 28
At December 31, 1996, the Bank's loan to deposit ratio was 80.6% compared
to a ratio of 72.3% at December 31, 1995. Management monitors and assesses the
adequacy of the Company's liquidity position on monthly basis to ensure that
sufficient sources of liquidity are maintained and available.
Under state banking law, regulatory approval will be required if the total of
all dividends declared in any calendar year by the Bank exceeds the Bank's net
profits to date for that year combined with its retained net profits for the
preceding two years. Retained earnings of the Bank available for payment of
dividends without prior regulatory approval for the year ended December 31,
1996 is approximately $6,985,000. These dividends represent the Parent
Company's primary source of liquidity.
The Company's interest rate sensitivity position at December 31, 1996 is
presented in the table below.
<TABLE>
<CAPTION>
Assets and liabilities repricing within
3 months 4 to 6 7 to 12 1 to 5 Over 5
(Dollars in thousands) or less Months Months Years Years Total
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $75,993 $19,374 $12,325 $44,389 $13,070 $165,151
Investment securities 4,447 5,093 3,905 32,329 5,358 51,132
Federal funds sold 1,810 1,810
-----------------------------------------------------------------
Total interest-bearing assets 82,250 24,467 16,230 76,718 18,428 218,093
-----------------------------------------------------------------
Interest-bearing liabilities:
Deposits 52,516 25,586 42,874 17,889 23,189 162,054
Other borrowings 11,091 11,091
-----------------------------------------------------------------
Total interest-bearing liabilities 63,607 25,586 42,874 17,889 23,189 173,145
-----------------------------------------------------------------
Interest Sensitivity gap 18,643 (1,119) (26,644) 58,829 (4,761) 44,948
=================================================================
Cumulative interest
sensitivity gap 18,643 17,524 (9,120) 49,709 44,948 44,948
=================================================================
Cumulative sensitivity ratio 8.5% 8.0% (4.2)% 22.8% 20.6%
====================================================
</TABLE>
<PAGE> 29
The Company is cumulatively asset sensitive through the entire time horizon
except for the 7 to 12 month time period This suggests that if interest rates
should decrease, the net interest margin should decrease. Conversely, if rates
increase the net interest margin would increase. Since all interest rates and
yields do not adjust at the same velocity, the gap is only a general indicator
of rate sensitivity. For purposes of the above repricing presentation, some
demand and savings deposits are considered partly repricable within the
shortest time period, 3 months or less, with the remainder spread into longer
time periods. This allocation is made because these liabilities will reprice
quickly in a changing interest rate environment, however, historically they do
not reprice to the same extent as the repricing assets. Time deposits are
presented based on their contractual terms. It is the Company's policy to
maintain its cumulative one year gap ratio in the -.15 to +.15 range.
INVESTMENT PORTFOLIO
Maturities of Investment securities at December 31, 1996 (Amortized Cost)
<TABLE>
<CAPTION>
After 1 Year After 5 Years Mortgaged
Within 1 Year Within 5 Years Within 10 Years After 10 Years Backed
(Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities Held to Maturity:
U.S. Treasury Securities $2,000 5.81% $ 5,965 5.89%
U.S. Gov't Sponsored Agencies 992 7.39%
States and municipals (A) 574 10.54% 2,260 11.67% 1,446 8.43% 1,075 10.02%
Other 75 (B)
-------------------------------------------------------------------------------------------
Total held to maturity 2,574 7.02% 9,217 8.31% 1,446 8.43% 1,150 10.02%
-------------------------------------------------------------------------------------------
Securities Available for sale:
U.S. Treasury Securities 7,038 5.93% 14,182 5.48% -
Mortgaged Backed Securities 15,076
Other 449 9.89%
-------------------------------------------------------------------------------------------
Total Available for Sale 7,038 5.93% 14,631 5.85% 0 15,076
-------------------------------------------------------------------------------------------
Total $ 9,612 6.50% $23,848 6.34% $1,446 8.43% $ 1,150 10.02% $15,076
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
(Dollars in thousands) Yield Totals
<S> <C> <C>
Securities Held to Maturity:
U.S. Treasury Securities $ 7,965
U.S. Gov't Sponsored Agencies 992
States and municipals (A) 5,355
Other 75
---------------
Total held to maturity 14,387
---------------
Securities Available for sale:
U.S. Treasury Securities 21,220
Mortgaged Backed Securities 6.13% 15,076
Other 449
---------------
Total Available for Sale 6.13% 36,745
---------------
Total 6.13% $51,132
===============
</TABLE>
(A) Weighted average yields on tax-exempt obligations have been
computed by grossing up actual tax-exempt income to a fully taxable
equivalent basis using a tax rate of 37.6%.
(B) Represents investment in common stock of Independent Bankers
Bank stock which pays no dividends.
<PAGE> 30
DEPOSITS
The following table presents the average amount outstanding and the average
rate paid on deposits by the Company for the years ended December 31, 1996,
1995, and 1994.
<TABLE>
<CAPTION>
1996 1995 1994
Average Average Average Average Average Average
(Dollars in thousands) Amount Rate Amount Rate Amount Rate
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-bearing deposits $ 41,755 $ 37,269 $ 32,967
Interest-bearing deposits
NOW Accounts 30,235 1.56% 26,752 1.97% 27,722 1.65%
Money market 13,256 2.53% 14,079 2.62% 17,747 2.14%
Savings deposit 41,380 2.97% 41,317 3.12% 46,366 2.65%
Other time deposits 76,689 5.51% 73,333 5.45% 59,742 4.64%
--------------------------------------------------------
Total $203,315 3.05% $192,750 3.21% $184,544 2.62%
========================================================
</TABLE>
The following table presents the maturity of the Company's time deposits at
December 31, 1996.
<TABLE>
Deposits Deposits
$100,000 Less than
(Dollars in thousands) and Greater $100,000 Total
- ----------------------------------------------------------------
<S> <C> <C> <C>
Months to maturity:
3 or less $ 7,344 $ 13,315 $ 20,659
3 to 6 4,705 10,828 15,533
6 through 12 5,588 19,773 25,361
Over 12 5,703 12,237 17,940
----------------------------------------
Total $ 23,340 $ 56,153 $ 79,493
========================================
</TABLE>
CAPITAL ADEQUACY
There are various primary measures of capital adequacy for banks and bank
holding companies such as risk based capital guidelines and the leverage
capital ratio. See "Business-Supervision and Regulation - Capital
Regulations."
As of December 31, 1996, the Bank exceeded its required levels of capital for a
Bank categorized by the FDIC as well capitalized under the regulatory framework
for prompt corrective action. The Bank's risk-based capital ratio of Tier 1
capital to risk-weighted assets was 13.5%, its risk-based ratio of total
capital to risk-weighted assets was 14.7%; and its leverage ratio was 9.7%.
See Note K to Consolidated Financial Statements.
<PAGE> 31
INFLATION
Inflation has an important impact on the growth of total assets in the banking
industry and causes a need to increase equity capital higher than normal rates
in order to maintain an appropriate equity to assets ratio. The Company has
been able to maintain an adequate level of equity, as previously mentioned and
copes with the effects of inflation by managing its interest rate sensitivity
gap position through its asset/liability management program, and by
periodically adjusting its pricing of services and banking products to take
into consideration current costs.
<PAGE> 32
MARKET INFORMATION AND DIVIDENDS
Potential purchasers of the Shares should consider the following
information with respect to the Common Stock.
NO ESTABLISHED PUBLIC TRADING MARKET
There is no established public trading market or market maker for the
Common Stock, and trading of Common Stock has been limited. There can be no
assurance that an active trading market for Common Stock will develop or be
maintained in the future. As a result, a purchaser of Shares may experience
difficulty in selling purchased Shares in a timely manner and may be required
to sell their Shares at a discount to the price that would be established in an
active trading market. However, the Company currently plans to apply to list
the Company's common stock on the National Market System of the Nasdaq Stock
Market by the end of the second calendar quarter.
MARKET PRICES
Based on limited information available to the Company's management, the
last known selling prices of Common Stock (and, prior to the Reorganization,
the common stock of the Bank) in what the Company's management believes were
arm's- length transactions were between $7.83 and $9.00 per share pursuant to
178 transactions with respect to an aggregate of 429,945 shares from January 1,
1996 through March 1, 1997.
DIVIDENDS
The Company is permitted to pay dividends on its outstanding capital
stock at such time and in such amounts as the Board of Directors deems
advisable, subject only to restrictions contained in the Florida Business
Corporation Act. The ability of the Company to pay cash dividends to its
shareholders is directly dependent upon the Bank's ability to pay cash
dividends to the Company. The Board of Directors of the Bank, however, is
limited due to regulatory constraints in its ability to pay cash dividends on
the outstanding capital stock of the Bank. In general, the Bank may not
declare a dividend without the approval of the Florida Department of Banking
and Finance of the total of the dividends declared by the Bank in a calendar
year exceeds the total of its net profits for that year combined with its
retained profits of the preceding two years. These restrictions on the ability
of the Bank to pay dividends to the Company may, in turn, serve as a limitation
on the ability of the Company to pay dividends to its shareholders.
The Company and the Bank declared the following cash dividends on the
Common Stock (or Bank common stock prior to the Reorganization on August 31,
1996) during 1995 and 1996: $1.50 per share declared in 1995 and $1.12 per
share declared in 1996. In addition, the Bank paid stock dividends of 10,158
shares of common stock to its shareholders in 1995 and 7,878 shares of common
stock to its shareholders in 1996.
OPTIONS TO PURCHASE SHARES
There were outstanding as of March 1, 1997 options to purchase from the
Company 612,300 shares of Common Stock.
SHARES ELIGIBLE FOR SALE
Substantially all of the outstanding shares of the Common Stock are
freely transferable.
MANAGEMENT AND PRINCIPAL SHAREHOLDERS
INFORMATION ABOUT THE BOARD OF DIRECTORS AND THEIR COMMITTEES
The Bank's Board of Directors maintains Asset/Liability, Audit,
Executive Loan, Investment, and Salary Review Committees. The Company's Board
of Directors, which has no standing committees, now performs the functions of a
Nominating Committee.
<PAGE> 33
The Bank's Asset/Liability Committee provides management with guidelines
for the generation and deployment of funds that will assist in the attainment
of the objective of maximizing net interest income within the constraints of
optimum earning asset mix, capital adequacy and liability. The Asset/Liability
Committee is currently composed of Messrs. Lett, Marr, Martin-Vegue and Roth.
The Bank's Audit Committee reviews the Bank's financial statements and
internal accounting policies and controls; recommends independent accountants
and reviews with them the scope of their engagement and all material matters
relating to financial reporting and accounting procedures of the Bank; reviews
loan portfolio audits, with particular attention given to classified loans,
loans past due, non-performing loans and trends regarding the same; and
reviews reports of examination by regulatory authorities. The Audit Committee
is currently composed of Messrs. Marr, Lawson and Meeks.
The Bank's Board of Directors reviews lending policies and procedures
and reports relating to the Bank's loan- portfolio, with particular attention
given to such matters as categories of borrowers and concentrations in
particular types of loans. The Bank's Executive Loan Committee considers loan
requests in excess of $500,000 and reviews reports relating to and considers
all loans or extensions of credit proposed for any of the Bank's directors or
executive officers. The Loan Committee is currently composed of all directors
on a rotating basis and several Bank senior loan officers.
The Bank's Investment Committee reviews the Bank's investment policies,
the composition of the Bank's investment portfolio, information relating to the
investment activities and portfolio of the Bank and the consistency of the
portfolio with the Bank's asset/liability and liquidity policies, with
particular attention given to such matters as categories of investments and
concentrations, and investment portfolio audit reports, and comments on current
investments. The Investment Committee is currently composed of Messrs. Lett,
Marr, Martin-Vegue and Roth.
The Salary Review Committee reviews the performance of the Bank's
President and Chief Executive Officer and his review of Senior officers. The
Salary Review Committee makes recommendations to the Board of Directors on
compensation levels for Bank officers. The Salary Review Committee is composed
of Messrs. Carter, Henriquez, Lawson, Lett and Roth.
The following table sets forth certain information with respect to the
directors of the Company and the Bank as of March 31, 1997:
<TABLE>
<CAPTION>
POSITION WITH POSITION WITH
NAME AGE THE COMPANY THE BANK
---- --- ----------- --------
<S> <C> <C> <C>
BG Carter 54 Director Director
Dr. Armando J. 62 Director Director
Henriquez
James R. Lawson, III 62 Director Director
Edward V. Lett 51 Director, President and CEO Director, President and
CEO
Scott A. Marr 42 Director Director
Derek D. Martin-Vegue 51 Director Director
W. Kenneth Meeks 69 Director and Chairman Director and Chairman
Joseph H. Roth, Jr. 50 Director Director
Marvin F. Schindler 54 Director Director
Richard J. Williams 76 Director Director
</TABLE>
The members of the Board of Directors of the Company are elected by the
shareholders. The directorships of the Company are divided into three classes,
with the members of each class serving three-year terms and the shareholders
electing one class annually. The directors of the Company were first elected
to the Board in 1996 (except Mr. Schindler who was appointed in February 1997
to fill a vacancy) and serve initial staggered terms of
<PAGE> 34
one, two and three years. The terms of the current directors expire as
follows: the terms of directors Meeks, Schindler and Williams expire in 1997;
the terms of directors Carter, Henriquez and Lawson expire in 1998; and the
terms of directors Lett, Marr, Martin-Vegue and Roth expire in 1999. The
members of the Board of Directors of the Bank will be elected annually by the
Company as the sole shareholder of the Bank.
The principal business experience for at least the last five years of
each of the directors and executive officers of the Company and the Bank is set
forth below.
BG CARTER is the Managing Director of the Independent Companies which is
engaged in the mortgage brokerage businesses. Mr. Carter is also the owner of
Westwinds, a guest house in Key West.
DR. ARMANDO J. HENRIQUEZ has served as Vice President of Client
Relations of Fringe Benefits Management Company since September of 1993. Dr.
Henriquez served as a consultant to the Florida Association of School
Superintendents from January of 1993 until joining Fringe Benefits Management
Company. Dr. Henriquez served as Superintendent of Schools of Monroe County,
Florida, from January, 1969 to December, 1992.
JAMES R. LAWSON is now retired. He was the owner of the Key Largo
Shopper, a grocery store in Key Largo, prior to its sale in 1994.
EDWARD V. LETT has been the President and Chief Executive Officer of the
Bank since January 6, 1996, and has served as a director since 1992. Prior to
becoming President, Mr. Lett served as Executive Vice President and Chief
Operating Officer of the Bank since joining the Bank in November, 1991. Prior
to joining the Bank, Mr. Lett had served as Executive Vice President and Chief
Operating Officer of American National Bank of Florida. Mr. Lett has been the
President and Chief Executive Officer of the Company since its inception.
SCOTT A. MARR has been the General Manager and a Partner of Marina-Del
Mar Resorts, which consists of two hotels in Key Largo, Florida, for more than
five years.
DEREK D. MARTIN-VEGUE has been the President of Keys Insurance Agency of
Monroe County, Inc. for more than five years.
W. KENNETH MEEKS has been the Chairman of the Bank since 1976 and the
Chairman of the Company since its inception. Mr. Meeks retired as Chief
Executive Officer of the Bank in 1996, and served as the Bank's acting Chief
Executive Officer from September 1995 through January 5, 1996.
JOSEPH H. ROTH, JR. has been Managing Owner of Holiday Isle Resorts and
Marina and the General Partner of Little Palm Island Resorts for more than five
years.
MARVIN F. SCHINDLER is the owner and operator of Marathon Glass Company
in Marathon, Florida and Florida Keys Truss Company. Mr. Schindler is retired
from the U.S. Army.
RICHARD J. WILLIAMS has been a professional fishing guide for over 50
years, and has also owned and operated the Coral Cove Resort on Islamorada.
<PAGE> 35
OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the shares
of the common stock of the Company owned as of the record date (i) by each
person who beneficially owns more than 5% of the shares of the common stock of
the Company, (ii) by each of the Company's directors, and (iii) by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
NAME NUMBER OF SHARES PERCENTAGE OWNERSHIP(2)
5% Shareholders:
---------------
<S> <C> <C>
W. Kenneth Meeks(3)(4) 992,478 21.73%
Joseph H. Roth, Jr.(3)(5) 376,998 8.25%
Directors:
----------
BG Carter(6) 6,030 *
Dr. Armando J. Henriquez (7) 40,506 *
James R. Lawson (3)(8) 189,732 4.15%
Edward V. Lett (3)(9) 178,656 3.91%
Scott A. Marr(10) 30,042 *
Derek D. Martin-Vegue(11) 36,000 *
W. Kenneth Meeks(3)(4) 992,478 21.73%
Joseph H. Roth, Jr.(3)(5) 376,998 8.25%
Marvin F. Schindler 0 0%
Richard J. Williams(12) 41,280 *
All directors and executive
officers as a group (14 persons) 1,906,434 41.75%
</TABLE>
_________________________________________
* Percent share ownership is less than 1% of total shares outstanding.
