EX-99 2 k23317exv99.txt QUARTERLY BROCHURE OF CNB CORPORATION DATED JANUARY 29, 2008 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 --------- --------- 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 ========= =========
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 ------- ------- ------- 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 ======= ======= ======= BASIC NET INCOME PER SHARE $ 2.51 $ 2.68 $ 2.66 ======= ======= =======