CNB (CNBZ) 8-K Quarterly Shareholder Brochure of CNB Corporation

Exhibit 99

Quarterly Shareholder Brochure of CNB Corporation

August 1, 2011

Dear Shareholder,

As reflected on the consolidated financial statement accompanying this message, management’s efforts for the first six months of 2011 have been focused on problem loan resolution. After three years of working through these problem loans the strategy now is to move deliberately toward final resolution by year-end, where possible. This will include writing down balances and acknowledging additional loan loss provision on some loans, along with loan charge-offs, as well as liquidating the remaining bank-owned real estate. This strategy, admittedly, will likely have a negative impact on earnings. However, looking beyond 2011, this will allow management to focus on growing the bank and support improved earnings in 2012; moving the corporation closer to its goal of being able to resume the payment of dividends on a sustainable basis.

In spite of the challenges presented by the problem loans, there is cause for optimism; core earnings have remained strong. Had the $700,000 loan loss provision and the $248,000 in maintenance, insurance, taxes and attorney fees associated with problem loans through June 30, 2011 not be necessary, these amounts would have been included in earnings and resulted in after-tax net income of approximately $908,000, or a 0.72% return on assets. Applying this same methodology to financial performance in 2009 and 2010, core earnings would have been at a comparable level and returning to this level of profitability remains a primary goal.

Additionally, summer has arrived in northern Michigan and early indications are that it is going to be a good one!

As always, my door is open and I continue to encourage shareholders to stop by or call if you have any questions, comments or concerns.

Very truly yours,

Susan A. Eno
President & CEO

	June 30,
	2011			2010
ASSETS
Cash and due from banks	$	3,842		$	2,566
Interest-bearing deposits with other financial institutions		11,082			15,954
Federal funds sold		0			0
Total cash and cash equivalents		14,924			18,520
Time deposits with other financial institutions		9,806			8,795
Securities available for sale		71,065			48,768
Securities held to maturity (market value of $7,699 in 2010 and $8,177 in 2010)		7,116			7,825
Other securities		997			1,008
Total investment securities		79,178			57,601
Loans		126,954			142,927
Less allowance for loan losses		(2,090	)		(1,215	)
Loans, Net		124,864			141,712
Premises and equipment, net		5,334			5,717
Other assets		14,149			12,652
Total assets	$	248,255		$	244,997
LIABILITIES
Deposits
Noninterest-bearing demand	$	46,631		$	39,879
Interest-bearing deposits		175,970			179,477
Total deposits		222,601			219,356
Other liabilities		4,353			4,563
Total liabilities		226,954			223,919
SHAREHOLDERS’ EQUITY
Common Stock		3,030			3,030
Surplus		19,499			19,499
Retained Earnings and Accumulated other Comprehensive Income/(Loss)		(1,228	)		(1,451	)
Total shareholders’ equity		21,301			21,078
Total liabilities and shareholders’ equity	$	248,255		$	244,997

	in thousands of dollars
	Six months ended June 30,
	2011			2010			2009
INTEREST INCOME
Interest and fees on loans	$	3,884		$	4,466		$	5,234
Interest on securities:
Taxable		549			476			751
Tax exempt		246			278			254
Other interest income		106			115			119
Total interest income		4,785			5,335			6,358
INTEREST EXPENSE ON DEPOSITS		792			1,129			1,921
NET INTEREST INCOME		3,993			4,206			4,437
Provision for loan losses		700			375			500
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		3,293			3,831			3,937
NONINTEREST INCOME
Service charges and fees		498			515			542
Net realized gains from sale of loans		67			80			272
Loan servicing fees, net of amortization		46			45			(75	)
Gains on life insurance proceeds		0			189			0
Gain on sale of investment securities		0			5			620
Other income		274			170			191
Total noninterest income		885			1,004			1,550
NONINTEREST EXPENSES
Salaries and benefits		1,966			1,959			2,076
Occupancy		502			496			546
FDIC insurance premiums		219			262			374
Expenses relating to ORE property		204			265			288
Other expenses		1,038			952			1,012
Total noninterest expenses		3,929			3,934			4,296
INCOME BEFORE INCOME TAXES		249			901			1,191
Income tax expense		(33	)		129			64
NET INCOME	$	282		$	772		$	1,127
BASIC NET INCOME PER SHARE	$	0.23		$	0.64		$	0.93
Return on Average Assets		0.22	%		0.62	%		0.87	%
Return on Average Equity		2.69	%		7.47	%		11.72	%