-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HlrVRRE7XQYg1I+7VYsGcqx3PSExnzPWfIFxRyC4uXbokJZHL0ThhtU1DaUDw3yu 2hRbNgToeA6ZR4+6USh7Lg== 0000950124-04-002402.txt : 20040517 0000950124-04-002402.hdr.sgml : 20040517 20040517085108 ACCESSION NUMBER: 0000950124-04-002402 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNB CORP /MI/ CENTRAL INDEX KEY: 0000779125 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 362662386 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-00737 FILM NUMBER: 04809880 BUSINESS ADDRESS: STREET 1: PO BOX 10 CITY: CHEBOYGAN STATE: MI ZIP: 49721 BUSINESS PHONE: 6166277111 MAIL ADDRESS: STREET 1: P O BOX 10 CITY: CHEBOYGAN STATE: MI ZIP: 49721 10-Q 1 k84965e10vq.txt QUARTERLY REPORT FOR PERIOD ENDED 03/31/04 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, 2004 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 Act). Yes No (X) As of April 26, 2004 there were 1,247,282 shares of the issuer's common stock outstanding. ITEM 1-FINANCIAL STATEMENTS (CONDENSED) CONSOLIDATED BALANCE SHEETS (dollars in thousands,except per share data)
March 31, December 31, 2004 2003 ASSETS (Unaudited) Cash and due from banks $ 5,435 $ 6,308 Interest-bearing deposits with other financial institutions 1,064 2,057 Federal funds sold 2,250 8,700 -------- -------- Total cash and cash equivalents 8,749 17,065 Securities available for sale 78,546 75,717 Securities held to maturity (market value of $4,737 in 2004 and $5,009 in 2003) 4,627 4,892 Other securities 6,382 6,312 Loans, held for sale 1,702 468 Loans, net of allowance for loan losses of $1,546 in 2004 and $1,575 in 2003 142,521 141,442 Premises and equipment, net 4,335 4,084 Other assets 4,577 4,426 -------- -------- Total assets $251,439 $254,406 ======== ======== LIABILITIES Deposits Noninterest-bearing $ 31,708 $ 36,062 Interest-bearing 190,224 188,852 -------- -------- Total deposits 221,932 224,914 Other liabilities 3,930 4,354 -------- -------- Total liabilities 225,862 229,268 -------- -------- SHAREHOLDERS' EQUITY Common stock - $2.50 par value; 2,000,000 shares authorized; and 1,247,282 and 1,243,939 shares issued and outstanding in 2004 and 2003 3,118 3,110 Additional paid-in capital 21,021 20,932 Retained earnings 969 783 Accumulated other comprehensive income, net of tax 469 313 -------- -------- Total shareholders' equity 25,577 25,138 -------- -------- Total liabilities and shareholders' equity $251,439 $254,406 ======== ========
See accompanying notes to consolidated financial statements. 2 CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data)
Three months ended March 31, 2004 2003 (Unaudited) INTEREST INCOME Loans, including fees $ 2,415 $ 2,728 Securities Taxable 441 469 Tax exempt 187 230 Interest on federal funds sold 28 49 ------- ------- Total interest income 3,071 3,476 INTEREST EXPENSE ON DEPOSITS 756 942 ------- ------- NET INTEREST INCOME 2,315 2,534 Provision for loan losses -- -- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,315 2,534 ------- ------- NONINTEREST INCOME Service charges and fees 227 234 Net realized gains from sales of loans 62 203 Loan servicing fees, net of amortization 33 (30) Other income 61 40 ------- ------- Total noninterest income 383 447 NONINTEREST EXPENSES Salaries and benefits 1,011 975 Occupancy 202 196 Other expenses 408 467 ------- ------- Total noninterest expense 1,621 1,638 INCOME BEFORE INCOME TAXES 1,077 1,343 Income tax expense 304 354 ------- ------- NET INCOME $ 773 $ 989 ======= ======= TOTAL COMPREHENSIVE INCOME $ 929 $ 909 ======= ======= Return on average assets (annualized) 1.22% 1.58% Return on average equity (annualized) 12.12% 15.70% Basic earnings per share $ .62 $ 0.79 Diluted earnings per share $ .62 $ 0.79
See accompanying notes to consolidated financial statements. 3 CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands)
Three months ended March 31, 2004 2003 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 773 $ 989 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 300 211 Loans originated for sale (4,195) (9,646) Proceeds from sales of loans originated for sale 3,001 9,777 Gain on sales of loans (62) (203) Decrease (increase)in other assets (208) 180 Decrease in other liabilities 263 72 -------- -------- Total adjustments (901) 391 -------- -------- Net cash from operating activities (128) 1,380 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturities of securities available for sale 7,618 6,877 Purchase of securities available for sale (10,408) (13,355) Proceeds from maturities of securities held to maturity 265 410 Purchase of securities held to maturity -- -- Proceeds from maturities of other securities 40 320 Purchase of other securities (110) (600) Net change in portfolio loans (1,079) (1,266) Premises and equipment expenditures (355) (20) -------- -------- Net cash from investing activities (4,029) (7,634) CASH FLOWS FROM FINANCING ACTIVITIES Net increase(decrease) in deposits (2,982) 1,366 Dividends paid (1,186) (1,188) Net proceeds from exercise of stock options 24 1 Purchases of common stock (15) (8) -------- -------- Net cash from financing activities (4,159) 171 Net change in cash and cash equivalents (8,316) (6,083) Cash and cash equivalents at beginning of year 17,065 22,733 -------- -------- Cash and cash equivalents at end of period $ 8,749 $ 16,650 ======== ======== Cash paid during the period for: Interest $ 749 $ 1,451 Income taxes $ 382 $ 323
