CNB CORPORATION
and
THE CONWAY NATIONAL BANK
FINANCIAL REPORT
SEPTEMBER 30, 2005
www.conwaynationalbank.com
TO OUR SHAREHOLDERS AND FRIENDS:
Conway National passed the three-quarter billion-dollar mark in total assets during the third quarter of this year. From June 30, 2005 to September 30, 2005, assets grew $43.5 million to $764.6 million, making it one of the best quarters of performance in the bank's history.
Net income for the nine-month period ended September 30, 2005, totaled $7,435,000, up from $6,509,000 for the same period in 2004. On a per share basis, earnings have grown 14.3% from $8.25 at September 30, 2004 to $9.43 at September 30, 2005.
As of September 30, 2005, total assets were $764,571,000, an increase of 12.4% over September 30, 2004; total deposits amounted to $648,904,000, an increase of 13.3% over the previous year; loans totaled $479,225,000, an increase of 21.3% from 2004; and investment securities were $190,460,000, a decrease of 7.1% from the prior year. As indicated, loan growth is strong and funds have been allocated to the lending area. Stockholders' equity totaled $73,271,000 at September 30, 2005.
Net income for the nine-month period ended September 30, 2005, of $7,435,000 resulted in a return on average assets of 1.38% as compared to 1.34% for the same period last year and a return on average equity of 14.16% as compared to 12.96% for the same period last year.
Bank earnings are primarily the result of the Bank's net interest income which showed a 14.3% increase from $18,456,000 for the nine-month period ended September 30, 2004, to $21,091,000 for the nine-month period ended September 30, 2005. Other factors which affect earnings include the provision for loan losses, other expense, and other income items. The provision for possible loan losses increased 5.3% from $760,000 during the first three quarters of 2004 to $800,000 during the first three quarters of 2005. Other expenses increased 8.5% from $13,138,000 to $14,255,000 and other income showed little change from $4,958,000 to $4,998,000 during the same period. Non-interest expenses have increased due to increased fixed asset and staffing expenditures. Non-interest income growth slowed due to lower service charge revenue on deposit accounts resulting from rising customer balances as the economy has strengthened.
This record performance is the direct result of the energy, insight and enthusiasm everyone at Conway National has demonstrated in recent months. We look forward to continued progress as we work to enhance the products and services we offer to our customers.
/s/R. Phil Hucks, President
R. Phil Hucks, President
CNB Corporation and
The Conway National Bank
CNB CORPORATION AND SUBSIDIARY
Conway, South Carolina
CONSOLIDATED BALANCE SHEET
(Unaudited) |
|
ASSETS: | Sept. 30, 2005 | Sept. 30, 2004 |
| Cash and due from banks.............................................. | $ 34,823,000 | $ 30,805,000 |
| Interest-bearing deposits with banks.............................. | 0 | 0 |
| Investment securities:..................................................... | | |
| United States government securities............................ | 0 | 0 |
| Obligations of United States government agencies
and corporations...................................................... |
167,470,000
|
179,747,000
|
| Obligations of states and political subdivisions............. | 21,197,000 | 23,567,000 |
| Other securities.......................................................... | 1,793,000 | 1,726,000 |
| Total investment securities................................. | 190,460,000 | 205,040,000 |
| Federal funds sold and securities purchased under
agreement to resell..................................................... |
35,000,000
|
28,000,000
|
| Loans........................................................................... | 479,225,000 | 395,006,000 |
| Less allowance for loan losses.................................... | (5,790,000) | (4,888,000) |
| Net loans.......................................................... | 473,435,000 | 390,118,000 |
| Bank premises and equipment....................................... | 18,892,000 | 17,629,000 |
| Other assets................................................................. | 11,961,000 | 8,801,000 |
| Total assets...................................................... | $764,571,000 | $680,393,000 |
| | | |
LIABILITIES AND STOCKHOLDERS' EQUITY: | | |
| Liabilities: | | |
| Deposits: | | |
| Noninterest-bearing................................................. | $143,433,000 | $127,465,000 |
| Interest-bearing....................................................... | 505,471,000 | 445,508,000 |
| Total deposits................................................... | 648,904,000 | 572,973,000 |
| | | |
| Federal funds purchased and securities sold under
agreement to repurchase........................................... |
33,914,000
|
32,700,000
|
| Other short-term borrowings......................................... | 3,249,000 | 1,541,000 |
| Other liabilities.............................................................. | 5,233,000 | 3,234,000 |
| Total Liabilities.................................................. | 691,300,000 | 610,448,000 |
| | | |
| Stockholders' Equity: | | |
| Common stock, par value $10.00 per share:
Authorized 1,500,000; issued 789,774 in
2004 and 2005........................................................ |
7,898,000
|
7,898,000
|
| Surplus...................................................................... | 43,543,000 | 43,541,000 |
| Undivided profits....................................................... | 22,993,000 | 17,137,000 |
| Net unrealized holding gains (losses) on
available-for-sale securities....................................... |
(983,000)
|
1,513,000
