**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

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| x      | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                            |
|   | For                the quarterly period ended: June                30, 2005                                     |

| o      | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|--------|------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                             |
|   | For the transition              period from __________ to ___________                                            |

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** **
***000-1329385***

**CB      FINANCIAL      CORPORATION**

**(Exact      name of Small Business Issuer as Specified in its Charter)**

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| **North                  Carolina**                                                              |   | **20-2928613**                                        |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|
| (State                  or Other Jurisdiction of Incorporation or                  Organization) |   | (I.R.S.                  Employer Identification No.) |

| **3710                  Nash Street North****Post                  Office Box 8189 (Zip 27893)****Wilson,                  North Carolina 27896-1120** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Address                  of principal executive offices)                                                                                              |
|                                                                                                                                                   |
|  **(252)                  243-5588**                                                                                                              |
|  (Issuer’s                  Telephone Number, Including Area                  Code)                                                         |

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|                            |                                                                                                                          |                                                                    | Page                No. |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------|
| **Part                I.**      | **FINANCIAL                INFORMATION**                                                                                      |                                                                    |                    |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Item                1 -**     | **Financial                Statements (Unaudited)**                                                                           |                                                                    |                    |
|                            |                                                                                                                          |                                                                    |                    |   |
|                            |                                                                                                                          | Consolidated                Statements of Financial Condition           |                    |   |
|                            |                                                                                                                          | June                30, 2005 and December 31, 2004                      |                    | 3 |
|                            |                                                                                                                          |                                                                    |                    |   |
|                            |                                                                                                                          | Consolidated                Statements of Operations                    |                    |   |
|                            |                                                                                                                          | Three                Months and Six Months Ended June 30, 2005 and 2004 |                    | 4 |
|                            |                                                                                                                          |                                                                    |                    |   |
|                            |                                                                                                                          | Consolidated                Statements of Cash Flows                    |                    |   |
|                            |                                                                                                                          | Six                Months Ended June 30, 2005 and 2004                  |                    | 5 |
|                            |                                                                                                                          |                                                                    |                    |   |
|                            |                                                                                                                          | Notes                to Consolidated Financial Statements               |                    | 6 |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Item                2 -**     | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations** |                                                                    | 11                      |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Item                3 -**     | **Controls                and Procedures**                                                                                    |                                                                    | 15                      |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Part                II.**     | **OTHER                INFORMATION**                                                                                          |                                                                    |                    |
|                            |                                                                                                                          |                                                                    |                    |   |
| **I****tem                1 -** | **Legal                Proceedings**                                                                                          |                                                                    | 16                      |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Item                4 -**     | **Submission                of Matters to a Vote of Security Holders**                                                        |                                                                    | 16                      |
|                            |                                                                                                                          |                                                                    |                    |   |
| **Item                6 -**     | **Exhibits**                                                                                                                  |                                                                    | 17                      |

