**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549


_____________________




**FORM
      10-KSB**




ANNUAL
      REPORT UNDER SECTION 13 OR
      15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934




For
      the
      fiscal year ended: **** **December
      31, 2005**






Commission
      File Number: **000-51351**




**CB
      FINANCIAL CORPORATION**


(Name
      of
      small business issuer in its charter)





**North
                Carolina**
              (State
                or other jurisdiction of
              incorporation
                or organization)
            
            **56-2129155**
              (I.R.S.
                Employer Identification No.)**3710
                Nash Street North**
              **Post
                Office Box 8189 (Zip 27893)**
              **Wilson,
                North Carolina 27896-1120**
              (Address
                of principal executive offices)
            
            **27896-1120**
              (Zip
                Code)




**(252)
      243-5588**


(Issuer’s
      telephone number)




Securities
      Registered Under Section 12(b) of the Act: **None**




Securities
      Registered Under Section 12(g) of the Act: **Common
      Stock, no par value**


(Title
      of
      Class)




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. [ ]




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.


Yes
            X
            
            No




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will 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-KSB or any
      amendment to this Form 10-KSB. [X]




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
            
            
            No
            X




State
      issuer’s revenues for its most recent fiscal year. **$8,492,800,
      based on the sum of total interest income and total non-interest income for
      fiscal year 2005.**







State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked prices of a specified date within the past
      60
      days. **$13.1
      million, based on the market price of the common stock on March 8, 2006, in
      the
      last trade known to management to have occurred, which was $15.50 per
      share.**




State
      the
      number of shares outstanding of each of the registrant's classes of common
      equity, as of the latest practicable date. **1,014,228
      shares of common stock outstanding at March 17, 2006.**





**DOCUMENTS
      INCORPORATED BY REFERENCE**





Portions
      of the Annual Report of CB Financial Corporation for the year ended December
      31,
      2005 (the “2005 Annual Report”) are incorporated by reference into Parts I and
      II.





Portions
      of the Proxy Statement for the 2006 Annual Meeting of Stockholders of CB
      Financial Corporation to be held on May 25, 2006, (the “Proxy
      Statement”) are incorporated by reference into Part III.





Transitional
              Small Business Disclosure Format:
            Yes
            
            
            No
            X





















*This
      report contains certain forward-looking statements with respect to the financial
      condition, results of operations and business of CB Financial Corporation
      (“Company”) and its banking subsidiary, Cornerstone Bank (“Bank”). These
      forward-looking statements involve risks and uncertainties and are based on
      the
      beliefs and assumptions of management of the Company and the Bank and on the
      information available to management at the time that these disclosures were
      prepared. These statements can be identified by the use of words like “expect,”
“anticipate,” “estimate” and “believe,” variations of these words and other
      similar expressions. Readers should not place undue reliance on forward-looking
      statements as a number of important factors could cause actual results to differ
      materially from those in the forward-looking statements. Factors that could
      cause actual results to differ materially include, but are not limited to,
      (1)
      competition in the Bank’s markets, (2) changes in the interest rate environment,
      (3) general national, regional or local economic conditions may be less
      favorable than expected, resulting in, among other things, a deterioration
      in
      credit quality and the possible impairment of collectibility of loans, (4)
      legislative or regulatory changes, including changes in accounting standards,
      (5) significant changes in the federal and state legal and regulatory
      environment and tax laws, (6) the impact of changes in monetary and fiscal
      policies, laws, rules and regulations and (7) other risks and factors identified
      in the Company’s other filings with the Securities and Exchange Commission. The
      Company undertakes no obligation to update any forward-looking statements.*




2





**PART
      I**





**ITEM
                    1.**
                
                **DESCRIPTION
                    OF BUSINESS**





**General**





CB
      Financial Corporation (the “Company”) was established in 2005 as a bank holding
      company registered with the Board of Governors
      of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding
      Company Act of 1956, as amended (the “BHCA”), and the **** bank
      holding company laws of North Carolina. The Company’s main office is located at
      3710 Nash Street North, Wilson, North Carolina. The Company’s primary activity
      is owning Cornerstone Bank (the “Bank”), a North Carolina-chartered commercial
      bank. The Company’s principal sources of income are any dividends that are
      declared and paid by the Bank on its capital stock, all of which is owned by
      the
      Company, and earnings on the Company’s investments. The Company invests its
      capital primarily in interest-bearing deposits, U.S. government, federal agency
      and other marketable securities with terms of up to 10 years and mortgage-backed
      securities.





Cornerstone
      Bank was incorporated on March 14, 2000, and began operations on March 15,
      2000,
      as a North Carolina chartered commercial bank. The Bank is engaged in commercial
      and consumer banking primarily in Wilson, Wilson County, North Carolina, and
      operates under the banking laws of North Carolina and the rules and regulations
      of the Federal Deposit Insurance Corporation (the “FDIC”).





As
      a
      North Carolina bank, the Bank is subject to examination and regulation by the
      FDIC and the Commissioner of Banks, North Carolina Department of Commerce (the
      “Commissioner”). The Bank also is subject to certain regulations of the Board of
      Governors of the Federal Reserve (“Federal Reserve Board”) governing reserves
      required to be maintained against deposits and other matters. The business
      and
      regulation of the Bank are subject to legislative changes from time to time.
      See
      Item 1. “DESCRIPTION OF BUSINESS - Supervision and Regulation.”





The
      Bank
      became a member of the Federal Home Loan Bank (the “FHLB”) system on March 28,
      2000, and its deposits have been federally insured since its organization.
      The
      deposits of the Bank are insured by the Bank Insurance Fund (the “BIF”) of the
      FDIC to the maximum amount permitted by law. The Bank conducts business through
      its main office located in Wilson, North Carolina, another full service office
      in Wilson, and a loan production facility in Zebulon, North
      Carolina.





The
      majority of the Bank’s deposit and loan customers are individuals and small to
      medium-sized businesses located in the Bank’s market area. Management does not
      believe the Bank is dependent on a single customer or group of customers
      concentrated in a particular industry whose loss or insolvency would have a
      material adverse impact on operations.





At
      December 31, 2005, the Company had total assets of $152.8 million, total loans
      of $114.5 million, deposits of $129.1 million, and stockholders’ equity of $10.5
      million.





**Subsidiaries**





The
      Company has two subsidiaries: the Bank and CB Financial Capital Statutory Trust
      I (the “Trust”), which is non-banking subsidiary that holds trust preferred
      securities.





*CB
      Financial Capital Statutory Trust I* .
      On July
      12, 2005, the Company completed a trust preferred securities transaction in
      the
      amount of $5 million. In connection with the transaction, the Company
      established the Trust, a Connecticut statutory trust, on July 8, 2005. The
      Trust
      issued and sold $5,000,000 aggregate principal amount of floating rate preferred
      securities (the “Trust Preferred Securities”) in a private placement to an
      institutional investor and issued $155,000 in floating rate common securities
      (the “Common Securities”) to the Company. The Trust used the proceeds of these
      issuances to purchase $5,155,000 of the Company’s junior subordinated debentures
      due July 12, 2035 (the “Notes”).




3


The
      Notes
      are the sole assets of the Trust and are subordinate to the Company’s senior
      obligations. The net proceeds to the Company from the sale of the Notes to
      the
      Trust are being  used
      by
      the Company to support growth and for other general corporate
      purposes.  Concurrently
      with the issuance of the Notes and the Trust Preferred Securities,  the
      Company entered into a Guarantee Agreement dated July 12, 2005 between the
      Company and U.S. Bank National Association under which the Company guaranteed
      the payment of various obligations associated with the Trust Preferred
      Securities.





**Competition**





The
      Bank
      faces strong competition both in attracting deposits and making real estate
      and
      other loans. Its most direct competition for deposits comes from commercial
      banks, savings institutions, and credit unions located in its primary market
      area, including large financial institutions that have greater financial and
      marketing resources available to them. At June 30, 2005, there were 24 branches
      of commercial banks and savings institutions in Wilson County based on FDIC
      information. The Bank also faces additional significant competition for
      investors’ funds from short-term money market securities and other corporate and
      government securities. The ability of the Bank to attract and retain savings
      deposits depends on its ability generally to provide a rate of return, liquidity
      and risk comparable to that offered by competing investment
      opportunities.





The
      Bank’s competition for real estate loans is from savings institutions,
      commercial banks, credit unions and mortgage banking companies. It competes
      for
      loans primarily through the interest rates and loan fees it charges, the
      efficiency and quality of services it provides borrowers, and its more flexible
      underwriting standards. Competition is increasing as a result of the continuing
      reduction of restrictions on the interstate operations of financial
      institutions.





**Primary
      Market Area**





The
      Bank’s primary market area consists of Wilson County, North Carolina, and
      surrounding areas. Currently, two full service offices are located in Wilson,
      Wilson County, North Carolina, and a loan production office is located in
      Zebulon, Wake County, North Carolina. As a result, the Bank’s loans and deposits
      are primarily generated from the Wilson community, with a growing percentage
      of
      loans generated from the Zebulon area. The Bank also has established lines
      of
      credit with correspondent banks outside its primary market area to provide
      additional liquidity as needed. In 2005, the Bank had purchased $2.2 million
      in
      brokered deposits for liquidity/leverage purposes. The Bank’s loans and deposits
      are primarily generated from the Bank’s market area. To meet funding needs, the
      Bank occasionally solicits deposits outside its primary market area using a
      national certificate of deposit rate service, CD Rateline. The remainder of
      deposits are generated from its primary market area.





