CONWAY NATIONAL BANK [filing]

10-K/A 1 cnb10k01a.htm CNB CORP SC AMENDED 10-K FOR 12/31/01 CONWAY NATIONAL BANK [filing]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

(Mark One)
    X            Annual Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934

                 For the fiscal year ended December 31, 2001.

                                       or

                 Transition Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934 [No Fee Required]

                 For the Transition Period From            to            .

                      Commission file number 2-96350
                              CNB CORPORATION
           (Exact name of registrant as specified in its charter)

South Carolina                      57-0792402
(State of incorporation)            (I.R.S. Employer Identification No.)

1400 Third Avenue, P.O. Box 320, Conway, South Carolina         29528
       (Address of Principal executive offices)               (Zip Code)

     Registrant's telephone number, including area code: (843) 248-5721

        Securities registered pursuant to section 12(b) of the Act:

                                  None

        Securities registered pursuant to Section 12(g) of the Act:

                                                   Name of each exchange
Title of each class                                of which registered

Common Stock, par value $10.00 per share           None

     Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

     As of February 28, 2002, 716,912 shares of Common Stock of CNB Corporation were outstanding and the aggregate market value of such Common Stock held by nonaffiliates (based upon the price at which stock was sold during the 60 days prior to the date of filing) was approximately $76,709,584.

No Documents have been incorporated by reference.

TABLE OF CONTENTS

PART I

		Page
ITEM 1 ITEM 2 ITEM 3 ITEM 4	Description of Business and Supplementary Data Properties Legal Proceedings Submission of Matters to a Vote of Security Holders	1-23 24 24 25

PART II

ITEM 5

ITEM 6
ITEM 7

ITEM 8
ITEM 9

Market for the Registrant's Common Stock and Related Security Holder Matters
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations
Financial Statements
Disagreements on Accounting and Financial Disclosure

25

26
27-34

35-59
59

PART III

ITEM 10
ITEM 11
ITEM 12

ITEM 13

Directors and Executive Officers of the Registrant
Executive Compensation
Security Ownership of Certain Beneficial Owners
and Management
Certain Relationships and Related Transactions

60-64
65-68
69

69

PART IV

ITEM 14

Exhibits, Financial Statement Schedules, Notes to Financial Statements, and Reports on Form 8-K

PART I

ITEM 1. Description of Business

DESCRIPTION OF CNB CORPORATION

CNB Corporation (the "Company") is a South Carolina business corporation organized for the purpose of becoming a bank holding company for The Conway National Bank (the "Bank") under the Bank Holding Company Act. The Company was organized with $500 of capital on March 8, 1985; received approval from the Board of Governors of the Federal Reserve System on May 15, 1985, to become a bank holding company; and on June 10, 1985, acquired, in exchange for its own shares of common stock, substantially all of the common stock of the Bank. The activities of the Company are subject to the supervision of the Federal Reserve, and the Company may engage directly or through subsidiary corporations in those activities closely related to banking which are specifically permitted under the Bank Holding Company Act and Gramm-Leach-Bliley Act of 1999. See "Supervision and Regulation." Although the Company, after obtaining the requisite approval of the Federal Reserve and any other appropriate regulatory agency, may seek to enter businesses closely related to banking or to acquire existing businesses already engaged in such activities, the Company has not conducted, and has no present intent to conduct, negotiations for the acquisition or formation of any entities to engage in other permissible activities other than the acquisition of the Bank. There can be no assurance that the Company will form or acquire any other entity.

The Company and the Bank compete with those banks and other financial institutions that compete with the Bank. See "Competition." In addition, if the Company attempts to form or acquire other entities and engage in activities closely related to banking, the Company will be competing with other bank holding companies, financial holding companies, and companies currently engaged in lines of business or permissible activities in which the Company might engage, many of which have far greater assets and financial resources than the Company and a greater capacity to raise additional debt and equity capital than the Company.

DESCRIPTION OF THE SUBSIDIARY

The Bank is an independent community bank engaged in the general commercial banking business in Horry and Georgetown Counties, South Carolina. The Bank was organized on June 5, 1903 as the Bank of Horry located on Main Street in Conway, South Carolina. The Bank became a national bank operating as The Conway National Bank in 1914. On June 10, 1985, the Bank was reorganized into a bank holding company structure when substantially all of the common stock of the Bank was acquired by CNB Corporation in exchange for its own shares of common stock. In 1960, the Bank opened its first additional office at 1400 Third Avenue in Conway. Since that time, the following offices have been opened: Coastal Centre in Conway, Horry County, (1969); Surfside in Surfside Beach, Horry County, (1971); Northside, north of Myrtle Beach, Horry County, (1977); Red Hill in Conway, Horry County, (1981); Socastee, in the southern portion of Myrtle Beach, Horry County, (1986); Aynor in the Town of Aynor, Horry County, (1991), Myrtle Beach in the City of Myrtle Beach, Horry County, (1995), West Conway, in Conway, Horry County, (1998) and Murrells Inlet in Murrells Inlet, Georgetown County, (2000). The Surfside office was enlarged in 1977 and 1984, and the Coastal Centre office was expanded in 1980. The Third Avenue office, which houses the Bank's administrative offices and data processing facilities was expanded in 1982 from 11,150 square feet to 33,616 square feet. The Bank employs approximately 209 full-time-equivalent employees at its principal office and ten branch offices.

The Bank performs the full range of normal commercial banking functions. Some of the major services provided include checking accounts, NOW accounts, money market deposit accounts, IRA accounts, savings and time deposits of various types and loans to individuals for personal use, home mortgages, home improvement, automobiles, real estate, agricultural purposes and business needs. Commercial lending operations include various types of credit for business, industry, and agriculture. In addition, the Bank offers safe deposit boxes, wire transfer services, bank money orders, 24-hour teller machines on the STAR Network, internet banking, direct deposits and a MasterCard/Visa program. Through a correspondent relationship the Bank offers discount brokerage services. The Bank does not provide trust services; does not sell annuities; and does not sell mutual funds.

The majority of the Bank's customers are individuals and small to medium-sized businesses headquartered within the Bank's service area. The Bank has no material concentration of deposits from any single customer or group of customers. No significant portion of the Bank's loans is concentrated within a single industry or group of related industries. There are no material seasonal factors that would have any adverse effect on the Bank nor does the Bank rely on foreign sources of funds or income.

COMPETITION

The Bank actively competes with other institutions in Horry County in providing customers with deposit, credit and other financial services. The principal competitors of the Bank include local offices of six regional banks, two state-wide banks, five locally owned banks in Horry County and various other financial and thrift institutions. The regional banks with offices in Horry County are Bank of America, Centura Bank, First Union National Bank, First Citizens Bank and Trust Company, Branch Bank and Trust and Wachovia, N.A.. The statewide banks with offices in Horry County are National Bank of South Carolina and Carolina First Savings Bank. The locally owned banks having offices in Horry County are Anderson Brothers Bank, Coastal Federal Savings Bank, Horry County State Bank, Sandhills Bank, and Beach First National Bank. In addition, two thrift institutions have offices in Horry County. The Bank also competes with credit unions, money market funds, brokerage houses, insurance companies, mortgage companies, leasing companies, consumer finance companies and other financial institutions. Significant competitive factors include interest rates on loans and deposits, prices and fees for services, office location, customer service, community reputation, and continuity of personnel.

SUPERVISION AND REGULATION

General
The Company and the Bank are subject to an extensive collection of state and federal banking laws and regulations which impose specific requirements and restrictions on, and provide for general regulatory oversight with respect to, virtually all aspects of the Company's and the Bank's operations. The Company and the Bank are also affected by government monetary policy and by regulatory measures affecting the banking industry in general. The actions of the Federal Reserve System affect the money supply and, in general, the Bank's lending abilities in increasing or decreasing the cost and availability of funds to the Bank. Additionally, the Federal Reserve System regulates the availability of bank credit in order to combat recession and curb inflationary pressures in the economy by open market operations in United States government securities, changes in the discount rate on member bank borrowings, and changes in the reserve requirements against bank deposits.

During 1989 and 1991, the United States Congress enacted two major pieces of banking legislation: The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") and the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"). The FIRREA and FDICIA have significantly changed the commercial banking industry through, among other things, revising and limiting the types and amounts of investment authority, significantly increasing minimum regulatory capital requirements, and broadening the scope and power of federal bank and thrift regulators over financial institutions and affiliated persons in order to protect the deposit insurance funds and depositors. These laws, and the resulting implementing regulations, have subjected the Bank and the Company to extensive regulation, supervision and examination by the Office of the Comptroller of the Currency (OCC). This has resulted in increased administrative, professional and compensation expenses in complying with a substantially increased number of new regulations and policies. The regulatory structure created by these laws gives the regulatory authorities extensive authority in connection with their supervisory and enforcement activities and examination policies.

The Omnibus Consolidated Appropriations Act was enacted on September 30, 1996. Among the law's many provisions is a resolution of the BIF-SAIF deposit insurance premium disparity, many regulatory burden relief provisions and other bank-related legislation. The BIF-SAIF provisions are contained in the Deposit Insurance Funds Act of 1996.

The Gramm-Leach-Bliley Financial Modernization Act of 1999, effective March 11, 2000, allows bank holding companies to elect to be treated as financial holding companies. Financial holding companies may engage in a broad range of securities, insurance, and other financial activities.

The following is a brief summary of certain statutes, rules and regulations affecting the Company and the Bank. This summary is qualified in its entirety by reference to the particular statutory and regulatory provisions referred to below and is not intended to be an exhaustive description of the statutes or regulations applicable to the business of the Company and the Bank. Any change in applicable laws or regulations may have a material adverse effect on the business and prospects of the Company and the Bank.

The Company

The Company is a bank holding company within the meaning of the Federal Bank Holding Company Act of 1956, as amended (the "BHCA") and is registered as such with the Federal Reserve. The Company is required to file annual reports and other information regarding its business operations and those of its subsidiaries. It is also subject to supervision and regular examinations.

The BHCA requires every bank holding company to obtain the prior approval of the Federal Reserve Board before (i) it or any of its subsidiaries (other than a bank) acquires substantially all of the assets of any bank, (ii) it acquires ownership or control of any voting shares of any bank if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank, or (iii) it merges or consolidates with any other bank holding company.

The BHCA and the Federal Change in Bank Control Act, together with regulations promulgated by the Federal Reserve Board, require that, depending on the particular circumstances, either the Federal Reserve Board's approval must be obtained or notice must be furnished to the Federal Reserve Board and not disapproved prior to any person or company acquiring control of a bank holding company, such as the Company, subject to certain exemptions for certain transactions.

Under the BHCA, a bank holding company is generally prohibited from engaging in, or acquiring direct or indirect control of more than 5% of the voting shares of any company engaged in, nonbanking activities, unless the Federal Reserve Board, by order or regulation, has found those activities to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Some of the activities that the Federal Reserve Board has determined by regulation to be proper incidents to the business of a bank holding company include making or servicing loans and certain types of leases, engaging in certain insurance and discount brokerage activities, performing certain data processing services, acting in certain circumstances as a fiduciary or investment or financial adviser, owning savings associations and making investments in certain corporations or projects designed primarily to promote community welfare. The Company is also restricted in its activities by the provisions of the Glass-Stegall Act of 1933, which prohibits the Company from owning subsidiaries that are engaged principally in the issue, flotation, underwriting, public sale or distribution of securities. The regulatory requirements to which the Company is subject also set forth various conditions regarding the eligibility and qualifications of its directors and officers.

Under the Gramm-Leach-Bliley Act, the Company may elect to be treated as a financial holding company which would allow the Company to engage in a broad range of securities, insurance, and other financial activities.

The Bank

The Bank is subject to regulation and supervision, of which regular bank examinations are a part, by the Comptroller of the Currency. The Bank is a member of the Federal Deposit Insurance Corporation (the "FDIC") which currently insures the deposits of each member bank to a maximum of $100,000 per depositor. For this protection, each bank pays a statutory assessment and is subject to the rules and regulations of the FDIC. The Company is an "affiliate" of the Bank within the meaning of the Federal Reserve Act and the Federal Deposit Insurance Act, which imposes restrictions on loans by any subsidiary bank to the Company, on investments by any subsidiary bank in the stock or securities of the Company and on the use of such stock or securities as collateral security for loans by any subsidiary bank to any borrower. The Company will also be subject to certain restrictions with respect to engaging in the business of issuing, underwriting and distributing securities.

DESCRIPTION OF BANK STOCK

The Bank is authorized to issue 199,536 shares and has outstanding 193,536 shares of Bank Stock. The holders of Bank Stock are entitled to one vote per share. Holders of shares of Bank Stock have preemptive rights to purchase additional shares of Bank Stock and have cumulative rights in the elections of directors of the Bank. The National Bank Act generally provides for a majority vote of the Bank Stock to approve an action by the Bank but a two-thirds vote of the outstanding shares of Bank Stock is required to approve certain fundamental changes.

The National Bank Act, 12 U.S.C. Section 55, provides for the pro rata assessment of holders of common stock of a national bank in the event that its capital becomes impaired, such assessment to be enforced by sale to the extent necessary of the stock of the stockholder failing to pay his assessment. However, the Company has been advised that the Comptroller of the Currency has not used this provision in recent years. Accordingly, the shares of Bank Stock are subject to such assessment. However, the Bank's management does not anticipate the Bank Stock being assessed in this manner in the foreseeable future.

The holders of Bank Stock are entitled to receive such dividends as may be declared by the Board of Directors of the Bank out of funds legally available therefor. National banking laws and regulations impose restrictions on the payment of dividends and other distributions to stockholders. The National Bank Act provides that a national bank cannot pay dividends or other distributions to stockholders out of any portion of its capital and surplus, and that no dividend shall be paid by a bank in an amount greater than its "net profits then on hand" (as defined in the National Bank Act), after deduction of statutory "bad debts." In addition, 12 U.S.C. Section 60 provides that the approval of the Comptroller of the Currency is required for the payment of dividends by a national bank if the total of all dividends declared by the bank in any calendar year shall exceed the total of its "net profits" of that year combined with its "retained net profits" of the preceding two years. The same section further provides that, until the surplus fund of a national bank shall equal its common capital, no dividends shall be declared unless there has been carried to the surplus fund not less than one-tenth part of the bank's net profits of the preceding half year in the case of quarterly or semiannual dividends, or not less than one-tenth part of its net dividends. Also, under 12 U.S.C. Section 1818, the Comptroller of the Currency can restrict a national bank's dividend payments if they are deemed an unsafe or unsound banking practice.

In the event of the liquidation, dissolution or winding-up of the affairs of the Bank, the holders of outstanding shares of Bank Stock will be entitled to share pro rata according to their respective interests in the Bank's assets and funds remaining after payment or provision for payment of all debts and other liabilities of the Bank.

DESCRIPTION OF COMPANY STOCK

General

The Company is authorized to issue 1,500,000 shares of Company Stock and as of December 31, 2001, has 718,246 shares issued and 716,112 shares outstanding. The holders of Company Stock are entitled to one vote per share. Holders of shares of Company Stock do not have pre-emptive rights to purchase any additional shares of Company Stock and do not have cumulative voting rights in the election of directors. Without pre-emptive rights, stockholders could experience dilution of their voting power and of their equity interest in the Company.

The ability of the Company to pay dividends to the holders of the Company Stock depends upon the amount of dividends paid by the Bank to the Company. The holders of shares of Company Stock will be entitled to receive such dividends as may be declared by the Board of Directors of the Company out of the funds legally available therefor. The payment of dividends by the company are subject to the restrictions of South Carolina laws applicable to the declaration of dividends by a business corporation. Under such provisions, dividends may be paid in cash or in property of the Company, including the shares of other corporations, except when the Company is insolvent or would thereby be made insolvent or when the declaration of payment thereof would be contrary to any restrictions in the Company Articles. Dividends may be declared and paid only out of the unreserved and unrestricted earned surplus of the Company.

In the event of the liquidation, dissolution or winding-up of the affairs of the Company, the holders of outstanding shares of Company Stock will be entitled to share pro rata according to their respective interests in the Company's assets and funds remaining after payment or provision for payment of all debts and other liabilities of the Company.

All shares of Company Stock are fully paid and nonassessable.

The Bank is the transfer agent for shares of Company Stock.

DISCUSSION OF FORWARD-LOOKING STATEMENTS

Information in the enclosed report, other than historical information, may contain forward-looking statements that involve risks and uncertainties, including, but not limited to, timing of certain business initiatives of the Company, the Company's interest rate risk condition, and future regulatory actions of the Comptroller of the Currency and Federal Reserve System. It is important to note that the Company's actual results may differ materially and adversely from those discussed in forward-looking statements.

