UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
Commission file number 0-28388
CNB CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2662386
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
303 NORTH MAIN STREET, CHEBOYGAN, MI 49721
(Address of principal executive offices, including Zip code)
Registrant's telephone number (231) 627-7111
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $ 2.50 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes___X____ No_______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Indicate by check mark if registrant is an accelerated filer (as defined in Rule
12b-2 of the Act.) Yes_________ No____X_____
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2003 was $ 53,894,800.
As of March 17, 2004 there were outstanding 1,243,652 shares of the registrant's
common stock, $ 2.50 par value.
DOCUMENTS INCORPORATED BY REFERENCE
Specified portions of the registrant's annual report to security holders for
fiscal year ended December 31, 2003 are incorporated by reference in Part I and
Part II of this report, and specified portions of the registrant's proxy
statement for its annual meeting of shareholders to be held May 18, 2004 are
incorporated by reference in Part III of this report.
Page 1
PART I
FORWARD-LOOKING STATEMENTS
When used in this filing and in future filings involving the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases, "anticipate,"
"would be," "will allow," "intends to," "will likely result," "are expected to,"
"will continue," "is anticipated," "estimated," "project," or similar
expressions are intended to identify, "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to risks and uncertainties, including but not limited to changes in
economic conditions in the Company's market area, and competition, all or some
of which could cause actual results to differ materially from historical
earnings and those presently anticipated or projected.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as to the date made, and advise
readers that various factors, including regional and national economic
conditions, substantial changes in levels of market interest rates, credit and
other risks of lending and investing activities, and competitive and regulatory
factors, could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.
The Company does not undertake, and specifically disclaims any obligation, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
ITEM 1 - BUSINESS
CNB Corporation (the Company) was incorporated in June, 1985 as a business
corporation under the Michigan Business Corporation Act, pursuant to the
authorization and direction of the Board of Directors of the Citizens National
Bank of Cheboygan (the Bank).
The Company is a bank holding company registered with the Board of Governors of
the Federal Reserve System (the Federal Reserve Board) under the Bank Holding
Company Act with the Bank as its only wholly-owned subsidiary. The Bank was
acquired by the Company effective December 31, 1985. The Company has corporate
power to engage in such activities as permitted to business corporations under
the Michigan Business Corporation Act, subject to the limitations of the Bank
Holding Company Act and regulations of the Federal Reserve Board. In general,
the Bank Holding Company Act and regulations restrict the Company with respect
to its own activities and activities of any subsidiaries to the business of
banking or such other activities which are closely related to the business of
banking.
During 2001, the Company, through its subsidiary, the Bank, formed the CNB
Mortgage Corporation. Residential mortgages were transferred to the new
subsidiary in October, 2001. The change had no impact on our customers who will
continue to have their loans serviced locally by our Bank.
The Bank offers a full range of banking services to individuals, partnerships,
corporations, and other entities. Banking services include checking, NOW
accounts, savings, time deposit accounts, money market deposit accounts, safe
deposit facilities and money transfers.
The Bank's lending function provides a full range of loan products. These
include real estate mortgages, secured and unsecured commercial and consumer
loans, check credit loans, lines of credit, home equity loans and construction
financing. The Bank also participates in specialty loan programs through the
Michigan State Housing Development Authority, Small Business Administration,
Federal Home Loan Mortgage Corporation, Farm Service Agency and Mortgage
Guaranty Insurance Corporation. Through correspondent relationships, the Bank
also makes available credit cards and student loans. The Bank's loan portfolio
is over 62% residential real estate mortgages on both primary and secondary
homes. The borrower base is very diverse and loan to value ratios are generally
80% or less. The commercial loan portfolio accounts for approximately 6% of
total loans. Agricultural lending is minimal and secured by real estate.
Construction lending is predominately residential, with only an occasional
"spec" home or commercial building. Unsecured lending is very limited and
personal guarantees are required on most commercial loans.
