UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
Commission file # 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)
(231) 627-7111
(Registrant's telephone number, including area code)
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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and larger accelerated filer" in Rule 12b-2 or the Exchange Act. (Check
one):
Large accelerated filer Accelerated filer Non-accelerated filer X
--- --- ---
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of May 7, 2007 there were 1,239,510 shares of the issuer's common stock
outstanding.
CNB CORPORATION
Index
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Condensed):
Consolidated Balance Sheets - March 31, 2007 and December 31,
2006...................................................... 3
Consolidated Statements of Income - Three Months Ended March
31, 2007 and 2006......................................... 4
Consolidated Statements of Cash Flows - Three Months Ended
March 31, 2007 and 2006................................... 5
Notes to Consolidated Financial Statements................... 6 - 7
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 8 - 12
Item 3 - Quantitative and Qualitative Disclosures About Market Risk... 12
Item 4 - Controls and Procedures...................................... 12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings............................................ 13
Item 1A - Risk Factors................................................ 13
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.. 13
Item 3 - Defaults Upon Senior Securities.............................. 13
Item 4 - Submission of Matters to a Vote of Security Holders.......... 13
Item 5 - Other Information............................................ 13
Item 6 - Exhibits and Reports on Form 8-K............................. 13
Signatures............................................................ 14 - 17
Exhibit Index......................................................... 18
2
PART I - FINANCIAL INFORMATION
ITEM 1-FINANCIAL STATEMENTS (CONDENSED)
CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data)
March 31, December 31,
2007 2006
----------- ------------
(Unaudited)
ASSETS
Cash and due from banks $ 4,981 $ 8,444
Interest-bearing deposits with other
financial institutions 10,163 --
Federal funds sold 11,362 6,368
-------- --------
Total cash and cash equivalents 26,506 14,812
Securities available for sale 46,687 51,331
Securities held to maturity (market value of $4,575
in 2007 and $4,582 in 2006) 4,532 4,543
Other securities 1,008 1,008
Loans, held for sale 1,987 --
Loans, net of allowance for loan losses of $1,551
in 2007 and $1,498 in 2006 164,888 165,730
Premises and equipment, net 6,570 6,626
Other assets 8,270 7,850
-------- --------
Total assets $260,448 $251,900
======== ========
LIABILITIES
Deposits
Noninterest-bearing $ 37,031 $ 39,620
Interest-bearing 193,151 181,745
-------- --------
Total deposits 230,182 221,365
Other liabilities 5,061 5,537
-------- --------
Total liabilities 235,243 226,902
SHAREHOLDERS' EQUITY
Common stock - $2.50 par value; 2,000,000 shares
authorized; and 1,239,510 and 1,239,512 shares
issued and outstanding in 2007 and 2006 3,099 3,099
Additional paid-in capital 20,482 20,482
Retained earnings 2,343 2,235
Accumulated other comprehensive loss, net of tax (719) (818)
-------- --------
Total shareholders' equity 25,205 24,998
-------- --------
Total liabilities and shareholders' equity $260,448 $251,900
======== ========
See accompanying notes to consolidated financial statements.
3
CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except
per share data)
Three months
ended March 31,
---------------
2007 2006
------ ------
(Unaudited)
INTEREST INCOME
Loans, including fees $3,132 $2,822
Securities
Taxable 427 456
Tax exempt 127 127
Other interest income 243 102
------ ------
Total interest income 3,929 3,507
INTEREST EXPENSE ON DEPOSITS 1,468 995
------ ------
NET INTEREST INCOME 2,461 2,512
Provision for loan losses 69 30
------ ------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 2,392 2,482
------ ------
NONINTEREST INCOME
Service charges and fees 273 225
Net realized gains from sales of loans 31 50
Loan servicing fees, net of amortization 18 29
Other income 58 40
------ ------
Total noninterest income 380 344
NONINTEREST EXPENSES
Salaries and employee benefits 914 880
Deferred compensation 81 81
Pension 35 64
Hospitalization 114 141
Occupancy 311 269
Supplies 52 34
Legal and professional 105 98
Other expenses 277 323
------ ------
Total noninterest expense 1,889 1,890
------ ------
INCOME BEFORE INCOME TAXES 883 936
Income tax expense 253 242
------ ------
NET INCOME $ 630 $ 694
====== ======
TOTAL COMPREHENSIVE INCOME $ 728 $ 787
====== ======
Return on average assets (annualized) 0.98% 1.08%
Return on average equity (annualized) 9.97% 11.21%
Basic earnings per share $ 0.51 $ 0.56
Diluted earnings per share $ 0.51 $ 0.56
Dividends declared per share $ 0.42 $ 0.42
See accompanying notes to consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands).