SUPPLEMENTARY DATA

QUARTERLY SHAREHOLDER INFORMATION

CNB CORPORATION
QUARTERLY SHAREHOLDER INFORMATION
(All Dollar Amounts, Except Per Share Data, in Thousands)

Summary of Operating Results by Quarter

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total interest income Total interest expense Net interest income Provision for possible loan losses Total other operating income Total other operating expenses Income before income taxes Income taxes Net Income Net income per weighted average shares outstanding	2001 $8,907 4,404 4,503 190 1,133 3,465 1,981 615 $1,366 $ 1.91	2000 $8,301 3,420 4,881 240 1,027 3,332 2,336 771 $1,565 $ 2.19	2001 $8,647 4,080 4,567 130 1,430 3,544 2,323 714 $1,609 $ 2.25	2000 $8,491 3,501 4,990 240 1,144 3,379 2,515 814 $1,701 $ 2.38	2001 $8,423 3,455 4,968 210 1,422 3,486 2,694 800 $1,894 $ 2.65	2000 $8,646 3,791 4,855 170 1,222 3,438 2,469 804 $1,665 $ 2.32	2001 $7,986 2,883 5,103 95 1,352 4,111 2,249 683 $1,566 $ 2.19	2000 $8,837 4,113 4,724 170 1,169 3,812 1,911 531 $1,380 $ 1.93

SUPPLEMENTARY INFLATION ADJUSTED FINANCIAL DATA

Inflation-adjusted accounting has not been applied to the Company's financial information as management does not believe this type of analysis provides useful information within the financial services industry. The Company currently does not meet the asset size criteria which would make detailed disclosure of inflation adjusted data mandatory.

GUIDE 3. STATISTICAL DISCLOSURE BY BANK
HOLDING COMPANIES

The following tables present additional statistical information about CNB Corporation and its operation and financial condition and should be read in conjunction with the consolidated financial statements and related notes thereto contained elsewhere in this report.

DISTRIBUTION OF ASSETS, LIABILITIES, AND STOCKHOLDERS' EQUITY:
INTEREST RATES AND INTEREST DIFFERENTIAL

The tables on the following 5 pages present selected financial data and an analysis of net interest income.

CNB Corporation and Subsidiary Selected Financial Data
Assets: Earning assets: Loans, net of unearned income Investment securities: Taxable Tax-exempt Federal funds sold and securities purchased under agreement to resell Total earning assets Other assets Total assets Liabilities and stockholder equity: Interest-bearing liabilities: Interest-bearing deposits Federal funds purchased and securities sold under agreement to repurchase Other short-term borrowings Total interest-bearing liabilities Noninterest-bearing deposits Other liabilities Stockholders' equity Total liabilities and stockholders' equity Net interest income as a percent of total earning assets (1) Tax-equivalent adjustment based on a 34% tax rate	Twelve Months Ended 12/31/01 Average Interest Avg.Annual Balance Income/ Yield or Expense(1) Rate
	$294,837 122,060 20,744 32,984 $470,625 33,771 $504,396 $332,870 30,882 3,409 $367,161 80,218 4,474 52,543 $504,396 $470,625	$ 24,967 6,778 1,411 1,287 $34,443 13,577 1,070 175 $ 14,822 $ 19,621 $ 480	8.47% 5.55 6.80 3.90 7.32 4.08 3.46 5.13 4.04 4.17%
Ratios: Annualized return on average total assets Annualized return on average stockholders' equity Cash dividends declared as a percent of net income Average stockholders' equity as a percent of: Average total assets Average total deposits Average loans, net of unearned income Average earning assets as a percent of average total assets			1.28% 12.25 38.96 10.42 12.72 17.82 93.30%

(2) The Company had no out-of-period adjustments or foreign activities.
     Loan fees of $295 are included in the above interest income. Loans on a
     non-accrual basis for the recognition of interest income totalling $633
     as of December 31, 2001 are included in loans, net of unearned income,
     for purpose of this analysis.

CNB Corporation and Subsidiary Selected Financial Data
Assets: Earning assets: Loans, net of unearned income Investment securities: Taxable Tax-exempt Federal funds sold and securities purchased under agreement to resell Total earning assets Other assets Total assets Liabilities and stockholder equity: Interest-bearing liabilities: Interest-bearing deposits Federal funds purchased and securities sold under agreement to repurchase Other short-term borrowings Total interest-bearing liabilities Noninterest-bearing deposits Other liabilities Stockholders' equity Total liabilities and stockholders' equity Net interest income as a percent of total earning assets (1) Tax-equivalent adjustment based on a 34% tax rate	Twelve Months Ended 12/31/00 Average Interest Avg.Annual Balance Income/ Yield or Expense(1) Rate
	$284,431 118,983 16,344 11,022 $430,780 31,580 $462,360 $299,460 30,953 4,206 $334,619 77,180 3,536 47,025 $462,360 $430,780	$ 25,771 7,045 1,167 689 $34,672 13,082 1,470 273 $ 14,825 $ 19,847 $ 397	9.06% 5.92 7.14 6.25 8.05 4.37 4.75 6.49 4.43 4.61%
Ratios: Annualized return on average total assets Annualized return on average stockholders' equity Cash dividends declared as a percent of net income Average stockholders' equity as a percent of: Average total assets Average total deposits Average loans, net of unearned income Average earning assets as a percent of average total assets			1.36% 13.42 39.66 10.17 12.49 16.53 93.17%

(2) The Company had no out-of-period adjustments or foreign activities.
    Loan fees of $237 are included in the above interest income. Loans on a
    non-accrual basis for the recognition of interest income totalling $305
    as of December 31, 2000 are included in loans, net of unearned income,
    for purpose of this analysis.

CNB Corporation and Subsidiary Selected Financial Data
Assets: Earning assets: Loans, net of unearned income Investment securities: Taxable Tax-exempt Federal funds sold and securities purchased under agreement to resell Total earning assets Other assets Total assets Liabilities and stockholder equity: Interest-bearing liabilities: Interest-bearing deposits Federal funds purchased and securities sold under agreement to repurchase Other short-term borrowings Total interest-bearing liabilities Noninterest-bearing deposits Other liabilities Stockholders' equity Total liabilities and stockholders' equity Net interest income as a percent of total earning assets (1) Tax-equivalent adjustment based on a 34% tax rate	Twelve Months Ended 12/31/99 Average Interest Avg.Annual Balance Income/ Yield or Expense(1) Rate
	$248,616 132,136 14,980 27,883 $423,615 29,956 $453,571 $298,789 32,555 1,644 $332,988 74,385 3,052 43,146 $453,571 $423,615	$ 21,869 7,754 1,089 1,401 $32,113 11,616 1,351 77 $ 13,044 $ 19,069 $ 370	8.80% 5.87 7.27 5.02 7.58 3.89 4.15 4.68 3.92 4.50%
Ratios: Annualized return on average total assets Annualized return on average stockholders' equity Cash dividends declared as a percent of net income Average stockholders' equity as a percent of: Average total assets Average total deposits Average loans, net of unearned income Average earning assets as a percent of average total assets			1.35% 14.15 34.17 9.51 11.56 17.35 93.40%

(2) The Company had no out-of-period adjustments or foreign activities.
    Loan fees of $228 are included in the above interest income. Loans on a
    non-accrual basis for the recognition of interest income totalling $527
    as of December 31, 1999 are included in loans, net of unearned income,
    for purpose of this analysis.

CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Twelve Months Ended December 31, 2001 and 2000
(Dollars in Thousands)

Earning Assets:
Loans, Net of unearned
income (2)
Investment securities:
Taxable
Tax-exempt
Federal funds sold and
securities purchased under agreement to resell

Total Earning Assets

Interest-bearing
Liabilities:

Interest-bearing deposits
Federal funds purchased and securities sold under
agreement to repurchase
Other short-term borrowings

Total Interest-bearing
Liabilities
Interest-free Funds
Supporting Earning Assets

Total Funds Supporting
Earning Assets

Interest Rate Spread
Impact of Non-interest-
bearing Funds on Net Yield
on Earning Assets

Net Yield on Earning Assets

Average
Volume
2001

294,837

122,060
20,744

32,984

470,625

332,870

30,882
3,409

367,161

103,464

470,625

Average
Volume
2000

284,431

118,983
16,344

11,022

430,780

299,460

30,953
4,206

334,619

96,161

430,780

Yield/Rate
2001 (1)

8.47%

5.55%
6.80%

3.90%

7.32%

4.08%

3.46%
5.13%

4.04%


3.15%

3.28%

.89%

4.17%

Yield/Rate
2000 (1)

9.06%

5.92%
7.14%

6.25%

8.05%

4.37%

4.75%
6.49%

4.43%


3.44%

3.62%

.99%

4.61%

Interest
Earned/Paid
2001 (1)

24,967

6,778
1,411

1,287

34,443

13,577

1,070
   175

14,822


14,822



19,621

Interest
Earned/Paid
2000 (1)

25,771

7,045
1,167

   689

34,672

13,082

1,470
   273

14,825


14,825



19,847

Variance

(804)

(267)
244

  598

(229)

495

(400)
  (98)

   (3)


   (3)

Change
Due to
Rate

(1,678)

(440)
(56)

  (255)

(2,429)

(868)

(399)
   (57)

(1,324)


(1,324)

Change
Due to
Volume

943

182
314

1,373

2,812

1,460

(2)
(52)

1,406

1,406

Change
Due to
Rate X
Volume

(69)

(9)
(14)

(520)

(612)

(97)

1
   11

  (85)


  (85)

(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.

CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Twelve Months Ended December 31, 2000 and 1999
(Dollars in Thousands)

Earning Assets:
Loans, Net of unearned
income (2)
Investment securities:
Taxable
Tax-exempt
Federal funds sold and
securities purchased under
agreement to resell

Total Earning Assets

Interest-bearing
Liabilities:

Interest-bearing deposits
Federal funds purchased and
securities sold under
agreement to repurchase
Other short-term borrowings

Total Interest-bearing
Liabilities
Interest-free Funds
Supporting Earning Assets

Total Funds Supporting
Earning Assets

Interest Rate Spread
Impact of Non-interest-
bearing Funds on Net Yield
on Earning Assets

Net Yield on Earning Assets

Average
Volume
2000

284,431

118,983
16,344

11,022

430,780

299,460

30,953
4,206

334,619

96,161

430,780

Average
Volume
1999

248,616

132,136
14,980

27,883

423,615

298,789

32,555
1,644

332,988

90,627

423,615

Yield/Rate
2000 (1)

9.06%

5.92%
7.14%

6.25%

8.05%

4.37%

4.75%
6.49%

4.43%


3.44%

3.62%

.99%

4.61%

Yield/Rate
1999 (1)

8.80%

5.87%
7.27%

5.02%

7.58%

3.89%

4.15%
4.68%

3.92%


3.08%

3.66%

.84%

4.50%

Interest
Earned/Paid
2000 (1)

25,771

7,045
1,167

   689

34,672

13,082

1,470
   273

14,825


14,825



19,847

Interest
Earned/Paid
1999 (1)

21,869

7,754
1,089

1,401

32,113

11,616

1,351
    77

13,044


13,044



19,069

Variance

3,902

(709)
78

(712)

2,559

1,466

119
196

1,781

1,781

Change
Due to
Rate

646

66
(19)

  343

1,036

1,434

195
   30

1,659


1,659

Change
Due to
Volume

3,152

(772)
99

(846)

1,633

26

(66)
  120

   80


   80

Change
Due to
Rate X
Volume

104

(3)
(2)

(209)

(110)

6

(10)
   46

   42


   42

(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.

CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Twelve Months Ended December 31, 1999 and 1998
(Dollars in Thousands)

Earning Assets:
Loans, Net of unearned
income (2)
Investment securities:
Taxable
Tax-exempt
Federal funds sold and
securities purchased under
agreement to resell

Total Earning Assets

Interest-bearing
Liabilities:

Interest-bearing deposits
Federal funds purchased and
securities sold under
agreement to repurchase
Other short-term borrowings

Total Interest-bearing
Liabilities
Interest-free Funds
Supporting Earning Assets

Total Funds Supporting
Earning Assets

Interest Rate Spread
Impact of Non-interest-
bearing Funds on Net Yield
on Earning Assets

Net Yield on Earning Assets

Average
Volume
1999

248,616

132,136
14,980

27,883

423,615

298,789

32,555
1,644

332,988

90,627

423,615

Average
Volume
1998

228,057

118,941
13,771

26,890

387,659

273,469

34,274
1,514

309,257

78,402

387,659

Yield/Rate
1999 (1)

8.80%

5.87%
7.27%

5.02%

7.58%

3.89%

4.15%
4.68%

3.92%


3.08%

3.66%

.84%

4.50%

Yield/Rate
1998 (1)

9.10%

6.04%
7.65%

5.23%

7.84%

4.18%

4.42%
5.55%

4.21%


3.36%

3.63%

.85%

4.48%

Interest
Earned/Paid
1999 (1)

21,869

7,754
1,089

1,401

32,113

11,616

1,351
    77

13,044


13,044



19,069

Interest
Earned/Paid
1998 (1)

20,755

7,187
1,053

1,406

30,401

11,432

1,514
    84

13,030


13,030



17,371

Variance

1,114

(567)
36

   (5)

1,712

184

(163)
   (7)

   14


   14

Change
Due to
Rate

(684)

(202)
(52)

  (56)

(994)

(793)

(93)
  (13)

(899)


(899)

Change
Due to
Volume

1,871

797
92

   52

2,812

1058

(76)
    7

  989


  989

Change
Due to
Rate X
Volume

(73)

(28)
(4)

   (1)

(106)

(81)

6
   (1)

  (76)


  (76)

(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.

INVESTMENT SECURITIES

The purpose of the investment policy of the Bank is to ensure that the investment securities portfolio shall be managed to maximize portfolio yield over the long term in a manner that is consistent with liquidity needs, pledging requirements, asset/liability strategies, and safety/soundness concerns. Specific investment objectives include the desire to: ensure adequate liquidity for loan demand, deposit fluctuations, and other changes in balance sheet mix; manage interest rate risk; maximize the institution's overall return; ensure collateral is available for pledging; and manage asset-quality diversification of the bank's assets. Currently, investment securities comprise a higher percentage of total assets due to weakened loan demand within our market. At December 31, 2001, the Loans/Total Assets ratio had dropped to 58.6% as compared to 62.8% at December 31, 2000, and investment securities correspondingly rose as a percentage of total assets from 27.8% to 32.0%, respectively.

Investment securities with a par value of $76,640, $90,870, and $82,325 at December 31, 2001, 2000, and 1999, respectively, 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 on investment securities at December 31, 2001, 2000, and 1999.

AVAILABLE FOR SALE	December 31, 2001 Book Unrealized Fair Value Gains Losses Value Yield(1)
Federal agencies Within one year One to five years Six to ten years	$ 9,927 96,652 14,612 121,191	$ 173 2,050 328 2,551	$ - 174 - 174	$10,100 98,528 14,940 123,568	5.60% 5.46% 5.76% 5.51%
State, county and municipal One to five years Six to ten years After ten years Other restricted CRA Qualified Investment Fund Total available for sale	3,652 11,640 854 16,146 278 $137,615	48 149 3 200 - $ 2,751	29 146 10 185 - $ 359	3,671 11,643 847 16,161 278 $140,007	5.38% 5.89% 6.34% 5.80% 9.45% 5.55%
HELD TO MATURITY Federal agencies Within one year One to five years	3,013 7,011 10,024	31 295 326	- - -	3,044 7,306 10,350	5.07% 6.77% 6.26%
State, county and municipal Within one year One to five years Six to ten years Total held to maturity OTHER INVESTMENTS, AT COST Federal Reserve & Federal Home Loan Bank Stock	1,570 5,931 3,180 10,681 $ 20,705 $ 1,394	20 187 80 287 $ 613 -	- - 6 6 $ 6 -	1,590 6,118 3,254 10,962 $ 21,312 $ 1,394	5.88% 6.39% 6.39% 6.31% 6.29% 7.03%

(1) Tax equivalent adjustment based on a 34% tax rate.

As of the quarter ended December 31, 2001, the Bank did not hold any securities of an issuer that exceeded 10% of stockholders' equity.

INVESTMENT SECURITIES, continued

AVAILABLE FOR SALE United States Treasury Within one year	December 31, 2000 Book Unrealized Fair Value Gains Losses Value Yield(1)
AVAILABLE FOR SALE United States Treasury Within one year	$14,066	$ 65	$ -	$14,131	6.05%
Federal agencies Within one year One to five years	25,059 41,517 66,576	19 129 148	52 207 259	25,026 41,439 66,465	5.68% 5.99% 5.87%
State, county and municipal One to five years Six to ten years After ten years Other restricted CRA Qualified Investment Fund Total available for sale	453 4,711 1,357 6,521 254 $87,417	5 134 71 210 - $ 423	- - - - - $ 259	458 4,845 1,428 6,731 254 $87,581	6.65% 6.54% 7.40% 6.73% 5.64% 5.96%
HELD TO MATURITY United States Treasury Within one year	$ 1,006	$ 1	$ -	$ 1,007	5.76%
Federal agencies Within one year One to five years	13,026 15,082 28,108	23 129 152	2 22 24	13,047 15,189 28,236	6.45% 6.27% 6.36%
State, county and municipal Within one year One to five years Six to ten years Total held to maturity OTHER INVESTMENTS, AT COST Federal Reserve & Federal Home Loan Bank Stock	2,415 6,322 4,364 13,101 $42,215 $ 1,394	11 50 112 173 $ 326 -	- 4 7 11 $ 35 -	2,426 6,368 4,469 13,263 $42,506 $ 1,394	7.42% 6.17% 6.52% 6.52% 6.39% 6.96%

(1) Tax equivalent adjustment based on a 34% tax rate.