**       **

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**        **

**Part      I. **
**FINANCIAL      INFORMATION**

**Item      1 - Financial Statements**

***CB      FINANCIAL CORPORATION AND SUBSIDIARY***

***CONSOLIDATED      STATEMENTS OF FINANCIAL CONDITION***

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|                                                                                                                                                                                                             |   | June                30, 2005                             |    | December                31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|---------|-----------------------------|--------|
|                                                                                                                                                                                                             |   | (Unaudited)                                              |    | 2004                        |   |
|                                                                                                                                                                                                             |   | (Amounts                in thousands, except share data) |    |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |
| **ASSETS**                                                                                                                                                                                                       |   |                                                     |    |                        |   |
| Cash                and due from banks                                                                                                                                                                           |   | $                                                        | 4,215   |                        | $      | 2,717 |   |
| Interest-earning                deposits in banks                                                                                                                                                                |   |                                                     | 3,208   |                        |   | 3,397 |   |
| Federal                funds sold                                                                                                                                                                                |   |                                                     | 6,512   |                        |   | 4,680 |   |
| Time                deposits                                                                                                                                                                                     |   |                                                     | 3,246   |                        |   | 4,316 |   |
| Investment                securities available for sale, at fair value                                                                                                                                           |   |                                                     | 12,367  |                        |   | 10,908 |   |
| Investment                securities held to maturity, at amortized cost (fair market value                at June                30, 2005, $2,890)                                                              |   |                                                     | 2,885   |                        |   | 1,663 |   |
| Loans                                                                                                                                                                                                            |   |                                                     | 92,332  |                        |   | 89,330 |   |
| Allowance                for loan losses                                                                                                                                                                         |   |                                                     | (1,410  | )                           |   | (1,216 | ) |
| NET                LOANS                                                                                                                                                                                         |   |                                                     | 90,922  |                        |   | 88,114 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| Accrued                interest receivable                                                                                                                                                                       |   |                                                     | 463     |                        |   | 443 |   |
| Stock                in Federal Home Loan Bank of Atlanta, at cost                                                                                                                                               |   |                                                     | 315     |                        |   | 272 |   |
| Premises                and equipment                                                                                                                                                                            |   |                                                     | 1,517   |                        |   | 1,540 |   |
| Life                insurance                                                                                                                                                                                    |   |                                                     | 1,312   |                        |   | 1,286 |   |
| Real                estate owned                                                                                                                                                                                 |   |                                                     | -       |                        |   | 39 |   |
| Other                assets                                                                                                                                                                                      |   |                                                     | 779     |                        |   | 597 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| TOTAL                ASSETS                                                                                                                                                                                      |   | $                                                        | 127,741 |                        | $      | 119,972 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                    |   |                                                     |    |                        |   |   |   |
| Deposits:                                                                                                                                                                                                        |   |                                                     |    |                        |   |   |   |
| Demand                                                                                                                                                                                                           |   | $                                                        | 23,424  |                        | $      | 16,203 |   |
| Savings                                                                                                                                                                                                          |   |                                                     | 1,092   |                        |   | 1,093 |   |
| Money                market and NOW                                                                                                                                                                              |   |                                                     | 42,706  |                        |   | 44,184 |   |
| Time                over $100,000                                                                                                                                                                                |   |                                                     | 20,754  |                        |   | 21,025 |   |
| Time                                                                                                                                                                                                             |   |                                                     | 27,784  |                        |   | 26,119 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| TOTAL                DEPOSITS                                                                                                                                                                                    |   |                                                     | 115,760 |                        |   | 108,624 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| Advances                from Federal Home Loan Bank                                                                                                                                                              |   |                                                     | 1,500   |                        |   | 1,667 |   |
| Accrued                interest payable                                                                                                                                                                          |   |                                                     | 119     |                        |   | 107 |   |
| Accrued                expenses and other liabilities                                                                                                                                                            |   |                                                     | 380     |                        |   | 179 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| TOTAL                LIABILITIES                                                                                                                                                                                 |   |                                                     | 117,759 |                        |   | 110,577 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| Stockholders’                equity:                                                                                                                                                                       |   |                                                     |    |                        |   |   |   |
| Common                stock, no par value, 20,000,000 shares authorized; 959,728 shares                issued                and outstanding at June 30, 2005 and December 31, 2004,                respectively |   |                                                     | 8,911   |                        |   | 8,911 |   |
| Retained                earnings                                                                                                                                                                                 |   |                                                     | 1,106   |                        |   | 459 |   |
| Accumulated                other comprehensive income (loss)                                                                                                                                                     |   |                                                     | (35     | )                           |   | 25 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| TOTAL                STOCKHOLDERS’ EQUITY                                                                                                                                                                  |   |                                                     | 9,982   |                        |   | 9,395 |   |
|                                                                                                                                                                                                             |   |                                                     |    |                        |   |   |   |
| TOTAL                LIABILITIES AND STOCKHOLDERS’                EQUITY                                                                                                                                   |   | $                                                        | 127,741 |                        | $      | 119,972 |   |

*See            accompanying notes.*

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***CB      FINANCIAL CORPORATION AND SUBSIDIARY***