Three months
ended March 31,
-----------------
2006 2006
------- -------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 630 $ 694
Adjustments to reconcile net income to
net cash from operating activities
Depreciation, amortization and
accretion, net 212 (84)
Provision for loan losses 69 30
Loans originated for sale (2,878) (2,528)
Proceeds from sales of loans
originated for sale 898 2,237
Gain on sales of loans (18) (50)
Increase in other assets (242) (415)
Increase in other liabilities 264 315
------- -------
Total adjustments (1,695) (495)
------- -------
Net cash (used in) provided by
operating activities (1,065) 199
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities
available for sale 9,742 8,800
Purchase of securities available for
sale (4,994) (4,697)
Proceeds from maturities of securities
held to maturity 522 427
Purchase of securities held to maturity (511) --
Net change in portfolio loans 556 (2,594)
Premises and equipment expenditures (111) (383)
------- -------
Net cash provided by investing
activities 5,204 1,553
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase(decrease) in deposits 8,817 (227)
Dividends paid (1,262) (1,251)
Net proceeds from exercise of stock
options -- 8
Purchases of common stock -- (4)
------- -------
Net cash provided by (used in)
financing activities 7,555 (1,474)
------- -------
Net change in cash and cash equivalents 11,694 278
Cash and cash equivalents at beginning of
year 14,812 11,943
------- -------
Cash and cash equivalents at end of period $26,506 $12,221
======= =======
Cash paid during the period for:
Interest $ 1,441 $ 977
Income taxes 48 --
Non-cash transactions:
Transfer from loans to other real estate
owned 217 35
See accompanying notes to consolidated financial statements.
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1-Basis of Presentation
The consolidated financial statements include the accounts of CNB Corporation
("Company") and its wholly owned subsidiary, Citizens National Bank of Cheboygan
("Bank") and the Bank's wholly owned subsidiary CNB Mortgage Corporation. All
significant intercompany accounts and transactions are eliminated in the
consolidation process. The statements have been prepared by management without
an audit by independent certified public accountants. However, these statements
reflect all adjustments (consisting of normal recurring accruals) and
disclosures which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented and should be read
in conjunction with the notes to the consolidated financial statements included
in the CNB Corporation's Form 10-K for the year ended December 31, 2006.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission.
Because the results of operations are so closely related to and responsive to
changes in economic conditions, the results for any interim period are not
necessarily indicative of the results that can be expected for the entire year.
Recent Accounting Developments:
In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt SFAS No. 159 for their first quarter 2007
financial statements. The Company has not adopted the standard early, therefore
SFAS No. 159 will become applicable for years beginning January 1, 2008.
The new Statement allows entities to choose, at specified election dates, to
measure eligible financial assets and liabilities at fair value that are not
otherwise required to be measured at fair value. If a company elects the fair
value option for an eligible item, changes in that item's fair value in
subsequent reporting periods must be recognized in current earnings. FAS 159
also establishes presentation and disclosure requirements designed to draw
comparison between entities that elect different measurement attributes for
similar assets and liabilities. The management is currently evaluating the
effect of this pronouncement on financial statements.