The Bank makes first and second mortgage loans to its customers for the purchase
of residential and commercial properties. Historically, the Bank has sold its
long term fixed rate residential mortgage loans qualifying for the secondary
market to the Federal Home Loan Mortgage Corporation (FHLMC). The mortgage loan
portfolio serviced by the Bank for the FHLMC totaled approximately $ 61 million
at December 31, 2003.
Page 2
Banking services are delivered through five full-service banking offices and
three drive-in branches plus nine automated teller machines in Cheboygan, Emmet
and Presque Isle Counties, Michigan. The business base of the counties is
primarily tourism with light manufacturing. The Bank maintains correspondent
bank relationships with several larger banks, which involve check clearing
operations, transfer of funds, loan participation, and the purchase and sale of
federal funds and other similar services.
Under various agency relationships, the Bank provides trust and discount
brokerage services and mutual fund, annuity and life insurance products to its
customers.
In its primary market, which includes Cheboygan County and parts of Emmet,
Mackinac, Presque Isle and Montmorency Counties, the Bank is one of three
principal banking institutions located within this market. One is a member of a
multi-bank holding company with substantially more assets than the Company,
while the other is an independent community bank. There are also two credit
unions, one savings and loan association and a brokerage firm.
As of December 31, 2003, the Bank employed 67 full-time and 17 part-time
employees. This compares to 68 full-time and 15 part-time employees as of
December 31, 2002. Neither the Company or CNB Mortgage Corporation have any
full-time employees. Their operation and business are carried out by officers
and employees of the Bank who are not compensated by the Company.
Page 3
SECURITIES
The year end fair values and related gross unrealized gains and losses for
securities available for sale, were as follows:
AVAILABLE FOR SALE Gross Gross
Fair Unrealized Unrealized
Value Gains Losses
------- ------- -------
(In thousands)
2003
U.S. government and agency $48,802 $ 363 $ (28)
State and municipal 26,915 638 (8)
------- ------- -------
$75,717 $ 1,001 $ (36)
======= ======= =======
2002
U.S. government and agency $26,989 $ 687 $ -
State and municipal 30,544 866 (41)
------- ------- -------
$57,533 $ 1,553 $ (41)
======= ======= =======
2001
U.S. government and agency $33,057 $ 986 $ -
State and municipal 28,061 432 (53)
------- ------- -------
$61,118 $ 1,418 $ (53)
======= ======= =======
The year end carrying amount, unrecognized gains and losses, and fair value of
securities held to maturity were as follows:
HELD TO MATURITY Gross Gross
Carrying Unrecognized Unrecognized Fair
Amount Gains Losses Value
------ ----- ------ -----
(In thousands)
2003
State and municipal $4,892 $ 117 $ - $5,009
====== ====== ====== ======
2002
State and municipal $5,615 $ 140 $ - $5,755
====== ====== ====== ======
2001
State and municipal $7,168 $ 132 $ (186) $7,114
====== ====== ====== ======
Scheduled maturities of the fair value of securities available for sale and the
carrying amount of held to maturity securities at December 31, 2003, were as
follows:
Due in Due from Due from Due
one year one to five to after ten
or less five years ten years years Total
------- ---------- --------- ----- -----
(Dollars in thousands)
U.S. Government and agencies $ 3,055 $ 45,747 $ - $ - $ 48,802
State and municipal 8,257 17,463 2,300 3,787 31,807
----------- ------------ --------------- --------------- --------------
$ 11,312 $ 63,210 $ 2,300 $ 3,787 $ 80,609
=========== ============ =============== =============== ==============
Yield 3.93% 2.96% 4.04% 3.27% 3.14%
Page 4
LOANS
The following is a summary of loans at December 31:
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
(In thousands)
Residential real estate $ 89,042 $ 92,653 $ 84,588 $ 77,823 $ 71,709
Consumer 9,660 11,270 11,767 12,155 10,891
Commercial real estate 35,258 31,581 26,536 26,571 24,810
Commercial 9,540 10,824 11,912 11,193 11,939
------------- --------------- --------------- -------------- ---------------
143,500 146,328 134,803 127,742 119,349
Deferred loan origination fees, net (15) (22) (30) (41) (58)
Allowance for loan losses (1,575) (1,669) (1,667) (1,652) (1,583)
------------- --------------- --------------- -------------- ---------------
$141,910 $144,637 $ 133,106 $126,049 $ 117,708
============= =============== =============== ============== ===============
Maturity and Rate Sensitivity of Selected Loans
The following table presents the remaining maturity of total loans outstanding
excluding residential real estate and consumer loans at December 31, 2003,
according to scheduled repayments of principal. The amounts due after one year
are classified according to the sensitivity of changes in interest rates.
