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

                        FORM 10-K/A Amendment No. I
(Mark One)

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

                 For the fiscal year ended December 31, 1998.

                                       or

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

                 For the Transition Period From ___________ to ___________.

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

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

1400 Third Avenue, P.O. Box 320, Conway, South Carolina         29526
(Address of Principal executive offices)                      (Zip Code)

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

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

                                   None

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

                                                    Name of each exchange
Title of each class                                 of which registered

Common Stock, par value $10.00 per share...............................None

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

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

     As of February 28, 1999, 597,431 shares of Common Stock of CNB
Corporation were outstanding and the aggregate market value of such Common
Stock held by nonaffiliates (based upon the price at which stock was sold
during the 60 days prior to the date of filing) was approximately
$59,145,669.

No Documents have been incorporated by reference.
<PAGE>

                         TABLE OF CONTENTS


                               PART I


                                                                   Page

ITEM 1.     Description of Business and Supplementary Data         1-21
ITEM 2.     Properties                                               22
ITEM 3.     Legal Proceedings                                        22
ITEM 4.     Submission of Matters to a Vote of Security Holders      23


                               PART II

ITEM 5.     Market for the Registrant's Common Stock and Related     23
            Security Holder Matters
ITEM 6.     Selected Financial Data                                  24
ITEM 7.     Management's Discussion and Analysis of Financial     25-31
            Condition and Results of Operations
ITEM 8.     Financial Statements                                  32-55
ITEM 9.     Disagreements on Accounting and Financial Disclosure     55


                               PART III

ITEM 10.    Directors and Executive Officers of the Registrant    56-60
ITEM 11.    Executive Compensation                                61-63
ITEM 12.    Security Ownership of Certain Beneficial Owners          64
            and Management
ITEM 13.    Certain Relationships and Related Transactions           64


                                PART IV

ITEM 14.    Exhibits, Financial Statement Schedules, Notes to        65
            Financial Statements, and Reports on Form 8-K
<PAGE>





















                                PART I

                    ITEM 1.   Description of Business

                     DESCRIPTION OF CNB CORPORATION

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

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

                     DESCRIPTION OF THE SUBSIDIARY

The Bank is an independent community bank engaged in the general commercial
banking business in Horry County, South Carolina. The Bank was organized on
June 5, 1903 as the Bank of Horry located on Main Street in Conway,  South
Carolina.   The Bank became a national bank operating as The Conway National
Bank in 1914.   On June 10, 1985, the Bank was reorganized into a bank
holding company structure when substantially all of the common stock of the
Bank was acquired by CNB Corporation in exchange for its own shares of
common stock.  In 1960, the Bank opened its first additional office at 1400
Third Avenue in Conway.  Since that time,  the following offices have been
opened in Horry County:  Coastal Centre in Conway (1969); Surfside in
Surfside Beach (1971);  Northside, north of Myrtle Beach (1977); Red Hill in
Conway (1981); Socastee,  in the southern portion of Myrtle Beach (1986);
Aynor in the Town of Aynor (1991), Myrtle Beach in the City of Myrtle Beach
(1995), and West Conway in Conway (1998).   The Surfside office was enlarged
in 1977 and 1984, and the Coastal Centre office was expanded in 1980.   The
Third Avenue office, which houses the Bank's administrative offices and data
processing facilities was expanded in 1982 from 11,150 square feet to 33,616
square feet.  The Bank employs approximately 198 full-time-equivalent
employees at its principal  office and nine branch offices.

                                     1
<PAGE>

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

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

                                COMPETITION

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

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

                                     2
<PAGE>
During 1989 and 1991, the United States Congress enacted two major pieces of
banking legislation:  The Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA").  The FIRREA and FDICIA have
significantly changed the commercial banking industry through, among other
things, revising and limiting the types and amounts of investment authority,
significantly increasing minimum regulatory capital requirements, and
broadening the scope and power of federal bank and thrift regulators over
financial institutions and affiliated persons in order to protect the
deposit insurance funds and depositors.  These laws, and the resulting
implementing regulations, have subjected the Bank and the Company to
extensive regulation, supervision and examination by the Office of the
Comptroller of the Currency (OCC).  This has resulted in increased
administrative, professional and compensation expenses in complying with a
substantially increased number of new regulations and policies.  The
regulatory structure created by these laws gives the regulatory authorities
extensive authority in connection with their supervisory and enforcement
activities and examination policies.

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

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

The Company

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

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

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


                                     3
<PAGE>
Under the BHCA, a bank holding company is generally prohibited from engaging
in, or acquiring direct or indirect control of more than 5% of the voting
shares of any company engaged in, nonbanking activities, unless the Federal
Reserve Board, by order or regulation, has found those activities to be so
closely related to banking or managing or controlling banks as to be a
proper incident thereto.  Some of the activities that the Federal Reserve
Board has  determined by regulation to be proper incidents to the business
of a bank holding company include making or servicing loans and certain
types of leases, engaging in certain insurance and discount brokerage
activities, performing certain data processing services, acting in certain
circumstances as a fiduciary or investment or financial adviser, owning
savings associations and making investments in certain corporations or
projects designed primarily to promote community welfare.  The Company is
also restricted in its activities by the provisions of the Glass-Stegall Act
of 1933, which prohibits the Company from owning subsidiaries that are
engaged principally in the issue, flotation, underwriting, public sale or
distribution of securities.  The regulatory requirements to which the
Company is subject also set forth various conditions regarding the
eligibility and qualifications of its directors and officers.

The Bank

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























                                     4
<PAGE>
                        DESCRIPTION OF BANK STOCK

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

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

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

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











                                     5
<PAGE>
                     DESCRIPTION OF COMPANY STOCK

General

The Company is authorized to issue 1,500,000 shares of Company Stock and as
of December 31, 1998, has 598,681 shares issued and 596,615 shares
outstanding. The holders of Company Stock are entitled to one vote per
share.  Holders of shares of Company  Stock do not have pre-emptive rights
to purchase any additional shares of Company Stock and do not have
cumulative voting rights in the election of directors.  Without pre-emptive
rights, stockholders could experience dilution of their voting power and of
their equity interest in the Company.

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

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

All shares of Company Stock are fully paid and nonassessable.

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


                  DISCUSSION OF FORWARD-LOOKING STATEMENTS

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












                                     6
<PAGE>
                            SUPPLEMENTARY DATA

QUARTERLY SHAREHOLDER INFORMATION

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

Summary of Operating Results by Quarter
<TABLE>
<CAPTION>
                                                   Quarter Ended
              1998                  March 31    June 30   September 30  December 31
<S>                                 <C>         <C>         <C>         <C>
Interest income                     $  7,187    $  7,554    $  7,737    $  7,565
Interest expense                       3,166       3,282       3,324       3,258
   Net interest income                 4,021       4,272       4,413       4,307
Provision for loan losses                190         175         160         155
   Net interest income after
       provision for loan losses       3,831       4,097       4,253       4,152
Noninterest income                       816         963       1,161         992
Noninterest expenses                   2,754       2,758       2,906       3,518
   Income before income taxes          1,893       2,302       2,508       1,626
Income taxes                             657         756         821         587
   Net income                       $  1,236    $  1,546    $  1,687    $  1,039
Net income per share                $   2.07    $   2.58    $   2.83    $   1.74
Weighted average shares outstanding  598,098     597,768     597,258     596,684

          1997

Interest income                     $  6,520    $  6,813    $  7,108    $  7,318
Interest expense                       2,798       2,923       3,022       3,021
   Net interest income                 3,722       3,890       4,086       4,297
Provision for loan losses                240         210         150         200
   Net interest income after
     provision for loan losses         3,482       3,680       3,936       4,097
Noninterest income                       775         871         993         774
Noninterest expenses                   2,541       2,687       2,621       3,192
   Income before income taxes          1,716       1,864       2,308       1,679
Income taxes                             603         712         805         640
   Net income                       $  1,113    $  1,152    $  1,503    $  1,039
Net income per share                $   1.86    $   1.92    $   2.51    $   1.74
Weighted average shares outstanding  598,198     598,401     598,486     598,435
</TABLE>
SUPPLEMENTARY INFLATION ADJUSTED FINANCIAL DATA

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

             GUIDE 3.   STATISTICAL DISCLOSURE BY BANK
                           HOLDING COMPANIES

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

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

The tables on the following 5 pages present selected financial data and an
analysis of net interest income.
                                     7
<PAGE>
                       CNB Corporation and Subsidiary
                          Selected Financial Data
<TABLE>
<CAPTION>
                                       Twelve Months Ended 12/31/98
                                       Average   Interest    Avg. Annual
                                       Balance   Income/      Yield or
                                                 Expense(2)     Rate
<S>                                    <C>        <C>          <C>
Assets:
  Earning assets
   Loans, net of
     unearned income                   $228,057   $20,755       9.10%
   Investment securities:
     Taxable                            118,941     7,187       6.04
     Tax-exempt                          13,771     1,053       7.65
   Federal funds sold and
     securities purchased under
     agreement to resell                 26,890     1,406       5.23

      Total earning assets             $387,659   $30,401       7.84
   Other assets                          26,219
      Total assets                     $413,878

Liabilities and stockholders' equity:
   Interest-bearing liabilities:
     Interest-bearing deposits         $273,469    11,432       4.18
     Federal funds purchased and
      securities sold under
      agreement to repurchase            34,274     1,514       4.42
     Other short-term borrowings          1,514        84       5.55
        Total interest-bearing
         liabilities                   $309,257   $13,030       4.21
   Noninterest-bearing deposits          62,582
   Other liabilities                      1,841
   Stockholders' equity                  40,198
       Total liabilities and
         stockholders' equity          $413,878
   Net interest income as a
     percent of total
     earning assets                    $387,659   $17,371       4.48%

(1)  Tax-equivalent adjustment
     based on a 34% tax rate                      $   358
</TABLE>
Ratios:
Annualized return on average total assets                       1.33%
Annualized return on average stockholders' equity              13.70
Cash dividends declared as a percent of net income             37.94
Average stockholders' equity as a percent of:
  Average total assets                                          9.71
  Average total deposits                                       11.96
  Average loans, net of unearned income                        17.63
Average earning assets as a percent of
average total assets                                           93.67%

(2) The  Company had no out-of-period adjustments or foreign activities.
    Loan fees of $0 are included in the above interest income.  Loans on
    a non-accrual basis for the recognition of interest income totalling
    $422 as of December 31, 1998 are included in loans, net of unearned
    income, for purpose of this analysis.

                                    8
<PAGE>
                       CNB Corporation and Subsidiary
                          Selected Financial Data
<TABLE>
<CAPTION>
                                        Twelve Months Ended 12/31/97
                                        Average   Interest    Avg. Annual
                                        Balance   Income/      Yield or
                                                  Expense(2)     Rate
<S>                                    <C>        <C>          <C>
Assets:
  Earning assets
   Loans, net of
     unearned income                   $204,987   $19,110       9.32%
   Investment securities:
     Taxable                            118,900     7,191       6.05
     Tax-exempt                          13,841     1,083       7.82
   Federal funds sold and
     securities purchased under
     agreement to resell                 13,730       743       5.41

      Total earning assets             $351,458   $28,127       8.00
   Other assets                          24,531
      Total assets                     $375,989

Liabilities and stockholders' equity:
   Interest-bearing liabilities:
     Interest-bearing deposits         $241,009    10,009       4.15
     Federal funds purchased and
      securities sold under
      agreement to repurchase            36,148     1,676       4.64
     Other short-term borrowings          1,562        79       5.06
        Total interest-bearing
         liabilities                   $278,719   $11,764       4.22
   Noninterest-bearing deposits          57,645
   Other liabilities                      3,130
   Stockholders' equity                  36,495
       Total liabilities and
         stockholders' equity          $375,989
   Net interest income as a
     percent of total
     earning assets                    $351,458   $16,363       4.66%

(1)  Tax-equivalent adjustment
     based on a 34% tax rate                      $   368
</TABLE>
Ratios:
Annualized return on average total assets                       1.28%
Annualized return on average stockholders' equity              13.17
Cash dividends declared as a percent of net income             37.32
Average stockholders' equity as a percent of:
  Average total assets                                          9.71
  Average total deposits                                       12.22
  Average loans, net of unearned income                        17.80
Average earning assets as a percent of
average total assets                                           93.48%

(2) The  Company had no out-of-period adjustments or foreign activities.
    Loan fees of $0 are included in the above interest income.  Loans on
    a non-accrual basis for the recognition of interest income totalling
    $24 as of December 31, 1997 are included in loans, net of unearned
    income, for purpose of this analysis.

                                    9
<PAGE>
                       CNB Corporation and Subsidiary
                          Selected Financial Data
<TABLE>
<CAPTION>
                                       Twelve Months Ended 12/31/96
                                       Average    Interest    Avg. Annual
                                       Balance    Income/      Yield or
                                                  Expense(2)     Rate
<S>                                    <C>        <C>          <C>
Assets:
  Earning assets
   Loans, net of
     unearned income                   $169,815   $15,808       9.31%
   Investment securities:
     Taxable                            126,368     7,488       5.93
     Tax-exempt                          13,999     1,121       8.01
   Federal funds sold and
     securities purchased under
     agreement to resell                  8,626       460       5.33

      Total earning assets             $318,808   $24,877       7.80
   Other assets                          23,374
      Total assets                     $342,182

Liabilities and stockholders' equity:
   Interest-bearing liabilities:
     Interest-bearing deposits         $214,194     8,610       4.02
     Federal funds purchased and
      securities sold under
      agreement to repurchase            39,506     1,906       4.82
     Other short-term borrowings          1,164        63       5.41
         Total interest-bearing
          liabilities                  $254,864   $10,579       4.15
   Noninterest-bearing deposits          51,249
   Other liabilities                      2,449
   Stockholders' equity                  33,620
       Total liabilities and
         stockholders' equity          $342,182
   Net interest income as a
     percent of total
     earning assets                    $318,808   $14,298       4.48%

(1)  Tax-equivalent adjustment
     based on a 34% tax rate                      $   381
</TABLE>
Ratios:
Annualized return on average total assets                       1.19%
Annualized return on average stockholders' equity              12.15
Cash dividends declared as a percent of net income             35.09
Average stockholders' equity as a percent of:
  Average total assets                                          9.83
  Average total deposits                                       12.67
  Average loans, net of unearned income                        19.80
Average earning assets as a percent of
average total assets                                           93.17%

(2) The  Company had no out-of-period adjustments or foreign activities.
    Loan fees of $0 are included in the above interest income.  Loans on
    a non-accrual basis for the recognition of interest income totalling
    $377 as of December 31, 1996 are included in loans, net of unearned
    income, for purpose of this analysis.