***CONSOLIDATED      STATEMENTS OF OPERATIONS (Unaudited)***

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|                                                                               |   | Three                Months Ended                              |    | Six                Months Ended |   |
|------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|---------|---------------------------------|--------|
|                                                                               |   | June                30,                                        |    | June                30,         |   |
|                                                                               |   | (In                thousands, except share and per share data) |    |
|                                                                               |   | 2005                                                           |    | 2004                            |   | 2005 |   | 2004 |   |
| INTEREST                INCOME                                                     |   |                                                           |    |                            |   |   |   |   |   |
| Loans                                                                              |   | $                                                              | 1,470   |                            | $      | 1,060 |   | $ | 2,856 |   | $ | 2,070 |   |
| Investments                                                                        |   |                                                           | 136     |                            |   | 99 |   |   | 254 |   |   | 191 |   |
| Federal                funds sold                                                  |   |                                                           | 42      |                            |   | - |   |   | 79 |   |   | 1 |   |
| Interest-earning                bank deposits                                      |   |                                                           | 24      |                            |   | 24 |   |   | 44 |   |   | 41 |   |
| Other                interest and dividends                                        |   |                                                           | 34      |                            |   | 12 |   |   | 65 |   |   | 24 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| TOTAL                INTEREST                INCOME                                |   |                                                           | 1,706   |                            |   | 1,195 |   |   | 3,298 |   |   | 2,327 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| INTEREST                EXPENSE                                                    |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Money                market, NOW and savings deposits                              |   |                                                           | 206     |                            |   | 187 |   |   | 399 |   |   | 364 |   |
| Time                deposits                                                       |   |                                                           | 383     |                            |   | 241 |   |   | 728 |   |   | 500 |   |
| Borrowings                                                                         |   |                                                           | 14      |                            |   | 25 |   |   | 28 |   |   | 42 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| TOTAL                INTEREST EXPENSE                                              |   |                                                           | 603     |                            |   | 453 |   |   | 1,155 |   |   | 906 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| NET                INTEREST INCOME                                                 |   |                                                           | 1,103   |                            |   | 742 |   |   | 2,143 |   |   | 1,421 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| PROVISION                FOR LOAN LOSSES                                           |   |                                                           | 85      |                            |   | 83 |   |   | 198 |   |   | 254 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| NET                  INTEREST INCOME AFTERPROVISION                FOR LOAN LOSSES |   |                                                           | 1,018   |                            |   | 659 |   |   | 1,945 |   |   | 1,167 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| NON-INTEREST                INCOME                                                 |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Service                charges on deposit accounts                                 |   |                                                           | 104     |                            |   | 93 |   |   | 223 |   |   | 164 |   |
| Mortgage                operations                                                 |   |                                                           | 36      |                            |   | 33 |   |   | 86 |   |   | 135 |   |
| Other                income                                                        |   |                                                           | 72      |                            |   | 19 |   |   | 120 |   |   | 46 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| TOTAL                NON-INTEREST INCOME                                           |   |                                                           | 212     |                            |   | 145 |   |   | 429 |   |   | 345 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| NON-INTEREST                EXPENSE                                                |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Salaries                and employee benefits                                      |   |                                                           | 393     |                            |   | 317 |   |   | 768 |   |   | 653 |   |
| Occupancy                and equipment                                             |   |                                                           | 43      |                            |   | 39 |   |   | 85 |   |   | 75 |   |
| Data                processing expenses                                            |   |                                                           | 87      |                            |   | 68 |   |   | 164 |   |   | 134 |   |
| Other                (Note D)                                                      |   |                                                           | 196     |                            |   | 152 |   |   | 333 |   |   | 261 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| TOTAL                NON-INTEREST EXPENSE                                          |   |                                                           | 719     |                            |   | 576 |   |   | 1,350 |   |   | 1,123 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| INCOME                BEFORE INCOME TAXES                                          |   |                                                           | 511     |                            |   | 228 |   |   | 1,024 |   |   | 389 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| INCOME                TAXES                                                        |   |                                                           | 176     |                            |   | 72 |   |   | 377 |   |   | 103 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| NET                INCOME                                                          |   | $                                                              | 335     |                            | $      | 156 |   | $ | 647 |   | $ | 286 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Net                Income Per Common Share                                         |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Basic                                                                              |   | $                                                              | .35     |                            | $      | .16 |   | $ | .67 |   | $ | .30 |   |
| Diluted                                                                            |   |                                                           | .34     |                            |   | .16 |   |   | .66 |   |   | .30 |   |
|                                                                               |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Weighted                Average Shares Outstanding                                 |   |                                                           |    |                            |   |   |   |   |   |   |   |   |   |
| Basic                                                                              |   |                                                           | 959,728 |                            |   | 959,728 |   |   | 959,728 |   |   | 959,728 |   |
| Diluted                                                                            |   |                                                           | 982,668 |                            |   | 965,719 |   |   | 981,047 |   |   | 968,885 |   |

*See            accompanying notes.*

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***CB      FINANCIAL CORPORATION AND SUBSIDIARY***

