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

                           -----------------------

                                 FORM 10-KSB

(Mark One)

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

      For the fiscal year ended December 31, 2005

OR

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

      For the transition period from _______________ to _______________

Commission File No. 0-25437

                         COMMUNITY NATIONAL BANCORPORATION
                   (Name of Small Business Issuer in Its charter)

         Georgia                                      58-1856963
---------------------------------       ---------------------------------------
(State or Other Jurisdiction            (I.R.S. Employer Identification Number)
of Incorporation or Organization)

561 East Washington Avenue, Box 2619                   31714-2619
          Ashburn, Georgia                          -----------------
------------------------------------                   (Zip Code)
 (Address of Principal Executive Offices)

                                     (229) 567-9686
                   ------------------------------------------------
                   (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b)
           of the Exchange Act:                          Name of Each Exchange
           Title of Each Class                            on Which Registered
           -------------------                            -------------------
                 None                                             None

Securities registered under Section 12(g) of the Exchange Act:

                           COMMON STOCK, NO PAR VALUE
                --------------------------------------------------
                                (Title of Class)

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

Check whether the issuer has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.   YES [X]  NO [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [ ]

The issuer's revenues for its most recent fiscal year were $10,505,614.

The aggregate market value of the common stock of the issuer held by non-
affiliates of the issuer 1,250,210 shares on March 27, 2006, was approximately
$16,690,303.  As of such date, no organized trading market existed for the
common stock of the issuer.  The aggregate market value was computed by
reference to the last sale of the common stock of the issuer on March 24, 2006.
For the purposes of this response, directors, officers and holders of 5% or
more of the issuer's common stock are considered the affiliates of the issuer
at that date.

As of March 27, 2006, there were issued and outstanding 2,008,595 shares of the
issuer's common stock.

Transitional Small Business Disclosure Format (check one):   YES [ ]  NO [X]
<PAGE>
            SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Certain statements in this Annual Report on Form 10-KSB contain "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, which represent the expectations or beliefs of, including,
but not limited to, statements concerning the banking industry and the issuer's
operations, performance, financial condition and growth.  For this purpose, any
statements contained in this Report that are not statements of historical fact
may be deemed forward-looking statements.  Without limiting the generality of
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"intend," "could," "should," "can," "estimate," or "continue" or the negative
or other variations thereof or comparable terminology are intended to identify
forward-looking statements.  These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond the issuer's
control, and actual results may differ materially depending on a variety of
important factors, including competition, general economic and market
conditions, changes in interest rates, changes in the value of real estate and
other collateral securing loans, interest rate sensitivity and exposure to
regulatory and legislative changes, and other risks and uncertainties described
in the issuer's filings with the Securities and Exchange Commission.  Although
we believe that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove to be inaccurate.  Therefore, we
can give no assurance that the results contemplated in the forward-looking
statements will be realized.  The inclusion of this forward-looking information
should not be construed as a representation by the issuer or any person that
the future events, plans, or expectations contemplated by the issuer will be
achieved.  The issuer undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.


                                    PART I

ITEM 1.    DESCRIPTION OF BUSINESS
-------    -----------------------

BACKGROUND AND RECENT DEVELOPMENTS

      Community National Bancorporation (the "Company") was incorporated as a
Georgia corporation in 1989 for the purpose of serving as a bank holding
company to a de novo subsidiary bank, Community National Bank ("CNB"), a
national banking association chartered under the laws of the United States.
After the receipt of necessary approvals from federal and state banking
regulators, CNB commenced business in 1990.  CNB's initial branch was in
Ashburn, Turner County, Georgia, and it has since opened additional branches
in Turner and Crisp Counties of Georgia.

      In 1999, the Company opened for business its subsidiary Cumberland
National Bank ("Cumberland"), a de novo national bank.  Cumberland operated
a branch located in Camden County, Georgia.