Total
-----
(In thousands)
In one year or less $ 14,832
After one year but within five years
Interest rates are floating or adjustable 4,248
Interest rates are fixed or predetermined 17,088
After five years
Interest rates are floating or adjustable 2,953
Interest rates are fixed or predetermined 5,677
---------------
$ 44,798
===============
Summary of loan loss experience is as follows:
Additional information relative to the allowance for loan losses is presented in
the following table. This table summarizes loan balances at the end of each
period and daily average balances, changes in the allowance for loan losses
arising from loans charged off and recoveries on loans previously charged off by
loan category, and additions to the allowance for loan losses through provisions
charged to expense.
Page 5
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
(Dollars in thousands)
Balance at the beginning of the period $ 1,669 $ 1,667 $ 1,652 $ 1,583 $ 1,518
Less Charge-offs:
Residential real estate 8 - - - -
Consumer 98 49 84 86 40
Commercial real estate - - - - -
Commercial - 1 3 - 3
------------- --------------- --------------- -------------- ---------------
Total charge-offs 106 50 87 86 43
------------- --------------- --------------- -------------- ---------------
Recoveries:
Residential real estate 1 - 3 14 1
Consumer 11 52 15 28 7
Commercial real estate - - - 2 -
Commercial - - 1 1 -
------------- --------------- --------------- -------------- ---------------
Total recoveries 12 52 19 45 8
------------- --------------- --------------- -------------- ---------------
Provision charged to expense - - 83 110 100
------------- --------------- --------------- -------------- ---------------
Allowance for loan losses,
end of period $ 1,575 $ 1,669 $ 1,667 $ 1,652 $ 1,583
============= =============== =============== ============== ===============
Total loans outstanding at
end of period $143,500 $146,328 $ 134,803 $127,742 $ 119,349
Average total loans outstanding
for the year $146,330 $143,840 $ 128,913 $124,732 $ 114,042
Ratio of net charge-offs to
daily average loans outstanding 0.06% 0.00% 0.05% 0.03% 0.03%
Ratio of net charge-offs to
total loans outstanding 0.07% 0.00% 0.05% 0.03% 0.03%
The allocation of the allowance for loan losses for the years ended December 31
is:
Residential Commercial
Real Estate Consumer Real Estate Commercial Unallocated Total
----------- -------- ----------- ---------- ----------- -----
(Dollars in thousands)
2003 Allowance amount $258 $48 $88 $49 $1,132 $1,575
% of Total loans 62.1% 6.7% 24.6% 6.6% 100.0%
2002 Allowance amount $244 $32 $79 $45 $1,269 $1,669
% of Total loans 61.8% 7.7% 23.1% 7.4% 100.0%
2001 Allowance amount $219 $44 $65 $30 $1,309 $1,667
% of Total loans 62.8% 8.7% 19.7% 8.8% 100.0%
2000 Allowance amount $218 $79 $67 $64 $1,224 $1,652
% of Total loans 60.9% 9.5% 20.8% 8.8% 100.0%
1999 Allowance amount $224 $35 $77 $29 $1,218 $1,583
% of Total loans 60.1% 9.1% 20.8% 10.0% 100.0%
The review of the loan portfolio revealed no undue concentrations of credit,
however, the portfolio continues to be concentrated in residential real estate
mortgages and highly dependent upon the tourist industry for the source of
repayment. Because the reliance on tourism is both primary, (i.e. loans to
motels, hotels and restaurants, etc.) and secondary (i.e. loans to employees of
tourist related businesses), it is difficult to assess a specific dollar amount
of inherent loss potential. Likewise, the residential real estate market has
been stable or increasing, so inherent loss potential in this concentration is
also difficult to reasonably assess. Therefore, the tourism industry and
residential real estate mortgage concentrations are considered in establishing
the allowance for loan loss.