***CONSOLIDATED***
***STATEMENTS      OF CASH FLOWS (Unaudited)***

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|                                                                                                            |   | Six                Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                                            |   | June                30,         |   |
|                                                                                                            |   | 2005                            |   | 2004 |   |
|                                                                                                            |   | (In                thousands)   |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                                             |   |                            |   |   |   |
| Net                income                                                                                       |   | $                               | 647    |   | $ | 286 |   |
| Adjustments                to reconcile net income to net cash                provided by operating activities: |   |                            |   |   |   |   |   |
| Depreciation                and amortization                                                                    |   |                            | 79     |   |   | 100 |   |
| Provision                for loan losses                                                                        |   |                            | 198    |   |   | 254 |   |
| Earnings                on life insurance                                                                       |   |                            | (26    | ) |   | (29 | ) |
| Loss                on sale of available for sale investments                                                   |   |                            | -      |   |   | 15 |   |
| Gain                on sale of real estate owned                                                                |   |                            | (30    | ) |   | - |   |
| Proceeds                from sale of REO                                                                        |   |                            | 69     |   |   | - |   |
| Increase                in accrued interest receivable                                                          |   |                            | (20    | ) |   | (35 | ) |
| (Increase)                decrease in other assets                                                              |   |                            | (19    | ) |   | 20 |   |
| Increase                in accrued interest payable                                                             |   |                            | 12     |   |   | 10 |   |
| Increase                (decrease) in accrued expenses and other liabilities                                    |   |                            | 201    |   |   | (56 | ) |
|                                                                                                            |   |                            |   |   |   |   |   |
| NET                  CASH PROVIDED BYOPERATING ACTIVITIES                                                       |   |                            | 1,111  |   |   | 565 |   |
|                                                                                                            |   |                            |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                                             |   |                            |   |   |   |   |   |
| Net                maturities of time deposits                                                                  |   |                            | 1,070  |   |   | 388 |   |
| Purchase                of available-for-sale securities                                                        |   |                            | (3,022 | ) |   | (4,523 | ) |
| Maturities,                sales and calls of available for sale investments                                    |   |                            | 1,437  |   |   | 3,107 |   |
| Purchase                of held to maturity securities                                                          |   |                            | (1,224 | ) |   | - |   |
| Net                increase in loans                                                                            |   |                            | (3,006 | ) |   | (7,622 | ) |
| Purchase                of FHLB, Community Alliance and CapitalSouth Partners                stock              |   |                            | (168   | ) |   | (89 | ) |
| Purchases                of company premises and equipment                                                      |   |                            | (26    | ) |   | (20 | ) |
|                                                                                                            |   |                            |   |   |   |   |   |
| NET                  CASH USED BY INVESTING                ACTIVITIES                                           |   |                            | (4,939 | ) |   | (8,759 | ) |
|                                                                                                            |   |                            |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                                             |   |                            |   |   |   |   |   |
| Increase                (decrease) in Federal Home Loan Bank advances                                           |   |                            | (167   | ) |   | 633 |   |
| Decrease                in federal funds purchased                                                              |   |                            | -      |   |   | (342 | ) |
| Increase                in deposits                                                                             |   |                            | 7,136  |   |   | 4,198 |   |
|                                                                                                            |   |                            |   |   |   |   |   |
| NET                CASH PROVIDED BY FINANCING ACTIVITIES                                                        |   |                            | 6,969  |   |   | 4,489 |   |
|                                                                                                            |   |                            |   |   |   |   |   |
| NET                  INCREASE (DECREASE) INCASH                AND CASH EQUIVALENTS                             |   |                            | 3,141  |   |   | (3,705 | ) |
|                                                                                                            |   |                            |   |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, BEGINNING                                                             |   |                            | 10,794 |   |   | 9,940 |   |
|                                                                                                            |   |                            |   |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, ENDING                                                                |   | $                               | 13,935 |   | $ | 6,235 |   |

*See            accompanying notes.*

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***CB      FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO FINANCIAL      STATEMENTS***

** **

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**NOTE      A - BASIS OF PRESENTATION**