Employment
      in the Bank’s market area is diversified among manufacturing, agricultural,
      retail and wholesale trade. Employment in the Bank’s primary market area as of
      January 2006 was stable, with an unemployment rate above that of North Carolina
      and national averages. The Bank anticipates continued steady growth in the
      Wilson community population, and believes that such a trend will result in
      a
      greater demand for banking services in the future. ****





**Lending
      Activities**





**General.** The Bank
      offers a wide range of lending services, including commercial, real estate
      and
      consumer loans. The Bank considers individual consumers and small to medium
      businesses to be its primary market for loans. **** The
      Bank
      also offers both personal and commercial overdraft lines of credit in connection
      with its checking accounts. The Bank’s current lending strategy is to establish
      market share throughout Wilson County, with an emphasis in Wilson and
      surrounding areas, including mortgage loans originated in Zebulon.




**Construction
      Loans.** Real
      estate construction loans include twelve-month contract housing loans, which
      are
      intended to convert to permanent residential mortgage loans upon completion
      of
      the construction. These permanent residential mortgage loans are sold in the
      secondary market. The Bank also originates commercial construction loans. These
      loans are typically made to businesses or individuals located within Wilson
      County for the construction of commercial structures in Wilson County,
      including, but not limited to, industrial facilities, apartments, office
      buildings, and warehouse facilities. The properties are generally for owner
      occupancy. Permanent financing commitments from third parties are usually
      required for non owner-occupied real estate construction and development
      activities. Other non owner-occupied real estate loans are made at reasonable
      loan-to-value ratios against income-producing properties with adequate cash
      flow. In the case of owner-occupied properties, the Bank verifies that the
      owner
      has adequate resources to repay the debt. The Bank generally does not offer
      long-term, fixed-rate financing for owner-occupied or non owner-occupied
      buildings and residences. The Bank does offer loans with fixed rate financing
      for five years or less which have the option to be either called or renewed
      at
      prevailing market rates at the end of that term.





4


**Commercial
      and Industrial Loans and Commercial Real Estate.** The
      Bank’s commercial lending program is generally targeted to serve closely held
      established businesses with sales of $50 million or less. In-house limits allow
      lending to larger customers that have reasonable business connections with
      the
      Bank’s market in Wilson County. Commercial lending includes commercial,
      financial, agricultural, industrial, and real estate loans. These loans consist
      of both secured and unsecured working capital loans and longer-term secured
      loans. Secured loans are generally secured by commercial property and equipment,
      as well as other assets such as inventory and accounts receivable. Personal
      guarantees are typically obtained for both secured and unsecured loans to
      supplement the financial strength of the borrower and the value of any
      collateral securing the loan. Pricing on commercial loans is driven largely
      by
      competition, credit risk and deposit relationships and is usually tied to the
      prime rate.





**Consumer
      Loans and Home Equity Lines of Credit.** The Bank
      offers various consumer loan products. Both secured and unsecured loans are
      marketed to existing clients and to any other creditworthy candidates. Home
      equity lines of credit (“Home Equity Lines”) are underwritten with note amounts
      and credit limits that ensure consistency with the Bank’s loan-to-value policy
      (85% for consumer loans secured by real estate). The Bank offers Home Equity
      Lines up to 100% of the appraised value of a home, but underwrites 15% of such
      loans on an unsecured basis. The Bank’s Home Equity Line program offers an
      adjustable rate tied to the Wall Street Journal prime rate. Typically, all
      Home
      Equity Lines have an interest rate floor of 5.00%.




**Residential
      Mortgage Loans.** Loans
      secured by residential real estate on terms of up to three years are retained
      in
      the Bank’s loan portfolio. These loans can be priced at a variable rate under
      one- or three-year Adjustable Rate Mortgages (“ARMs”). The Bank offers varying
      amortization periods up to 30 years. The Bank does not originate loans with
      negative amortization. Risks associated with residential lending include
      interest rate risk, which is mitigated through the sale of substantially all
      fixed-rate loans with maturities greater than three years, and default risk,
      which is reduced through underwriting procedures and loan-to-value limitations.
      Loans secured by residential real estate and held for the Bank’s portfolio
      generally have a loan-to-value ratio of less than 80%.





**Residential
      Mortgage Loans Held for Sale.** The Bank
      engages in mortgage loan originations by offering fixed- and adjustable-rate
      government and conventional loans for the purpose of constructing, purchasing
      or
      refinancing owner-occupied properties. The Bank originates single-family
      residential first mortgage loans, with maturities greater than three years,
      on a
      presold basis. Upon closing, these loans, together with their servicing rights,
      are sold to other financial institutions under prearranged terms. The Bank
      recognizes certain origination and service release fees upon the sale, which
      are
      classified as mortgage operations on the statement of operations.





**Other
      Loans.** Numerous
      forms of unsecured loans, including revolving credits (DDA overdraft lines
      of
      credit and personal lines of credit) are provided and various installment loan
      products, including vehicle loans, are offered. Pricing of such loans is based
      largely on in-market competition. Closed-end installment loans are usually
      priced as fixed-rate simple interest loans. Most of the Bank’s revolving loans
      have variable rates.





**Loan
      Solicitation, Processing and Underwriting.** Loan
      originations are derived from a number of sources, such as referrals from real
      estate brokers, present depositors and borrowers, builders, attorneys, walk-in
      customers and in some instances, other lenders.





During
      its loan approval process, the Bank assesses the applicant’s ability to make
      principal and interest payments on the loan and the value of the property
      securing the loan. The Bank obtains detailed written loan applications to
      determine the borrower’s ability to repay and verifies responses on the loan
      application through the use of credit reports, financial statements, and other
      confirmations. Under current practice, the loan officer of the Bank analyzes
      the
      loan application and the property involved, and an appraiser inspects and
      appraises the property. The Bank requires independent fee appraisals on all
      loans originated primarily on the basis of real estate collateral. The Bank
      also
      obtains information concerning the income, financial condition, employment
      and
      the credit history of the applicant.





5


Loans
      up
      to $500,000 may be approved by certain designated loan officers and the Bank’s
      chief lending officer in cases where the loan meets all of the Bank’s
      underwriting guidelines. Loans over $500,000 must be approved by the Bank’s loan
      committee, which is composed of four members of the Board of Directors.





**Analysis
      of Loan Portfolio.** The
      Bank’s loan portfolio totaled approximately $114.5 million at
      December 31, 2005, representing approximately 74.9% of the Bank’s
      total assets. At December 31, 2005, approximately 89.5% of the Bank’s total loan
      portfolio was composed of adjustable rate loans, and approximately 10.5% of
      the
      Bank’s total loan portfolio was composed of fixed rate loans. Selected data
      relating to the composition of the Bank’s loan portfolio by type of loan at
      December 31, 2005, is set forth in Note D in the section captioned “Consolidated
      Financial Statements - Notes to Consolidated Financial Statements” in the
      Company’s 2005 Annual Report, which section is incorporated herein by
      reference. ****





**Loan
      Maturity Schedule and Rate Sensitivity.** Information
      regarding maturities and sensitivities of certain loan types to changes in
      interest rates at December 31, 2005, is set forth under the section captioned
      “Management’s Discussion and Analysis” in the Company’s 2005 Annual Report,
      which section is incorporated herein by reference.





**Nonperforming
      Assets and Classified Assets**





Nonperforming
      assets include non-accrual loans and real estate acquired through loan
      foreclosures. It is the general policy of the Bank to discontinue the accrual
      of
      interest on loans, including loans impaired under Statement of Financial
      Accounting Standards No. 114, “Accounting by Creditors for Impairment of a Loan”
(SFAS No. 114) when principal or interest payments are delinquent 90 to 120
      days
      or more. In some cases, loans may be placed on non-accrual status earlier based
      on specific circumstances surrounding the loan. If the collection of principal
      and/or interest income becomes doubtful at any time during the collection
      process, the loan is placed on non-accrual status. At
      December 31, 2005, the Bank had $2.2 million in nonperforming
      assets. ****





Applicable
      regulations require the Bank to “classify” its own assets on a regular basis. In
      addition, in connection with examinations of banks, regulatory examiners have
      authority to identify problem assets and, if appropriate, classify them. Problem
      assets are classified as “substandard,” “doubtful,” or “loss,” depending on the
      presence of certain characteristics. At December 31, 2005, the Bank had loans
      totaling $2.5 million internally classified as “substandard,” “doubtful,” or
“loss.”





The
      Bank
      also identifies assets that possess credit deficiencies or potential weaknesses
      deserving close attention by management. These assets may be considered “special
      mention” assets and do not yet warrant adverse classification. At December 31,
      2005, the Bank had no loans in the “special mention” category.





When
      an
      insured institution classifies problem assets as either “substandard” or
“doubtful,” it is required to establish general allowances for loan losses in an
      amount deemed prudent by management. These allowances represent loss allowances
      that have been established to recognize the inherent risk associated with
      lending activities and the risks associated with particular problem assets.
      When
      an insured institution classifies problem assets as “loss,” it charges off the
      balance of the asset. The Bank’s determination as to the classification of its
      assets and the amount of its valuation allowances is subject to review by the
      FDIC and the Commissioner, which can order the establishment of additional
      loss
      allowances.