See accompanying notes to consolidated financial statements. 4 NOTES TO 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 consolidation. 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 financial statements included in the CNB Corporation's Form 10-K for the year ended December 31, 2003. 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. Stock Compensation: The following proforma information presents net income and basic and diluted earnings per share had the fair value method been used to measure compensation for stock options granted. The exercise price of options granted is equivalent to the market price of the underlying stock at the stock grant date; therefore no compensation expense has been recorded for stock options granted.
2004 2003 ---- ---- Net income as reported $ 773 $ 989 Deduct: Stock based compensation expense determined under fair value method (11) -- -------- -------- Proforma net income 762 989 Basic earnings per share as reported $ 0.62 $ 0.79 Proforma basic earnings per share 0.61 0.79 Diluted earnings per share as reported 0.62 0.79 Proforma diluted earnings per share 0.61 0.79
There were no stock options granted during the three months ended March 31, 2004 and 2003. 5 In future years, as additional options are granted, the proforma effect on net income and earnings per share may increase. Stock options are used to reward certain officers and provide them with an additional equity interest. Options are issued for 10 year periods and have varying vesting schedules. Information about options available for grant and options granted follows:
Weighted Average Available Options Exercise For Grant Outstanding Price Balance at December 31, 2003 9,952 39,342 $44.10 Options exercised -- (8,173) 31.24 Options issued -- -- -- ----- ------ Balance at March 31, 2004 9,952 31,169 $47.48 ===== ======
At March 31, 2004 options outstanding had a weighted average remaining life of approximately 5.9 years. There were 22,507 options exercisable at March 31, 2004 with a weighted-average exercise price of $ 47.07. There have been no significant changes in the Company's critical accounting policies since December 31, 2003. 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, 2004 the weighted average shares outstanding in calculating basic earnings per share were 1,244,405 while the weighted average number of shares for diluted earnings per share were 1,250,706. As of March 31, 2004 there were 10,976 shares not considered in the earnings per share calculation because they were antidilutive. For the three month period ending March 31, 2003 the weighted average shares outstanding in calculating basic earnings per share were 1,247,727 while the weighted average number of shares for diluted earnings per share were 1,250,878. 6 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, 2004. FINANCIAL CONDITION The Company's balances of cash and cash equivalents decreased $8.3 million or 48.7%. During the period ending March 31, 2004, $128,000 in cash was utilized by operating activities. Investing activities utilized $ 4.0 million during the three months ended March 31, 2004 and financing activities utilized $4.2 million due to a decrease in deposits and payments of cash dividends. SECURITIES The securities portfolio increased $2.6 million or 3.0%, since December 31, 2003. The available for sale portfolio increased to 87.7% of the investment portfolio up from 87.1% 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, 2004 U.S. Government agency $52,338 $ 594 $ -- State and municipal 26,208 607 (1) ------- ------- ------- $78,546 $ 1,201 $ (1) ======= ======= ======= DECEMBER 31, 2003 U.S. Government agency $48,802 $ 363 $ (28) State and municipal 26,915 638 (8) ------- ------- ------- $75,717 $ 1,001 $ (36) ======= ======= =======
7 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, 2004 State and municipal $4,627 $ 110 $ -- $4,737 ====== ====== ====== ====== DECEMBER 31, 2003 State and municipal $4,892 $ 117 $ -- $5,009 ====== ====== ====== ======
The carrying amount and fair value of securities by contractual maturity at March 31, 2004 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 $14,286 $ 723 $ 727 Due from one to five years 60,501 2,113 2,193 Due from five to ten years 1,436 344 371 Due after ten years 2,323 1,447 1,446 ------- ------- ------- $78,546 $ 4,627 $ 4,737 ======= ======= =======
LOANS Loans at March 31, 2004 increased $ 2.3 million from December 31, 2003. The table below shows total loans outstanding by type, in thousands of dollars, at March 31, 2004 and December 31, 2003 and their percentages of the total loan portfolio. All loans are domestic. A quarterly review of loan concentrations at March 31, 2004 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 11.2% of total loans.
