FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
___________________
For Quarter Ended June 30, 1995 Commission file number: 2-96350
CNB Corporation
(Exact name of registrant as specified in its charter)
South Carolina 57-0792402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 320, Conway, South Carolina 29526
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code): (803) 248-5721
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 .
The number of shares outstanding of the issuer's $10.00 par value common
stock as of June 30, 1995 was 478,197.
<PAGE>
CNB Corporation
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1995, 1
December 31, 1994 and June 30, 1994
Consolidated Statement of Income for the Three Months 2
and Six Months Ended June 30, 1995 and 1994
Consolidated Statement of Changes in Stockholders' 3
Equity for the Six Months Ended June 30, 1995
and 1994
Consolidated Statement of Cash Flows for the Six Months 4
Ended June 30, 1995 and 1994
Notes to Consolidated Financial Statements 5-12
Item 2. Management's Discussion and Analysis of Financial 13-22
Condition and Results of Operations
Item 4. Submission of Matters to a Vote of Security Holders 22
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURE 23
<PAGE>
CNB Corporation and Subsidiary
Consolidated Balance Sheets
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1995 1994 1994
ASSETS:
<S> <C> <C> <C>
Cash and due from banks $ 12,428 $ 14,552 $ 10,518
Interest bearing deposits with banks 0 0 0
Investment Securities 82,034 83,094 79,537
(Fair values of $82,145 at
June 30, 1995, $79,429 at
December 31, 1994, and $78,236
at June 30, 1994)
Securities Available for Sale 43,019 43,635 42,319
(Amortized cost of $42,561 at
June 30, 1995, $44,615 at
December 31, 1994, and $42,466
at June 30, 1994)
Federal Funds sold and securities
purchased under agreement
to resell 24,625 3,125 11,250
Loans:
Gross Loans 152,531 145,594 143,793
Less unearned income (1,143) (1,231) (1,214)
Loans, net of unearned income 151,388 144,363 142,579
Less reserve for possible
loan losses (2,327) (2,220) (2,149)
Net loans 149,061 142,143 140,430
Bank premises and equipment 6,482 5,310 5,440
Other assets 5,559 5,261 5,186
Total assets 323,208 297,120 294,680
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest bearing 49,697 40,986 40,757
Interest-bearing 190,190 193,207 187,713
Total deposits 239,887 234,193 228,470
Federal funds purchased and
securities sold under agreement
to repurchase 47,707 29,236 34,507
Other short-term borrowings 1,904 2,494 1,665
Obligations under mortgages and
capital leases 16 18 23
Other liabilities 2,129 2,302 1,704
Minority interest in subsidiary 22 20 20
Total liabilities 291,665 268,263 266,389
Stockholders' equity:
Common stock, par value $10 per
share: Authorized 500,000;
issued 479,093, 479,093 and
399,353 shares 4,791 4,791 3,994
Surplus 15,663 15,659 11,347
Undivided Profits 10,874 9,107 13,525
Net Unrealized Holding 274 (588) (89)
Gains (Losses) on
Available-For-Sale Securities
Less: Treasury stock (59) (112) (486)
Total stockholders' equity 31,543 28,857 28,291
Total liabilities
and stockholders' equity 323,208 297,120 294,680
</TABLE>
1
<PAGE>
CNB Corporation and Subsidiary
Consolidated Statement of Income
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Interest Income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 3,642 $ 3,009 $ 7,112 $ 5,785
Interest on investment securities:
Taxable investment securities 1,590 1,586 3,232 3,083
Tax-exempt investment securities 220 248 450 504
Other securities 3 3 3 3
Interest on federal funds sold and securities
purchased under agreement to resell 239 94 338 235
Total interest income 5,694 4,940 11,135 9,610
Interest Expense:
Interest on deposits 1,969 1,498 3,819 2,948
Interest on federal funds purchased and
securities sold under agreement to
repurchase 559 301 982 609
Interest on other short-term borrowings 14 10 37 20
Interest on obligation under mortgages and
capital leases 0 0 0 1
Total interest expense 2,542 1,809 4,838 3,578
Net interest income 3,152 3,131 6,297 6,032
Provision for possible loan losses 15 80 80 100
Net interest income after provision for
possible loan losses 3,137 3,051 6,217 5,932
Other income:
Service charges on deposit accounts 453 489 900 958
Gains/(Losses) on securities 0 (25) 26 (25)
Other operating income 212 241 358 414
Total other income 665 705 1,284 1,347
Other expenses:
Minority interest in income of subsidiary 0 0 1 1
Salaries and employee benefits 1,442 1,314 2,764 2,590
Occupancy expense 371 337 737 689
Other operating expenses 757 675 1,404 1,261
Total operating expenses 2,550 2,326 4,906 4,541
Income before income taxes 1,252 1,430 2,595 2,738
Income tax provision 415 484 829 891
Net Income 837 946 1,766 1,847
Per share data (1):
Net income per weighted average shares
outstanding $ 1.75 $ 1.99 $ 3.69 $ 3.88
Cash dividend paid per share $ 0 $ 0 $ 0 $ 0
Book value per actual number of shares
outstanding $ 65.96 $ 60.00 $ 65.96 $ 60.00
Weighted average number of shares outstanding 478,045 476,496 478,045 476,496
Actual number of shares outstanding 478,197 471,500 478,197 471,500
</TABLE>
(1) Adjusted for the effect of a 20% stock dividend issued during the third
quarter of 1994.
2
<PAGE>
CNB Corporation and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
(All Dollar Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
Common Stock:
($10 par value; 500,000 shares authorized)
Balance, January 1 4,791 3,994
Issuance of Common Stock None None
Balance at end of period 4,791 3,994
Surplus:
Balance, January 1 15,659 11,338
Issuance of Common Stock None None
Gain on sale of treasury stock 4 9
Balance at end of period 15,663 11,347
Undivided profits:
Balance, January 1 9,107 11,678
Net Income 1,766 1,847
Cash dividends declared None None
Balance at end of period 10,874 13,525
Net unrealized holding gains/(losses) on
available-for-sale securities:
Balance, January 1 (588) 0
Change in net unrealized gains/(Losses) 862 (89)
Balance at end of period 274 (89)
Treasury stock:
Balance, January 1 (112) (190)
Purchase of treasury stock (26) (376)
Reissue of treasury stock 79 80
Balance at end of period (59) (486)
Total stockholders' equity 31,543 28,291
</TABLE>
Note: Columns may not add due to rounding.