***NOTE      B - STOCK COMPENSATION PLANS***

*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*

----

***CB        FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO FINANCIAL        STATEMENTS***

** **

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***NOTE      B - STOCK COMPENSATION PLANS (CONTINUED)***

|                                                                                                                                                                                              |   | Three                Months Ended                            |   | Six                Months Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                                                                                                                              |   | June                30,                                      |   | June                30,         |   |
|                                                                                                                                                                                              |   | 2005                                                         |   | 2004                            |   | 2005 |   | 2004 |   |
|                                                                                                                                                                                              |   | (Amounts                in thousands, except per share data) |   |
| Net                income:                                                                                                                                                                        |   |                                                         |   |                            |   |   |   |   |   |
| As                reported                                                                                                                                                                        |   | $                                                            | 335    |                            | $      | 156 |   | $ | 647 |   | $ | 286 |   |
| Deduct:                Total stock-based employee compensation expense determined under                fair                value method for all awards, net                of related tax effects |   |                                                         | (13    | )                               |   | (14 | ) |   | (26 | ) |   | (26 | ) |
|                                                                                                                                                                                              |   |                                                         |   |                            |   |   |   |   |   |   |   |   |   |
| Pro                forma                                                                                                                                                                          |   | $                                                            | 322    |                            | $      | 142 |   | $ | 621 |   | $ | 260 |   |
|                                                                                                                                                                                              |   |                                                         |   |                            |   |   |   |   |   |   |   |   |   |
| Basic                net income per share:                                                                                                                                                        |   |                                                         |   |                            |   |   |   |   |   |   |   |   |   |
| As                reported                                                                                                                                                                        |   | $                                                            | .35    |                            | $      | .16 |   | $ | .67 |   | $ | .30 |   |
| Pro                forma                                                                                                                                                                          |   |                                                         | .34    |                            |   | .15 |   |   | .65 |   |   | .27 |   |
|                                                                                                                                                                                              |   |                                                         |   |                            |   |   |   |   |   |   |   |   |   |
| Diluted                net income per share:                                                                                                                                                      |   |                                                         |   |                            |   |   |   |   |   |   |   |   |   |
| As                reported                                                                                                                                                                        |   | $                                                            | .34    |                            | $      | .16 |   | $ | .66 |   | $ | .30 |   |
| Pro                forma                                                                                                                                                                          |   |                                                         | .33    |                            |   | .15 |   |   | .63 |   |   | .27 |   |

***NOTE      C - LOANS***

|                                             |   | June                30, 2005          |   | December                31, 2004 |   |
|--------------------------------------------------|--------|---------------------------------------|--------|----------------------------------|--------|
|                                             |   |                                  |   | Percent                          |   |   |   | Percent |   |
|                                             |   | Amount                                |   | of                total          |   | Amount |   | of                total |   |
|                                             |   | (Dollars                in thousands) |   |
| Residential                mortgage              |   | $                                     | 3,260  |                             |   | 3.53 | % | $ | 3,724 |   |   | 4.17 | % |
| Residential                construction          |   |                                  | 3,617  |                             |   | 3.92 | % |   | 4,068 |   |   | 4.55 | % |
| Home                equity lines of credit       |   |                                  | 6,277  |                             |   | 6.80 | % |   | 5,574 |   |   | 6.24 | % |
| Commercial                and industrial loans   |   |                                  | 74,452 |                             |   | 80.60 | % |   | 71,376 |   |   | 79.87 | % |
| Loans                to individuals              |   |                                  | 4,756  |                             |   | 5.15 | % |   | 4,618 |   |   | 5.17 | % |
|                                             |   |                                  |   |                             |   |   |   |   |   |   |   |   |   |
| Total                loans                       |   |                                  | 92,362 |                             |   | 100.00 | % |   | 89,360 |   |   | 100.00 | % |
|                                             |   |                                  |   |                             |   |   |   |   |   |   |   |   |   |
| Less:                                            |   |                                  |   |                             |   |   |   |   |   |   |   |   |   |
| Allowance                for loan losses         |   |                                  | (1,410 | )                                |   |   |   |   | (1,216 | ) |   |   |   |
| Deferred                loan fees and costs, net |   |                                  | (30    | )                                |   |   |   |   | (30 | ) |   |   |   |
|                                             |   |                                  |   |                             |   |   |   |   |   |   |   |   |   |
| Net                loans receivable              |   | $                                     | 90,922 |                             |   |   |   | $ | 88,114 |   |   |   |   |

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***CB          FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO FINANCIAL          STATEMENTS***

** **

----

***NOTE      C - LOANS (Continued)***

|                                                                           |   | Six                  Months Ended June 30, |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                           |   | 2005                                       |   | 2004 |   |
|                                                                           |   | (Dollars                in thousands)      |   |
| Allowance                for loan losses at beginning of period                |   | $                                          | 1,216  |   | $ | 1,033 |   |
| Provision                for loan losses                                       |   |                                       | 198    |   |   | 254 |   |
| Loans                charged-off                                               |   |                                       | (11    | ) |   | (172 | ) |
| Recoveries                                                                     |   |                                       | 7      |   |   | - |   |
|                                                                           |   |                                       |   |   |   |   |   |
| Allowance                for loan losses at end of period                      |   | $                                          | 1,410  |   | $ | 1,115 |   |
|                                                                           |   |                                       |   |   |   |   |   |
| Allowance                  for loan losses as a percent of loans at period end |   |                                       | 1.53   | % |   | 1.38 | % |