Stock Options
The Company adopted a stock option plan in May 1996 under which the stock
options may be issued at market prices to employees. The plan states that no
grant or award shall be made under the plan more than ten years from the date of
adoption of the plan and therefore the plan ended in 2006. Stock options were
used to reward certain officers and provide them with an additional equity
interest. Options were issued for 10 year periods and have varying vesting
schedules. The exercise price of options granted is equivalent to the market
value of underlying stock at the grant date. The Company has a policy of issuing
new shares to satisfy option exercises. There were no modification of awards
during the periods ended March 31, 2007 and 2006.
Due to the plan end date, there are no options available for grant as of March
31, 2007 and there were no stock options granted during the three months ended
March 31, 2006.
6
Information about options outstanding and options exercisable follows:
Weighted
Weighted Average
Average Remaining Aggregate
Options Exercise Contractual Intrinsic
Outstanding Price Term Value
----------- -------- ----------- ---------
Balance at January 1, 2007 23,438 $49.00
Options exercised -- --
Balance at March 31, 2007 23,438 $49.00 3.5 years $45,873
======
The aggregate intrinsic value of options exercised for the three months ended
March 31, 2007 and 2006 was approximately $0 and $4,000, respectively. There
were no shares vested for the same periods.
Cash received from option exercises for the periods ending March 31, 2006 and
2005 was approximately $0 and $8,000, respectively. There were no tax benefits
realized from option exercises during the same periods.
There have been no significant changes in the Company's critical accounting
policies since December 31, 2006.
Note 2-Earnings Per Share
Basic earnings per share are calculated solely on weighted-average common shares
outstanding. Diluted earnings per share will reflect the potential dilution of
stock options and other common stock equivalents. For the three month period
ending March 31, 2007 the weighted average shares outstanding in calculating
basic earnings per share was 1,239,511 while the weighted average number of
shares for diluted earnings per share was 1,240,485. As of March 31, 2007 there
were 19,407 shares not considered in the earnings per share calculation because
they were antidilutive. For the three month period ending March 31, 2006 the
weighted average shares outstanding in calculating basic earnings per share were
1,237,435 while the weighted average number of shares for diluted earnings per
share was 1,239,494.
7
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion provides information about the consolidated financial condition
and results of operations of CNB Corporation ("Company") and its wholly owned
subsidiary, Citizens National Bank of Cheboygan ("Bank") and the Bank's wholly
owned subsidiary CNB Mortgage Corporation for the three month period ending
March 31, 2007.
CRITICAL ACCOUNTING POLICIES
Certain of the Company's accounting policies are important to the portrayal of
the Company's financial condition, since they require management to make
difficult, complex or subjective judgments, some of which may relate to matters
that are inherently uncertain. Estimates associated with these policies are
susceptible to material changes as a result of changes in fact and
circumstances. Facts and circumstances which could affect these judgments
include, but without limitation, changes in interest rates, in the performance
of the economy or in the financial condition of borrowers. Management believes
that its critical accounting policies include determining the allowance for loan
losses and determining the fair value of securities. The Company's critical
accounting policies are described in the Management Discussion and Analysis
section of its 2006 Annual Report.
FINANCIAL CONDITION
As of March 31, 2007 total assets of the company were $260.4 million which
represents an increase of $8.5 million or 3.4% from December 31, 2006. The
Company recognized a marginal decrease in the loan portfolio of 0.5% while
deposits increased $8.8 million.
SECURITIES
The securities portfolio decreased $4.7 million since December 31, 2006. The
available for sale portfolio decreased to 89.4% of the investment portfolio down
from 90.2% at year-end.