3
<PAGE>
CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the six-month period ended June 30,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,766 $ 1,847
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 320 258
Provision for loan losses 80 100
Provision for deferred income taxes 573 (25)
Loss (gain) on sale of investment
securities 26 (25)
(Increase) decrease in accrued interest
receivable (404) (295)
(Increase) decrease in other assets (89) (3)
(Decrease) increase in other liabilities (112) (875)
Increase in minority interest in
subsidiary 2 1
Net cash provided by operating
activities 2,162 983
INVESTING ACTIVITIES
Proceeds from sale of investment securities
available for sale 3,117 8,000
Proceeds from maturities of investment
securities held to maturity 845 1,365
Proceeds from maturities of investment
securities available for sale 2,000 9,525
Purchase of investment securities held to
maturity 0 (6,920)
Purchase of investment securities
available for sale (2,849) (17,500)
Decrease (increase) in interest-bearing
deposits in banks 0 0
(Increase) decrease in federal funds sold (21,500) 3,150
(Increase) decrease in loans (7,025) (10,845)
Premises and equipment expenditures (1,492) (681)
Net cash provided by (used for)
investing activities (26,904) (13,906)
FINANCING ACTIVITIES
Dividends paid (955) (794)
Increase (Decrease) in deposits 5,694 9,168
(Decrease) increase in securities sold
under repurchase agreement 18,471 2,688
(Decrease) increase in other
short-term borrowings (590) (827)
Increase (decrease)in obligation under
mortgages and capital leases (2) (4)
Net cash provided by (used for)
financing activities 22,618 10,231
Net increase (decrease) in cash
and due from banks (2,124) (2,692)
CASH AND DUE FROM BANKS, BEGINNING OF YEAR 14,552 13,210
CASH AND DUE FROM BANKS, JUNE 30, 1995 AND 1994 $12,428 $10,518
CASH PAID (RECEIVED) FOR:
Interest $ 4,672 $ 3,742
Income taxes $ 753 $ 808
</TABLE> 4
<PAGE>
CNB CORPORATION AND SUBSIDIARY (The "Corporation")
CNB CORPORATION (The "Parent")
THE CONWAY NATIONAL BANK (The "Bank")
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All Dollar Amounts in Thousands)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income per share - Net income per share is computed on the basis of the
weighted average number of common shares outstanding adjusted for the
effect of a 20% stock dividend issued during the third quarter of 1994,
478,045 for the six-month period ended June 30, 1995 and 476,496 for the
six-month period ended June 30, 1994.
NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANKS
The Bank is required to maintain average reserve balances either at the
Bank or on deposit with the Federal Reserve Bank. The average amount of
these reserve balances for the six-month period ended June 30, 1995 and
for the years ended December 31, 1994 and 1993 were approximately $4,246,
$3,988, and $3,592, respectively.
5
<PAGE>
NOTE 3 - INVESTMENT SECURITIES
Investment securities with a par value of approximately $70,387 at June 30,
1995 and $50,615 at December 31, 1994 were pledged to secure public deposits
and for other purposes required by law.
The following summaries reflect the book value, unrealized gains and losses,
approximate market value, and tax-equivalent yields of investment securities
at June 30, 1995 and at December 31, 1994.
<TABLE>
<CAPTION>
June 30, 1995
Book Unrealized Holding Fair
Value Gains Losses Value Yield(1)
<S> <C> <C> <C> <C> <C>
AVAILABLE FOR SALE
United States Treasury
Within one year $ 5,990 $ 22 $ 5 $ 6,007 6.61%
One to five years 29,353 525 101 29,777 6.26
35,343 547 106 35,784 6.32
Federal agencies
Within one year 2,471 17 0 2,488 7.38
One to five years 3,001 0 2 2,999 6.25
After ten years 1,003 1 20 984 6.16
6,475 18 22 6,471 6.67
State, county and
municipal
Within one year 301 4 0 305 12.45
One to five years 326 17 0 343 7.85
627 21 0 648 10.05
Other Securities(Equity) 116 0 0 116 -
Total available for sale $42,561 $ 586 $ 128 $43,019 6.42%
HELD TO MATURITY
United States Treasury
Within one year 10,128 1 62 10,067 4.93%
One to five years 48,349 338 511 48,176 5.58
58,477 339 573 58,243 5.47
Federal agencies
Within one year 2,003 31 0 2,034 7.90%
One to five years 6,985 79 74 6,990 6.30
8,988 110 74 9,024 6.65
State, county and
municipal
Within one year 3,163 28 1 3,190 10.98%
One to five years 5,887 216 1 6,102 9.04
Six to ten years 5,519 179 112 5,586 7.51
14,569 423 114 14,878 8.88
Total held to maturity $82,034 $ 872 $ 761 $82,145 6.20%
</TABLE>
(1) Tax equivalent adjustment based on a 34% tax rate.
As of the quarter ended June 30, 1995, the Bank did not hold any securities
of an issuer that exceeded 10% of stockholders' equity. The net unrealized
holding gains/(losses) on available-for-sale securities component of capital
is $274 as of June 30, 1995.
6
<PAGE>
NOTE 3 - INVESTMENT SECURITIES (Continued)
<TABLE>
<CAPTION>
1994
Book Unrealized Holding Fair
Value Gains Losses Value Yield(1)
<S> <C> <C> <C> <C> <C>
AVAILABLE FOR SALE
United States Treasury
Within one year $ 4,985 $ - $ 9 $ 4,976 6.93%
One to five years 31,304 - 944 30,360 6.34
36,289 - 953 35,336 6.42
Federal agencies
Within one year 4,006 11 2 4,015 7.31
One to five years 2,523 12 2 2,533 6.62
After ten years 1,051 - 60 991 5.26
7,580 23 64 7,539 6.80
State, county and
municipal
Within one year 303 7 - 310 12.45
One to five years 326 7 - 333 7.85
629 14 - 643 10.05
Total available for sale $44,498 $ 37 $ 1,017 $43,518 6.53%
HELD TO MATURITY
United States Treasury
One to five years 58,668 6 3,131 55,543 5.46
Federal agencies
Six to ten years 8,995 12 359 8,648 6.65%
State, county and
municipal
Within one year 2,932 39 1 2,970 11.64
One to five years 5,611 101 54 5,658 9.10
Six to ten years 6,888 66 344 6,610 7.73
15,431 206 399 15,238 8.97
Total held to maturity $83,094 $ 224 $ 3,889 $79,429 6.25%
</TABLE>
(1) Tax equivalent adjustment based on a 34% tax rate.