      In 2000, the Company acquired Tarpon Financial Corporation and its
wholly-owned subsidiary First National Bank, a national banking association
located in Tarpon Springs, Pinellas County, Florida ("Tarpon"), for
approximately $3.7 million in cash and common stock.

      From early 2000 through mid-2003, loan losses at Cumberland and, to a
lesser extent, Tarpon, required the Company to increase its borrowings to
supplement the capital accounts of these subsidiary banks.  In June 2003, CNB
entered into a Memorandum of Understanding with the Office of the Comptroller
of the Currency (the "OCC") pursuant to which CNB agreed to take certain
corrective actions to operate in a safe and sound manner.  In November 2005,
the OCC terminated the Memorandum of Understanding between CNB and the OCC.


                                       2
<PAGE>
      In September 2003, the Company sold Cumberland to an unrelated third
party or approximately $2.9 million.  In October 2004, the Company sold Tarpon
to an unrelated third party for approximately $6 million.

      On February 6, 2006, the Company and South Georgia Bank Holding Company
("South Georgia") announced that they have reached a definitive Agreement and
Plan of Merger (the "Merger Agreement") pursuant to which the Company will be
acquired by South Georgia through the merger of an interim subsidiary to be
formed by South Georgia (the "Interim Subsidiary") with and into the Company
(the "Merger").

      As a result of the Merger, each share of the common stock of the Company
that is outstanding at the effective time of the Merger shall be converted into
the right to receive a pro rata share of the aggregate cash merger
consideration of $29.5 million, such merger consideration being subject to
possible upward or downward adjustment based on the Company's stockholder
equity and loan loss reserves at closing.  However, under the terms of the
Merger Agreement, the aggregate merger consideration may not be adjusted above
$30.0 million.  Subject to receipt of shareholder approval, approvals of
various regulatory agencies and the satisfaction or waiver of other conditions
to closing, it is expected that the Merger will be consummated prior to June
30, 2006.

      All of the Company's operations are currently conducted through its sole
subsidiary, CNB, which has three offices, located in Turner and Crisp Counties,
Georgia.

PRODUCTS AND SERVICES OFFERED BY CNB

      DEPOSITS.  CNB offers a full range of interest-bearing and non-interest
bearing accounts, including commercial and retail checking accounts, negotiable
order of withdrawal ("NOW") accounts, individual retirement accounts, regular
interest-bearing savings accounts and certificates of deposit with a range of
maturity date options.  The sources of deposits are residents, businesses and
employees of businesses within CNB's market areas.  Customers are obtained
through personal solicitation, direct mail solicitation and advertisements
published in the local media.

      CNB pays competitive interest rates on time and savings deposits.  In
addition, it has implemented a service charge fee schedule competitive with
other financial institutions, covering such matters as maintenance fees on
checking accounts, per item processing fees on checking accounts, returned
check charges and other standard fees.

      OTHER SERVICES.  Other services offered by CNB include safe deposit
boxes, travelers' checks, direct deposit of payroll and social security checks,
and automatic drafts for various accounts, second mortgage loans and
installment loans for personal use such as education and personal investment,
or for the purchase of automobiles or other consumer items.  CNB is a member of
the Star network of automated teller machines and CNB offers its own credit
cards.

LENDING ACTIVITIES

      CNB engages in a full complement of lending activities, including short-
to medium-term commercial, consumer installment and real estate loans.  A
significant number of loans are made to farmers or farming concerns.


                                       3
<PAGE>
      COMMERCIAL, FINANCIAL AND AGRICULTURAL LOANS.  Commercial lending is
directed principally towards businesses whose demands for funds fall within
CNB's legal lending limits and which are potential deposit customers of CNB.
As of December 31, 2005, CNB had a legal lending limit for unsecured loans of
up to $2,658,850 to any one borrower.  Commercial loans include loans made to
individual, partnership and corporate borrowers, both secured and unsecured.
These loans are obtained for a variety of business purposes, including working
capital (e.g., inventory and receivables), business expansion (e.g.,
acquisition of real estate and improvements), and purchase of equipment and
machinery.  Particular emphasis is placed on loans to small- and medium-sized
businesses, and CNB is qualified to make loans guaranteed by the Small Business
Administration.  Agricultural loans include secured and unsecured loans for
row crop production including corn, soybeans, peanuts, cotton and other produce.