The fair values and related unrealized gains and losses for securities available
for sale were as follows, in thousands of dollars:
Gross Gross
Fair Unrealized Unrealized
Value Gains Losses
------- ---------- ----------
Available for Sale
MARCH 31, 2007
U.S. Government agency $15,348 $11 $ (52)
Mortgage-backed 10,079 9 (69)
State and municipal 7,260 67 (7)
Money market preferred stocks 14,000 -- --
------- --- -----
$46,687 $87 $(128)
======= === =====
DECEMBER 31, 2006
U.S. Government agency $21,307 $ 8 $(125)
Mortgage-backed 10,491 4 (107)
State and municipal 8,549 59 (13)
Money market preferred stocks 10,984 -- (16)
------- --- -----
$51,331 $71 $(261)
======= === =====
8
The carrying amount, unrecognized gains and losses, and fair value of securities
held to maturity were as follows, in thousand of dollars:
Gross Gross
Carrying Unrecognized Unrecognized Fair
Amount Gains Losses Value
-------- ------------ ------------ ------
Held to Maturity
MARCH 31, 2007
State and municipal $4,532 $55 $(12) $4,575
====== === ==== ======
DECEMBER 31, 2006
State and municipal
$4,543 $54 $(15) $4,582
====== === ==== ======
The carrying amount and fair value of securities by contractual maturity at
March 31, 2007 are shown below, in thousands of dollars.
Available for
sale Held to Maturity
------------- -----------------
Fair Carrying Fair
Value Amount Value
------- -------- ------
Due in one year or less $29,951 $ 617 $ 618
Due from one to five years 15,316 1,471 1,507
Due from five to ten years 643 1,644 1,650
Due after ten years 777 800 800
------- ------ ------
$46,687 $4,532 $4,575
======= ====== ======
LOANS
Net loans at March 31, 2007 decreased $842,000 from December 31, 2006. The table
below shows total loans outstanding by type, in thousands of dollars, at March
31, 2007 and December 31, 2006 and their percentages of the total loan
portfolio. All loans are domestic. A quarterly review of loan concentrations at
March 31, 2007 indicates the pattern of loans in the portfolio has not changed
significantly. There is no individual industry with more than a 10%
concentration. However, all tourism related businesses, when combined, total
13.3% of total loans.
March 31, 2007 December 31, 2006
--------------------- ---------------------
Balance % of total Balance % of total
-------- ---------- -------- ----------
Portfolio loans:
Residential real estate $ 81,499 48.96% $ 82,842 49.53%
Consumer 9,082 5.46% 9,444 5.65%
Commercial real estate 62,579 37.60% 61,740 36.92%
Commercial 13,284 7.98% 13,208 7.90%
-------- ------ -------- ------
166,444 100.00% 167,234 100.00%
====== ======
Deferred loan origination fees,
net (5) (6)
Allowance for loan losses (1,551) (1,498)
-------- --------
Loans, net $164,888 $165,730
======== ========
9
ALLOWANCE AND PROVISION FOR LOAN LOSSES
An analysis of the allowance for loan losses, in thousands of dollars, for the
three months ended March 31, follows:
2007 2006
------ ------
Beginning balance $1,498 $1,456
Provision for loan losses 69 30
Charge-offs (24) (35)
Recoveries 8 13
------ ------
Ending balance $1,551 $1,464
====== ======
The Company had impaired loans of $58,000 during the first three months of 2007
and no impaired loans during the first three months of 2006.
Since December 31, 2006 commercial real estate mortgages have increased $839,000
while consumer mortgages have decreased $1.3 million. This is primarily due to a
slow down in residential refinancing and a stronger emphasis on commercial
lending. There has been no change in the bank's lending policies. The lending
staff continues to be well-trained and experienced. The trend and volume of past
due loans continues to be well-controlled and in line with peer averages. In
response to the change in portfolio composition and loan growth management
recorded a provision of $69,000 in the first three months of 2007 and $30,000 in
the first three months of 2006.