                                     10
<PAGE>
<TABLE>
<CAPTION>
                                                       CNB Corporation and Subsidiary
                                                        Rate/Volume Variance Analysis
                                            For the Twelve Months Ended December 31, 1998 and 1997
                                                            (Dollars in Thousands)
<S>                            <C>      <C>      <C>         <C>         <C>          <C>          <C>      <C>     <C>      <C>
                                                                                                                             Change
                               Average  Average                           Interest     Interest             Change  Change   Due To
                                Volume   Volume  Yield/Rate  Yield/Rate  Earned/Paid  Earned/Paid           Due to  Due To   Rate X
                                 1998     1997    1998 (1)    1997 (1)    1998 (1)     1997 (1)    Variance  Rate   Volume   Volume
Earning Assets:

Loans, Net of unearned
 income (2)                    228,057   204,987     9.10%       9.32%    20,755      19,110       1,645      (451)   2,147     (51)
Investment securities:
 Taxable                       118,941   118,900     6.04%       6.05%     7,187       7,191          (4)       (7)       3       -
 Tax-exempt                     13,771    13,841     7.65%       7.82%     1,053       1,083         (30)      (24)      (6)      -
Federal funds sold and
 securities purchased under
 agreement to resell            26,890    13,730     5.23%       5.41%     1,406         743         663       (25)     712     (24)

Total Earning Assets           387,659   351,458     7.84%       8.00%    30,401      28,127       2,274      (507)   2,856     (75)

Interest-bearing Liabilities:

Interest-bearing deposits      273,469   241,009     4.18%       4.15%    11,432      10,009       1,423        72    1,342       9
Federal funds purchased and
 securities sold under
 agreement to repurchase        34,274    36,148     4.42%       4.64%     1,514       1,676        (162)      (80)     (86)      4
Other short-term borrowings      1,514     1,562     5.55%       5.06%        84          79           5         8       (3)      -


Total Interest-bearing
 Liabilities                   309,257   278,719     4.21%       4.22%    13,030      11,764       1,266         -    1,253      13
Interest-free Funds
 Supporting Earning Assets      78,402    72,739

Total Funds Supporting

Earning Assets                 387,659   351,458     3.36%       3.34%    13,030      11,764       1,266         -    1,253      13

Interest Rate Spread                                 3.63%       3.78%
Impact of Non-interest-bearing
 Funds on Net Yield on Earning
 Assets                                               .85%        .88%


Net Yield on Earning Assets                          4.48%       4.66%    17,371      16,363
</TABLE>
(1)  Tax-equivalent adjustment based on a 34% tax rate.
(2)  Includes non-accruing loans which does not have a material effect on the
     Net Yield on Earning Assets.

                                                                   11
<PAGE>

<TABLE>
<CAPTION>
                                                       CNB Corporation and Subsidiary
                                                        Rate/Volume Variance Analysis
                                            For the Twelve Months Ended December 31, 1997 and 1996
                                                            (Dollars in Thousands)
<S>                            <C>      <C>      <C>         <C>         <C>          <C>          <C>      <C>     <C>      <C>
                                                                                                                             Change
                               Average  Average                           Interest     Interest             Change  Change   Due To
                                Volume   Volume  Yield/Rate  Yield/Rate  Earned/Paid  Earned/Paid           Due to  Due To   Rate X
                                 1997     1996    1997 (1)    1996 (1)    1997 (1)     1996 (1)    Variance  Rate   Volume   Volume
Earning Assets:

Loans, Net of unearned
 income (2)                    204,987   169,815     9.32%       9.31%    19,110      15,808       3,302        17    3,281       4
Investment securities:
 Taxable                       118,900   126,368     6.05%       5.93%     7,191       7,488        (297)      152     (440)     (9)
 Tax-exempt                     13,841    13,999     7.82%       8.01%     1,083       1,121         (38)      (26)     (13)      1
Federal funds sold and
 securities purchased under
 agreement to resell            13,730     8,626     5.41%       5.33%       743         460         283         7      272       4

Total Earning Assets           351,458   318,808     8.00%       7.80%    28,127      24,877       3,250       150    3,100       -

Interest-bearing Liabilities:

Interest-bearing deposits      241,009   214,194     4.15%       4.02%    10,009       8,610       1,399       278    1,086      35
Federal funds purchased and
 securities sold under
 agreement to repurchase        36,148    39,506     4.64%       4.82%     1,676       1,906        (230)      (71)    (165)      6
Other short-term borrowings      1,562     1,164     5.06%       5.41%        79          63          16        (4)      21      (1)


Total Interest-bearing
 Liabilities                   278,719   254,864     4.22%       4.15%    11,764      10,579       1,185       203      942      40
Interest-free Funds
 Supporting Earning Assets      72,739    63,944

Total Funds Supporting

Earning Assets                 351,458   318,808     3.34%       3.32%    11,764      10,579       1,185       203      942      40

Interest Rate Spread                                 3.78%       3.65%
Impact of Non-interest-bearing
 Funds on Net Yield on Earning
 Assets                                               .88%        .83%


Net Yield on Earning Assets                          4.66%       4.48%    16,363      14,298
</TABLE>
(1)  Tax-equivalent adjustment based on a 34% tax rate.
(2)  Includes non-accruing loans which does not have a material effect on the
     Net Yield on Earning Assets.

                                                                   12
<PAGE>
                              INVESTMENT SECURITIES

Investment securities with a par value of $74,500, $69,965, and $55,665 at
December 31, 1998, 1997, and 1996, respectively, were pledged to secure
public deposits and for other purposes required by law.

The following summaries reflect the book value, unrealized gains and losses,
approximate market value, and tax-equivalent yields on investment securities
at December 31, 1998, 1997, and 1996.

                                              December 31, 1998
                             Book       Unrealized           Fair
                             Value   Gains     Losses        Value   Yield(1)

AVAILABLE FOR SALE
  United States Treasury
   Within one year         $ 8,011  $   59      $    -      $ 8,070    6.28%
   One to five years         5,962     179           -        6,141    6.09%
                            13,973     238           -       14,211    6.20%

  Federal agencies
    Within one year          5,171      30           -        5,201    6.20%
    One to five years       60,289     520          87       60,722    5.77%
                            65,460     550          87       65,923    5.81%

  State, county and municipal
    Within one year            325       7           -          332    7.90%

  Other-restricted
    Federal Reserve
     Bank Stock                116       -           -          116    6.03%

    Total available
     for sale              $79,874  $  795      $   87      $80,582    5.88%

HELD TO MATURITY
  United States Treasury
   Within one year         $ 6,995  $   81      $    -      $ 7,076    6.56%
    One to five years        4,019      76           -        4,095    6.05%
                            11,014     157           -       11,171    6.38%

  Federal agencies
   Within one year           2,036       6           -        2,042    5.50%
   One to five years        33,350     615           -       33,965    6.14%
                            35,386     621           -       36,007    6.10%


  State, county and municipal
   Within one year           1,236      11           -        1,247    9.57%
   One to five years         8,430     260           -        8,690    7.69%
   Six to ten years          4,582     231           -        4,813    7.56%
                            14,248     502           -       14,750    7.81%

  Total held to maturity   $60,648  $1,280      $    -      $61,298    6.56%

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

As of the quarter ended December 31, 1998, the Bank did not hold any
securities of an issuer that exceeded 10% of stockholders' equity.



                                   13
<PAGE>
                     INVESTMENT SECURITIES, continued




                                              December 31, 1997
                             Book       Unrealized           Fair
                             Value   Gains     Losses        Value   Yield(1)

AVAILABLE FOR SALE
  United States Treasury
   Within one year         $10,252  $   52      $    8      $10,296    6.53%
   One to five years        11,987     125           -       12,112    6.30%
                            22,239     177           8       22,408    6.41%

  Federal agencies
   Within one year           4,995       1          12        4,984    5.11%
   One to five years        23,805     158          18       23,945    6.26%
   After ten years           1,375      21           -        1,396    6.90%
                            30,175     180          30       30,325    6.10%

  State, county and municipal
    One to five years          325      10           -          335    7.85%

  Other-restricted
    Federal Reserve
     Bank Stock                116       -           -          116    6.03%

    Total available
     for sale              $52,855  $  367      $   38      $53,184    6.24%

HELD TO MATURITY
  United States Treasury
   Within one year         $17,703  $   11      $   49      $17,665    5.14%
   One to five years         9,977     131           -       10,108    6.46%
                            27,680     142          49       27,773    5.62%

  Federal agencies
   One to five years        28,235     216          45       28,406    6.34%

  State, county and municipal
   Within one year           1,540       9           -        1,549    8.88%
   One to five years         6,436     214           1        6,649    8.71%
   Six to ten years          5,746     157           -        5,903    7.39%
   After ten years             602      11           -          613    7.39%
                            14,324     391           1       14,714    8.14%

  Total held to maturity   $70,239  $  749      $   95      $70,893    6.42%

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

As of the quarter ended December 31, 1997, the Bank did not hold any
securities of an issuer that exceeded 10% of stockholders' equity.








                                   14
<PAGE>

                     INVESTMENT SECURITIES, continued


                                              December 31, 1996
                             Book       Unrealized           Fair
                             Value   Gains     Losses        Value   Yield(1)

AVAILABLE FOR SALE
  United States Treasury
   Within one year         $15,533  $   52      $   22      $15,563    5.95%
   One to five years        16,262     169          27       16,404    6.46%
                            31,795     221          49       31,967    6.21%

  Federal agencies
    One to five years       29,072      48         169       28,951    6.04%
    After ten years            784       -          18          766    6.08%
                            29,856      48         187       29,717    6.04%

  State, county and municipal
    One to five years          326      12           -          338    7.85%

  Other-restricted
    Federal Reserve
     Bank Stock                116       -           -          116    6.03%

    Total available
     for sale              $62,093  $  281      $  236      $62,138    6.14%

HELD TO MATURITY
  United States Treasury
   Within one year         $17,066  $   20      $   30      $17,056    5.36%
   One to five years        23,703     154         176       23,681    5.67%
                            40,769     174         206       40,737    5.54%

  Federal agencies
   One to five years        13,320      97         110       13,307    6.27%
   Six to ten years          2,002       -          35        1,967    6.40%
                            15,332      97         145       15,274    6.28%

  State, county and municipal
   Within one year           1,112       2           2        1,112    8.87%
   One to five years         6,950     302          15        7,237    8.72%
   Six to ten years          5,626      20          75        5,571    6.98%
   After ten years             370       5           -          375    7.89%
                            14,058     329          92       14,295    8.01%

  Total held to maturity   $70,149  $  600      $  443      $70,306    6.20%

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

As of the quarter ended December 31, 1996, the Bank did not hold any
securities of an issuer that exceeded 10% of stockholders' equity.










                               15
<PAGE>
<TABLE>
<CAPTION>
                                     LOAN PORTFOLIO

                                  CLASSIFICATION OF LOANS

The following is a summary of loans, in thousands of dollars, at December
31, 1998, 1997, 1996, 1995, and 1994 by major classification:


                                       1998      1997       1996      1995       1994
<S>                                 <C>        <C>       <C>        <C>       <C>
Real estate Loans  - mortgage       $142,039   $136,441  $111,474   $ 95,451  $ 89,728
                   - construction     15,560     19,653    15,148      5,453     6,328
Loans to farmers                       1,487      1,214     1,328      1,032     1,180
Commercial and industrial loans       36,393     34,606    28,105     23,133    17,472
Loans to individuals for household
  family and other consumer
  expenditure                         32,669     30,772    29,642     28,095    30,700
All other loans, including
   Overdrafts                          1,951        140       236        334       186
   Gross Loans                       230,099    222,826   185,933    153,498   145,594
     Less unearned income               (970)    (1,105)   (1,058)    (1,094)   (1,231)
    Less reserve for loan losses      (3,132)    (2,879)   (2,370)    (2,242)   (2,220)
     Net loans                      $225,997   $218,842  $182,505   $150,162  $142,143
</TABLE>


           MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES


The Company's loan portfolio consisted of approximately $178,510 and
$160,088 in fixed rate loans as of December 31, 1998 and 1997, respectively.
At December 31, 1998, and 1997, fixed rate loans with maturities in excess
of one year amounted to approximately $137,928 and $119,218, respectively.
Variable rate loans are those on which the interest rate can be adjusted to
changes in the Bank's prime rate.  Fixed rate loans are those on which the
interest rate generally cannot be changed for the term of the loan.
























                                     16
<PAGE>


                               RISK ELEMENTS

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

                NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

The following schedule summarizes the amount of nonaccrual, past due, and
restructured loans, in thousands of dollars, for the periods ended December
1998, 1997, 1996, 1995, 1994:

                                                December 31,
                                   1998    1997    1996    1995    1994
   Nonaccrual loans              $  422  $   24  $  377  $  479  $1,062

   Accruing loans which are
   contractually past due
   90 days or more as to
   principal or interest
   payments                      $  100  $  135  $   77  $   87  $   55

   Restructed trouble debt         None    None    None    None    None

Information relating to interest income on nonaccrual and renegotiated loans
outstanding for the year ended December 31, 1998, 1997, and 1996 is as
follows:

                                              1998   1997    1996

   Interest included in income during the
   year                                       $ 16   $  1    $  7

   Interest which would have been included
   at the original contract rates             $ 40   $  3    $ 45

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





                                     17
<PAGE>
                         POTENTIAL PROBLEM LOANS

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

As of December 31, 1998, loans which management had serious concerns about
the borrower being able to repay were put into a non-accrual status which
are disclosed under "Risk Elements".

                           FOREIGN OUTSTANDINGS

As of the year ended December 31, 1998, the Company had no foreign loans
outstanding.

                            LOAN CONCENTRATIONS
As of the year ended December 31, 1998, the Company did not have any
concentration of loans exceeding 10% of total loans which are not otherwise
disclosed as a category of loans pursuant to Item III. A. of Guide 3.

