FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT  OF 1934

For the transition period from  to 
___________________

For Quarter Ended September 30, 2001    Commission file number:2-96350CNB Corporation               (Exact name of registrant as specified in its charter)South Carolina 57-0792402 (State or other jurisdiction of                (I.R.S. Employer
  incorporation or organization)                 Identification No.)P.O. Box 320, Conway, South Carolina 29528(Address of principal executive offices)        (Zip Code)
(Registrant's telephone number, including area code):(803) 248-5721

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X.  No .
The number of shares outstanding of the issuer's  $10.00 par value common stock as of September 30, 2001 was 714,448.



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CNB Corporation

Page
PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements:

Consolidated Balance Sheets as of September 30, 2001,            1
           December 31, 2000 and September 30, 2000

Consolidated Statements of Income for the Three Months           2
           and Nine Months Ended September 30, 2001 and 2000

Consolidated Statements of Comprehensive Income                  3
           for the Three Months and Nine Months Ended
           September 30, 2001 and 2000

Consolidated Statements of Changes in Stockholders'              4
           Equity for the Nine Months Ended September 30, 2001
           and 2000

Consolidated Statements of Cash Flows for the Nine Months        5
           Ended September 30, 2001 and 2000

Notes to Consolidated Financial Statements                    6-13
Item 2.    Management's Discussion and Analysis of Financial    
         14-23
           Condition and Results of Operations

Item 3.    Qualitative and Quantitative Disclosures About Market Risk      24

PART II.   OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K                                25
SIGNATURE                                                                
 25



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CNB Corporation and Subsidiary
Consolidated Balance Sheets
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)

|ASSETS:
    Cash and due from banks
    Interest bearing deposits with banks
    Investment Securities
      (Fair values of $22,795 at
       September 30, 2001, $42,506 at 
       December 31, 2000, and $43,160
       at September 30, 2000)
    Securities Available for Sale
      (Amortized cost of $125,415 at
       September 30, 2001, $88,811 at
       December 31, 2000, and $89,651
       at September 30, 2000)
    Federal Funds sold and securities
       purchased under agreement
       to resell
    Loans:
       Total loans
       Less allowance for possible
          loan losses
         Net loans
    Bank premises and equipment
    Other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY:
    Deposits:
       Non-interest bearing
       Interest-bearing
          Total deposits
    Federal funds purchased and
       securities sold under agreement
       to repurchase
    Other short-term borrowings
    Other liabilities
 Total liabilities
   Stockholders' equity:
       Common stock, par value $10 per
       share:  Authorized 1,500,000 in
       2001 and 2000; issued 718,246
       in 2001 and 2000
       Surplus
       Undivided Profits
       Net Unrealized Holding
       Gains (Losses) on
        Available-For-Sale Securities
         Less:  Treasury stock
            Total stockholders' equity
           Total liabilities
             and stockholders' equity | Sept. 30,
  2001  
$ 18,579 
0 
 21,972 
129,520 
34,000 
         
292,194 
  (3,773)288,421 
 11,262   9,301  513,05582,195 
 327,577 409,772
36,702 
6,260 
 4,536 457,270
7,182 
34,746 
11,766 
2,464(373) 55,785 513,055 | December 31,
 2000   
$ 20,239 
0 
42,215 
88,975 
9,875 
         
295,648 (3,782) 291,866 
   9,795 8,111 
 471,076
76,342 314,388 
 390,730
22,567 
3,484 5,689 
 422,470
7,182 
34,732 
6,898 
98 (304)
  48,606 
 471,076 | Sept. 30,
 2000  
$ 18,248 
0 
43,365 
88,592 
14,125 
        
 288,244 (3,843) 284,401 
8,819 8,424 
 465,974
74,782 301,572 
 376,354
30,194 
7,454 2,896 
 416,898
7,182 
34,732 
8,021 
(636)(223)
  49,076 
 465,974
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|Interest Income:
  Interest and fees on loans
  Interest on investment securities:
    Taxable investment securities
    Tax-exempt investment securities
    Other securities
  Interest on federal funds sold and securities
    purchased under agreement to resell
      Total interest income
Interest Expense:
  Interest on deposits
  Interest on federal funds purchased and securities
    sold under agreement to repurchase
  Interest on other short-term borrowings
      Total interest expense
  Net interest income
  Provision for possible loan losses
  Net interest income after provision for possible
    loan losses
  Other income:
    Service charges on deposit accounts
    Gains/(Losses) on securities
    Other operating income
        Total other income
  Other expenses:
    Salaries and employee benefits
    Occupancy expense
    Other operating expenses
        Total operating expenses
  Income before income taxes
    Income tax provision
  Net income
    Per share data:
    Net income per weighted average shares
     outstanding
    Cash dividend paid per share
    Book value per actual number of shares
     outstanding
    Weighted average number of shares outstanding
    Actual number of shares outstanding | Three Months Ended 
Sept. 30,                                                                                                                                                                     | Nine Months Ended 
Sept. 30,                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2001  
$  6,104
1,668
225
91335
   8,4233,144
26843
   3,455
   4,968210
   4,758788
0634
   1,422   2,145
     443898
   3,486
   2,694800
   1,894
$   2.65
$      0
$  78.08
 714,626
 714,448                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2000  
$  6,543
1,705
189
28181
   8,6463,340
38764
   3,791
   4,855170
   4,685688
0534
   1,222   2,013
     434991
   3,438
   2,469804
   1,665
$   2.32
$      0
$  68.56
 715,746
 715,812 | 2001  
$  19,160
4,928
682
941,113
  25,97710,928
875136
  11,939
  14,038530
  13,5082,190
1691,626
   3,985   6,530
   1,3882,577
  10,495
   6,9982,129
   4,869
$   6.81
$      0
$  78.08
 714,626
 714,448