CREDIT QUALITY
The Company maintains a high level of asset quality as a result of actively
managing delinquencies, nonperforming assets and potential loan problems. The
Company performs an ongoing review of all large credits to watch for any
deterioration in quality. Nonperforming loans are comprised of: (1) loans
accounted for on a nonaccrual basis; (2) loans contractually past due 90 days or
more as to interest or principal payments (but not included in nonaccrual loans
in (1) above); and (3) other loans whose terms have been renegotiated to provide
a reduction or deferral of interest or principal because of a deterioration in
the financial position of the borrower (exclusive of loans in (1) or (2) above).
The aggregate amount of nonperforming loans is shown in the table below.
March 31, December 31,
2007 2006
--------- ------------
(dollars in thousands)
Nonaccrual $ 58 $ --
Loans past due 90 days or more 349 177
Troubled debt restructurings -- --
---- ----
Total nonperforming loans $407 $177
==== ====
Percent of total loans 0.21% 0.11%
At March 31, 2007, total nonperforming assets increased by $230,000 from
December 31, 2006. The Bank is closely monitoring and managing nonperforming
loans. Nonaccrual loans increased to $58,000 since December 31, 2006. This
amount is from one loan that went on nonaccrual status in March 2007. Loans past
due 90 days and still accruing are loans that management considers to be
collectable including accrued interest. The increase in nonperforming assets was
primarily in construction and commercial loans and management believes the Bank
is adequately reserved on these loans.
10
DEPOSITS
Deposits at March 31, 2007 increased $8.8 million since December 31, 2006. This
increase is due, in part, to a deposit promotion the bank offered in the first
quarter of 2007 and in part to the new branch location that opened in January
2007. Interest-bearing deposits increased $11.4 million or 6.3% for the three
months ended March 31, 2007, while noninterest-bearing deposits decreased $2.6
million or 6.5%. This change in the deposit mix can be attributed to the
changing rate environment and the increased rates paid on certificates of
deposit.
LIQUIDITY AND FUNDS MANAGEMENT
The Company's balances of cash and cash equivalents increased $11.7 million or
78.9%. During the three month period ending March 31, 2007, $1.1 million in cash
was used in operating activities. Investing activities provided $5.2 million
during the three months ended March 31, 2007, primarily due to proceeds of
maturing securities and financing activities provided $7.6 million.
As of March 31, 2007, the Company had $11.4 million in federal funds sold, $46.7
million in securities available for sale and $617,000 in held to maturity
securities maturing within one year. These sources of liquidity are supplemented
by new deposits and loan payments received by customers. These short-term assets
represent 25.5% of total deposits as of March 31, 2007.
Total equity of the Company at March 31, 2007 was $25.2 million compared to
$25.0 million at December 31, 2006.
RESULTS OF OPERATIONS
CNB Corporation's 2007 net income for the first three months was $630,000, a
decrease of $64,000 compared to 2006 results. This decrease in net income can be
attributed to an increase in interest expense resulting from the current rate
environment. Basic and diluted earnings per share were $0.51 for 2007 compared
to $0.56 for 2006. The return on assets was .98% for the first three months of
the year versus 1.08% for the same period in 2006. The return on equity was
9.97% compared to 11.21% for the same period last year.
For the first three months of 2007, net interest income was $2.5 million
representing a decrease of 2.0% from the same period in 2006. The fully taxable
equivalent net interest margin increased to 4.33% for the three month period
ending March 31, 2007 compared to 4.30% for the same period ending March 31,
2006. This change can be attributable to a flat interest rate environment during
2006 and so far in 2007.
In response to the change in the loan portfolio composition and loan growth,
management recorded a provision expense of $69,000 in the first three months in
2007 and $30,000 in the first three months in 2006.
Noninterest income for the three months ending March 31, 2006 was $380,000, an
increase of $36,000 or 10.5% from the same period last year. This change between
the two periods is attributed, in part, due to an increase in our per item NSF
fee effective June 2006 and an Overdraft Privilege program that was introduced
to our customers in the beginning of August 2006.