                        OTHER INTEREST-BEARING ASSETS
The Bank maintains an investment in an executive life insurance program
through Confederation Life Insurance and Annuity Company, Inc..  During 1994
the Michigan Insurance Commission seized control of this United States
Corporation due to a similar action by the Canadian regulatory authorities
over the company's parent corporation, Confederation Life Insurance Company.
Regulatory oversight began as concerns regarding investment losses of the
parent corporation developed during 1993 and 1994.  Management determined
that any impairment of the approximate $2,100,000 cash surrender value of
the policies is remote due to the financial stability of the U.S.
subsidiary.  Subsequently, on October 23, 1996, a plan of Rehabilitation for
Confederation Life Insurance Company (U.S.) was confirmed by the State of
Michigan in the Circuit Court for the County of Ingham.  The plan provides
for the assumption of company owned life insurance policies (COLI), such as
the Bank's, to be assumed by Pacific Mutual Life Insurance Company.  Under
the agreement, holders of COLI Policies will have the option to have a
policy reinsured by Pacific Mutual which is expected to have the same
account value and substantially the same contract terms as the original
policy or to receive the liquidation or "opt-out" value of the policy.

The Bank's independent external auditors have revisited the facts and
circumstances regarding the investment in the COLI program and have read the
significant uncertainties requiring the recognition of a loss contingency as
of the date of this report.

The Bank's COLI policies were reinsured by Pacific Mutual during the third
quarter of 1997.  Management received permission from the Office of the
Comptroller of the Currency to return this asset to accrual status and to
adjust the carrying value during the first quarter of 1998 with the total
cash surrender values totalling approximately $85,000 above the carrying
value on the bank's books.

As of December 31, 1998, the Company does not have any interest-bearing
assets that would be required to be disclosed under Item III. C. 1. or 2. if
such assets were loans.

                                      18
<PAGE>
<TABLE>
<CAPTION>
                            SUMMARY OF LOAN LOSS EXPERIENCE

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

                                                Year Ended December 31,

                                     1998      1997       1996      1995      1994

<S>                                <C>       <C>       <C>       <C>       <C>
Loans (net of unearned income):
  Average loans outstanding for
  the period                       $228,057  $204,987  $169,815  $149,940  $140,104
Reserve for loan losses:

Balance at beginning
    of period                      $  2,879  $  2,370  $  2,242  $  2,220  $  2,170
  Charge-offs:
    Commercial, financial, and
     Agricultural                       189       238       111       133       122

    Real Estate - construction
                  and mortgage           14         5        22         3        57

    Loans to individuals                553       399       296       313       277

      Total charge-offs            $    756  $    642  $    429  $    449   $   456

  Recoveries:
    Commercial, financial, and
     Agricultural                        89       100        47       166        58

    Real estate-construction
     and mortgage                         5       106        15        44        35

Loans to individuals                    235       145       135       151       118

      Total recoveries             $    329  $    351  $    197  $    361   $   211

  Net charge-offs                  $    427  $    291  $    232  $     88   $   245
  Additions charged to operations  $    680  $    800  $    360  $    110   $   295
  Balance at end of period         $  3,132  $  2,879  $  2,370  $  2,242   $ 2,220
  Ratio of net charge-offs during
   the period to average loans
   outstanding during the period        .19%      .14%      .14%      .06%      .17%
</TABLE>
[FN]
The reserve for loan losses is maintained at the greater of 1.20% of net
loans or an amount that bears the same ratio to eligible loans as net
charge-offs to average eligible loans over the past six years.  In addition,
the Asset/ Liability Management Committee and the Loan Committee review the
adequacy of the reserve quarterly and make recommendations as to the desired
amount of the reserve.  Determination of the adequacy of the reserve is
based on the above ratios and, but not limited to, considerations of
classified and internally-identified problem loans, the current trend in
delinquencies, the volume of past-due loans, and current or expected
economic conditions.  Based upon these factors, net charge-offs are
anticipated to be approximately $420 during 1999.
</FN>

                                     19
<PAGE>
                                DEPOSITS

                   AVERAGE DEPOSITS BY CLASSIFICATION


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

                                           Years Ended December 31,
                                          1998       1997       1996


Noninterest bearing demand deposits     62,582     57,645     51,249
Interest bearing demand deposits        47,249     45,844     44,886
Savings deposits                        28,428     29,894     31,375
Time deposits                          197,792    165,271    137,733
 Total deposits                        336,051    298,654    265,443


                      AVERAGE RATES PAID ON DEPOSITS

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

                                           Years Ended December 31,

                                          1998      1997       1996

Interest bearing demand deposits         1.49%     1.70%      1.70%
Savings deposits                         2.69%     2.70%      2.79%
Time deposits                            5.04%     5.10%      5.06%




          MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE

The following table sets forth the maturity of time deposits of $100,000 or
more, in thousands of dollars, at December 31, 1998:

            Time Certificates of Deposit
            Maturity within 3 months or less         $27,018
            Over 3 through 6 months                   17,923
            Over 6 through 12 months                   8,246
            Over 12 months                             8,141
              Total                                   61,328
















                                     20
<PAGE>

                      RETURN ON EQUITY AND ASSETS

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

                                                  Year ended December 31,

                                                  1998      1997      1996

   Return on average total assets                 1.33%     1.28%     1.19%
   Return on average stockholders' equity        13.70%    13.17%    12.15%
   Cash dividend payout ratio                    37.94%    37.32%    35.09%
   Average equity to average assets ratio         9.71%     9.71%     9.83%



                          SHORT-TERM BORROWINGS

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

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


                                              December 31,
   Federal funds purchased
    and securities sold under         1998       1997       1996
    agreement to repurchase         $32,518    $32,366    $33,018


The following information relates to short-term borrowings outstanding
during 1998, 1997, and 1996:

                          Maximum Amount        Weighted Average
                       Outstanding in Any        Interest Rate
                           Month  End           at December 31,
                      1998    1997    1996    1998   1997   1996
  Federal funds
   purchased and
   securities sold
   under agreement
   to repurchase     $39,678 $49,506 $45,333  4.12%  4.61%  4.81%



                                           Year ended December 31,
                                          1998      1997      1996
  Federal funds purchased and
   securities sold under
   agreement to repurchase-
   average daily amount outstanding     $34,274   $36,148   $39,506
   Weighted average interest rate paid     4.42%     4.64%    4.82%





                                     21
<PAGE>


                           ITEM 2.   PROPERTIES

The Company's subsidiary, The Conway National Bank, has ten permanent
offices in Horry County.  The principal office, located at 1400 Third Avenue
in Conway, houses the Bank's administrative offices and  data processing
facilities.  This three-story structure, which was significantly expanded in
1982, contains approximately 33,616 square feet.  In addition, the Bank has
a 632 square foot building for express banking services adjacent to the
principal office.  The Bank has a two-story office on Main Street in Conway
containing 8,424 square feet.  Bank offices are housed in one-story
facilities at the Coastal Centre in Conway (3,500 square feet with an
adjacent 675 square foot building for express banking services), Red Hill in
Conway (3,760 square feet) West Conway in Conway (3,286 square feet)
Surfside in Surfside Beach (6,339 square feet), Northside, north of Myrtle
Beach (2,432 square feet), Socastee in the southern portion of Myrtle Beach
(3,498 square feet), Aynor in The Town of Aynor (2,809 square feet),and
Myrtle Beach in the City of Myrtle Beach (12,000 square feet).  Of the ten
offices, the bank owns the principal office, the office at Red Hill, West
Conway, Northside, Main Street, Socastee, Aynor, and Myrtle Beach.  All
other facilities are leased by the Bank under long-term leases with renewal
options. In addition to the existing facilities, the Company has purchased
two future office sites.  The sites consist of approximately 1.5 acres on
Highway 17 south of Myrtle Beach in Murrells Inlet and 1.1 acres on Highway
701 north of Conway.  An office is scheduled to be constructed and opened on
the Murrells Inlet property during the fourth quarter of 1999.  The company
also anticipates building an office on the other site within the next three
years, depending on market conditions.


                     ITEM 3.   LEGAL PROCEEDINGS

There were no material legal proceedings against the Company or its
subsidiary, The Conway National Bank, as of December 31, 1998.

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

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

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











                                  22
<PAGE>





         ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY
HOLDERS


On May 12, 1998, at the Annual Meeting of CNB Corporation, the security holders:

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

2) Ratified the appointment of Elliott, Davis, and Company, Certified Public
   Accountants, as independent auditors for the Company and its subsidiary
   for the year ending December 31, 1998.

                                   PART II

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


As of December 31, 1998, there were approximately 670 holders of record of
Company stock. There is no established market for shares of Company stock
and only limited trading in such shares has occurred since the formation of
the Company on June 10, 1985.  Most of the limited trading transactions have
been effected through the efforts of officers of the Company in matching
interested purchasers with shareholders who have expressed an interest in
selling their shares of Company stock.  Some private trading of Company
stock has occurred without any participation in the transaction by the
officers of the Company other than to effect the transfer on the Company's
shareholder records. Accordingly, management of the Company is not aware of
the prices at which all shares of Company stock have traded.  The following
table sets forth the prices known to management of the Company at which
shares of Company stock have traded in each quarter within the two most
recent fiscal years adjusted for the effect of a 25% stock dividend paid
during 1997.

                                           1998               1997
                                      High       Low     High      Low

                    First  Quarter  $90.00    $90.00   $76.80   $76.80
                    Second Quarter  $94.00    $90.00   $84.00   $76.80
                    Third  Quarter  $94.00    $94.00   $84.00   $84.00
                    Fourth Quarter  $99.00    $94.00   $90.00   $84.00

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









                                       23
<PAGE>
<TABLE>
<CAPTION>
                            ITEM 6. SELECTED FINANCIAL DATA
                                    CNB Corporation
                                   FINANCIAL SUMMARY
               (All Dollar Amounts, Except Per Share Data, in Thousands)


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

                                                     Year Ended December 31,
                                     1998        1997        1996        1995
    1994
<S>                                 <C>         <C>          <C>         <C>       <C>
Selected Income Statement Data:
Total Interest Income                $ 30,043   $ 27,759     $ 24,496    $ 22,601  $ 19,847
Total Interest Expense                 13,030     11,764       10,579      10,115     7,613
Net Interest Income                    17,013     15,995       13,917      12,486    12,234
Provision for Possible Loan Losses        680        800          360         110       295
Net Interest Income after Provision
 for Possible Loan Losses              16,333     15,195       13,557      12,376    11,939
Total Other Operating Income            3,932      3,413        3,015       2,954     2,814
Total Other Operating Expense          11,936     11,041       10,393       9,797     9,599
Income Before Income Taxes              8,329      7,567        6,179       5,533     5,154
Income Taxes                            2,821      2,760        2,095       1,777     1,657
Net Income                           $  5,508   $  4,807     $  4,084    $  3,756  $  3,497

Per Share:
Net Income Per Weighted Average
 Shares Outstanding*                 $   9.22   $   8.03     $   6.84    $   6.29  $   5.87
Cash Dividend Paid Per Share         $   3.50   $   3.00     $   3.00    $   3.00  $   2.00
Weighted Average Shares
 Outstanding*                         597,452    598,435      596,870     597,275   595,463

*Restated for stock dividend

Selected Balance Sheet Data:
Assets                               $426,359   $381,144     $341,818    $324,694  $297,120
Net Loans                             225,997    218,842      182,505     150,162   142,143
Investment Securities                 141,230    123,423      132,287     138,768   126,613
Federal Funds Sold                     22,100     11,375            -       7,300     3,125

Deposits:
 Non-Interest-Bearing                $ 66,303   $ 55,422     $ 49,911    $ 44,723  $ 40,986
 Interest-Bearing                     279,809    245,905      218,502     206,433   193,207
 Total Deposits                      $346,112   $301,327     $268,413    $251,156  $234,193
 Stockholders' Equity                $ 41,201   $ 37,717     $ 34,496    $ 32,195  $ 28,857
</TABLE>

























                                         24
<PAGE>
         ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

"Management's Discussion and Analysis" is provided to afford a clearer
understanding of the major elements of the Company's financial condition,
results of operations, liquidity, and capital resources. The following
discussion should be read in conjunction with the Company's financial
statements and notes thereto and other detailed information appearing
elsewhere in this report.

Distribution of Assets and Liabilities

The Company maintains a conservative approach in determining the
distribution of assets and liabilities.  Loans, net of unearned income,
increased 19.9% from $184,875 at December 31, 1996 to $221,721 at December
31, 1997; and 3.3% from December 31, 1997 to $229,129 at December 31, 1998.
 Loan growth is attributed to overall business development efforts to meet
business and personal loan demand in our market area. Loan demand was strong
in our market area in 1997 due to a strong local economy but slowed somewhat
in 1998.  Loans, net of unearned income, increased as a percentage of total
assets from 54.1% at year-end 1996 to 58.2% at year-end 1997 and decreased
to 53.7% at year-end 1998. Correspondingly, investment securities and
federal funds sold decreased as a percentage of total assets from 38.7% at
year-end 1996 to 35.3% at year-end 1997 and increased to 39.5% at year-end
1998 as investments have been utilized to balance the growth in loan
outstandings.  Investments and federal funds sold provide for an adequate
supply of secondary liquidity.  Year-end other assets as a percentage of
total assets decreased from 7.2% in 1996 to 6.5% in 1996 as the Bank grew
into its expanded infrastructure but increased to 6.8% in 1998 due to a
branch office addition and $199,000 in Y-2K related hardware and software
purchases. Management has sought to build the deposit base with stable,
relatively non-interest-rate sensitive deposits by offering the small to
medium account holders a wide array of deposit instruments at competitive
rates. Non-interest-bearing demand deposits remained flat at 14.6% at
December 31, 1996 and 14.5% at December 31, 1997 but grew to 15.6% at
December 31, 1998.  Demand deposits are expected to decline over the long-
term as more customers utilize interest-bearing deposit and repo accounts.
Interest-bearing liabilities as a percentage of total assets have declined
from 74.3% at December 31, 1996 and 1997 to 73.5% at December 31, 1998.