2

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CNB Corporation and Subsidiary
Consolidated Statement of Comprehensive Income
(All Dollar Amounts, Except Per Share Data, in Thousands)
(Unaudited)

|Net Income                                                                                                                                          | Three Months     
Ended        
September 30, | Nine Months     
Ended        
September 30,
|--------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------
|2001                                                                                                                                                | 2000                                          | 2001                                        
|$1,894                                                                                                                                              | $1,665                                        | $4,869                                      
|Other comprehensive income, net of tax
    Unrealized gains/(losses)
      on securities:
    Unrealized holding gains/(losses)
      during period | 1,633                                         | 494                                         
|Net Comprehensive Income                                                                                                                            | $3,527                                        | $2,159                                      

3

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CNB Corporation and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
(All Dollar Amounts in Thousands)
(Unaudited)

|Common Stock:
($10 par value; 1,500,000 shares authorized)
Balance, January 1
Issuance of Common Stock
Stock Dividend
Balance at end of period                                                                                        | Nine Months Ended
September 30,          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------
|2001                                                                                                                                                                                                                                  | 2000                                     
|7,182 
None None 
  7,182                                                                                                                                                                                                             | 5,987 
None 1,195 
  7,182               
|Surplus:
Balance, January 1
Issuance of Common Stock
Stock Dividend
Gain on sale of Treasury stock
Balance at end of period                                                                                                           | 34,732 
None None 14 
 34,746            
|Undivided profits:
Balance, January 1
Net Income
Stock Dividend
Cash dividends declared
Balance at end of period                                                                                                                      | 6,898 
4,869 
None None 
 11,766         
|Net unrealized holding gains/(losses) on
Available-for-sale securities:
Balance, January 1
Change in net unrealized gains/(losses)
Balance at end of period                                                                           | 98 2,366 
  2,464                        
|Treasury stock:
Balance, January 1
(3,256 shares in 2001; 2,722 shares in 2000)
Purchase of treasury stock
Reissue of treasury stock
Balance at end of period
(3,798 shares in 2001; 2,434 shares in 2000)
Total stockholders' equity | (304)
(174)105 
   (373)
        
 55,785

Note:  Columns may not add due to rounding.



4

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CNB CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

|OPERATING ACTIVITIES
  Net Income
  Adjustments to reconcile net income to
    net cash provided by operating activities
    Depreciation
    Provision for loan losses
    Provision for deferred income taxes
    Loss (gain) on sale of investment
     securities
    (Increase) decrease in accrued interest
     receivable
    (Increase) decrease in other assets
    (Decrease) increase in other liabilities                                                                                                                        | For the nine-month period ended
          September 30,     2001           2000
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------
|$  4,869 
450 
530 
1,348 
169 
400 
(1,769)(2,160)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $  4,931 
393 
650 
99 
0 
(388)
(55)(44)                                      
|Net cash provided by operating
          activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 3,837                                                                          
|INVESTING ACTIVITIES
  Proceeds from sale of investment securities
   available for sale
  Proceeds from maturities of investment
   securities held to maturity
  Proceeds from maturities of investment
   securities available for sale
  Purchase of investment securities held to
   maturity
  Purchase of investment securities
   available for sale
  Decrease (increase) in interest-bearing
    deposits in banks
  (Increase) decrease in federal funds sold
  (Increase) decrease in loans
  Premises and equipment expenditures | 11,213 
20,243 
37,320 
0 
(85,135)
0 
(24,125)
3,454  (1,917)                 
|Net cash provided by (used for)
          investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (38,947)                                                                       
|FINANCING ACTIVITIES
  Dividends paid
  Increase (Decrease) in deposits
  (Decrease) increase in securities sold
    under repurchase agreement
  (Decrease) increase in other
    short-term borrowings                                                                                                                                                                                                                                                                                                                                      | (2,503)
19,042 
14,135 2,776                                                   
|Net cash provided by (used for)
          financing activities
        Net increase (decrease) in cash
          and due from banks
CASH AND DUE FROM BANKS, BEGINNING OF YEAR
CASH AND DUE FROM BANKS, SEPT. 30, 2001 AND 2000
CASH PAID (RECEIVED) FOR:
  Interest
  Income taxes                                                                                                                                                                                                                                                           | 33,450
(1,660)20,239 
$ 18,579 
$ 12,181 
$  2,155                             

5

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CNB CORPORATION AND SUBSIDIARY (The "Corporation")
CNB CORPORATION (The "Parent")
THE CONWAY NATIONAL BANK (The "Bank")
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All Dollar Amounts in Thousands)NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income per share - Net income per share is computed on the basis of the number of common shares outstanding, 714,626 for the nine-month period ended September 30, 2001 and 715,746 for the nine-month period ended September 30, 2000.

NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANKSThe Bank is required to maintain average reserve balances either at the Bank or on deposit with the Federal Reserve Bank.  The average amount of these reserve balances for the nine-month period ended September 30, 2001 and for the years ended December 31, 2000 and 1999 were approximately $8,933, $8,852, and $8,300, respectively.