(1) Except as otherwise indicated, the persons named in the above table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them. Information relating to beneficial
ownership of the shares is based upon "beneficial ownership" concepts
set forth in the rules promulgated under the Securities and Exchange Act
of 1934, as amended. Under such rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting
power" with respect to such security. A person may be deemed to be the
"beneficial owner" of a security if that person has the right to acquire
beneficial ownership of such security within 60 days. The information
as to beneficial ownership has been furnished by the respective persons
listed in the above table.
(2) Based on 4,334,364 shares outstanding as of March 1, 1997 plus 232,050
shares not outstanding but which are subject to options granting the
holders thereof the right to acquire shares within 60 days through the
exercise of options.
(3) Includes 95,676 shares of common stock of the Company over which Messrs.
Lawson, Lett, Roth and Meeks exercise voting rights as co-trustees under
the Bank's 401(K) Savings and Employee Stock Ownership Plan.
(4) Includes (a) 74,016 shares which are held of record by Mr. Meeks'
spouse, and (b) 30,000 shares representing unexercised options.
<PAGE> 36
(5) Includes (a) 47,424 shares held as custodian for Mr. Roth's minor
children, (b) 8,100 shares held jointly with Mr. Roth's spouse and (c)
906 shares held of record by Mr. Roth's spouse.
(6) Includes (a) 6,000 shares representing unexercised options and (b) 30
shares held by Independent Mortgage and Finance Co.
(7) Includes (a) 10,410 shares as to which Mr. Henriquez shares beneficial
ownership with his spouse, and (b) 26,400 shares representing
unexercised options.
(8) Includes (a) 51,114 shares as to which Mr. Lawson shares beneficial
ownership with his spouse, and (b) 18,000 shares representing
unexercised options.
(9) Includes (a) 75 shares held jointly with Sally D. Howard, and (b) 16,200
shares representing unexercised options.
(10) Includes 26,400 shares representing unexercised options.
(11) Includes 30,000 shares representing unexercised options.
(12) Includes 27,000 shares representing unexercised options.
EXECUTIVE OFFICERS
The following lists the executive officers of the Company and certain
officers of the Bank, all positions held by them with the Company and the Bank
and the periods during which such positions have been held, a brief account of
their business experience during the past five years and certain other
information including their ages. All officers of both the Company and the
Bank are appointed annually at the meetings of the respective Board of
Directors following their election to serve until the annual meeting in the
subsequent year and until successors are chosen. Information concerning
directorships, committee assignments, minor positions and peripheral business
interests has not been included. No family relationships exist between any the
officers.
<TABLE>
<CAPTION>
NAME INFORMATION ABOUT EXECUTIVE OFFICERS
- ---- ------------------------------------
<S> <C>
Edward V. Lett See the table above under "Directors."
Gregory S. Bills Mr. Bills, age 45, is a Senior Vice President of the Bank. He joined the Bank in
November 1994. Mr. Bills was Senior Vice President/ Chief Lending Officer at Republic
Security Bank, West Palm Beach, Florida from 1985 until he joined the Bank.
David P. Johnson Mr. Johnson, age 41, is a Vice President and Controller of the Bank. Mr. Johnson has
been an officer of the Bank since 1987.
Daniel W. Taylor Mr. Taylor, age 50, is an Executive Vice President of the Bank. Mr. Taylor has been
employed by the Bank since March 1995. From 1993 until joining the Bank, Mr. Taylor was
self employed as a bank consultant. From 1969 to 1993, Mr.Taylor served in several
capacities at First Florida Bank, Tampa, Florida.
Millard J. Younkers, Jr. Mr. Younkers, age 53, is an Executive Vice President of the Bank. Mr. Younkers has been
employed by the Bank since September 1996. From 1993 until joining the Bank, he was an
officer of Northern Trust Bank of Florida, Naples, Florida.
</TABLE>
<PAGE> 37
EXECUTIVE COMPENSATION
The Company does not compensate any of its directors or executive
officers separately from the compensation they receive from the Bank. The
following sets forth certain information concerning the compensation during the
fiscal years 1996, 1995, 1994 of the Bank's executive officers whose annual
compensation was in excess of $100,000 during 1996 or who served as Chief
Executive Officer of the Bank during 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other Annual Securities All Other
Name and Principal Fiscal Compensation Underlying Compensation
Position Year Salary ($) Bonus ($) ($)(1) Options (#) ($)(2)
-------- ---- ---------- --------- ------ ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Lett 1996 $137,706 $57,453 $13,600 12,000 $1,365
President and Chief 1995 123,627 14,216 16,600 0 1,545
Executive Officer(3) 1994 117,087 8,747 10,167 81,000 583
W. Kenneth Meeks 1996 $12,500 0 $16,600 0 0
Chairman of the Board; 1995 12,500 0 16,600 0 0
Former Interim CEO(4) 1994 0 0 15,500 30,000 0
Gregory S. Bills 1996 $108,487 $12,500 $4,800 6,000 $875
Senior Vice President 1995 106,000 11,667 0 0 0
1994 16,667 0 0 24,000 0
Daniel W. Taylor 1996 $117,433 $32,000 0 30,000 $811
Executive Vice President 1995 83,367 4,000 0 18,000 0
John R. Weachter 1996 $87,393 $14,344 0 12,000 $865
Executive Vice President 1995 80,359 9,180 0 0 837
1994 79,900 5,625 0 30,000 125
</TABLE>
(1) Includes (i) quarterly retainer and fees for attending Board of
Directors meetings paid to all directors including Messrs. Lett and
Meeks, and (ii) amounts paid to Mr. Bills as a car allowance.
Compensation does not include any other perquisites and other personal
benefits which may be derived from business-related expenditures that in
the aggregate exceed the lesser of $50,000 or 10% of the total annual
salary and bonus reported for such person.
(2) The reported amount consists of matching contributions to the Bank's
401(k) and Employee Stock Ownership Plan.
(3) Mr. Lett became the Bank's President and Chief Executive Officer on
January 6, 1996, and served as the Bank's Executive Vice President and
Chief Operating Officer during 1995.
(4) Mr. Meeks served as the Bank's interim Chief Executive Officer from
September 26, 1995 through January 5, 1996 and received a salary at an
annualized rate equal to $50,000 during that period.
The following table sets forth information with respect to the above
named executives concerning unexercised options held as of December 31, 1996.
AGGREGATE OPTION EXERCISES IN 1996 AND DECEMBER 31, 1996 OPTION VALUES
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF
ACQUIRED UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
ON OPTIONS AT 12/31/96 OPTIONS AT 12/31/96(1)
------------------- -----------------------
VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Lett 0 0 16,200 76,800 $ 56,835 $235,340
W. Kenneth Meeks 0 0 30,000 0 105,250 0
Gregory S. Bills 0 0 4,800 25,200 16,840 71,360
Daniel W. Taylor 3,000 0 3,000 42,000 10,500 62,000
John R. Weachter 0 0 6,000 24,000 32,950 131,800
</TABLE>
(1) Based on a fair market value of $9.00 per share and exercise prices
per share of $5.49167. The number of shares, options and per share
amounts have been restated to reflect a three-for-one stock split
distributed on March 18, 1997, to shareholders of record on
February 25, 1997.
<PAGE> 38
EMPLOYMENT AGREEMENTS
The Bank and Edward V. Lett, the President and Chief Executive Officer
of the Company and the Bank, are parties to an "Executive Employment Agreement"
(the "Agreement"). Under the Agreement, Mr. Lett receives a base salary of
$140,000 per year. The Bank may increase Mr. Lett's salary annually based on
Mr. Lett's performance. The agreement provides that Mr. Lett will be employed
by the Bank on an "at-will" basis, unless and until there is a change of
ownership control of the Bank. The Agreement provides that in the event there
is a change of ownership control of the Bank, Mr. Lett will no longer be an
at-will employee and the agreement will become an employment agreement for a
term of 24 months on the effective date of the change in ownership control.
Under the Agreement, change of ownership control means the acquisition by a
person or other legal entity (or person acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934) of 51% or more of the
voting securities of the Bank or any lesser percentage if the Board of
Directors of the Bank, the Federal Deposit Insurance Corporation or the Federal
Reserve System makes a determination that such acquisition constitutes or will
constitute control of the Bank. Mr. Lett's salary cannot be reduced for any
reason during this 24 month term, unless the agreement is terminated due to
death or incapacity of Mr. Lett or for "cause". The agreement further
provides that Mr. Lett will be entitled to a credit for all years of service
with the Bank (i.e., all years prior to the change in ownership control, plus
the greater of 24 months or the actual period of employment after the change in
ownership control) in determining eligibility for and benefits from any and all
retirement, disability, profit-sharing and other employee benefit programs
offered by the Bank. Two other employees of the Bank, Daniel W. Taylor and
Millard J. Younkers, Jr. are parties to employment agreements with the Bank.
The terms, conditions and benefits under these agreements are the same as
described above except that Mr. Taylor's base salary per year is $110,000 and
Mr. Younkers' base salary per year is $95,000.
COMPENSATION TO DIRECTORS
All of the members of the Board of Directors of the Bank who are not
Bank employees receive a quarterly retainer of $2,500 and $600 for attending
each of 11 regular board meetings, for a total of up to $16,600 annually.
Directors who are executive officers of the Bank receive the quarterly retainer
only. No additional fees are currently paid for services as directors of the
Company.
Each member of the Board of Directors has also received a grant of an
option to purchase 30,000 shares of the Bank's common stock at an exercise
price of $5.49 per share, except for a more recent grant to Mr. Martin-Vegue
with an exercise price of $6.23 per share and a grant to Mr. Schindler with an
option to purchase up to 5,000 shares of the Bank's common stock at an exercise
price of $9.00 per share. Board meetings of the Company, when called, are held
in conjunction with Board meetings of the Bank. No additional compensation
will be paid to the directors of the Company.
LIMITATION ON DIRECTORS' LIABILITY
The Company's Articles of Incorporation contain a provision which
eliminates or limits the personal liability of directors to the Company or its
shareholders for monetary damages for certain breaches of their duty of care or
other duty. This provision provides that a director of the Company shall not
be personally liable for monetary damages for a breach of his duty of care or
other duty as a director, except for liabilities for (i) any appropriation, in
violation of the director's duties, of any business opportunity of the Company,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) authorization of improper
dividends or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit. Liability for monetary damages remains
unaffected by such provision if liability is based on any of these grounds.
Liability for monetary damages for violations of federal securities laws would
also remain unaffected. The provision does not eliminate a director's
fiduciary duty, nor does it preclude a shareholder from pursuing injunctive or
other equitable remedies. The Board of Directors believes this provision in
the Company's Articles of Incorporation is essential to maintain and improve
the ability of the Company to attract and retain competent directors.
<PAGE> 39
INDEMNIFICATION
The Company's Articles of Incorporation provide for the
indemnification of the directors, officers, employees and agents of the Company
against certain liabilities and expenses that may be incurred by them to the
fullest extent permitted by Florida corporate law.
The Company's Articles of Incorporation provide for indemnification of
expenses reasonably incurred by them in connection with any civil, criminal,
administrative or investigative action, suit or proceeding in which they may
become involved by reason of being a director or officer of the Company.
Indemnification is permitted if the director or officer acted in a manner he
believed in good faith to be in or not opposed to the best interests of the
Company and, with respect to in criminal actions, if he had no reasonable cause
to believe his conduct to be unlawful; provided that the Company may not
indemnify any director (i) in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to the corporation
or (ii) in connection with any other proceeding in which he was adjudged liable
on the basis that personal profit was improperly received by him. Article 8 of
the Company's Articles of Incorporation contains a provision by providing for
the indemnification of officers and directors and advancement of expenses to
the fullest extent authorized by the Florida Business Corporation Act.
The Company may seek to purchase and maintain directors and officers
liability insurance which insures against liabilities that directors and
officers of the Company may incur in such capacities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
CERTAIN TRANSACTIONS
Certain of the executive officers, directors and principal
shareholders of the Bank and affiliates of such persons have, from time to
time, engaged in banking transactions with the Bank and are expected to
continue such relationships in the future. All loans or other extensions of
credit made by the Bank to such individuals were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unaffiliated third parties and did not involve more than the normal risk of
collectibility or present other unfavorable features. As of March 4, 1997,
loans and other extensions of credit to executive officers and directors of the
Bank, including affiliates of such persons, amounted to $6,256,470.20 in the
aggregate.
<PAGE> 40
DESCRIPTION OF CAPITAL STOCK
THE FOLLOWING INFORMATION CONCERNING THE COMPANY'S CAPITAL STOCK
SUMMARIZES CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION AND
BYLAWS AND CERTAIN STATUTES REGULATING THE RIGHTS OF HOLDERS OF COMPANY CAPITAL
STOCK. THE INFORMATION DOES NOT PURPORT TO BE A COMPLETE DESCRIPTION OF SUCH
MATTERS AND IS QUALIFIED IN ALL RESPECTS BY THE PROVISIONS OF THE COMPANY'S
ARTICLES OF INCORPORATION AND BYLAWS AND THE CORPORATE LAWS OF THE STATE OF
FLORIDA.
COMMON STOCK
GENERALLY. The Company's Articles of Incorporation, as amended,
authorize the Company's Board of Directors to issue a maximum of 5,000,000
shares of $0.10 par value common stock. As of the date of this Prospectus,
4,334,364 shares Common Stock were issued and outstanding and held by 489
shareholders of record. In addition, 448,500 shares were subject to
outstanding employee stock options and 163,800 shares were subject to
outstanding stock options granted to the Company's non-employee directors. See
"Management and Principal Shareholders -- Company Stock Option Plans" and "--
Compensation to Directors."
VOTING RIGHTS. The holders of Common Stock are entitled to one vote
for each share of Common Stock held. The holders of the Common Stock are not
entitled to cumulative voting rights in the election of directors, which means
that the holders of more than 50% of the shares of the Common Stock voting in
the election of directors (subject to the voting rights of any preferred shares
then outstanding) can elect all of the directors then standing for election if
they choose to do so and, in such event, the holders of the remaining less than
50% of the shares voting for the election of directors are not able to elect
any person or persons to the Board.
CLASSIFIED BOARD. The Company's Board of Directors is divided into
three classes with as nearly equal a number of directors in each class as
possible. After initial terms ended or ending at the Company's annual meetings
of shareholders in 1997, 1998 and 1999, directors elected by the shareholders
to each class are serving or will serve three-year terms of office.
DIVIDEND RIGHTS. Subject to any preferences of preferred shares then
outstanding, each share of Common Stock is entitled to participate equally in
dividends as and when declared by the Board of Directors out of funds legally
available therefor. The only current source of funds which the Company could
use to pay dividends would be from amounts received as dividends from the Bank.
For information concerning legal limitations on the ability of the Company to
pay dividends, see "Market Information and Dividends -- Dividends."
PREEMPTIVE RIGHTS. The holders of Common Stock do not have any
preemptive or preferential right to purchase or to subscribe for any additional
shares of Common Stock or any other securities that may be issued by the
Company.
ASSESSMENT AND REDEMPTION. The shares of Common Stock presently
outstanding are fully paid and nonassessable. There is no provision for
redemption or conversion of Common Stock.
SUPERVISION AND REGULATION
The Company and the Bank are subject to substantial regulation. The
following summaries of statues and regulations affecting bank holding companies
and banks do not purport to be complete. Such summaries are qualified in their
entirety by reference to such statutes and regulations. The supervision and
regulation of the Company and the Bank by the bank regulatory agencies is
intended primarily for the protection of depositors rather than the
shareholders of the Company.
SUPERVISION AND REGULATION OF THE COMPANY
The Company is a bank holding company within the meaning of the
federal Bank Holding Company Act (the "Act"). As a bank holding company, the
Company is required to file with the Board of Governors of the Federal Reserve
System (the "Board") an annual report and such additional information as the
Board may require
<PAGE> 41
pursuant to the Act. Bank holding companies are required by the Act to obtain
approval from the Board prior to acquiring, directly or nondirectly, ownership
or control of more than 5% of the voting shares of a bank.
The Act also prohibits bank holding companies, with certain
exceptions, from acquiring more than 5% of the voting shares of any company
that is not a bank, and from engaging in any nonbanking business (other than a
business closely related to banking as determined by the Board) or from
managing and controlling banks and other subsidiaries authorized by the Act
without the prior approval of the Board. The Board's Regulation Y lists those
nonbanking activities which are regarded as closely related to banking or
managing or controlling banks, and therefore, permissible activities for bank
holding companies to engage in subject to appropriate notice to the Board. The
Board may differentiate between activities that are initiated de novo by a bank
holding company or a subsidiary and activities commenced by acquisition of a
going concern.