**Allowance
      for Loan Losses.** In
      originating loans, the Bank recognizes that credit losses will be experienced
      and that the risk of loss will vary with, among other things, the type of loan
      being made, the creditworthiness of the borrower over the term of the loan
      and,
      in the case of a secured loan, the quality of the security for the loan as
      well
      as general economic conditions. It is the Bank’s policy to maintain an adequate
      allowance for loan losses based on, among other things, the banking industry’s
      historical loan loss experience, evaluation of economic conditions and regular
      reviews of delinquencies and loan portfolio quality. Specific allowances are
      provided for individual loans when ultimate collection is considered
      questionable by management after reviewing the current status of loans that
      are
      contractually past due and considering the net realizable value of the security
      for the loans. The Bank’s allowance for loan losses is set at a level that
      reflects the economic environment and that adequately reserves for any future
      loan losses.





Additional
      information regarding the Bank’s allowance for loan losses is set forth under
      the section captioned “Management’s Discussion and Analysis” and under Note D in
      the section captioned “Consolidated Financial Statements - Notes to Consolidated
      Financial Statements” in the Company’s 2005 Annual Report, which sections are
      incorporated herein by reference.





6


**Investment
      Activities**





Interest
      and dividend income from investment activities generally provides the second
      largest source of income to the Bank after interest on loans. **** During
      2005, the Bank maintained all of its excess liquidity in overnight investments
      and United States government agency, mortgage-backed securities and municipals.
      This allowed the Bank to have maximum flexibility in funding loan demand. As
      of
      December 31, 2005, United States government agency and mortgage-backed
      securities and municipals totaled $19.5 million. Interest income on United
      States government agency, mortgage-backed securities and municipals totaled
      $0.6
      million at December 31, 2005. Overnight investments totaled $4.6 million at
      December 31, 2005, and consisted of federal funds sold and Money Market
      Accounts. Interest income on overnight investments totaled $130,000 for the
      fiscal year ended December 31, 2005.





The
      Bank
      may engage in other types of investment activities in the future. The Board
      of
      Directors has determined that the Bank’s investments will be limited to U.S.
      Treasury obligations, federal agency securities, municipal obligations of the
      State of North Carolina or its political subdivisions rated A and above,
      government agency sponsored mortgage-backed securities, stock of FHLB of Atlanta
      and certificates of deposits of $100,000 or less in federally insured financial
      institutions and other approved investments approved per the Bank’s investment
      policy. Investment decisions are made by authorized officers of the Bank in
      accordance with the Bank’s investment policy. Such investments will be managed
      in an effort to produce the highest yield consistent with maintaining safety
      of
      principal and compliance with regulations governing the financial services
      industry. The Bank’s investment strategy emphasizes, in order of priority,
      liquidity, safety of principal and yield.





**Deposits
      and Borrowings**





**Deposits.** Deposits
      are the primary source of the Bank’s funds for lending and other investment
      purposes. The Bank attracts both short-term and long-term deposits from the
      general public by offering a variety of accounts and rates. The Bank offers
      statement savings accounts, negotiable order of withdrawal accounts, money
      market demand accounts, noninterest-bearing accounts, and fixed interest rate
      certificates with varying maturities. **** At
      December 31, 2005, 62.9% of the Bank’s deposits consisted of time
      deposit accounts, less than 1% consisted of statement savings and money market
      accounts, 27.2% consisted of interest-bearing transaction accounts and money
      market accounts, and 9% consisted of noninterest-bearing transaction
      accounts. **** Deposit
      flows are greatly influenced by economic conditions, the general level of
      interest rates, competition, and other factors. The Bank occasionally does
      utilize the services of deposit brokers, but its savings deposits are obtained
      primarily from its primary market area. The Bank uses traditional marketing
      methods to attract new customers and savings deposits, including print media
      advertising and direct mailings. The
      Bank
      periodically advertises rates of interest on its certificates of deposits on
      the
      Internet through CD Rateline. The Bank anticipates that the amount of internet
      deposits it holds will continue to decline. Although the Bank accepts these
      deposits primarily for liquidity purposes, the Bank also uses them to manage
      the
      Bank’s interest rate risk.





Certain
      information regarding the Bank’s deposits at December 31, 2005, is set forth
      under the section captioned “Management’s Discussion and Analysis” in the
      Company’s 2005 Annual Report **,** which
      section is incorporated herein by reference.





At
      December 31, 2005, the aggregate amount of certificates of deposit and other
      time deposits of the Bank, in amounts greater than or equal to $100,000 was
      $33
      million. Information regarding the maturity of time deposits of the Bank at
      December 31, 2005, is set forth under Note F in the section captioned
“Consolidated Financial Statements - Notes to Consolidated Financial Statements”
in the Company’s 2005 Annual Report, which section is incorporated herein by
      reference.





**Borrowings.** Borrowings may be used on a short-term basis to compensate for reductions in
      the
      availability of funds from other sources. They may also be used on a longer-term
      basis for general business purposes. The Bank may obtain advances of up to
      10%
      of its assets from the FHLB of Atlanta to supplement its liquidity needs. The
      FHLB system functions in a reserve credit capacity for banks. As a member,
      the
      Bank is required to own capital stock in the FHLB of Atlanta and is authorized
      to apply for advances from the FHLB of Atlanta on the security of that stock
      and
      a floating lien on certain of its real estate secured loans and other assets.
      Each credit program has its own interest rate and range of maturities. Depending
      on the program, limitations on the amount of advances are based either on a
      fixed percentage of an institution’s net worth or on the FHLB of Atlanta’s
      assessment of the institution’s creditworthiness. At December 31, 2005, the Bank
      had outstanding FHLB borrowings totaling $6.3 million.





7


In
      addition to FHLB advances, the Company issued $5.1 million of junior
      subordinated debentures to its wholly owned capital trust, CB Financial Capital
      Statutory Trust I, to fully and unconditionally guarantee the preferred
      securities issued by the trust. Also, the Bank has established lines of credit
      of approximately $15.3 million with correspondent banks to provide additional
      liquidity if and as needed. At December 31, 2005, the amount outstanding under
      these agreements totaled $1.1 million.





**Return
      on Equity and Assets**





The
      following table sets forth information regarding the Company’s return on equity
      and assets at December 31, 2005:





**RETURN
      ON EQUITY AND ASSETS**


December
      31, 2005





Return
                on average assets - annualized
            0.86%Return
                on average equity - annualized
            11.33%Average
                equity to average assets ratio
            7.56%





**Employees**





At
      December 31, 2005, the Bank had 33 full-time employees and no part-time
      employees.





**Supervision
      and Regulation**





*Bank
      holding companies and state commercial banks are extensively regulated under
      both federal and state law.* *The
      following is a brief summary of some of the basic statutes and regulations
      that
      apply to the Company and Bank, but it is not a complete discussion of all the
      laws that affect the Company’s and Bank’s business.* *Supervision,
      regulation and examination of the Bank by the regulatory agencies are intended
      primarily for the protection of depositors rather than shareholders of the
      Bank.*





***Supervision
      and Regulation of the Company***





**General.** The
      Company was organized for the purpose of acquiring and holding all of the
      capital stock of the Bank. As a bank holding company subject to the BHCA, the
      Company is subject to certain regulations of the Federal Reserve. Under the
      BHCA, a bank holding company such as the Company, which does not qualify as
      a
      financial holding company, is prohibited from engaging in activities other
      than
      banking, managing or controlling banks or other permissible subsidiaries,
      furnishing services to or performing services for its subsidiaries or engaging
      in any other activity that the Federal Reserve determines to be so closely
      related to banking or managing or controlling banks as to be a proper incident
      thereto. The BHCA also prohibits the Company from acquiring direct or indirect
      control of more than 5% of the outstanding voting stock or substantially all
      of
      the assets of any bank or merging or consolidating with another bank holding
      company without prior approval of the Federal Reserve.





Additionally,
      the BHCA prohibits the Company from engaging in, or acquiring ownership or
      control of more than 5% of the outstanding voting stock of any company engaged
      in, a non-banking business unless such business is determined by the Federal
      Reserve to be so closely related to banking as to be properly incident thereto.
      The BHCA does not place territorial restrictions on the activities of such
      non-banking related activities.





Similarly,
      Federal Reserve approval (or, in certain cases, non-objection) must be obtained
      prior to any person acquiring control of the Company. Control is conclusively
      presumed to exist if, among other things, a person owns, controls, or has the
      power to vote 25% or more of any class of voting stock of the holding company
      or
      controls in any manner the election of a majority of the directors of the
      holding company. Control is presumed to exist if a person owns, controls, or
      has
      the power to vote more than 10% of any class of voting stock and the stock
      is
      registered under Section 12 of the Securities Exchange Act of 1934, as amended
      (“Exchange Act”) or the acquiror will be the largest stockholder after the
      acquisition.