As of the quarter ended December 31, 1994, the Bank did not hold any
securities of an issuer that exceeded 10% of stockholders' equity. The
net unrealized holding gains/(losses) on available-for-sale securities
component of capital is $(588) as of December 31, 1994.
7
<PAGE>
NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES
The following is a summary of loans at June 30, 1995 and December 31,
1994 by major classification:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Real estate loans - mortgage $ 96,979 $ 89,728
- construction 4,904 6,328
Commercial and industrial loans 21,004 17,472
Loans to individuals for household,
family and other consumer expenditures 27,301 30,700
Agriculture 2,111 1,180
All other loans, including overdrafts 232 186
Gross loans 152,531 145,594
Less unearned income (1,143) (1,231)
Less reserve for loan losses (2,327) (2,220)
Net loans 149,061 142,143
</TABLE>
8
<PAGE>
NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES, continued
Changes in the reserve for loan losses for the quarter ended and six-
month period ended June 30, 1995 and the year ended December 31, 1994 are
summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended December
June 30, June 30, 31,
1995 1994 1995 1994 1994
<S> <C> <C> <C> <C> <C>
Balance, beginning of period $ 2,310 $ 2,124 $ 2,220 $ 2,170 $ 2,170
Charge-offs:
Commercial, financial, and agricultural 2 34 57 64 122
Real Estate - construction and mortgage 0 0 3 42 57
Loans to individuals 91 76 144 117 277
Total charge-offs $ 93 $ 110 $ 204 $ 223 $ 456
Recoveries:
Commercial, financial, and agricultural $ 10 $ 24 $ 114 $ 28 $ 58
Real Estate - construction and mortgage 8 11 12 19 35
Loans to individuals 77 20 105 55 118
Total recoveries $ 95 $ 55 $ 231 $ 102 $ 211
Net charge-offs/(recoveries) $ (2) $ 55 $ (27) $ 121 $ 245
Additions charge to operations $ 15 $ 80 $ 80 $ 100 $ 295
Balance, end of period $ 2,327 $ 2,149 $ 2,327 $ 2,149 $ 2,220
Ratio of net charge-offs during the period
to average loans outstanding during the
period - .04% - .07% .17%
</TABLE>
The entire balance is available to absorb future loan losses.
At June 30, 1995 and December 31, 1994 loans on which no interest was being
accrued totalled approximately $547 and $1,062, respectively and foreclosed
real estate totalled $0 and $0, respectively.
NOTE 5 - PREMISES AND EQUIPMENT
Property at June 30, 1995 and December 31, 1994 is summarized as
follows:
June 30, December 31,
1995 1994
Land and buildings $ 6,069 $ 6,250
Furniture, fixtures and equipment 4,832 4,653
Construction in progress 1,715 316
$ 12,616 $ 11,219
Less accumulated depreciation and
amortization 6,134 5,909
$ 6,482 $ 5,310
Depreciation and amortization of bank premises and equipment charged to
operating expense was $169 and $320 for the quarter ended and the six month
period ended June 30, 1995, respectively and $623 for the year ended December
31, 1994.
9
<PAGE>
NOTE 6 - CERTIFICATES OF DEPOSIT IN EXCESS OF $100,000
At June 30, 1995 and December 31, 1994, certificates of deposit of
$100,000 or more included in time deposits totaled approximately $20,874 and
$21,008 respectively. Interest expense on these deposits was approximately
$275 and $516 for the quarter ended and the six-month period ended June 30,
1995 and $750 for the year ended December 31, 1994.
NOTE 7 - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
At June 30, 1995 and December 31, 1994, securities sold under repurchase
agreements totaled approximately $47,707 and $29,236. U.S. Government
securities with a book value of $52,352 ($52,359 market value) and $35,875
($34,249 market value), respectively, are used as collateral for the
agreements. The weighted-average interest rate of these agreements was 5.32
percent and 4.29 percent at June 30, 1995 and December 31, 1994.
NOTE 8 - LINES OF CREDIT
At June 30, 1995, the Bank had unused short-term lines of credit to
purchase Federal Funds from unrelated banks totaling $17,000. These lines of
credit are available on a one to seven day basis for general corporate
purposes of the Bank. All of the lenders have reserved the right to withdraw
these lines at their option.
The Bank has a demand note through the U.S. Treasury, Tax and Loan
system with the Federal Reserve Bank of Richmond. The Bank may borrow up to
$5,000 under the arrangement at a variable interest rate. The note is
secured by U.S. Treasury Notes with a market value of $5,981 at June 30,
1995. The amount outstanding under the note totaled $1,904 and $2,494 at
June 30, 1995 and December 31, 1994, respectively.
NOTE 9 - INCOME TAXES
Income tax expense for the quarter ended June 30, 1995 and June 30, 1994
on pretax income of $1,252 and $1,430 totalled $415 and $484 respectively.
Income tax expense for the six-month period ended June 30, 1995 and June 30,
1994 on pretax income of $2,595 and $2,738 totalled $829 and $891
respectively. The provision for federal income taxes is calculated by
applying the 34% statutory federal income tax rate and increasing or reducing
this amount due to any tax-exempt interest, state bank tax (net of federal
benefit), business credits, surtax exemption, tax preferences, alternative
minimum tax calculations, or other factor. A summary of income tax
components and a reconciliation of income taxes to the federal statutory rate
is included in fiscal year-end reports.
Effective January 1, 1992, the Company adopted the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". SFAS 109 replaces SFAS 96 beginning in 1993, with early
implementation permitted. The impact of the adoption of SFAS 109 is not
considered to be material.