As a bank holding company, the Company is subject to capital adequacy
guidelines-based capital guidelines for bank holding companies effective March
15, 1989. Beginning on December 31, 1992, the minimum required ratio for total
capital to risk weighted assets became 8 percent (of which at least 4 percent
must consist of Tier 1 capital). Tier 1 capital (as defined in regulations for
the Board) consists of common shareholders equity and qualifying preferred
stock and minority interests in equity accounts of consolidated subsidiaries,
less goodwill and other intangible assets required to be deducted under the
Board's guidelines. The Board's guidelines apply on a consolidated basis to
bank holding companies (such as the Company) with total consolidated assets of
$150 million or more. The Board has stated that risk-based capital guidelines
establish minimum standards and that bank holding companies generally are
expected to operate will above the minimum standards. At December 31, 1996,
the Company exceeded the Board's minimum risk-based capital guidelines. At
December 31, 1996, the Company had Tier 1 capital and total capital equal to
approximately 13.7% and 14.8%, representing risk-weighted assets.
The table which follows sets forth certain capital information for the
Company on a consolidated basis, as of December 31, 1996.
<TABLE>
<CAPTION>
CAPITAL ADEQUACY
(Dollars in thousands)
December 31, 1996
-----------------
Leverage Ratio Amount Percent
-------------- ------ -------
<S> <C> <C>
Actual $22,621 9.4%
Minimum Required (1) $ 7,232 3.0%
Risk-Based Capital:
Tier 1 Capital
Actual $22,621 13.7%
Minimum Required $ 6,621 4.0%
Total Capital
Actual $24,551 14.8%
Minimum Required $13,242 8.0%
</TABLE>
(1) Represents the highest regular minimum requirement. Institution that are
contemplating acquisitions or anticipating or experiencing significant growth
may be required to maintain a substantially higher leverage ratio. See also
"FDICIA" below regarding the consequences of failing to meet specified capital
standards.
Banking regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations, including a proposal to add
an interest rate risk component to risk-based capital requirements.
Bank holding companies may be compelled by bank regulatory authorities
to invest additional capital into a subsidiary bank in the event the subsidiary
bank experiences either significant loan losses or rapid growth of loans or
deposits. In addition, the Company may be required to provide additional
capital to any additional banks it
<PAGE> 42
acquires as a condition to obtaining the approvals and consents of regulatory
authorities in connection with such acquisitions.
The Company is an "affiliate" of the Bank within the meaning of the
Federal Reserve Act, which imposes restrictions on loans to the Company by the
Bank, investments by the Bank in securities of the Company and on the use of
such securities as collateral security for loans by the Bank to any borrower.
The Federal Reserve Act will limit the transfer of funds by the Bank to the
Company and its nonbanking subsidiaries, whether in the form of loans,
extensions of credit, investments or asset purchases. Such transfers by the
Bank to the Company or any nonbanking Company subsidiary are limited in an
amount to 10% of the Bank's capital and surplus and, with respect to the
Company and all such nonbanking subsidiaries, to an aggregate of 20% of the
Bank's capital and surplus. Furthermore, such loans and extensions of credit
are required to be secured in the specified amounts.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Banking Act"), subject to certain restrictions, allows
adequately capitalized and managed bank holding companies to acquire existing
banks across state lines, regardless of state statutes that would prohibit
acquisitions by out-of-state institutions. Further, effective June 1, 1997, a
bank holding company may consolidate interstate bank subsidiaries into branches
and a bank may merge with an unaffiliated bank across state lines to the extent
that the applicable states have not "opted out" of interstate branching prior
to such effective date. Some states may elect to permit interstate mergers
prior to June 1, 1997. The Interstate Banking Act generally prohibits an
interstate acquisition (other than the initial entry into a state by a bank
holding company) that would result in either the control of more than (i) 10%
of the total amount of insured deposits in the United States, or (ii) 30% of
the total insured deposits in the home state of the target bank, unless such
30% limitation is waived by the home state on a basis which does not
discriminate against out-of-state institutions. As a result of this
legislation, the Company may become a candidate for acquisition by, or may
itself seek to acquire, banking organizations located in other states.
The Riegle Community Development and Regulatory Improvement Act of
1994 (the "Improvement Act") provides for the creation of a community
development financial institutions' fund to promote economic revitalization in
community development. Banks and thrift institutions are allowed to
participate in such community development banks. The Improvement Act also
contains (i) provisions designed to enhance small business capital formation
and to enhance disclosure with regard to high cost mortgages for the protection
of consumers, and (ii) more than 50 regulatory relief provisions that apply to
banks and thrift institutions, including the coordination of examinations by
various federal agencies, coordination of frequency and types of reports
financial institutions are required to file and reduction of examinations for
well capitalized institutions.
SUPERVISION AND REGULATION OF THE BANK
The Bank is a state-chartered commercial bank organized under the laws
of the State of Florida. The operations of the Bank are subject to state and
federal statutes applicable to state chartered banks whose deposits are insured
by the Federal Deposit Insurance Corporation ("FDIC") and the regulations of
the Florida Department of Banking and Finance (the "DBF") and the FDIC. Such
statutes and regulations relate to, among other things, required reserves,
permissible investments, lending limitations and procedures, mergers and
consolidations, issuances of securities, payment of dividends, establishment of
branches and other aspects of the Bank's operations. The Bank is subject to
regulatory scheduled examinations by the DBF and FDIC. In addition, and as
discussed above under "Supervision and Regulation of the Company," the Federal
Reserve Act restricts extensions of credit by the Bank to affiliates, such as
the Company or, with certain exceptions, other affiliates, and on the taking of
such stock or securities as collateral on loans to any borrower. The Bank is
prohibited from engaging in certain tie-in arrangements in connection with any
extension of credit or the providing of any property or service.
CAPITAL REQUIREMENTS
The FDIC has adopted final risk-based capital guidelines for all FDIC
insured state chartered banks that are not members of the Federal Reserve
System. Beginning on December 31, 1992, all banks were required to maintain a
minimum ratio of total capital to risk weighted assets of 8 percent (of which
at least 4 percent must consist of Tier 1 capital). Tier 1 capital of state
chartered banks (as defined in regulations) generally consists of (i) common
stockholders equity; (ii) noncumulative perpetual preferred stock and related
surplus; and (iii) minority interests in the equity accounts of consolidated
subsidiaries.
<PAGE> 43
In addition, the FDIC adopted a minimum ratio of Tier 1 capital to
total assets of banks. This capital measure is generally referred to as the
leverage capital ratio. The FDIC has established a minimum leverage capital
ratio of 3 percent if the FDIC determines that the institution is not
anticipating or experiencing significant growth and has well- diversified risk,
including no undue interest rate exposure, excellent asset quality, high
liquidity, good earnings and, in general, is considered a strong banking
organization, rated Composite 1 under the Uniform Financial Institutions Rating
System. Other financial institutions are expected to maintain leverage capital
at least 100 to 200 basis points above the minimum level. At December 31,1
996, the Bank exceeded the minimum Tier 1, risk-based and leverage capital
ratios.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
The Federal Deposit Insurance Corporation Improvement Act of 1991,
enacted in December 1991 ("FDICIA"), specifies, among other things, the
following five capital standard categories for depository institutions: (i)
well capitalized, (ii) adequately capitalized, (iii) undercapitalized, (iv)
significantly undercapitalized and (v) critically undercapitalized. FDICIA
imposes progressively more restrictive constraints on operations, management and
capital distributions depending on the category in which an institution is
classified. Each of the federal banking agencies has issued final uniform
regulations that became effective December 19, 1992, which, among other things,
define the capital levels described above. Under the final regulations, a bank
is considered "well capitalized" if it (i) has a total risk-based capital ratio
of 10% or greater, (ii) has a Tier 1 risk-based capital ratio of 6% or greater,
(iii) has a leverage ratio of 5% or greater, and (iv) is not subject to any
order or written directive to meet and maintain a specific capital level for any
capital measure. An "adequately capitalized" bank is defined as one that has
(i) a total risk-based capital ratio for 8% or greater, (ii) a Tier 1 risk-based
capital ratio of 4% or greater (or 3% or greater in the case of a bank with a
composite CAMEL rating of 1). A bank is "undercapitalized" if it has (i) a total
risk-based capital ratio of less 8%, (ii) a Tier 1 risk-based capital ratio of
less than 4% and (iii) a leverage ratio of 4% or greater, or (iii) a leverage
ratio of less than 3%, and "critically undercapitalized" if the bank has a ratio
of tangible equity to total assets equal to or less than 2%. The applicable
federal regulatory agency for a bank that is "well capitalized" may reclassify
it as "adequately capitalized" or "undercapitalized" institution to the
supervisory actions applicable to the next lower capital category, if it
determines that the Bank is in an unsafe or unsound condition or deems the bank
to be engaged in an unsafe or unsound practice and not to have corrected the
deficiency. As of December 31, 1996, the Bank met the definition of a "well
capitalized" institution.
"Undercapitalized" depository institutions, among other things, are
subject to growth limitations, are prohibited, with certain exceptions, from
making capital distributions, are limited in their ability to obtain funding
from a Federal Reserve Bank and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. In addition, for a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution will comply with such capital restoration plan and provide
appropriate assurances of performance. If a depository institution fails to
submit an acceptable plan, including if the holding company refuses or is
unable to make the guarantee described in the previous sentence, it is treated
as if it is "significantly undercapitalized". Failure to submit or implement
an acceptable capital plan also is grounds for the appointment of a conservator
or a receiver. "Significantly undercapitalized" depository institutions may be
subject to a number of additional requirements and restrictions, inclucient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
"Critically undercapitalized" institutions, among other things, are prohibited
from making any payments of principal and interest on subordinated debt, and
are subject to the appointment of a receiver or conservator.
Under FDICIA, the FDIC is permitted to provide financial assistance to
an insured bank before appointment of a conservator or receiver only if (i)
such assistance would be the least costly method of meeting the FDIC's
insurance obligations, (ii) grounds for appointment of a conservator or a
receiver exist or are likely to exist, (iii) it is unlikely that the bank can
meet all capital standards without assistance and (iv) the bank's management
has been competent, has complied with applicable laws, regulations, rules and
supervisory directives and has not engaged in any insider dealing, speculative
practice or other abusive activity.
FDIC INSURANCE ASSESSMENTS
The Bank will be subject to FDIC deposit insurance assessments for the
Bank Insurance Fund ("BIF"). The FDIC has implemented a risk-based assessment
system whereby banks are assessed on a sliding scale depending
<PAGE> 44
on their placement in nine separate supervisory categories. Recent legislation
provides that BIF insured institutions, such as the Bank, will share the
Financial Corporation ("FICO") bond service obligation. Previously, only
Savings Association Insurance Fund ("SAIF") insured institutions were obligated
to contribute to the FICO bond service. The BIF deposit insurance premium will
be less than $.02 per $100 of BIF insured deposits for the highest-rated
institutions.
COMMUNITY REINVESTMENT ACT AND FAIR LENDING
On April 19, 1995, the federal bank regulatory agencies adopted
uniform revisions to the regulations promulgated pursuant to the Community
Reinvestment Act (the "CRA"), which are intended to set standards for financial
institutions. The revised regulation contains three evaluation tests: (a) a
lending test which will compare the institution's market share of loans in low
and moderate income areas to its market share of loans in its entire service
area and the percentage of a bank's outstanding loans to low and moderate
income areas or individuals, (b) a services test which will evaluate the
provision of services that promote the availability of credit to low and
moderate income areas, and (c) an investment test, which will evaluate an
institution's record of investments in organizations designed to foster
community development,s mall and minority owned businesses and affordable
housing lending, including state and local government housing or revenue bonds.
The regulation is designed to reduce the paperwork requirements of the current
regulations and provide regulatory agencies, institutions, and community groups
with a more objective and predictable manner with which to evaluate the CRA
performance of financial institutions. The rule became effective on January 1,
1996 when evaluation under streamlined procedures began for institutions with
total assets of less than $250 million that are owned by a holding company with
total assets of less than $1 billion.
Congress and various federal agencies (including, in addition to the
bank regulatory agencies, the Department of Housing and Urban Development, the
Federal Trade Commission and the Department of Justice (collectively, the
"Federal Agencies") responsible for implementing the nation's fair lending laws
have been increasingly concerned that the prospective home buyers and other
borrowers are experiencing discrimination in their efforts to obtain loans.
Justice has filed suit against financial institutions which it determined had
discriminated, seeking fines and restitution for borrowers who allegedly
suffered from discriminatory practices. Most, if not all, of these suites have
been settled (some for substantial sums) without a full adjudication on the
merits.
On March 8, 1994, the Federal Agencies, in an effort to clarify what
constitutes discrimination in lending and to specify the factors the agencies
will consider in determining if lending discrimination exists, announced a
joint policy statement detailing specific discriminatory practices prohibited
under the Equal Credit Opportunity Act and the Fair Housing Act. In the policy
statement, three methods of establishing discrimination in lending were
identified: (a) overt evidence of discrimination, when a lender blatantly
discriminates on a prohibited basis, or (b) where there is no showing that the
treatment was motivated by intent to discriminate against a person, and (c)
evidence of disparate impact, when a lender applies a practice uniformly to all
applicants, but the practice has a discriminatory effect on a protected class,
even where such practices are neutral on their face and are applied equally,
unless the practice can be justified on the basis of business necessity.
FURTHER CHANGES IN REGULATORY REQUIREMENTS
The United States Congress and the Florida legislature have
periodically considered and adopted legislation that has resulted in
deregulation of, among other matters, banks and other financial institutions,
or adversely affected the profitability of the banking industry. Future
legislation could further modify or eliminate geographic restrictions on banks
and bank holding companies and current prohibitions with other financial
institutions, including mutual funds, securities brokerage firms, insurance
companies, banks from other states and investment banking firms. The effect of
any such legislation on the business of the Company or the Bank cannot be
accurately predicted. The Company also cannot predict what legislation might
be enacted or what other implementing regulations might be adopted, and if
enacted or adopted, the effect thereof.
MONETARY AND FISCAL POLICIES
Banking is a business which depends on interest rate differentials.
In general, the difference between interest paid by a bank on its deposits and
its other borrowings, and the interest received by a bank on its loans and
securities holdings, constitutes the major portion of a bank's earnings. Thus,
the earnings and growth of the
<PAGE> 45
Company will be subject to the influence of economic conditions generally, both
domestic and foreign, and also to the monetary and fiscal policies of the
United States and its agencies, particularly the Federal Reserve. The Federal
Reserve regulates the supply of money through various means, including open
market dealings in United States Government securities, the discount rate at
which banks may borrow from the Federal Reserve and the reserve requirements on
deposits. The nature and timing of any changes in such policies and their
impact on the Company cannot be predicted.
CERTAIN AFFILIATE RESTRICTIONS
The Company and the Bank are subject to the Federal Reserve Act, Section
23A, which limits a bank's "covered transactions" (generally, any extension of
credit) with any single affiliate to no more than 10% of a bank's capital and
surplus. Covered transactions with all affiliates combined are limited to no
more than 20% of a bank's capital and surplus. All covered and exempt
transactions between a bank and its affiliates must be on terms and conditions
consistent with safe and sound banking practices, and a bank and its
subsidiaries are prohibited from purchasing low quality assets from the bank's
affiliates. Finally, Section 23A requires that all of a bank's extensions of
credit to an affiliate be appropriately secured by collateral. The Company and
the Bank are also subject to Section 23B of the Federal Reserve Act, which
further limits transactions among affiliates. Sections 22(g) and 22(h) of the
Federal Reserve Act and implementing regulations also prohibit extensions of
credit by a state non-member bank (such as the Bank) to its directors, officers
and controlling shareholders on terms which are more favorable than those
afforded other borrowers, and impose limits on the amounts of loans to
individual affiliates and all affiliates as a group.
LEGAL MATTERS
Certain legal matters in connection with the Shares offered hereby will
be passed upon for the Company by Holland & Knight LLP Atlanta, Georgia.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1996 and for the year then ended, have been audited by Bricker & Melton, P.A.,
independent auditors, as set forth in their report appearing elsewhere herein,
and are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of the Company as of December 31,
1995, and for each of the years in the two-year period ended December
31, 1995, have been included herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.
<PAGE> 46
INDEX TO TIB FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
AUDITED FINANCIAL STATEMENTS
<S> <C>
Independent Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Bricker & Melton, P.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
KPMG Peat Marwick, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheets at December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-11
</TABLE>
Page F-1
<PAGE> 47
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
TIB Financial Corp. and Subsidiary
Key Largo, Florida
We have audited the accompanying consolidated balance sheet of TIB Financial
Corp. and subsidiary as of December 31, 1996, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of TIB Financial Corp.'s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of TIB Financial Corp. and subsidiary as of December 31, 1996, and the results
of their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.