The following table sets forth the percentage relationship to total assets
of significant components of the Company's balance sheet as of December 31,
1998, 1997 and 1996:
<TABLE>
<CAPTION>                                                  December 31,
                                                    1998      1997      1996
<S>                                                 <C>       <C>       <C>
Assets:
  Earning assets
    Loans, net of unearned income                   53.7%     58.2%     54.1%
          Investment securities:
          Taxable                                   29.8      28.6      34.6
          Tax-exempt                                 3.3       3.7       4.1
    Federal funds sold and securities
     purchased under agreement to resell             6.4       3.0         -
    Other earning assets                               -         -         -
     Total earning assets                           93.2      93.5      92.8
    Other assets                                     6.8       6.5       7.2
     Total assets                                  100.0%    100.0%    100.0%
Liabilities and stockholders' equity:
    Interest-bearing liabilities:
      Interest-bearing deposits                     65.6%     64.5%     63.9%
      Federal funds purchased and securities
             sold under agreement to repurchase      7.6       8.5       9.7
            Other short-term borrowingS               .3       1.3        .7
       Total interest-bearing liabilities           73.5      74.3      74.3
    Non-interest-bearing deposits                   15.6      14.5      14.6
    Other liabilities                                1.2       1.3       1.0
    Stockholders' equity                             9.7       9.9      10.1
     Total liabilities and stockholders' equity    100.0%    100.0%    100.0%
</TABLE>









                                         25
<PAGE>
Results of Operation

CNB Corporation and subsidiary experienced earnings in 1998, 1997 and 1996
of $5,508, $4,807,and $4,084, respectively, resulting in a return of average
assets of 1.33%, 1.28%, and 1.19% and a return on average stockholders'
equity of 13.70%, 13.17% and 12.15%. The earnings were primarily
attributable to favorable  net interest margins in each period (see Net
Income-Net Interest Income). Other factors include management's ongoing
effort to maintain other income at adequate levels (see Net Income - Other
Income) and to control other expenses (see Net Income - Other Expenses).
These strong earnings, coupled with a conservative dividend policy, have
supplied the necessary capital funds to support bank operations. Total
assets were  $426,359 at December 31, 1998  as  compared  to $381,144  at
December  31,  1997 and $341,818 at December 31, 1996.  The following table
sets forth the financial highlights for fiscal years 1998, 1997, and 1996.
























































                                       26
<PAGE>
<TABLE>
<CAPTION>

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

                            December 31, 1997 to 1998  December 31, 1996 to 1997 December 31,
                                1998       Percent        1997      Percent         1996
                                           Increase                 Increase
                                          (Decrease)               (Decrease)
<S>                            <C>          <C>     <C>              <C>         <C>
Net interest income after
 provision for loan losses     $ 16,333      7.5%   $ 15,195         12.1%       $  13,557
Income before income taxes        8,329     10.1       7,567         22.5            6,179
Net Income                        5,508     14.6       4,807         17.7            4,084
 Per share (weighted average
 of shares outstanding)*       $   9.22     14.8    $   8.03         17.4        $    6.84

Cash dividends declared           2,090     16.5       1,794         25.2            1,433

 Per Share                     $   3.50     16.7    $   3.00            -        $    3.00


Total assets                   $426,359     11.9%   $381,144         11.5%       $ 341,818
Total deposits                  346,112     14.9     301,327         12.3          268,413
Loans, net of unearned income   229,129      3.3     221,721         19.9          184,875
Investment securities           141,230     14.4     123,423         (6.7)         132,287
Stockholders' equity             41,201      9.2      37,717          9.3           34,496
  Book value per share*
 (actual number of shares
     outstanding)              $  69.06      9.5    $  63.06          9.2        $   57.73
</TABLE>
<TABLE>
<CAPTION>
*Restated for stock dividend
<S>                               <C>        <C>       <C>            <C>            <C>
Ratios(1):
Returns on average total assets    1.33%     3.9        1.28%         7.6             1.19%
Return on average stockholders'
 equity                           13.70%     4.0       13.17%         8.4            12.15%
</TABLE>

(1) For the fiscal years ended December 31, 1998, 1997, and 1996, average total
assets amounted to $413,878, $375,989, and $342,182 with average stockholders'
equity totaling $40,198,$36,495, and $33,620, respectively.



























                                      27
<PAGE>

NET INCOME

Net Interest Income - Earnings are dependent to a large degree on net
interest income, defined as the difference between gross interest and fees
earned on earning assets, primarily loans and investment securities, and
interest paid on deposits and borrowed funds.  Net interest income is
affected by the interest rates earned or paid and by volume changes in
loans, investment securities, deposits, and borrowed funds.

The Bank has maintained strong net interest margins in 1998, 1997 and 1996
by earning adequate yields on loans and investments and funding these assets
with a favorable deposit and repurchase agreement mix.  Fully-tax-equivalent
net interest income has grown from $14,298 in 1996 and $16,363 in 1997 to
$17,371 in 1998.  During the three-year period, total fully-tax-equivalent
interest income increased by 13.1% from $24,877 in 1996 to $28,127 in 1997
and increased 8.1% in 1998 to $30,401.  Over the same period, total interest
expense increased by 11.2% from $10,579 in 1996 to $11,764 in 1997 and
increased 10.8% to $13,030 in 1998.  Fully-tax-equivalent net interest
income as a percentage of average total earning assets increased from 4.5%
in 1996 to 4.7% in 1997 and decreased back to 4.5% in 1998.  The increase
was reflective of strong loan growth and higher loan to deposit ratios.

Interest rates paid on deposits and borrowed funds and earned on loans and
investments have generally followed the fluctuations in market interest
rates in 1998, 1997, and 1996. However, fluctuations in market interest
rates do not necessarily have a significant impact on net interest income,
depending on the Bank's rate sensitivity position.  A rate sensitive asset
(RSA) is any loan or investment that can be repriced up or down in interest
rate within a certain time interval.  A rate sensitive liability (RSL) is an
interest paying deposit or other liability that can be repriced either up or
down in interest rate within a certain time interval. When a proper balance
between RSA and RSL exists, market interest rate fluctuations should not
have a significant impact on earnings.  The larger the imbalance, the
greater the interest rate risk assumed by the Bank and the greater the
positive or negative impact of interest rate fluctuations on earnings. The
Bank seeks to manage its assets and liabilities in a manner that will limit
interest rate risk and thus stabilize long-run earning power. The following
table sets forth the Bank's static gap rate sensitivity position at each of
the time intervals indicated.  The table illustrates the Bank's rate
sensitivity position on specific dates and may not be indicative of the
position at other points in time. Management believes that a rise or fall in
interest rates will not materially effect earnings.
<TABLE>
<CAPTION>
                              Interest Rate Sensitivity Analysis

                                   1 Day  90 Days  180 Days   365 Days  5 Years    5 Years
<S>                               <C>      <C>      <C>      <C>       <C>        <C>
Rate Sensitive Assets (RSA)
 Federal Funds Sold               27,100         0        0         0         0         0
 Investment Securities                 0     5,885    6,230    11,754   112,856     4,389
 Loans (net of non-accruals $422) 51,589    17,340   11,354    11,465    98,042    39,886
Total, RSA                        78,689    23,225   17,584    23,219   210,898    44,275
Rate Sensitive Liabilities (RSL)
Deposits:
Certificates of Deposit of             0    27,018   17,923     8,246     8,141         0
 $100,000 or more
All Other Time Deposits                0    40,559   28,490    26,898    11,505         0
Money Market Deposit Accounts     32,713         0        0         0         0         0
Federal Funds Purchased and       30,428        90        0         0     2,000         0
 Securities Sold Under
 Repurchase Agreements
Total RSL                         63,141    67,667   46,413    35,144    21,646         0
RSA-RSL                           15,548   (44,442) (28,829)  (11,925)  189,252    44,275
Cumulative RSA-RSL                15,548   (28,894) (57,723)  (69,648)  119,604   163,879
Cumulative RSA/RSL                  1.25       .78      .67       .67      1.51      1.70









                                    28
<PAGE>

NET INCOME (continued)

Provision for Possible Loan Losses - It is the policy of the bank to
maintain the reserve for possible loan losses at the greater of 1.20% of net
loans or the percentage based on the actual loan loss experience over the
previous five years. In addition, management may increase the reserve to a
level above these guidelines to cover potential losses identified during the
ongoing in-house problem loan identification process.  The Company includes
the provisions of SFAS No. 114, "Accounting by Creditors for Impairment of a
Loan", in the allowance for loan losses (see NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES).  The provision for possible loan losses was $680 in
1998, $800 in 1997 and $360 in 1996. Net loan charge-offs totalled $427 in
1998, $291 in 1997, and $232 in 1996 with net charge-offs being centered in
consumer purpose loans during each period.  The reserve for possible loan
losses as a percentage of net loans was 1.39% at December 31, 1998, 1.32% at
December 31, 1997, and 1.30% at December 31, 1996.

Securities Transactions - Net unrealized gains/(losses) in the investment
securities portfolio were $1,358 at December 31, 1998, $983 at December 31,
1997, and $202 at December 31, 1996. The market value of investment
securities rose in 1996, 1997, and 1998 as overall market rates declined.
Security gains/(losses) of $(28) and $41 were taken in 1997 and 1996,
respectively, when bonds were sold to provide additional primary liquidity
and to manage the bank's interest rate sensitivity position.  No security
gains/(losses) were taken in 1998.

Other Income -  Other income, net of security sales, increased by 15.7%
from $2,974 in 1996 to $3,441 in 1997 and grew 14.3% from $3,441 in 1997 to
$3,932 in 1998.  Other income rose in 1996 due to higher volumes in deposit
and loan account activity and rose significantly in 1997 and 1998 due to
continued growth in these areas compounded by a June 1, 1997 increase in
overall service charge rates.  Also, 1998 other income was enhanced by the
start-up of an in-house mortgage loan department dedicated to the
origination of mortgage loans for the secondary market.

Other Expenses - Other expenses increased by 6.2% from $10,393 in 1996 to
$11,041 in 1997 and 8.1% from $11,041 in 1997 to $11,936 in 1998.  The
components of other expenses are salaries and employee benefits of $6,166,
$6,591, and $7,259; occupancy and furniture and equipment expenses of
$1,759, $1,698, and $1,704; and other operating expenses of $2,468, $2,752,
and $2,973 for 1996, 1997, and 1998, respectively.   The increase in
salaries and employee benefits reflects compensation increments, the
increased costs of providing employee benefits, and an increase from 180 to
198 full-time equivalent employees over the three-year period. The addition
of the Myrtle Beach office in 1995 and the West Conway office in 1998
impacted occupancy and furniture and equipment expense.  Also, approximately
$106 of the budgeted "Year 2000" costs (see Year 2000) of $276 were expensed
during 1998.  Looking ahead, non-interest expense should grow due to a
planned addition of an office to the bank's branch network during the fourth
quarter of 1999 and the remaining "Year 2000" expenditures.

Income Taxes - Provisions for income taxes increased 31.7% from $2,095 in
1996 to $2,760 in 1997 and 2.2% from $2,760 in 1997 to $2,821 in 1998. The
increase in income taxes is primarily due to an increase in income before
income taxes of 22.5% from $6,179 in 1996 to $7,567 in 1997 and 10.1% from
$7,567 in 1997 to $8,329 in 1998.  Also, the utilization of tax-free income
as a percentage of income before income taxes declined in 1997 and 1998.


















                                    29
<PAGE>
LIQUIDITY

The bank's liquidity position is primarily dependent on short-term demands for
funds caused by customer credit needs and deposit withdrawals and upon the
liquidity of bank assets to meet these needs.  The bank's liquidity sources
include cash and due from banks, federal funds sold and short-term investments.
In addition, the bank has established federal funds lines of credit from
correspondent banks and has the ability, on a short-term basis, to borrow funds
from the Federal Reserve System.  The Company has cash balances on hand of
$4,467, $3,480, and $3,078 at December 31, 1998, 1997, and 1996 with
liabilities, consisting of cash dividends payable, totalling $2,090, $1,794, and
$1,435, respectively.  In anticipation of potential "Year 2000" liquidity needs,
the bank is in the process of joining the Federal Home Loan Bank system and
obtaining additional borrowing capacity, as well as increasing short-term assets
that may be easily converted to cash.  Management feels that liquidity sources
are more than adequate to meet funding needs.

CAPITAL RESOURCES

Total stockholders' equity was $41,201, $37,717, and $34,496 at December 31,
1998, 1997, and 1996, representing 9.66%, 9.90%, and 10.09% of total assets,
respectively.   At December 31, 1998, the Bank exceeds quantitative measures
established by regulation to ensure capital adequacy (see NOTE 15 - REGULATORY
MATTERS).  Capital is considered sufficient by management to meet current and
prospective capital requirements and to support anticipated growth in bank
operations.

EFFECTS OF INFLATION

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

EFFECTS OF REGULATORY ACTION

The Federal Deposit Insurance Corporation (FDIC) reduced FDIC insurance premium
rates during the third quarter of 1995.  This decrease had a positive effect on
earnings in 1996, 1997, and 1998, and should favorably impact future years
income.  The management of the Company and the Bank is not aware of any other
current recommendations by the regulatory authorities which, if they were to be
implemented, would have a material effect on liquidity, capital resources, or
operations.

ACCOUNTING ISSUES

In an effort to simplify the current standards in the United States for
computing earnings per share ("EPS") and make them more compatible with
international standards, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share" in February 1997.  SFAS 128
applies to entities with publicly traded common stock or potential common stock
and is effective for financial statements for periods ending after December 15,
1997, including interim periods.  SFAS 128 simplifies the standards for
computing EPS previously found in APB Opinion 15, "Earnings per Share."  It
replaces the presentation of primary EPS with a presentation of basic EPS.  It
also requires dual presentation of basic and diluted EPS on the face of the
income statement for all companies with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS computation.  The Company
does not have any dilutive common stock or equivalents and accordingly the
adoption of SFAS had no effect on earnings per share computations.

The FASB also issued SFAS No. 129, "Disclosure of Information about Capital
Structure" in February 1997.  The purpose of SFAS 129 is to consolidate existing
disclosure requirements for ease of retrieval.  SFAS 129 contains no change in
disclosure requirements for companies that were subject to the previously
existing requirements.  It applies to all entities and is effective for
financial statements for periods ending after December 15, 1997.






                                          30
<PAGE>
ACCOUNTING ISSUES (continued)

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS 130 establishes standards for reporting and display of comprehensive income
and its components (revenues, expenses, gains, and losses) in a full set of
general purpose financial statements. SFAS 130 requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements.  SFAS 130 requires that
companies (i) classify items of other comprehensive income by their nature in a
financial statement and (ii) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of the statement of financial condition.  SFAS 130
is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comprehensive purposes is required.  The adoption of SFAS 130 had no effect on
the Company's net income or stockholders' equity.

In June, 1997, the FASB also issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information."  SFAS 131 establishes standards for the
way public enterprises are to report information about operating segments in
annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders.  It also establishes standards for related disclosures about
products and services, geographic areas, and major customers.  SFAS 131
supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise."  SFAS 131 becomes effective for financial statements for periods
beginning after December 15, 1997, and requires that comparative information
from earlier years be restated to conform to its requirements.  The adoption of
the provisions of SFAS 131 is not expected to have a material impact on the
Company.