Page 6
The following is a summary of nonaccrual, past due and restructured loans as of
December 31:
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
(In thousands)
Nonaccrual loans $ - $ - $ - $ 181 $ 181
Loans past due 90 days or more 408 114 647 81 59
Troubled debt restructurings - - - - -
------------- --------------- --------------- -------------- ---------------
$ 408 $ 114 $ 647 $ 262 $ 240
============= =============== =============== ============== ===============
DEPOSITS
The following table presents the remaining maturity of time deposits
individually exceeding $ 100,000 at December 31, 2003. Dollars are reported in
thousands.
Up to 3 Months $ 1,078
3 to 6 Months 2,619
7 to 12 Months 7,447
Over 12 Months 4,409
------------
$15,553
============
SUPERVISION AND REGULATION
As a bank holding company within the meaning of the Bank Holding Company Act,
the Company is required by said Act to file annual reports of its operations and
such additional information as the Federal Reserve Board may require and is
subject, along with its subsidiary, to examination by the Federal Reserve Board.
The Federal Reserve Board is the primary regulator of the Company.
The Bank Holding Company Act requires every bank holding company to obtain prior
approval of the Federal Reserve Board before it may merge with or consolidate
into another bank holding company, acquire substantially all the assets of any
bank, or acquire ownership or control of any voting shares of any bank if after
such acquisition it would own or control, directly or indirectly, more than 5%
of the voting shares of such bank holding company or bank. The Bank Holding
Company Act also prohibits a bank holding company, with certain exceptions, from
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any company which is not a bank and from engaging in any business
other than that of banking, managing and controlling banks or furnishing
services to banks and their subsidiaries. However, holding companies may engage
in, and may own shares of companies engaged in, certain businesses found by the
Federal Reserve Board to be so closely related to banking or the management or
control of banks as to be a proper incident thereto.
Under current regulations of the Federal Reserve Board, a holding company and
its nonbank subsidiaries are permitted, among other activities, to engage,
subject to certain specified limitations, in such banking related business
ventures as consumer finance, equipment leasing, computer service bureau and
software operations, data processing, discount securities brokerage, mortgage
banking and brokerage, sale and leaseback, and other forms of real estate
banking. The Bank Holding Company Act does not place territorial restrictions on
the activities of nonbank subsidiaries of bank holding companies.
In addition, Federal legislation prohibits acquisition of "control" of a bank or
bank holding company without prior notice to certain federal bank regulators.
"Control" in certain cases may include the acquisition of as little as 10% of
the outstanding shares of capital stock.
Page 7
The Company's cash revenues are derived primarily from dividends paid by the
Bank. National banking laws restrict the payment of cash dividends by a national
bank by providing, subject to certain exceptions, that dividends may be paid
only out of net profits then on hand after deducting therefrom its losses and
bad debts, and no dividends may be paid unless the bank will have a surplus
amounting to not less than one hundred percent (100%) of its common capital
stock.