As discussed in Note A to the consolidated financial statements, in 1996 TIB
Financial Corp. and subsidiary changed its method of disclosure for stock-based
compensation.
Bricker and Melton P.A.
February 21, 1997, except for
Note O, as to which the date
is February 25, 1997
Duluth, Georgia
Page F-2
<PAGE> 48
INDEPENDENT AUDITORS' REPORT
The Board of Directors
TIB Financial Corp.
Key Largo, Florida
We have audited the accompanying consolidated statement of condition of TIB
Financial Corp. and subsidiary as of December 31, 1995, and the related
consolidated statements of earnings, stockholders' equity and cash flows for
each of the years in the two-year period then ended. These financial
statements are the responsibility of TIB Financial Corp.'s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted out audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examing, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of TIB Financial Corp. and
subsidiary as of December 31, 1995 and the results of their operations and
their cash flows for each of the years in the two-year period then ended in
conformity with generally accepted accounting principles.
February 2, 1996 KPMG PEAT MARWICK, LLP
Miami, Florida
F-3
<PAGE> 49
The Board of Directors
TIB Financial Corp.
Key Largo, Florida:
We consent to the use of our reports included herein and to the reference in
our firm under the heading "Experts" in the prospectus.
Miami, Florida
March 26, 1997
KPMG PEAT MARWICK, LLP
<PAGE> 50
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1996 1995
--------------- ---------------
ASSETS
<S> <C> <C>
Cash and due from banks (Note B) $ 12,109,935 $ 8,542,945
Federal funds sold 1,810,000 587,000
Investment securities held to maturity (market value of
$14,691,930 and $10,618,626, respectively) (Note C) 14,387,276 10,115,909
Investment securities available for sale (Note C) 36,490,481 50,844,979
Loans, net of deferred loan fees (Notes D and J) 164,544,622 138,369,991
Less: Allowance for loan losses (Note D) 1,929,719 1,700,823
--------------- ---------------
Loans, net 162,614,903 136,669,168
Premises and equipment, net (Note E) 8,221,676 8,570,271
Accrued interest receivable 1,680,743 1,709,057
Intangible assets, net 343,796 262,487
Other assets (Note H) 3,391,743 2,264,839
--------------- ---------------
TOTAL ASSETS $ 241,050,553 $ 219,566,655
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits (Note F):
Noninterest-bearing demand $ 42,929,774 $ 34,247,739
Interest-bearing demand and money market 66,340,839 67,172,506
Savings 16,220,162 17,545,775
Time deposits of $100,000 or more 23,340,142 22,329,989
Other time deposits 56,152,663 51,161,580
--------------- ---------------
Total Deposits 204,983,580 192,457,589
Short-term borrowings (Note G) 11,091,426 4,184,051
Accrued interest payable 1,743,654 1,432,716
Other liabilities (Note H) 610,976 429,153
--------------- ---------------
TOTAL LIABILITIES 218,429,636 198,503,509
--------------- ---------------
</TABLE>
(Continued)
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-4
<PAGE> 51
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, (continued)
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
STOCKHOLDERS' EQUITY (Note K)
Common stock - $.10 par value: 5,000,000 shares authorized,
4,322,364 and 4,258,464 shares issued and outstanding
(Note O) 432,236 70,975
Surplus 6,140,199 6,150,518
Retained earnings 16,207,233 14,663,648
Market valuation reserve on investment securities available
for sale (Note C) (158,751) 178,005
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 22,620,917 21,063,146
--------------- ---------------
Commitments and contingent liabilities (Note L)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 241,050,553 $ 219,566,655
=============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-5
<PAGE> 52
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------------
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
INTEREST INCOME
Loans, including fees $ 15,037,810 $ 13,530,024 $ 10,584,641
Investment securities:
U.S. Treasury securities 1,883,460 2,014,771 2,337,752
U.S. Government agencies and corporations 1,094,824 1,409,393 1,538,318
States and political subdivisions 373,110 415,248 503,019
Other investments 44,125 44,125 108,769
Federal funds sold 69,420 111,043 106,083
--------------- --------------- ---------------
TOTAL INTEREST INCOME 18,502,749 17,524,604 15,178,582
--------------- --------------- ---------------
INTEREST EXPENSE
Interest-bearing demand and money market 808,402 896,078 836,894
Savings 1,230,686 1,291,489 1,229,532
Time deposits of $100,000 or more 1,426,049 1,397,538 1,047,000
Other time deposits 2,743,791 2,601,797 1,727,801
Short-term borrowings 297,832 65,664 117,777
--------------- --------------- ---------------
TOTAL INTEREST EXPENSE 6,506,760 6,252,566 4,959,004
--------------- --------------- ---------------
NET INTEREST INCOME 11,995,989 11,272,038 10,219,578
PROVISION FOR LOAN LOSSES (Note D) 240,000 135,000 120,000
--------------- --------------- ---------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 11,755,989 11,137,038 10,099,578
--------------- --------------- ---------------
OTHER INCOME
Service charges on deposit accounts 1,336,306 1,093,453 982,374
Investment securities gains, net (Note C) 18,478 8,174 78,241
Merchant bank card processing income 519,203 461,742 292,935
Gains (losses) on other real estate owned, net -- (29,200) 117,552
Gain on exchange of bank premises -- 233,895 --
Gain on sale of SBA loans 17,314 97,258 30,794
Gain on sale of mortgage loans 173,468 -- --
Fees on mortgage loans sold at origination 359,562 364,040 41,470
Other income 169,681 135,073 99,235
--------------- --------------- ---------------
TOTAL OTHER INCOME 2,594,012 2,364,435 1,642,601
--------------- --------------- ---------------
</TABLE>
(Continued)
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-6
<PAGE> 53
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME, (continued)
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------------
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
OTHER EXPENSE
Salaries and employee benefits (Note I) 5,535,872 4,995,289 4,323,570
Net occupancy expense 1,691,870 1,593,709 1,258,292
Other real estate owned expenses, net -- 14,725 57,441
Other expense (Note M) 2,330,292 2,305,807 2,044,254
--------------- --------------- ---------------
TOTAL OTHER EXPENSE 9,558,034 8,909,530 7,683,557
--------------- --------------- ---------------
INCOME BEFORE INCOME TAX EXPENSE
4,791,967 4,591,943 4,058,622
INCOME TAX EXPENSE (Note H) 1,589,000 1,591,000 1,373,000
--------------- --------------- ---------------
NET INCOME $ 3,202,967 $ 3,000,943 $ 2,685,622
=============== =============== ===============
EARNINGS PER SHARE (Notes A and O) $ .72 $ .69 $ .65
=============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-7
<PAGE> 54
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
For the years ended December 31, 1996, 1995 and 1994
-------------------------------------------------------------------------
Market
Common Retained Valuation
Stock Surplus Earnings Reserve Total
---------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993 $ 853,510 $ 4,379,097 $ 11,604,151 $ -- $ 16,836,758
Effect of reorganization with TIB Bank
of the Keys (785,229) 785,229 -- -- --
Net income -- -- 2,685,622 -- 2,685,622
Cash dividends declared, $.21 per share -- -- (873,114) -- (873,114)
Stock dividends declared, $5.50 per
share 1,016 334,198 (335,214) -- --
Exercise of stock options 640 210,240 -- -- 210,880
Market valuation adjustment -- -- -- (1,972,000) (1,972,000)
---------- ------------ ------------ ------------ -------------
BALANCE AT DECEMBER 31, 1994 69,937 5,708,764 13,081,445 (1,972,000) 16,888,146
Net income -- -- 3,000,943 -- 3,000,943
Cash dividends declared, $.25 per share -- -- (1,058,321) -- (1,058,321)
Stock dividends declared, $7.63 per
share 788 359,631 (360,419) -- --
Exercise of stock options 250 82,123 -- -- 82,373
Market valuation adjustment -- -- -- 2,150,005 2,150,005
---------- ------------ ------------ ------------ -------------
BALANCE AT DECEMBER 31, 1995 70,975 6,150,518 14,663,648 178,005 21,063,146
Net income -- -- 3,202,967 -- 3,202,967
Two-for-one stock split 70,974 (70,974) -- -- --
Cash dividends declared, $.39 per share -- -- (1,659,382) -- (1,659,382)
Exercise of stock options 2,130 348,812 -- -- 350,942
Market valuation adjustment -- -- -- (336,756) (336,756)
---------- ------------ ------------ ------------ -------------
BALANCE AT DECEMBER 31, 1996 144,079 6,428,356 16,207,233 (158,751) 22,620,917
Three-for-one stock split subsequent to
December 31, 1996 (Note O) 288,157 (288,157) -- -- --
---------- ------------ ------------ ------------ -------------
BALANCE AT DECEMBER 31, 1996, AFTER
RETROACTIVE RESTATEMENT FOR STOCK
SPLIT $ 432,236 $ 6,140,199 $ 16,207,233 $ (158,751) $ 22,620,917
========== ============ ============ ============ =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-8
<PAGE> 55
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------------
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,202,967 $ 3,000,943 $ 2,685,622
Adjustments to reconcile net income to net cash
provided by operating activities:
Net amortization of investments 201,344 223,148 239,329
Amortization of intangible assets 59,967 27,142 5,703
Depreciation of premises and equipment 761,001 640,877 426,147
Provision for loan losses 240,000 135,000 120,000
Deferred income tax provision (benefit) (87,000) 52,000 31,500
Deferred net loan fees (84,807) (65,443) (42,809)
Investment securities (gains), net (18,478) (8,174) (78,241)
Net loss (gains) on sales of other real estate
owned, net -- 29,200 (117,552)
Gain on exchange of building premises -- (233,895) --
Gain on sales of premises and equipment (1,166) (4,320) (2,110)
Gains on sales of SBA loans (17,314) (97,258) (30,794)
Gains on sales of mortgage loans (173,648) -- --
(Increase) decrease in interest receivable 28,314 (183,611) (98,359)
Increase in interest payable 310,938 636,096 212,380
(Increase) in intangible assets (141,276) -- --
(Increase) in other assets (944,246) (1,243,866) (356,435)
Increase (decrease) in other liabilities (143,172) 14,692 99,545
--------------- --------------- ---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES
3,193,424 2,922,531 3,093,926
--------------- --------------- ---------------
</TABLE>
(Continued)
The accompanying notes are an integral part of these consolidated financial
statements.
Page F-9
<PAGE> 56
TIB FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, (continued)
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------------------
1996 1995 1994
--------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities held to maturity $ (5,951,250) $ -- $ (5,774,119)
Purchases of investment securities available for sale -- -- (17,117,969)
Sales of investment securities available for sale 8,013,906 -- 10,077,188
Repayments of principal and maturities of investment
securities available for sale 5,591,954 5,433,994 7,815,907
Maturities of investment securities held to maturity 1,706,000 2,184,500 970,000
Proceeds from sales of SBA loans 1,075,630 2,010,750 1,150,310
Proceeds from sales of mortgage loans 11,564,515 -- --
Loans originated or acquired, net of principal
repayments (38,550,111) (16,776,495) (14,710,631)
Proceeds from sales of other real estate owned, net -- 357,011 941,741
Purchases of premises and equipment (415,670) (2,731,781) (999,212)
Sales of premises and equipment 4,430 18,052 18,632
NET CASH USED BY INVESTING ACTIVITIES --------------- --------------- ---------------
16,960,596 (9,503,969) (17,628,153)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in federal funds purchased and
securities sold under agreements to
repurchase 6,907,375 3,051,088 (1,755,496)
Net increase (decrease) in demand, money market and
savings accounts 6,524,755 (1,414,558) (2,250,183)
Time deposits accepted, net of repayments 6,001,236 4,387,694 12,987,452
Proceeds from exercise of stock options and warrants 350,942 82,373 210,880
Cash dividends paid (1,227,146) (1,055,493) (1,140,297)
NET CASH PROVIDED BY FINANCING ACTIVITIES --------------- --------------- ---------------
18,557,162 5,051,104 8,052,356
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,789,990 (1,530,334) (6,481,871)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 9,129,945 10,660,279 17,142,150
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 13,919,935 $ 9,129,945 $ 10,660,279
=============== =============== ===============
SUPPLEMENTAL DISCLOSURES OF CASH PAID:
Interest $ 6,159,810 $ 5,616,470 $ 4,746,624
=============== =============== ===============
Income taxes $ 1,656,000 $ 1,510,000 $ 1,215,000
=============== =============== ===============
</TABLE>
Page F-10
<PAGE> 57
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
TIB Financial Corp. and subsidiary provide full-service commercial banking
services in Monroe County, Florida.
The accounting and reporting policies of TIB Financial Corp. and subsidiary
conform to generally accepted accounting principles and to general practices
within the banking industry. The following is a summary of the more significant
of these policies.
The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the balance sheet
and revenues and expenses for the period. Actual results could differ
significantly from those estimates. Material estimates that are particularly
susceptible to significant change in the near term relate to the determination
of the market valuation reserve on investment securities available for sale and
the allowance for loan losses. Management believes that the allowance for loan
losses is adequate and the decline in market value of investment securities
available for sale is temporary. While management uses available information to
recognize losses on loans, future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the allowance for loan losses. Such agencies may require additions to the
allowance for loan losses based on their judgments about information available
to them at the time of their examination.
CORPORATE REORGANIZATION
During 1996, TIB Financial Corp. ("Company") was formed providing for a
reorganization whereby TIB Bank of the Keys ("Bank") became a wholly-owned
subsidiary of TIB Financial Corp. The transaction was approved unanimously by
the Bank's shareholders and accounted for on a historical cost basis similar to
a pooling of interests and, accordingly, the accompanying consolidated
financial statements are prepared as if the reorganization occurred January 1,
1994.
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of TIB Financial
Corp. (Parent Company) and its wholly-owned subsidiary, TIB Bank of the Keys
(Bank), collectively known as the Company. All significant intercompany
accounts and transactions have been eliminated in consolidation.
INVESTMENT SECURITIES
Investment securities which management has the ability and intent to hold to
maturity are reported at cost, adjusted for amortization of premium and
accretion of discount. Investment securities available for sale are reported at
fair value, with unrealized gains and losses reported as a separate component
of stockholders' equity, net of the related tax effect. Other investments are
reported at cost and, accordingly, earnings are reported when interest is
accrued or when dividends are received.
Page F-11
<PAGE> 58
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)
Premium and discount on all investment securities are amortized (deducted)
and accreted (added), respectively, to interest income on the effective-yield
method over the period to the maturity of the related securities. Premium and
discount on mortgage-backed securities are amortized (deducted) and accreted
(added), respectively, to interest income on the effective interest method over
the period to maturity of the related securities taking into consideration
assumed prepayment patterns.
Gains or losses on disposition are computed by the specific identification
method for all securities.
LOANS
Loans are reported at the gross amount outstanding, reduced by net deferred
loan fees and a valuation allowance for loan losses. Interest income on loans
is recognized over the terms of the loans based on the unpaid daily principal
amount outstanding. If the collectibility of interest appears doubtful, the
accrual thereof is discontinued. Loan origination fees, net of direct loan
origination costs, are deferred and recognized as income over the life of the
related loan on a level-yield basis. Gains on sales of SBA loans are recognized
as income when the sale occurs.
The Bank adopted the provisions of Statement of Financial Accounting
Standards No. 114 (SFAS 114), "Accounting by Creditors for Impairment of a
Loan," as amended by Statement of Financial Accounting Standards No. 118 (SFAS
118), "Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosure," on January 1, 1995. Management, considering current information
and events regarding the borrowers' ability to repay their obligations,
considers a loan to be impaired when it is probable that the Bank will be
unable to collect all amounts due according to the contractual terms of the
loan. When a loan is considered to be impaired, the amount of the impairment is
measured based on the present value of expected future cash flows discounted at
the note's effective interest rate. Impairment losses are included in the
allowance for loan losses through a charge to the provision. Cash receipts on
impaired loans are applied to reduce the principal amount of such loans until
the principal has been recovered and are recognized as interest income,
thereafter. Prior periods were not restated. There was no significant impact on
the financial condition or results of operations of the Company upon adoption.
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 122 (SFAS 122), "Accounting for Mortgage Servicing
Rights," an amendment of Statement of Financial Accounting Standards No. 65,
"Accounting for Certain Mortgage Banking Activities." The provisions of SFAS
122 denote the accounting distinction between rights to service mortgage loans
that are acquired through loan origination and those acquired through purchase.
The adoption of SFAS 122 did not have a significant impact on the financial
condition or results of operations of the Company.
Fixed rate mortgage loans are originated by the Bank and sold to a third
party immediately without recourse. All fees are recognized as income at the
time of the sale.