As of the quarter ended December 31, 2000, the Bank did not hold any securities of an issuer that exceeded 10% of stockholders' equity.

INVESTMENT SECURITIES, continued

AVAILABLE FOR SALE United States Treasury Within one year One to five years	December 31, 1999 Book Unrealized Fair Value Gains Losses Value Yield(1)
	$ 4,984 10,117 15,101	$ 11 0 11	$ 10 114 124	$ 4,985 10,003 14,988	6.38% 5.99% 6.12%
Federal agencies Within one year One to five years	11,461 61,746 73,207	0 5 5	38 1,533 1,571	11,423 60,218 71,641	5.96% 5.79% 5.82%
State, county and municipal Six to ten years Total available for sale	1,132 $89,440	1 $ 17	5 $1,700	1,128 $87,757	6.96% 5.78%
HELD TO MATURITY United States Treasury Within one year One to five years	$ 3,000 1,012 4,012	$ 5 - 5	$ - 14 14	$ 3,005 998 $ 4,003	6.54% 5.76% 6.35%
Federal agencies Within one year One to five years	7,613 28,188 35,801	- 25 25	11 368 379	7,602 27,845 35,447	6.30% 6.36% 6.35%
State, county and municipal Within one year One to five years Six to ten years After ten years Total held to maturity OTHER INVESTMENTS, AT COST Federal Reserve & Federal Home Loan Bank Stock	1,759 8,342 4,315 639 15,055 $54,868 $ 1,394	12 42 17 1 72 $ 102 -	- 49 78 20 147 $ 540 $ 1,394	1,771 8,335 4,254 620 14,980 $54,430 -	8.60% 6.50% 6.69% 5.56% 6.76% 6.46% 6.96%

(1) Tax equivalent adjustment based on a 34% tax rate.

As of the quarter ended December 31, 1999, the Bank did not hold any securities of an issuer that exceeded 10% of stockholders' equity.

LOAN PORTFOLIO

LENDING ACTIVITIES

The Company engages, through the Bank, in a full compliment of lending activities, including commercial, consumer, installment and real estate loans.

Real Estate Loans
One of the primary components of the Bank's loan portfolio are loans secured by first or second mortgages on residential and commercial real estate. These loans will generally consist of commercial real estate loans, construction and development loans and residential real estate loans (including home equity and second mortgage loans). Interest rates may be fixed or adjustable. The bank seeks to manage credit risk in the commercial real estate portfolio by emphasizing loans on owner-occupied office and retail buildings where the loan-to-value ratio, established by independent appraisals, generally does not exceed 80%. In addition, the Bank typically requires personal guarantees of the principal owners of the property. The Bank may also facilitate mortgage loans for sale into the secondary market, earning a fee, but avoiding the interest rate risk of holding long-term, fixed-rate loans. The principal economic risk associated with all loans, including real estate loans, is the creditworthiness of the Bank's borrowers. The ability of a borrower to repay a real estate loan will depend upon a number of economic factors, including employment levels and fluctuations in the value of real estate. In the case of a real estate construction loan, there is generally no income from the underlying property during the construction period, and the developer's personal obligations under the loan may be limited. Each of these factors increases the risk of nonpayment by the borrower. In the case of a real estate purchase loan, the borrower may be unable to repay the loan at the end of the loan term and may thus be forced to refinance the loan at a higher interest rate, or, in certain cases, the borrower may default as a result of its inability to refinance the loan. In either case, the risk of nonpayment by the borrower is increased. The Bank will also face additional credit risks to the extent that it engages in making adjustable rate mortgage loans ("ARMs"). In the case of an ARM, as interest rates increase, the borrower's required payments increase periodically, thus increasing the potential for default. The marketability of all real estate loans, including ARMs, is also generally affected by the prevailing level of interest rates.

Commercial Loans
The Bank makes loans for commercial purposes in various lines of business. The commercial loans will include both secured an unsecured loans for working capital (including inventory and receivables), loans for business expansion (including acquisition of real estate and improvements), and loans for purchases of equipment and machinery. Equipment loans will typically be made for a term of five years of less at either fixed or variable rates, with the loan fully amortized over the term and secured by the financed equipment. Working capital loans will typically have terms not exceeding one year and will usually be secured by accounts receivable, inventory or personal guarantees of the principals of the business. Commercial loans will vary greatly depending upon the circumstances and loan terms will be structured on a case-by-case basis to better serve customer needs. The risks associated with commercial loans vary with many economic factors, including the economy in the Bank's market area. Many of the Bank's commercial loans are made to small- to medium - sized businesses, which are typically smaller, have shorter operating histories, and less sophisticated record keeping systems than larger entities. As a result, these smaller entities may be less able to withstand adverse competitive, economic and financial conditions than larger borrowers. In addition, because payments on loans secured by commercial property generally depend to a large degree on the results of operations and management of the properties, repayment of such loans may be subject, to a greater extent than other loans, to adverse conditions in the real estate market or the economy. The Bank seeks to spread commercial loans throughout a variety of industries and monitors loan diversification to avoid a significant concentration within the loan portfolio.

CLASSIFICATION OF LOANS

Consumer Loans

The Bank makes a variety of loans to individuals for personal and household purposes, including secured and unsecured installment and term loans, home equity loans and lines of credit and unsecured revolving lines of credit such as credit cards. The secured installment and term loans to consumers will generally consist of loans to purchase automobiles, boats, recreational vehicles, mobile homes and household furnishings, with the collateral for each loan being the purchased property. The underwriting criteria for home equity loans will generally be the same as applied by the Bank when making a first mortgage loan, as described above, but more restrictive for home equity lines of credit. Consumer loans generally involve more credit risks than other loans because of the type and nature of the underlying collateral or because of the absence of any collateral. Consumer loan repayments are dependent on the borrower's continuing financial stability and are likely to be adversely affected by job loss, divorce and illness. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans in the case of default. In most cases, any repossessed collateral will not provide an adequate source of repayment of the outstanding loan balance. Although the underwriting process for consumer loans includes a comparison of the value of the security, if any to the proposed loan amount, the Bank cannot predict the extent to which the borrower's ability to pay, and the value of the security, will be affected by prevailing economic and other conditions.

Loan Approval and Review
The Bank's loan approval policies provide for various levels of officer lending authority. When the amount of aggregate loans to a single borrower exceeds an individual officer's lending authority, the loan request will be considered and approved by an officer with a higher lending limit or by the Credit Committee as established by the Board of Directors. The Loan Committee of the Board of Directors determines the lending limits for the Bank's loan officers. The Bank has an in-house lending limit to a single borrower of 10% of capital. An unsecured limit (aggregate) for the Bank is set at 100% of total capital.

CLASSIFICATION OF LOANS

The following is a summary of loans, in thousands of dollars, at December 31, 2001, 2000, 1999, 1998, and 1997 by major classification:

	2001	2000	1999	1998	1997
Real Estate Loans - mortgage - construction Loans to farmers Commercial and industrial loans Loans to individuals for household family and other consumer expenditure All other loans, including Overdrafts Gross Loans Less unearned income Less reserve for loan losses Net loans	$187,808 28,324 1,316 44,351 32,015 2,800 296,614 (7) (3,763) $292,844	$191,329 20,590 1,376 45,929 34,775 1,698 295,697 (49) (3,782) $291,866	$163,614 21,013 1,447 45,742 33,864 1,736 267,416 (275) (3,451) $263,690	$142,039 15,560 1,487 36,393 32,669 1,951 230,099 (970) (3,132) $225,997	$136,441 19,653 1,214 34,606 30,772 140 222,826 (1,105) (2,879) $218,842

MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES

The Company's loan portfolio consisted of approximately $220,786 and $232,944 in fixed rate loans as of December 31, 2001 and 2000, respectively. At December 31, 2001, and 2000, fixed rate loans with maturities in excess of one year amounted to approximately $169,151 and $175,866, respectively. Variable rate loans are those on which the interest rate can be adjusted to changes in the Bank's prime rate. Fixed rate loans are those on which the interest rate generally cannot be changed for the term of the loan.

RISK ELEMENTS

The following information relates to certain assets which are defined as risk elements by the Securities and Exchange Commission. All loans which meet the criteria set forth by the Securities and Exchange Commission are detailed below, regardless of the likelihood of collection in full or in part. All loans classified for regulatory purposes as loss, doubtful, substandard, or especially mentioned that have not been disclosed do not represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity, or capital resources or represent material credits about which management is aware of any information which causes management to have serious doubts as to the ability of such borrower to comply with the loan repayment terms. As a matter of practice, loans which management has serious concerns about the borrower being able to pay are put into a non-accrual status and disclosed under Risk Elements. Management reviews these loans periodically and feels that the current reserve for possible loan losses adequately provides coverage for actual loss potential. Other interest-bearing assets considered a risk element, if any, are also detailed in this section.

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

The following schedule summarizes the amount of nonaccrual, past due, and restructured loans, in thousands of dollars, for the periods ended December 2001, 2000, 1999, 1998, 1997:

	2001	2000	1999	1998	1997
Nonaccrual loans Accruing loans which are contractually past due 90 days or more as to principal or interest payments Restructured trouble debt	$ 633 $ 138 None	$ 305 $ 189 None	$ 527 $ 142 None	$ 422 $ 100 None	$ 24 $ 135 None

Information relating to interest income on nonaccrual and renegotiated loans outstanding for the year ended December 31, 2001, 2000, and 1999 is as follows:

	2001	2000	1999
Interest included in income during the year Interest which would have been included at the original contract rates	$ 12 $ 66	$ 10 $ 38	$ 26 $ 46

Loans are placed in a non-accrual status when, in the opinion of management, the collection of additional interest is questionable. Thereafter no interest is taken into income unless received in cash or until such time as the borrower demonstrates the ability to pay principal and interest.

POTENTIAL PROBLEM LOANS

In addition to those loans disclosed under "Risk Elements", there are certain loans in the portfolio which are presently current but about which management has concerns regarding the ability of the borrower to comply with present loan repayment terms. Management maintains a loan review of the total loan portfolio to identify loans where there is concern that the borrower will not be able to continue to satisfy present loan repayment terms. Such problem loan identification includes the review of individual loans, loss experience, and economic conditions. Problem loans include both current and past due loans.

As of December 31, 2001, loans which management had serious concerns about the borrower being able to repay were put into a non-accrual status which are disclosed under "Risk Elements".

FOREIGN OUTSTANDINGS

As of the year ended December 31, 2001, the Company had no foreign loans outstanding.

LOAN CONCENTRATIONS

As of the year ended December 31, 2001, the Company did not have any concentration of loans exceeding 10% of total loans which are not otherwise disclosed as a category of loans pursuant to Item III. A. of Guide 3.

OTHER INTEREST-BEARING ASSETS

As of December 31, 2001, the Company does not have any interest-bearing assets that would be required to be disclosed under Item III. C. 1. or 2. if such assets were loans.

SUMMARY OF LOAN LOSS EXPERIENCE

Loan loss experience for each reported period, in thousands of dollars, is summarized as follows:

Loans (net of unearned income): Average loans outstanding for the period Reserve for loan losses: Balance at the beginning of period Charge-offs: Commercial, financial, and agricultural Real Estate - construction and mortgage Loans to individuals Total charge-offs Recoveries: Commercial, financial, and agricultural Real Estate - construction and mortgage Loans to individuals Total recoveries Net charge-offs Additions charged to operations Balance at end of period	Year Ended December 31, 2001 2000 1999 1998 1997
	$294,837 $ 3,782 383 96 470 949 106 31 168 $ 305 $ 644 $ 625 $ 3,763	$284,431 $ 3,451 186 134 426 746 92 19 146 $ 257 $ 489 $ 820 $ 3,782	$248,616 $ 3,132 254 3 559 816 103 21 216 $ 340 $ 476 $ 795 $ 3,451	$228,057 $ 2,879 189 14 553 756 89 5 235 $ 329 $ 427 $ 680 $ 3,132	$204,987 $ 2,370 238 5 399 642 100 106 145 $ 351 $ 291 $ 800 $ 2,879
Ratio of net charge-offs during the period to average loans outstanding during the period	.22%	.17%	.19%	.19%	.14%

The reserve for loan losses is maintained at the greater of 1.20% of net loans or an amount that bears the same ratio to eligible loans as net charge-offs to average eligible loans over the past six years. In addition, the Asset/ Liability Management Committee and the Loan Committee review the adequacy of the reserve quarterly and make recommendations as to the desired amount of the reserve. Determination of the adequacy of the reserve is based on the above ratios and, but not limited to, considerations of classified and internally-identified problem loans, the current trend in delinquencies, the volume of past-due loans, and current or expected economic conditions.

The Board of Directors maintains an independent Loan Review function which has established controls and procedures to monitor loan portfolio risk on an on-going basis. Credit reviews on all major relationships are conducted on a continuous basis as is the monitoring of past-due trends and classified assets. The function utilizes various methodologies in its assessment of the adequacy of the Reserve for Loan Losses. Three primary measurements are reported to the Board of Directors on a quarterly basis, the Graded Loan Method based on a bank-wide risk grading model, the Migration Analysis Method which tracks risk patterns on charged-off loans for the previous 10 years, and the Historical Experience Method based on net charge-offs. Additionally, the function annually conducts an independent economic assessment, addresses portfolio risk by industry concentration, reviews loan policy changes and marketing strategies for any effect on portfolio risk, and conducts tests addressing portfolio performance by type of portfolio, collateral type, and loan officer performance.

Based upon all relevant factors, Management anticipates net charge-offs to be approximately $750 during 2002.

DEPOSITS

AVERAGE DEPOSITS BY CLASSIFICATION

The following table sets forth the classification of average deposits for the indicated period, in the thousands of dollars:

	Years Ended December 31,
Noninterest bearing demand deposits Interest bearing demand deposits Savings deposits Time deposits Total deposits	2001 80,218 53,225 26,931 252,714 413,088	2000 77,180 52,389 27,665 219,406 376,640	1999 74,385 52,195 28,594 218,000 373,174

AVERAGE RATES PAID ON DEPOSITS

The following table sets forth average rates paid on categories of interest-bearing deposits for the periods indicated:

	Years Ended December 31,
Interest bearing demand deposits Savings Deposits Time deposits	2001 ..72% 2.21% 4.99%	2000 1.06% 2.46% 5.40%	1999 1.06% 2.51% 4.74%

MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE

The following table sets forth the maturity of time deposits of $100,000 or more, in thousands of dollars, at December 31, 2001:

          Maturity within 3 months or less
          Over 3 through 6 months
          Over 6 through 12 months
          Over 12 months
              Total

$28,479
24,768
11,989
3,372
$68,608

RETURN ON EQUITY AND ASSETS

The following table presents certain ratios relating to the Company's equity and assets:

	Years Ended December 31,
Return on average total assets Return on average stockholders' equity Cash dividend payout ratio Average equity to average assets ratio	2001 1.28% 12.25% 38.96% 10.42%	2000 1.36% 13.42% 39.66% 10.17%	1999 1.35% 14.15% 34.17% 9.51%

SHORT-TERM BORROWINGS

Federal funds purchased and securities sold under repurchase agreements are short-term borrowings which generally mature within 90 days from the dates of issuance. No other category of short-term borrowings had an average balance outstanding during the reported period which represented 30 percent or more of stockholders' equity at the end of the period.