10
<PAGE>
NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES
From time to time the bank subsidiary is a party to various litigation,
both as plaintiff and as defendant, arising from its normal operations. No
material losses are anticipated in connection with any of these matters at
June 30, 1995.
Also, in the normal course of business, the bank subsidiary has
outstanding commitments to extend credit and other contingent liabilities,
which are not reflected in the accompanying financial statements. At June
30, 1995, commitments to extend credit totalled $12,940; financial standby
letters of credit totalled $858; and performance standby letters of credit
totalled $735. In the opinion of management, no material losses or
liabilities are expected as a result of these transactions.
As of June 30, 1995, the Bank has entered into a contract for the
construction of a new branch office for $1,686,000. Construction of the
branch is expected to be completed by August 7, 1995. Total cost of the
project is expected to be $2.6 million.
NOTE 11 - EMPLOYEE BENEFIT PLAN
The Bank has a defined contribution pension plan covering all employees
who have attained age twenty-one and have a minimum of one year of service.
Upon ongoing approval of the Board of Directors, the Bank matches one-hundred
percent of employee contributions up to one percent of employee salary
deferred and fifty percent of employee contributions in excess of one percent
and up to six percent of salary deferred. The Board of Directors may also
make discretionary contributions to the Plan. For the three-month and six
month period ended June 30, 1995 and years ended December 31, 1994, 1993 and
1992, $77, $153, $295, $273, and $218, respectively, was charged to
operations under the plan.
NOTE 12 - REGULATORY RESTRICTIONS
The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory -and possibly additional
discretionary - actions by regulators that, if undertaken, could have a
direct material effect on the financial statements. The regulations require
the Bank to meet specific capital adequacy guidelines that involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The capital
classification is also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the maintenance of minimum amounts and ratios (set forth in
the table below) of Tier I capital to adjusted total assets (Leverage Capital
ratio) and minimum ratios of Tier I and total capital to risk-weighted
assets. To be considered adequately capitalized under the regulatory
framework for prompt corrective action, the Bank must maintain minimum Tier
I leverage, Tier I risk-based and total risked-based ratios as set forth in
the table. The Bank's actual capital ratios are presented in the table below
as of June 30, 1995:
Conway National Bank
Ratios
Required
Minimum Actual
Tier I Leverage Capital 4.0% 9.2%
Tier I Risk-based Capital 4.0% 18.5%
Total Risk-based Capital 8.0% 19.8%
11
<PAGE>
NOTE 13 - CONDENSED FINANCIAL INFORMATION
Following is condensed financial information of CNB Corporation (parent
company only):
CONDENSED BALANCE SHEET
JUNE 30, 1995
(Unaudited)
ASSETS
Cash $ 1,444
Investment in subsidiary 29,818
Fixed assets 245
Other assets 36
$ 31,543
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liability $ 0
Stockholders' equity 31,543
$ 31,543
CONDENSED STATEMENT OF INCOME
For the six-month period ended June 30, 1995
(Unaudited)
EQUITY IN NET INCOME OF SUBSIDIARY $ 1,784
OTHER INCOME 2
OTHER EXPENSES (20)
Net Income $ 1,766
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's Discussion and Analysis is provided to afford a clearer
understanding of the major elements of the corporation's results of
operations, financial condition, liquidity,and capital resources. The
following discussion should be read in conjunction with the corporation's
financial statements and notes thereto and other detailed information
appearing elsewhere in this report. In addition, the results of operations
for the interim periods shown in this report are not necessarily indicative
of results to be expected for the fiscal year. In the opinion of management,
the information contained herein reflects all adjustments necessary to make
the results of operations for the interim periods a fair statement of such
operations. All such adjustments are of a normal recurring nature.
DISTRIBUTION OF ASSETS AND LIABILITIES
The Company maintains a conservative approach in determining the
distribution of assets and liabilities. Loans, net of unearned income, have
increased 6.2% from $142,579 at June 30, 1994 to $151,388 at June 30, 1995
and have decreased as a percentage of total assets from 48.4% to 46.8% over
the same period as moderate loan demand has not kept pace with asset growth
in our market. Correspondingly, securities and federal funds sold have
increased as a percentage of total assets from 45.2% at June 30, 1994 to
46.3% at June 30, 1995. This level of investments and federal funds sold
provides for a more than adequate supply of secondary liquidity. Management
has sought to build the deposit base with stable, relatively
non-interest-sensitive deposits by offering the small to medium deposit
account holders a wide array of deposit instruments at competitive rates.
Non-interest-bearing demand deposits increased as a percentage of total
assets from 13.8% at June 30, 1994 to 15.4% at June 30, 1995. However, as
more customers, both business and personal, are attracted to
interest-bearing deposit accounts, we expect a decline in the percentage of
demand deposits over the long-term. Interest-bearing deposits have decreased
from 63.7% of total assets at June 30, 1994 to 58.8% at June 30, 1995 while
securities sold under agreement to repurchase have increased from 11.7% to
14.8% over the same period.
The following table sets forth the percentage relationship to total assets of
significant component's of the corporation's balance sheet as of June 30,
1995 and 1994:
<TABLE>
<CAPTION>
June 30,
<S> <C> <C>
Assets: 1995 1994
Earning assets:
Loans, net of unearned income 46.8% 48.4%
Investment securities 25.4 27.0
Securities Available for Sale 13.3 14.4
Federal funds sold and securities purchased
under agreement to resell 7.6 3.8
Other earning assets - -
Total earning assets 93.1 93.6
Other assets 6.9 6.4
Total assets 100.0% 100.0%
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits 58.8% 63.7%
Federal funds purchased and securities sold
under agreement to repurchase 14.8 11.7
Other short-term borrowings .6 .6
Obligations under mortgages and capital leases - -
Total interest-bearing liabilities 74.2 76.0
Noninterest-bearing deposits 15.4 13.8
Other liabilities .6 .6
Stockholders' equity 9.8 9.6
Total liabilities and stockholders' equity 100.0% 100.0%
</TABLE>
13
<PAGE>
RESULTS OF OPERATION
CNB Corporation experienced earnings for the three-month period ended
June 30, 1995 and 1994 of $837 and $946, respectively, resulting in a return
on average assets of 1.07% and 1.29% and a return on average stockholders'
equity of 10.90% and 13.49%.