8


There
      are
      a number of obligations and restrictions imposed on bank holding companies
      and
      their depository institution subsidiaries by law and regulatory policy that
      are
      designed to minimize potential loss to the depositors of such depository
      institutions and FDIC insurance funds in the event the depository institution
      becomes in danger of default or is in default. For example, to avoid
      receivership of an insured depository institution subsidiary, a bank holding
      company is required to guarantee the compliance of any insured depository
      institution subsidiary that has become “undercapitalized” with the terms of any
      capital restoration plan filed by such subsidiary with its appropriate federal
      banking agency up to the lesser of (i) an amount equal to 5% of the
      institution’s total assets at the time the institution became undercapitalized,
      or (ii) the amount which is necessary to bring the institution into compliance
      with all acceptable capital standards as of the time the institution initially
      fails to comply with such capital restoration plan. Under a policy of the
      Federal Reserve with respect to bank holding company operations, a bank holding
      company is required to serve as a source of financial strength to its subsidiary
      depository institutions and to commit resources to support such institutions
      in
      circumstances where it might not do so absent such policy. The Federal Reserve
      under the BHCA also has the authority to require a bank holding company to
      terminate any activity or to relinquish control of a nonbank subsidiary (other
      than a nonbank subsidiary of a bank) upon the Federal Reserve’s determination
      that such activity or control constitutes a serious risk to the financial
      soundness and stability of any bank subsidiary of the bank holding
      company.





In
      addition, the “cross-guarantee” provisions of the Federal Deposit Insurance Act,
      as amended, require insured depository institutions under common control to
      reimburse the FDIC for any loss suffered as a result of the default of a
      commonly controlled insured depository institution or for any assistance
      provided by the FDIC to a commonly controlled insured depository institution
      in
      danger of default. The FDIC may decline to enforce the cross-guarantee
      provisions if it determines that a waiver is in the best interest of the deposit
      insurance funds. The FDIC’s claim for damages is superior to claims of
      stockholders of the insured depository institution or any affiliate but is
      subordinate to claims of depositors, secured creditors and holders of
      subordinated debt (other than affiliates) of the commonly controlled insured
      depository institutions.





As
      a
      result of the Company’s ownership of the Bank, the Company is registered under
      the bank holding company laws of North Carolina. Accordingly, the Company is
      also subject to regulation and supervision by the Commissioner.





**Financial
      Services Modernization Legislation.**





**Gramm-Leach-Bliley
      Act**





The
      federal Gramm-Leach-Bliley Act enacted in 1999 (the “GLB Act”) dramatically
      changed various federal laws governing the banking, securities, and insurance
      industries. The GLB Act has expanded opportunities for banks and bank holding
      companies to provide services and engage in other revenue-generating activities
      that previously were prohibited to them. However, this expanded authority also
      may present us with new challenges as our larger competitors are able to expand
      their services and products into areas that are not feasible for smaller,
      community oriented financial institutions. The GLB Act has had a significant
      economic impact on the banking industry and on competitive conditions in the
      financial services industry generally.





**USA
      Patriot Act of 2001**





The
      USA
      Patriot Act of 2001 was enacted in response to the terrorist attacks that
      occurred in New York, Pennsylvania and Washington, D.C. on September 11, 2001.
      The Act is intended to strengthen the ability of U.S. law enforcement and the
      intelligence community to work cohesively to combat terrorism on a variety
      of
      fronts. The potential impact of the Act on financial institutions of all kinds
      is significant and wide ranging. The Act contains sweeping anti-money laundering
      and financial transparency laws and imposes various regulations, including
      standards for verifying customer identification at account opening, and rules
      to
      promote cooperation among financial institutions, regulators, and law
      enforcement entities in identifying parties that may be involved in terrorism
      or
      money laundering.





9


**Sarbanes-Oxley
      Act of 2002**





On
      July
      30, 2002, the Sarbanes-Oxley Act of 2002 was signed into law. It contained
      sweeping changes to federal legislation, addressing accounting, corporate
      governance and disclosure issues. The impact of the Sarbanes-Oxley Act is
      wide-ranging as it applies to all public companies and imposes significant
      new
      requirements for public company governance and disclosure
      requirements.





In
      general, the Sarbanes-Oxley Act mandates corporate governance and financial
      reporting requirements intended to enhance the accuracy and transparency of
      public companies’ reported financial results. It establishes new
      responsibilities for corporate chief executive officers, chief financial
      officers and audit committees in the financial reporting process and creates
      a
      new regulatory body to oversee auditors of public companies. It backs these
      requirements with new SEC enforcement tools, increases criminal penalties for
      federal mail, wire and securities fraud, and creates new criminal penalties
      for
      document and record destruction in connection with federal investigations.
      It
      also increases the opportunity for more private litigation by lengthening the
      statute of limitations for securities fraud claims and providing new federal
      corporate whistleblower protection.





The
      economic and operational effects of this legislation on public companies,
      including us, are significant in terms of the time, resources and costs
      associated with complying with the law. Because the Sarbanes-Oxley Act, for
      the
      most part, applies equally to larger and smaller public companies, we are
      presented with additional challenges as a smaller, community-oriented financial
      institution seeking to compete with larger financial institutions in our
      market.





**Capital
      Adequacy Guidelines for Holding Companies.** The
      Federal Reserve has adopted capital adequacy guidelines for bank holding
      companies and banks that are members of the Federal Reserve system and have
      consolidated assets of $150 million or more. For bank holding companies with
      less than $150 million in consolidated assets, the guidelines are applied on
      a
      bank-only basis unless the parent bank holding company (i) is engaged in nonbank
      activity involving significant leverage or (ii) has a significant amount of
      outstanding debt that is held by the general public.





Bank
      holding companies subject to the Federal Reserve’s capital adequacy guidelines
      are required to comply with the Federal Reserve's risk-based capital guidelines.
      Under these regulations, the minimum ratio of total capital to risk-weighted
      assets (including certain off-balance sheet activities, such as standby letters
      of credit) is 8%. At least half of the total capital is required to be "Tier
      I
      capital," principally consisting of common stockholders' equity, non-cumulative
      perpetual preferred stock, and a limited amount of cumulative perpetual
      preferred stock, less certain goodwill items. The remainder ("Tier II capital")
      may consist of a limited amount of subordinated debt, certain hybrid capital
      instruments and other debt securities, perpetual preferred stock, and a limited
      amount of the general loan loss allowance. In addition to the risk-based capital
      guidelines, the Federal Reserve has adopted a minimum Tier I capital (leverage)
      ratio, under which a bank holding company must maintain a minimum level of
      Tier
      I capital to average total consolidated assets of at least 3% in the case of
      a
      bank holding company which has the highest regulatory examination rating and
      is
      not contemplating significant growth or expansion. All other bank holding
      companies are expected to maintain a Tier I capital (leverage) ratio of at
      least
      1% to 2% above the stated minimum.





**Dividend
      and Repurchase Limitations.** The
      Company must obtain Federal Reserve approval in order to use more than 10%
      of
      its net worth to make stock repurchases during any 12 month period unless the
      Company (i) both before and after the redemption satisfies capital requirements
      for "well capitalized" state member banks; (ii) received a one or two rating
      in
      its last examination; and (iii) is not the subject of any unresolved supervisory
      issues. Although the payment of dividends and repurchase of stock by the Company
      are subject to the requirements and limitations of North Carolina corporate
      law,
      except as set forth in this paragraph, neither the Commissioner nor the FDIC
      have promulgated any regulations specifically limiting the right of the Company
      to pay dividends and repurchase shares. The ability of the Company to pay
      dividends or repurchase shares may be dependent upon the Company's receipt
      of
      dividends from the Bank. The Bank’s ability to pay dividends is limited.





10


**Capital
      Maintenance Agreement.** In order
      to acquire control of the Bank, the Company was required to execute a capital
      maintenance agreement under which it has agreed to maintain the Bank’s capital
      in an amount sufficient to enable the Bank to satisfy all regulatory capital
      requirements.





**Federal
      Securities Laws.** The
      Company has registered its common stock with the SEC pursuant to Section 12(g)
      of the Exchange Act. As a result of such registration, the proxy and tender
      offer rules, insider trading reporting requirements, annual and periodic
      reporting and other requirements of the Exchange Act are applicable to the
      Company.





***Supervision
      and Regulation of the Bank***





**General.** The Bank
      is an insured North Carolina-chartered commercial bank that is a member of
      the
      FHLB system. Its deposits are insured through the FDIC’s Bank Insurance Fund
      (“BIF”), and it is subject to supervision and examination by and the regulations
      and reporting requirements of the FDIC and the Commissioner, which are its
      primary federal and state banking regulators respectively. The Bank is not
      a
      member bank of the Federal Reserve System.





As
      an
      insured bank, the Bank is prohibited from engaging as principal in any activity
      that is not permitted for national banks unless (1) the FDIC determines that
      the
      activity or investment would not pose a significant risk to the BIF and (2)
      the
      Bank is, and the Bank continues to be, in compliance with the capital standards
      that apply to it. The Bank also is prohibited from directly acquiring or
      retaining any equity investment of a type or in an amount that is not permitted
      for national banks.




In
      addition, the Bank is subject to various regulations promulgated by the Federal
      Reserve including, without limitation, Regulation B (Equal Credit Opportunity),
      Regulation D (Reserves), Regulation E (Electronic Fund Transfers), Regulation
      O
      (Loans to Executive Officers, Directors and Principal Stockholders), Regulation
      W (Transactions Between Member Banks and Affiliates), Regulation Z (Truth in
      Lending), Regulation CC (Availability of Funds) and Regulation DD (Truth in
      Savings).





The
      FDIC
      and the Commissioner have broad powers to enforce laws and regulations
      applicable to the Bank. Among others, these powers include the ability to assess
      civil money penalties, to issue cease and desist or removal orders, and to
      initiate injunctive actions. In general, these enforcement actions may be
      initiated in response to violations of laws and regulations and the conduct
      of
      unsafe and unsound practices.





