UNITED STATES
                   	SECURITIES AND EXCHANGE COMMISSION 
                        	Washington, D.C.  20549
	                          
                               	FORM 10-K
(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


*Restated for stock dividend

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
<S>                                 <C>     <C>      <C>       <C>       <C>      <C>
                                   	 1 Day	 90 Days	 180 Days	 365 Days	 5 Years	 5 Years
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
</TABLE>







                                        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
                                29606-6286
TELEPHONE (864) 242-3370                                TELEFAX (864) 232-7161

                                     -34-
<PAGE>
<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
LOANS					                                                                     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 lNONINTEREST 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>
                          CNB CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                              (amounts in thousands)


					                                          For the years ended December 31,	
                                         				        1998      1997 	    1996 	

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




























                                       -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 S, 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.


NOTE 3 - INVESTMENT SECURITIES

		The book value and approximate fair value of investment securities are
summarized as follows (amounts in thousands):
<TABLE>
<CAPTION>

                                  				        	   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
							                                        December 31, 1997        	 
                             					  Amortized  Unrealized Holding 		 Fair    
	AVAILABLE FOR SALE	                   cost	  		Gains    Losses 		   value
		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

                                       						 	December 31, 1997             	 
					                               Amortized  Unrealized Holding 	 	Fair      
                           					       cost	  		Gains  		Losses  	   value 	    
		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

		Securities sold under repurchase agreements are summarized as follows (amounts
  in thousands):
							                                                          December 31,		 
							                                                         1998 	 	 1997
			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	

		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>
	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:
													                                                December 31,	
													                                                1998	   1997 	
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)

                                                   													(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
	









                                       -52-
<PAGE>

NOTE 17 - PARENT COMPANY INFORMATION

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

</TABLE>
<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>
                          	CONDENSED STATEMENTS OF INCOME

								                                  For the years ended December 31,	 
					                                				     1998      1997 	    1996  	    
	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







                                     	-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)
				Unaudited condensed financial data by quarter for 1998 and 1997 is as
follows (amounts, except per share data, in thousands):
								    	          Quarter ended                   	
			1998	 		                               March 31 	June 30 	Sept. 30	Dec. 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

                               							-54-		          		          (Continued)
<PAGE>
NOTE 18 - QUARTERLY FINANCIAL DATA (UNAUDITED), Continued

								    	       Quarter ended                   	              
			1997	 		                                March 31 	June 30 		Sept. 30  Dec. 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


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>         <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>	        <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>

(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.



                                      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.               
     























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                               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.

(b)  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.














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                                  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









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