CNB : 2022 1st Quarter Statement of Condition

DIRECTORS - CNB CORPORATION AND

CITIZENS NATIONAL BANK

RICK A. TROMBLE

Chairman, CNB Corporation

Chairman, Citizens National Bank

Owner, Tromble Bay Farms

DANA F. ANDREWS

President, Sturgeon River Pottery, Inc.

*STEPHANIE V. BALDWIN

President, Edgewater Design Group

*MELISSA K. BRIDGES

Attorney, Bodman LLP

SUSAN A. ENO

Retired President/Chief Executive Officer,

Citizens National Bank & CNB Corporation

*BRIAN B. EWBANK

President & COO, Stafford's Hospitality

MATTHEW E. KEENE

President/Chief Executive Officer,

Citizens National Bank & CNB Corporation

SCOTT D. LANDON

President, Landon Auto Parts

CHRISTOPHER B. SHEPLER

President, Shepler's Mackinac Island Ferry Service

R. JEFFERY SWADLING

Audit Committee Chairman, CNB Corporation Vice President, Ken's Village Market

DIRECTORS EMERITI

JOHN P. WARD

STEVEN J. BAKER, D.V.M.

JAMES C. CONBOY, JR.

KATHLEEN M. DARROW

THOMAS J. ELLENBERGER

VINCENT J. HILLESHEIM

KATHLEEN A. LIEDER

THOMAS J. REDMAN

FRANCIS J. VANANTWERP, JR.

*Citizens National Bank Director

CNB CORPORATION OFFICERS

MATTHEW E. KEENE . . . . . . . . . . . .	President & Chief Executive Officer
VICTORIA J. HAND . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . Secretary
AMY E. ESSEX . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . Treasurer

CITIZENS NATIONAL BANK OFFICERS

LEADERSHIP:

MATTHEW E. KEENE. . . . . . . . . . . . . President & Chief Executive Officer VICTORIA J. HAND . . Executive Vice President, Chief Operating Officer, Cashier & Compliance Officer AMY E. ESSEX . . . . . . . . . Senior Vice President & Chief Financial Officer

JOSEPH P. GARBER. . . . . . . . Senior Vice President & Chief Credit Officer DAVID A. WOODS . . . . . . . . . . Senior Vice President & Chief Loan Officer TRISHA M. DOBIAS . . . . . . . . . . . . . . . Vice President, Human Resources VALERIE A. JONES. . . . . . . . . . . . . . . . . Vice President, Cash Management NANCY K. LINDSAY . . . . . . . . . . . . . . . . . . . . . . Vice President, Marketing AMANDA J. NICHOLSON. . . . . . . . . . . . . . . . . . Universal Banking Officer

BUSINESS BANKING:

JOSEPH M. DALY . . . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

NICOLE M. DRAKE . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

TIMOTHY J. TIMMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President

CYNTHIA D. LAMBERSON . . . . . . . . . . . . . . . . . . Assistant Vice President

STEPHEN J. DALY . . . . . . . . . . . . . . . . . . . . . . . . Business Banking Officer

RESIDENTIAL BANKING:

STEPHEN J. CRUSOE . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

MICHELLE M. MILLER . . . . . . . . . . . . . . . . . . . . Assistant Vice President

SHARON L. COPPERNOLL . . . . . . . . . . . . . . . . . . . . . . Residential Officer

DENNIS S. MYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residential Officer

REGINA H. PATTON . . . . . . . . . . . . . . . . . . . . . . . . . . . Residential Officer

WEALTH & RETIREMENT STRATEGIES:

MATTHEW H. DEWILDT . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President

OPERATIONS:

QUINN C. BONNETT . . . . . . . . . . . . Facilities Manager & Security Officer

MARILY J. GALLOWAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk Officer

CHANDLAR E. RUSH . . . . . . . . . . . . . . . . . . . . . . . . . . . Technology Officer

SHERRY M. WICHLACZ . . . . . . . . . . . . . . . . . . . . . . . . Operations Officer

Citizens National Bank has offices in:

Cheboygan•Onaway•Mackinaw City

Pellston•Indian River•Alanson•Petoskey

You can also visit our website at

www.CNBisMyBank.com

our 91 year tradition continues

STATEMENT OF CONDITION

March 31, 2022

CONSOLIDATED BALANCE SHEET

(UNAUDITED) In thousands of dollars

	March 31,
ASSETS	2022	2021
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . .	$ 6,440	$ 6,867
Interest-bearing deposits with other financial
institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10,287	47,631
	______	______
Total cash and cash equivalents. . . . . . . . . . . . . . . . . .	16,727	54,498
Time deposits with other financial institutions	10,146	12,632
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . .	266,310	173,476
Securities held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . .	4,490	3,524
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,720	957
	______	______
Total investment securities. . . . . . . . . . . . . . . . . . . . . . . .	272,520	177,957
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	903	4,852
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	180,459	176,196
Less: allowance for loan losses. . . . . . . . . . . . .	(2,771)	(3,013)
	______	______
Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	178,591	178,035
Premises and equipment, net. . . . . . . . . . . . . . . . . . . . .	6,578	7,551
ORE Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	138	0
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15,694	10,918
	______	______
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$500,394	$441,591
	_______	_______
LIABILITIES	_______	_______
Deposits:
Noninterest-bearingdemand . . . . . . . . . . . . . . . . . . .	$ 172,911	$ 151,972