Page F-12
<PAGE> 59
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through a provision for loan
losses charged to expense. The allowance represents an amount which, in
management's judgment, will be adequate to absorb probable losses on existing
loans that may become uncollectible. Management's judgment in determining the
adequacy of the allowance is based on evaluations of the collectibility of
loans and takes into consideration such factors as changes in the nature and
volume of the loan portfolio, current economic conditions that may affect the
borrower's ability to pay, overall portfolio quality and review of specific
problem loans. Periodic revisions are made to the allowance when circumstances
which necessitate such revisions become known. Recognized losses are charged to
the allowance for loan losses, while subsequent recoveries are added to the
allowance.
PREMISES AND EQUIPMENT
Premises and equipment are reported at cost less accumulated depreciation.
For financial reporting purposes, depreciation is computed using primarily the
straight-line method over the estimated useful lives of the assets.
Expenditures for maintenance and repairs are charged to operations as incurred,
while major renewals and betterments are capitalized. When property is disposed
of, any gain or loss is reflected in income. For Federal tax reporting
purposes, depreciation is computed using primarily accelerated methods.
OTHER REAL ESTATE
Other real estate represents property acquired through in-substance
foreclosure, foreclosure, or in settlement of loans and is reported at the
lower of cost or fair value less estimated selling expenses. Losses incurred in
the acquisition of foreclosed properties are charged against the allowance for
loan losses at the time of foreclosure. Subsequent write-downs of other real
estate are charged against the current period's operations.
MERCHANT BANK CARD PROCESSING INCOME
The Bank participates in merchant credit card processing for a number of
businesses in the local area. The Bank receives a percentage of each
transaction which it processes.
INTANGIBLE ASSETS
Intangible assets include amounts for excess servicing fees on SBA loans and
organizational expenses. Excess servicing rights are being amortized over the
expected life of the related loan. Holding company organizational expenses are
being amortized over five years using the straight-line method.
INCOME TAXES
The tax effect of transactions is recorded at current tax rates in the
periods the transactions are reported for financial statement purposes.
Deferred income taxes are established for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such amounts are
realized or settled. The Company will file its 1996 income tax returns on a
consolidated basis.
Page F-13
<PAGE> 60
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)
COMMON STOCK SPLITS
On March 26, 1996, the Board of Directors declared a two-for-one common
stock split distributable on May 14, 1996, to shareholders of record at the
close of business on May 2, 1996, resulting in 709,740 additional shares of
common stock being issued. On February 25, 1997, the Board of Directors
declared a three-for-one common split distributable on March 18, 1997, to
shareholders of record on February 25, 1997. In the consolidated financial
statements, all per share amounts, number of shares outstanding and market
prices have been restated to reflect these stock splits. An amount equal to the
$.10 par value of the additional shares outstanding after the stock splits has
been transferred from surplus to common stock.
EARNINGS PER SHARE
Earnings per share has been computed based on the weighted average number of
common shares outstanding during the period, which totaled 4,424,676, 4,352,838
and 4,160,994 shares in 1996, 1995 and 1994, respectively. Stock options and
warrants, as described in Note K, are considered to be common stock equivalents
for purposes of calculating earnings per share. The common stock splits have
been treated retroactively as occurring on January 1, 1994, for earnings per
share computation purposes.
STOCK-BASED COMPENSATION
The Company accounts for stock options under Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). Under APB
25, because the exercise price of the Company's stock options equals the market
price of the underlying stock on the date of grant, no compensation expense is
recognized.
Effective January 1, 1996, the Company adopted the disclosure requirements of
Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation." As provided by SFAS 123, the Company has elected to
continue applying the provisions of APB 25 in determining its net income
relative to stock-based compensation. The Company has adopted the SFAS 123
requirement that a company disclose the pro forma net income and pro forma
earnings per share for the years ending December 31, 1996 and 1995, as if the
alternative fair-value-based accounting method in SFAS 123 had been used in
determining net income. The adoption of SFAS 123 did not have a significant
impact on the financial condition or results of operations of the Company.
FINANCIAL INSTRUMENTS
In the ordinary course of business, the Bank has entered into
off-balance-sheet financial instruments consisting of commitments to extend
credit and standby letters of credit. Such financial instruments are recorded
in the financial statements when they are funded or related fees are incurred
or received.
Page F-14
<PAGE> 61
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)
FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company uses the following methods and assumptions in estimating fair
values of financial instruments (see Note N):
Cash and cash equivalents-The carrying amount of cash and cash equivalents
approximates fair value.
Investment securities-The fair value of investment securities held to
maturity and available for sale is estimated based on bid quotations received
from independent pricing services. The carrying amount of other investments
approximates fair value.
Loans-For variable rate loans that reprice frequently and have no
significant change in credit risk, fair values are based on carrying values.
For all other loans, fair values are calculated by discounting the contractual
cash flows using estimated market discount rates which reflect the credit and
interest rate risk inherent in the loan, or by using the current rates at which
similar loans would be made to borrowers with similar credit ratings and for
the same remaining maturities.
Deposits-The fair value of deposits with no stated maturity, such as demand,
NOW and money market, and savings accounts, is equal to the amount payable on
demand at year-end. The fair value of certificates of deposit is based on the
discounted value of contractual cash flows using the rates currently offered
for deposits of similar remaining maturities.
Short-term borrowings-The carrying amount of federal funds purchased and
other short-term borrowings maturing within 30 days approximates fair value.
Accrued interest-The carrying amount of accrued interest receivable and
payable approximates fair value.
Off-balance-sheet instruments-Fair values for off-balance-sheet lending
commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the
borrower's credit standing.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand, amounts due from banks and federal funds sold. Generally, federal
funds are purchased and sold for one-day periods.
LONG-LIVED ASSETS
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The provisions
of SFAS 121 require the Company to review long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. The adoption of SFAS 121 did not have a
significant impact on the financial condition or results of operations of the
Company.
Page F-15
<PAGE> 62
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)
RECLASSIFICATIONS
Certain reclassifications have been made in the 1995 and 1994 financial
statements to conform with the 1996 presentation.
PENDING ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 125 (SFAS 125), "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS 125 is
effective for such transactions entered into subsequent to December 31, 1996,
and for certain excess servicing rights recorded at December 31, 1996. Under
SFAS 125, a company recognizes the financial and servicing assets it controls
and the liabilities it has incurred and derecognizes financial assets when
control has been surrendered and liabilities when extinguished. The Financial
Accounting Standards Board has issued Statement of Financial Accounting
Standards No. 127 (SFAS 127), "Deferral of the Effective Date of FASB Statement
No. 125," which delays the effective date of certain provisions of SFAS 125
until 1998. The adoption of SFAS 125 and SFAS 127 is not expected to have a
significant impact on the financial condition or results of operations of the
Company.
NOTE B-CASH AND DUE FROM BANKS
A bank is required to maintain average reserve balances with the Federal
Reserve Bank, on deposit with national banks or in cash. The Bank's average
reserve requirement as of December 31, 1996 was approximately $2,348,000. The
Bank maintained cash balances which were adequate to meet this requirement.
NOTE C-INVESTMENT SECURITIES
The amortized cost and estimated market value of investment securities held
to maturity are as follows at December 31:
<TABLE>
<CAPTION>
1996
---------------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
-------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 7,964,622 $ 1,017 $ 6,579 $ 7,959,060
States and political subdivisions 5,354,837 303,029 776 5,657,090
U.S. Government agencies and
corporations 992,817 7,963 -- 1,000,780
Other investments 75,000 -- -- 75,000
-------------- ----------- ----------- --------------
$ 14,387,276 $ 312,009 $ 7,355 $ 14,691,930
============== =========== =========== ==============
</TABLE>
Page F-16
<PAGE> 63
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE C-INVESTMENT SECURITIES, (Continued)
<TABLE>
<CAPTION>
1995
---------------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
-------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 2,008,965 $ 11,655 $ -- $ 2,020,620
States and political subdivisions 6,049,446 453,250 -- 6,502,696
U.S. Government agencies and
corporations 1,982,498 37,812 -- 2,020,310
Other investments 75,000 -- -- 75,000
-------------- ----------- ----------- --------------
$ 10,115,909 $ 502,717 $ -- $ 10,618,626
============== =========== =========== ==============
</TABLE>
The amortized cost and estimated market value of investment securities
available for sale are as follows at December 31:
<TABLE>
<CAPTION>
1996
---------------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
-------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 21,219,561 $ 22,458 $ 129,679 $ 21,112,340
Mortgage-backed securities 15,075,896 25,846 207,688 14,894,054
Other debt securities 449,433 34,654 -- 484,087
-------------- ----------- ----------- --------------
$ 36,744,890 $ 82,958 $ 337,367 $ 36,490,481
============== =========== =========== ==============
</TABLE>
<TABLE>
<CAPTION>
1995
---------------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
-------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 31,421,475 $ 218,235 $ 30,000 $ 31,609,710
Mortgage-backed securities 18,689,057 93,348 51,000 18,731,405
Other debt securities 449,201 54,663 -- 503,864
-------------- ----------- ----------- --------------
$ 50,559,733 $ 366,246 $ 81,000 $ 50,844,979
============== =========== =========== ==============
</TABLE>
Other investments at December 31, 1996 and 1995, consists of stock in the
Independent Bankers Bank of Florida. Other debt securities at December 31, 1996
and 1995 consists of corporate debt securities.
The net unrealized (loss) and gain on available for sale securities at
December 31, 1996 and 1995, net of the related deferred taxes of $(95,658) and
$107,241, is $(158,751) and $178,005, respectively, and is included as a
separate component of stockholders' equity.
Page F-17
<PAGE> 64
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE C INVESTMENT SECURITIES, (Continued)
The amortized cost and estimated market value of investment securities held
to maturity and available for sale at December 31, 1996, by contractual
maturity, are shown below. Expected maturities differ from contractual
maturities because borrowers may have the right to call or repay obligations
without call or prepayment penalties.
<TABLE>
<CAPTION>
Investment Securities Investment Securities
Held to Maturity Available for Sale
-------------------------------- --------------------------------
Amortized Market Amortized Market
Cost Value Cost Value
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Due in one year or less $ 2,573,805 $ 2,585,256 $ 7,038,028 $ 7,057,660
Due after one year through five years 9,217,008 9,399,313 14,630,966 14,538,767
Due after five years through ten years 1,445,841 1,497,939 -- --
Due after ten years 1,150,622 1,209,422 -- --
Mortgage-backed securities -- -- 15,075,896 14,894,054
-------------- -------------- -------------- --------------
$ 14,387,276 $ 14,691,930 $ 36,744,890 $ 36,490,481
============== ============== ============== ==============
</TABLE>
Proceeds from sales of investment securities available for sale during 1996
were $8,013,906 with gross gains of $3,706 and no gross losses. There were no
sales of investment securities in 1995. Proceeds from sales of investment
securities available for sale during 1994 were $10,077,188, with gross gains of
$128,326 and gross losses of $50,085 realized on those sales. Maturities and
principal repayments of investment securities available for sale during 1996,
1995 and 1994 were $5,591,954, $5,433,994 and $7,815,907, respectively, with
gross gains of $14,772, $8,174 and $0 and no gross losses realized on those
transactions.
Investment securities having carrying values of approximately $21,652,000
and $18,318,000 at December 31, 1996 and 1995, respectively, were pledged to
secure public funds on deposit, securities sold under agreements to repurchase,
and other purposes as required by law.
At December 31, 1996, the Bank has no outstanding off-balance-sheet
derivative financial instruments such as swaps, options, futures or forward
contracts.
Page F-18
<PAGE> 65
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE D-LOANS
Major classifications of loans are as follows at December 31:
<TABLE>
<CAPTION>
1996 1995
--------------- ---------------
<S> <C> <C>
Commercial, financial and agricultural $ 6,423,961 $ 7,939,397
Real estate-commercial 102,854,287 85,353,686
Real estate-construction 7,391,050 5,441,850
Real estate-individual 40,834,718 35,946,521
Installment and simple interest individual 7,553,799 4,250,134
Other 93,322 129,725
--------------- ---------------
Total loans 165,151,137 139,061,313
Net deferred loan fees 606,515 691,322
--------------- ---------------
Loans, net of deferred loan fees $ 164,544,622 $ 138,369,991
=============== ===============
</TABLE>
Substantially all loans are made to borrowers in the Bank's primary market
area of Monroe County in which the primary industry is tourism. Therefore, a
substantial portion of the Bank's loan customers and outstanding loans are
related to the tourism industry. At December 31, 1996 and 1995, the Bank had
approximately $151,080,000 and $126,742,000, respectively, of its portfolio
secured by real estate.
Nonaccrual and restructured loans totaled $430,000 and $82,000 at December
31, 1996 and 1995, respectively. If such loans had been on a full-accrual
basis, interest income would have been approximately $16,000 and $3,000 higher
in 1996 and 1995, respectively. Interest income recognized on these loans
totaled approximately $27,000 and $5,000, respectively.
At December 31, 1996 and 1995, the Bank has no loans which are impaired
under SFAS 114.
The following is a summary of transactions in the allowance for loan losses
for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Balance, beginning of year $ 1,700,823 $ 1,566,626 $ 1,448,795
Provision charged to expense 240,000 135,000 120,000
Loans charged off (11,734) (803) (3,169)
Recoveries of loans previously charged off 630 -- 1,000
------------- ------------- -------------
Balance, end of year $ 1,929,719 $ 1,700,823 $ 1,566,626
============= ============= =============
</TABLE>
Page F-19
<PAGE> 66
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE E-PREMISES AND EQUIPMENT
Premises and equipment are comprised of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
Land $ 2,579,977 $ 2,386,487
Buildings 5,472,086 5,429,766
Furniture, fixtures and equipment 4,505,827 4,181,842
Other 7,000 201,790
-------------- --------------
12,564,890 12,199,885
Less: Accumulated depreciation (4,343,214) (3,629,614)
-------------- --------------
Premises and equipment, net $ 8,221,676 $ 8,570,271
============== ==============
</TABLE>
The charge to operating expense for depreciation totaled $761,001, $640,877
and $426,147 in 1996, 1995 and 1994, respectively.
The Bank is obligated under operating leases for office space. The leases
expire in periods varying from one to two years, and some have renewal options
for subsequent periods. Future minimum lease payments are as follows at
December 31, 1996:
Years ending December 31,
<TABLE>
<S> <C>
1997 $ 51,128
1998 36,916
1999 39,667
2000 42,428
2001 47,196
--------------
$ 217,335
==============
</TABLE>
Rental expense for the years ended December 31, 1996, 1995, and 1994 was
approximately $40,000, $67,000 and $47,000, respectively.
During 1995, the Bank entered into a contract with a related party to
exchange existing Bank premises for an office building. Included in earnings
for the year ended December 31, 1995, is a gain of $233,895 related to this
exchange.
Page F-20
<PAGE> 67
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE F-TIME DEPOSITS
At December 31, 1996, the scheduled maturities of time deposits are as
follows:
Years ended December 31:
<TABLE>
<S> <C>
1997 $ 61,551,539
1998 9,774,778
1999 4,025,526
2000 and thereafter 4,140,962
--------------
$ 79,492,805
==============
</TABLE>
NOTE G-SHORT-TERM BORROWINGS
Short-term borrowings include federal funds purchased, wholesale and retail
securities sold under agreements to repurchase, and a Treasury, Tax and Loan
note option. The Bank utilizes these short-term borrowings, which generally
represent overnight borrowing transactions, for liquidity purposes.
The Bank has unsecured lines of credit for federal funds purchased from
other banks totaling $5,000,000 at December 31, 1996. Securities sold under
agreements to repurchase (wholesale) represent a wholesale agreement with a
correspondent bank which is collateralized by a U.S. Treasury note. The Bank
also has several securities sold under repurchase agreements (retail) with
commercial account holders whereby the Bank sweeps to the customer's accounts
on a daily basis and pays interest on the same. These agreements are
collateralized by investment securities chosen by the Bank. (See Note C.)
The Bank accepts Treasury, Tax and Loan deposits from certain commercial
depositors and remits these deposits to the appropriate government authorities.
The Bank can hold up to $1,700,000 of these deposits more than a day under a
note option agreement with its regional federal reserve bank and pay interest
on those funds held. The Bank pledges certain investment securities against
this account. (See Note C.)