The following is a summary of short-term borrowings at December 31 of each reported period, in thousands of dollars:

	December 31,
Federal funds purchased and securities sold under agreement to repurchase	2001 $32,821	2000 $22,567	1999 $27,477

The following information relates to short-term borrowings outstanding during 2001, 2000, and 1999:

                         Maximum Amount        Weighted Average
                       Outstanding in Any        Interest Rate
                           Month  End           at December 31,
                      2001    2000    1999    2001   2000   1999
  Federal funds
   purchased and
   securities sold
   under agreement
   to repurchase     $36,702 $34,263 $36,183   1.91% 5.00%  4.34%

                                           Year ended December 31,
                                         2001      2000      1999
  Federal funds purchased and
   securities sold under
   agreement to repurchase-
   average daily amount outstanding     $30,882   $30,851   $32,555
   Weighted average interest rate paid     3.46%     4.76%     4.15%

ITEM 2. PROPERTIES

The Company's subsidiary, The Conway National Bank, has ten permanent offices in Horry County and one permanent office in Georgetown County, for a total of eleven offices. The principal office, located at 1400 Third Avenue in Conway, houses the Bank's administrative offices and data processing facilities. This three-story structure, which was significantly expanded in 1982, contains approximately 33,616 square feet. In addition, the Bank has a 632 square foot building for express banking services adjacent to the principal office. The Bank has a two-story office on Main Street in Conway containing 8,424 square feet. Bank offices are housed in one-story facilities at the Coastal Centre in Conway (3,500 square feet with an adjacent 675 square foot building for express banking services), Red Hill in Conway (3,760 square feet) West Conway in Conway (3,286 square feet) Surfside in Surfside Beach (6,339 square feet), Northside, north of Myrtle Beach (2,432 square feet), Socastee in the southern portion of Myrtle Beach (3,498 square feet), Aynor in The Town of Aynor (2,809 square feet), Myrtle Beach in the City of Myrtle Beach (12,000 square feet), and Murrells Inlet in Murrells Inlet, Georgetown County (3,600 square feet). Of the eleven offices, the bank owns the principal office, the office at Red Hill, West Conway, Surfside Beach, Northside, Main Street, Socastee, Aynor, Myrtle Beach, and Murrells Inlet. One facility, Coastal Centre in Conway, is leased by the Bank under a long-term lease with renewal options. In addition to the existing facilities, the Company has purchased three future office sites. The sites consist of 1.1 acres on Highway 701 north of Conway, 1.0 acres on Highway 17 in North Myrtle Beach, and 3.24 acres on Highway 9 west of North Myrtle Beach. Plans are being made to build an approximate 3,600 square foot office on the North Myrtle Beach site with a tentative opening date in October, 2002. The company anticipates building offices on the other sites within the next three to five years, depending on market conditions. Additionally, preliminary work is being done to build a new approximate 24,000 square foot retail office at the principal site and converting the existing 33,616 square foot building into an operations center. Anticipated completion of this project is in the latter half of 2003.

ITEM 3. LEGAL PROCEEDINGS

There were no material legal proceedings against the Company or its subsidiary, The Conway National Bank, as of December 31, 2001.

There were no administrative or judicial proceedings arising under Section 8 of the Federal Deposit Insurance Act.

There were no material proceedings to which any director, officer, or owner of record of more than 5% of the voting securities of the Company or any associate is a party adverse to the Company.

There are other legal proceedings pending against the Company or its subsidiary, The Conway National Bank, in the ordinary course of business. In the opinion of management, based upon the opinion of counsel, liabilities arising from these proceedings, if any, would not have a material adverse effect on the financial position of the Company.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

On May 8, 2001, at the Annual Meeting of CNB Corporation, the security holders:

1) Nominated and elected three directors to serve for a three-year
   term; and

2) Ratified the appointment of Elliott Davis, LLP as independent
   auditors for the Company and its subsidiary for the year ending December
   31, 2001.

PART II

ITEM 5. MARKET PRICE OF REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS

As of December 31, 2001, there were approximately 723 holders of record of Company stock. There is no established market for shares of Company stock and only limited trading in such shares has occurred since the formation of the Company on June 10, 1985. Most of the limited trading transactions have been effected through the efforts of officers of the Company in matching interested purchasers with shareholders who have expressed an interest in selling their shares of Company stock. Some private trading of Company stock has occurred without any participation in the transaction by the officers of the Company other than to effect the transfer on the Company's shareholder records. Accordingly, management of the Company is not aware of the prices at which all shares of Company stock have traded. The following table sets forth the prices known to management of the Company at which shares of Company stock have traded in each quarter within the two most recent fiscal years adjusted for the effect of a 20% stock dividend paid during 2000.

                                          2001                2000
                                     High       Low       High      Low

                    First Quarter  $100.00    $100.00   $ 91.25   $ 91.25
                    Second Quarter $104.00    $100.00   $ 95.00   $ 91.25
                    Third Quarter  $104.00    $104.00   $ 95.00   $ 95.00
                    Fourth Quarter $107.00    $104.00   $100.00   $ 95.00

Holders of shares of Company stock are entitled to such dividends as may be declared from time to time by the Board of Directors of the Company. The Company paid an annual cash dividend of $3.50 per share in 2001, 2000, 1999 and 1998, $3.00 per share in 1997, 1996 and 1995, $2.00 per share in 1994, 1993 and 1992, $1.50 per share in 1991, and $1.00 per share in the years 1985 through 1990. In addition, the Company may from time to time pay a stock dividend. The Company paid a 20% stock dividend in September 2000, a 25% stock dividend in September 1997, a 20% stock dividend in September 1994, a 50% stock dividend in July 1989, a 20% stock dividend in August 1987 and a 15% stock dividend in November 1985. There can be no assurance, however, as to the payment of dividends by the Company in the future since payment will be dependent upon the earnings and financial condition of the Company and the Bank and other related factors.

ITEM 6. SELECTED FINANCIAL DATA
CNB Corporation
FINANCIAL SUMMARY
(All Dollar Amounts, Except Per Share Data, in Thousands)

The following table sets forth certain selected financial data relating to the Company and subsidiary and is qualified in its entirety by reference to the more detailed
financial statements of the Company and subsidiary and notes thereto included elsewhere
in this report.

	Year Ended December 31,
Selected Income Statement Data: Total Interest Income Total Interest Expense Net Interest Income Provisions for Possible Loan Losses Net Interest Income after Provision for Possible Loan Losses Total Other Operating Income Total Other Operating Expense Income Before Income Taxes Income Taxes Net Income Per Share: Net Income Per Weighted Average Shares Outstanding* Cash Dividend Paid Per Share Weighted Average Shares Outstanding*	2001 $ 33,963 14,822 19,141 625 18,516 5,337 14,606 9,247 2,812 $ 6,435 $ 9.00 $ 3.50 714,618	2000 $ 34,275 14,825 19,450 820 18,630 4,562 13,961 9,231 2,920 $ 6,311 $ 8.82 $ 3.50 715,656	1999 $ 31,743 13,044 18,699 795 17,904 4,307 13,030 9,181 3,076 $ 6,105 $ 8.53 $ 3.50 716,209	1998 $ 30,043 13,030 17,013 680 16,333 3,932 11,936 8,329 2,821 $ 5,508 $ 7.68 $ 3.50 716,942	1997 $ 27,759 11,764 15,995 800 15,195 3,413 11,041 7,567 2,760 $ 4,807 $ 6.69 $ 3.00 718,122

*Restated for a 20% stock dividend issued during 2000.

Selected Balance Sheet Data:
Assets
Net Loans
Investment Securities
Federal Funds Sold

Deposits:
  Non-Interest-Bearing
  Interest-Bearing
   Total Deposits
Stockholders' Equity

$505,725
292,844
162,106
3,950

$ 88,995
321,648
$410,643
$ 53,996

$471,076
291,866
131,190
9,875

$ 76,342
314,388
$390,730
$ 48,606

$455,702
263,690
144,019
11,150

$ 72,728
302,775
$375,503
$ 43,712

$426,359
225,997
141,203
27,100

$ 66,303
279,809
$346,112
$ 41,201

$381,144
218,842
123,423
11,375

$ 55,422
245,905
$301,327
$ 37,717

ITEM 7. 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 Company's financial condition, results of operations, liquidity, and capital resources. The following discussion should be read in conjunction with the Company's financial statements and notes thereto and other detailed information appearing elsewhere in this report.

Distribution of Assets and Liabilities

The Company maintains a conservative approach in determining the distribution of assets and liabilities. Loans, net of unearned income, increased 10.7% from $267,141 at December 31, 1999 to $295,648 at December 31, 2000; and .3% from December 31, 2000 to $296,607 at December 31, 2001. Loan growth is attributed to overall business development efforts to meet business and personal loan demand in our market area. Loan demand was strong in our market area in 2000 reflecting a strong local economy, but declined in 2001 due to recessionary pressures coupled with the effects of the September 11 terrorist attacks on consumer confidence. Loans, net of unearned income, increased as a percentage of total assets from 58.6% at year-end 1999 to 62.8% at year-end 2000 and decreased to 58.6% at year-end 2001. Correspondingly, investment securities and federal funds sold decreased as a percentage of total assets from 34.1% at year-end 1999 to 29.9% at year-end 2000 and increased to 32.8% at year-end 2001 as investments have been utilized to balance the growth in loan outstandings. Investments and federal funds sold provide for an adequate supply of secondary liquidity. Year-end other assets as a percentage of total assets increased from 7.3% in 1999 and 2000 to 8.6% in 2001 due to the purchase of the existing Surfside Beach office site in early 2001. Management has sought to build the deposit base with stable, relatively non-interest-rate sensitive deposits by offering the small to medium account holders a wide array of deposit instruments at competitive rates. Non-interest-bearing demand deposits have grown from 16.0% at December 31, 1999 to 16.2% at December 31, 2000 and 17.6% at December 31, 2001. Demand deposits are expected to decline over the long-term as more customers utilize interest-bearing deposit and repo accounts. Interest-bearing liabilities as a percentage of total assets have declined from 73.3% at December 31, 1999 to 72.3% at December 31, 2000 and 70.5% at December 31, 2001.

The following table sets forth the percentage relationship to total assets of significant components of the Company's balance sheet as of December 31, 2001, 2000 and 1999:

Assets: Earning assets: Loans, net of unearned income Investment securities: Taxable Tax-exempt Federal funds sold and securities purchased under agreement to resell Other earning assets Total earning assets Other assets Total assets	December 31, 2001 2000 1999
	58.6% 26.7 5.3 ..8 - 91.4 8.6 100.0%	62.8% 23.6 4.2 2.1 - 92.7 7.3 100.0%	58.6% 28.0 3.6 2.5 - 92.7 7.3 100.0%
Liabilities and stockholder's equity: Interest-bearing liabilities: Interest-bearing deposits Federal funds purchased and securities sold under agreement to resell Other short-term borrowings Total interest-bearing liabilities Noninterest-bearing deposits Other liabilities Stockholders' equity Total liabilities and stockholders' equity	63.6% 6.5 .4 70.5 17.6 1.2 10.7 100.0%	66.8% 4.8 .7 72.3 16.2 1.2 10.3 100.0%	66.5% 6.0 .8 73.3 16.0 1.1 9.6 100.0%

Results of Operation

CNB Corporation and subsidiary experienced earnings in 2001, 2000 and 1999 of $6,435, $6,311,and $6,105, respectively, resulting in a return of average assets of 1.28%, 1.36%, and 1.35% and a return on average stockholders' equity of 12.25%, 13.42% and 14.15%. The earnings were primarily attributable to favorable 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). These strong earnings, coupled with a conservative dividend policy, have supplied the necessary capital funds to support bank operations. Total assets were $505,725 at December 31, 2001 as compared to $471,076 at December 31, 2000 and $455,702 at December 31, 1999. The following table sets forth the financial highlights for fiscal years 2001, 2000, and 1999.

CNB Corporation and Subsidiary
FINANCIAL HIGHLIGHTS
(All Dollar Amounts, Except Per Share Data, in Thousands)

December 31,
2001

2000
to
2001
Percent
Increase
(Decrease)

December 31, 2000

1999
to
2000
Percent
Increase
(Decrease)

December 31,
1999

Net interest income after provision
     for loan losses
Income before income taxes
Net Income
Per Share (weighted average
  of shares outstanding)*

Cash dividends declared

   Per Share*

Total assets
Total deposits
Loans, net of unearned income
Investment securities
Stockholders' equity
    Book value per share*
   (actual number of shares
    outstanding)

*Restated for stock dividend

Ratios (1):
Return on average total assets
Return on average stockholders'
  equity

$ 18,516
9,247
6,435

$   9.00

2,507

$   3.50

$505,725
410,643
296,607
162,106
53,996

$  75.40

1.28%

12.25%

(.6)%
..2
2.0

2.0

..2

-

7.4%
5.1
..3
23.6
11.1

10.9

(5.9)

(8.7)

$ 18,630
9,231
6,311

$   8.82

2,502

$   3.50

$471,076
390,730
295,648
131,190
48,606

$  67.98

1.36%

13.42%

4.1%
5.5
3.4

3.4

19.9

-

3.4%
4.1
10.7
(8.9)
11.2

11.2

..7

(5.2)

$ 17,904
9,181
6,105

$   8.53

2,086

$   3.50

$455,702
375,503
267,141
144,019
43,712

$  61.12

1.35%

14.15%

(1) For the fiscal years ended December 31, 2001, 2000, and 1999, average total assets amounted to $504,396, $462,360, and $453,571 with average stockholders' equity totaling $52,543, $47,025, and $43,146, respectively.

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 investment securities, and interest paid on deposits and borrowed funds. Net interest income is affected by the interest rates earned or paid and by volume changes in loans, investment securities, deposits, and borrowed funds.

The Bank maintained net interest margins in 2000 and 1999 of 4.6% and 4.5%, respectively, which meet or exceed management's long-term target of 4.5%. However, the 2001 net interest margin fell to 4.2% due to an unusually rapid decline in market interest rates lowering returns available on loans and investments while interest costs on liabilities did not decline as quickly due to strong competitive pressure. We do expect a widening in the net interest margin in 2002. Fully-tax-equivalent net interest income grew from $19,069 in 1999 to $19,847 in 2000 and shrank to 19,621 in 2001. During the three-year period, total fully-tax-equivalent interest income increased by 8.0% from $32,113 in 1999 to $34,672 in 2000 and decreased .7% in 2001 to $34,443. Over the same period, total interest expense increased by 13.7% from $13,044 in 1999 to $14,825 in 2000 and showed little change to $14,822 in 2001. Fully-tax-equivalent net interest income as a percentage of average total earning assets was 4.5% in 1999, 4.6% in 2000 and decreased to 4.2% in 2001.

Interest rates paid on deposits and borrowed funds and earned on loans and investments have generally followed the fluctuations in market interest rates in 2001, 2000, and 1999. 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 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 long-run earning power. The following table sets forth the Bank's static gap rate sensitivity position at each of the time intervals indicated. The table illustrates the Bank's rate sensitivity position on specific dates and may not be indicative of the position at other points in time. Management believes that a rise or fall in interest rates will not materially effect earnings.

Interest Rate Sensitivity Analysis

	1 Day	90 Days	180 Days	365 Days	Over 1 to 5 Years	Over 5 Years
Rate Sensitive Assets (RSA) Federal Funds Sold Investment Securities Loans(net of non-accruals $633) Total, RSA Rate Sensitive Liabilities (RSL) Deposits: Certificates of Deposit of $100,000 or more All Other Time Deposits Federal Funds Purchased and Securities Sold Under Repurchase Agreements Federal Home Loan Bank Advances Total RSL RSA-RSL Cumulative RSA-RSL Cumulative RSA/RSL	3,950 0 75,821 79,771 0 0 32,289 0 32,289 47,482 47,482 2.47	0 8,184 20,810 28,994 28,479 43,365 532 83 72,459 (43,465) 4,017 1.04	0 9,000 12,615 21,615 24,768 24,068 0 83 48,919 (27,304) (23,287) .85	0 25,029 17,584 42,613 11,989 41,406 0 83 53,478 (10,865) (34,152) .84	0 105,622 116,601 222,223 3,372 11,540 0 330 15,242 206,981 172,829 1.78	0 12,877 52,550 65,427 0 388 0 906 1,294 64,133 236,962 2.06

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 during the ongoing in-house problem loan identification process. The Company includes the provisions of SFAS No. 114, "Accounting by Creditors for Impairment of a Loan",as amended by SFAS 118, in the allowance for loan losses (see NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES). The provision for possible loan losses was $625 in 2001, $820 in 2000 and $795 in 1999. Net loan charge-offs totalled $644 in 2001, $489 in 2000, and $476 in 1999 with net charge-offs being centered in consumer purpose loans during each period. The reserve for possible loan losses as a percentage of net loans was 1.28% at December 31, 2001, 1.30% at December 31, 2000, and 1.31% at December 31, 1999. The decreased provision during 2001 was due to a decrease in the rate of loan growth.

Securities Transactions - Net unrealized gains/(losses) in the investment securities portfolio were $2,999 at December 31, 2001, $455 at December 31, 2000, and $(2,121) at December 31, 1999. The market value of investment securities rose in 2000 and 2001 as overall market rates declined. No security gains/(losses) were taken in 1999 or 2000, but a gain of $169 was taken in 2001. Due to the increased steepness of the Treasury yield curve, it was felt appropriate to take the gains on the sale of $11,213 in available-for-sale short-term Treasuries with a .8 year average life and reinvest in U.S. Agencies with an average life of 5.3 years.