6

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NOTE 3 - INVESTMENT SECURITIESInvestment securities with a par value of approximately $77,640 at September 30, 2001 and $90,870 at December 31, 2000 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 of investment securities
at various contractual maturity dates at September 30, 2001 and at December 31, 2000.

|AVAILABLE FOR SALE
  United States Treasury                                                                                               | September 30, 2001 Book  Unrealized Holding Fair          
 Value   Gains   Losses   Value Yield(1)
|----------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|$      0                                                                                                                                  | $    -                                                                                             
|Federal agencies
   Within one year
   One to five years
   Six to ten years                                                              | 17,924
80,77717,771
 116,472                                                                       
|State, county and 
  municipal
   One to five years
   Six to ten years
   After ten years
  Other Securities 
  Total available for sale | 985
6,6391,045
   8,669
     274
$125,415                                                          
|HELD TO MATURITY
  United States Treasury
   Within one year                                                                              | 1,001                                                                                              
|Federal agencies
   Within one year
   One to Five years                                                                                  | 3,0267,013
  10,039                                                                                
|State, county and
  municipal
   Within one year
   One to five years
   Six to ten years
   
   Total held to maturity                   | 860
  6,8933,179
  10,932
$ 21,972                                                                 

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

As of the quarter ended September 30, 2001, the Bank did not hold any securities of an issuer that exceeded 10% of stockholders' equity. The net unrealized holding gains/(losses) on available-for-sale securities component of capital is $2,464 as of September 30, 2001.

7

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NOTE 3 - INVESTMENT SECURITIES (Continued)

|AVAILABLE FOR SALE
  United States Treasury
   Within one year                                                                                                                                                            | December 31, 2000 Book  Unrealized Holding Fair          
 Value   Gains   Losses   Value Yield(1)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------
|_______$14,066                                                                                                                                                                                                            | ______$   65                                                                                      
|Federal agencies
   Within one year
   One to five years                                                                                                                                                                  | 25,05941,517
 66,576                                                                              
|State, county and 
  municipal
   One to five years
   Six to ten years
   After ten years
  Other -restricted
   Federal Reserve
    Bank and FHLB Stock
   CRA Qualified Investment
    Fund
 
Total available for sale | 453
4,7111,357
  6,521  
1,394254
  1,648
$88,811                                                 
|HELD TO MATURITY
  United States Treasury
   Within one year                                                                                                                                                              | 1,006                                                                                             
|Federal agencies
   Within one year
   One to Five years                                                                                                                                                                  | 13,02615,082
 28,108                                                                              
|State, county and
  municipal
   Within one year
   One to five years
   Six to ten years
      
   Total held to maturity                                                                                                | 2,415
6,3224,364
 13,101
$42,215                                                                  

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

As of the quarter ended  December 31, 2000, the Bank  did not hold any securities of an issuer that exceeded 10% of stockholders' equity. The net unrealized  holding gains/(losses) on available-for-sale securities component of capital is $98 as of December 31, 2000.

8

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NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a summary of loans at September 30, 2001 and December 31, 2000 by major classification:

|Real estate loans - mortgage
                  - construction
Commercial and industrial loans
Loans to individuals for household,
  family and other consumer expenditures
Agriculture
All other loans, including overdrafts
     Gross loans
       Less allowance for loan losses
         Net loans | Sept. 30,   December 31,2001     2000                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------
|$180,405 
28,747 
47,068 
32,345 
1,314 2,315 
 292,194 
  (3,773)
 288,421                                                                                                                                                                                                                            | $191,329 
20,590 
45,929 
34,726 
1,376 1,698 
 295,648 
  (3,782)
 291,866

9

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NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES, continued

Changes in the allowance for loan losses for the quarter ended and nine-month period ended September 30, 2001 and 2000 and the year ended December 31, 2000 are summarized as follows:

|Balance, beginning of period
Charge-offs:
   Commercial, financial, and agricultural
   Real Estate - construction and mortgage
   Loans to individuals
       Total charge-offs
Recoveries:
   Commercial, financial, and agricultural
   Real Estate - construction and mortgage
   Loans to individuals
       Total recoveries
Net charge-offs/(recoveries)
Additions charge to operations
Balance, end of period | Quarter Ended    Six Months Ended   December   
Sept. 30,           Sept. 30,         31,     
 2001  2000   2001  2000   2000
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------
|$ 3,762
98
67101
$   266$    38
029
$    67
$   199
$   210
$ 3,773                                                                                                                                                                                                                                                                                                                                                   | $ 3,82849
48116
$   213
$    12
046
$    58
$   155
$   170
$ 3,843                                                           
|Ratio of net charge-offs during the period
 to average loans outstanding during the
 period                                                                                                                                                                                                                                                                                                                           | .07%                                                                                                                          

The entire balance is available to absorb future loan losses.
At September 30, 2001 and December 31, 2000 loans on which no interest was being accrued totalled approximately $589 and $305, respectively and foreclosed real estate totalled $64 and $0, respectively; and loans 90 days past due and still accruing totalled $119 and $189, respectively.



As of September 30, 2001, the Company does not have any interest-bearing assets that would be required to be disclosed under Item III.C.1. or 2. if such assets were loans.