***NOTE      D - OTHER NON-INTEREST EXPENSE***

|                                                 |   | Three                Months Ended     |   | Six                Months Ended |   |
|------------------------------------------------------|--------|---------------------------------------|--------|---------------------------------|--------|
|                                                 |   | June                30,               |   | June                30,         |   |
|                                                 |   | 2005                                  |   | 2004                            |   | 2005 |   | 2004 |   |
|                                                 |   | (Dollars                in thousands) |   |
|                                                 |   |                                  |   |                            |   |   |   |   |   |
| Postage,                printing and office supplies |   | $                                     | 33     |                            | $      | 25 |   | $ | 47 |   | $ | 39 |   |
| Advertising                and promotion             |   |                                  | 25     |                            |   | 21 |   |   | 40 |   |   | 36 |   |
| Professional                services                 |   |                                  | 47     |                            |   | 38 |   |   | 89 |   |   | 70 |   |
| Other                                                |   |                                  | 91     |                            |   | 68 |   |   | 157 |   |   | 116 |   |
|                                                 |   |                                  |   |                            |   |   |   |   |   |   |   |   |   |
| Total                                                |   | $                                     | 196    |                            | $      | 152 |   | $ | 333 |   | $ | 261 |   |

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***CB          FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO FINANCIAL          STATEMENTS***

** **

----

***NOTE      E - COMPREHENSIVE INCOME (LOSS)***

|                                                                                                                                                       |   | Three                Months Ended     |   | Six                Months Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|---------------------------------|--------|
|                                                                                                                                                       |   | June                30,               |   | June                30,         |   |
|                                                                                                                                                       |   | 2005                                  |   | 2004                            |   | 2005 |   | 2004 |   |
|                                                                                                                                                       |   | (Dollars                in thousands) |   |
|                                                                                                                                                       |   |                                  |   |                            |   |   |   |   |   |
| Net                income                                                                                                                                  |   | $                                     | 335    |                            | $      | 156 |   | $ | 647 |   | $ | 286 |   |
|                                                                                                                                                       |   |                                  |   |                            |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss):                                                                                                          |   |                                  |   |                            |   |   |   |   |   |   |   |   |   |
| Net                    increase (decrease) in the fair value of investment securities                    available                    for sale, net of tax |   |                                  | 30     |                            |   | (166 | ) |   | (60 | ) |   | (132 | ) |
|                                                                                                                                                       |   |                                  |   |                            |   |   |   |   |   |   |   |   |   |
| Total                comprehensive income (loss)                                                                                                           |   | $                                     | 365    |                            | $      | (10 | ) | $ | 587 |   | $ | 154 |   |

***NOTE      F - PER SHARE RESULTS***

|                                                                    |   |                              |    |                            |   |    |   |   |    |
|-------------------------------------------------------------------------|--------|-----------------------------------|---------|---------------------------------|--------|---------|--------|--------|---------|
|                                                                    |   | Three                Months Ended |    | Six                Months Ended |   |
|                                                                    |   | June                30,           |    | June                30,         |   |
|                                                                    |   | 2005                              |    | 2004                            |   | 2005    |   | 2004   |    |
|                                                                    |   |                              |    |                            |   |    |   |   |    |
| Weighted                average outstanding shares used for basic EPS   |   |                              | 959,728 |                            |   | 959,728 |   |   | 959,728 |   |   | 959,728 |   |
|                                                                    |   |                              |    |                            |   |    |   |   |    |   |   |   |   |
| Plus                incremental shares from assumed exercise of:        |   |                              |    |                            |   |    |   |   |    |   |   |   |   |
| Stock                options                                            |   |                              | 22,940  |                            |   | 5,991   |   |   | 21,319  |   |   | 9,157 |   |
|                                                                    |   |                              |    |                            |   |    |   |   |    |   |   |   |   |
| Weighted                average outstanding shares used for diluted EPS |   |                              | 982,668 |                            |   | 965,719 |   |   | 981,047 |   |   | 968,885 |   |

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***CB          FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO FINANCIAL          STATEMENTS***

** **

----

***NOTE      G - SUBSEQUENT EVENTS***

*Trust      Preferred Transaction*

*Stock      Split in Form of Stock Dividend*

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results      of **
**Operations**