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

In thousands of dollars, except per share data

For the three months ended March 31,

INTEREST INCOME	2022	2021	2020
Interest and fees on loans . . . . . . . . . . . . . .	$ 1,937	$ 2,251	$ 2,071
Interest on securities:
Taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	903	309	417
Tax exempt . . . . . . . . . . . . . . . . . . . . . . . . . .	80	81	74
Other interest income . . . . . . . . . . . . . . . . . . .	59	77	178
	______	______	______
Total interest income . . . . . . . . . . . . . . . . . . . .	2,979	2,718	2,740
INTEREST EXPENSE ON DEPOSITS	171	142	104
	______	______	______
NET INTEREST INCOME . . . . . . . . . . . .	2,808	2,576	2,636
Provision for loan losses . . . . . . . . . . . . . . . .	0	0	0
	______	______	______
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES . . . .	2,808	2,576	2,636
	______	______	______
NONINTEREST INCOME
Service charges and fees . . . . . . . . . . . . . . . . . .	306	256	247
Net gain from sale of loans . . . . . . . . . . . . . .	161	728	272
Gain on sale of assets . . . . . . . . . . . . . . . . . . . .	391	37	6
Loan servicing fees, net of amortization	21	(61)	10
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86	165	153
	______	______	______
Total noninterest income . . . . . . . . . . . . . . .	965	1,125	688

NONINTEREST EXPENSES

May 13, 2022

Dear Shareholder,

CNB Corporation (the Corporation) and its subsidiary, Citizens National Bank (the Bank), welcomed 2022 with optimism and a continued focus on engaging with our customers. Over the next month, branch lobbies will be entirely restored to their pre-pandemic routines, with the coffee bars and cookies making their long-awaited return.

During this time of global turmoil, we are fortunate our own northern Michigan community is well-positioned for another strong summer tourist season. Below are the financial highlights from the first quarter 2022:

• Higher yields in the bank's investment portfolio increased interest on securities, growing total interest income by $261,000 year-over-year.
• The rising rate environment created an unrealized loss in the available-for-sale investment portfolio, which is reflected in the Bank's accumulated other comprehensive income/(loss). However, it is unlikely the loss will be realized, as the Bank historically holds all investments to maturity.
• In the first quarter 2021, $21.7 million of the Bank's $178.0 million loan portfolio was outstanding Paycheck Protection Program (PPP) loans. The business banking team worked proactively to help customers navigate the forgiveness process, and, as of this current quarter end, all PPP loans have been settled. While assisting local businesses in successfully finish- ing the PPP program, Bank staff simultaneously grew organic loans by $22.2 million year-over-year.
• Rising rates led to an industry-wide reduction in demand for residential refinances; as a result, net gain from sale of loans decreased by 77.9% compared to the same quarter 2021.
• Gain on sale of assets increased by $354,000 year-over-year, boosted by the sale of the surplus Petoskey property. Renovation of the new branch is expected to begin this sum- mer.
• Total noninterest expenses remained relatively flat as Bank staff worked diligently to increase efficiencies.
• The Bank ended the first quarter 2022 with net income of $567,000, contributing to the increase in retained earnings of $1.8 million over the same quarter in 2021.

It is with deepest regrets I inform you of the passing of Director Emeritus John Ward. John had a notable career with the Bank, beginning in 1973 and continuing until his retirement from the board in 2006. Please keep his family in your thoughts and prayers

Interest-bearingdeposits . . . . . . . . . . . . . . . . . . . . . . . .	307,828		254,342
	______		______
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	480,739		406,314
Accrued and other liabilities. . . . . . . . . . . . . . . . . . . . . .	5,556		5,569
	______		______
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	486,295		411,883
SHAREHOLDERS' EQUITY
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,027		3,027
Additional Paid-InCapital . . . . . . . . . . . . . . . . . . . . . . . . .	19,472		19,472
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,212		6,376
Accumulated other
Comprehensive Income/(Loss), net . . . . . . . . .	(16,612)		833
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . .	14,099		29,708
Total liabilities and shareholders' equity . . . . . . .	$500,394		$441,591
	_______		_______
	_______		_______

Salaries and benefits . . . . . . . . . . . . . . . . . . . . . . . . .

Occupancy and equipment . . . . . . . . . . . . .

FDIC insurance premiums . . . . . . . . . . . . . .

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total noninterest expenses . . . . . . . . . . . . .

INCOME BEFORE INCOME TAXES . . . . . . . .

Income tax expense . . . . . . . . . . . . . . . . . . . . .

NET INCOME (LOSS) . . . . . . . . . . . . . . . . .

BASIC NET INCOME PER SHARE . . . . . . . . .

	1,815		1,741		1,553
	359		314		310
	78		54		33
	835		813		767
______	______	______
	3,087		2,922		2,663
______	______	______
	686		779		661
	119		135		113
______	______	______
$	567	$	644	$	548
______	______	______
______	______	______
$	0.47	$	0.53	$	0.45
______	______	______
______	______	______

during this difficult time.

Past President & CEO Susan Eno has announced her retirement from the board and, by the time this statement reaches you, will have served at her last board meeting. I encourage you to offer her your congratulations and thank her for her nearly 51 years of service to the Bank and the Corporation.

The Annual Meeting of Shareholders will take place on Tuesday, May 17th at the Knights of Columbus Hall in Cheboygan. I'm pleased to announce that we will be hosting a dinner this year, and I welcome all of you to attend and to celebrate the retirements of Steven Baker, Susan Eno, Kathleen Lieder, and Thomas Redman.

Sincerely,

Matthew E. Keene

President & CEO