      The primary repayment risk for commercial loans is the failure of the
business due to economic or financial factors.  Although CNB typically looks to
a commercial borrower's cash flow as the principal source of repayment for such
loans, many commercial loans are secured by inventory, equipment, accounts
receivable, and other assets.

      CONSUMER LOANS.  CNB's consumer loans consist primarily of installment
loans to individuals for personal, family and household purposes, including
automobile loans to individuals and pre-approved lines of credit.  This
category of loans also includes lines of credit and term loans secured by
second mortgages on the residences of borrowers for a variety of purposes,
including home improvements, education and other personal expenditures.  In
evaluating these loans CNB reviews the borrower's level and stability of income
and past credit history and the impact of these factors on the ability of the
borrower to repay the loan in a timely manner.  In addition, CNB seeks to
maintain an appropriate margin between the loan amount and collateral value.

      REAL ESTATE LOANS.  CNB's real estate loans consist of residential first
and second mortgage loans, residential construction loans and, to a limited
degree, commercial real estate loans.  These loans are made in accordance with
CNB's appraisal policy and real estate lending policy which detail maximum
loan-to-value ratios and maturities.  These loan-to-value ratios are designed
to compensate for fluctuations in the real estate market to minimize the risk
of loss on such loans.

MARKET AREA

      CNB's primary service area includes the Georgia counties of Turner and
Crisp.  CNB also extends credit to qualified borrowers in the contiguous
counties of Tift and Worth, Georgia.  Turner County is located approximately 80
miles north of the Georgia-Florida state line, 165 miles south of Atlanta, 38
miles east of Albany, and 180 miles west of Savannah.  The county is comprised
of the cities of Ashburn, which is the county seat, Sycamore and Rebecca and
covers an area of 293 square miles.  As of 2000, the population of Turner
County was approximately 9,500.

      Turner County's economy is dependent on agriculture.  Management of CNB
intends to continue to place a substantial portion of CNB's assets in
agricultural loans.  This sector of the economy remains the most significant
industry in CNB's market.  A significant portion of the agricultural output
produced in the county is peanuts, and the county is home to significant peanut
shelling and distribution operations.  The livestock and poultry industries are
also important segments of the local economy.  Turner County also contains
light manufacturing, primarily in the apparel and textile sector.

      As of December 31, 2005, there was one other financial institution in
Turner County.  FDIC reports show that as of June 30, 2005, deposits in the
county totaled $95.0 million, with CNB having approximately 44.31% of those
deposits.


                                       4
<PAGE>
      Crisp County is located contiguous to Turner County on its northwest
border.  Although Crisp County is slightly smaller than Turner County in total
area, its population is approximately twice that of Turner County.  Retail
trade and service industries are significant employment sectors in the county.

      As of December 31, 2005, there were five financial institutions serving
Crisp County.  FDIC reports show that as of June 30, 2005, deposits in the
county totaled $316.7 million, with CNB's branch having approximately 7.14% of
those deposits.

COMPETITION

      CNB competes to provide various financial services to customers with
other commercial banks, savings and loan associations, credit unions, mortgage
banking companies, consumer finance companies, securities brokerage firms,
insurance companies, money market mutual funds and other financial
institutions.  Competition is likely to increase due to trends in federal
interstate banking laws and state laws to loosen restrictions on interstate
banking.  Many of the financial institutions operating in Georgia have
substantially greater financial resources and offer certain services, such as
trust services, that CNB does not provide.  By virtue of their greater total
capitalization, such institutions have substantially higher lending limits than
CNB and substantial advertising and promotional budgets.  To compete, CNB
relies on specialized services, responsive handling of customer needs, and
personal contacts by officers, directors and staff.