***FINANCIAL      CONDITION AT***

***June      30, 2005 and December 31, 2004***

***RESULTS      OF OPERATIONS FOR THE THREE MONTHS ENDED***

***June      30, 2005 and 2004***

*Overview.*
* *

*Net      Interest Income.*
* *

*Provision      for Loan Losses.*

----

*Non-Interest      Income.*

*Non-Interest      Expenses.*

*Income      Taxes.*

***RESULTS      OF OPERATIONS FOR THE SIX MONTHS ENDED***

***June      30, 2005 and 2004***

*Overview.*
* *

*Net      Interest Income.*
* *

----

*Provision      for Loan Losses.*
* *

*Non-Interest      Income.*

*Non-Interest      Expenses.*

*Income      Taxes.*

***LIQUIDITY***

** **

----

***CAPITAL***

***FORWARD-LOOKING      INFORMATION***

----

**Item      3. Controls and Procedures**

----

**Part      II.**
**OTHER      INFORMATION**

**Item      1. **
**Legal      Proceedings.**

**Item      4.**
**Submission      of Matters to a Vote of Security Holders.**

| **Proposal                  1:**  | To                  elect three members of the Board of Directors for a three-year                  term until                  the Annual Meeting of Shareholders in 2008. Votes for each nominee                  were as                  follows: |
|----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                        |   | For     |   | Withheld |
|---------------------------------------------|--------|---------|--------|----------|
| Norman                    B. Osborn         |   | 759,723 |   | 0        |
| Gregory                    A. Turnage       |   | 759,723 |   | 0        |
| S.                    Christopher Williford |   | 759,723 |   | 0        |

| John                    C. Anthony  |   | Thomas                    E. Brown III    |   | Judy                    A. Muirhead      |
|-------------------------------------|--------|-------------------------------------------|--------|------------------------------------------|
| David                    W. Woodard |   | Robert                    E. Kirkland III |   | W.                    Coalter Paxton III |

| **Proposal****2:**  | To                  ratify the appointment of Dixon Hughes PLLC as the Bank's independent                  auditor for the year ending December 31,                  2005. |
|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For     |   | Against |   | Withheld |
|---------|--------|---------|--------|----------|
| 758,697 |   | 301     |   | 725      |

| **Proposal                  3:** | The                  approval of the Amended and Restated Cornerstone Bank Employee                  Stock                  Purchase Plan. |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| For     |   | Against |   | Withheld |
|---------|--------|---------|--------|----------|
| 699,600 |   | 13,330  |   | 3,074    |

| **Proposal                  4:** | The                  approval                  of an Agreement and Plan of Reorganization, pursuant to which the                  Bank                  became a wholly-owned subsidiary of CB Financial Corporation, a                  newly                  formed North Carolina bank holding company, and each outstanding                  share of                  the Bank’s common stock was exchanged for one share of the new holding                  company’s common stock. |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For     |   | Against |   | Withheld |
|---------|--------|---------|--------|----------|
| 711,950 |   | 1,567   |   | 2,487    |