The
      Bank’s business also is influenced by prevailing economic conditions and
      governmental policies, both foreign and domestic, and by the monetary and fiscal
      policies of the Federal Reserve Board (even though the Bank is not a member
      bank
      of the Federal Reserve System). The Federal Reserve Board’s actions and policy
      directives determine to a significant degree the cost and availability of funds
      the Bank obtains from money market sources for lending and investing, and they
      also influence, directly and indirectly, the rates of interest the Bank pays
      on
      its time and savings deposits and the rates the Bank charges on commercial
      bank
      loans.





**Transactions
      with Affiliates.** The
      Company and Bank are subject to the provisions of Section 23A of the Federal
      Reserve Act. Section 23A places limits on the amount of:





·
            a
                bank’s loans or extensions of credit to, or investment in, its
                affiliates;


·
            assets
                a bank may purchase from affiliates, except for real and personal
                property
                exempted by the Federal Reserve
                Board;


·
            the
                amount of loans or extensions of credit by a bank to third parties
                which
                are collateralized by the securities or obligations of the bank’s
                affiliates; and


·
            a
                bank’s guarantee, acceptance or letter of credit issued on behalf of one
                of its affiliates.




The
      total
      amount of the above transactions is limited in amount, as to any one affiliate,
      to 10% of a bank’s capital and surplus and, as to all affiliates combined, to
      20% of a bank’s capital and surplus. In addition to the limitation on the amount
      of these transactions, each of the above transactions must also meet specified
      collateral requirements. The Bank must also comply with other provisions
      designed to avoid the taking of low-quality assets from an
      affiliate.




11


The
      Bank
      is also subject to the provisions of Section 23B of the Federal Reserve Act
      which, among other things, prohibits a bank from engaging in the above
      transactions with its affiliates unless the transactions are on terms
      substantially the same, or at least as favorable to the bank or its
      subsidiaries, as those prevailing at the time for comparable transactions with
      nonaffiliated companies.





Federal
      law also places restrictions on our ability to extend credit to our executive
      officers, directors, principal stockholders and their related interests. These
      extensions of credit (1) must be made on substantially the same terms, including
      interest rates and collateral, as those prevailing at the time for comparable
      transactions with unrelated third parties, and (2) must not involve more than
      the normal risk of repayment or present other unfavorable features.





**FDIC
      Insurance Assessments.** The Bank
      is also subject to insurance assessments imposed by the FDIC. The FDIC currently
      uses a risk-based assessment system that takes into account the risks
      attributable to different categories and concentrations of assets and
      liabilities for purposes of calculating deposit insurance assessments payable
      by
      insured depository institutions. The risk-based assessment system categorizes
      institutions as “well capitalized,” “adequately capitalized” or
“undercapitalized.” These three categories are substantially similar to the
      prompt corrective action categories (see “Prompt Corrective Action”), with the
“undercapitalized” category including institutions that are “undercapitalized,”
“significantly undercapitalized” and “critically undercapitalized” for prompt
      corrective action purposes. Institutions also are assigned by the FDIC to one
      of
      three supervisory subgroups within each capital group. The particular
      supervisory subgroup to which an institution is assigned is based on a
      supervisory evaluation provided to the FDIC by the institution’s primary federal
      banking regulator and information which the FDIC determines to be relevant
      to
      the institution’s financial condition and the risk posed to the deposit
      insurance fund. An institution’s insurance assessment rate then is determined
      based on the capital category and supervisory subgroup to which it is assigned.
      Under the risk-based assessment system, there are nine assessment risk
      classifications (i.e., combinations of capital groups and supervisory subgroups)
      to which different assessment rates (ranging from zero to 27 basis points)
      are
      applied. In addition, the Bank pays premiums assessed against all banks based
      on
      their deposit levels to service debt on bonds issued to recapitalize the deposit
      insurance funds.





An
      institution’s deposit insurance may be terminated by the FDIC upon a finding
      that the institution has engaged in unsafe and unsound practices, is in an
      unsafe or unsound condition, or has violated any applicable law, regulation,
      rule, order, or condition imposed by the FDIC.





**Community
      Reinvestment Act.** Under
      the Community Reinvestment Act as implemented by regulations of the FDIC, an
      insured institution has a continuing and affirmative obligation consistent
      with
      its safe and sound operation to help meet the credit needs of its entire
      community, including low and moderate income neighborhoods. The Community
      Reinvestment Act does not establish specific lending requirements or programs
      for financial institutions, nor does it limit an institution’s discretion to
      develop, consistent with the Community Reinvestment Act, the types of products
      and services that it believes are best suited to its particular community.
      The
      Community Reinvestment Act requires the federal banking regulators, in
      connection with their examinations of insured institutions, to assess the
      institutions’ records of meeting the credit needs of their communities, using
      the ratings of “outstanding,” “satisfactory,” “needs to improve,” or
“substantial noncompliance,” and to take that record into account in its
      evaluation of certain applications by those institutions. All institutions
      are
      required to make public disclosure of their Community Reinvestment Act
      performance ratings. The Bank received a “satisfactory” rating in its last
      Community Reinvestment Act examination.





**Capital
      Adequacy Requirements Applicable to the Bank.** The Bank
      is required to comply with the capital adequacy standards established by the
      FDIC. The FDIC has promulgated risk-based capital and leverage capital
      guidelines for determining the adequacy of a bank’s capital, and all applicable
      capital standards must be satisfied for the Bank to be considered in compliance
      with the FDIC’s requirements.





Under
      the
      FDIC’s risk-based capital measure, the minimum ratio (“Total Risk-Based Capital
      Ratio”) of a bank’s total capital to its risk-weighted assets (including certain
      off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
      half of total capital must be composed of common equity, undivided profits,
      minority interests in the equity accounts of consolidated subsidiaries,
      qualifying non-cumulative perpetual preferred stock, and a limited amount of
      cumulative perpetual preferred stock, less goodwill and certain other intangible
      assets (“Tier 1 Capital”). The remainder may consist of certain subordinated
      debt, certain hybrid capital instruments and other qualifying preferred stock,
      a
      limited amount of loan loss reserves, and net unrealized holding gains on equity
      securities (“Tier 2 Capital”). At December 31, 2005, the Bank’s Total Risk-Based
      Capital Ratio and its ratio of Tier 1 Capital to risk-weighted assets (“Tier 1
      Risk-Based Capital Ratio”) were 15.40% and 14.14%, respectively, which were well
      above the FDIC’s minimum risk-based capital guidelines.





12


Under
      the
      FDIC’s leverage capital measure, the minimum ratio (the “Leverage Capital
      Ratio”) of Tier 1 Capital to total assets is 3.0% for banks that meet certain
      specified criteria, including having the highest regulatory rating. All other
      banks generally are required to maintain an additional cushion of 100 to 200
      basis points above the stated minimum. The FDIC’s guidelines also provide that
      banks experiencing internal growth or making acquisitions will be expected
      to
      maintain strong capital positions substantially above the minimum levels without
      significant reliance on intangible assets, and the FDIC has indicated that
      it
      will consider a bank’s “Tangible Leverage Ratio” (deducting all intangible
      assets) and other indicia of capital strength in evaluating proposals for
      expansion or new activities. At December 31, 2005, the Bank’s Leverage Capital
      Ratio was 10.57%, which was well above the FDIC’s minimum leverage capital
      guidelines.





Failure
      to meet the FDIC’s capital guidelines could subject a bank to a variety of
      enforcement remedies, including issuance of a capital directive, the termination
      of deposit insurance by the FDIC, a prohibition on the taking of brokered
      deposits, and certain other restrictions on its business. As described below,
      substantial additional restrictions can be imposed upon FDIC-insured depository
      institutions that fail to meet applicable capital requirements. See “Prompt
      Corrective Action.” The FDIC also considers interest rate risk (arising when the
      interest rate sensitivity of an institution’s assets does not match the
      sensitivity of its liabilities or its off-balance-sheet position) in the
      evaluation of a bank’s capital adequacy. Banks with excessive interest rate risk
      exposure may be required to maintain higher levels of capital to protect them
      against that exposure.





**Loans-To-One-Borrower.**
      The Bank is subject to the Commissioner’s loans-to-one-borrower limits. As of
      December 31, 2005, the largest aggregate amount of loans that the Bank had
      to
      any one borrower and its affiliates was $2 million. Theses loans were performing
      in accordance with their original terms. The Bank does not believe that the
      loans-to-one-borrower limits will have a significant impact on its business,
      operations and earnings.





**Limits
      on Rates Paid on Deposits and Brokered Deposits.** ** Regulations
      enacted by the FDIC place limitations on the ability of insured depository
      institutions to accept, renew or roll-over deposits by offering rates of
      interest which are significantly higher than the prevailing rates of interest
      on
      deposits offered by other insured depository institutions in the depository
      institution’s normal market area. Under these regulations, “well capitalized”
depository institutions may accept, renew or roll-over such deposits without
      restriction, “adequately capitalized” depository institutions may accept, renew
      or roll-over such deposits with a waiver from the FDIC (subject to certain
      restrictions on payments of rates) and “undercapitalized” depository
      institutions may not accept, renew, or roll-over such deposits. The regulations
      contemplate that the definitions of “well capitalized,” “adequately capitalized”
and “undercapitalized” will be the same as the definitions adopted by the FDIC
      to implement the corrective action provisions discussed below. See “Prompt
      Corrective Action.” As of December 31, 2005, the Bank was considered “well
      capitalized,” and, thus, was not subject to the limitations on rates payable on
      its deposits.