CNB Corporation experienced earnings for the six-month period ended June 30,
1995 and 1994 of $1,766 and $1,847, respectively, resulting in a return on
average assets of 1.16% and 1.26% and a return on average stockholders'
equity of 11.75% and 13.26%.
The earnings were primarily attributable to net interest margins in
each period (see Net Income-Net Interest Income). Other factors include
management's ongoing effort to maintain other income at adequate levels (see
Net Income - Other Income) and to control other expenses (see Net Income -
Other Expenses). This level of earnings, coupled with a conservative
dividend policy, have supplied the necessary capital funds to support the
growth in total assets. Total assets have increased $28,528 or 9.7% from
$294,680 at June 30, 1994 to $323,208 at June 30, 1995. The following table
sets forth the financial highlights for the three-month and six-month periods
ending June 30, 1995 and June 30, 1994:
CNB Corporation
CNB Corporation and Subsidiary
FINANCIAL HIGHLIGHTS
(All Dollar Amounts, Except Per Share Data, in Thousands)
<TABLE>
<CAPTION>
Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
Percent Percent
Increase Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Net interest income after
provision for loan losses 3,137 3,051 2.8% 6,217 5,932 4.8%
Income before income taxes 1,252 1,430 (12.4) 2,595 2,738 (5.2)
Net Income 837 946 (11.5) 1,766 1,847 (4.4)
Per Share (1) 1.75 1.99 (12.1) 3.69 3.88 (4.9)
Cash dividends declared 0 0 - 0 0 -
Per Share (1) 0 0 - 0 0 -
Total assets 323,208 294,680 9.7% 323,208 294,680 9.7%
Total deposits 239,887 228,470 5.0 239,887 228,470 5.0
Loans, net of unearned income 151,388 142,579 6.2 151,388 142,579 6.2
Investment securities and
securities available for
sale 125,053 121,856 2.6 125,053 121,856 2.6
Stockholders' equity 31,543 28,291 11.5 31,543 28,291 11.5
Book value per share (1) 65.96 60.00 9.9 65.96 60.00 9.9
Ratios (2):
Annualized return on average
total assets 1.07% 1.29% (17.1)% 1.16% 1.26% (7.9)%
Annualized return on average
stockholders' equity 10.90% 13.49% (19.2)% 11.75% 13.26%(11.4)%
</TABLE>
(1) Adjusted for the effect of a 20% stock dividend issued during the third
quarter of 1994.
(2) For the three-month period ended June 30, 1995 and June 30, 1994,
average total assets amounted to $312,422 and $292,356 with average
stockholders' equity totaling $30,713 and $28,049, respectively. For the
six-month period ended June 30, 1995 and June 30, 1994, average total
assets amounted to $305,706 and $294,029 with average stockholders'
equity totaling $30,051 and $27,864, respectively.
14
<PAGE>
NET INCOME
Net Interest Income - Earnings are dependent to a large degree on net
interest income, defined as the difference between gross interest and fees
earned on earning assets, primarily loans and securities, and interest paid
on deposits and borrowed funds. Net interest income is effected by the
interest rates earned or paid and by volume changes in loans, securities,
deposits, and borrowed funds.
Interest rates paid on deposits and borrowed funds and earned on loans and
investments have generally followed the fluctuations in market interest rates
in 1995 and 1994. However, fluctuations in market interest rates do not
necessarily have a significant impact on net interest income, depending on
the bank's rate sensitivity position. A rate sensitive asset (RSA) is any
loan or investment that can be repriced either up or down in interest rate
within a certain time interval. A rate sensitive liability (RSL) is an
interest paying deposit or other liability that can be repriced either up or
down in interest rate within a certain time interval. When a proper balance
between RSA and RSL exists, market interest rate fluctuations should not
have a significant impact on earnings. The larger the imbalance, the greater
the interest rate risk assumed by the bank and the greater the positive or
negative impact of interest rate fluctuations on earnings. The bank seeks to
manage its assets and liabilities in a manner that will limit interest rate
risk and thus stabilize longrun earning power. Management believes that a
rise or fall in interest rates will not materially effect earnings.
The Bank has maintained adequate net interest margins for the three-month and
six-month periods ended June 30, 1995 and 1994 by earning satisfactory
yields on loans and securities and funding these assets with a favorable
deposit mix containing a significant level of noninterest-bearing demand
deposits.
Fully-tax-equivalent net interest income showed a .2% increase from $3,259
for the three-month period ended June 30, 1994 to $3,265 for the
three-month period ended June 30, 1995. During the same period, total
fully-tax-equivalent interest income increased by 14.6% from $5,068 to
$5,807 and total interest expense increased by 40.5% from $1,809 to $2,542.
Fully-tax-equivalent net interest income as a percentage of total
earning assets has shown a decrease of .25% from 4.73% for the three-month
period ended June 30, 1994 to 4.48% for the three-month period ended June 30,
1995.
Fully-tax-equivalent net interest income showed a 3.8% increase from $6,292
for the six-month period ended June 30, 1994 to $6,529 for the six-month
period ended June 30, 1995. During the same period, total fully-tax-
equivalent interest income increased by 15.2% from $9,870 to $11,367 and
total interest expense increased by 35.2% from $3,578 to $4,838. Fully-tax-
equivalent net interest income as a percentage of total earning assets has
shown no change from 4.58% for the six-month period ended June 30, 1994 to
4.58% for the six-month period ended June 30, 1995.
The tables on the following four pages present selected financial data and
an analysis of net interest income.
15
<PAGE>
CNB Corporation and Subsidiary
Selected Financial Data
<TABLE>
<CAPTION>
Three Months Ended 6/30/95 Three Months Ended 6/30/94
Avg. Interest Avg. Ann. Avg. Interest Avg.Ann.