Other Income - Other income, net of any securities gains/(losses), increased by 5.9% from $4,307 in 1999 to $4,562 in 2000 and grew 13.3% from $4,562 in 2000 to $5,168 in 2001. Other income rose in 1999, 2000 and 2001 due to continued growth in deposit account activity, higher merchant discount income and increased refinancing volume in the mortgage loan department. Effective July 1, 2001, overall service charge rates were increased which will correspondingly increase future non-interest income levels.

Other Expenses - Other expenses increased by 7.1% from $13,030 in 1999 to $13,961 in 2000 and 4.6% from $13,961 in 2000 to $14,606 in 2001. The components of other expenses are salaries and employee benefits of $8,024, $8,620, and $9,282; occupancy and furniture and equipment expenses of $1,719, $1,821, and $1,876; and other operating expenses of $3,287, $3,520, and $3,448 for 1999, 2000, and 2001, respectively. The increase in salaries and employee benefits reflects compensation increments, the increased costs of providing employee benefits, and an increase from 202 to 209 full-time equivalent employees over the three-year period. The addition of the Murrells Inlet office in 2000 and the purchase of the Surfside Office which was previously a leasehold interest impacted occupancy and furniture and equipment expense. Looking ahead, non-interest expense should grow in 2002 due to the addition of the North Myrtle Beach office and corresponding operational areas, and in 2003 due to the construction of the new Main Office Retail Center. Other operating expenses have decreased due to lower credit card department related costs in the merchant discount income area.

Income Taxes - Provisions for income taxes decreased 5.1% from $3,076 in 1999 to $2,920 in 2000 and decreased 3.7% from $2,920 in 2000 to $2,812 in 2001. The decrease in income taxes in 2000 and 2001 was due to only a slight increase in income before income taxes each year coupled with a 7.1% increase in nontaxable income from $719 in 1999 to $770 in 2000 and a 20.9% increase from $770 in 2000 to $931 in 2001.

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; has the ability, on a short-term basis, to borrow funds from the Federal Reserve System; and has a line of credit from the Federal Home Loan Bank of Atlanta (see NOTE 8 - LINES OF CREDIT). The Company has cash balances on hand of $5,248, $4,776, and $4,241 at December 31, 2001, 2000, and 1999 with liabilities, consisting of cash dividends payable, totalling $2,507, $2,502, and $2,086, respectively. Management feels that liquidity sources are more than adequate to meet funding needs.

OFF-BALANCE SHEET RISK

The Company, through the operations of the Bank, makes contractual commitments to extend credit in the ordinary course of business. These commitments are legally binding agreements to lend money to customers of the Bank at predetermined interest rates for a specified period of time. In addition to commitments to extend credit, the Bank also issues standby letters of credit which are assurances to a third party that they will not suffer a loss if the Bank's customer fails to meet its contractual obligation to a third party. At December 31, 2001, the Bank had issued commitments to extend credit of $25.8 million and standby letters of credit of $3.5 million (see NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK). The majority of the commitments and standby letters of credit typically mature within one year and past experience indicates that many of the commitments and standby letters of credit will expire unused. However, through its various sources of liquidity, the Bank believes that it will have the necessary resources to meet these obligations should the need arise.

Neither the Company nor the Bank is involved in other off-balance sheet contractual relationships, unconsolidated related entities that have off-balance sheet arrangements, or transactions that could result in liquidity needs or other commitments or significantly impact earnings.

Obligations under noncancelable operating lease agreements totaled $41 thousand at December 31, 2001. These obligations are payable over several years as shown in NOTE 11 - COMMITMENTS AND CONTINGENCIES.

CAPITAL RESOURCES

Total stockholders' equity was $53,996, $48,606, and $43,712 at December 31, 2001, 2000, and 1999, representing 10.68%, 10.32%, and 9.59% of total assets, respectively. At December 31, 2001, the Bank exceeds quantitative measures established by regulation to ensure capital adequacy (see NOTE 15 - REGULATORY MATTERS). Capital is considered sufficient by management to meet current and prospective capital requirements and to support anticipated growth in bank operations.

EFFECTS OF INFLATION

Inflation normally has the effect of accelerating the growth of both a bank's assets and liabilities. One result of this inflationary effect is an increased need for equity capital. Income is also affected by inflation. While interest rates have traditionally moved with inflation, the effect on net income is diminished because both interest earned on assets and interest paid on liabilities vary directly with each other. In some cases, however, rate increases are delayed on fixed-rate instruments. Loan demand normally declines during periods of high inflation. Inflation has a direct impact on the Bank's non-interest expense. The Bank responds to inflation changes through readjusting non-interest income by repricing services.

EFFECTS OF REGULATORY ACTION

The Federal Deposit Insurance Corporation (FDIC) reduced FDIC insurance premium rates during 1995 which has had a positive effect on subsequent earnings and should favorably impact future year's income. Effective March 11, 2000, the Gramm-Leach-Bliley Act of 1999 allows bank holding companies to elect to be treated as financial holding companies which may engage in a broad range of securities, insurance, and other financial activities. At this time, neither the Company nor the Bank plan to enter these new lines of business. The management of the Company and the Bank is not aware of any other current recommendations by the regulatory authorities which, if they were to be implemented, would have a material effect on liquidity, capital resources, or operations.

ACCOUNTING ISSUES

Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities -- a replacement of SFAS No. 125," was issued in September 2000. It revised the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures but 3will carry over most of SFAs No. 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after March 31, 2001. This statement is effective for recognition and reclassification of collateral and for disclosures related to securitization transactions and collateral for fiscal years ending after December 15, 2000. The adoption of the provisions of SFAS No. 140 in 2001 did not have a material effect on the Company.

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. The Company was required to adopt the provisions of SFAS No. 141 immediately and must adopt SFAS No. 142 effective January 1, 2002. The adoption of the provisions of SFAS No. 141 in 2001 did not have a material effect on the Company. The adoption of SFAS No. 142 is not expected to have a material effect on the Company.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This SFAS supercedes prior pronouncements associated with impairment or disposal of long-lived assets. The SFAS establishes methodologies for assessing impairment of long-lived assets, including assets to be disposed of by sale or by other means. This statement is effective for all fiscal years beginning after December 15, 2001. This SFAS is not expected to have a material impact on the Company's financial position.

On July 2, 2001, The Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 102, "Selected Loan Loss Allowance Methodology and Documentation Issues". SAB 102 expresses the SEC's views on the development, documentation and application of a systematic methodology for determining the allowance for loan and lease losses in accordance with Generally Accepted Accounting Principles. The Company believes that it is currently in compliance with the requirements of SAB 102.

Other accounting standards that have been issued or proposed by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

RISKS AND UNCERTAINTIES

In the normal course of its business the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different basis, than its interest-earning assets. Credit risk is the risk of default on the Company's loan portfolio that results from borrower's inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company.

The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required loss allowances and operating restrictions from the regulators' judgments based on information available to them at the time of their examination.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates. The Company's market risk arises principally from interest rate risk inherent in its lending, deposit and borrowing activities. Management actively monitors and manages its interest rate risk exposure. In addition to other risks which the Company manages in the normal course of business, such as credit quality and liquidity risk, management considers interest rate risk to be a significant market risk that could potentially have a material effect on the Company's financial condition and results of operations (See Net Income - Net Interest Income). Other types of market risks, such as foreign currency risk and commodity price risk, do not arise in the normal course of the Company's business activities.

ITEM 8 - FINANCIAL STATEMENTS

CNB CORPORATION AND SUBSIDIARY

REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

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CNB CORPORATION AND SUBSIDIARY
CONWAY, SOUTH CAROLINA

CONTENTS

	PAGE
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Consolidated balance sheets Consolidated statements of income Consolidated statements of stockholders' equity Consolidated statements of comprehensive income Consolidated statements of cash flows NOTES TO FINANCIAL STATEMENTS	36 37 38 39 40 41 42 - 58

-36-

ELLIOTT DAVIS, LLP
CERTIFIED PUBLIC ACCOUNTS
MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTS

GREENVILLE, S.C.
GREENWOOD, S.C.
ANDERSON, S.C.
AIKEN, S.C.
COLUMBIA, S.C.
AUGUSTA, GA

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Directors and Stockholders
CNB Corporation
Conway, South Carolina

     We have audited the accompanying consolidated balance sheets of CNB Corporation and Subsidiary as of December 31, 2001 and 2000, and the related consolidated statements of income, stockholders' equity, comprehensive income and cash flows for each of the years in the three year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CNB Corporation and Subsidiary at December 31, 2001 and 2000 and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

Elliott Davis, LLP

January 18, 2002
Greenville, South Carolina

Internationally - Moore Stephens Elliott Davis, LLC
Members of the American Institute of Certified Public Accounts
870 S. PleasantburG Drive Post Office Box 6286 Greenville, South Carolina 29606-6286
Telephone (864) 242-3370 Telefax (864) 232-7161

-37-

CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(amounts, except share data, in thousands)

	December 31,
ASSETS CASH AND DUE FROM BANKS FEDERAL FUNDS SOLD INVESTMENT SECURITIES AVAILABLE FOR SALE INVESTMENT SECURITIES HELD TO MATURITY (fair value $21,312 in 2001 and $42,506 in 2000) OTHER INVESTMENTS, AT COST LOANS Less allowance for loan losses Net loans PREMISES AND EQUIPMENT ACCRUED INTEREST RECEIVABLE OTHER ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing Interest-bearing Total deposits Federal Home Loan Bank advances Securities sold under repurchase agreements United States Treasury demand notes Other liabilities Total liabilities COMMITMENTS AND CONTINGENT LIABILITIES - Notes 10 and 11 STOCKHOLDERS' EQUITY Common stock - $10 par value; authorized 1,500,000 shares; issued 718,246 shares in 2001 and 2000 Capital in excess of par value of stock Retained earnings Accumulated other comprehensive income Less 2,134 in 2001 and 3,256 in 2000 shares held in Treasury at cost Total stockholders' equity	2001 $ 27,895 3,950 140,007 20,705 1,394 296,607 (3,763) 292,844 11,285 4,482 3,163 $ 505,725 $ 88,995 321,648 410,643 1,485 32,821 653 6,127 451,729 7,182 34,774 10,826 1,435 54,217 (221) 53,996 $505,725	2000 $ 20,239 9,875 87,581 42,215 1,394 295,648 (3,782) 291,866 9,795 5,099 3,012 $ 471,076 $ 76,342 314,388 390,730 1,650 22,567 1,834 5,689 422,470 7,182 34,732 6,898 98 48,910 (304) 48,606 $471,076

The accompanying notes are an integral part of these consolidated financial statements.

-38-

CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(amounts, except per share data, in thousands)

	For the years ended December 31,
INTEREST INCOME Loans and fees on loans Investment securities Taxable Nontaxable Total interest on investment securities Federal funds sold Total interest income INTEREST EXPENSE Deposits Securities sold under repurchase agreements Federal Home Loan Bank advances United States Treasury demand notes Total interest expense Net interest income PROVISION FOR LOAN LOSSES Net interest income after provision for loan losses NONINTEREST INCOME Service charges on deposit accounts Other service and exchange charges Gain on sale of investment securities available for sale Total noninterest income NONINTEREST EXPENSES Salaries and wages Pensions and other employee benefits Occupancy Furniture and equipment Liability insurance Office supplies Credit card operations Other operating expenses Total noninterest expenses Income before provision for income taxes PROVISION FOR INCOME TAXES Net income NET INCOME PER SHARE OF COMMON STOCK	2001 $ 24,967 6,778 931 7,709 1,287 33,963 13,577 1,070 111 64 14,822 19,141 625 18,516 3,015 2,153 169 5,337 7,212 2,070 853 1,023 74 447 863 2,064 14,606 9,247 2,812 $ 6,435 $ 9.00	2000 $ 25,771 7,045 770 7,815 689 34,275 13,082 1,470 154 119 14,825 19,450 820 18,630 2,758 1,804 - 4,562 6,794 1,826 846 975 76 405 947 2,092 13,961 9,231 2,920 $ 6,311 $ 8.82	1999 $ 21,869 7,754 719 8,473 1,401 31,743 11,616 1,351 - 77 13,044 18,699 795 17,904 2,563 1,744 - 4,307 6,387 1,637 755 964 110 490 862 1,825 13,030 9,181 3,076 $ 6,105 $ 8.53

The accompanying notes are an integral part of these consolidated financial statements.

-39-

CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended December 31, 2001, 2000, and 1999
(amounts, except share data, in thousands)

	Common stock Shares Amount		Capital in excess of par value of stock		Retained earnings	Accumu- lated other compre- hensive income (loss)	Treasury stock	Total stock- holders' equity
BALANCE, DECEMBER 31, 1998 Net income Cash dividend, $3.50 per share Treasury stock transactions, net Gain on sale of treasury stock Net change in unrealized holding gain, net of income taxes of $957 BALANCE, DECEMBER 31, 1999 Net income Cash dividend, $3.50 per share Six-for-five stock split effected in the form of a stock dividend Cash in lieu of fractional shares on stock split Treasury stock transactions, net Gain on sale of treasury stock Net change in unrealized holding loss, net of income taxes of $739 BALANCE, DECEMBER 31, 2000 Net income Cash dividend, $3.50 per share Treasury stock transactions, net Gain on sale of treasury stock Net change in unrealized holding gain, net of income taxes of $891 BALANCE, DECEMBER 31, 2001	598,681 - - - - - 598,681 - - 119,565 - - - - 718,246 - - - - - 718,246	$5,987 - - - - - 5,987 - - 1,195 - - - - 7,182 - - - - - $ 7,182	$ 24,538 - - - 8 - 24,546 - - 10,163 - - 23 - 34,732 - - - 42 - $34,774	$ 10,448 6,105 (2,086) - - - 14,467 6,311 (2,502) (11,358) (20) - - - 6,898 6,435 (2,507) - - - $10,826		$ 425 - - - - (1,436) (1,011) - - - - - - 1,109 98 - - - - 1,337 $1,435	$ (197) - - (80) - - (277) - - - - (27) - - (304) - - 83 - - $ (221)	$ 41,201 6,105 (2,086) (80) 8 (1,436) 43,712 6,311 (2,502) - (20) (27) 23 1,109 48,606 6,435 (2,507) 83 42 1,337 $53,996

The accompanying notes are an integral part of these consolidated financial statements.

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CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in thousands)

	For the years ended December 31,
NET INCOME OTHER COMPREHENSIVE INCOME, NET OF TAX Unrealized holding (losses) gains on investment securities available for sale Reclassification adjustments for gains included in net income COMPREHENSIVE INCOME	2001 $ 6,435 1,506 (169) $ 7,772	2000 $ 6,311 1,109 - $ 7,420	1999 $ 6,105 (1,436) - $ 4,669

The accompanying notes are an integral part of these consolidated financial statements.

-41-

CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

	For the years ended December 31,
OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Provision for loan losses Provision for deferred income taxes (Gain) loss on disposal of equipment Gain on sale of investment securities available for sale Changes in assets and liabilities: (Increase) decrease in accrued interest receivable Increase in other assets Increase (decrease) in other liabilities Net cash provided by operating activities INVESTING ACTIVITIES Proceeds from sales of investment securities available for sale Proceeds from maturities and calls of investment securities held to maturity Proceeds from maturities of investment securities available for sale Purchases of investment securities available for sale Purchases of investment securities held to maturity Net decrease in federal funds sold Net increase in loans Premises and equipment expenditures Net cash used for investing activities FINANCING ACTIVITIES Dividends paid Net increase in deposits Increase (decrease) in securities sold under repurchase agreements Proceeds from Federal Home Loan Bank advances Repayments of Federal Home Loan Bank advances Increase (decrease) in United States Treasury demand notes Treasury stock transactions, net Cash paid in lieu of fractional shares on stock split Net cash provided by financing activities Net increase (decrease) in cash and due from banks CASH AND DUE FROM BANKS, BEGINNING OF YEAR CASH AND DUE FROM BANKS, END OF YEAR CASH PAID FOR Interest Income taxes	2001 $ 6,435 650 625 (267) - (169) 617 (265) (14) 7,612 11,382 21,510 44,192 (105,602) - 5,925 (1,667) (2,140) (26,400) (2,502) 19,913 10,254 - (165) (1,181) 125 - 26,444 7,656 20,239 $ 27,895 $ 15,216 $ 2,815	2000 $ 6,311 586 820 (40) 7 - (633) (98) 73 7,026 - 12,653 13,671 (11,647) - 1,275 (28,996) (1,884) (14,928) (2,086) 15,227 (4,910) 1,650 - (1,975) (4) (20) 7,882 (20) 20,259 $ 20,239 $ 12,953 $ 3,087	1999 $ 6,105 576 795 (112) (2) - (365) (77) 168 7,088 - 14,450 17,454 (28,416) (8,670) 15,950 (38,489) (1,820) (29,541) (2,090) 29,390 (5,041) - - 2,661 (72) - 24,848 2,395 17,864 $ 20,259 $ 12,759 $ 3,408

The accompanying notes are an integral part of these consolidated financial statements.