Page F-21
<PAGE> 68
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE G-SHORT-TERM BORROWINGS, (Continued)
The following table reflects the average daily outstanding, year-end
outstanding, maximum month-end outstanding and weighted average rate paid for
the year ended for each of the four categories of short-term borrowings as of
and for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
FEDERAL FUNDS PURCHASED:
Balance:
Average daily outstanding $ 840,748 $ 198,679
Year-end outstanding -- --
Maximum month-end outstanding 5,000,000 977,000
Rate:
Weighted average 5.8% 5.9%
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (WHOLESALE):
Balance:
Average daily outstanding $ 3,362,637 $ 131,507
Year-end outstanding 9,000,000 3,000,000
Maximum month-end outstanding 9,000,000 3,000,000
Rate:
Weighted average 5.7% 5.9%
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (RETAIL):
Balance:
Average daily outstanding $ 790,296 $ 587,317
Year-end outstanding 908,206 521,806
Maximum month-end outstanding 1,238,650 885,210
Rate:
Weighted average 3.1% 1.7%
TREASURY, TAX AND LOAN NOTE OPTION:
Balance:
Average daily outstanding $ 690,509 $ 770,770
Year-end outstanding 1,183,220 662,245
Maximum month-end outstanding 1,546,956 2,427,726
Rate:
Weighted average 4.5% 4.7%
</TABLE>
Page F-22
<PAGE> 69
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE H-INCOME TAXES
The following are the components of income tax expense as provided for the
years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Current income tax provision
Federal $ 1,440,000 $ 1,294,000 $ 1,121,000
State 236,000 245,000 220,500
------------- ------------- -------------
1,676,000 1,539,000 1,341,500
Deferred income tax provision (benefit) (87,000) 52,000 31,500
------------- ------------- -------------
$ 1,589,000 $ 1,591,000 $ 1,373,000
============= ============= =============
</TABLE>
A reconciliation of income tax computed at the Federal statutory income tax
rate to total income taxes is as follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Pretax income $ 4,791,967 $ 4,591,943 $ 4,058,622
============= ============= =============
Income taxes computed at Federal statutory tax rate $ 1,629,300 $ 1,561,000 $ 1,380,000
Increase (decrease) resulting from:
Tax-exempt interest income (120,250) (130,000) (160,000)
Exercise of stock options (65,900) -- --
State income taxes 155,800 161,700 145,500
Other, net (9,950) (1,700) 7,500
------------- ------------- -------------
$ 1,589,000 $ 1,591,000 $ 1,373,000
============= ============= =============
</TABLE>
The following summarizes the tax effects of temporary differences which
comprise the net deferred tax assets (liabilities) at December 31:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Reserve for loan losses $ 581,321 $ 495,200
Unrealized losses on securities available for sale 95,658 --
Accrual for severance -- 39,800
------------- -------------
Total gross deferred tax assets 676,979 535,000
------------- -------------
Accumulated depreciation (276,429) (252,165)
Deferred loan fees (42,092) (104,835)
Gain on building swap (85,800) (88,000)
Unrealized gains on securities available for sale -- (107,000)
------------- -------------
Total gross deferred tax liabilities (404,321) (552,000)
------------- -------------
$ 272,658 $ (17,000)
============= =============
</TABLE>
Page F-23
<PAGE> 70
TIB FINANCIAL CORP
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE I-EMPLOYEE BENEFIT PLAN
Effective January 1, 1994, the Bank established an Employee Stock Ownership
Plan containing Internal Revenue Code Section 401(k) Provisions. The plan is a
complete amendment, restatement, and consolidation of the TIB Bank of the Keys
401(k) Plan, originally effective January 1, 1990, and the Employee Profit
Sharing Trust, originally effective January 1, 1978.
Three types of contributions can be made to the Plan by the Bank and
participants: basic voluntary contributions which are discretionary
contributions made by all participants; a matching contribution, whereby the
Bank will match 25 percent of salary reduction contributions up to 4 percent of
compensation, not to exceed a maximum contribution of $1,000 per employee; and
an additional discretionary contribution made by the Bank allocated to the
accounts of participants on the basis of total relative compensation. The Bank
contributed to the plan $168,000 in 1996, $156,000 in 1995, and $144,000 in
1994.
NOTE J-RELATED PARTY TRANSACTIONS
As of December 31, 1996 and 1995, the Bank had direct and indirect loans
outstanding to certain of its officers, directors and their related business
interests which aggregated $8,579,820 and $7,461,155, respectively. During
1996, $6,115,462 of such loans were made and repayments totaled $4,996,797.
These loans were made in the ordinary course of business in conformity with
normal credit terms, including interest rates and collateral requirements
prevailing at the time for comparable transactions with other borrowers. These
individuals and their related interests also maintain customary demand and time
deposit accounts with the Bank.
NOTE K-STOCKHOLDERS' EQUITY
The Bank is subject to various regulatory capital requirements administered
by the federal and state banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. The regulations require the
Bank to meet specific capital adequacy guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Bank's capital
classification is also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
requires the Bank to maintain minimum amounts and ratios (set forth in the
table below) of Tier 1 capital (as defined in the regulations) to total average
assets (as defined), and minimum ratios of Tier 1 and total capital (as
defined) to risk weighted assets (as defined). As of December 31, 1996, the
most recent notification from the Federal Deposit Insurance Corporation
categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. There are no conditions or events since that
notification that management believes has changed the Bank's category. To be
considered well capitalized and adequately capitalized (as defined) under the
regulatory framework for prompt corrective action, the Bank must maintain
minimum Tier 1 leverage, Tier 1 risk-based, and total risk-based ratios as set
forth in the table. The Bank's actual capital amounts and ratios are also
presented in the table.
Page F-24
<PAGE> 71
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE K-STOCKHOLDERS' EQUITY, (Continued)
<TABLE>
<CAPTION>
1996
----------------------------------------------------------------------------
Adequately
Well Capitalized Capitalized
Requirement Requirement Actual
Amount (Ratio) Amount (Ratio) Amount (Ratio)
----------------------- ----------------------- -----------------------
<S> <C> <C><C> <C> <C> <C> <C>
Tier 1 Capital (to Average Assets) $>11,603,374 > 5.0% $ 6,962,024 3.0% $ 22,419,000 9.7%
- -
Tier 1 Capital (to Risk Weighted $> 9,945,000 > 6.0% $ 6,630,000 4.0% $ 22,419,000 13.5%
Assets) - -
Total Capital (to Risk Weighted Assets) $>16,576,000 > 10.0% $ 13,261,000 8.0% $ 24,349,000 14.7%
- -
</TABLE>
<TABLE>
<CAPTION>
1995
----------------------------------------------------------------------------
Adequately
Well Capitalized Capitalized
Requirement Requirement Actual
Amount (Ratio) Amount (Ratio) Amount (Ratio)
----------------------- ----------------------- -----------------------
<S> <C> <C><C> <C> <C> <C> <C>
Tier 1 Capital (to Average Assets) $>10,736,000 > 5.0% $ 6,442,000 3.0% $ 20,635,000 9.6%
- -
Tier 1 Capital (to Risk Weighted Assets) $> 8,527,000 > 6.0% $ 5,685,000 4.0% $ 20,635,000 14.5%
- -
Total Capital (to Risk Weighted Assets) $>14,212,000 > 10.0% $ 11,370,000 8.0% $ 22,335,000 15.7%
- -
</TABLE>
Management believes, as of December 31, 1996, that the Bank meets all
capital requirements to which it is subject.
Under state banking law, regulatory approval will be required if the total
of all dividends declared in any calendar year by the Bank exceeds the Bank's
net profits to date for that year combined with its retained net profits for
the preceding two years. Retained earnings of the Bank available for payment of
dividends without prior regulatory approval for the year ended December 31,
1996 is approximately $6,985,000.
STOCK OPTION PLAN
Under the Bank's 1994 Incentive Stock Option and Nonstatutory Stock Option
Plan ("the Plan"), the Company may grant stock options to persons who are now
or who during the term of the Plan become directors, officers, or key
executives as defined by the Plan. Stock options granted under the Plan may
either be incentive stock options or nonqualified stock options for federal
income tax purposes. The Board of Directors of the Company may grant
nonqualified stock options to any director, and incentive stock options or
nonqualified stock options to any officer, key executive, administrative, or
other employee including an employee who is a director of the Company. Subject
to the provisions of the Plan, the maximum number of shares of common stock of
the Company that may be optioned or sold is 978,000 shares. Such shares may be
treasury, or authorized, but unissued, shares of common stock of the Company.
Page F-25
<PAGE> 72
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE K-STOCKHOLDERS' EQUITY, (Continued)
The exercise price for common stock under each nonqualified stock option
must equal 100 percent of the fair market value of the stock at the time the
option is granted, or, if greater, the par value of the stock on the date of
the grant. The exercise price for stock under each incentive stock option shall
not be less than the greater of 100 percent of the fair market value of the
stock at the time the option is granted or the par value of the stock on the
date of the grant. The exercise price under an incentive stock option granted
to a person owning stock representing more than 10 percent of the common stock
must equal at least 110 percent of the fair market value at the date of the
grant and such option is not exercisable after five years from the date the
incentive stock option was granted.
The Board of Directors may, at its discretion, provide that an option not be
exercised in whole or in part for any period or periods of time as specified in
the option agreements. No option may be exercised after the expiration of ten
years from the date it is granted.
The Company applies APB 25 and related Interpretations in accounting for its
stock-based compensation plan. Accordingly, no compensation cost has been
recognized. Had compensation cost for the Company's stock-based compensation
plan been determined based on the fair value at the grant dates for awards
under the plan consistent with the method of SFAS 123, the Company's net income
and earnings per share would have been the pro forma amounts indicated below:
<TABLE>
<CAPTION>
For the years
ended December 31,
-------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Net income
As reported $ 3,202,967 $ 3,000,943
Pro forma 3,194,108 2,986,604
Primary earnings per share
As reported $ .72 $ .69
Pro forma .72 .69
</TABLE>
The fair value of each option is estimated as of the date of grant using the
Black-Scholes Option Pricing Model and the following weighted average
assumptions for options granted in 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
Dividend yield 4.8% 4.1%
Risk-free interest rate 6.4% to 6.7% 6.7% to 7.9%
Expected lives 9 years 5 to 9 years
Volatility 0 0
</TABLE>
Page F-26
<PAGE> 73
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE K-STOCKHOLDERS' EQUITY, (Continued)
A summary of the status of the Company's fixed stock option plan as of and
for the three years ended December 31, 1996, and changes during that period
after the effect of the three-for-one stock split in 1997 is presented below:
<TABLE>
<CAPTION>
Exercise Price Weighted Average
Shares Range Exercise Price
----------- -------------- -----------------
<S> <C> <C> <C>
Balance at December 31, 1993 -- $ -- $--
Granted 714,000 5.49 5.49
Exercised (38,400) 5.49 5.49
---------- -------------- ------
Balance at December 31, 1994 675,600 5.49 5.49
Granted 84,000 5.50-6.23 5.76
Exercised (15,000) 5.49 5.49
Expired (132,000) 5.49 5.49
---------- -------------- ------
Balance at December 31, 1995 612,600 5.49-6.23 5.53
Granted 120,000 8.33-9.00 8.45
Exercised (64,500) 5.49-5.50 5.49
Expired (61,800) 5.49-5.50 5.49
---------- -------------- ------
Balance at December 31, 1996 606,300 $ 5.49-9.00 $6.11
========== ============== ======
Options exercisable at December 31, 1996 229,800
==========
Options exercisable at December 31, 1995 250,500
==========
Weighted average fair value of options granted
during 1996 $ .74
==========
Weighted average fair value of options granted
during 1995 $ .76
==========
</TABLE>
Page F-27
<PAGE> 74
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE K-STOCKHOLDERS' EQUITY, (Continued)
The following table summarizes information about fixed stock options
outstanding at December 31, 1996, after the effect of the three-for-one stock
split in 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------------------------------------------------- ---------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding at Contractual Exercise Exercisable at Exercise
Price December 31, 1996 Life Price December 31,1996 Price
-------------- ----------------- ----------- ---------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
$ 5.49-5.50 456,300 7.9 $ 5.49 199,800 $ 5.49
6.23 30,000 8.4 6.23 30,000 6.23
8.33-9.00 120,000 9.3 8.45 -- --
------- ----- ------- ------- ---------
606,300 8.2 $ 6.11 229,800 $ 5.59
======= ===== ======= ======= =========
</TABLE>
NOTE L-COMMITMENTS AND CONTINGENCIES
The Bank is party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and standby
letters of credit. These instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amount recognized in the
consolidated balance sheets. The contract amounts of these instruments reflect
the extent of involvement the Bank has in particular classes of financial
instruments.
The Bank's exposure to credit loss in the event of nonperformance by the
customer on the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual amounts of those
instruments. The Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require the payment of a fee. At December 31, 1996 and 1995, total commitments
to extend credit were approximately $23,568,000 and $22,941,000, respectively,
in unfunded loan commitments. The Bank's experience has been that approximately
60 percent of loan commitments are drawn upon by customers.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers. Since most of the letters of credit
are expected to expire without being drawn upon, they do not necessarily
represent future cash requirements. At December 31, 1996 and 1995, commitments
under standby letters of credit aggregated approximately $391,000 and $258,000,
respectively. In 1996 and 1995, the Bank was not required to perform on a
standby letter of credit.
Page F-28
<PAGE> 75
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE L-COMMITMENTS AND CONTINGENCIES, (Continued)
The Bank evaluates each customer's creditworthiness on a case-by-case basis.
The amount of collateral obtained, if deemed necessary by the Bank upon
extension of credit, is based on management's credit evaluation of the
borrower. Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, residential real estate and
income-producing commercial properties on those commitments for which
collateral is deemed necessary.
The Company has employment agreements with three of its executive officers.
Such agreements provide for minimum salary levels, adjustable solely at the
discretion of the Board of Directors. These agreements contain certain
provisions that, in the event a change in ownership control occurs, the term of
the employment agreements becomes 24 months. If such a change in ownership
control had occurred as of December 31, 1996, the commitment for future salary
payments on these contracts would have been $690,000.
NOTE M-SUPPLEMENTAL FINANCIAL DATA
Components of other expense in excess of 1 percent of total interest and
other income are as follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Operating supplies $ 290,327 $ 238,566 $ 202,897
Computer services 572,239 402,520 238,991
FDIC assessment 48,353 258,646 444,176
Legal and professional fees 397,565 320,248 257,001
</TABLE>
Page F-29
<PAGE> 76
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE N-FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are as
follows at December 31:
<TABLE>
<CAPTION>
1996 1995
--------------------------------- ----------------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
--------------- --------------- --------------- ---------------
Financial assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 13,920,000 $ 13,920,000 $ 9,130,000 $ 9,130,000
Investment securities held to
maturity 14,387,000 14,692,000 10,116,000 10,619,000
Investment securities available for
sale 36,490,000 36,490,000 50,845,000 50,845,000
Loans 162,614,000 160,651,000 134,682,000 133,909,000
Accrued interest receivable 1,681,000 1,681,000 1,709,000 1,709,000
Financial liabilities:
Noncontractual deposits $ 125,491,000 $ 125,491,000 $ 118,966,000 $ 118,966,000
Contractual deposits 79,493,000 79,955,000 73,492,000 74,125,000
Short-term borrowings 11,091,000 11,091,000 4,184,000 4,184,000
Accrued interest payable 1,743,000 1,743,000 1,433,000 1,433,000
Off-balance-sheet instruments:
Undisbursed credit lines $ 23,568,000 $ 22,941,000
Standby letters of credit 391,000 258,000
</TABLE>
NOTE O-SUBSEQUENT EVENT
On February 25, 1997, the Board of Directors of the Company declared a
three-for-one stock split distributable on March 18, 1997, to shareholders of
record February 25, 1997. This will result in 2,889,576 additional shares being
issued. All references in the consolidated financial statements to number of
shares, per share amounts, and market prices of the Company's common stock have
been retroactively restated to reflect the increased number of shares
outstanding as if the three-for-one stock split occurred January 1, 1994.
Page F-30
<PAGE> 77
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
================================================================================
NOTE P-CONDENSED FINANCIAL INFORMATION OF TIB FINANCIAL CORP.
