Exhibit 99
Quarterly Shareholder Brochure of CNB Corporation
January 29, 2008
Dear Shareholders:
The following provides you a summary for the year ended December 31, 2007.
The Corporation's net income for 2007 was $3,088,000 or $2.51 basic earnings per
share, compared to $3,323,000 or $2.68 basic earnings per share in 2006. Last
year's net income figure included a one-time income event of $340,000 as a
result of the sale of real estate to Walgreens as previously reported. Taking
this one-time event out of the calculations, our income for 2007 increased by
$105,000 over 2006.
Deposits at the end of 2007 increased 1.65% to $225.0 million, compared with
$221.4 million the same time last year. Net loans as of December 31, 2007
increased 4.36% to $173.0 million compared to $165.7 million on December 31,
2006. Assets of the Corporation on December 31, 2007 increased 1.31% to $255.2
million from $251.9 million last year at the same time.
Despite the ongoing challenges presented by Michigan's economy the financial
results for the year ended December 31, 2007 were favorable and continue to be
strong with income at or above many other Michigan banks. This is due in part to
our strong loan portfolio as well as the fact the bank made a decision early-on
not to participate in non-traditional (sub-prime) mortgage products. Based on
our performance in 2007, the Board of Directors at its December 27 meeting
declared a $0.42 per share dividend plus a special dividend of $0.60 per share
payable on January 10, 2008 to shareholders of record on December 27.
The Corporation's $1,000,000 redemption program, which began June 14 and ended
on December 10, 2007, resulted in the repurchase of 24,934 shares at a cost of
$999,990.00. The redemption program along with the active promotion of market
makers continues to decrease the number of shares available for sale.
I am also pleased to announce that the Office of the Comptroller of the
Currency, following an examination of the bank's performance in relation to the
Community Reinvestment Act, awarded the bank its highest rating of
"outstanding". This rating is based on the bank's record of meeting the credit
needs of its entire communities, including low and moderate income neighborhoods
and reflects that the bank has an excellent record of providing for,
participating in and donating services and investments to the communities in
which it has a presence. We are very proud of this accomplishment because it
recognizes the bank's longstanding mission as an independent community bank of
offering quality finanacial services which meet the needs of the customers and
communities we serve and to foster economic vitality and civic well-being in our
communities.
Jim Conboy's retirement as President and CEO was official December 31st and we
are pleased Jim will continue his involvement in the bank as senior advisor to
management and he will remain on both the Citizens National Bank and CNB
Corporation boards. In addition to Jim's retirement, other personnel changes
included the promotions of Victoria J. Hand to Vice President and Cashier and
Nancy K. Lindsay to Assistant Vice President of Marketing. Matthew J. Kavanaugh
and Cyril S. Drier were added to our staff as Assistant Vice Presidents.
Lastly, I am extremely honored to be given the opportunity to lead such an
outstanding organization. I look forward to seeing you on May 20th at our annual
meeting.
Sincerely,
Susan A. Eno
President & CEO
Consolidated Balance Sheets
(UNAUDITED)
in thousands of dollars
December 31, 2006
2007 2006
ASSETS
Cash and due from banks $ 8,844 $ 8,444
Interest-bearing deposits with other financial institutions 0 0
Federal funds sold 8,428 6,368
--------- ---------
Total cash and cash equivalents 17,272 14,812
Securities available for sale 40,493 51,331
Securities held to maturity (market value
of $8,882 in 2007 and $ 4,582 in 2006) 8,789 4,543
Other securities 1,008 1,008
--------- ---------
Total investment securities 50,290 56,882
Loans 174,624 167,228
Less allowance for loan losses (1,670) (1,498)
--------- ---------
Loans, Net 172,954 165,730
Premises and equipment, net 6,353 6,626
Other assets 8,324 7,850
--------- ---------
Total assets $ 255,193 $ 251,900
========= =========
LIABILITIES
Deposits
Noninterest-bearing demand $ 37,984 $ 39,620
Interest-bearing deposits 187,042 181,745
--------- ---------
Total deposits 225,026 221,365
Other liabilities 5,767 5,537
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Total liabilities 230,793 226,902
SHAREHOLDERS' EQUITY
Common Stock 3,034 3,099
Surplus 19,509 20,482
Retained Earnings and Accumulated other
Comprehensive Income/(Loss) 1,857 1,417
--------- ---------
Total shareholders' equity 24,400 24,998
--------- ---------
Total liabilities and shareholders' equity $ 255,193 $ 251,900
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Consolidated Statement of Income
(Unaudited)
in thousands of dollars
Twelve months ended December 31,
2007 2006 2005
INTEREST INCOME
Interest and fees on loans $12,977 $12,149 $10,460
Interest on securities:
Taxable 2,054 1,861 2,073
Tax exempt 489 482 571
Other interest income 660 477 252
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Total interest income 16,180 14,969 13,356
INTEREST EXPENSE ON DEPOSITS 5,858 4,672 3,132
------- ------- -------
NET INTEREST INCOME 10,322 10,297 10,224
Provision for loan losses 275 120 120
------- ------- -------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 10,047 10,177 10,104
------- ------- -------
NON-INTEREST INCOME
Service charges and fees 1,194 1,049 942
Net realized gains from sale of loans 154 166 256
Loan servicing fees, net of amortization 127 119 113
Gain on sale of premises and equipment 0 521 0
Gain on life insurance 39 0 300
Other income 190 171 205
------- ------- -------
Total noninterest income 1,704 2,026 1,816
------- ------- -------
NONINTEREST EXPENSE
Salaries and benefits 3,727 3,535 3,303
Deferred compensation 311 317 690
Pension 103 239 260
Hospitalization 567 591 545
Occupancy 1,152 1,053 913
Supplies 220 222 168
Marketing 191 193 191
Other expenses 1,310 1,404 1,322
------- ------- -------
Total noninterest expense 7,581 7,554 7,392
------- ------- -------
INCOME BEFORE INCOME TAXES 4,170 4,649 4,528
Income tax expense 1,082 1,326 1,240
------- ------- -------
NET INCOME $ 3,088 $ 3,323 $ 3,288
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BASIC NET INCOME PER SHARE $ 2.51 $ 2.68 $ 2.66
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