In June 1998, the FASB issued SFAS 133, "Accounting for Derivative Instrument
and Hedging Activities."  All derivatives are to be measured at fair value and
recognized in the balance sheet as assets or liabilities.  The statement is
effective for fiscal years and quarters beginning after June 15, 1999.  Because
the Company does not use derivative transactions at this time, management does
not expect that this standard will have a significant effect on the Company.

YEAR 2000

The Year 2000 poses a significant challenge for financial institutions because
of the way date fields have been historically handled.  Older versions of
software used a two digit year date field and assumed the first two digits of
the year date to be "19".  All software applications using this dating method
must be replaced or modified to avoid computer systems reverting to the year
date of 1900 in the year 2000.

The Board of Directors early in 1997 assigned Year 2000 Project implementation
responsibility to the Electronic Data Processing (EDP) Steering Committee.  The
EDP Steering Committee is comprised of the following members: President,
Executive Vice President, Vice President and Cashier, Vice President-Systems,
Vice President-Data Processing, and Assistant Vice President-Systems.  The
committee meets at least quarterly with the meetings being reviewed by the Board
Audit Committee and progress reports made to the full Board.  The CPA firm of
Tourville, Simpson, & Henderson has been engaged to assist in Year 2000 Plan
development, implementation, and examination.

All systems used by the bank have been identified and prioritized with a time
line established for projected dates of upgrades, replacement, certification,
and testing. Anticipated Year 2000 costs are projected to be approximately
$276,000.  The majority of this amount has been spent on capital expenditures to
be expensed over the next four years.  $20,000 will be spent this year on public
information and education.

All mission critical systems have been replaced or upgraded to Year 2000
compliance.  All mission critical systems have been tested to ensure Year 2000
functionality.  Further testing will be conducted during 1999 as deemed
appropriate.  The bank has in place a Business Interruption Plan in case of
unforeseen problems or failures.

In June of this year, The Conway National Bank and The Conway Chamber of
Commerce will jointly sponsor a Year 2000 Community Forum.  Participants will
include local utilities, city and county governments, social security, health
services, the post office and educational institutions.  The public will have an
opportunity to hear progress reports on participants' Year 2000 projects.

The bank is currently working on its Year 2000 Contingency Plan for cash
services.  This plan will anticipate and provide for the increased demand for
extra cash by customers as we approach year end.
                                   31
<PAGE>
                       ITEM 8 - FINANCIAL STATEMENTS








                      CNB CORPORATION AND SUBSIDIARY

                REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

          FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
































                                      -32-
<PAGE>
                          CNB CORPORATION AND SUBSIDIARY
                             CONWAY, SOUTH CAROLINA


                                   CONTENTS


                                                                  PAGE

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                  34

FINANCIAL STATEMENTS
        Consolidated balance sheets                                 35
        Consolidated statements of income                           36
        Consolidated statements of changes in stockholders' equity  37
        Consolidated statements of comprehensive income             38
        Consolidated statements of cash flows                       39

NOTES TO FINANCIAL STATEMENTS                                    40-55































                                    -33-
<PAGE>
                        ELLIOTT, DAVIS & COMPANY, LLP
                        CERTIFIED PUBLIC ACCOUNTANTS
    MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

                               GREENVILLE, SC
                                GREENWOOD, SC
                                ANDERSON, SC
                                 AIKEN, SC
                                COLUMBIA, SC
                                AUGUSTA, GA


           REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Directors and Stockholders
CNB Corporation
Conway, South Carolina

     We have audited the accompanying consolidated balance sheets of CNB
Corporation and Subsidiary as of December 31, 1998 and 1997, and the related
consolidated statements of income, changes in stockholders' equity,
comprehensive income and cash flows for each of the three years in the period
ended December 31, 1998.  These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CNB
Corporation and Subsidiary at December 31, 1998 and 1997 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

                                          ELLIOTT, DAVIS & COMPANY, LLP

January 28, 1999

                Internationally - Moore Stephens Elliott Davis, LLC
870 S. Pleasantburg Drive   Post Office Box 6286   Greenville, South Carolina
    TELEPHONE (864) 242-3370     TELEFAX (864) 232-7161     29606-6286

                                     -34-
<PAGE>

</TABLE>
<TABLE>
<CAPTION>
                        CNB CORPORATION AND SUBSIDIARY
                         CONSOLIDATED BALANCE SHEETS
                 (amounts, except share data, in thousands)

                                                                                     December 31,
                                                                                   1998        1997
                                  ASSETS
<S>                                                                             <C>         <C>
CASH AND DUE FROM BANKS                                                         $ 17,864    $ 14,371
FEDERAL FUNDS SOLD                                                                27,100      11,375
INVESTMENT SECURITIES HELD TO MATURITY
     (fair value $61,928 in 1998 and $70,893 in 1997)                             60,648      70,239
INVESTMENT SECURITIES AVAILABLE FOR SALE                                          80,582      53,184
LOAN                                                                             230,099     222,826
     Less unearned income                                                           (970)     (1,105)
     Less allowance for loan losses                                               (3,132)     (2,879)
         Net loans                                                               225,997     218,842
PREMISES AND EQUIPMENT                                                             7,258       6,798
ACCRUED INTEREST RECEIVABLE                                                        4,102       3,680
OTHER ASSETS                                                                       2,808       2,655
                                                                                $426,359    $381,144
                         LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
     Deposits
          Noninterest-bearing                                                   $ 66,303    $ 55,422
          Interest-bearing                                                       279,809     245,905
              Total deposits                                                     346,112     301,327
     Securities sold under repurchase agreements                                  32,518      32,366
     United States Treasury demand notes                                           1,148       5,000
     Other liabilities                                                             5,380       4,734
              Total liabilities                                                  385,158     343,427
COMMITMENTS AND CONTINGENT LIABILITIES - Notes 10, 11 and 12
STOCKHOLDERS' EQUITY
     Common stock - $10 par value; authorized 1,500,000 shares in 1998 and1997;
          issued 598,681 shares in 1998 and 1997                                   5,987       5,987
     Capital in excess of par value of stock                                      24,538      24,552
     Retained earnings                                                            10,448       7,030
     Accumulated other comprehensive income                                          425         197
                                                                                  41,398      37,766
     Less 2,066 shares and 539 shares held in Treasury at cost                      (197)        (49)

             Total stockholders' equity                                           41,201      37,717

                                                                                $426,359    $381,144
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
                                  -35-
<PAGE>
<TABLE>
<CAPTION>
                      CNB CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF INCOME
             (amounts, except per share data, in thousands)


                                                                           For the years ended December 31,
                                                                           1998          1997          1996
<S>                                                                     <C>           <C>           <C>
INTEREST INCOME
     Loans and fees on loans                                            $ 20,755      $ 19,110      $ 15,808
     Investment securities
        Taxable                                                            7,187         7,191         7,488
        Nontaxable                                                           695           715           740
             Total interest on investment securities                       7,882         7,906         8,228
     Federal funds sold                                                    1,406           743           460
             Total interest income                                        30,043        27,759        24,496
INTEREST EXPENSE
     Deposits                                                             11,432        10,009         8,610
     Securities sold under repurchase agreements                           1,514         1,676         1,906
     United States Treasury demand notes                                      84            79            63
             Total interest expense                                       13,030        11,764        10,579
             Net interest income                                          17,013        15,995        13,917
PROVISION FOR LOAN LOSSES                                                    680           800           360
             Net interest income after provision for loan losses          16,333        15,195        13,557
NONINTEREST INCOME
     Service charges on deposit accounts                                   2,449         2,246         1,956
     Other service and exchange charges                                    1,483         1,195         1,018
     Gain (loss) on sale of investment securities available for sale           -           (28)           41
             Total noninterest income                                      3,932         3,413         3,015
NONINTEREST EXPENSES
     Salaries and wages                                                    5,857         5,328         5,031
     Pensions and other employee benefits                                  1,402         1,263         1,135
     Occupancy                                                               690           670           719
     Furniture and equipment                                               1,014         1,028         1,040
     Liability insurance                                                     103           105            79
     Office supplies                                                         407           366           290
     Credit card operations                                                  737           624           569
     Other operating expenses                                              1,726         1,657         1,530
             Total noninterest expenses                                   11,936        11,041        10,393
             Income before provision for income taxes                      8,329         7,567         6,179
PROVISION FOR INCOME TAXES                                                 2,821         2,760         2,095
             Net income                                                 $  5,508      $  4,807      $  4,084
NET INCOME PER SHARE OF COMMON STOCK                                    $   9.22      $   8.03      $   6.84
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                    -36-
<PAGE>
                        CNB CORPORATION AND SUBSIDIARY
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
             For the years ended December 31, 1998, 1997 and 1996
                  (amounts, except share data, in thousands)
<TABLE>
<CAPTION>
                                                                        Capital in                      Accumulated
                                                                        excess of                       other          Total
                                                              Common    par value   Retained  Treasury  comprehensive  stockholders
                                                     Shares   stock     of stock    earnings  stock     income         equity
<S>                                                  <C>      <C>       <C>         <C>       <C>       <C>            <C>
BALANCE, DECEMBER 31, 1995                           479,093  $  4,791  $ 15,676    $ 11,431  $ (133)   $  430         $  32,195

                        1996
Net income                                                 -         -         -       4,084       -         -             4,084
Cash dividend, $3.00 per share                             -         -         -      (1,433)      -         -            (1,433)
Treasury stock transactions (net)                          -         -         -           -      32         -                32
Gain on sale of treasury stock                             -         -        21           -       -         -                21
Net change in unrealized holding gain,
      net of income taxes of $269                          -         -         -           -       -      (403)             (403)

BALANCE, DECEMBER 31, 1996                           479,093     4,791    15,697      14,082    (101)       27            34,496

                        1997
Net income                                                 -         -         -       4,807       -         -             4,807
Cash dividend, $3.00 per share                             -         -         -      (1,794)      -         -            (1,794)
Stock dividend                                       119,588     1,196     8,850     (10,046)      -         -                 -
Cash in lieu of fractional shares on stock dividend        -         -         -         (19)      -         -               (19)
Treasury stock transactions (net)                          -         -         -           -      52         -                52
Gain on sale of treasury stock                             -         -         5           -       -         -                 5
Net change in unrealized holding gain,
      net of income taxes of $114                          -         -         -           -       -       170               170

BALANCE, DECEMBER 31, 1997                           598,681     5,987    24,552       7,030     (49)      197            37,717

                        1998
Net income                                                 -         -         -       5,508       -         -             5,508
Cash dividend, $3.50 per share                             -         -         -      (2,090)      -         -            (2,090)
Treasury stock transactions (net)                          -         -         -           -    (148)        -              (148)
Gain on sale of treasury stock                             -         -         6           -       -         -                 6
Minority interest purchase premium                         -         -       (20)          -       -         -               (20)
Net change in unrealized holding gain,
net of income taxes of $152                                -         -         -           -       -       228               228

BALANCE, DECEMBER 31, 1998                           598,681  $  5,987  $ 24,538    $ 10,448  $ (197)  $   425         $  41,201
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
                                     -37-
<PAGE>
<TABLE>
<CAPTION>
                            CNB CORPORATION AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                               (amounts in thousands)


                                                     For the years ended December 31,
                                                          1998      1997      1996
<S>                                                    <C>       <C>       <C>
NET INCOME                                             $  5,508  $  4,807  $  4,084

OTHER COMPREHENSIVE INCOME, NET OF TAX:
      Unrealized holding (losses) gains on investment
           securities available for sale                    228       198      (444)
      Reclassification adjustments for losses
           (gains) included in net income                     -       (28)       41

COMPREHENSIVE INCOME                                   $  5,736  $  4,977  $  3,681
</TABLE>






























                                     -38-
<PAGE>
<TABLE>
<CAPTION>
                        CNB CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (amounts in thousands)

                                                                            For the years ended December 31,
                                                                               1998       1997       1996
<S>                                                                         <C>        <C>        <C>
OPERATING ACTIVITIES
      Net income                                                            $  5,508   $  4,807   $  4,084
      Adjustments to reconcile net income to net cash provided
         by operating activities
         Depreciation                                                            693        700        757
         Provision for loan losses                                               680        800        360
         Provision for deferred income taxes                                    (272)        50         89
         Loss on disposal of equipment                                            78         51          -
         Changes in assets and liabilities:
             Increase in accrued interest receivable                            (422)      (355)       (38)
             Increase in other assets                                           (153)      (170)       (79)
             Increase in other liabilities                                       767        998        108
                Net cash provided by operating activities                      6,879      6,881      5,281

INVESTING ACTIVITIES
      Proceeds from sale of investment securities available for sale               -      4,707      3,932
      Proceeds from maturities of investment securities held to maturity      22,676     17,776     19,670
      Proceeds from maturities of investment securities available for sale    17,474     18,832     11,546
      Purchases of investment securities available for sale                  (44,493)   (14,301)   (15,921)
      Purchases of investment securities held to maturity                    (13,085)   (17,866)   (13,418)
      Net (increase) decrease in federal funds sold                          (15,725)   (11,375)     7,300
      Net increase in loans                                                   (7,835)   (37,137)   (32,702)
      Premises and equipment expenditures                                     (1,231)      (683)      (457)
             Net cash used for investing activities                          (42,219)   (40,047)   (20,050)

FINANCING ACTIVITIES
      Dividends paid                                                          (2,090)    (1,794)    (1,432)
      Net increase in deposits                                                44,785     32,914     17,257
      Increase (decrease) in securities sold under repurchase agreements         152      3,348     (7,917)
      Increase (decrease) in federal funds purchased                               -     (4,000)     4,000
      Increase (decrease) in United States Treasury demand notes              (3,852)     2,681      1,553
      Treasury stock transactions (net)                                         (162)        57         53
      Cash in lieu of fractional shares on stock dividend                          -        (19)         -
             Net cash provided by financing activities                        38,833     33,187     13,514

             Net increase (decrease) in cash and due from banks                3,493         21     (1,255)

CASH AND DUE FROM BANKS, BEGINNING OF YEAR                                    14,371     14,350     15,605

CASH AND DUE FROM BANKS, END OF YEAR                                        $ 17,864   $ 14,371   $ 14,350

CASH PAID FOR
      Interest                                                              $ 12,744   $ 11,233   $ 10,580
      Income taxes                                                          $  2,935   $  2,665   $  1,915
</TABLE>
The accompanying  notes are an integral part of these consolidated financial
statements.
                                 -39-
<PAGE>

                      CNB CORPORATION AND SUBSIDIARY
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES

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

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

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

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

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

Loans and interest income
    Interest on loans is accrued and taken into income based upon the interest
    method.  Interest on certain installment loans is accrued and taken into
    income based upon the sum-of-the-months-digits method.  The results from the
    use of the sum-of-the-months-digits method are not materially different from
    those that would be obtained using the interest method.