SUPERVISION AND REGULATION

      The following discussion sets forth some of the material elements of the
regulatory framework applicable to bank holding companies and their
subsidiaries and provides some specific information relative to the Company.
The regulatory framework is intended primarily for the protection of depositors
and the Bank Insurance Fund and not for the protection of security holders and
creditors.  To the extent that the following information describes statutory
and regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions.

      THE COMPANY

      GENERAL.  As a bank holding company, the Company is regulated under the
Bank Holding Company Act of 1956 (the "BHC Act"), as well as other federal and
state laws governing the banking business.  The Federal Reserve Board is the
primary regulator of the Company, and supervises the Company's activities on a
continual basis.  CNB is also subject to regulation and supervision by various
regulatory authorities, including the OCC, the Federal Deposit Insurance
Corporation (the "FDIC"), and the Federal Reserve Board.

      BANK HOLDING COMPANY REGULATION.  In general, the BHC Act limits bank
holding company business to owning or controlling banks and engaging in other
banking-related activities.  Bank holding companies must obtain the Federal
Reserve Board's approval before they:

      *   acquire direct or indirect ownership or control of any voting shares
          of any bank that results in total ownership or control,  directly or
          indirectly, of more than 5% of the voting shares of such bank;
      *   merge or consolidate with another bank holding company; or
      *   acquire substantially all of the assets of any additional banks.


                                       5
<PAGE>
      Subject to certain state laws, a bank holding company that is adequately
capitalized and adequately managed may acquire the assets of both in-state and
out-of-state banks.  With certain exceptions, the BHC Act prohibits bank
holding companies from acquiring direct or indirect ownership or control of
voting shares in any company that is not a bank or a bank holding company
unless the Federal Reserve Board determines such activities are incidental or
closely related to the business of banking.

      The Change in Bank Control Act of 1978 requires a person (or group of
persons acting in concert) acquiring "control" of a bank holding company to
provide the Federal Reserve Board with 60 days' prior written notice of the
proposed acquisition.  Following receipt of this notice, the Federal Reserve
Board has 60 days (or up to 90 days if extended) within which to issue a notice
disapproving the proposed acquisition.  In addition, any "company" must obtain
the Federal Reserve Board's approval before acquiring 25% (5% if the "company"
is a bank holding company) or more of the outstanding shares or otherwise
obtaining control over the Company.

      FINANCIAL SERVICES MODERNIZATION.  The Gramm-Leach-Bliley Financial
Modernization Act of 1999 (the "Modernization Act"), enacted on November 12,
1999, amended the BHC Act and:

      *   allows bank holding companies that qualify as "financial holding
          companies" to engage in a substantially broader range of non-banking
          activities than was permissible under prior law;
      *   allows insurers and other financial services companies to acquire
          banks;
      *   allows national banks, and some state banks, either directly or
          through operating subsidiaries, to engage in certain non-banking
          financial activities;
      *   removes various restrictions that applied to bank holding company
          ownership of securities firms and mutual fund advisory companies; and
      *   establishes the overall regulatory structure applicable to bank
          holding companies that also engage in insurance and securities
          operations.

      If the Company, which has not obtained qualification as a "financial
holding company," were to do so in the future, the Company would be eligible
to engage in, or acquire companies engaged in, the broader range of activities
that are permitted by the Modernization Act, provided that if any of the
Company's banking subsidiaries were to cease to be "well capitalized" or "well
managed" under applicable regulatory standards, the Federal Reserve Board
could, among other things, place limitations on the Company's ability to
conduct these broader financial activities or, if the deficiencies persisted,
require the Company to divest the banking subsidiary.  In addition, if the
Company were to be qualified as a financial holding company and any of its
banking subsidiaries were to receive a rating of less than satisfactory under
the Community Reinvestment Act of 1977 (the "CRA"), the Company would be
prohibited from engaging in any additional activities other than those
permissible for bank holding companies that are not financial holding
companies.  The broader range of activities that financial holding companies
are eligible to engage in includes those that are determined to be "financial
in nature", including insurance underwriting, securities underwriting and
dealing, and making merchant banking investments in commercial and financial
companies.