**Federal
      Home Loan Bank System.** The FHLB
      system provides a central credit facility for member institutions. In December
      2004, the FHLB of Atlanta implemented a new capital plan. As a member of the
      FHLB of Atlanta and under the new capital plan, the Bank is required to own
      capital stock in the FHLB of Atlanta in an amount at least equal to 0.20% (or
      20
      basis points) of the Bank’s total assets at the end of each calendar year, plus
      4.5% of its outstanding advances (borrowings) from the FHLB of Atlanta under
      the
      new activity-based stock ownership requirement. On December 31, 2005, the Bank
      was in compliance with this requirement.





**Reserve
      Requirements.** Under
      regulations of the Federal Reserve Board, all FDIC-insured depository
      institutions must maintain average daily reserves against their transaction
      accounts equal to specified percentages of the balances of those accounts.
      These
      percentages are subject to adjustment by the Federal Reserve Board. Because
      the
      Bank’s reserves are required to be maintained in the form of vault cash or in a
      non-interest-bearing account at a Federal Reserve Bank, one effect of the
      reserve requirement is to reduce the amount of the Bank’s interest-earning
      assets. At December 31, 2005, the Bank met FDIC reserve requirements.





13


The
      Bank
      also is subject to the reserve requirements established by the Commissioner.
      North Carolina law requires state non-member banks to maintain, at all times,
      a
      reserve fund in an amount set by regulation of the Commissioner. Currently,
      the
      Commissioner requires the Bank to maintain and establish reserves at the level
      required by the Federal Reserve Board for non-member banks. The reserve must
      consist of cash on hand, balances payable on demand, certain unencumbered
      interest-bearing obligations, and balances maintained at the Federal Reserve
      Bank. A bank that fails to maintain reserves at or above the legal requirement
      is prohibited generally from making new loans or discounts or paying dividends
      from its profits. In addition, the Commissioner has established surplus
      requirements applicable to state-chartered commercial banks. The Bank must
      maintain a surplus equal to 50% of the Bank’s common capital stock. At December
      31, 2005, the Bank met both the Commissioner’s reserve and surplus
      requirements.




**Prompt
      Corrective Action.** Current
      federal law establishes a system of prompt corrective action to resolve the
      problems of undercapitalized institutions. Under this system, the FDIC has
      established five capital categories (“well capitalized,” “adequately
      capitalized,” “undercapitalized,” “significantly undercapitalized,” and
“critically undercapitalized”). The FDIC is required to take certain mandatory
      supervisory actions, and is authorized to take other discretionary actions,
      with
      respect to institutions in the three undercapitalized categories. The severity
      of any action taken will depend upon the capital category in which an
      institution is placed. Generally, subject to a narrow exception, current federal
      law requires the FDIC to appoint a receiver or conservator for an institution
      that is critically undercapitalized.





Under
      the
      FDIC’s rules implementing the prompt corrective action provisions, an insured,
      state-chartered bank that (i) has a Total Risk-Based Capital Ratio of 10.0%
      or
      greater, a Tier 1 Risk-Based Capital Ratio of 6.0% or greater, and a Leverage
      Capital Ratio of 5.0% or greater, and (ii) is not subject to any written
      agreement, order, capital directive, or prompt corrective action directive
      issued by the FDIC, is deemed to be “well capitalized.” A bank with a Total
      Risk-Based Capital Ratio of 8.0% or greater, a Tier 1 Risk-Based Capital Ratio
      of 4.0% or greater, and a Leverage Capital Ratio of 4.0%” or greater, is
      considered to be “adequately capitalized.” A bank that has a Total Risk-Based
      Capital Ratio of less than 8.0%, a Tier 1 Risk-Based Capital Ratio of less
      than
      4.0%, or a Leverage Capital Ratio of less than 4.0%, is considered to be
“undercapitalized.” A bank that has a Total Risk-Based Capital Ratio of less
      than 6.0%, a Tier 1 Risk-Based Capital Ratio of less than 3.0%, or a Leverage
      Capital Ratio of less than 3.0%, is considered to be “significantly
      undercapitalized,” and a bank that has a ratio of tangible equity capital to
      assets equal to or less than 2.0% is deemed to be “critically undercapitalized.”
For purposes of these rules, the term “tangible equity” includes core capital
      elements counted as Tier 1 Capital for purposes of the risk-based capital
      standards (see “Capital Adequacy Requirements of the Bank”), plus the amount of
      outstanding cumulative perpetual preferred stock (including related surplus),
      minus all intangible assets (with certain exceptions). A bank may be deemed
      to
      be in a capitalization category lower than indicated by its actual capital
      position if it receives an unsatisfactory examination rating.





A
      bank
      that is categorized as “undercapitalized,” “significantly undercapitalized,” or
“critically undercapitalized,” is required to submit an acceptable capital
      restoration plan to the FDIC. An “undercapitalized” bank also is generally
      prohibited from increasing its average total assets, making acquisitions,
      establishing any branches, or engaging in any new line of business, except
      in
      accordance with an accepted capital restoration plan or with the approval of
      the
      FDIC. In addition, the FDIC is given authority with respect to any
“undercapitalized” bank to take any of the actions it is required to or may take
      with respect to a “significantly undercapitalized” bank if it determines that
      those actions are necessary to carry out the purpose of the law.





At
      December 31, 2005, the Bank had the requisite capital levels to qualify as
“well
      capitalized.”





**Interstate
      Banking.** The
      BHCA, as amended by the interstate banking provisions of the Riegle-Neal
      Interstate Banking and Branching Efficiency Act of 1994, permits adequately
      capitalized and managed bank holding companies to acquire control of the assets
      of banks in any state. Acquisitions are subject to antitrust provisions that
      cap
      at 10% the portion of the total deposits of insured depository institutions
      in
      the United States that a single bank holding company may control and generally
      cap at 30% the portion of the total deposits of insured depository institutions
      in a state that a single bank holding company may control. Under certain
      circumstances, states have the authority to increase or decrease the 30% cap,
      and states may set minimum age requirements of up to five years on target banks
      within their borders.





14


Subject
      to certain conditions and the states’ right to opt out of certain provisions,
      the interstate banking laws also permit interstate branching by allowing a
      bank
      in one state to merge with a bank located in a different state. Each state
      was
      allowed to accelerate the effective date for interstate mergers by adopting
      a
      law authorizing merger transactions prior to June 1, 1997, or it could “opt out”
and thereby prohibit interstate branching by enacting legislation to that effect
      prior to that date. The interstate banking laws also permit banks to establish
      branches in other states by opening new branches or acquiring existing branches
      of other banks, provided the laws of those other states specifically permit
      that
      form of interstate branching. North Carolina has adopted statutes that, under
      certain conditions, authorize out-of-state bank holding companies and banks
      to
      acquire or merge with North Carolina banks and to establish or acquire branches
      in North Carolina.





**Restrictions
      on Dividends and Other Capital Distributions.**  Under
      North Carolina law, the Bank may pay dividends only from its undivided profits.
      However, if the Bank’s surplus is less than 50% of the Bank’s paid-in capital
      stock, then the Bank’s directors may not declare any cash dividend until the
      Bank has transferred from undivided profits to surplus 25% of the Bank’s
      undivided profits or any lesser percentage necessary to raise the Bank’s surplus
      to an amount equal to 50% of its paid-in capital stock.





In
      addition to the restrictions described above, other state and federal statutory
      and regulatory restrictions apply to the Bank’s payment of cash dividends on its
      common stock. As an insured depository institution, federal law prohibits the
      Bank from making any capital distributions, including the payment of a cash
      dividend, if the Bank is, or after making the distribution would become,
“undercapitalized” (as that term is defined in the Federal Deposit Insurance
      Act). Additionally, if in the opinion of the FDIC an insured depository
      institution under its jurisdiction is engaged in or is about to engage in an
      unsafe or unsound practice (which, depending on the financial condition of
      the
      depository institution, could include the payment of dividends), the FDIC may
      require, after notice and hearing, that the institution cease and desist from
      that practice. The FDIC has indicated that paying dividends that deplete a
      depository institution’s capital base to an inadequate level would be an unsafe
      and unsound banking practice. The FDIC has issued policy statements that provide
      that insured banks generally should pay dividends only from their current
      operating earnings, and, under the Federal Deposit Insurance Act, no dividend
      may be paid by an insured bank while it is in default on any assessment due
      the
      FDIC. The Bank’s payment of dividends also could be affected or limited by other
      factors, such as events or circumstances that lead the FDIC to require that
      the
      Bank maintains capital in excess of regulatory guidelines.





In
      the
      future, the Bank’s ability to declare and pay cash dividends will be subject to
      the Board of Directors’ evaluation of its operating results, financial
      condition, future growth plans, general business and economic conditions, and
      tax and other relevant considerations. There is no assurance that, in the
      future, the Bank will have funds available to pay cash dividends or, even if
      funds are available, that the Bank will pay dividends in any particular amounts
      or at any particular times, or that the Bank will pay dividends at all.