-42-

CNB CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES

Principles of consolidation and nature of operations

The consolidated financial statements include the accounts of CNB Corporation ("the Company") and its wholly-owned subsidiary, The Conway National Bank ("the Bank"). The Company operates as one business segment. All significant intercompany balances and transactions have been eliminated. The Bank operates under a national bank charter and provides full banking services to customers. The Bank is subject to regulation by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The Company is subject to regulation by the Federal Reserve Board.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the consolidated balance sheets and the consolidated statements of income for the periods covered. Actual results could differ from those estimates.

Concentrations of credit risk

The Company, through its subsidiary, makes commercial and personal loans to individuals and small businesses located primarily in the South Carolina coastal region. The Company has a diversified loan portfolio and the borrowers' ability to repay their loans is not dependent upon any specific economic sector.

Cash and cash equivalents

For purposes of the statements of cash flows, cash and cash equivalents are defined as those amounts included in the balance sheet caption "Cash and Due from Banks". Cash and cash equivalents have an original maturity of three months or less.

Investment securities

The Company accounts for investment securities in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This statement requires that the Company classify debt securities upon purchase as available for sale, held to maturity or trading. Such assets classified as available for sale are carried at fair value. Unrealized holding gains or losses are reported as a component of stockholders' equity (accumulated other comprehensive income (loss)) net of deferred income taxes. Securities classified as held to maturity are carried at cost, adjusted for the amortization of premiums and the accretion of discounts into interest income using a method which approximates a level yield. To qualify as held to maturity the Company must have the intent and ability to hold the securities to maturity. Trading securities are carried at market value. The Company has no trading securities. Gains or losses on disposition of securities are based on the difference between the net proceeds and the adjusted carrying amount of the securities sold, using the specific identification method.

(Continued)

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued

Loans and interest income

Interest on loans is accrued and recognized based upon the interest method.

The Company accounts for impaired loans in accordance with SFAS No. 114, "Accounting by Creditors for Impairment of a Loan". This standard requires that all creditors value loans at the loan's fair value if it is probable that the creditor will be unable to collect all amounts due according to the terms of the loan agreement. Fair value may be determined based upon the present value of expected cash flows, market price of the loan, if available, or value of the underlying collateral. Expected cash flows are required to be discounted at the loan's effective interest rate. SFAS No. 114 was amended by SFAS No. 118 to allow a creditor to use existing methods for recognizing interest income on an impaired loan and by requiring additional disclosures about how a creditor recognizes interest income on an impaired loan.

Under SFAS No. 114, as amended by SFAS 118, when the ultimate collectibility of an impaired loan's principal is in doubt, wholly or partially, all cash receipts are applied to principal. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement. Once the reported principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring. For these accruing impaired loans, cash receipts are typically applied to principal and interest receivable in accordance with the terms of the restructured loan agreement. Interest income is recognized on these loans using the accrual method of accounting.

Allowance for loan losses

The allowance for loan losses is based on management's ongoing evaluation of the loan portfolio and reflects an amount that, in management's opinion, is adequate to absorb losses in the existing portfolio. In evaluating the portfolio, management takes into consideration numerous factors, including current economic conditions, prior loan loss experience, the composition of the loan portfolio, and management's estimate of anticipated credit losses. Loans are charged against the allowance at such time as they are determined to be losses. Subsequent recoveries are credited to the allowance. Management considers the year-end allowance appropriate and adequate to cover possible losses in the loan portfolio; however, management's judgment is based upon a number of assumptions about future events, which are believed to be reasonable, but which may or may not prove valid. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the allowance for loan losses will not be required.

Non-performing assets

Non-performing assets include real estate acquired through foreclosure or deed taken in lieu of foreclosure, and loans on non-accrual status. Loans are placed on non-accrual status when, in the opinion of management, the collection of additional interest is questionable. Thereafter no interest is taken into income unless received in cash or until such time as the borrower demonstrates the ability to pay principal and interest.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed over the estimated useful lives of the assets using primarily the straight-line method. Additions to premises and equipment and major replacements or improvements are capitalized at cost. Maintenance, repairs and minor replacements are expensed when incurred. Gains and losses on routine dispositions are reflected in current operations.

(Continued)

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued

Advertising expense

Advertising, promotional and other business development costs are generally expensed as incurred. External costs incurred in producing media advertising are expensed the first time the advertising takes place. External costs relating to direct mailing costs are expensed in the period in which the direct mailings are sent. Advertising, promotional and other business development costs of $294,000, $357,000 and $285,000, were included in the Company's results of operations for 2001, 2000, and 1999, respectively.

Income taxes

Income taxes are accounted for in accordance with SFAS No. 109, "Accounting for Income Taxes". Under SFAS No. 109, deferred tax liabilities are recognized on all taxable temporary differences (reversing differences where tax deductions initially exceed financial statement expense, or income is reported for financial statement purposes prior to being reported for tax purposes). In addition, deferred tax assets are recognized on all deductible temporary differences (reversing differences where financial statements expense initially exceeds tax deductions, or income is reported for tax purposes prior to being reported for financial statement purposes). Valuation allowances are established to reduce deferred tax assets if it is determined to be "more likely than not" that all or some portion of the potential deferred tax assets will not be realized.

Reclassifications

Certain amounts in the financial statements for the year ended December 31, 2000 and 2001 have been reclassified, with no effect on net income to be consistent with the classifications adopted for the year ended December 31, 2001.

Net income per share

The Company computes net income per share in accordance with SFAS No. 128, "Earnings Per Share." Net income per share is computed on the basis of the weighted average number of common shares outstanding: 714,618 in 2001, 715,656 in 2000, and 716,209 in 1999. The Company does not have any dilutive instruments and therefore only basic net income per share is presented.

Fair values of financial instruments

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments," as amended by SFAS No. 119, requires disclosure of fair value information for financial instruments, whether or not recognized in the balance sheet, when it is practicable to estimate the fair value. SFAS No. 107 defines a financial instrument as cash, evidence of an ownership interest in an entity or contractual obligations which require the exchange of cash or other financial instruments. Certain items are specifically excluded from the disclosure requirements, including the Company's common stock. In addition, other nonfinancial instruments such as premises and equipment and other assets and liabilities are not subject to the disclosure requirements.

The following methods and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein:

Cash and due from banks - The carrying amounts of cash and due from banks (cash on hand, due from banks and interest bearing deposits with other banks) approximate their fair value.

Federal funds sold - The carrying amounts of federal funds sold approximate their fair value.

Investment securities available for sale and held to maturity - Fair values for investment securities are based on quoted market prices.

Other investments - No ready market exists for Federal Reserve and Federal Home Loan Bank Stock and they have no quoted market value. However, redemption of this stock has historically been at par value.

(Continued)

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued

Fair values of financial instruments, continued

Loans - For variable rate loans that reprice frequently and for loans that mature within one year, fair values are based on carrying values. Fair values for all other loans are estimated using discounted cash flow analyses, with interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Deposits - The fair values disclosed for demand deposits are, by definition, equal to their carrying amounts. The carrying amounts of variable rate, fixed-term money market accounts and short-term certificates of deposit approximate their fair values at the reporting date. Fair values for long-term fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities.

Short-term borrowings - The carrying amounts of borrowings under repurchase agreements, federal funds purchased, short-term Federal Home Loan Bank advances and U. S. Treasury demand notes approximate their fair values.

Federal Home Loan Bank advances - Fair values of Federal Home Loan Bank advances are based on a discounted cash flow analysis comparing existing rates on the Company's advances to current rates offered on advances of similar maturities.

Off balance sheet instruments - Fair values of off balance sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing.

Recently issued accounting standards

Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities -- a replacement of SFAS No. 125, " was issued in September 2000. It revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures but will carry over most of SFAS No. 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after March 31, 2001. This statement is effective for recognition and reclassification of collateral and for disclosures related to securitization transactions and collateral for fiscal years ending after December 15, 2000. The adoption of the provisions of SFAS No. 140 in 2001 did not have a material effect on the Company.

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. The Company was required to adopt the provisions of SFAS No. 141 immediately and must adopt SFAS No. 142 effective January 1, 2002. The adoption of the provisions of SFAS No. 141 in 2001 did not have a material effect on the Company. The adoption of SFAS No. 142 is not expected to have a material effect on the Company.

(Continued)

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued

Recently issued accounting standards, continued

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This SFAS supercedes prior pronouncements associated with impairment or disposal of long-lived assets. The SFAS establishes methodologies for assessing impairment of long-lived assets, including assets to be disposed of by sale or by other means. This statement is effective for all fiscal years beginning after December 15, 2001. This SFAS is not expected to have a material impact on the Company's financial position.

On July 2, 2001, The Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin (SAB") No. 102, "Selected Loan Loss Allowance Methodology and Documentation Issues". SAB 102 expresses the SEC's views on the development, documentation and application of a systematic methodology for determining the allowance for loan and lease losses in accordance with Generally Accepted Accounting Principles. The Company believes that it is currently in compliance with the requirements of SAB 102.

Other accounting standards that have been issued or proposed by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Risks and Uncertainties

In the normal course of its business the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different basis, than its interest-earning assets. Credit risk is the risk of default on the Company's loan portfolio that results from borrower's inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company.

The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required loss allowances and operating restrictions from the regulators' judgments based on information available to them at the time of their examination.

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 amounts of these reserve balances for the years ended December 31, 2001 and 2000 were approximately $9,103,000 and $8,852,000, respectively.

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NOTE 3 - INVESTMENT SECURITIES

The book value, approximate fair value and expected maturities of investment securities are summarized as follows (tabular amounts in thousands):

	December 31, 2001 Amortized Unrealized Holding Fair
AVAILABLE FOR SALE Federal Agencies Within one year One to five years Six to ten years State, county and municipal One to five years Six to ten years After ten years Other CRA Qualified Investment Fund Total available for sale HELD TO MATURITY Federal agencies Within one year One to five years State, county and municipal Within one year One to five years Six to ten years Total held to maturity	Cost $ 9,927 96,652 14,612 121,191 3,652 11,640 854 16,146 278 $137,615 $ 3,013 7,011 10,024 1,570 5,931 3,180 10,681 $ 20,705	Gains $ 173 2,050 328 2,551 48 149 3 200 - $ 2,751 $ 31 295 326 20 187 80 287 $ 613	Losses $ - 174 - 174 29 146 10 185 - $ 359 $ - - - - - 6 6 $ 6	Value $ 10,100 98,528 14,940 123,568 3,671 11,643 847 16,161 278 $ 140,007 $ 3,044 7,306 10,350 1,590 6,118 3,254 10,962 $ 21,312

(Continued)

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NOTE 3 - INVESTMENT SECURITIES, Continued

	December 31, 2000 Amortized Unrealized Holding Fair
AVAILABLE FOR SALE United States Treasury Within one year Federal Agencies Within one year One to five years State, county and municipal One to five years Six to ten years After ten years Other CRA Qualified Investment Fund Total available for sale HELD TO MATURITY United States Treasury Within one year Federal agencies Within one year One to five years State, county and municipal Within one year One to five years Six to ten years Total held to maturity	Cost $ 14,066 25,059 41,517 66,576 453 4,711 1,357 6,521 254 $ 87,417 $ 1,006 13,026 15,082 28,108 2,415 6,322 4,364 13,101 $ 42,215	Gains $ 65 19 129 148 5 134 71 210 - $ 423 $ 1 23 129 152 11 50 112 173 $ 326	Losses $ - 52 207 259 - - - - - $ 259 $ - 2 22 24 - 4 7 11 $ 35	Value $ 14,131 25,026 41,439 66,465 458 4,845 1,428 6,731 254 $ 87,581 $ 1,007 13,047 15,189 28,236 2,426 6,368 4,469 13,263 $ 42,506

OTHER INVESTMENTS, AT COST

The Bank, as a member institution, is required to own certain stock investments in the Federal Home Loan Bank of Atlanta ("FHLB")and the Federal Reserve Bank. The stock is generally pledged against any borrowings from these institutions (see Note 8). No ready market exists for the stock and it has no quoted market value. However, redemption of these stocks has historically been at par value.

-49-

NOTE 3 - INVESTMENT SECURITIES, Continued

OTHER INVESTMENTS, AT COST, Continued

The Company's investments in stock are summarized below (tabular amounts in thousands):

	December 31,
Federal Reserve Bank Federal Home Loan Bank of Atlanta	2001 $ 116 1,278 $ 1,394	2000 $ 116 1,278 $ 1,394

Investment securities with an aggregate par value of $76,640,000 at December 31, 2001 and $90,870,000 at December 31, 2000 were pledged to secure public deposits and for other purposes.

NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES

Following is a summary of loans by major classification (tabular amounts in thousands):

	December 31,
Real estate - mortgage Real estate - construction Commercial and industrial Loans to individuals for household, family and other consumer expenditures Agriculture All other loans, including overdrafts	2001 $ 187,808 28,324 44,351 32,008 1,316 2,800 $296,607	2000 $ 191,329 20,590 45,929 34,726 1,376 1,698 $ 295,648

The Bank's loan portfolio consisted of $220,786,000 and $232,944,000 in fixed rate loans as of December 31, 2001 and 2000, respectively. Fixed rate loans with maturities in excess of one year amounted to $169,151,000 and $175,866,000 at December 31, 2001 and 2000, respectively. The Bank has an available line of credit from the Federal Home Loan Bank of Atlanta. Securing the line is a blanket lien on qualifying 1-4 family mortgages.

Changes in the allowance for loan losses are summarized as follows (tabular amounts in thousands):

For the years ended December 31,

	2001	2000		1999
Balance, beginning of year Recoveries of loans previously charged against the allowance Provided from current year's income Loans charged against the allowance Balance, end of year	$ 3,782 305 625 (949) $ 3,763		$ 3,451 257 820 (746) $ 3,782	$ 3,132 340 795 (816) $ 3,451

At December 31, 2001 and 2000, non-accrual loans totaled $633,000 and $305,000, respectively. The total amount of interest earned on non-accrual loans was $12,000 in 2001, $10,000 in 2000, and $26,000 in 1999. The gross interest income which would have been recorded under the original terms of the non-accrual loans amounted to $66,000 in 2001, $38,000 in 2000, and $46,000 in 1999. As of December 31, 2001 and 2000, the Company had no impaired loans.

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NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment at December 31 is summarized as follows (tabular amounts in thousands):

	2001	2000
Land and buildings Furniture, fixtures and equipment Less accumulated depreciation and amortization Construction in progress	$ 14,097 6,175 20,272 8,992 11,280 5 $11,285	$ 12,267 5,826 18,093 8,359 9,734 61 $ 9,795

Depreciation and amortization of premises and equipment charged to operating expense totaled $650,000 in 2001, $586,000 in 2000, $576,000 in 1999.

NOTE 6 - DEPOSITS

A summary of deposits, by type, as of December 31 follows (tabular amounts in thousands):

	2001	2000
Transaction accounts Savings deposits Insured money market accounts Time deposits over $100,000 Other time deposits Total deposits	$ 139,395 29,237 52,636 68,608 120,767 $410,643	$ 126,536 25,182 39,122 85,981 113,909 $390,730

Interest paid on certificates of deposit of $100,000 or more totaled $4,627,000 in 2001, $3,915,000 in 2000, and $3,513,000 in 1999.

At December 31, 2001 the scheduled maturities of time deposits are as follows (dollar amounts in thousands):

             2002
             2003
             2004
             2005

$ 174,075
9,480
5,432
388
$189,375

NOTE 7 - FHLB ADVANCES AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

Securities sold under repurchase agreements are summarized as follows (tabular amounts in thousands):

	At and for the year ended December 31,
Amount outstanding at year end Average amount outstanding during year Maximum outstanding at any month-end Weighted average rate paid at year-end Weighted average rate paid during year	2001 $ 32,821 30,882 36,702 1.91% 3.46%	2000 $ 22,567 30,851 34,263 5.00% 4.76%

(Continued)

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NOTE 7 - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS, Continued

The Bank enters into sales of securities under agreements to repurchase. These obligations to repurchase securities sold are reflected as liabilities in the consolidated balance sheets. The dollar amount of securities underlying the agreements are book entry securities maintained at the Federal Reserve Bank of Richmond. U. S. Government securities with a book value of $37,599,000 ($38,631,000 fair value) and $38,592,000 ($38,626,000 fair value) at December 31, 2001 and 2000, respectively, are used as collateral for the agreements.

The Bank has an outstanding advance with the FHLB totaling $1,485,000 and $1,650,000 at December 31, 2001 and 2000, respectively. At December 31, 2001, the advance bears interest at 7.01 percent and matures on October 18, 2010.