The Bank is a national banking association and as such is subject to the
regulations of, and supervision and regular examination by, the Office of the
Comptroller of the Currency ("OCC"). Deposit accounts of the Bank are insured by
the Federal Deposit Insurance Corporation ("FDIC"). Requirements and
restrictions under the laws of the State of Michigan and Title 12 of the United
States Code include the requirements that banks maintain reserves against
deposits, restrictions on the nature and amount of loans which may be made by a
bank, and the interest that may be charged thereon, restrictions on the payment
of interest on certain deposits, and restrictions relating to investments and
other activities of a bank. The Federal Reserve Board has established guidelines
for risk based capital by bank holding companies. These guidelines establish a
risk adjusted ratio relating capital to risk-weighted assets and off-balance
sheet exposures. These capital guidelines primarily define the components of
capital, categorize assets into different risk classes, and include certain
off-balance-sheet items in the calculation of capital requirements.
An analysis of the Company's regulatory capital requirements at December 31,
2003 is presented on page 23 of the Registrant's 2003 Annual Report in Note 14
Regulatory Capital to the Company's consolidated financial statements, which is
incorporated herein by reference.
ITEM 2 - PROPERTIES.
The Company and the Bank have their primary office at 303 North Main Street,
Cheboygan, Michigan. In addition, the Bank owns and operates the following
facilities: Onaway Office, 20581 W. State Street, Onaway; Mackinaw City Office,
580 S. Nicolet Street, Mackinaw City; Pellston Office, 200 Stimpson, Pellston;
Indian River Office, 3990 Straits Highway, Indian River; South Side drive-in,
991 1/2 South Main Street, Cheboygan; Downtown drive-in, 414 Division Street,
Cheboygan; and East Side drive-in, 816 East State Street, Cheboygan. All
properties are owned by the Bank free of any mortgages or encumbrances.
ITEM 3- LEGAL PROCEEDINGS.
Neither the Company nor the Bank are a party to any pending legal proceedings
other than the routine litigation that is incidental to the business of lending.
ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no matters submitted to a vote of security holders during the
fourth quarter of 2003.
Page 8
PART II
ITEM 5-MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The common stock of the Company has no public trading market. All trades are
handled on a direct basis between buyer and seller. The Bank acts as the
Company's transfer agent. The principal market for the Company's stock consists
of existing shareholders, family members of existing shareholders and
individuals in its service area.
The information detailing the range of high and low bid information for the
Company's common stock and cash dividends declared for each full quarterly
period within the two most recent fiscal years can be found under the caption
"Financial Highlights" of the Company's Annual Report to Shareholders for the
fiscal year ended December 31, 2003, which is hereby incorporated by reference.
The information which indicates the amount of common stock that is subject to
outstanding options or warrants to purchase, or securities convertible into,
common equity of the registrant can be found in Note 8 on page 18 of the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
2003, which is hereby incorporated by reference.
There are no public offerings pending.
There are approximately 907 shareholders of record of the common stock of the
Company as of January 31, 2004.
During 2003, the Company declared regular dividends of $ 1.53 per share plus a
special dividend of $ .57 per share. In 2002, the Company declared regular
dividends of $ 1.47 plus a special dividend of $ .57. These per share statistics
have been restated to reflect the 5% stock dividend paid March 12, 2004. The
information detailing the cash dividends declared within the two most recent
fiscal years can be found under the caption "Financial Highlights" of the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
2003, which is hereby incorporated by reference. These have resulted in a
dividend payout ratio averaging 65.5% for the past three years.
The Federal Reserve Board's Policy on the Payment of Cash Dividends by Bank
Holding Companies restricts the payment of cash dividends based on the following
criteria: (1) The Company's net income from operations over the past year must
be sufficient to fully fund the dividend and (2) the prospective rate of
earnings retention must be consistent with the Company's capital needs, asset
quality and overall financial condition.
ITEM 6-SELECTED FINANCIAL DATA.
The information required by this item is included on Page 1 under the caption
"Financial Highlights" of the Company's Annual Report to Shareholders for the
fiscal year ended December 31, 2003, which is hereby incorporated by reference.
ITEM 7-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
The information required by this item is included on pages 28 through 39 of the
Company's Annual
Page 9
Report to Shareholders for the fiscal year ended December 31, 2003, which is
hereby incorporated by reference.