**Other
      Federal and North Carolina Regulations.** ** The
      federal banking agencies, including the FDIC, have developed joint regulations
      requiring disclosure of contingent assets and liabilities and, to the extent
      feasible and practicable, supplemental disclosure of the estimated fair market
      value of assets and liabilities. Additional joint regulations require annual
      examinations of all insured depository institutions by the appropriate federal
      banking agency, with some exceptions for small, well-capitalized institutions
      and state-chartered institutions examined by state regulators, and establish
      operational and managerial, asset quality, earnings and stock valuation
      standards for insured depository institutions, as well as compensation standards
      when such compensation would endanger the insured depository institution or
      would constitute an unsafe practice.




**ITEM
                  2.**
              
              **DESCRIPTION
                OF PROPERTY**


**Properties**





The
      Bank’s principal office is located in Wilson, North Carolina. Its full service
      branch office is also located in Wilson, North Carolina, and the Bank has a
      loan
      production facility in Zebulon, North Carolina. The Bank owns the land on which
      its principal office is located. As of December 31, 2005, the net book value
      of
      the Bank’s principal office was $1,306,374. The Bank leases the office
      facilities for its Wilson branch office and Zebulon loan production
      facility.




15


The
      Bank’s management considers the property consisting of its principal office to
      be in good condition and is of the opinion that it is adequately covered by
      insurance. The total net book value of the Bank’s furniture, fixtures and
      equipment on December 31, 2005 was $412,474. Additional
      information about this property is set forth under Note E in the section
      captioned “Consolidated Financial Statements - Notes to Consolidated Financial
      Statements” in the Company’s 2005 Annual Report, which section is incorporated
      herein by reference. Any
      property acquired as a result of foreclosure or by deed in lieu of foreclosure
      is classified as real estate owned until such time as it is sold or otherwise
      disposed of by the Bank to recover its investment.  As of December 31,
      2005, the Bank had recorded $117,414 **** for
      real
      estate acquired in settlement of loans.




**ITEM
                  3.**
              
              **LEGAL
                PROCEEDINGS**


From
      time
      to time the Company or the Bank may become involved in legal proceedings
      occurring in the ordinary course of business. However, subject to the
      uncertainties inherent in any litigation, management believes that currently
      there are no pending or threatened proceedings that are reasonably likely to
      result in a material adverse change in the Company or the Bank’s financial
      condition or operations. ****




**ITEM
                  4.**
              
              **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**


No
      matter
      was submitted to a vote of the Company's stockholders during the fourth quarter
      of the fiscal year ended December 31, 2005.





**PART
      II**


**ITEM
                    5.**
                
                **MARKET
                  FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES
                  OF
                  EQUITY SECURITIES**




As
      of
      December 31, 2005, the Company had 1,014,228 shares of common stock outstanding,
      which were held by approximately 1,346 stockholders **** of
      record, not including the persons or entities whose stock is held in nominee
      or
“street” name and by various banks and brokerage firms. There is no established
      public trading market for the Company’s common stock.





Based
      upon information provided to the Company by its transfer agent, management
      believes there have been approximately 10,938 shares of common stock traded
      during the fiscal year ended December 31, 2005. Certain sales have been
      facilitated by the Company in 2005 and 2004, all of which were, to the knowledge
      of management, at prices ranging from $12.38 to $15.00 per share. The price
      of
      the Company’s common stock in the last trade known to management to have
      occurred in 2005 was $15.00, which trade occurred on
      December 23, 2005, and involved 120 shares.





See
      Item
      1. “DESCRIPTION OF BUSINESS-Supervision and Regulation” above for regulatory
      restrictions that limit the ability of the Bank to pay dividends to the Company.
      The Company has not paid any cash dividends to common stockholders during the
      last two (2) fiscal years. The Bank paid the Company $121,000 in cash dividends
      in 2005. A 5%
      stock
      dividend, in the form of a 20-to-21 stock split, was paid on May 31, 2004 and
      August 26, 2005.





See
      Item
      11. “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” below for
      information on equity compensation plan information.





The
      Company did not repurchase any shares of its common stock during the last
      quarter of 2005.




16





**ITEM
                6.**
            
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL
                CONDITION**





See
      the
      information set forth under Item 1. “DESCRIPTION OF BUSINESS - Supervision and
      Regulation” above and the information set forth in the section captioned “Management’s
      Discussion and Analysis” in the Company’s 2005 Annual Report, which section is
      incorporated herein by reference.





**RISK
      FACTORS**




**Bank’s
      Operation Concentrated in Wilson County Market Area**





Currently,
      the Bank’s primary market area consists of the communities surrounding its
      office in Wilson, Wilson County, North Carolina. As a result of this geographic
      concentration, the Bank’s results may correlate to the economic conditions of
      this area. A deterioration in economic conditions in any of this market area,
      particularly in industries on which this geographic area depends, may adversely
      affect the quality of the loan portfolio and demand for products and services,
      and accordingly, results of operations.





**Bank
      is Exposed to Risks in Connection with the Loans it Makes**





A
      significant source of risk for the Bank arises from the possibility that losses
      will be sustained because borrowers, guarantors and related parties may fail
      to
      perform in accordance with the terms of their loans. The Bank has underwritten
      a
      credit monitoring procedure and credit policies, including the establishment
      and
      review of the allowance for loan losses, which management believes are
      appropriate to minimize the risk by assessing the likelihood of non-performance,
      tracking loan performance and diversifying the loan portfolio. However, such
      policy and procedures may not prevent unexpected losses that could adversely
      affect the results of operations.





**Company’s
      Trading Has Been Low Compared with Other Institutions**





There
      is
      no active trading market for the Company’s stock and it is unlikely that there
      will be an active trading market in the near future. The low trading volume
      of
      the Company’s stock may be comparable to other similarly sized companies or
      banks with no active trading market. Nevertheless, this trading is relatively
      low when compared with more seasoned companies and banks quoted on the OTC
      Bulletin Board, the NASDAQ Small Cap Market, the NASDAQ National Market System
      or other consolidated reporting systems or stock exchanges. Therefore, the
      market in the Company’s common stock may be limited in scope relative to other
      companies and banks.





**Government
      Regulations May Prevent or Impair Company’s Ability to Pay Dividends, Engage in
      Mergers, or Operate in Other Ways**





Current
      and future legislation and policies established by federal and state regulatory
      authorities affect the Company’s operations. The Bank is subject to the
      supervision and periodic examination by the FDIC and Commissioner. Banking
      regulations, designed primarily for the protection of depositors, may limit
      growth and the return to shareholders by restricting certain business
      activities.




**ITEM
                  7.**
              
              **FINANCIAL
                STATEMENTS**


The
      information required by this Item is set forth in the section captioned
“Consolidated Financial Statements” in the Company ’s
      2005
      Annual Report, which section is incorporated herein by reference.




**ITEM
                  8.**
              
              **CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE**


Not
      applicable.






17




**ITEM 8A.**
              
              **CONTROLS
                  AND PROCEDURES**


The
      Company’s management, under the supervision and with the participation of the
      Chief Executive Officer and the Controller of the Company (its principal
      executive officer and principal financial officer, respectively) have concluded
      based on their evaluation as
      of the
      end of the period covered by this Report, that the
      Company’s disclosure controls and procedures are effective to ensure that
      information required to be disclosed by the Company in the reports filed or
      submitted by it under the Securities Exchange Act of 1934, as amended, is
      recorded, processed, summarized and reported within the time periods specified
      in the applicable rules and forms, and include controls and procedures designed
      to ensure that information required to be disclosed by the Company in such
      reports is accumulated and communicated to the Company’s management, including
      the Chief Executive Officer and the Controller of the Company, as appropriate
      to
      allow timely decisions regarding required disclosure.





There
      have been no changes in internal control over financial reporting during the
      fourth quarter of the 2005 fiscal year that have materially affected, or are
      reasonably likely to materially affect, the Company’s internal control over
      financial reporting.




**ITEM  8B.**
              
              **OTHER
                  INFORMATION**




Not
      applicable.




**PART
      III**





**ITEM
                9.**
              
              **DIRECTORS
                  AND EXECUTIVE OFFICERS OF THE
                  REGISTRANT**





**(a)
      Directors and Executive Officers -** The
      information required by this Item regarding directors and executive officers
      of
      the Company, the Company’s Audit Committee, and procedures for shareholder
      nominations is set forth under the sections captioned “Proposal I—Election of
      Directors-Nominees,” “Proposal I—Election of Directors-Executive Officers,”
“—Report of the Corporate Governance and Nominating Committee-Process for
      Nominating Directors,” “-Stockholder Nominations,” and “—Report of the Audit
      Committee” in the Company’s Proxy Statement, to be filed with the Securities and
      Exchange Commission with respect to the Annual Meeting of Shareholders to be
      held on May 25, 2006, which sections are incorporated herein by
      reference.





**(b)
      Section 16(a) Compliance -** The
      information required by this Item regarding compliance with Section 16(a) of
      the
      Securities Exchange Act of 1934 is set forth under the Proxy Statement section
      captioned “Section 16(a) Beneficial Ownership Reporting Compliance,” which
      section is incorporated herein by reference.





**(c)
      Audit Committee Financial Expert -** The
      information required by the Item regarding the Company’s Audit Committee
      Financial Expert is set forth under the Proxy Statement section captioned
“Report of the Audit Committee,” which section is incorporated by
      reference.