NOTE 8 - LINES OF CREDIT

      At December 31, 2001, the Bank had unused short-term lines of credit totaling $23,000,000 to purchase Federal Funds from unrelated banks. 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 $7,000,000 under the arrangement at an interest rate of 1.40 percent. The note is secured by U.S. Treasury Notes with a market value of $6,295,000 at December 31, 2001. The amount outstanding under the note totaled $653,000 and $1,834,000 at December 31, 2001 and 2000, respectively.

      The Bank also has a line of credit from the FHLB for $76,306,000 secured by a lien on the Bank's qualifying 1-4 family mortgages and the Bank's investment in FHLB stock. Allowable terms range from overnight to 20 years at varying rates set daily by the FHLB. At December 31, 2001, $1,485,000 was outstanding under the agreement.

NOTE 9 - INCOME TAXES

      The provision for income taxes is reconciled to the amount of income tax computed at the federal statutory rate on income before income taxes as follows (dollar amounts in thousands):

For the years ended December 31,

	2001		2000		1999
Tax expense at statutory rate Increase (decrease) in taxes resulting from: Tax exempt interest State bank tax (net of federal benefit) Other - net Tax provision	Amount $ 3,144 (352) 193 (173) $2,812	% 34.0% (3.8) 2.1 (1.9) 30.4%	Amount $ 3,138 (253) 188 (153) $ 2,920	% 34.0% (2.7) 2.0 (1.6) 31.7%	Amount $ 3,122 (242) 183 13 $ 3,076	% 34.0% (2.6) 2.0 0.1 33.5%

(Continued)

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NOTE 9 - INCOME TAXES, Continued

The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	December 31,
Deferred tax assets: Allowance for loan losses deferred for tax purposes Other Gross deferred tax assets Less valuation allowance Net deferred tax assets Deferred tax liabilities: Unrealized net gains on securities available for sale Depreciation for income tax reporting in excess of amount for financial reporting Gross deferred tax liabilities Net deferred tax asset (liability)	2001 $ 1,443 255 1,698 835 863 (957) (351) (1,308) $ (445)	2000 $ 1,280 214 1,494 930 564 (65) (320) (385) $ 179

The net deferred tax asset (liability) is included in other assets and other liabilities at December 31, 2001 and 2000, respectively.

A portion of the change in net deferred taxes relates to the change in unrealized net gains and losses on securities available for sale. The related 2001 deferred tax expense of $891,000 and the 2000 deferred tax expense of $739,000 have been recorded directly to stockholders' equity. The balance of the change in net deferred taxes results from the current period deferred tax benefit.

The following summary of the provision for income taxes includes tax deferrals which arise from temporary differences in the recognition of certain items of revenue and expense for tax and financial reporting purposes (amounts in thousands):

For the years ended December 31,

Income taxes currently payable
  Federal
  State

Deferred income taxes

    Provision for income taxes

    2001

$   2,742
       292

3,034
      (222)

$   2,812

    2000

$   2,933
       285

3,218
      (298)

$   2,920

    1999

$   2,910
       278

3,188
      (112)

$   3,076

-53-

NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

The Bank is a party to financial instruments with off balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated balance sheets. The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on balance sheet instruments.

The contract value of the Bank's off balance sheet financial instruments is as follows as of December 31, 2001 (amounts in thousands):

Commitments to extend credit

Standby letters of credit

Contract
amount

$25,819

$ 3,488

Commitments to extend credit are agreements to lend as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on management's credit evaluation.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

At December 31, 2001, the Bank was obligated under a number of non-cancelable operating leases on land used for branch offices and a computer maintenance contract that had initial or remaining terms of more than one year. Future minimum payments under these agreements at December 31, 2001 were (tabular amounts in thousands):

Payable in year ending

      2002
      2003
      2004
      2005
      2006
      2007 and thereafter

         Total future minimum payments required

Amount

$    16
       5
       5
       4
       4
       7

$    41

Lease payments under all operating leases charged to expense totaled $25,000 in 2001, $60,000 in 2000 and $92,900 in 1999. The leases provide that the lessee pay property taxes, insurance and maintenance cost.

The Company is party to litigation and claims arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such litigation and claims will not be material to the Company's financial position.

-54-

NOTE 12 - RESTRICTION ON DIVIDENDS

The ability of the Company to pay cash dividends is dependent upon receiving cash in the form of dividends from the Bank. Federal banking regulations restrict the amount of dividends that can be paid and such dividends are payable only from the retained earnings of the Bank. At December 31, 2001 the Bank's retained earnings were $10,826,000.

NOTE 13 - TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS AND ASSOCIATES

Directors and executive officers of the Company and the Bank and associates of such persons are customers of and had transactions with the Bank in the ordinary course of business. Additional transactions may be expected to take place in the future. Also, included in such transactions are outstanding loans and commitments, all of which were made on comparable terms, including interest rates and collateral, as those prevailing at the time for other customers of the Bank, and did not involve more than normal risk of collectibility or present other unfavorable features.

Total loans to all executive officers and directors, including immediate family and business interests, at December 31, were as follows (tabular amounts in thousands):

	December 31,
Balance, beginning of year New loans Less loan payments Balance, end of year	2001 $ 1,215 237 282 $ 1,170	2000 $ 1,213 372 370 $ 1,215

NOTE 14 - 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 three percent of employee salary deferred and fifty percent of employee contributions in excess of three percent and up to five percent of salary deferred. The Board of Directors may also make discretionary contributions to the Plan. For the years ended December 31, 2001, 2000, and 1999, $426,000, $404,000 and $423,000, respectively, were charged to operations under the plan.

Supplemental benefits are provided to certain key officers under The Conway National Bank Executive Supplemental Income Plan (ESI) and the Long-Term Deferred Compensation Plan (LTDC). These plans are not qualified under the Internal Revenue Code. The plans are unfunded. However, certain benefits under the ESI Plan are informally and indirectly funded by insurance policies on the lives of the covered employees.

-55-

NOTE 15 - REGULATORY MATTERS

         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 Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are 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 Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets. Management believes, as of December 31, 2001, that the Bank meets all capital adequacy requirements to which it is subject.

         As of December 31, 2001, the most recent notification from the Office of the Comptroller of the Currency categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's category. The Bank's actual capital amounts and ratios and minimum regulatory amounts and ratios are presented as follows (dollar amounts in thousands):

	Actual		For capital adequacy purposes Minimum		To be well capitalized under prompt corrective action provisions Minimum
As of December 31, 2001 Total Capital (to risk weighted assets) Tier I Capital (to risk weighted assets) Tier I Capital (to average assets) As of December 31, 2000 Total Capital (to risk weighted assets) Tier I Capital (to risk weighted assets) Tier I Capital (to average assets)	Amount $ 52,540 48,777 48,777 $ 48,965 45,191 45,191	Ratio 16.62 % 15.43 9.69 16.22 % 14.97 9.79	Amount $ 25,286 12,643 20,134 $ 24,151 12,076 18,457	Ratio 8.00 % 4.00 4.00 8.00 % 4.00 4.00	Amount $ 31,608 18,965 25,168 $ 30,189 18,114 23,072	Ratio 10.00 % 6.00 5.00 10.00 % 6.00 5.00

-56-

NOTE 16 - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments were as follows at December 31 (amounts in thousands):

	2001 Carrying Fair		2000 Carrying Fair
FINANCIAL ASSETS Cash and due from banks Federal funds sold Investment securities available for sale Investment securities held to maturity Other investments Loans FINANCIAL LIABILITIES Deposits Federal Home Loan Bank advances Securities sold under repurchase agreements U.S. Treasury demand notes OFF BALANCE SHEET INSTRUMENTS Commitments to extend credit Standby letters of credit	Amount $ 27,895 3,950 140,007 20,705 1,394 296,607 410,643 1,485 32,821 653 25,819 3,488	Value $ 27,895 3,950 140,007 21,312 1,394 294,012 411,150 1,615 32,821 653 25,819 3,488	Amount $ 20,239 9,875 87,581 42,215 1,394 295,648 390,730 1,650 22,567 1,834 21,042 1,040	Value $ 20,239 9,875 87,581 42,506 1,394 283,305 390,654 1,650 22,567 1,834 21,042 1,040

NOTE 17 - PARENT COMPANY INFORMATION

Following is condensed financial information of CNB Corporation (parent company only) (amounts in thousands):

CONDENSED BALANCE SHEETS

	December 31,
ASSETS Cash Investment in subsidiary Land Other assets LIABILITIES AND STOCKHOLDERS' EQUITY Dividends payable Stockholders' equity (net of $221 and $304 of treasury stock)	2001 $ 5,248 50,212 1,006 37 $ 56,503 $ 2,507 53,996 $ 56,503	2000 $ 4,776 45,289 1,006 37 $ 51,108 $ 2,502 48,606 $ 51,108

-57-

NOTE 17 - PARENT COMPANY INFORMATION, Continued

CONDENSED STATEMENTS OF INCOME

	For the years ended December 31,
INCOME Dividend from bank subsidiary EXPENSES Sundry Income before equity in undistributed net income of bank subsidiary EQUITY IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY Net income	2001 $ 2,903 54 2,849 3,586 $ 6,435	2000 $ 2,905 40 2,865 3,446 $ 6,311	1999 $ 2,515 38 2,477 3,628 $ 6,105

CONDENSED STATEMENTS OF CASH FLOWS

	For the years ended December 31,
OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed net income of bank subsidiary Net cash provided by operating activities INVESTING ACTIVITIES Purchase of land Proceeds from the sale of land Net cash used for investing activities FINANCING ACTIVITIES Dividends paid Cash in lieu of fractional shares on stock split Treasury stock transactions, net Net cash used for financing activities Net increase (decrease) in cash CASH, BEGINNING OF THE YEAR CASH, END OF THE YEAR	2001 $ 6,435 (3,586) 2,849 - - - (2,502) - 125 (2,377) 472 4,776 $ 5,248	2000 $ 6,311 (3,446) 2,865 (1,006) 786 (220) (2,086) (20) (4) (2,110) 535 4,241 $ 4,776	1999 $ 6,105 (3,628) 2,477 (786) 245 (541) (2,090) (72) (2,162) (226) 4,467 $ 4,241

-58-

NOTE 18 - QUARTERLY FINANCIAL DATA (UNAUDITED)
Unaudited condensed financial data by quarter for 2001 and 2000 is as follows (amounts, except per share data, in thousand):

	Quarter ended
	March 31			June 30	September 30					December 31
2001 Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Noninterest expenses Income before income taxes Income taxes Net income Net income per share Weighted average shares outstanding	$ 8,907 4,404 4,503 190 4,313 1,133 3,465 1,981 615 $ 1,366 $ 1.91 714,790			$ 8,647 4,080 4,567 130 4,437 1,430 3,544 2,323 714 $ 1,609 $ 2.25 714,702	$ 8,423 3,455 4,968 210 4,758 1,422 3,486 2,694 800 $ 1,894 $ 2.65 714,626					$ 7,986 2,883 5,103 95 5,008 1,352 4,111 2,249 683 $ 1,566 $ 2.19 714,618
	Quarter ended
	March 31		June 30				September 30		December 31
2000 Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Noninterest expenses Income before income taxes Income taxes Net income Net income per share Weighted average shares outstanding	$ 8,301 3,420 4,881 240 4,641 1,027 3,332 2,336 771 $ 1,565 $ 2.19 715,906	$ 8,491 3,501 4,990 240 4,750 1,144 3,379 2,515 814 $ 1,701 $ 2.38 715,712				$ 8,646 3,791 4,855 170 4,685 1,222 3,438 2,469 804 $ 1,665 $ 2.32 715,746		$ 8,837 4,113 4,724 170 4,554 1,169 3,812 1,911 531 $ 1,380 $ 1.93 715,260

ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.
-59-

PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
MANAGEMENT OF THE COMPANY

Directors

The Directors and Nominees for election to the Board of Directors of the Company are as follows:

Name (Age)

Director
Since

Proposed
Term
Expires

Present
Principal
Occupation

    Company
  Stock Owned
  Number      %

Willis J. Duncan
     (74)

W. Jennings Duncan
     (46)

James W. Barnette, Jr.
     (56)

*Harold G. Cushman, Jr.
     (72)

*H. Buck Cutts
     (60)

Paul R. Dusenbury

     (43)

*G. Heyward Goldfinch
     (83)

*Robert P. Hucks
     (56)

1958

1984

1984

1963

Has not
served on
the Board
of Directors.

1997

1976

1993

2003

2004

2004

2005

2005

2003

2005

2005

Chairman of the Board.
The President of the
Bank from November
1985 to February 1988.

President. Executive
Vice President of the
Bank from November
1985 to February 1988.

President of Surfside
Rent Mart, Inc., a
general rental company
located in Surfside
Beach, S.C., since
1992.

Retired in 1995 as
President of Dargan
Construction Company,
Inc.

Attorney in private
practice in Surfside
Beach, South Carolina.

Treasurer. Vice
President and Cashier
of the Bank since 1988.

Retired. Director of
Goldfinch's, Inc.,
a funeral home, and of
Hillcrest Cemetery of
Conway, Incorporated.

Executive Vice
President. Served as
Vice President and
Cashier of the Bank
from 1985 to 1988.

31,187(1)

26,930(2)

  5,829(3)

24,982(4)

16,446(5)

  1,102(6)

  3,912(7)

2,228(8)

4.36

3.76

.82

3.49

2.30

.15

.55

.31

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
MANAGEMENT OF THE COMPANY (continued)

Name (Age)	Director Since	Proposed Term Expires	Present Principal Occupation	Company Stock Owned Number %
Richard M. Lovelace, Jr. (55) John K. Massey (87) *Howard B. Smith, III (53)	1984 1959 1993	2003 2004 2005	Attorney in private practice in Conway, South Carolina. Retired. Executive in Residence for the Wall College of Business, Coastal Carolina University. Previously, Mr. Smith was a Practicing certified public accountant with Smith, Sapp,Bookhout,Crumpler, & Callihan, P.A. In Myrtle Beach,South Carolina.	1,495(9) 5,666(10) 3,632	.21 .79 .51

* Nominee for election to the Board of Directors.

       Except as indicated below, each director or director nominee of the company has sole voting and investment power with respect to all shares of Company stock owned by such director or director nominee. Each director or director nominee resides in Conway, South Carolina with the exceptions of Harold G. Cushman, H. Buck Cutts, and Paul R. Dusenbury who reside in Myrtle Beach, Surfside Beach, and Aynor, respectively, which are within Horry County, South Carolina. The address of each director or director nominee is c/o The Conway National Bank, Post Office Drawer 320, 1400 Third Avenue, Conway, South Carolina 29528. All Directors and officers of the Company and its subsidiary, The Conway National Bank, as a group (42 persons), own 147,813 (20.6%) shares of Company stock.

       (1) Includes 12,632 shares held by Harriette B. Duncan (wife).

       (2) Includes 1,665 shares held by Robin F. Duncan (wife); 3,632 shares held by Ann Louise Duncan (daughter); 3,632 shares held by Mary Kathryn Duncan (daughter); 3,632 shares by Willis Jennings Duncan, V (son); and 3,632 shares by Margaret Brunson Duncan (daughter).

       (3) Includes 4,826 shares held by Janet J. Barnette (wife).

       (4) Includes 21,000 shares held by the Cushman Family Limited partnership; 488 shares held by Dianne C. Cushman (wife); 657 shares held by Frances Faison Cushman (daughter); 657 shares held by Harold G. Cushman, III (son); 639 shares held by Harold G. Cushman, IV (grandson); and 638 shares held by Kara Dawn Cushman (granddaughter).

       (5) Includes 1,293 shares held by Brenda M. Cutts (wife); 1,172 shares held by Claire Cutts Abbot (daughter); and 1,172 shares held by Emeline E. Cutts (daughter).

       (6) Includes 208 shares held by Jennifer S. Dusenbury (wife); 65 shares held by Elena Cox Dusenbury (daughter); and 65 shares held by Sarah Cherry Dusenbury (daughter).

       (7) Includes 988 shares held by George Heyward Goldfinch (son); 350 shares held by Merilyn Goldfinch Cain (daughter); and 250 shares held by Cynthia Goldfinch Turner (daughter).

       (8) Includes 400 shares held by Willie Ann Hucks (wife); 30 shares held by Mariah J. Hucks (daughter); 74 shares held by Norah Leigh Hucks (daughter); and 224 shares held by Robert P. Hucks, II (son).

       (9) Includes 434 shares held by Rebecca S. Lovelace (wife); 518 shares held by Richard Blake Lovelace (son); and 423 shares held by Macon B. Lovelace (son).

      (10) Includes 1,586 shares held by Bertha T. Massey (wife).

       Each director or director nominee of the Company has been engaged in his principal occupation of employment as specified above for five (5) years or more unless otherwise indicated.