CONDENSED BALANCE SHEETS
(Parent Only)
<TABLE>
<CAPTION>
December 31,
----------------------------------
1996 1995
--------------- ---------------
ASSETS
<S> <C> <C>
Cash on deposit with subsidiary $ 190,687 $ --
Dividends and other receivables 469,999
Investment in subsidiary 22,260,609 21,063,146
Organization expenses 131,858 --
-------------- --------------
TOTAL ASSETS $ 23,053,153 $ 21,063,146
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Dividends payable $ 432,236 $ --
-------------- --------------
STOCKHOLDERS' EQUITY
Common stock 432,236 70,975
Surplus 6,140,199 6,150,518
Retained earnings 16,207,233 14,663,648
Market valuation reserve on investment securities available
for sale (158,751) 178,005
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 22,620,917 21,063,146
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 23,053,153 $ 21,063,146
============== ==============
</TABLE>
Page F-31
<PAGE> 78
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
================================================================================
NOTE P-CONDENSED FINANCIAL INFORMATION OF TIB FINANCIAL CORP., (Continued)
CONDENSED STATEMENTS OF INCOME
(Parent Only)
<TABLE>
<CAPTION>
For the years ended December 31,
----------------------------------------------------
1996 1995 1994
-------------- -------------- --------------
<S> <C> <C> <C>
OPERATING INCOME
Dividends from subsidiary paid to shareholders $ 1,659,382 $ 1,058,321 873,114
Dividends from subsidiary 192,942 -- --
-------------- -------------- --------------
TOTAL OPERATING INCOME 1,852,324 1,058,321 873,114
-------------- -------------- --------------
OPERATING EXPENSE
Amortization of organization costs 9,418 -- --
Other expense 33,945 -- --
-------------- -------------- --------------
TOTAL OPERATING EXPENSE 43,363 -- --
-------------- -------------- --------------
INCOME BEFORE INCOME TAX BENEFIT AND EQUITY IN
UNDISTRIBUTED EARNINGS OF SUBSIDIARY 1,808,961 1,058,321 873,114
INCOME TAX BENEFIT 16,300 -- --
-------------- -------------- --------------
INCOME BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF
SUBSIDIARY 1,825,261 1,058,321 873,114
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY 1,377,706 1,942,622 1,812,508
-------------- -------------- --------------
NET INCOME $ 3,202,967 $ 3,000,943 $ 2,685,622
============== ============== ==============
</TABLE>
Page F-32
<PAGE> 79
TIB FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
================================================================================
NOTE P-CONDENSED FINANCIAL INFORMATION OF TIB FINANCIAL CORP., (Continued)
CONDENSED STATEMENTS OF CASH FLOWS
(Parent Only)
<TABLE>
<CAPTION>
For the years ended December 31,
----------------------------------------------------
1996 1995 1994
-------------- -------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,202,967 $ 3,000,943 $ 2,685,622
Equity in undistributed earnings of subsidiary (1,377,706) (1,942,622) (1,812,508)
Amortization of organization costs 9,418 -- --
Increase in other assets (611,276) -- --
-------------- -------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,223,403 1,058,321 873,114
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options and
warrants 350,942 82,373 210,880
Cash dividends paid (1,227,146) (1,058,321) (873,114)
Capital contributed to subsidiary (156,512) (82,373) (210,880)
Proceeds from note payable 124,000 -- --
Repayment of note payable (124,000) -- --
-------------- -------------- --------------
NET CASH USED BY FINANCING ACTIVITIES
(1,032,716) (1,058,321) (873,114)
============== ============== ==============
NET INCREASE IN CASH 190,687 -- --
CASH, BEGINNING OF YEAR -- -- --
-------------- -------------- --------------
Cash, END OF YEAR $ 190,687 $ -- $ --
============== ============== ==============
</TABLE>
Page F-33
<PAGE> 80
TABLE OF CONTENTS Until ______, 1997, (90 days after the date of
this Prospectus), all dealers effecting
transactions in the registered securities,
Page whether or not participating in this
- ---- distribution, may be required to deliver a
Additional Information........ Prospectus. This is in addition to the
obligation of dealers to deliver a Prospectus
Prospectus Summary............ when acting as underwriters and with respect
to their unsold allotments or subscriptions.
Risk Factors.................. -----------------------------------------------
-
The Offering.................. No person has been authorized to give any
information or to make any representations in
Dividend Policy............... connection with the offer contained in this
Prospectus unless preceded or accompanied by
Use of Proceeds............... this Prospectus, nor has any person been
contained in this Prospectus, and, if given or
Capitalization................ made, such information or representations must
not be relied upon. This Prospectus does not
Business...................... constitute an offer or solicitation in any
jurisdiction to any person to whom it is
Supervision and Regulation.... unlawful to make such offer or solicitation in
such jurisdiction. Neither the delivery of
Management.................... this Prospectus nor any sale made hereunder
shall under any circumstances create an
Certain Transactions.......... implication that there has been no change in
the facts herein set forth since the date
Principal Shareholders........ hereof. However, if any material change occurs
while this Prospectus is required by law to be
Description of Capital Stock.. delivered, this Prospectus will be amended or
supplemented accordingly.
Legal Matters................. -----------------------------------------------
Experts.......................
Financial Statements.......... -
TIB FINANCIAL CORP.
Up to 1,178,124 Shares of Common Stock
by Selling Shareholders
---------------------------------------
PROSPECTUS
---------------------------------------
--------- -------, 1997
<PAGE> 81
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses of this offering are estimated to be as set forth below.
The Company will pay all of such expenses.
<TABLE>
<S> <C>
Legal Fees and Expenses ................................ $ *
-----------
Blue Sky Fees .......................................... *
-----------
Printing Fees .......................................... *
-----------
SEC Registration Fee ................................... 1,910
-----------
EDGAR Filing Expenses .................................. *
-----------
Accounting Fees and Expenses ........................... *
-----------
Miscellaneous Expenses ................................. *
-----------
Total .......................................... $ *
-----------
</TABLE>
* To be completed by amendment.
ITEM 14.INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0831 of the Florida Business Corporation Act provides that a
corporation's articles of incorporation may contain a provision eliminating or
limiting the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as a
director. This Section also provides, however, that such a provision shall not
eliminate or limit the liability of a director (i) for any appropriation, in
violation of his duties, of any business opportunity of the corporation, (ii)
for acts or omissions involving intentional misconduct or a knowing violation
of law, (iii) for certain other types of liability set forth in the Act, and
(iv) for transactions from which the director derived an improper personal
benefit. Article 6 of the Registrant's Articles of Incorporation contains a
provision eliminating or limiting the personal liability of a director of the
Registrant to the fullest extent authorized by the Florida Business Corporation
Act.
In addition, Section 607.0850 of the Florida Business Corporation Act
provides for indemnification of directors and officers of the Registrant for
liability and expenses reasonably incurred by them in connection with any
civil, criminal, administrative, or investigative action, suit or proceeding in
which they may become involved by reason of being a director or officer of the
Registrant. Indemnification is permitted if the director or officer acted in a
manner which he believed in good faith to be in or not opposed to the best
interests of the Registrant and, with respect to, in criminal actions, if he
had no reasonable cause to believe his conduct to be unlawful. Article 8 of
the Registrant's Articles of Incorporation contains a provision providing for
the indemnification of officers and directors and advancement of expenses to
the fullest and officers liability insurance which insures against liabilities
that directors and officers of the Registrant may incur in such capacities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, the only sales of unregistered securities of
the Company sold by the Company have been those shares issued pursuant to the
Registrant's Incentive Stock Option Plan and Non-Statutory Stock Option Plan
(collectively, the "Plan"). For the calendar years 1996 and 1997, the Company
issued 35,400 and 21,690 shares, respectively, of Common Stock pursuant to the
exercise of the Plan's grants of stock options to officers, employees and
directors of the Company. In accordance with the terms of the Plan, the
purchase price for the shares of Common Stock issued to such officers,
employees and directors pursuant to the exercise of stock options was fixed at
the time each such option was granted. During this period, such purchase price
ranged between $5.49 and $5.50 per share. The sales of such shares by the
Company pursuant to the exercises of all such options were exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) thereof
as sales not involving any public offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The Documents as set forth on the Exhibit Index on page II-___ are
incorporated herein by reference, and such documents are filed as exhibits to
this Registration Statement.
<PAGE> 82
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE> 83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Key Largo, State of
Florida, on March 25, 1997.
TIB FINANCIAL CORP.
By: /s/ Edward V. Lett
---------------------------------
Edward V. Lett, President
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints Edward V. Lett as his true and lawful
attorneys-in-fact and agents,with full power of substitution, and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents, or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Edward V. Lett Director, President and Principal March 25, 1997
--------------------------------- Executive Officer; Principal
Edward V. Lett Financial and Accounting Officer
/s/ W. Kenneth Meeks Director and Chairman March 25, 1997
----------------------------------
W. Kenneth Meeks
/s/ BG Carter Director March 25, 1997
---------------------------------
BG Carter
/s/ Armando J. Henriquez Director March 25, 1997
----------------------------------
Armando J. Henriquez
</TABLE>
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE> 84
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James R. Lawson, III Director March 25, 1997
----------------------------------
James R. Lawson, III
/s/ Scott A. Marr Director March 25, 1997
----------------------------------
Scott A. Marr
/s/ Derek D. Martin-Vegue Director March 25, 1997
----------------------------------
Derek D. Martin-Vegue
/s/ Joseph H. Roth, Jr. Director March 25, 1997
----------------------------------
Joseph H. Roth, Jr.
Director
----------------------------------
Marvin F. Schindler
/s/ Richard J. Williams Director March 25, 1997
----------------------------------
Richard J. Williams
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page
----------- ----------- ---------------
<S> <C> <C>
3.1* Articles of Incorporation
3.2* Bylaws
4.1* Specimen Stock Certificate
5.1** Opinion of Holland & Knight LLP
as to legality of the securities
being registered
10.1* Employment Contract between
Edward V. Lett and TIB Bank of
the Keys
10.2* 401(K) Savings and Employee Stock
Ownership Plan
10.3* Employee Incentive Stock Option
Plan
10.4 Employment Contract between
Daniel W. Taylor and TIB Bank of
the Keys
10.5 Employment Contract between
Millard J. Younkers, Jr. and TIB
Bank of the Keys
10.6 Employment Contract between
Edward V. Lett and TIB Bank of
the Keys (as amended September 24,
1996)
11.1 Computation of Earnings Per Share
21.1 Subsidiaries of the Company. The
sole subsidiary of the Company is
TIB Bank of the Keys, Key Largo,
Florida, which is wholly owned by
the Company
23.1** Consent of Holland & Knight LLP
(included in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Bricker & Melton, P.A.
27 Financial Data Schedule
</TABLE>
* Items 3.1 through 4.1, and 10.1 through 10.3, as listed above, were
previously filed by the Company as Exhibits (with the same respective
Exhibit Number as indicated herein) to the Company's Registration
Statement (Registration No. 333-03499) and such documents are
incorporated herein by reference.
** To be filed by amendment.
<PAGE> 1
EXHIBIT 10.4
TIB BANK OF THE KEYS
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of September,
1996, between TIB BANK OF THE KEYS, a Florida Banking corporation ("Bank"), and
DANIEL W. TAYLOR ("Employee").
RECITALS
A. Employee is an at-will management executive with the Bank.
B. The Bank desires to ensure continuity of management stability of the
Bank currently and in the event that ownership control of the Bank is
transferred.
C. Employee desires a measure of employment security in the event that
ownership control of the Bank is transferred.
D. The Board of Directors of the Bank has determined that it is in the
best interests of the shareholders of the Bank to promote executive employees'
loyalty by providing them with a measure of security and to ensure a continuity
of management stability of the Bank in the event that ownership control of the
Bank is transferred.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by both parties, Bank and Employee hereby agree as follows:
AGREEMENTS
1. Continuation of At-Will Employment.
a. The Bank agrees to continue Employee's employment
in the capacity of Executive Vice President to perform such services and duties
as the Board of Directors may, from time to time, designate during the term
hereof. Subject to the terms and conditions hereof, Employee will perform such
duties and exercise such authority as is customarily performed and exercised by
persons holding such office, subject to the general direction of the Board of
Directors of the Bank.
b. Employee agrees to continue such at-will
employment and shall devote his or her full-time attention and efforts to the
diligent performance of his or her duties herein specified and as an officer of
the Bank. Employee will not accept employment
<PAGE> 2
with any other individual, corporation, partnership, governmental authority, or
any other entity, or engage in any other venture for profit that the Bank may
consider to be in conflict with its best interests or to be in competition with
the Bank's business, or that might interfere in any with the Employee's
performance of his or her duties hereunder. Employee will not accept any outside
employment or participate directly or indirectly in any outside venture without
first notifying Bank in writing of his or her intent to do so, supplying all
information the Bank requests in connection with such notification, and
obtaining prior written approval from the Bank. Employee agrees that he or she
will, at all times, refrain from conduct that is likely to harm the image or
reputation of the Bank.
2. Compensation. In payment for the services of Employee
rendered to Bank pursuant to this Agreement, Bank shall pay to Employee the sum
of $ 110,000.00 per Year ("Base Salary"). Employee's Base Salary is payable in
arrears in equal semi-monthly installments and is subject to such deductions as
are required by law. Bank shall review and evaluate Employee's performance in
December of each year that Employee is employed with Bank. Following such
review, Employee may receive, in the sole and absolute discretion of the Board
of Directors, an increase in pay over and above Employee's Base Salary.
3. Benefits. Employee shall be entitled to participate in any
plan adopted by the Bank providing stock options, stock purchase, profit
sharing, vacations, group life insurance, medical coverage, education and any
other retirement or employee benefit plan adopted by the Bank for the benefit of
its employees. Employee's participation in such plan or plans shall be in
accordance with the documents controlling such employee benefit plan and in
accordance with the policies of the Bank as established by the Board of
Directors.
4. Change of Ownership Control.
a. In the event of a change of ownership control of
the Bank, this Employee shall no longer remain an at-will employee and this
Agreement shall become an employment agreement for a term of twenty four months
on the effective date of such change of ownership control. Employee's salary
shall not be reduced for any reason during the twenty four month term of
employment, except as provided under Paragraph 5(b), below.
b. Following a change of ownership control, the
Employee shall be entitled to credit for all years of service with Bank (i.e.,
all years prior to change of ownership control, plus the greater of 24 months or
the actual period of employment after change of ownership control) in
determining eligibility for and benefits from any and all retirement,
disability, profit-sharing and other employee benefit programs offered by the
Bank.
c. For the purposes of this Agreement, a change of
ownership control shall have occurred upon the acquisition by a person, or
persons acting as a group within the meaning of Section 13(d) of the Securities,
Exchange Act of 1934, of fifty-one
- 2 -
<PAGE> 3
percent or more of the voting securities of the Bank, or of any lesser
percentage of the voting securities of the Bank if the Board of Directors of the
Bank, the Comptroller of Florida, the FDIC, or the Federal Reserve Bank makes a
determination that such acquisition constitutes or will constitute control of
the Bank. The term "person" as used herein includes an individual, corporation,
bank holding company or any other legal entity.
5. Termination of Employment.
a. Prior to any change of ownership control of the
Bank, and while Employee is an at-will employee of the Bank, Employee's
employment may be terminated by either party as permitted under the laws of the
State of Florida and the United States of America.
b. Following a change of ownership control of the
Bank, this Agreement shall terminate upon the death or incapacity of Employee or
upon discharge of Employee by Bank for cause. "Cause" shall mean:
(1) Employee's willful and deliberate
violation of any law or governmental
regulation applicable to the conduct of
Bank's business;
(2) Employee's failure or refusal to comply
with the provisions of this Agreement;
(3) Employee' s conviction of a felony;
(4) Employee's failure to perform his or her
duties at acceptable levels and to
conformity with Bank's performance standards
as reasonably determined by the Board of
Directors, utilizing performance standards
applicable to comparable branches of the
acquiring entity.
(5) Employee's physical or mental disability
rendering Employee physically or mentally
unable to perform his or her duties for a
period of at least 180 consecutive days.
6. Post-Termination Covenants. Employee acknowledges that
certain information acquired while employed by Bank constitutes trade secrets
and proprietary information which are the exclusive property of the Bank and
that unauthorized use or disclosure of the same will irreparably harm Bank.
Therefore, during any period during which Employee is receiving compensation
pursuant to this Agreement, Employee shall not, without the prior written
consent of the Bank:
- 3 -
<PAGE> 4
(1) Furnish any person with the name of any
customer of the Bank, or any list or list of
customers of the Bank or otherwise use such
customer names and lists in connection with
any banking business, provided, that this
prohibition shall not prevent compliance
with a Court Order or subpoena directed to
Employee in his/her official capacity with
Bank;
(2) Furnish, use or divulge to any person
any information acquired by Employee
concerning the Bank's manner and methods of
doing business;
(3) Solicit, directly or indirectly, for any
purpose, the customers of the Bank;
(4) Hire, directly or indirectly, for
himself or any other employer, any employee
of Bank, or otherwise cause or encourage any
employee of Bank to leave his or her
employment to become employed by another.
The parties agree that the restrictions and prohibitions set forth in this
Section 6 are separate, discrete and independent. In the event that any single
restriction or prohibition, or portion thereof, set forth in this Section 6 is
determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, such finding shall not affect the remaining restrictions and
prohibitions which shall remain valid, binding and subsisting.
7. Waiver. Waiver of any default by any party shall not be
deemed to be a continuing waiver and shall not bar a party from enforcing this
Agreement in strict accordance with its terms and conditions.
8. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Florida.
9. Severability. If for any reason any provision of this
Agreement shall be held by a court of competent jurisdiction to be void or
unenforceable, the same shall be considered severable and the remaining
provisions of this Agreement shall remain valid, binding and subsisting.
10. Entire Agreement. This Agreement contains the entire
agreement between the parties and supersedes all prior discussions and
agreements between them.
11. Modification. This Agreement may not be modified except by
an instrument in writing signed by the parties.
- 4 -
<PAGE> 5
12. Counterparts and Headings. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument. The
headings set out herein are for convenience of reference and shall not be deemed
a part of this Agreement.