March 31, 2004 December 31, 2003 Balance % of total Balance % of total ------- ---------- ------- ---------- Portfolio loans: Residential real estate $ 87,525 60.75% $ 88,574 61.93% Consumer 9,284 6.44% 9,660 6.75% Commercial real estate 37,718 26.18% 35,258 24.65% Commercial 9,554 6.63% 9,540 6.67% --------- ------ --------- ------ 144,081 100.00% 143,032 100.00% Deferred loan origination fees, net (14) (15) Allowance for loan losses (1,546) (1,575) --------- --------- Loans, net $ 142,521 $ 141,442 ========= =========
8 ALLOWANCE FOR LOAN LOSSES An analysis of the allowance for loan losses, in thousands of dollars, for the three months ended March 31, follows:
2004 2003 ------- ------- Beginning balance $ 1,575 $ 1,669 Provision for loan losses -- -- Charge-offs (30) (22) Recoveries 1 2 ------- ------- Ending balance $ 1,546 $ 1,649 ======= =======
The Company had no impaired loans during 2004 and 2003. 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, 2004 2003 (dollars in thousands) Nonaccrual $ 211 $ -- Loans past due 90 days or more 193 408 Troubled debt restructurings -- ---- ---- Total nonperforming loans $404 $408 ==== ==== Percent of total loans 0.28% 0.29%
DEPOSITS Deposits at March 31, 2004 decreased $ 3.0 million or 1.3% since December 31, 2003. Interest-bearing deposits increased $ 1.4 million or .7% for the three months ended March 31, 2004, while noninterest-bearing deposits decreased $ 4.4 million or 12.1%. LIQUIDITY AND FUNDS MANAGEMENT As of March 31, 2004, the Company had $ 2.3 million in federal funds sold, $ 78.5 million in securities available for sale and $ 723,000 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 36.8% of total deposits as of March 31, 2004. Total equity of the Company at March 31, 2004 was $ 25.6 million compared to $25.1 million at December 31, 2003. 9 RESULTS OF OPERATIONS CNB Corporation's 2004 net income for the first three months was $ 773,000 a decrease of $ 216,000 compared to 2003 results. This decrease can be partially attributed to a decline in interest income due to the low rate environment. Also, the decrease can be attributed to the decline in refinance activity and the resulting decline of gains on the sale of loans the Company experienced at March 31, 2004 compared to March 31, 2003. Basic earnings per share and diluted earnings per share were $0.62 per share for 2004 compared to $0.79 for 2003. The return on assets was 1.22% for the first three months of the year versus 1.58% for the same period in 2003. The return on equity was 12.12% compared to 15.70% for the same period last year. For the first three months of 2004, net interest income was $ 2.3 million representing a decrease of 8.6% from the same period in 2003. This decrease can be attributed to a greater decline in interest income compared to interest expense for the first three months of 2004. Net interest margin decreased to 3.84% for the quarter ending March 31, 2004 compared to 4.32% for the period ending March 31, 2003. This change can be attributable to a decline in overall interest rates from 2003 to 2004. Noninterest income for the three months ending March 31, 2004 was $ 383,000 a decrease of $ 64,000 or 14.3% from the same period last year. This decrease can be attributed to a decline in the number of loans sold to the secondary market which in turn decreased the gain on sale of loans received. Noninterest expense for the first three months of 2003 was $ 1.6 million, the same as 2003. The decline in the income tax expense for the Company during the first three months of 2004 compared to 2003 resulted from lower income before tax and from a decline in tax exempt interest income which increased the effective tax rate by 2% compared to 2003. 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, 2003 Management Discussion and Analysis appearing in the December 31, 2003 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. 10 There have been no changes in the Corporation's internal controls over financial reporting that occurred during the Corporation's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting. PART II-OTHER INFORMATION ITEM 1-LEGAL PROCEEDINGS None ITEM 2-CHANGES IN SECURITIES AND USE OF PROCEEDS ISSUER PURCHASES OF EQUITY SECURITIES PERIOD