                                                                   (Continued)

                                     -40-

<PAGE>

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

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

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

     A loan is also considered impaired if its terms are modified in a troubled
     debt restructuring.  For these accruing impaired loans, cash receipts are
     typically applied to principal and interest receivable in accordance with
     the terms of the restructured loan agreement.  Interest income is
     recognized on these loans using the accrual method of accounting.  As of
     December 31, 1998 and 1997, the Company had no impaired loans.

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

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

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

                                                                   (Continued)
                                   -41-
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued
Advertising expense
     Advertising, promotional and other business development costs are generally
     expensed as incurred.  External costs incurred in producing media
     advertising are expensed the first time the advertising takes place.
     External costs relating to direct mailing costs are expensed in the period
     in which the direct mailings are sent. Advertising, promotional and other
     business development costs of $295,000, $338,000 and $294,000 were included
     in the Company's results of operations for 1998, 1997 and 1996,
     respectively.

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

Net income per share
     The Company computes net income per share in accordance with SFAS No. 128,
     "Earnings Per Share."  Net income per share is computed on the basis of the
     weighted average number of common shares outstanding, 597,452 in 1998,
     598,435 in 1997, and 596,870 in 1996.  The Company does not have any
     dilutive instruments and therefore only basic net income per share is
     presented.

     In September of 1997, the Company's Board of Directors declared a five-for-
     four stock split effected in the form of a 25 percent common stock
     dividend.  This stock was issued on September 30, 1997, to common
     stockholders of record on September 12, 1997.  Share and per share data
     have been restated to reflect this stock split.

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

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

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

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

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


                                                                   (Continued)
                                       -42-

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

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

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

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

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

Comprehensive income
     In June 1997, the Financial Accounting Standards Board (FSAB) issued SFAS
     No. 130, "Reporting Comprehensive Income," which establishes standards for
     reporting and display of comprehensive income and its components in a full
     set of general purpose financial statements.  Under this statement, the
     Company is required to classify items of "other comprehensive income" by
     their nature in the financial statements.  Statement 130 is effective for
     both interim and annual periods beginning after December 15, 1997.
     Comparative financial statements provided for earlier periods were required
     to be reclassified to reflect the provisions of the statement. The adoption
     of SFAS 130 had no effect on the Company's net income or stockholders'
     equity.

Recently issued accounting standards
     In June 1997, the FASB issued SFAS 131, "Disclosure about Segments of an
     Enterprise and Related Information."  SFAS 131 requires that a public
     business enterprise report financial and descriptive information about its
     reportable operating segments.  Operating segments are components of an
     enterprise about which separate financial information is available that is
     evaluated regularly by the chief operating decision maker in deciding how
     to allocate resources and in assessing performance.  SFAS 131 requires that
     a public enterprise report a measure of segment profit or loss, certain
     specific revenue and expense items, segment assets, information about the
     way that the operating segments were determined and other items.  The
     Statement is effective for fiscal years beginning after December 15, 1997.
     Management does not anticipate that adoption of SFAS 131 will have a
     material effect on the Company's financial statements.

     In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
     Instrument and Hedging Activities." All derivatives are to be measured at
     fair value and recognized in the balance sheet as assets or liabilities.
     The statement is effective for fiscal years and quarters beginning after
     June 15, 1999.  Because the Company does not use derivative transactions at
     this time, management does not expect that this standard will have a
     significant effect on the Company.



                                  -43-

<PAGE>
NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANKS

    The Bank is required to maintain average reserve balances either at the Bank
or on deposit with the Federal Reserve Bank.  The average amounts of these
reserve balances for the years ended December 31, 1998 and 1997 were
approximately $6,839,000 and $5,909,000, respectively.
<TABLE>
<CAPTION>
NOTE 3 - INVESTMENT SECURITIES

    The book value and approximate fair value of investment securities are
    summarized as follows (amounts in thousands):
                                                      December 31, 1998
                                          Amortized   Unrealized Holding      Fair
                                             Cost     Gains      Losses       value
<S>                                       <C>        <C>        <C>        <C>
   AVAILABLE FOR SALE
       United States Treasury
             Within one year              $  8,011   $     59   $      -   $  8,070
             One to five years               5,962        179          -      6,141
                                            13,973        238          -     14,211
       Federal agencies
             Within one year                 5,171         30          -	     5,201
             One to five years              60,289        520         87     60,722
                                            65,460        550         87     65,923
       State, county and municipal
             Within one year                   325          7          -        332
       Other - restricted
             Federal Reserve Bank stock        116          -          -        116
             Total available for sale     $ 79,874   $    795   $     87   $ 80,582
   HELD TO MATURITY
       United States Treasury
             Within one year              $  6,995   $     81   $      -   $  7,076
             One to five years               4,019         76          -      4,095
                                            11,014        157          -     11,171
       Federal agencies
             Within one year                 2,036          6          -      2,042
             One to five years              33,350        615          -     33,965
                                            35,386        621          -     36,007
       State, county and municipal
             Within one year                 1,236         11          -      1,247
             One to five years               8,430        260          -      8,690
             Six to ten years                4,582        231          -      4,813
                                            14,248        502          -     14,750
             Total held to maturity       $ 60,648   $  1,280   $      -   $ 61,298
</TABLE>
                                                                   (Continued)

                                       -44-
<PAGE>
NOTE 3 - INVESTMENT SECURITIES, Continued
<TABLE>
<CAPTION>
                                                 December 31, 1997
                                          Amortized   Unrealized Holding      Fair
   AVAILABLE FOR SALE                        cost      Gains     Losses       value
<S>                                       <C>        <C>        <C>        <C>
       United States Treasury
             Within one year              $ 10,252   $     52   $      8   $ 10,296
             One to five years              11,987        125          -     12,112
                                            22,239        177          8     22,408
       Federal agencies
             Within one year                 4,995          1         12      4,984
             One to five years              23,805        158         18     23,945
             Six to ten years                1,375         21          -      1,396
                                            30,175        180         30     30,325
       State, county and municipal
             One to five years                 325         10          -        335
       Other - restricted
             Federal Reserve Bank stock        116          -          -        116
       Total available for sale           $ 52,855   $    367   $     38   $ 53,184
</TABLE>
<TABLE>
<CAPTION>
                                                       December 31, 1997
                                          Amortized    Unrealized Holding      Fair
                                             Cost       Gains     Losses       value
<S>                                        <C>        <C>        <C>        <C>
   HELD TO MATURITY
       United States Treasury
             Within one year               $ 17,703   $     11   $     49   $ 17,665
             One to five years                9,977        131          -     10,108
                                             27,680        142         49     27,773
       Federal agencies
             One to five years               28,235        216         45     28,406

       State, county and municipal
             Within one year                  1,540          9          -      1,549
             One to five years                6,436        214          1      6,649
             Six to ten years                 5,746        157          -      5,903
             After ten years                    602         11          -        613
                                             14,324        391          1     14,714
             Total held to maturity        $ 70,239   $    749    $    95   $ 70,893

     Investment securities with an aggregate par value of  $74,500,000
at December 31, 1998 and $69,965,000 at December 31, 1997 were pledged to
secure public deposits and for other purposes.





                                    -45-

<PAGE>
NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES

     Following is a summary of loans by major classification (tabular amounts in
     thousands):
                                                               December 31,
                                                             1998       1997
          Real estate - mortgage                           $142,039   $136,441
          Real estate - construction                         15,560     19,653
          Commercial and industrial                          36,393     34,606
          Loans to individuals for household, family and
              other consumer expenditures                    32,669     30,772
          Agriculture                                         1,487      1,214
          All other loans, including overdrafts               1,951        140
                                                           $230,099   $222,826

     The Bank's loan portfolio consisted of $178,510,000 and $160,088,000 in
fixed rate loans as of December 31, 1998 and 1997, respectively.  At December
31, 1998, fixed rate loans with maturities in excess of one year amounted to
$137,928,000.

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

                                                    1998       1997       1996

         Balance, beginning of year              $  2,879   $  2,370   $  2,242
         Recoveries of loans previously charged
             against the allowance                    329        351        197
         Provided from current year's income          680        800        360
         Loans charged against the allowance         (756)      (642)      (429)

         Balance, end of year                    $  3,132   $  2,879   $  2,370

     At December 31, 1998 and 1997, non-accrual loans totaled $422,000 and
$24,000, respectively.  The total amount of interest earned on non-accrual loans
was $16,000 in 1998, $1,000 in 1997, and $7,000 in 1996.  The gross interest
income which would have been recorded under the original terms of the
non-accrual loans amounted to $40,000 in 1998, $3,000 in 1997, and $45,000 in
1996.  As of December 31, 1998 and 1997, the Company had no impaired loans.













                                     -46-

<PAGE>
NOTE 5 - PREMISES AND EQUIPMENT

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

                                                             1998       1997

         Land and buildings                               $  9,581   $  8,853
         Furniture, fixtures and equipment                   5,188      5,313
                                                            14,769     14,166
         Less accumulated depreciation and amortization      7,530      7,370
                                                             7,239      6,796
         Construction in progress                               19          2
                                                          $  7,258   $  6,798

      Depreciation and amortization of premises and equipment charged to
operating expense totaled $693,000 in 1998, $700,000 in 1997, and $757,000 in
1996.


NOTE 6 - DEPOSITS

     At December 31, 1998 and 1997, certificates of deposit of $100,000 or more
totaled $61,328,000 and $56,305,000, respectively.  Interest expense on these
deposits was $3,455,000 in 1998, $2,815,000 in 1997, and $1,639,000 in 1996.


NOTE 7 - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

</TABLE>
<TABLE>
<CAPTION>
     Securities sold under repurchase agreements are summarized as follows
     (amounts in thousands):
                                                                             December 31,
                                                                           1998       1997
<S>                                                                     <C>        <C>
         U. S. Government securities with a book value of $35,127
             ($35,672 fair value) and $38,984 ($39,216 fair value)
             at December 31, 1998 and 1997, respectively, are used as
             collateral for the agreements.                             $ 32,518   $ 32,366
</TABLE>
          The Bank enters into sales of securities under agreements to
repurchase. These obligations to repurchase securities sold are reflected as
liabilities in the consolidated balance sheets.  The dollar amount of securities
underlying the agreements are book entry securities maintained at the Federal
Reserve Bank of Richmond.  The weighted average interest rate of these
agreements was 4.12 and 4.61 percent at December 31, 1998 and 1997,
respectively.  Securities sold under repurchase agreements averaged $34,274,000
and $35,815,000 during 1998 and 1997, respectively.  The maximum amounts
outstanding at any month-end were $39,678,000 and $49,506,000 during 1998 and
1997, respectively.





                                     -47-

<PAGE>
NOTE 8 - LINES OF CREDIT

     At December 31, 1998, the Bank had unused short-term lines of credit
totaling $23,000,000 to purchase Federal Funds from unrelated banks.  These
lines of credit are available on a one to seven day basis for general corporate
purposes of the Bank.  All of the lenders have reserved the right to withdraw
these lines at their option.

     The Bank has a demand note through the U.S. Treasury, Tax and Loan system
with the Federal Reserve Bank of Richmond.  The Bank may borrow up to $7,000,000
under the arrangement at an interest rate of 4.11%. The note is secured by U.S.
Treasury Notes with a market value of $7,530,000 at December 31, 1998.  The
amount outstanding under the note totaled $1,148,000 and $5,000,000 at December
31, 1998 and 1997, respectively.


NOTE 9 - INCOME TAXES

     The provision for income taxes is reconciled to the amount of income tax
computed at the federal statutory rate on income before income taxes as follows
(amounts in thousands):
<TABLE>
<CAPTION>
                                                         1998              1997               1996
                                                    Amount     %      Amount      %      Amount      %
<S>                                                <C>       <C>     <C>        <C>     <C>        <C>
     Tax expense at statutory rate                 $ 2,832   34.0%   $  2,573   34.0%   $  2,101   34.0%
     Increase (decrease) in taxes resulting from:
          Tax exempt interest                         (213)  (2.6)       (219)  (2.9)       (253)  (4.1)
          State bank tax (net of federal benefit)      166    2.0         132    1.8         121    2.0
          Other - net                                   36    0.5         274    3.6         126    2.0
         Tax provision                             $ 2,821   33.9%   $  2,760   36.5%   $  2,095   33.9%
</TABLE>
     The sources and tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities are
as follows:
<TABLE>
<CAPTION>
                                                                      December 31,
                                                                    1998       1997
<S>                                                              <C>        <C>
Deferred tax assets:
     Allowance for loan losses deferred for tax purposes         $  1,065   $    979
     Other                                                            125         28
          Gross deferred tax assets                                 1,190      1,007
          Less valuation allowance                                  1,072      1,007
          Net deferred tax assets                                     118          -
Deferred tax liabilities:
     Unrealized net gains on securities available for sale           (283)      (132)
     Accumulated discount accretion                                     -       (125)
     Depreciation for income tax reporting in excess of amount
          for financial reporting                                    (312)      (330)
     Other                                                              -        (31)
          Gross deferred tax liabilities                             (595)      (618)
          Net deferred tax liability                             $   (477)  $   (618)
</TABLE>

                                                                   (Continued)
                                      -48-
<PAGE>
NOTE 9 - INCOME TAXES, Continued

     A portion of the change in the net deferred tax liability relates to the
change in unrealized net gains on securities available for sale.  The related
1998 deferred tax provision of $151,000 has been recorded directly to
stockholders' equity.  The balance of the change in the net deferred tax
liability results from the current period deferred tax expense.