10

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NOTE 5 - PREMISES AND EQUIPMENT

Property at September 30, 2001 and December 31, 2000 is summarized as follows:

|Land and buildings
Furniture, fixtures and equipment
Construction in progress
Less accumulated depreciation and
   amortization | Sept. 30   2001  
$ 13,981  
5,966  123  $ 20,070  8,808  $ 11,262 | December 31,2000  
$ 12,267  
5,826  61  $ 18,154  8,359  $  9,795
|------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------------

Depreciation and amortization of bank premises and equipment charged to operating expense was $147 and $450 for the quarter ended and the nine month period ended September 30, 2001, respectively and $586 for the year ended December 31, 2000.

NOTE 6 - CERTIFICATES OF DEPOSIT IN EXCESS OF $100,000

At September 30, 2001 and December 31, 2000, certificates of deposit of $100,000 or more included in time deposits totaled approximately $73,467 and $85,981 respectively.  Interest expense on these deposits was approximately $974 and $3,840 for the quarter ended and the nine-month period ended September 30, 2001 and $3,915 for the year ended December 31, 2000.

NOTE 7 - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

At September 30, 2001 and December 31, 2000, securities sold under repurchase agreements totaled approximately $36,702 and $22,567. U.S. Government securities with a book value of $38,579 ($39,804 market value) and $38,592 ($38,626 market value), respectively, are used as collateral for the agreements.  The weighted-average interest rate of these agreements was 2.77 percent and 5.00 percent at September 30, 2001 and December 31, 2000.

NOTE 8 - LINES OF CREDIT

At September 30, 2001, the Bank had unused short-term lines of credit to purchase Federal Funds from unrelated banks totaling $23,000.  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 under the arrangement at a variable interest rate.  The note is secured by U.S. Treasury and Agency Notes with a market value of $6,325 at September 30, 2001.  The amount outstanding under the note totaled $4,693 and $1,834 at September 30, 2001 and December 31, 2000, respectively.

The Bank also has a line of credit from the Federal Home Loan Bank of Atlanta for $70,530 secured by a lien on the Bank's 1-4 family mortgages.  Allowable terms range from overnight to 20 years at varying rates set daily by the FHLB.  An advance of $1,568 and $1,650 was outstanding at September 30, 2001 and December 31, 2000, respectively.

NOTE 9 - INCOME TAXES

Income tax expense for the quarter ended September 30, 2001 and September 30, 2000 on pretax income of $2,694 and $2,469 totalled $800 and $804 respectively.  Income tax expense for the nine-month period ended September 30, 2001 and September 30, 2000 on pretax income of $6,998 and $7,320 totalled $2,129 and $2,389 respectively.  The provision for federal income taxes is calculated by applying the 34% statutory federal income tax rate and increasing or reducing this amount due to any tax-exempt interest, state bank tax (net of federal benefit), business credits, surtax exemption, tax preferences, alternative minimum tax calculations, or other factor.  A summary of income tax components and a reconciliation of income taxes to the federal statutory rate are included in fiscal year-end reports.

11

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NOTE 9 - INCOME TAXES (Continued)     The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes".

NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES

From time to time the bank subsidiary is a party to various litigation, both as plaintiff and as defendant, arising from its normal operations.  No material losses are anticipated in connection with any of these matters at September 30, 2001.

Also, in the normal course of business, the bank subsidiary has outstanding commitments to extend credit and other contingent liabilities, which are not reflected in the accompanying financial statements.  At September 30, 2001, commitments to extend credit totalled $26,787; financial standby letters of credit totalled $2,861; and performance standby letters of credit totalled $509.  In the opinion of management, no material losses or liabilities are expected as a result of these transactions.

NOTE 11 - EMPLOYEE BENEFIT PLAN

The Bank has a defined contribution pension plan covering all employees who have attained age twenty-one and have a minimum of one year of service. Upon ongoing approval of the Board of Directors, the Bank matches one hundred percent of employee contributions up to three percent of employee salary deferred and fifty percent of employee contributions in excess of three percent and up to five percent of salary deferred.  The Board of Directors may also make discretionary contributions to the Plan.  For the three-month and nine month period ended September 30, 2001 and years ended December 31, 2000, 1999 and 1998, $120, $361, $404, $423, and $378, respectively, was charged to operations under the plan.

NOTE 12 - 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 financial statements.  The regulations require the Bank to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The capital classification is 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 maintenance of minimum amounts and ratios (set forth in the table below) of Tier I capital to adjusted total assets (Leverage Capital ratio) and minimum ratios of Tier I and total capital to risk-weighted assets.  To be considered adequately capitalized under the regulatory framework for prompt corrective action, the Bank must maintain minimum Tier I leverage, Tier I risk-based and total risked-based ratios as set forth in the table.  The Bank's actual capital ratios are presented in the table below as of September 30, 2001:

|Total Capital (to
 risk weighted assets)
Tier I Capital (to
 risk weighted assets)
Tier I Capital (to
 avg.assets | To be      
well capitalized
For           under prompt 
Capital adequacy corrective action   Purposes   provisionsActual   Minimum  MinimumAmount Ratio   Amount   Ratio  Amount   Ratio
|----------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|$53,882
50,109
50,109                                                                                             | 17.08%
15.88 
10.02                                                                                                                                                                      

12

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NOTE 13 - CONDENSED FINANCIAL INFORMATION

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

|CONDENSED BALANCED SHEET
SEPTEMBER 30, 2001
(Unaudited)                                     
|--------------------------------------------------------------------------------------------
|ASSETS
   Cash
   Investment in subsidiary
   Fixed assets
   Other assets                  
|LIABILITIES AND STOCKHOLDERS' EQUITY
   Other liability
   Stockholders' equity             
|CONDENSED STATEMENT OF INCOME
For the nine-month period ended September 30, 2001
(Unaudited)
|EQUITY IN NET INCOME OF SUBSIDIARY
OTHER INCOME
OTHER EXPENSES
   Net Income                

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.