Total Approximate number dollar value of shares of shares Total Average purchased that may number of price as part of publicly be purchased shares paid per announced under the plans purchased share plans or programs or programs January, 2004 None February, 2004 187 $ 51.00 187 $572,707 March, 2004 100 $ 51.00 100 $567,607 Total 287 $ 51.00 287 $567,607
The Company adopted a Stock Redemption Program on November 14, 2002 with the provision that it would remain in effect for six months or until $1 million had been expended on the purchase of common stock, whichever shall occur first. The Company extended the program in May 2003 until November 2003. The Company reinstated the program on December 24, 2003 and it will remain in effect until the $1 million originally allocated for common stock purchases is met. As of March 31, 2004, the Company has $ 567,607 remaining to purchase stock. ITEM 3-DEFAULTS UPON SENIOR SECURITIES None ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5-OTHER INFORMATION Robert E. Churchill retired as chief executive officer of Citizens National Bank effective May 1, 2004. His retirement, which was for health reasons, was regretfully acknowledged by the board of directors on April 8, 11 2004. Mr. Churchill continues as chairman of the board of the bank and chairman and chief executive officer of CNB Corporation. James C. Conboy, Jr., president of the bank was appointed the bank's chief executive officer effective May 1, 2004. Mr. Conboy joined Citizens National Bank in 1998 as president and chief operating officer and executive vice president of CNB Corporation. Mr. Conboy has been on the Company's board of directors since its inception in 1985 and on the bank's board of directors since 1983. Prior to 1998, he practiced law with the firm of Bodman, Longley and Dahling, LLP where his practice was concentrated on the law of financial institutions. ITEM 6-EXHIBITS AND REPORTS OF FORM 8-K a.) None b.) None 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/ Robert E. Churchill Date: May 13, 2004 ------------------------------ Robert E. Churchill Chairman and Chief Executive Officer /s/ James C. Conboy, Jr. Date: May 13, 2004 ------------------------------------ James C. Conboy, Jr. President and Chief Operating Officer 12 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 31.1 Certification of President and Chief Executive Officer 31.2 Certification of Chief Financial Officer 32.1 Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 EX-31.1 2 k84965exv31w1.txt CERTIFICATION OF PRESIDENT AND CEO EXHIBIT 31.1 CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER I, Robert E. Churchill, Chairman and Chief Executive Officer, certify that: 1) I have reviewed this quarterly report on Form 10-Q of CNB Corporation; 2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4) The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) [intentionally omitted]; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5) The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): e) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and f) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6) The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 13, 2004 /s/ Robert E. Churchill - ----------------------------- Robert E. Churchill Chairman and Chief Executive Officer EX-31.2 3 k84965exv31w2.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER I, Irene M. English, Treasurer, certify that: 1) I have reviewed this quarterly report on Form 10-Q of CNB Corporation; 2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4) The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) [intentionally omitted]; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5) The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): e) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and f) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6) The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 13, 2004 /s/ Irene M. English - ----------------------- Irene M. English Treasurer EX-32.1 4 k84965exv32w1.txt CERTIFICATION PURSUANT TO SECTION 906 EXHIBIT 32.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 ("Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the registrant. CNB CORPORATION (Registrant) /s/ Robert E. Churchill By: ------------------------------- Robert E. Churchill Chairman and Chief Executive Officer /s/ Irene M. English May 13, 2004 By: ------------------------------- Irene M. English Treasurer (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----