----

**       **

**Item      6.**
**Exhibits      **

|  Exhibit                    Name   |  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit                    (2)          | Articles                    of Share Exchange and Agreement and Plan of Reorganization dated                    May 26,                    2005, incorporated herein by reference to Exhibit (2) to the                    Form 8-K                    filed with the SEC on June 10, 2005                                                                                                                                                                        |
| Exhibit                    3(i)         | Articles                    of Incorporation, incorporated herein by reference to Exhibit                    3(i) to the                    Form 8-K filed with the SEC on June 10, 2005                                                                                                                                                                                                                                                                          |
| Exhibit                    3(ii)        | Bylaws,                    incorporated herein by reference to Exhibit 3(ii) to the Form                    8-K filed                    with the SEC on June 10, 2005                                                                                                                                                                                                                                                                                            |
| Exhibit                    4(i)         | Specimen                    Stock Certificate, incorporated herein by reference to Exhibit                    4 to the                    Form 8-K filed with the SEC on June 10, 2005                                                                                                                                                                                                                                                                            |
| Exhibit                    4(ii)        | Indenture                    dated July 12, 2005 between the Company and U.S. Bank National                    Association, as trustee, incorporated herein by reference to                    Exhibit 4(i)                    to the Form 8-K filed with the SEC on July 15, 2005                                                                                                                                                                                |
| Exhibit                    4(iii)       | Amended                    and Restated Declaration of Trust dated July 12, 2005 by and                    among the                    Company, as sponsor, U.S. Bank National Association, as institutional                    trustee, and the Administrators named therein, incorporated herein                    by                    reference to Exhibit 4(ii) to the Form 8-K filed with the SEC                    on July 15,                    2005 |
| Exhibit                    4(iv)        | Form                    of Junior Subordinated Debenture (included as an exhibit to Exhibit                    4(ii)                    above), incorporated herein by reference to Exhibit 4(iii) to                    the Form 8-K                    filed with the SEC on July 15, 2005                                                                                                                                                                      |
| Exhibit                    4(v)         | Form                    of Capital Security Certificate (included as an exhibit to Exhibit                    4(iii)                    above), incorporated herein by reference to Exhibit 4(iv) to                    the Form 8-K                    filed with the SEC on July 15, 2005                                                                                                                                                                       |
| Exhibit                    4(vi)        | Guarantee                    Agreement dated July 12, 2005 between the Company and U.S. Bank                    National                    Association, incorporated herein by reference to Exhibit 4(v)                    to the Form                    8-K filed with the SEC on July 15, 2005                                                                                                                                                               |
| Exhibit                    10(i)        | Employment                    Agreement with Norman B. Osborn, incorporated herein by reference                    to                    Exhibit 10(i) to the Form 10-SB of Cornerstone Bank filed with                    the FDIC on                    April 30, 2001                                                                                                                                                                                          |
| Exhibit                    10(ii)       | Employment                    Agreement with Robert W. Kernodle, incorporated herein by reference                    to                    Exhibit 10(ii) to the Form 10-SB of Cornerstone Bank filed with                    the FDIC                    on April 30, 2001                                                                                                                                                                                       |
| Exhibit                    10(iii)      | Employment                    Agreement with G. Brooks Batchelor, incorporated herein by reference                    to                    Exhibit 10(iii) to the Form 10-SB of Cornerstone Bank filed with                    the FDIC                    on April 30, 2001                                                                                                                                                                                     |
| Exhibit                    10(iv)  | Employment                    Agreement with Robert H. Ladd III, incorporated herein by reference                    to                    Exhibit 10(iv) to the Form 10-SB of Cornerstone Bank filed with                    the FDIC                    on April 30, 2001                                                                                                                                                                                       |

----

| Exhibit                    10(v)    | Director                    Stock Option Plan, incorporated herein by reference to Exhibit                    10(v) to                    the Form 10-SB of Cornerstone Bank filed with the FDIC on April                    30,                    2001                                      |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit                    10(vi)   | Employee                    Stock Option Plan, incorporated herein by reference to Exhibit                    10(vi) to                    the Form 10-SB of Cornerstone Bank filed with the FDIC on April                    30,                    2001                                     |
| Exhibit                    10(vii)  | Cornerstone                    Bank 2005 Employee Incentive Compensation Plan, incorporated                    by reference                    to Exhibit 10(vii) to the Form 10-KSB of Cornerstone Bank filed                    with the                    FDIC on March 29, 2005.         |
| Exhibit                    10(viii) | Cornerstone                    Bank 2005 Management Team Incentive Compensation Plan, incorporated                    by                    reference to Exhibit 10(viii) to the Form 10-KSB of Cornerstone                    Bank filed                    with the FDIC on March 29, 2005. |
| Exhibit                    10(ix)   | Cornerstone                    Bank 2005 Chief Executive Officer Incentive Compensation Plan,                    incorporated by reference to Exhibit 10(ix) to the Form 10-KSB                    of                    Cornerstone Bank filed with the FDIC on March 29, 2005.              |
| Exhibit                    31.1     | Certification                    of Norman B. Osborn                                                                                                                                                                                                                                          |
| Exhibit                    31.2     | Certification                    of Dora Kicklighter                                                                                                                                                                                                                                          |
| Exhibit                    32       | Certification                    of Periodic Financial Report Pursuant to                    18 U.S.C. § 1350                                                                                                                                                             |

----

**       **

**SIGNATURES**

|                               |                                               |                                   |
|------------------------------------|----------------------------------------------------|----------------------------------------|
|                               | **CB              FINANCIAL CORPORATION**          |
|                          |                                          |                              |
| Date:              August 12, 2005 | By:                                      | /s/ Norman              B. Osborn |
|                               | Norman              B. Osborn                      |
|                               | President              and Chief Executive Officer |

|                               |                                      |                                   |
|------------------------------------|-------------------------------------------|----------------------------------------|
|                          |                                 |                              |
| Date:              August 12, 2005 | By:                             | /s/ Dora              Kicklighter |
|                               | Dora              Kicklighter             |
|                               | Principal              Accounting Officer |

----