13

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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 corporation's results of operations, financial condition, liquidity, and capital resources. The following discussion should be read in conjunction with the corporation's financial statements and notes thereto and other detailed information appearing elsewhere in this report.  In addition, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year.  In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations.  All such adjustments are of a normal and recurring nature.

DISTRIBUTION OF ASSETS AND LIABILITIES

The Company maintains a conservative approach in determining the distribution of assets and liabilities.  Loans, net of unearned income, have only increased 1.4% from $288,244 at September 30, 2000 to $292,194 at September 30, 2001 and have decreased as a percentage of total assets from 61.9% to 57.0% over the same period as loan demand has lessened in our market. Securities and federal funds sold have increased as a percentage of total assets from 31.3% at September 30, 2000 to 36.1% at September 30, 2001 as lending has slowed.  This level of investments and federal funds sold provides for a more than adequate supply of secondary liquidity.  Management has sought to build the deposit base with stable, relatively non-interest-sensitive deposits by offering the small to medium deposit account holders a wide array of deposit instruments at competitive rates. Non-interest-bearing demand deposits decreased as a percentage of total assets from 16.1% at September 30, 2000 to 16.0% at September 30, 2001.  As more customers, both business and personal, are attracted to interest-bearing deposit accounts, we expect the percentage of demand deposits to decline over the long-term. Interest-bearing deposits have decreased slightly from 64.7% of total assets at September 30, 2000 to 63.8% at September 30, 2001 while securities sold under agreement to repurchase have increased from 6.5% to 7.2% over the same period.

The following table sets forth the percentage relationship to total assets of significant components of the corporation's balance sheet as of September 30, 2001 and 2000:

|Assets:
   Earning assets:
   Loans
   Investment securities
   Securities Available for Sale
   Federal funds sold and securities purchased
     under agreement to resell
   Other earning assets
      Total earning assets
   Other assets
      Total assets                                                                                                                                       | Sept. 30,   2001  2000                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------
|57.0%
4.3 
25.2 
6.6 - 
 93.1 
  6.9 
100.0%                                                                                                                                                                                                                                                                                                                                                            | 61.9%
9.3 
19.0 
3.0 - 
 93.2 
  6.8 
100.0%
|Liabilities and stockholder's equity:
  Interest-bearing liabilities:
    Interest-bearing deposits
    Federal funds purchased and securities sold
      under agreement to resell
    Other short-term borrowings
        Total interest-bearing liabilities
          Noninterest-bearing deposits
    Other liabilities
    Stockholders' equity
        Total liabilities and stockholders' equity | 63.8%
7.2 1.2 
 72.2 16.0 
 .9 10.9 
100.0% 

14



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RESULTS OF OPERATION

CNB Corporation experienced earnings for the three-month period ended September 30, 2001 and 2000 of $1,894 and $1,665, respectively, resulting in a return on average assets of 1.48% and 1.43% and a return on average stockholders' equity of 14.18% and 13.87%.

CNB Corporation experienced earnings for the nine-month period ended September 30, 2001 and 2000 of $4,869 and $4,931, respectively, resulting in a return on average assets of 1.30% and 1.43% and a return on average stockholders' equity of 12.65% and 14.24%.

The earnings were primarily attributable to 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).  This level of earnings, coupled with a conservative dividend policy, have supplied the necessary capital funds to support the growth in total assets. Total assets have increased $47,081 or 10.1% from $465,974 at September 30, 2000 to $513,055 at September 30, 2001.  The following table sets forth the financial highlights for the three-month and nine-month periods ending September 30, 2001 and September 30, 2000:



|CNB Corporation
CNB Corporation and Subsidiary
FINANCIAL HIGHLIGHTS
(All Dollar Amounts, Except Per Share Data, in Thousands)                                                                                                                                                                                                                                                                                                     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Net interest income after provision
     for loan losses
Income before income taxes
Net Income
Per Share
Cash dividends declared
   Per Share
Total assets
Total deposits
Loans, net of unearned income
Investment securities and
    securities available for sale
Stockholders' equity
    Book value per share
Ratios (1):
Annualized return on average total
     assets
Annualized return on average
     stockholders'equity
|4,758 
2,694 
1,894 
2.65 
0 
0 
513,055 
409,772 
292,194 
151,492 
55,785 
78.08 
1.48%
14.18%                                                                                                                                                                                                                                                                                                                                  

(1) For the three-month period ended September 30, 2001 and September 30, 2000, average total assets amounted to $511,450 and $464,824 with average stockholders' equity totaling $53,419 and $48,010, respectively. For the nine-month period ended September 30, 2001 and September 30, 2000, average total assets amounted to $501,138 and $459,040 with average stockholders' equity totaling $51,339 and $46,156 respectively.

15

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

Interest rates paid on deposits and borrowed funds and earned on loans and investments have generally followed the fluctuations in market interest rates in 2001 and 2000.  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 either 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.  Management believes that a rise or fall in interest rates will not materially effect earnings.