|
| Less treasury stock.................................................. | (180,000) | (144,000) |
| Total stockholders' equity.................................. | 73,271,000 | 69,945,000 |
| Total liabilities and stockholders' equity.............. | $764,571,000 | $680,393,000 |
| | | |
CNB CORPORATION AND SUBSIDIARY
Conway, South Carolina
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) |
| Nine Months Ended |
INTEREST INCOME | Sept. 30, 2005 | Sept. 30, 2004 |
| Interest and fees on loans................................................. | $ 22,207,000 | $ 17,662,000 |
| Interest on investment securities: | | |
| Taxable investment securities......................................... | 4,903,000 | 4,858,000 |
| Tax -exempt investment securities.................................. | 664,000 | 722,000 |
| Other securities............................................................. | 60,000 | 46,000 |
| Interest on federal funds sold and securities
purchased under agreement to resell.............................. |
523,000
|
211,000
|
| Total interest income............................................ | 28,357,000 | 23,499,000 |
| | | |
INTEREST EXPENSE: | | |
| Interest on deposits | 6,802,000 | 4,803,000 |
| Interest on federal funds purchased and securities
sold under agreement to repurchase .............................. |
450,000
|
232,000
|
| Interest on other short-term borrowings............................ | 14,000 | 8,000 |
| Total interest expense.......................................... | 7,266,000 | 5,043,000 |
Net interest income............................................................. | 21,091,000 | 18,456,000 |
Provision for loan losses...................................................... | 800,000 | 760,000 |
Net interest income after provision for loan losses................ | 20,291,000 | 17,696,000 |
Other income: | | |
| Service charges on deposit accounts................................ | 2,538,000 | 2,635,000 |
| Gains/(losses) on securities.............................................. | 2,000 | 0 |
| Other operating income................................................... | 2,458,000 | 2,323,000 |
| Total other income.............................................. | 4,998,000 | 4,958,000 |
Other expenses: | | |
| Salaries and employee benefits......................................... | 9,079,000 | 8,056,000 |
| Occupancy expense......................................................... | 2,004,000 | 1,822,000 |
| Other operating expenses................................................ | 3,172,000 | 3,260,000 |
| Total other expenses............................................. | 14,255,000 | 13,138,000 |
Income before income taxes................................................ | 11,034,000 | 9,516,000 |
| Income tax provision ...................................................... | 3,599,000 | 3,007,000 |
Net Income........................................................................ | $ 7,435,000 | $ 6,509,000 |
| | |
Per share: | | |
| Net income per weighted average shares outstanding........ | $ 9.43 | $ 8.25 |
| | | |
| Cash dividend paid per share............................................ | $ 0 | $ 0 |
| | | |
| Book value per actual number of shares outstanding.......... | $ 92.94 | $ 88.69 |
| | | |
| Weighted average number of shares outstanding................ | 788,497 | 789,124 |
| | | |
| Actual number of shares outstanding................................. | 788,411 | 788,664 |
| | | |
| Member Federal Reserve System - Member FDIC |
| | | |
CNB CORPORATION
BOARD OF DIRECTORS
|
James W. Barnette, Jr. | W. Jennings Duncan |
William R. Benson | Paul R. Dusenbury |
Harold G. Cushman | R. Phil Hucks |
H. Buck Cutts | Richard M. Lovelace, Jr. |
Willis J. Duncan | Howard B. Smith, III |
| |
| |
CONWAY NATIONAL BANK OFFICERS
|
R. Phil Hucks | President |
Paul R. Dusenbury | Executive Vice President |
Marion E. Freeman, Jr. | Senior Vice President |
William R. Benson | Senior Vice President |
Phillip H. Thomas | Senior Vice President |
W.G. Holt, Jr. | Vice President |
M. Terry Hyman | Vice President |
Raymond Meeks | Vice President |
A. Mitchell Godwin | Vice President |
Jackie C. Stevens | Vice President |
L. Ford Sanders, II | Vice President |
Dana P. Arneman, Jr. | Vice President |
Betty M. Graham | Vice President |
Ernest J. Lareau | Vice President |
D. Richard Causey | Vice President |
F. Timothy Howell | Vice President |
E. Wayne Suggs | Vice President |
Bryan T. Huggins | Assistant Vice President |
Janice C. Simmons | Assistant Vice President |
Patricia C. Catoe | Assistant Vice President |
Gail S. Sansbury | Assistant Vice President |
W. Michael Altman | Assistant Vice President |
Boyd W. Gainey, Jr. | Assistant Vice President |
Ray Wells | Assistant Vice President |
W. Page Ambrose | Assistant Vice President |
Roger L. Sweatt | Assistant Vice President |
Linda Kay Benton | Assistant Vice President |
Virginia B. Hucks | Assistant Vice President |
William C. Purvis | Assistant Vice President |
Timothy L. Phillips | Assistant Vice President |
Helen A. Johnson | Asst. Cashier & Branch Manager |
Elaine H. Hughes | Assistant Cashier |
Sherry S. Sawyer | Assistant Cashier |
Rebecca G. Singleton | Assistant Cashier |
Josephine C. Fogle | Assistant Cashier |
Gwynn Branton | Assistant Cashier |
Jeffrey P. Singleton | Assistant Cashier |
Debra B. Johnston | Assistant Cashier |
Freeman Holmes | Assistant Cashier |
Doris B. Gasque | Assistant Cashier |
Carlton A. Terry | Assistant Cashier |
James A. Hansen | Assistant Cashier |
Joseph D. Richardson, II | Assistant Cashier |
Jennie L. Hyman | Assistant Cashier |
Tammy S. Scarberry | Assistant Cashier |
D. Scott Hucks | Assistant Cashier |
Janet F. Carter | Branch Manager |
Dawn L. DePencier | Branch Manager |