Balance Income/ Yield or Balance Income/ Yield or
Expense(1) Rate Expense(1) Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Earning assets:
Loans, net of unearned income $151,701 $ 3,642 9.60% $140,099 $ 3,009 8.59%
Securities:
Taxable 107,708 1,593 5.92 109,319 1,589 5.81
Tax-exempt 15,045 333 8.85 16,566 376 9.08
Federal funds sold and
securities purchased under
agreement to resell 16,878 239 5.66 9,866 94 3.81
Other earning assets 0 0 - 0 0 -
Total earning assets 291,332 5,807 7.97 275,850 5,068 7.35
Other assets 21,090 16,506
Total assets $312,422 $292,356
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits $189,158 1,969 4.16 $187,967 $ 1,498 3.19
Federal funds purchased and
securities sold under
agreement to repurchase 42,593 559 5.25 36,740 301 3.28
Other short-term borrowings 963 14 5.82 1,204 10 3.32
Obligations under mortgages
and capitalized leases 15 0 8.00 25 0 8.00
Total interest-bearing
liabilities $232,729 $ 2,542 4.37 $225,936 $ 1,809 3.20
Noninterest-bearing deposits 46,612 36,901
Other liabilities 2,368 1,470
Stockholders' equity 30,713 28,049
Total liabilities and
stockholders' equity $312,422 $292,356
Net interest income as a percent
of total earning assets $291,332 $ 3,265 4.48 $275,850 $ 3,259 4.73
(1) Tax-equivalent adjustment
based on a 34% tax rate $ 113 $ 128
Ratios:
Annualized return on average total assets 1.07 1.29
Annualized return on average stockholders' equity 10.90 13.49
Cash dividends declared as a percent of net income 0 0
Average stockholders' equity as a percent of:
Average total assets 9.83 9.59
Average total deposits 13.03 12.31
Average loans, net of unearned income 20.25 20.02
Average earning assets as a percent of
average total assets 93.25 94.35
</TABLE>
16
<PAGE>
CNB Corporation and Subsidiary
Selected Financial Data
<TABLE>
<CAPTION>
Six Months Ended 6/30/95 Six Months Ended 6/30/94
Avg. Interest Avg. Ann. Avg. Interest Avg.Ann.
Balance Income/ Yield or Balance Income/ Yield or
Expense(1) Rate Expense(1) Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Earning assets:
Loans, net of unearned income $149,261 $ 7,112 9.53% $137,308 $ 5,785 8.43%
Securities:
Taxable 108,879 3,235 5.94 107,115 3,086 5.76
Tax-exempt 15,262 682 8.94 16,459 764 9.28
Federal funds sold and
securities purchased under
agreement to resell 11,842 338 5.71 14,140 235 3.32
Other earning assets 0 0 - 0 0 -
Total earning assets 285,244 11,367 7.97 275,022 9,870 7.18
Other assets 20,462 19,007
Total assets $305,706 $294,029
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits $190,240 3,819 4.01 $186,547 $ 2,948 3.16
Federal funds purchased and
securities sold under
agreement to repurchase 38,832 982 5.06 38,649 609 3.15
Other short-term borrowings 1,305 37 5.67 1,246 20 3.21
Obligations under mortgages
and capitalized leases 16 0 8.00 25 1 8.00
Total interest-bearing
liabilities $230,393 $ 4,838 4.20 $226,467 $ 3,578 3.16
Noninterest-bearing deposits 43,275 38,098
Other liabilities 1,987 1,600
Stockholders' equity 30,051 27,864
Total liabilities and
stockholders' equity $305,706 $294,029
Net interest income as a percent
of total earning assets $285,244 $ 6,529 4.58 $275,022 $ 6,292 4.58
(1) Tax-equivalent adjustment
based on a 34% tax rate $ 232 $ 260
Ratios:
Annualized return on average total assets 1.16 1.26
Annualized return on average stockholders' equity 11.75 13.26
Cash dividends declared as a percent of net income 0 0
Average stockholders' equity as a percent of:
Average total assets 9.83 9.48
Average total deposits 12.87 12.40
Average loans, net of unearned income 20.13 20.29
Average earning assets as a percent of
average total assets 93.31 93.54
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Three Months Ended June 30, 1995 and 1994
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Change
Average Average Interest Interest Change Change Due To
Volume Volume Yield/Rate Yield/Rate Earned/Paid Earned/Paid Due to Due to Rate X
1995 1994 1995 (1) 1994 (1) 1995 (1) 1994 (1) Variance Rate Vol Vol
Earning Assets:
Loans, Net of unearned
income (2) 151,701 140,099 9.60% 8.59% 3,642 3,009 633 354 249 30
Investment securities:
Taxable 107,708 109,319 5.92% 5.81% 1,593 1,589 4 29 (24) (1)
Tax-exempt 15,045 16,566 8.85% 9.08% 333 376 (43) (9) (35) 1
Federal funds sold and
securities purchased under
agreement to resell 16,878 9,866 5.66% 3.81% 239 94 145 45 67 33
Other earning assets 0 0 - - 0 0 0 - - -
Total Earning Assets 291,332 275,850 7.97% 7.35% 5,807 5,068 739 419 257 63
Interest-bearing Liabilities:
Interest-bearing deposits 189,158 187,967 4.16% 3.19% 1,969 1,498 471 458 10 3
Federal funds purchased and
securities sold under
agreement to repurchase 42,593 36,740 5.25% 3.28% 559 301 258 181 48 29
Other short-term borrowings 963 1,204 5.82% 3.32% 14 10 4 7 (2) (1)
Mortgage indebtedness and
obligations under capital-
ized leases 15 25 8.00% 8.00% 0 0 0 - - -
Total Interest-bearing
Liabilities 232,729 225,936 4.37% 3.20% 2,542 1,809 733 646 56 31
Interest-free Funds
Supporting Earning Assets 58,603 49,914
Total Funds Supporting
Earning Assets 291,332 275,850 3.49% 2.62% 2,542 1,809 733 646 56 31
Interest Rate Spread 3.60% 4.15%
Impact of Non-interest-bearing
Funds on Net Yield on Earning
Assets .88% .58%
Net Yield on Earning Assets 4.48% 4.73% 3,265 3,259
</TABLE>
(1) Tax-equivalent adjustment based on a 34% tax rate.
(2) Includes non-accruing loans which does not have a material effect on the
Net Yield on Earning Assets.