The Bank has maintained adequate net interest margins for the three-month and nine-month periods ended September 30, 2001 and 2000 by earning satisfactory yields on loans and securities and funding these assets with a favorable deposit mix containing a significant level of noninterest-bearing demand deposits.

Fully-tax-equivalent net interest income showed a 2.6% increase from $4,953 for the three-month period ended September 30, 2000 to $5,084 for the three-month period ended September 30, 2001. During the same period, total fully-tax-equivalent interest income decreased by 2.3% from $8,744 to $8,539 and total interest expense decreased by 8.9% from $3,791 to $3,455. Fully-tax-equivalent net interest income as a percentage of total earning assets has shown a decrease of .34% from 4.58% for the three-month period ended September 30, 2000 to 4.24% for the three-month period ended September 30, 2001.

Fully-tax-equivalent net interest income showed a 4.2% decrease from $15,022 for the nine-month period ended September 30, 2000 to $14,389 for the nine-month period ended September 30, 2001. During the same period, total fully-tax-equivalent interest income increased by 2.3% from $25,734 to $26,328 and total interest expense increased by 11.5% from $10,712 to $11,939. Fully-tax-equivalent net interest income as a percentage of total earning assets has shown a decrease of .59% from 4.69% for the nine-month period ended September 30, 2000 to 4.10% for the nine-month period ended September 30, 2001.

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

16



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|CNB Corporation and Subsidiary
Selected Financial Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Assets:
  Earning assets:
   Loans, net of unearned
    income    
   Securities:
    Taxable
    Tax-exempt
   Federal funds sold and
    securities purchased     under agreement to   
    resell
   Other earning assets
      Total earning assets
    Other assets
      Total assets
Liabilities and stockholder equity
   Interest-bearing     liabilities:
   Interest-bearing deposits
   Federal funds purchased     and securities sold     under agreement to     repurchase
   Other short-term     borrowings
      Total interest-bearing
         liabilities
   Noninterest-bearing     deposits
   Other liabilities
   Stockholders' equity
         Total liabilities           and stockholders'           equity
   Net interest income as a     percent of total earning     assets
(1)  Tax-equivalent      adjustment based on a      34% tax rate
|$292,331
130,543
19,693
37,5010
 480,068
  31,382
$511,450
$330,679
33,5703,478
$367,727
  86,169
4,13553,419
$511,450
$480,068                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Ratios:
Annualized return on average total assets
Annualized return on average stockholders' equity
Cash dividends declared as a percent of net income
Average stockholders' equity as a percent of:
  Average total assets
  Average total deposits
  Average loans
Average earning assets as a percent of
average total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

17



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|CNB Corporation and Subsidiary
Selected Financial Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Assets:
  Earning assets:
   Loans, net of unearned     income
   Securities:
    Taxable
    Tax-exempt
   Federal funds sold and
    securities purchased     under agreement to     resell
   Other earning assets
      Total earning assets
    Other assets
      Total assets
Liabilities and stockholder equity
   Interest-bearing     liabilities:
   Interest-bearing     deposits
   Federal funds purchased     and securities sold     under agreement to      repurchase
   Other short-term     borrowings
   Total interest-bearing     liabilities
   Noninterest-bearing     deposits
   Other liabilities
   Stockholders' equity
         Total liabilities          and stockholders'          equity
   Net interest income as a     percent of total
    earning assets
(1)  Tax-equivalent      adjustment based on a      34% tax rate
|$295,093
118,299
19,709
34,4470
 467,548
  33,590
$501,138
$333,271
29,7203,242
$366,233  79,469
4,09751,339
$501,138
$467,548                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Ratios:
Annualized return on average total assets
Annualized return on average stockholders' equity
Cash dividends declared as a percent of net income
Average stockholders' equity as a percent of:
  Average total assets
  Average total deposits
  Average loans, net of unearned income
Average earning assets as a percent of
average total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

18



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CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Three Months Ended September 30, 2001 and 2000
(Dollars in Thousands)

|Earning Assets:
Loans, Net of unearned
 Income (2)
Investment securities:
 Taxable
 Tax-exempt
Federal funds sold and
 Securities purchased under
 agreement to resell
Other earning assets
Total Earning Assets
Interest-bearing
 Liabilities:
Interest-bearing deposits
Federal funds purchased and
 securities sold under
 agreement to repurchase
Other short-term borrowings
Total Interest-bearing
 Liabilities
Interest-free Funds
 Supporting Earning Assets
Total Funds Supporting
Earning Assets
Interest Rate Spread
Impact of Non-interest-
 bearing Funds on Net Yield
 on Earning Assets
Net Yield on Earning Assets | Average
Volume2001 
292,331
130,543
19,693
37,5010
480,068330,679
33,5703,478
367,727
112,341480,068 | Average
Volume2000 
288,137
116,949
16,128
11,7280
432,942297,932
32,5392,760
333,231
 99,711432,942 | Yield/Rate2001 (1) 
8.35%
5.39%
6.93%
3.57%- 
7.11%3.80%
3.19%4.95%
3.76%
     
2.87%3.35%.89%
4.24% | Yield/Rate2000 (1) 
9.08%
5.93%
7.12%
6.17%- 
8.08%4.48%
4.76%9.28%
4.55%
     