Noninterest expense for the first three months of 2007 and 2006 was $1.9
million. Although the noninterest expense remained at the same level during the
two periods, the expense mix did change between the periods. The increase in
occupancy expense can largely be attributed to increases in depreciation expense
due to the purchase of new processing equipment and a new branch facility in
Alanson. Also, an increase in salary and benefit expenses as the Company
increased its number of employees from 77.5 full-time equivalent employees at
March 31, 2006 to 79.5 full-time equivalent employees at March 31, 2007. This
increase in employees is due to increased branch hours and a new branch
facility, both of which require additional staffing. Hospitalization expense
decreased due to a change in benefit coverage. Also, other expenses for 2006,
includes $51,000 of expense due to the recognition of loss on sale or write-down
of other real estate properties owned.
11
The provision for federal income tax was 28.7% of pretax income for the three
months ended March 31, 2007 as compared to 25.9% for the same period in 2006.
The difference between the tax rates for the two periods is due, in part, to a
Qualified Zone Academy Bond which was a municipal investment that provided a
significant tax credit that matured in December 2006. The difference between the
effective tax rate and the federal corporate tax rate of 34% is generally due to
tax-exempt interest earned on investments and loans and other tax-related items.
ITEM 3-QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary source of market risk for the financial instruments held by the
Company is interest rate risk. That is, the risk that a change in market rates
will adversely affect the market value of the instruments. Generally, the longer
the maturity, the higher the interest rate risk exposure. While maturity
information does not necessarily present all aspects of exposure, it may provide
an indication of where risks are prevalent.
All financial institutions assume interest rate risk as an integral part of
normal operations. Managing and measuring interest rate risk is a dynamic,
multi-faceted process that ranges from reducing the exposure of the Company's
net interest margin to swings in interest rates, to assuring sufficient capital
and liquidity to support future balance sheet growth. The Company manages
interest rate risk through the Asset Liability Committee. The Asset Liability
Committee is comprised of bank officers from various disciplines. The Committee
reviews policies and establishes rates which lead to prudent investment of
resources, the effective management of risks associated with changing interest
rates, the maintenance of adequate liquidity, and the earning of an adequate
return of shareholders' equity.
Management believes that there has been no significant changes to the interest
rate sensitivity since the presentation in the December 31, 2006 Management
Discussion and Analysis appearing in the December 31, 2006 10K.
ITEM 4-CONTROLS AND PROCEDURES
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"). These
rules refer to the controls and other procedures of a company that are designed
to ensure that information required to be disclosed by a company in the reports
that it files under the Exchange Act is recorded, processed summarized and
reported within required time periods. Our Chief Executive Officer and
Treasurer, who serves as the Company's CFO have evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this report (the "Evaluation Date"), and have concluded that, as of the
Evaluation Date, our disclosure controls and procedures are effective in
providing them with material information relating to the Corporation which is
required to be included in our periodic reports filed under the Exchange Act.
Effective January 24, 2007 the Bank's Assistant Vice President and Controller
resigned from her position. The Bank hired Ms. Kathy Johnson as an accounting
clerk in February. Ms. Johnson will be involved in assisting with the financial
reporting of the Bank and the Corporation.
12
PART II-OTHER INFORMATION
ITEM 1-LEGAL PROCEEDINGS
None
ITEM 1A.-RISK FACTORS
There have been no material changes to the risk factors disclosed in Item 1A
Part I of the Company's 2006 10K.
ITEM 2- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3-DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5-OTHER INFORMATION
None
ITEM 6-EXHIBITS AND REPORTS OF FORM 8-K
a.) Exhibits
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
None
13
Pursuant to the requirements 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)
/s/ James C. Conboy, Jr.
Date: May 14, 2007 ----------------------------------------
James C. Conboy, Jr.
President and Chief Executive Officer
/s/ Susan A. Eno
Date: May 14, 2007 ----------------------------------------
Susan A. Eno
Executive Vice President
14
EXHIBIT INDEX
Number Exhibit
- ------ -------
31.1 Certification of Chief Executive Officer
31.2 Certification of Chief Financial Officer
32.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
18