18
<PAGE>
<TABLE>
<CAPTION>
CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Six Months Ended June 30, 1995 and 1994
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Change
Average Average Interest Interest Change Change Due To
Volume Volume Yield/Rate Yield/Rate Earned/Paid Earned/Paid Due to Due To Rate X
1995 1994 1995 (1) 1994 (1) 1995 (1) 1994 (1) Variance Rate Vol Vol
Earning Assets:
Loans, Net of unearned
income (2) 149,261 137,308 9.53% 8.43% 7,112 5,785 1,327 755 503 69
Investment securities:
Taxable 108,879 107,115 5.94% 5.76% 3,235 3,086 149 96 51 2
Tax-exempt 15,262 16,459 8.94% 9.28% 682 764 (82) (28) (56) 2
Federal funds sold and
securities purchased under
agreement to resell 11,842 14,140 5.71% 3.32% 338 235 103 169 (38) (28)
Other earning assets 0 0 - - 0 0 0 - - -
Total Earning Assets 285,244 275,022 7.97% 7.18% 11,367 9,870 1,497 992 460 45
Interest-bearing Liabilities:
Interest-bearing deposits 190,240 186,547 4.01% 3.16% 3,819 2,948 871 793 58 20
Federal funds purchased and
securities sold under
agreement to repurchase 38,832 38,649 5.06% 3.15% 982 609 373 369 3 1
Other short-term borrowings 1,305 1,246 5.67% 3.21% 37 20 17 15 1 1
Mortgage indebtedness and
obligations under capital-
ized leases 16 25 8.00% 8.00% 0 1 (1) - (1) -
Total Interest-bearing
Liabilities 230,393 226,467 4.20% 3.16% 4,838 3,578 1,260 1,177 61 22
Interest-free Funds
Supporting Earning Assets 54,851 48,555
Total Funds Supporting
Earning Assets 285,244 275,022 3.39% 2.60% 4,838 3,578 1,260 1,177 61 22
Interest Rate Spread 3.77% 4.02%
Impact of Non-interest-bearing
Funds on Net Yield on Earning
Assets .81% .56%
Net Yield on Earning Assets 4.58% 4.58% 6,529 6,292
</TABLE>
(1) Tax-equivalent adjustment based on a 34% tax rate.
(2) Includes non-accruing loans which does not have a material effect on the
Net Yield on Earning Assets.
19
<PAGE>
NET INCOME (continued)
Provision for Possible Loan Losses - It is the policy of the bank to maintain
the reserve for possible loan losses at the greater of 1.20% of net loans or
the percentage based on the actual loan loss experience over the previous
five years. In addition, management may increase the reserve to a level
above these guidelines to cover potential losses identified in the portfolio.
The provision for possible loan losses was $15 for the three-month period
ended June 30, 1995 and $80 for the three-month period ended June 30, 1994.
Net loan charge-offs/(recoveries) totaled $(2) for the three-month period
ended June 30, 1995 and $55 for the same period in 1994.
The provision for possible loan losses was $80 for the six-month period ended
June 30, 1995 and $100 for the six-month period ended June 30, 1994. Net
loan charge-offs/(recoveries) totaled $(27) for the six-month period ended
June 30, 1995 and $121 for the same period in 1994.
The reserve for possible loan losses as a percentage of net loans was 1.56%
at June 30, 1995 and 1.53% at June 30, 1994. The decreased provision
during the three-month and six-month period ended June 30, 1995 was due to
the decreased level of net loan charge-offs and to the expectation of
continued low net charge-offs through the remainder of 1995.
Securities Transactions - The bank recognized a loss on security transactions
for the three-month and six-month period ended June 30, 1994 of $25. During
the second quarter of 1994, management sold approximately $8 million in
treasury bonds at a net loss and reinvested in longer maturities to take
advantage of the steeply-sloped treasury curve. The bank recognized a gain
on security transactions for the three-month and six-month period ended June
30, 1995 of $26. During the first quarter of 1995, management sold
approximately $3 million in treasury bonds to fund loan growth and to adjust
the Bank's interest rate sensitivity position. At June 30, 1995, December
31, 1994, and June 30, 1994 market value appreciation/(depreciation) in the
securities portfolio totaled $569, $(4,645), and $(1,448). As indicated,
market value was sharply reduced due to rising market interest rates in 1994
but has recovered in 1995.
Other Income - Other income, net of any gains/losses on security
transactions, decreased by 8.9% from $730 for the three-month period ended
June 30, 1994 to $665 for the three-month period ended June 30, 1995.
Other income, net of any gains/losses on security transactions, decreased by
8.3% from $1,372 for the six-month period ended June 30, 1994 to $1,258 for
the six-month period ended June 30, 1995.
This decrease in the three-month and six-month period June 30, 1995 was
primarily due to flat deposit-related service charge rates and also an
increase in the earnings allowance rate used to offset service charges on
commercial accounts.
Other Expenses - Other expenses increased by 9.6% from $2,326 for the
three-month period ended June 30, 1994 to $2,550 for the three-month period
ended June 30, 1995. The major components of other expenses are salaries
and employee benefits which increased 8.2% from $1,314 to $1,422; occupancy
expense which increased 10.1% from $337 to $371; and other operating
expenses which increased by 12.1% from $675 to $757.
Other expenses increased by 8.0% from $4,541 for the six-month period ended
June 30, 1994 to $4,906 for the six-month period ended June 30, 1995. The
major components of other expenses are salaries and employee benefits which
increased 6.7% from $2,590 to $2,764; occupancy expense which increased 7.0%
from $689 to $737; and other operating expense which increased by 11.3% from
$1,261 to $1,404.
20
<PAGE>
Other Expenses (continued) - The increase in the three-month and six-month
period ended June 30, 1995 salaries and employee benefits expense is
attributed to normal salary adjustments, an increase in the cost of providing
health care insurance, and increased staffing for the new Myrtle Beach
office. The increase in occupancy expense is primarily due to the costs of
upgrading EDP facilities. The increase in other operating costs is due to
increased account volumes, slight inflationary pressure, and an increase in
the cost of providing credit card and merchant discount services.
Income Taxes - Provisions for income taxes decreased 14.3% from $484 for the
three-month period ended June 30, 1994 to $415 for the three-month period
ended June 30, 1995. Income before income taxes less interest on tax-exempt
investment securities decreased by 12.7% from $1,182 for the three-month
period ended June 30, 1994 to $1,032 for the same period in 1995. State tax
liability decreased as income before income taxes decreased 12.4% from $1,430
to $1,252 during the same period.