3.50%3.53%1.05%
4.58% | Interest  
Earned/Paid 2001 (1)  
6,104
1,759
341
3350
8,539
3,144
26843
3,455
     
3,455
     
5,084 | Interest  
Earned/Paid 2000 (1)  
6,543
1,733
287
1810
8,744
3,340
38764
3,791
     
3,791
     
4,953 | Variance
(439)
26 
54 
154 0 
 (205)
(196)
(119)(21)
 (336)
      
 (336) | Change
Due toRate 
(526)
(158)
(8)
(76)- 
 (768)
(506)
(128)(30)
 (664)
      
 (664) | Change
Due toVolume
95 
202 
63 
398 - 
 758
367 
12 17 
 396 
     
 396 | Change
Due to
Rate XVolume
(8)
(18)
(1)
(168)- 
(195)
(57)
(3)(8)
 (68)
     
 (68)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | -----------------------------------------------------------------------------------

(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.

19

---

CNB Corporation and Subsidiary
Rate/Volume Variance Analysis
For the Three Months Ended September 30, 2001 and 2000
(Dollars in Thousands)

|Earning Assets:
Loans, Net of unearned
 Income (2)
Investment securities:
 Taxable
 Tax-exempt
Federal funds sold and
 Securities purchased under
 agreement to resell
Other earning assets
Total Earning Assets
Interest-bearing
 Liabilities:
Interest-bearing deposits
Federal funds purchased and
 securities sold under
 agreement to repurchase
Other short-term borrowings
Total Interest-bearing
 Liabilities
Interest-free Funds
 Supporting Earning Assets
Total Funds Supporting
Earning Assets
Interest Rate Spread
Impact of Non-interest-
 bearing Funds on Net Yield
 on Earning Assets
Net Yield on Earning Assets | Average
Volume2001 
295,093
118,299
19,709
34,4470
467,548333,271
29,7203,242
366,233
101,315467,548 | Average
Volume2000 
281,991
121,617
16,178
7,5080
427,294297,004
30,0894,300
331,393 95,901427,294 | Yield/Rate2001 (1) 
8.66%
5.66%
6.99%
4.31%- 
7.51%4.37%
3.93%5.59%
4.35%
     
3.41%3.16%.94%
4.10% | Yield/Rate2000 (1) 
9.04%
5.93%
7.17%
5.93%- 
8.03%4.24%
4.69%6.29%
4.31%
     
3.34%3.72%.97%
4.69% | Interest  
Earned/Paid 2001 (1)  
19,160
5,022
1,033
1,1130
26,328
10,928
875136
11,939
      
11,939
      
14,389 | Interest  
Earned/Paid 2000 (1)  
19,124
5,406
870
3340
25,734
9,450
1,059203
10,712
      
10,712
      
15,022 | Variance
36 
(384)
163 
779 0 
  594
1,478 
(184)(67)
1,227 
      
1,227 | Change
Due toRate 
(804)
(246)
(22)
(91)- 
(1,163)
290 
(172)(23)
    95 
       
    95 | Change
Due toVolume
888 
(148)
190 
1,198 - 
2,128
1,153 
(13)(50)
1,090 
      
1,090 | Change
Due to
Rate XVolume
(48)
10 
(5)
(338)- 
(371)
35 
1 6 
  42 
     
  42
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------

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

(2)  Includes non-accruing loans which does not have a material effect on the Net
Yield on Earning Assets.

20

---

NET INCOME (continued)

Provision for Possible Loan Losses - It is the policy of the bank to maintain the
allowance 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
allowance to a level above these guidelines to cover potential losses identified in the portfolio.

The provision for possible loan losses was $210 for the three-month period ended September 30, 2001 and $170 for the three-month period ended September 30, 2000. Net loan charge-offs/(recoveries) totaled $199 for the three-month period ended September 30, 2001 and $155 for the same period in 2000.

The provision for possible loan losses was $530 for the nine-month period ended September 30, 2001 and $650 for the nine-month period ended September 30, 2000. Net loan charge-offs/(recoveries) totaled $539 for the nine-month period ended September 30, 2001 and $258 for the same period in 2000.

The allowance for possible loan losses as a percentage of net loans was 1.31% at September 30, 2001 and 1.35% at September 30, 2000.  The decreased provision during the nine-month period ended September 30, 2001 was due to a decrease in the rate of loan growth.

Securities Transactions - The Bank had no security sales during the first three quarters of 2000 or the first and third quarters of 2001.  During the second quarter of 2001, the Bank sold $11,213 in available-for-sale short-term U.S. Treasury securities for a before-tax gain of $169.  Due to the increased steepness of the Treasury yield curve, it was felt to be appropriate to take the gains on the Treasuries with a .8 year average life and reinvest in U.S. Agencies with an average life of 5.3 years.  At September 30, 2001, December 31, 2000, and September 30, 2000 market value appreciation/(depreciation) in the securities portfolio totaled $4,928, $455, and $(1,264).  As indicated, market value has increased in 2001 due to falling market interest rates.

Other Income - Other income, net of any gains/losses on security transactions, increased by 16.4% from $1,222 for the three-month period ended September 30, 2000 to $1,422 for the three-month period ended September 30, 2001.

Other income, net of any gains/losses on security transactions, increased by 12.5% from $3,393 for the nine-month period ended September 30, 2000 to $3,816 for the nine-month period ended September 30, 2001.