ITEM 7A-QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included on pages 32 through 33 of the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
2003, which is hereby incorporated by reference.
ITEM 8-FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
This information is included on pages 2 through 26 of the Company's Annual
Report to Shareholders for the fiscal year ended December 31, 2003, which is
hereby incorporated by reference.
ITEM 9-CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
ITEM 9A-CONTROLS AND PROCEDURES.
As of the end of the period covered by this report (the "Evaluation Date") an
evaluation was carried out under the supervision and with the participation of
the Company's management, including our Chief Executive Officer and Treasurer
who serves as our Chief Financial and Accounting Officer, of the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Based on
their evaluation, our Chief Executive Officer and Treasurer have concluded that
as of the Evaluation Date, the Company's disclosure controls and procedures are,
to the best of their knowledge, effective to ensure that material information
relating to the Company known to others within the Company required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission rules and forms.
There has been no change in the Company's internal control over financial
reporting that occurred during the quarter ended December 31, 2003 that
materially affected, or is reasonably likely to materially affect the Company's
internal control over financial reporting.
Page 10
PART III
ITEM 10-DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The disclosure required by this item is included under Code of Ethics in the
Company's proxy statement for the annual meeting of shareholders scheduled for
May 18, 2004, which is hereby incorporated by reference.
Certain information required by this item is included under the caption
"Information About Director Nominees" of the Company's proxy statement for the
annual meeting of shareholders scheduled for May 18, 2004, which is hereby
incorporated by reference.
Information about the executive officers of the Corporation is set forth below.
Name and Age Position
- ------------ --------
Robert E. Churchill, 63 Chairman and Chief Executive Officer of the Corporation and
Citizens National Bank of Cheboygan. Mr. Churchill has
been an officer of the Corporation since its inception in
1985 and an employee of the Bank since 1975. He has
been in his current position for more than 15 years.
James C. Conboy, Jr., 56 President and Chief Operating Officer of the Corporation and
Citizens National Bank of Cheboygan. Mr. Conboy joined the
Corporation and the Bank during 1998. He has been in his
current position for more than 5 years.
Susan A. Eno, 49 Executive Vice President of the Corporation; Executive Vice
President and Cashier of Citizens National Bank of Cheboygan.
Ms. Eno has been an officer of the Corporation since 1996 and an
employee of the Bank since 1971. She has been in her current
position for more than 7 years.
Douglas W. Damm, 50 Senior Vice President of the Corporation and
Citizens National Bank of Cheboygan. Mr. Damm
has been an officer of the Corporation since 2003
and an employee of the Bank since 1987. He has been
in his current position for more than 16 years.
John F. Ekdahl, 53 Senior Vice President of the Corporation and
Citizens National Bank of Cheboygan. Mr. Ekdahl
has been an officer of the Corporation since 1993
and an employee of the Bank since 1987. He has
been in his current position for more than 10 years.
John P. Ward, 67 Secretary of the Corporation. Mr. Ward retired from
the Bank during 1998.
Irene M. English, 44 Treasurer of the Corporation; Vice President and
Controller of Citizens National Bank of Cheboygan.
Ms. English was appointed an officer of the Corporation
during 1998 and has been an employee of the Bank
since 1985.
Page 11
ITEM 11-EXECUTIVE COMPENSATION.
The information required by this item is included under the caption
"Compensation of Executive Officers" of the Company's proxy statement for the
annual meeting of shareholders scheduled for May 18, 2004, which is hereby
incorporated by reference.
ITEM 12-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
The information required by this item is included under the caption "Ownership
of Common Stock" of the Company's proxy statement for the annual meeting of
shareholders scheduled for May 18, 2004, which is hereby incorporated by
reference.
The information required by this item is included under the caption "Equity
Compensation Plan Information" of the Company's proxy statement for the annual
meeting of shareholders scheduled for May 18, 2004, which is hereby incorporated
by reference.