**(d)
      Code of Ethics -** The
      Company has adopted a Code of Business Conduct and Ethics that is applicable
      to
      all of its directors, officers and employees, including its principal executive
      and senior financial officers, as required by Section 406 of the Sarbanes-Oxley
      Act of 2002 and applicable SEC rules. A copy of the Company’s Code of Business
      Conduct and Ethics adopted by the Company’s Board of Directors is attached as
      Exhibit 14.





In
      the
      event that the Company makes any amendment to, or grants any waivers of, a
      provision of its Code of Business Conduct and Ethics that applies to the
      principal executive officer or senior financial officers that requires
      disclosure under applicable SEC rules, the Company intends to disclose such
      amendment or waiver by filing a Form 8-K with the SEC.





18




**ITEM 10.**
              
              **EXECUTIVE
                  COMPENSATION**




The
      information required by this Item is set forth under the Proxy Statement
      sections captioned “Proposal 1—Election of Directors-Director Compensation” and
“Management Compensation,” which sections are incorporated herein by
      reference.




**ITEM 11.**
              
              **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS**





The
      information required by this Item is set forth under the Proxy Statement
      sections captioned “Security Ownership of Certain Beneficial Owners,” and
“Equity Compensation Plan Information,” which sections are incorporated herein
      by reference.




**ITEM 12.**
              
              **CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS**





The
      information required by this Item is set forth under the Proxy Statement
      sections captioned “Certain Indebtedness and Related Transactions” and “Security
      Ownership of Certain Beneficial Owners,” which sections are incorporated herein
      by reference.




**ITEM 13.**
              
              **EXHIBITS**






Exhibit
                Name
            DescriptionExhibit
                (2)
            Articles
                of Share Exchange and Agreement and Plan of Reorganization dated
                May 26,
                2005, incorporated herein by reference to Exhibit (2) to the Form
                8-K
                filed with the SEC on June 10, 2005Exhibit
                3(i)
            Articles
                of Incorporation, incorporated herein by reference to Exhibit 3(i)
                to the
                Form 8-K filed with the SEC on June 10, 2005Exhibit
                3(ii)
            Bylaws,
                incorporated herein by reference to Exhibit 3(ii) to the Form 8-K
                filed
                with the SEC on June 10, 2005Exhibit
                4(i)
            Specimen
                Stock Certificate, incorporated herein by reference to Exhibit 4
                to the
                Form 8-K filed with the SEC on June 10, 2005Exhibit
                4(ii)
            Indenture
                dated July 12, 2005 between the Company and U.S. Bank National
                Association, as trustee, incorporated herein by reference to Exhibit
                4(i)
                to the Form 8-K filed with the SEC on July 15, 2005Exhibit
                4(iii)
            Amended
                and Restated Declaration of Trust dated July 12, 2005 by and among
                the
                Company, as sponsor, U.S. Bank National Association, as institutional
                trustee, and the Administrators named therein, incorporated herein
                by
                reference to Exhibit 4(ii) to the Form 8-K filed with the SEC on
                July 15,
                2005Exhibit
                4(iv)
            Form
                of Junior Subordinated Debenture (included as an exhibit to Exhibit
                4(ii)
                above), incorporated herein by reference to Exhibit 4(iii) to the
                Form 8-K
                filed with the SEC on July 15, 2005






19




Exhibit
                4(v)
            Form
                of Capital Security Certificate (included as an exhibit to Exhibit
                4(iii)
                above), incorporated herein by reference to Exhibit 4(iv) to the
                Form 8-K
                filed with the SEC on July 15, 2005Exhibit
                4(vi)
            Guarantee
                Agreement dated July 12, 2005 between the Company and U.S. Bank National
                Association, incorporated herein by reference to Exhibit 4(v) to
                the Form
                8-K filed with the SEC on July 15, 2005Exhibit
                10(i)
            Employment
                Agreement with Norman B. Osborn, incorporated herein by reference
                to
                Exhibit 10(i) to the Form 10-SB of Cornerstone filed with the FDIC
                on
                April 30, 2001Exhibit
                10(ii)
            Employment
                Agreement with Robert W. Kernodle, incorporated herein by reference
                to
                Exhibit 10(ii) to the Form 10-SB of Cornerstone Bank filed with the
                FDIC
                on April 30, 2001Exhibit
                10(iii)
            Employment
                Agreement with G. Brooks Batchelor, incorporated herein by reference
                to
                Exhibit 10(iii) to the Form 10-SB of Cornerstone Bank filed with
                the FDIC
                on April 30, 2001Exhibit10(iv)
            Employment
                Agreement with Robert H. Ladd III, incorporated herein by reference
                to
                Exhibit 10(iv) to the Form 10-SB of Cornerstone Bank filed with the
                FDIC
                on April 30, 2001Exhibit
                10(v)
            Director
                Stock Option Plan, incorporated herein by reference to Exhibit 10(v)
                to
                the Form 10-SB of Cornerstone Bank filed with the FDIC on April 30,
                2001Exhibit
                10(vi)
            Employee
                Stock Option Plan, incorporated herein by reference to Exhibit 10(vi)
                to
                the Form 10-SB of Cornerstone Bank filed with the FDIC on April 30,
                2001Exhibit
                10(vii)
            Cornerstone
                Bank 2005 Employee Incentive Compensation Plan, incorporated by reference
                to Exhibit 10(vii) to the Form 10-KSB of Cornerstone Bank filed with
                the
                FDIC on March 29, 2005Exhibit
                10(viii)
            Cornerstone
                Bank 2005 Management Team Incentive Compensation Plan, incorporated
                by
                reference to Exhibit 10(viii) to the Form 10-KSB of Cornerstone Bank
                filed
                with the FDIC on March 29, 2005Exhibit
                10(ix)
            Cornerstone
                Bank 2005 Chief Executive Officer Incentive Compensation Plan,
                incorporated by reference to Exhibit 10(ix) to the Form 10-KSB of
                Cornerstone Bank filed with the FDIC on March 29, 2005Exhibit
                10(x)
            Lease
                Agreement dated September 2, 2005 by and between CB Financial Corporation
                and Cornerstone Bank, as lessee, and H/C Wilson, Inc., as lessor,
                incorporated herein by reference to Exhibit 10.1 to the Form 8-K
                filed
                with the SEC on September 9, 2005Exhibit
                11
            Statement
                Regarding Computation of Per Share EarningsExhibit
                13
            CB
                Financial Corporation 2005 Annual Report (excluding the Letter to
                Stockholders)Exhibit
                14
            Code
                of Business Conduct and Ethics, dated June 8,
                2005






20




Exhibit
                21
            See
                “Item 1. DESCRIPTION OF BUSINESS—General” and “—Subsidiaries” for
                discussion of subsidiariesExhibit
                31.1
            Certification
                of Norman B. OsbornExhibit
                31.2
            Certification
                of Dora KicklighterExhibit
                32
            Certification
                of Periodic Financial Report Pursuant to
                18 U.S.C. § 1350





**ITEM 14.**
              
              **PRINCIPAL
                  ACCOUNTANT FEES AND
                  SERVICES**




The
      information required by this Item is set forth under the Proxy Statement
      sections captioned “Audit Fees Paid to Independent Auditor” and “Pre-Approval of
      Audit and Permissible Non-Audit Services,” which sections are incorporated
      herein by reference.


21


**SIGNATURES**





Pursuant
      to the requirements of Section 13 of the Securities Exchange Act of 1934, the
      Company has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.





CB
                FINANCIAL CORPORATIONDate:
                March 28, 2006
            
            By:/s/
                Norman B. OsbornNorman
                B. OsbornPresident
                and Chief Executive Officer





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 Company and in the
      capacities and on the dates indicated:





Signature
            
            Title
            
            Date/s/
                Norman B. Osborn
            
            President,
                Chief Executive Officer
            
            March
                28, 2006Norman
                B. Osborn
            
            and
                Director/s/
                John Charles Anthony, Jr.
            
            Director
            
            March
                28, 2006John
                Charles Anthony, Jr./s/
                Robert E. Kirkland III
            
            Director
            
            March
                28, 2006Robert
                E. Kirkland III/s/
                W. Coalter Paxton III
            
            Director
            
            March
                28, 2006W.
                Coalter Paxton III/s/
                Thomas E. Brown III
            
            Director
            
            March
                28, 2006Thomas
                E. Brown III/s/
                Judy A. Muirhead
            
            Director
            
            March
                28, 2006Judy
                A. Muirhead/s/
                David W. Woodard
            
            Director
            
            March
                28, 2006David
                W. Woodard/s/
                Gregory A. Turnage
            
            Director
            
            March
                28, 2006Gregory
                A. Turnage/s/
                S. Christopher Williford
            
            Director
            
            March
                28, 2006S.
                Christopher Williford/s/
                Dora Kicklighter
            
            Controller
            
            March
                28, 2006Dora
                Kicklighter





22


**INDEX
      TO EXHIBITS**





Exhibit
                No.
            DescriptionExhibit
                11
            Statement
                Regarding Computation of Per Share Earnings for
                EmployeesExhibit
                13
            CB
                Financial Corporation 2005 Annual Report (excluding the Letter to
                Stockholders)Exhibit
                14
            Code
                of Business Conduct and Ethics, dated June 8, 2005Exhibit
                31.1
            Certification
                of Norman B. OsbornExhibit
                31.2
            Certification
                of Dora KicklighterExhibit
                32
            Certification
                of Periodic Financial Report Pursuant to 18 U.S.C. §
                1350




23