Provisions for income taxes decreased 7.0% from $891 for the six-month period
ended June 30, 1994 to $829 for the six-month period ended June 30, 1995.
Income before income taxes less interest on tax-exempt investment securities
decreased by 4.0% from $2,234 for the six-month period ended June 30, 1994 to
$2,145 for the same period in 1995 and state tax liability decreased as
income before income taxes decreased 5.2% from $2,738 to $2,595 during the
same period.
LIQUIDITY
The bank's liquidity position is primarily dependent on short-term demands
for funds caused by customer credit needs and deposit withdrawals and upon
the liquidity of bank assets to meet these needs. The bank's liquidity
sources include cash and due from banks, federal funds sold, and short-term
investments. In addition, the bank has established federal funds lines of
credit from correspondent banks and has the ability, on a short-term basis,
to borrow funds from the Federal Reserve System. Management feels that
liquidity sources are more than adequate to meet funding needs.
CAPITAL RESOURCES
Total stockholders' equity was $31,543, $28,857, $26,820, and $23,443 at June
30, 1995, December 31, 1994, December 31, 1993, and December 31, 1992,
representing 9.76%, 9.71%, 9.46%, and 9.12% of total assets, respectively.
At June 30, 1995, the Bank exceeds quantitative measures established by
regulation to ensure capital adequacy (see NOTE 12 - REGULATION
RESTRICTIONS). Capital is considered sufficient by management to meet
current and prospective capital requirements and to support anticipated
growth in bank operations.
EFFECTS OF REGULATORY ACTION
The management of the Company and the Bank is not aware of any current
recommendations by the regulatory authorities which, if they were to be
implemented, would have a material effect on liquidity, capital
resources, or operations.
Effective January 1, 1994, the Company adopted the provisions of SFAS No.
114, "Accounting by Creditors for Impairment of a Loan." SFAS No. 114, as
amended by SFAS No. 118, requires that impaired loans be measured based on
the present value of expected future cash flows or the underlying collateral
values as defined in the pronouncement. The adoption of SFAS No. 114 had no
effect on the balance sheet or income statement of the Company. The Company
includes the provisions of SFAS No. 114 in the allowance for loan losses.
21
<PAGE>
EFFECTS OF PLANNED EXPANSION
During the third quarter of 1994, the Bank requested and received approval to
build a ninth banking office on 21st Avenue North in Myrtle Beach, South
Carolina. This office will be approximately 12,000 square feet with long-
term expansion capabilities of up to 18,000 square feet. Serving as a
regional office in the Myrtle Beach market, the cost to build and equip the
office at approximately $2.6 million is considerably higher than our other
branch offices. Depreciation, staffing, and additional overhead costs will
impact earnings over the short term. But, as the office develops, additional
revenue streams should offset costs and provide an adequate return on
investment. Construction began in November, 1994 and the office is scheduled
to open August 7, 1995
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An Annual Meeting of shareholders of CNB Corporation was held in the main
office building of The Conway National Bank at 1400 Third Avenue, Conway,
South Carolina, at 4:15 p.m., Conway, South Carolina time, on April 11, 1995.
The purpose of the Annual Meeting was to: (1) elect four Directors; and (2)
ratify the appointment of Elliott, Davis, and Company, Certified Public
Accountants, as the Company's independent public accountant for the fiscal
year ending December 31, 1995.
Proxies for the meeting were solicited pursuant to Regulation 14 under the
Act; there was no solicitation in opposition to the management's nominees as
listed in the proxy statement; and all of such nominees were elected.
There were 338,453 of the 479,093 shares issued present or represented by
proxy and all shares were voted for the election of the four Directors listed
as management's nominees in the proxy statement and for the ratification of
Elliott, Davis, and Company as the Company's 1995 independent public
accountant.
EXHIBITS AND REPORTS ON FORM 8-K
See Exhibit Index appearing below.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter covered by this report.
EXHIBIT INDEX
Exhibit
Number
27 Financial Data Schedule - Article 9 Financial Data Schedule for
10-Q for electronic filers (pages 24 and 25).
All other exhibits, the filing of which are required with this Form, are not
applicable.
22
<PAGE>
CNB Corporation
SIGNATURE
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)
Paul R. Dusenbury
_________________________________________
Paul R. Dusenbury
Treasurer
(Chief Financial and Accounting Officer)
Date: August 9, 1995
23
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MORE
DETAILED FINANCIAL STATEMENTS OF THE COMPANY AND SUBSIDIARY AND NOTES THERETO
INCLUDED ELSEWHERE IN THIS REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIALS.
</LEGEND>
<CIK> 0000764581
<NAME> CNB CORP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 12,428
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 24,625
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,019
<INVESTMENTS-CARRYING> 82,034
<INVESTMENTS-MARKET> 82,145
<LOANS> 151,388
<ALLOWANCE> 2,327
<TOTAL-ASSETS> 323,208
<DEPOSITS> 239,887
<SHORT-TERM> 49,611
<LIABILITIES-OTHER> 2,167
<LONG-TERM> 0
<COMMON> 14,791
0
0
<OTHER-SE> 26,752
<TOTAL-LIABILITIES-AND-EQUITY> 323,208
<INTEREST-LOAN> 7,112
<INTEREST-INVEST> 3,685
<INTEREST-OTHER> 338
<INTEREST-TOTAL> 11,135
<INTEREST-DEPOSIT> 3,819
<INTEREST-EXPENSE> 4,838
<INTEREST-INCOME-NET> 6,297
<LOAN-LOSSES> 80
<SECURITIES-GAINS> 26
<EXPENSE-OTHER> 4,906
<INCOME-PRETAX> 2,595
<INCOME-PRE-EXTRAORDINARY> 1,766
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,766
<EPS-PRIMARY> 3.69
<EPS-DILUTED> 3.69
<YIELD-ACTUAL> 4.58
<LOANS-NON> 547
<LOANS-PAST> 141
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,647
<ALLOWANCE-OPEN> 2,220
<CHARGE-OFFS> 204
<RECOVERIES> 231
<ALLOWANCE-CLOSE> 2,327
<ALLOWANCE-DOMESTIC> 2,327
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
