Exhibit 99
Quarterly Shareholder Brochure of CNB Corporation
May 15, 2008
Dear Shareholder,
This communication is a follow up to the March 31, 2008 Statement of Condition
which was sent to shareholders on April 10 along with the first quarter
dividend. In that statement the loan losses for the first quarter were reported
as $317,400. Subsequent to the preparation and publication of that statement,
management identified another loan with significant loss potential. As a result,
on May 8, 2008 the board of directors was advised of an additional provision for
loan losses of $300,000 for the three months ended March 31, 2008. This
increases the provision as reported in the April 10 statement from $131,000 to
$431,000.
Although this issue was not identified until the second quarter, the quarterly
report as of March 31 had not yet been filed with the Securities and Exchange
Commission and that document requires management to attest to the inclusion of
all known information as of the filing date. Therefore, management determined it
was necessary to reflect the increased loan loss provision in the first quarter.
The impact of this change on the Corporation's consolidated balance sheet and
statement of income are reflected in the revised information provided in this
statement and reduce net income for the first quarter of 2008 to $467,000 or $
0.38 basic earnings per share compared to $630,000 or $0.51 basic earnings per
share for the same period last year, a decrease of 25.9%. Assets of the
Corporation at the end of the first quarter were $262.3 million compared with
$260.5 million last year, an increase of 0.7%. Deposits at the end of the first
quarter were flat, increasing 1.1% to $232.7 million, compared with $230.2
million the same time last year, and loans as of March 31, 2008 were $176.2
million, compared to $168.4 million at March 31, 2007, an increase of 4.6%.
The weakened economic conditions in our market area will continue to have an
effect on our loan portfolio, but as noted in the April 10, 2008 Statement of
Condition management is committed to taking an aggressive approach to identify
and work through these problem credits and will keep the shareholders informed.
Sincerely,
Susan A. Eno
President and CEO
Consolidated Balance Sheets
(RESTATED - UNAUDITED)
in thousands of dollars
March 31,
-------------------
2008 2007
-------- --------
ASSETS
Cash and due from banks $ 5,660 $ 4,981
Interest-bearing deposits with other financial institutions 5,020 10,163
Federal funds sold 19,635 11,362
-------- --------
Total cash and cash equivalents 30,315 26,506
Securities available for sale 33,680 46,687
Securities held to maturity (market value
of $8,630 in 2008 and $4,575 in 2007) 8,463 4,532
Other securities 1,008 1,008
-------- --------
Total investment securities 43,151 52,227
Loans 176,198 168,426
Less allowance for loan losses (1,795) (1,551)
-------- --------
Loans, Net 174,403 166,875
Premises and equipment, net 6,233 6,570
Other assets 8,246 8,270
-------- --------
Total assets $262,348 $260,448
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LIABILITIES
Deposits
Noninterest-bearing demand $ 34,828 $ 37,031
Interest-bearing deposits 197,904 193,151
-------- --------
Total deposits 232,732 230,182
Other liabilities 5,092 5,061
-------- --------
Total liabilities 237,824 235,243
SHAREHOLDERS' EQUITY
Common Stock 3,034 3,099
Surplus 19,509 20,482
Retained Earnings and Accumulated other
Comprehensive Income/(Loss) 1,981 1,624
-------- --------
Total shareholders' equity 24,524 25,205
-------- --------
Total liabilities and shareholders' equity $262,348 $260,448
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Consolidated Statement of Income
(RESTATED - UNAUDITED)
in thousands of dollars
Three months ended March 31,
2008 2007 2006
------ ------ ------
INTEREST INCOME
Interest and fees on loans $3,122 $3,132 $2,822
Interest on securities:
Taxable 497 427 456
Tax exempt 132 127 127
Other interest income 137 243 102
------ ------ ------
Total interest income 3,888 3,929 3,507
INTEREST EXPENSE ON DEPOSITS 1,345 1,468 995
------ ------ ------
NET INTEREST INCOME 2,543 2,461 2,512
Provision for loan losses 431 69 30
------ ------ ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,112 2,392 2,482
------ ------ ------
NONINTEREST INCOME
Service charges and fees 279 273 225
Net realized gains from sale of loans 37 31 50
Loan servicing fees, net of amortization 23 18 29
Other income 61 58 40
------ ------ ------
Total noninterest income 400 380 344
------ ------ ------
NONINTEREST EXPENSES
Salaries and benefits 1,149 1,063 1,085
Occupancy 292 311 269
Supplies 41 52 34
Other expenses 461 463 502
------ ------ ------
Total noninterest expenses 1,943 1,889 1,890
------ ------ ------
INCOME BEFORE INCOME TAXES 569 883 936
Income tax expense 102 253 242
------ ------ ------
NET INCOME $ 467 $ 630 $ 694
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BASIC NET INCOME PER SHARE $ 0.38 $0.51 $ 0.56
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