     The following summary of the provision for income taxes includes tax
deferrals which arise from temporary differences in the recognition of certain
items of revenue and expense for tax and financial reporting purposes (amounts
in thousands):
                                          1998       1997       1996
     Income taxes currently payable
          Federal                      $  2,864   $  2,487   $  1,828
          State                             249        223        178
                                          3,113      2,710      2,006
     Tax consequences of differences
          Loan losses                       (86)      (173)       (43)
          Depreciation                      (18)       (15)        39
          Accretion on investments         (125)        22         20
          Other                             (63)       216         73
               Provision               $  2,821   $  2,760   $  2,095


NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

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

     The contract value of the Bank's off balance sheet financial instruments is
as follows as of December 31, 1998 (amounts in thousands):

                                                       Contract
                                                        amount

               Commitments to extend credit           $  20,637

               Standby letters of credit              $     710

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



                                     -49-
<PAGE>

NOTE 11 - COMMITMENTS AND CONTINGENCIES

     At December 31, 1998, the Bank was obligated under a number of
non-cancelable operating leases on land used for branch offices and a computer
maintenance contract that had initial or remaining terms of more than one year.
Future minimum payments under these agreements at December 31, 1998 were
(tabular amounts in thousands):

     Payable in year ending                                     Amount
               1999                                          $          93
               2000                                                     77
               2001                                                      7
               2002                                                      5
               2003 and thereafter                                      25
                   Total future minimum payments required    $         207

          Lease payments under all operating leases charged to expense totaled
$56,000 in 1998, $62,000 in 1997, and $61,000 in 1996.  The leases provide that
the lessee pay property taxes, insurance and maintenance cost.

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


NOTE 12 - RESTRICTION ON DIVIDENDS

     The ability of the Company to pay cash dividends is dependent upon
receiving cash in the form of dividends from the Bank.  Federal banking
regulations restrict the amount of dividends that can be paid and such dividends
are payable only from the retained earnings of the Bank.  At December 31, 1998
the Bank's retained earnings were $34,247,000.


NOTE 13 - TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS AND ASSOCIATES

     Directors and executive officers of the Company and the Bank and associates
of such persons are customers of and had transactions with the Bank in the
ordinary course of business.  Additional transactions may be expected to take
place in the future.  Also, included in such transactions are outstanding loans
and commitments, all of which were made on comparable terms, including interest
rates and collateral, as those prevailing at the time for other customers of the
Bank, and did not involve more than normal risk of collectibility or present
other unfavorable features.  Total loans to all executive officers and
directors, including immediate family and business interests, at December 31,
1998 and 1997, were $1,085,000 and $1,628,000, respectively.  During 1998,
$55,000 of new loans were made to this group and repayments of $598,000 were
received.









                                     -50-
<PAGE>

NOTE 14 - EMPLOYEE BENEFIT PLAN

     The Bank has a defined contribution pension plan covering all employees who
have attained age twenty-one and have a minimum of one year of service.  Upon
ongoing approval of the Board of Directors, the Bank matches one-hundred percent
of employee contributions up to one percent of employee salary deferred and
fifty percent of employee contributions in excess of one percent and up to six
percent of salary deferred.  The Board of Directors may also make discretionary
contributions to the Plan.  For the years ended December 31, 1998, 1997 and
1996, $378,000, $361,000, and $336,000, respectively, were charged to operations
under the plan.

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


NOTE 15 - REGULATORY MATTERS

     The Bank is subject to various regulatory capital requirements administered
by the federal banking agencies.  Failure to meet minimum capital requirements
can initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements.  Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices.  The Bank's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.

     Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital to risk-weighted assets, and of Tier I
capital to average assets.  Management believes, as of December 31, 1998, that
the Bank meets all capital adequacy requirements to which it is subject.

     As of December 31, 1998, the most recent notification from the Office of
the Comptroller of the Currency categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action.  There are no conditions
or events since that notification that management believes have changed the
Bank's category.  The Bank's actual capital amounts and ratios and minimum
regulatory amounts and ratios are presented as follows (dollar amounts in
thousands):
<TABLE>
<CAPTION>
                                                                                 To be well capitalized
                                                                  For capital    under prompt corrective
                                                               adequacy purposes action provisions
                                                Actual             Minimum           Minimum
                                            Amount   Ratio      Amount  Ratio     Amount   Ratio
<S>                                       <C>        <C>      <C>        <C>    <C>        <C>
As of December 31, 1998
     Total Capital (to risk
          weighted assets)                $ 41,177   16.82%   $ 19,586   8.0%   $ 24,483   10.0%
     Tier I Capital (to risk
          weighted assets)                  38,117   15.57       9,793   4.0      14,690    6.0
     Tier I Capital (to average assets)     38,117    9.22      16,541   4.0      20,677    5.0
</TABLE>




                                    -51-                           (Continued)
<PAGE>
NOTE 15 - REGULATORY MATTERS, Continued
<TABLE>
<CAPTION>
                                                                                 To be well capitalized
                                                                 For capital    under prompt corrective
                                                              adequacy purposes   action provisions
                                                Actual             Minimum             Minimum
                                            Amount   Ratio      Amount  Ratio      Amount   Ratio
<S>                                       <C>        <C>      <C>        <C>     <C>        <C>
As of December 31, 1997
     Total Capital (to risk
          weighted assets)                $ 38,295   16.98%   $ 18,046   8.0%    $ 22,558   10.0%
     Tier I Capital (to risk
          weighted assets)                  35,475   15.73       9,023   4.0       13,535    6.0
     Tier I Capital (to average assets)     35,475    9.45      15,018   4.0       18,773    5.0


NOTE 16 - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

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

</TABLE>
<TABLE>
<CAPTION>
                                                                1998                  1997
                                                        Carrying     Fair     Carrying      Fair
                                                         amount      value     amount       value
<S>                                                     <C>        <C>        <C>        <C>
     FINANCIAL ASSETS
          Cash and due from banks                       $ 17,864   $ 17,864   $ 14,371   $ 14,371
          Federal funds sold                              27,100     27,100     11,375     11,375
          Investment securities held to maturity          60,648     61,928     70,239     70,893
          Investment securities available for sale        80,582     80,582     53,184     53,184
          Loans                                          230,099    227,831    222,826    219,546

     FINANCIAL LIABILITIES
          Deposits                                       346,112    346,460    301,327    301,490
          Securities sold under repurchase agreements     32,518     32,602     32,366     32,420
          U. S. Treasury demand notes                      1,148      1,148      5,000      5,000

     OFF BALANCE SHEET INSTRUMENTS
          Commitments to extend credit                    20,637     20,637     20,551     20,551
          Standby letters of credit                          710        710      1,438      1,438
</TABLE>













                                      -52-
<PAGE>

NOTE 17 - PARENT COMPANY INFORMATION

     Following is condensed financial information of CNB Corporation (parent
company only) (amounts in thousands):
<TABLE>
<CAPTION>
                               CONDENSED BALANCE SHEETS
                                                                              December 31,
                                                                            1998       1997
<S>                                                                      <C>        <C>
     ASSETS
          Cash                                                           $  4,467   $  3,480
          Investment in subsidiary                                         38,542     35,646
          Land                                                                245        348
          Other assets                                                         37         37
                                                                         $ 43,291   $ 39,511
     LIABILITIES AND STOCKHOLDERS' EQUITY
          Dividends payable                                              $  2,090   $  1,794
          Stockholders' equity (net of $197 and $49 of treasury stock)     41,201     37,717
                                                                         $ 43,291   $ 39,511
</TABLE>
<TABLE>
<CAPTION>
                            CONDENSED STATEMENTS OF INCOME

                                                       For the years ended December 31,
                                                          1998       1997       1996
<S>                                                    <C>        <C>        <C>
     INCOME
          Dividend from bank subsidiary                $  2,903   $  1,934   $  1,548
          Other income                                        -          -         11
                                                          2,903      1,934      1,559
     EXPENSES
          Sundry                                             38         34         30
               Income before equity in undistributed
                    net income of bank subsidiary         2,865      1,900      1,529
     EQUITY IN UNDISTRIBUTED NET INCOME OF
          SUBSIDIARY                                      2,643      2,904      2,555
               Net income                              $  5,508   $  4,804   $  4,084
</TABLE>











                                     -53-                          (Continued)
<PAGE>
NOTE 17 - PARENT COMPANY INFORMATION, Continued
<TABLE>
<CAPTION>
                         CONDENSED STATEMENTS OF CASH FLOWS
                                                                      For the years ended December 31,
                                                                          1998       1997       1996
<S>                                                                    <C>        <C>        <C>
     OPERATING ACTIVITIES
          Net income                                                   $  5,508   $  4,804   $  4,084
          Adjustments to reconcile net income to net cash provided
               by operating activities
               Equity in undistributed net income of bank subsidiary     (2,643)    (2,904)    (2,555)
                 Net cash provided by operating activities                2,865      1,900      1,529
     INVESTING ACTIVITIES
          Purchase of land                                                 (122)      (103)         -
          Proceeds from the sale of land                                    200          -          -
                 Net cash provided by (used for) investing activities        78       (103)         -
     FINANCING ACTIVITIES
          Dividends paid                                                 (1,794)    (1,433)    (1,431)
          Cash in lieu of fractional shares on stock dividend                 -        (19)         -
          Treasury stock transactions (net)                                (162)        57         53
                 Net cash provided by (used for) financing activities    (1,956)    (1,395)    (1,378)
                 Net increase in cash                                       987        402        151
     CASH, BEGINNING OF YEAR                                              3,480      3,078      2,927
     CASH, END OF YEAR                                                 $  4,467   $  3,480   $  3,078
</TABLE>
NOTE 18 - QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
     Unaudited condensed financial data by quarter for 1998 and 1997 is as
follows (amounts, except per share data, in thousands):
                                                        Quarter ended
<S>                                        <C>        <C>      <C>          <C>
          1998                             March 31   June 30  September 30 December 31
     Interest income                       $  7,187   $  7,554   $  7,737   $  7,565
     Interest expense                         3,166      3,282      3,324      3,258
          Net interest income                 4,021      4,272      4,413      4,307
     Provision for loan losses                  190        175        160        155
          Net interest income after
              provision for loan losses       3,831      4,097      4,253      4,152
     Noninterest income                         816        963      1,161        992
     Noninterest expenses                     2,754      2,758      2,906      3,518
          Income before income taxes          1,893      2,302      2,508      1,626
     Income taxes                               657        756        821        587
          Net income                       $  1,236   $  1,546   $  1,687   $  1,039
     Net income per share                  $   2.07   $   2.58   $   2.83   $   1.74
     Weighted average shares outstanding    598,098    597,768    597,258    596,684
</TABLE>

                                     -54-                          (Continued)
<PAGE>

NOTE 18 - QUARTERLY FINANCIAL DATA (UNAUDITED), Continued
<TABLE>
<CAPTION>
                                                                Quarter ended
<S>                                                <C>        <C>      <C>          <C>
                1997                               March 31   June 30  September 30 December 31
          Interest income                          $  6,520   $  6,813   $  7,108   $  7,318
          Interest expense                            2,798      2,923      3,022      3,021
               Net interest income                    3,722      3,890      4,086      4,297
          Provision for loan losses                     240        210        150        200
               Net interest income after
                       provision for loan losses      3,482      3,680      3,936      4,097
          Noninterest income                            775        871        993        774
          Noninterest expenses                        2,541      2,687      2,621      3,192
               Income before income taxes             1,716      1,864      2,308      1,679
          Income taxes                                  603        712        805        640
               Net income                          $  1,113   $  1,152   $  1,503   $  1,039
          Net income per share                     $   1.86   $   1.92   $   2.51   $   1.74
          Weighted average shares outstanding       598,198    598,401    598,486    598,435
</TABLE>

ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.

























                                         -55-
<PAGE>
<TABLE>
<CAPTION>
                                       PART III
             ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
                               MANAGEMENT OF THE COMPANY

Directors

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

                                   Proposed  Present                  Company
                        Director   Term     Principal               Stock Owned
Name (Age)              Since      Expires  Occupation              Number    %
<S>                     <C>        <C>      <C>                    <C>
 Willis J. Duncan
      (71)              1958       2000     Chairman of the Board. 31,150(1) 5.22
                                            The President of the
                                            Bank from November
                                            1985 to February 1988.
 W. Jennings Duncan
      (43)              1984       2001     President.  Executive  19,342(2) 3.24
                                            Vice President of the
                                            Bank from November
                                            1985 to February 1988.
 Dr. R. C. Smith
      (84)              1959       2001     Past Chairman of the    1,867     .31
                                            Board. Chairman of the
                                            Board from 1979 to
                                            1985, when he became
                                            Vice Chairman.
                                            Chairman of the Board
                                            from November 1985 to
                                            February 1988.
                                            Retired in 1985 as a
                                            physician with Conway
                                            Internists, P.A. of
                                            Conway,South Carolina.
 James W. Barnette, Jr.
      (53)              1984       2001     President of Surfside   4,858(3)  .81
                                            Rent Mart, Inc., a
                                            general rental company
                                            located in Surfside
                                            Beach, S.C., since
                                            1992.  Private real
                                            estate investor from
                                            1988 to 1991.
                                            Previously, Mr.
                                            Barnette was General
                                            Manager of Coastal
                                            Golf Corp., Burning
                                            Ridge Corp., and
                                            Indian Wells Golf
                                            Club, which own and
                                            operate golf courses
                                            in the Myrtle Beach,
                                            South Carolina, area.

</TABLE>



                                           56
<PAGE>

<TABLE>
<CAPTION>
            ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
                        MANAGEMENT OF THE COMPANY (continued)

                                   Proposed  Present                  Company
                        Director   Term     Principal               Stock Owned
Name    (Age)            Since    Expires   Occupation               Number    %
<S>                      <C>      <C>       <C>                     <C>
*Harold G. Cushman, Jr.
       (69)              1963     2002      Retired in 1995 as      20,403(4) 3.42
                                            President of Dargan
                                            Construction Company,
                                            Inc.

*Charles C. Cutts        1945     2002      Retired.                15,367(5) 2.58
       (93)

 Paul R. Dusenbury       1997     2000      Treasurer. Vice            836(6)  .14
       (40)                                 President and Cashier
                                            of the Bank since 1988.

*G. Heyward Goldfinch
       (80)              1976     2002      Retired.  Director       1,937     .32
                                            of Goldfinch's, Inc.,
                                            a funeral home, and of
                                            Hillcrest Cemetery of
                                            Conway, Incorporated.
 John Monroe J. Holliday
       (82)              1969     2000      President of Palmetto   15,025(7) 2.52
                                            Farms Corp. and partner
                                            in Holliday Associates,
                                            diversified agricul-
                                            tural, real estate
                                            development, and retail
                                            companies headquartered
                                            in Horry County, South
                                            Carolina.