13. No Assignment. This Agreement may not be assigned or
transferred by any party hereto, in whole or in part, without the prior written
consent of the other party.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
EMPLOYEE:
- ------------------------------ --------------------------------------
Witness
- ------------------------------
Witness
TIB BANK OF THE KEYS:
By:
- ------------------------------ ----------------------------------
Witness
Its:
----------------------------------
- ------------------------------
Witness
- 5 -
<PAGE> 1
EXHIBIT 10.5
TIB BANK OF THE KEYS
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of September,
1996, between TIB BANK OF THE KEYS, a Florida Banking corporation ("Bank"), and
Millard J. Younkers, Jr. ("Employee").
RECITALS
A. Employee is an at-will management executive with the Bank.
B. The Bank desires to ensure continuity of management stability of the
Bank currently and in the event that ownership control of the Bank is
transferred.
C. Employee desires a measure of employment security in the event that
ownership control of the Bank is transferred.
D. The Board of Directors of the Bank has determined that it is in the
best interests of the shareholders of the Bank to promote executive employees'
loyalty by providing them with a measure of security and to ensure a continuity
of management stability of the Bank in the event that ownership control of the
Bank is transferred.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by both parties, Bank and Employee hereby agree as follows:
AGREEMENTS
1. Continuation of At-Will Employment.
a. The Bank agrees to continue Employee's employment
in the capacity of Executive Vice President to perform such services and duties
as the Board of Directors may, from time to time, designate during the term
hereof. Subject to the terms and conditions hereof, Employee will perform such
duties and exercise such authority as is customarily performed and exercised by
persons holding such office, subject to the general direction of the Board of
Directors of the Bank.
b. Employee agrees to continue such at-will
employment and shall devote his or her full-time attention and efforts to the
diligent performance of his or her duties herein specified and as an officer of
the Bank. Employee will not accept employment
<PAGE> 2
with any other individual, corporation, partnership, governmental authority, or
any other entity, or engage in any other venture for profit that the Bank may
consider to be in conflict with its best interests or to be in competition with
the Bank's business, or that might interfere in any with the Employee's
performance of his or her duties hereunder. Employee will not accept any outside
employment or participate directly or indirectly in any outside venture without
first notifying Bank in writing of his or her intent to do so, supplying all
information the Bank requests in connection with such notification, and
obtaining prior written approval from the Bank. Employee agrees that he or she
will, at all times, refrain from conduct that is likely to harm the image or
reputation of the Bank.
2. Compensation. In payment for the services of Employee
rendered to Bank pursuant to this Agreement, Bank shall pay to Employee the sum
of $ 95,000.00 per Year ("Base Salary"). Employee's Base Salary is payable in
arrears in equal semi-monthly installments and is subject to such deductions as
are required by law. Bank shall review and evaluate Employee's performance in
December of each year that Employee is employed with Bank. Following such
review, Employee may receive, in the sole and absolute discretion of the Board
of Directors, an increase in pay over and above Employee's Base Salary.
3. Benefits. Employee shall be entitled to participate in any
plan adopted by the Bank providing stock options, stock purchase, profit
sharing, vacations, group life insurance, medical coverage, education and any
other retirement or employee benefit plan adopted by the Bank for the benefit of
its employees. Employee's participation in such plan or plans shall be in
accordance with the documents controlling such employee benefit plan and in
accordance with the policies of the Bank as established by the Board of
Directors.
4. Change of Ownership Control.
a. In the event of a change of ownership control of
the Bank, this Employee shall no longer remain an at-will employee and this
Agreement shall become an employment agreement for a term of twenty four months
on the effective date of such change of ownership control. Employee's salary
shall not be reduced for any reason during the twenty four month term of
employment, except as provided under Paragraph 5(b), below.
b. Following a change of ownership control, the
Employee shall be entitled to credit for all years of service with Bank (i.e.,
all years prior to change of ownership control, plus the greater of 24 months or
the actual period of employment after change of ownership control) in
determining eligibility for and benefits from any and all retirement,
disability, profit-sharing and other employee benefit programs offered by the
Bank.
c. For the purposes of this Agreement, a change of
ownership control shall have occurred upon the acquisition by a person, or
persons acting as a group within the meaning of Section 13(d) of the Securities,
Exchange Act of 1934, of fifty-one
- 2 -
<PAGE> 3
percent or more of the voting securities of the Bank, or of any lesser
percentage of the voting securities of the Bank if the Board of Directors of the
Bank, the Comptroller of Florida, the FDIC, or the Federal Reserve Bank makes a
determination that such acquisition constitutes or will constitute control of
the Bank. The term "person" as used herein includes an individual, corporation,
bank holding company or any other legal entity.
5. Termination of Employment.
a. Prior to any change of ownership control of the
Bank, and while Employee is an at-will employee of the Bank, Employee's
employment may be terminated by either party as permitted under the laws of the
State of Florida and the United States of America.
b. Following a change of ownership control of the
Bank, this Agreement shall terminate upon the death or incapacity of Employee or
upon discharge of Employee by Bank for cause. "Cause" shall mean:
(1) Employee's willful and deliberate
violation of any law or governmental
regulation applicable to the conduct of
Bank's business;
(2) Employee's failure or refusal to comply
with the provisions of this Agreement;
(3) Employee' s conviction of a felony;
(4) Employee's failure to perform his or her
duties at acceptable levels and to
conformity with Bank's performance standards
as reasonably determined by the Board of
Directors, utilizing performance standards
applicable to comparable branches of the
acquiring entity.
(5) Employee's physical or mental disability
rendering Employee physically or mentally
unable to perform his or her duties for a
period of at least 180 consecutive days.
6. Post-Termination Covenants. Employee acknowledges that
certain information acquired while employed by Bank constitutes trade secrets
and proprietary information which are the exclusive property of the Bank and
that unauthorized use or disclosure of the same will irreparably harm Bank.
Therefore, during any period during which Employee is receiving compensation
pursuant to this Agreement, Employee shall not, without the prior written
consent of the Bank:
- 3 -
<PAGE> 4
(1) Furnish any person with the name of any
customer of the Bank, or any list or list of
customers of the Bank or otherwise use such
customer names and lists in connection with
any banking business, provided, that this
prohibition shall not prevent compliance
with a Court Order or subpoena directed to
Employee in his/her official capacity with
Bank;
(2) Furnish, use or divulge to any person
any information acquired by Employee
concerning the Bank's manner and methods of
doing business;
(3) Solicit, directly or indirectly, for any
purpose, the customers of the Bank;
(4) Hire, directly or indirectly, for
himself or any other employer, any employee
of Bank, or otherwise cause or encourage any
employee of Bank to leave his or her
employment to become employed by another.
The parties agree that the restrictions and prohibitions set forth in this
Section 6 are separate, discrete and independent. In the event that any single
restriction or prohibition, or portion thereof, set forth in this Section 6 is
determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, such finding shall not affect the remaining restrictions and
prohibitions which shall remain valid, binding and subsisting.
7. Waiver. Waiver of any default by any party shall not be
deemed to be a continuing waiver and shall not bar a party from enforcing this
Agreement in strict accordance with its terms and conditions.
8. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Florida.
9. Severability. If for any reason any provision of this
Agreement shall be held by a court of competent jurisdiction to be void or
unenforceable, the same shall be considered severable and the remaining
provisions of this Agreement shall remain valid, binding and subsisting.
10. Entire Agreement. This Agreement contains the entire
agreement between the parties and supersedes all prior discussions and
agreements between them.
11. Modification. This Agreement may not be modified except by
an instrument in writing signed by the parties.
- 4 -
<PAGE> 5
12. Counterparts and Headings. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument. The
headings set out herein are for convenience of reference and shall not be deemed
a part of this Agreement.
13. No Assignment. This Agreement may not be assigned or
transferred by any party hereto, in whole or in part, without the prior written
consent of the other party.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
EMPLOYEE:
- ------------------------------ --------------------------------------
Witness
- ------------------------------
Witness
TIB BANK OF THE KEYS:
By:
- ------------------------------ ----------------------------------
Witness
Its:
----------------------------------
- ------------------------------
Witness
- 5 -
<PAGE> 1
EXHIBIT 10.6
TIB BANK OF THE KEYS
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of September,
1996, between TIB BANK OF THE KEYS, a Florida Banking corporation ("Bank"), and
Edward V. Lett ("Employee").
RECITALS
A. Employee is an at-will management executive with the Bank.
B. The Bank desires to ensure continuity of management stability of the
Bank currently and in the event that ownership control of the Bank is
transferred.
C. Employee desires a measure of employment security in the event that
ownership control of the Bank is transferred.
D. The Board of Directors of the Bank has determined that it is in the
best interests of the shareholders of the Bank to promote executive employees'
loyalty by providing them with a measure of security and to ensure a continuity
of management stability of the Bank in the event that ownership control of the
Bank is transferred.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by both parties, Bank and Employee hereby agree as follows:
AGREEMENTS
1. Continuation of At-Will Employment.
a. The Bank agrees to continue Employee's employment
in the capacity of President and CEO to perform such services and duties as the
Board of Directors may, from time to time, designate during the term hereof.
Subject to the terms and conditions hereof, Employee will perform such duties
and exercise such authority as is customarily performed and exercised by persons
holding such office, subject to the general direction of the Board of Directors
of the Bank.
b. Employee agrees to continue such at-will
employment and shall devote his or her full-time attention and efforts to the
diligent performance of his or her duties herein specified and as an officer of
the Bank. Employee will not accept employment
<PAGE> 2
with any other individual, corporation, partnership, governmental authority, or
any other entity, or engage in any other venture for profit that the Bank may
consider to be in conflict with its best interests or to be in competition with
the Bank's business, or that might interfere in any with the Employee's
performance of his or her duties hereunder. Employee will not accept any outside
employment or participate directly or indirectly in any outside venture without
first notifying Bank in writing of his or her intent to do so, supplying all
information the Bank requests in connection with such notification, and
obtaining prior written approval from the Bank. Employee agrees that he or she
will, at all times, refrain from conduct that is likely to harm the image or
reputation of the Bank.
2. Compensation. In payment for the services of Employee
rendered to Bank pursuant to this Agreement, Bank shall pay to Employee the sum
of $ 140,000.00 per Year ("Base Salary"). Employee's Base Salary is payable in
arrears in equal semi-monthly installments and is subject to such deductions as
are required by law. Bank shall review and evaluate Employee's performance in
December of each year that Employee is employed with Bank. Following such
review, Employee may receive, in the sole and absolute discretion of the Board
of Directors, an increase in pay over and above Employee's Base Salary.
3. Benefits. Employee shall be entitled to participate in any
plan adopted by the Bank providing stock options, stock purchase, profit
sharing, vacations, group life insurance, medical coverage, education and any
other retirement or employee benefit plan adopted by the Bank for the benefit of
its employees. Employee's participation in such plan or plans shall be in
accordance with the documents controlling such employee benefit plan and in
accordance with the policies of the Bank as established by the Board of
Directors.
4. Change of Ownership Control.
a. In the event of a change of ownership control of
the Bank, this Employee shall no longer remain an at-will employee and this
Agreement shall become an employment agreement for a term of twenty four months
on the effective date of such change of ownership control. Employee's salary
shall not be reduced for any reason during the twenty four month term of
employment, except as provided under Paragraph 5(b), below.
b. Following a change of ownership control, the
Employee shall be entitled to credit for all years of service with Bank (i.e.,
all years prior to change of ownership control, plus the greater of 24 months or
the actual period of employment after change of ownership control) in
determining eligibility for and benefits from any and all retirement,
disability, profit-sharing and other employee benefit programs offered by the
Bank.
c. For the purposes of this Agreement, a change of
ownership control shall have occurred upon the acquisition by a person, or
persons acting as a group within the meaning of Section 13(d) of the Securities,
Exchange Act of 1934, of fifty-one
- 2 -
<PAGE> 3
percent or more of the voting securities of the Bank, or of any lesser
percentage of the voting securities of the Bank if the Board of Directors of the
Bank, the Comptroller of Florida, the FDIC, or the Federal Reserve Bank makes a
determination that such acquisition constitutes or will constitute control of
the Bank. The term "person" as used herein includes an individual, corporation,
bank holding company or any other legal entity.
5. Termination of Employment.
a. Prior to any change of ownership control of the
Bank, and while Employee is an at-will employee of the Bank, Employee's
employment may be terminated by either party as permitted under the laws of the
State of Florida and the United States of America.
b. Following a change of ownership control of the
Bank, this Agreement shall terminate upon the death or incapacity of Employee or
upon discharge of Employee by Bank for cause. "Cause" shall mean:
(1) Employee's willful and deliberate
violation of any law or governmental
regulation applicable to the conduct of
Bank's business;
(2) Employee's failure or refusal to comply
with the provisions of this Agreement;
(3) Employee' s conviction of a felony;
(4) Employee's failure to perform his or her
duties at acceptable levels and to
conformity with Bank's performance standards
as reasonably determined by the Board of
Directors, utilizing performance standards
applicable to comparable branches of the
acquiring entity.
(5) Employee's physical or mental disability
rendering Employee physically or mentally
unable to perform his or her duties for a
period of at least 180 consecutive days.
6. Post-Termination Covenants. Employee acknowledges that
certain information acquired while employed by Bank constitutes trade secrets
and proprietary information which are the exclusive property of the Bank and
that unauthorized use or disclosure of the same will irreparably harm Bank.
Therefore, during any period during which Employee is receiving compensation
pursuant to this Agreement, Employee shall not, without the prior written
consent of the Bank:
- 3 -
<PAGE> 4
(1) Furnish any person with the name of any
customer of the Bank, or any list or list of
customers of the Bank or otherwise use such
customer names and lists in connection with
any banking business, provided, that this
prohibition shall not prevent compliance
with a Court Order or subpoena directed to
Employee in his/her official capacity with
Bank;
(2) Furnish, use or divulge to any person
any information acquired by Employee
concerning the Bank's manner and methods of
doing business;
(3) Solicit, directly or indirectly, for any
purpose, the customers of the Bank;
(4) Hire, directly or indirectly, for
himself or any other employer, any employee
of Bank, or otherwise cause or encourage any
employee of Bank to leave his or her
employment to become employed by another.
The parties agree that the restrictions and prohibitions set forth in this
Section 6 are separate, discrete and independent. In the event that any single
restriction or prohibition, or portion thereof, set forth in this Section 6 is
determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, such finding shall not affect the remaining restrictions and
prohibitions which shall remain valid, binding and subsisting.
7. Waiver. Waiver of any default by any party shall not be
deemed to be a continuing waiver and shall not bar a party from enforcing this
Agreement in strict accordance with its terms and conditions.
8. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Florida.
9. Severability. If for any reason any provision of this
Agreement shall be held by a court of competent jurisdiction to be void or
unenforceable, the same shall be considered severable and the remaining
provisions of this Agreement shall remain valid, binding and subsisting.
10. Entire Agreement. This Agreement contains the entire
agreement between the parties and supersedes all prior discussions and
agreements between them.
11. Modification. This Agreement may not be modified except by
an instrument in writing signed by the parties.
- 4 -
<PAGE> 5
12. Counterparts and Headings. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument. The
headings set out herein are for convenience of reference and shall not be deemed
a part of this Agreement.
13. No Assignment. This Agreement may not be assigned or
transferred by any party hereto, in whole or in part, without the prior written
consent of the other party.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
EMPLOYEE:
- ------------------------------ --------------------------------------
Witness
- ------------------------------
Witness
TIB BANK OF THE KEYS:
By:
- ------------------------------ ----------------------------------
Witness
Its:
----------------------------------
- ------------------------------
Witness
- 5 -
<PAGE> 1
Exhibit 11-Computation of Earnings Per Share
TIB Financial Corp.
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
1996 1995 1994
================================
<S> <C> <C> <C>
PRIMARY
-------
Net Income used for primary share amounts $ 3,203 $ 3,001 $ 2,686
================================
Weighted average of common shares outstanding 4,284 4,246 4,161
Add - Common stock equivalents determined using
the "Treasury Stock" method representing shares
issuable upon exercise of director and employee
stock options using annual average market price 141 107 0 (1)
Weighted average number of shares used in calculation --------------------------------
of primary earnings per share 4,425 4,353 4,161
================================
--------------------------------
PRIMARY EARNINGS PER SHARE $ 0.72 $ 0.69 $ 0.65
================================
</TABLE>
(1) The effect of common stock equivalents in 1994 is anti-dilutive
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use, in this Registration Statement of TIB
Financial Corp. on Form S-1, of our report dated February 21, 1997, except for
Note O, as to which the date is February 25, 1997, appearing in the Prospectus
and to references to us under the heading "Selected Financial Data" and
"Experts" in such Prospectus.
BRICKER & MELTON, P.A.
March 26, 1997
Duluth, Georgia
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TIB FINANCIAL CORP. FOR THE YEAR ENDED DECEMBER 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
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0
0
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</TABLE>