ITEM 13-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is included under the caption "Certain
Relationships and Related Transactions" of the Company's proxy statement for the
annual meeting of shareholders scheduled for May 18, 2004, which is hereby
incorporated by reference.
ITEM 14-PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information required by this item is included under the caption "Independent
Auditors" of the Company's proxy statement for the Annual Meeting of
Shareholders scheduled for May 18, 2004, which is hereby incorporated by
reference.
PART IV
ITEM 15-EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) (1) Financial Statements. The following financial statements, notes
to financial statements and independent auditor's report of CNB
Corporation and its subsidiary are incorporated by reference in
Item 8 of this report:
Consolidated Balance Sheets-December 31, 2003 and 2002.
Consolidated Statements of Income and Comprehensive Income for the
years ended December 31, 2003, 2002 and 2001.
Consolidated Statements of Changes in Shareholders' Equity for the
years ended December 31, 2003, 2002 and 2001.
Consolidated Statements of Cash Flows for the years ended December
31, 2003, 2002 and 2001.
Page 12
Notes to Consolidated Financial Statements.
Independent Auditor's Report dated February 12, 2004.
(2) Financial Statement Schedules. Not applicable
(3) Exhibits.
(3a) Articles of Incorporation. Previously filed as exhibit to
the registrant's Form 10-KSB filed April 26, 1996.
(3b) By-laws. Previously filed as exhibit to the registrant's
Form 10-KSB filed April 26, 1996.
(11) Statement regarding computation per share earnings. This
information is disclosed in Note 10 to the Company's Financial
Statements for the year ended December 31, 2003, which is
hereby incorporated by reference.
(13) Annual report to shareholders for the year ended December
31, 2003. (filed herewith).
(21) Subsidiaries of the Company. (filed herewith).
(23) Consent of Independent Auditors. (filed herewith).
(31.1) Certification of Chief Executive Officer
(31.2) Certification of Chief Financial Officer
(32.1) Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the last calendar quarter of the year covered by this report.
(c) See Item 15(a) (3)
(d) Financial Statement Schedules. Not applicable.
Page 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CNB CORPORATION
(Registrant)
Date March 25, 2004
/s/ Robert E. Churchill
- ---------------------------------------
Robert E. Churchill
Chairman and Chief Executive Officer
Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 27, 2003.
/s/ Steven J. Baker /s/ Thomas J. Ellenberger /s/ John P. Ward
- -------------------------------------- ---------------------------------- ----------------------------------
Steven J. Baker Thomas J. Ellenberger John P. Ward
Director Director Director
Secretary
/s/ Robert E. Churchill /s/ Vincent J. Hillesheim /s/ Susan A. Eno
- -------------------------------------- ---------------------------------- ----------------------------------
Robert E. Churchill Vincent J. Hillesheim Susan A. Eno
Director Director Executive Vice President
Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ James C. Conboy, Jr. /s/ John L. Ormsbee /s/ Douglas W. Damm
- -------------------------------------- ---------------------------------- ----------------------------------
James C. Conboy, Jr. John L. Ormsbee Douglas W. Damm
Director Director Senior Vice President
President and Chief Operating Officer
/s/ Kathleen M. Darrow /s/ Francis J. VanAntwerp, Jr. /s/ John F. Ekdahl
- -------------------------------------- ---------------------------------- ----------------------------------
Kathleen M. Darrow Francis J. VanAntwerp, Jr. John F. Ekdahl
Director Director Senior Vice President
/s/ Irene M. English
----------------------------------
Irene M. English
Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Page 14
EXHIBIT NO. DESCRIPTION
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(13) Annual report to shareholders for the year ended December
31, 2003. (filed herewith).
(21) Subsidiaries of the Company. (filed herewith).
(23) Consent of Independent Auditors. (filed herewith).
(31.1) Certification of Chief Executive Officer
(31.2) Certification of Chief Financial Officer
(32.1) Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.