*Robert P. Hucks         1993     2002      Executive Vice           1,774(8)  .30
       (53)                                 President.  Served as
                                            Vice President and
                                            Cashier of the Bank
                                            from 1985 to 1988.

 Richard M. Lovelace,Jr.
       (52)              1984     2000      Attorney in private      1,912(9)  .32
                                            practice with Lovelace
                                            & Rogers, PA in Conway,
                                            South Carolina.
 John K. Massey
       (84)              1959     2001      Retired.                 4,722(10) .79

*Howard B. Smith, III
       (50)              1993     2002      Asst. Professor of       2,393     .40
                                            Accounting with Coastal
                                            Carolina University
                                            since January, 1998.
                                            Previously, Mr. Smith
                                            was a practicing
                                            certified public
                                            accountant with Smith,
                                            Sapp,Bookhout,Crumpler,
                                            & Callihan,P.A. in
                                            Myrtle Beach, South
                                            Carolina.
</TABLE>

* Nominee for election to the Board of Directors.


                                    57

<PAGE>

       Except as indicated below, each director or director nominee of the
company has sole voting and investment  power  with respect to all shares of
Company stock owned by such director or director nominee.  The address of
each director or director nominee is c/o The Conway National Bank, Post
Office Drawer 320, 1400 Third Avenue, Conway, South Carolina  29526.  All
directors and officers of the Company and its subsidiary, The Conway
National Bank, as a group (42 persons), own 155,938 (26.14%) shares of
Company stock.

(1)  Includes 10,517 shares held by Harriette B. Duncan (wife).

       (2) Includes 871 shares held by Robin F. Duncan (wife); 2,510 shares
held by Ann Louise Duncan (daughter); 2,510 shares held by Mary Kathryn
Duncan (daughter); 2,510 shares by Willis Jennings Duncan, V (son); and
2,510 shares by Margaret Brunson Duncan (daughter).

       (3) Includes 4,022 shares held by Janet J. Barnette (wife).

       (4) Includes 17,500 shares held by the Cushman Family Limited
partnership; 261 shares held by Dianne C. Cushman (wife); 941 shares held by
Marion Shannon Cushman (son); 485 shares held by Frances Faison Cushman
(daughter); 485 shares held by Harold G. Cushman, III (son); 62 shares held
by Harold G. Cushman, IV  (grandson); and 62 shares held by Kara Dawn
Cushman (granddaughter).

       (5) Includes 7,703 shares held by Eugenia B. Cutts (wife).

       (6) Includes 125 shares held by Jennifer S. Dusenbury (wife); 37
shares held by Elena Cox Dusenbury (daughter); and 37 shares held by Sarah
Cherry Dusenbury (daughter).

       (7) Includes 1,575 shares held by Marjorie R. Holliday Irrevocable
Trust (wife); 4,130 shares held by M. Russell Holliday, Jr. (daughter);
2,472 shares held by Christian M. Holliday Douglas (daughter); 432 shares
held by Christian M. H. Douglas, Jr. (granddaughter); 432 shares held by
Marjorie Russell Douglas (granddaughter); 432 shares held by David Duvall
Douglas, Jr. (grandson); and 605 shares held by David D. and Christian M.H.
Douglas Trust (grandchildren).

       (8) Includes 250 shares held by Willie Ann Hucks (wife); 25 shares
held by Mariah J. Hucks (daughter); 62 shares held by Norah Leigh Hucks
(daughter); and 187 shares held by Robert P. Hucks, II (son).

       (9) Includes 362 shares held by Rebecca S. Lovelace (wife); 235
shares held by Richard Blake Lovelace (son); and 550 shares held by Macon B.
Lovelace (son).

      (10) Includes 1,322 shares held by Bertha T. Massey (wife).

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

       W. Jennings Duncan is Willis J. Duncan's son.  Richard M. Lovelace,
Jr. is Dr. R. C. Smith's son-in-law. No other family relationships exist
among the above named directors or officers of the Company.  None of the
directors of the Company holds a directorship in any company with a class of
securities registered under Section 12 of the Securities Exchange Act of
1934, as amended, or subject to the requirements of Section 15(d) of that
act or in any company registered as an investment company under the
Investment Company Act of 1940, as amended.














                                    58
<PAGE>

       The Board of Directors of the Company, as originally constituted, was
classified into three (3) classes with each class consisting of five (5)
directors. Five (5) directors in Class II will be elected at the 1999 Annual
Meeting to serve for a three (3) year term.  Directors in Class III will be
elected at the 2000 Annual Meeting to serve for a three (3) year term and
Directors in Class I will be elected at the 2001 Annual Meeting to serve for
a three (3) year term.  Currently, there are thirteen (13) Directors, with
five (5) directors in Class II.  The Board of Directors has passed a
resolution fixing the total number of Directors at thirteen (13).

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

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

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















                                    59
<PAGE>

       The function of the Audit Committee is to ensure that adequate
accounting procedures are in existence and functioning in a manner adequate
to safeguard the assets of the Bank.  The Audit Committee also monitors
internal and external audit activities.   The function of the Loan Committee
is to review and approve new loans and monitor the performance and quality
of existing loans, as well as to ensure that sound policies and procedures
exist in the Bank's lending operations.

       During 1998, the Company's Board of Directors met four (4) times; the
Bank's Board of Directors met twelve (12) times; the Executive Committee met
eleven (11) times; the Audit Committee met nine (9) times; the Loan
Committee met twelve (12) times; the Building Committee met two (2) times;
and the Public Relations Committee did not meet. With the exception of
Charles C. Cutts, each Director attended at least 75% of the aggregate of
(a) the total number of meetings of the Board of Directors held during the
period for which he served as Director and (b) the total number of meetings
held by all committees of the Board of Directors of which he served.

Executive Officers:

       The Executive Officers and other officers of the Company are
as follows:
                                  Position(s) Currently
         Name              Age       With The Company

    Willis J. Duncan       71     Chairman of the Board (1)

    W. Jennings Duncan     43     President and Director (1)

    Robert P. Hucks        53     Executive Vice President and
                                  Director (1)

    Verta Lee Chestnut     60     Secretary

    Paul R. Dusenbury      40     Treasurer and Director (1)
                                  (Chief Financial Officer and
                                   Chief Accounting Officer)


_____________________
(1) Executive Officer

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



















                                    60
<PAGE>

       ITEM 11.  COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS


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

Compensation Committee Report

       The Executive Committee of the Bank recommends to the Board of
Directors the appointment of officers; determines officer compensation
subject to Board approval; and reviews employee salaries.  The compensation
of the President (Chief Executive Officer) and the other executive officers
is not tied directly to corporate performance or any measure thereof.
However, it would be deemed unacceptable by the Executive Committee, Board,
and management to establish compensation levels that are not consistent with
the performance of the Bank or return to shareholders. During the
compensation decision process, much emphasis is placed on the Job Evaluation
Salary Administration Program (JESAP) Committee.  The "JESAP" Committee is
charged with the responsibility of establishing job position descriptions;
applying values to each job position in the form of a salary range; and
obtaining salary surveys of a local, regional, and national level to
determine that salary ranges are consistent with the industry and peers.
The "JESAP" committee utilizes an independent management consulting firm to
aid in this process.  For each Bank employee, including the President (Chief
Executive Officer) and all executive officers, a salary minimum, midpoint,
and maximum is established. For fiscal 1998, all executive officer salary
levels were below the midpoint as established by the JESAP process.

<TABLE>
<CAPTION>
Summary Compensation Table


                         Annual Compensation             Long-Term
                                                       Compensation
                                                          Awards          Payouts
                                                                  Stock   Long-Term
                                               Other   Restricted Options Incentive
Name and                    ($)         ($)    Annual(1)  Stock($) /SAR'S  Payout  All Other(2)
Principal Position Year   Salary       Bonus Compensation Awards    (#)     ($)   Compensation
<S>                <C>    <C>          <C>       <C>        <C>     <C>     <C>      <C>
W. Jennings Duncan 1998   135,504      29,900    4,361       0       0       0       10,163
President and      1997   128,136      25,000    3,386       0       0       0        9,610
Director of Bank   1996   121,740      15,640    2,985       0       0       0        9,131

Robert P. Hucks    1998   119,796      26,500    6,000       0       0       0        8,985
Executive Vice     1997   113,280      22,188    6,000       0       0       0        8,496
President and      1996   107,628      13,960    6,000       0       0       0        8,072
Director of Bank

Paul R. Dusenbury  1998   111,060      24,588    6,000       0       0       0        8,330
Vice President and 1997   105,024      20,688    6,000       0       0       0        7,877
Cashier of Bank    1996    99,780      13,000    6,000       0       0       0        7,484

</TABLE>
[FN]
(1)   Cash value of personal use of automobile furnished by the Bank or
      automobile travel allowance.

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






                                      61
<PAGE>

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS (continued)



                        PENSION PLAN DISCLOSURE


        The Bank has a defined contribution pension plan covering all
employees who have attained age twenty-one and have a minimum one year of
service.  Upon ongoing approval of the Board of Directors, the Bank matches
one hundred percent of employee contributions up to one percent of employee
contributions of salary deferred and fifty percent of employee contributions
in excess of one percent and up to six percent of salary deferred.  For the
years ended December 31, 1998, 1997, and 1996, $378,000, $361,000, and
$336,000, respectively, was charged to operations under the plan.

        The Board of Directors of the Bank provides supplemental benefits to
certain key officers, including Willis J. Duncan, W. Jennings Duncan, Robert
P. Hucks, and Paul R. Dusenbury, under The Conway National Bank Executive
Supplemental Income (ESI) Plan and a Long-Term Deferred Compensation (LTDC)
Plan.  These plans are not qualified under the Internal Revenue Code.  These
plans are unfunded, however, certain benefits under the ESI Plan are
informally and indirectly funded by insurance policies on the lives of the
covered employees.  Under the provisions of the ESI Plan, the Bank and the
participating employees will execute agreements providing each employee (or
his beneficiary, if applicable) with a pre-retirement death benefit and a
post-retirement annuity benefit.  The ESI Plan is designed to provide
participating employees with a pre-retirement benefit based on a percentage
of the employee's current compensation.  The ESI agreement's post-retirement
benefit is designed to supplement a participating employee's retirement
benefits from Social Security in order to provide the employee with a
certain percentage of his final average income at retirement age.  While the
employee is receiving benefits under the ESI Agreement, the agreement will
prohibit the employee from competing with the Bank and will require the
participating employee to be available for consulting work for the Bank.
The ESI Agreement may be amended or revoked at any time prior to the
participating employee's death or retirement, but only with the mutual
written consent of the covered employee and the Bank.  The ESI Agreements
require that the participating employee be employed at the Bank at the
earlier of death or retirement to be eligible to receive, or have his
beneficiary receive, benefits under the agreement.  During 1997, the Board
approved a LTDC Plan to be finalized in 1998.  Under the LTDC Plan, certain
key employees and the Board of Directors may defer a portion of their
compensation for their retirement and purchase units which are equivalent in
value to one share of the Company's stock at market value.  The employee or
Director receives appreciation, if any, in the market value of the unit as
compared to the initial value per unit.


Performance Graphs

The performance graph shall be submitted in paper form under cover of Form
SE as provided in Rule 304(d) of Regulation S-T.












                                    62
<PAGE>

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS (continued)


Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

     No Compensation Committee interlocks exist.  The members of the
Executive Committee of the Board, which serves as the Compensation
Committee, are Charles C. Cutts (outside Director), Willis J. Duncan
(Chairman of the Board and inside Director), W. Jennings Duncan (President
and inside Director), and Dr. R.C. Smith (outside Director).  Membership of
the "JESAP" Committee consists of six Bank officers.

Director Compensation

     Directors who are not Bank officers received $400 for each monthly
meeting of the Board of Directors and an additional $100 for each committee
meeting attended in 1998.  Effective February, 1999, Director compensation
for each committee meeting attended was increased to $150.

              COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

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

     Based solely on its review of copies of such reports received or
written representations from certain reporting persons, the Company believes
that during the fiscal year ended December 31, 1998, all Section 16(a)
filing requirements applicable to its officers, directors, and 10 percent
shareholders were complied with.


























                                    63
<PAGE>

                 ITEM 12.  SECURITY OWNERSHIP OF MANAGEMENT

         The following table sets forth as of December 31, 1998, certain
information regarding the ownership of Company Stock of all officers and
directors of the Company.  No shareholder who is not an officer or director
of the Company is known to the management of the Company to be the
beneficial owner of more than five (5%) percent of the Company Stock.  The
Company Stock is the Company's only class of voting securities.

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

Willis J. Duncan                   31,150                     5.2%
1400 Third Avenue
Conway, South Carolina  29526

All Officers and Directors as a Group

(41 persons)  (2)                 155,938                    26.1%
_________________

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

(2)     Includes 28 officers of the subsidiary, The Conway National Bank,
who are not officers of the Company.




                              ITEM 13. CERTAIN TRANSACTIONS

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























                                    64
<PAGE>

                               PART IV

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

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

                         FINANCIAL STATEMENTS

Report of Independent Public Accountants
Consolidated Statements of Condition - December 31, 1998 and 1997
Consolidated Statements of Income - Years ended December 31, 1998,
  1997, and 1996
Consolidated Statements of Changes in Stockholders' Equity - Years
  ended December 31, 1998, 1997, and 1996
Consolidated Statements of Comprehensive Income - Years ended
December 31,
  1998, 1997, and 1996.
Consolidated Statements of Cash Flows - Years Ended December 31,
  1998, 1997, and 1996
Notes to Consolidated Financial Statements

                    FINANCIAL STATEMENT SCHEDULES

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

                             EXHIBITS

See Exhibit Index appearing below.

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

                          EXHIBIT INDEX
Exhibit
Number

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

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

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

 27      Financial Data Schedule - Article 9 Financial Data
         Schedule for 10-k for electronic filers (pages 67 and 68).

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














                                65
<PAGE>
                        SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                         CNB Corporation

                                   W. Jennings Duncan, President

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in their capacities on March 17, 1999.

      Signature                                  Capacity

Willis J. Duncan                      Chairman of the Board


W. Jennings Duncan                    President and Director


Robert P. Hucks                       Executive Vice President and
                                      Director

Verta Lee Chestnut                    Secretary


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

Harold G. Cushman, Jr.                Director


Charles C. Cutts                      Director


G. Heyward Goldfinch                  Director


J.M.J Holliday                        Director


John K. Massey                        Director


Howard B. Smith, III                  Director











                                 66

<PAGE>