This increase in the three-month and nine-month period ended September 30, 2001 other income was due to an increase in deposit account volumes, higher merchant discount income and  increased refinancing volume in the mortgage loan department.  Effective July 1, 2001, overall service charge rates were increased which will correspondingly increase future non-interest income levels.

Other Expenses - Other expenses increased by 1.4% from $3,438 for the three-month period ended September 30, 2000 to $3,486 for the three-month period ended September 30, 2001.   The major components of other expenses are salaries and employee benefits which increased 6.6% from $2,013 to $2,145; occupancy expense which increased 2.1% from $434 to $443; and other operating expenses which decreased by 9.4% from $991 to $898.

Other expenses increased by 3.4% from $10,149 for the nine-month period ended September 30, 2000 to $10,495 for the nine-month period ended September 30, 2001.  The major components of other expenses are salaries and employee benefits which increased 7.8% from $6,059 to $6,530; occupancy expense which increased 2.1% from $1,359 to $1,388; and other operating expense which decreased by 5.6% from $2,731 to $2,577.

21

---

The increase in the three-month and nine-month period ended September 30, 2001 salaries and employee benefits and occupancy expense was due to normal pay increments and the increased costs of providing employee benefits, particularly health insurance coverage.   Occupancy expense was impacted by costs associated with the new Murrells Inlet office and the purchase of the Surfside Office which was previously a leasehold interest.  Other operating expenses have decreased due to lower credit card department related costs in the merchant discount income area.

Income Taxes - Provisions for income taxes decreased .5% from $804 for the three-month period ended September 30, 2000 to $800 for the three-month period ended September 30, 2001.  Income before income taxes less interest on tax-exempt investment securities increased by 8.3% from $2,280 for the three-month period ended September 30, 2000 to $2,469 for the same period in 2001.  State tax liability increased as income before income taxes increased 9.1% from $2,469 to $2,694 during the same period.

Provisions for income taxes decreased 10.9% from $2,389 for the nine-month period ended September 30, 2000 to $2,129 for the nine-month period ended September 30, 2001. Income before income taxes less interest on tax-exempt investment securities decreased by 6.4% from $6,746 for the nine-month period ended September 30, 2000 to $6,316 for the same period in 2001 and state tax liability decreased as income before income taxes decreased 4.4% from $7,320 to $6,998 during the same period.

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
(See Note 8 - Lines of Credit) and has the ability to borrow funds from the Federal Reserve System and the Federal Home Loan Bank of Atlanta. Management feels that short-term and long-term liquidity sources are more than adequate to meet funding needs.

CAPITAL RESOURCES

Total stockholders' equity was $55,785, $48,606, $43,712 and $41,201 at September 30, 2001, December 31, 2000, December 31, 1999, and December 31, 1998, representing 10.87%, 10.32%, 9.59%, and 9.66% of total assets, respectively. At September 30, 2001, the Bank exceeds quantitative measures established by regulation to ensure capital adequacy (see NOTE 12 - REGULATORY MATTERS). Capital is considered sufficient by management to meet current and prospective capital requirements and to support anticipated growth in bank operations.

The Company paid an approximate 20% stock dividend on September 2000. The Board maintained the annual cash dividend at $3.50 per share which increased the cash dividend payout ratio and cash dividend yield.

22

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EFFECTS OF REGULATORY ACTION

The Federal Deposit Insurance Corporation (FDIC) reduced FDIC insurance premium rates during the third quarter of 1995 which has had a positive effect on subsequent earnings and should favorably impact future year's income.  Effective March 11, 2000, the Gramm-Leach-Bliley Act of 1999 allows bank holding companies to elect to be treated as financial holding companies which may engage in a broad range of securities, insurance, and other financial activities.  At this time, neither the Company nor the Bank plan to enter these new lines of business.  The management of the Company and the Bank is not aware of any 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 July 2001, the SEC issued Staff Accounting Bulletin (SAB) No. 102 - Selected Loan Loss Allowance Methodology and Documentation Issues.  This staff accounting bulletin clearly defines the required development, documentation, and application of a systematic methodology for determining allowances for loan and lease losses in accordance with generally accepted accounting principles.  The Company believes that it is in compliance with SAB 102.

In June 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards ('SFAS") No. 141 - Business Combinations.  This SFAS addresses accounting and reporting for all business combinations and defines the purchase method as the only acceptable method.  This statement is effective for all business combinations initiated after June 30, 2001.

In June 2001, the FASB issued SFAS No. 142 - Goodwill and Other Intangible Assets.  This SFAS addresses how goodwill and other intangible assets should be accounted for at their acquisition (except for those acquired in a business combination) and after they have been initially recognized in the financial statements.  The statement is effective for all fiscal years beginning after December 15, 2001.  The Company believes the effect of this SFAS will not have a material impact on the financial position of the Company.

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

23

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QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

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

24

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EXHIBITS AND REPORTS ON FORM 8-K

See Exhibit Index appearing below.

(b)  Reports on Form 8-K - No reports on Form 8-K were filed during the
     quarter covered by this report.

EXHIBIT INDEX

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

CNB Corporation

SIGNATURE
Pursuant to the requirements 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
                                    (Registrant)
                                  Paul R. Dusenbury
                                  _________________________________________
                                  Paul R. Dusenbury
                                  Treasurer
                                 (Chief Financial and Accounting Officer)
Date:  November 13, 2001

25

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