       W. Jennings Duncan is Willis J. Duncan's son. No other family relationships exist among the above named directors or officers of the Company. No director owns 25% or more of a publicly traded company. None of the directors of the Company holds a directorship in any company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or subject to the requirements of Section 15(d) of that act or in any company registered as an investment company under the Investment Company Act of 1940, as amended.

       The Board of Directors of the Company, as originally constituted, was classified into three (3) classes with each class consisting of five (5) directors. Five (5) directors in Class II will be elected at the 2002 Annual Meeting to serve for a three (3) year term. Directors in Class III will be elected at the 2003 Annual Meeting to serve for a three (3) year term and Directors in Class I will be elected at the 2004 Annual Meeting to serve for a three (3) year term. Currently, there are ten (10) Directors, with four (4) directors in Class II. The Board of Directors has passed a resolution increasing the total number of Directors from ten (10) to eleven (11).

       The Board of Directors of the Company serves as the Board of Directors of its subsidiary, The Conway National Bank. The Company's Board of Directors meets as is necessary and the Bank's Board of Directors meets on a monthly basis.

       The Board of Directors of the Bank has an Executive Committee that meets when necessary between scheduled meetings of the Board of Directors. The Executive Committee recommends to the Board of Directors the appointment of officers; determines officer compensation subject to Board approval; reviews employee salaries; considers any director nominee submitted by the shareholders; and addresses any other business as is necessary which does not come under the authority of other committees on the Board of Directors. The Executive Committee will consider any nominee to the Board of Directors submitted by the shareholders, provided shareholders intending to nominate director candidates for election deliver written notice thereof to the Secretary of the Company not later than (i) with respect to at election to be held at an Annual Meeting of shareholders, ninety (90) days prior to the anniversary date of the immediately preceding Annual Meeting of shareholders, and (ii) with respect to an election to be held at a special meeting of shareholders, the close of business on the tenth (10th) day following the date on which notice of such meeting is first given to shareholders. The Bylaws further provide that the notice shall set forth certain information concerning such shareholder and his nominee(s), including their names and addresses, a representation that the shareholder is entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, a description of all arrangements or understandings between the shareholder and each nominee, such other information as would be required to be included in a proxy statement soliciting proxies for the election of the nominees of such shareholder and the consent of each nominee to serve as Director of the Company if so elected. The Chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedures. The members of the Executive Committee are Harold G. Cushman, Jr., Willis J. Duncan, and W. Jennings Duncan.

       In addition, the Board of Directors of the Bank has Audit, Loan, Public Relations, and Building Committees. The members of the Audit Committee are James W. Barnette, Jr., John K. Massey, and Howard B. Smith, III. The members of the Loan Committee are Harold G. Cushman, Jr., Willis J. Duncan, W. Jennings Duncan, Paul R. Dusenbury, G. Heyward Goldfinch, Robert P. Hucks, and Richard M. Lovelace, Jr. The members of the Public Relations Committee are James W. Barnette, Jr., G. Heyward Goldfinch, and John K. Massey. The members of the Building Committee are James W. Barnette, Jr., Harold G. Cushman, Jr., Willis J. Duncan, W. Jennings Duncan, and Robert P. Hucks. Willis J. Duncan, Chairman of the Board, and W. Jennings Duncan, President, are ex officio members of each of these committees of the Board with the exception of the Audit Committee.

       The Audit Committee acts pursuant to a written charter adopted by the Board of Directors. A copy of the charter is attached to the May 8, 2001 Proxy Statement as Appendix A. Each member of the Audit Committee is independent as defined in the National Association of Securities Dealers listing standards.

       The function of the Loan Committee is to review and ratify new loans and monitor the performance and quality of existing loans, as well as to ensure that sound policies and procedures exist in the Bank's lending operations.

       During 2001, the Company's Board of Directors met three (3) times; the Bank's Board of Directors met twelve (12) times; the Executive Committee met nine (9) times; the Audit Committee met nine (9) times; the Loan Committee met twelve (12) times; the Building Committee met two (2) times; and the Public Relations Committee did not meet. Each Director attended at least 75% of the aggregate of (a) the total number of meetings of the Board of Directors held during the period for which he served as Director and (b) the total number of meetings held by all committees of the Board of Directors of which he served.

Executive Officers:

       The Executive Officers and other officers of the Company are as follows:

                                  Position(s) Currently
         Name             Age       With The Company

    Willis J. Duncan       74     Chairman of the Board (1)

    W. Jennings Duncan     46     President and Director (1)

    Robert P. Hucks        56     Executive Vice President and
                                  Director (1)

    Paul R. Dusenbury      43     Treasurer and Director (1)
                                 (Chief Financial Officer and
                                  Chief Accounting Officer)

    Virginia B. Hucks      52     Secretary

_________________
(1) Executive Officer

       All executive officers and other officers serve at the pleasure of the Board of Directors of the Company. Each executive officer and other officer of the Company has been employed by the Company and/or the Bank for five (5) years.

ITEM 11. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The Company pays no remuneration to its Directors and Executive Officers. All remuneration for services rendered are paid by the Company's subsidiary, The Conway National Bank, Conway, South Carolina ("the Bank").

Compensation Committee Report

The Executive Committee of the Bank recommends to the Board of Directors the appointment of officers; determines officer compensation subject to Board approval; and reviews employee salaries. The compensation of the President (Chief Executive Officer) and the other executive officers is not tied directly to corporate performance or any measure thereof. However, it would be deemed unacceptable by the Executive Committee, Board, and management to establish compensation levels that are not consistent with the performance of the Bank or return to shareholders. During the compensation decision process, much emphasis is placed on the Job Evaluation Salary Administration Program (JESAP) Committee. The "JESAP" Committee is charged with the responsibility of establishing job position descriptions; applying values to each job position in the form of a salary range; and obtaining salary surveys of a local, regional, and national level to determine that salary ranges are consistent with the industry and peers. The "JESAP" committee utilizes an independent management consulting firm to aid in this process. For each Bank employee, including the President (Chief Executive Officer) and all executive officers, a salary minimum, midpoint, and maximum is established. For fiscal 2001, all executive officer salary levels were below the midpoint as established by the JESAP process.

Summary Compensation Table

Annual Compensation Long-Term Compensation
Awards Payouts

Name and Principal Position	Year	($) Salary	($) Bonus	Other Annual(1) Compensation	Restricted Stock($) Awards	Stock Options #/SARS	Long-Term Incentive Payout($)	All Other (2) Compensation
W. Jennings Duncan President and Director of the Bank Robert P. Hucks Executive Vice President and Director of the Bank Paul R. Dusenbury Vice President and Cashier of Bank.	2001 2000 1999 2001 2000 1999 2001 2000 1999	158,004 150,480 142,632 139,680 133,032 126,096 129,504 123,336 116,904	28,651 31,096 31,309 25,444 27,606 27,795 23,663 25,667 25,842	5,380 4,683 3,543 6,000 6,000 6,000 6,000 6,000 6,000	0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0	11,060 10,534 11,232 9,778 9,312 9,930 9,065 8,634 9,206

(1) Cash value of personal use of automobile furnished by the Bank or automobile travel allowance.

(2) Cash contributions made by the Bank to the Bank's contributory profit-sharing and savings defined contribution plan.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS (continued)

PENSION PLAN DISCLOSURE

The Bank has a defined contribution pension plan covering all employees who have attained age twenty-one and have a minimum one year of service. Upon ongoing approval of the Board of Directors, the Bank matches one hundred percent of employee contributions up to three percent of employee contributions of salary deferred and fifty percent of employee contributions in excess of three percent and up to five percent of salary deferred. For the years ended December 31, 2001, 2000, and 1999, $426,000, $404,000, and $423,000, respectively, was charged to operations under the plan.

The Board of Directors of the Bank provides supplemental benefits to certain key officers, under The Conway National Bank Executive Supplemental Income (ESI) Plan and a Long-Term Deferred Compensation (LTDC) Plan. A copy of said plans was filed as Exhibit 10(a) and 10(b) with an amended Form 10-K Annual Report dated June 10, 2002.These plans are not qualified under the Internal Revenue Code. These plans are unfunded, however, certain benefits under the ESI Plan are informally and indirectly funded by insurance policies on the lives of the covered employees. Under the provisions of the ESI Plan, the Bank and the participating employees will execute agreements providing each employee (or his beneficiary, if applicable) with a pre-retirement death benefit and a post-retirement annuity benefit. The ESI Plan is designed to provide participating employees with a pre-retirement benefit based on a percentage of the employee's current compensation. The ESI agreement's post-retirement benefit is designed to supplement a participating employee's retirement benefits from Social Security in order to provide the employee with a certain percentage of his final average income at retirement age. Upon normal retirement age, Willis J. Duncan, W. Jennings Duncan, Robert P. Hucks, and Paul R. Dusenbury are eligible to receive fifteen annual payments of $9,650, $37,178, $30,827, and $28,379, respectively. While the employee is receiving benefits under the ESI Agreement, the agreement will prohibit the employee from competing with the Bank and will require the participating employee to be available for consulting work for the Bank. The ESI Agreement may be amended or revoked at any time prior to the participating employee's death or retirement, but only with the mutual written consent of the covered employee and the Bank. The ESI Agreements require that the participating employee be employed at the Bank at the earlier of death or retirement to be eligible to receive, or have his beneficiary receive, benefits under the agreement. Under the LTDC Plan, certain key employees and the Board of Directors may defer a portion of their compensation for their retirement and purchase units which are equivalent in value to one share of the Company's stock at market value. The number of units shall be equitably adjusted and restated to reflect changes in the number of common shares outstanding resulting from stock splits, stock dividends, stock issuances, and stock redemptions. The number of units also shall be equitably adjusted and restated to reflect cash dividends paid to Company common shareholders. The employee or Director receives appreciation, if any, in the market value of the unit as compared to the initial value per unit.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS (continued)
Performance Graphs

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CNB CORPORATION, INDEPENDENT BANK INDEX, AND NASDAQ

ASSUMES $100 INVESTED ON DECEMBER 31, 1996 IN EACH OF CNB CORPORATION STOCK,
INDEPENDENT BANK INDEX, AND NASDAQ INDEX WITH REINVESTMENT OF DIVIDENDS

COMPARISON OF RETURN ON AVERAGE ASSETS (ROA)
AMONG THE BANK, ALL SOUTH CAROLINA BANKS, AND SOUTH CAROLINA S&L's

BASED ON DECEMBER 31 DATA WITH THE EXCEPTION OF THE SEPTEMBER 30,2001 DATA
DUE TO THE UNAVAILABILITY OF DECEMBER 31, 2001 DATA
67

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS (continued)

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

No Compensation Committee interlocks exist. The members of the Executive Committee of the Board, which serves as the Compensation Committee, are Harold G. Cushman, Jr. (outside Director), Willis J. Duncan (Chairman of the Board and inside Director), and W. Jennings Duncan (President and inside Director). Membership of the "JESAP" Committee consists of seven Bank officers.

Director Compensation

Directors who are not Bank officers received $500 for each monthly meeting of the Board of Directors and an additional $150 for each committee meeting attended in 2001. Committee meeting compensation has been increased to $200 in 2002.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers and persons who own more than ten percent of a registered class of the Company's equity securities to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange Commission (the "SEC") and the National Association of Securities Dealers. Such officers, directors, and 10 percent shareholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms that they file.

Based solely on its review of copies of such reports received or written representations from certain reporting persons, the Company believes that during the fiscal year ended December 31, 2001, all Section 16(a) filing requirements applicable to its officers, directors, and 10 percent shareholders were complied with.

ITEM 12. SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth as of December 31, 2001, certain information regarding the ownership of Company Stock of all officers and directors of the Company. No shareholder is known to the management of the Company to be the beneficial owner of more than five (5%) percent of the Company Stock. The Company Stock is the Company's only class of voting securities.

  Name and Address           Amount and Nature of          Percent
of Beneficial Owner         Beneficial Ownership(1)        of Class

All Officers and Directors as a Group

(42 persons)  (2)                  147,813                   20.6%
_________________

(1)     For a description of the amount and nature of ownership of the directors of the Company, see "Management of the Company -Directors".

(2)     Includes 31 officers of the subsidiary, The Conway National Bank, who are not officers of the Company.

ITEM 13. CERTAIN TRANSACTIONS

      Directors, principal shareholders, and Executive Officers of the Company and the Bank are customers of and had transactions with the Bank in the ordinary course of business. Included in such transactions are outstanding loans and commitments, all of which were made on comparable terms, including interest rates and collateral as those prevailing at the time for other customers of the Bank, and did not involve more than normal risk of collectibility or present other unfavorable features.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a) The following exhibits, financial statements and financial
statement schedules are filed as part of this report:

FINANCIAL STATEMENTS

Report of Independent Public Accountants
Consolidated Statements of Condition - December 31, 2001 and 2000
Consolidated Statements of Income - Years ended December 31, 2001,
  2000, and 1999
Consolidated Statements of Changes in Stockholders' Equity - Years
  ended December 31, 2001, 2000, and 1999
Consolidated Statements of Comprehensive Income - Years ended December 31,
  2001, 2000, and 1999.
Consolidated Statements of Cash Flows - Years Ended December 31,
  2001, 2000, and 1999
Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted from this Annual Report because the required information is presented in the financial statements or in the notes thereto or the required subject matter is not applicable.

EXHIBITS

See Exhibit Index appearing below.

Reports on Form 8-K - No reports on Form 8-K were filed during the last quarter of the period covered by this report.

EXHIBIT INDEX

Exhibit
Number

  3      Articles of Incorporation - A copy of the Articles of
         Incorporation of the Company is incorporated herein
         by reference to Exhibit 3(a) which was filed with a
         Form 8-A dated June 24, 1998

         By-laws of the Company - A copy of the By-laws of the
         Company is incorporated herein by reference to Exhibit
         3(b) which was filed with a Form 10-Q Quarterly
         Report dated June 30, 1997.

10       Executive Supplemental Income Plan - A copy of the Executive
         Supplemental Income Plan is filed herewith as Exhibit 10(a).

         Long Term Deferred Compensation Plan entitled "Phantom Stock Plan" - A
         copy of the Long Term Deferred Compensation Plan is filed herewith as
         Exhibit 10(b).

22       Subsidiaries of the Registrant - A copy of the subsidiaries
         of the registrant is incorporated herein by reference to Exhibit 22
         which was filed with a Form 10-K Annual Report dated March 28, 1986.

All other exhibits, the filing of which are required with this Form,
are not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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

                                   W. Jennings Duncan, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in their capacities on March 13, 2002.

    Signature                               Capacity

S/Willis J. Duncan
  Willis J. Duncan                    Chairman of the Board

S/W. Jennings Duncan
  W. Jennings Duncan                  President and Director

S/Robert P. Hucks
  Robert P. Hucks                     Executive Vice President and
                                      Director

S/Paul R. Dusenbury
  Paul R. Dusenbury                   Treasurer and Director
                                     (Chief Financial Officer
                                      and Chief Accounting Officer)

S/Virginia B. Hucks
  Virginia B. Hucks                   Secretary

S/James W. Barnette, Jr.
  James W. Barnette, Jr.              Director

S/Harold G. Cushman, Jr.
  Harold G. Cushman, Jr.              Director

S/G. Heyward Goldfinch
  G. Heyward Goldfinch                Director

S/Richard M. Lovelace, Jr.
  Richard M. Lovelace, Jr.            Director

S/John K. Massey
  John K. Massey                      Director

S/Howard B. Smith, III
  Howard B. Smith, III                Director

	December 31, 2001		2000 to 2001 Percent Increase (Decrease)		December 31, 2000		1999 to 2000 Percent Increase (Decrease)		December 31, 1999
Net interest income after provision for loan losses Income before income taxes Net Income Per Share (weighted average of shares outstanding)* Cash dividends declared Per Share* Total assets Total deposits Loans, net of unearned income Investment securities Stockholders' equity Book value per share* (actual number of shares outstanding) *Restated for stock dividend Ratios (1): Return on average total assets Return on average stockholders' equity	$ 18,516 9,247 6,435 $ 9.00 2,507 $ 3.50 $505,725 410,643 296,607 162,106 53,996 $ 75.40 1.28% 12.25%	(.6)% ..2 2.0 2.0 ..2 - 7.4% 5.1 ..3 23.6 11.1 10.9 (5.9) (8.7)		$ 18,630 9,231 6,311 $ 8.82 2,502 $ 3.50 $471,076 390,730 295,648 131,190 48,606 $ 67.98 1.36% 13.42%		4.1% 5.5 3.4 3.4 19.9 - 3.4% 4.1 10.7 (8.9) 11.2 11.2 ..7 (5.2)		$ 17,904 9,181 6,105 $ 8.53 2,086 $ 3.50 $455,702 375,503 267,141 144,019 43,712 $ 61.12 1.35% 14.15%