      TRANSACTIONS WITH AFFILIATES.  The Company and CNB are deemed to be
affiliates within the meaning of the Federal Reserve Act, and transactions
between affiliates are subject to certain restrictions.  Generally, the Federal
Reserve Act limits the extent to which a financial institution or its
subsidiaries may engage in "covered transactions" with an affiliate.  It also
requires all transactions with an affiliate, whether or not "covered
transactions," to be on terms substantially the same, or at least as favorable
to the institution or subsidiary, as those provided to a non-affiliate. The
term "covered transaction" includes the making of loans, purchase of assets,
issuance of a guarantee and other similar types of transactions.


                                       6
<PAGE>
      TIE-IN ARRANGEMENTS.  The Company and CNB cannot engage in certain tie-in
arrangements in connection with any extension of credit, sale or lease of
property or furnishing of services.  For example, with certain exceptions,
neither the Company nor CNB may condition an extension of credit on either a
requirement that the customer obtain additional services provided by either the
Company or CNB, or an agreement by the customer to refrain from obtaining other
services from a competitor.  The Federal Reserve Board has adopted exceptions
to its anti-tying rules that allow banks greater flexibility to package
products with their affiliates.  These exceptions were designed to enhance
competition in banking and non-banking products and to allow banks and their
affiliates to provide more efficient, lower cost service to their customers.

      SOURCE OF STRENGTH.  Under Federal Reserve Board policy, the Company is
expected to act as a source of financial strength to CNB and to commit
resources to support CNB.  This support may be required at times when, absent
that Federal Reserve Board policy, the Company may not find itself able to
provide it.  Capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary banks.  In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a subsidiary bank will be
assumed by the bankruptcy trustee and entitled to a priority of payment.

      Federal law also authorizes the OCC to order an assessment of the Company
if the capital of CNB were to become impaired.  If the Company failed to pay
the assessment within three months, the OCC could order the sale of the
Company's stock in CNB to cover the deficiency.

      SUBSIDIARY DIVIDENDS.  The Company is a legal entity separate and
distinct from CNB.  A major portion of the Company's revenues results from
amounts paid as dividends to the Company by CNB.  The OCC's prior approval is
required if the total of all dividends declared by a national bank in any
calendar year will exceed the sum of that bank's net profits for that year and
its retained net profits for the preceding two calendar years, less any
required transfers to surplus.  Federal law also prohibits national banks from
paying dividends that would be greater than CNB's undivided profits after
deducting statutory bad debt in excess of CNB's allowance for loan losses.

      In addition, the Company and CNB are subject to various general
regulatory policies and requirements relating to the payment of dividends,
including requirements to maintain adequate capital above regulatory minimums.
The appropriate federal regulatory authority is authorized to determine under
certain circumstances relating to the financial condition of a bank or bank
holding company that the payment of dividends would be an unsafe or unsound
practice and to prohibit payment thereof.  The appropriate federal regulatory
authorities have indicated that paying dividends that deplete a bank's capital
base to an inadequate level would be an unsound and unsafe banking practice
and that banking organizations should generally pay dividends only out of
current operating earnings.

      STATE LAW RESTRICTIONS.  As a Georgia business corporation, the Company
may be subject to certain limitations and restrictions under applicable Georgia
corporate law. In addition, although CNB is a national bank and therefore
primarily regulated by the OCC, Georgia banking law may restrict certain
activities of CNB.

      CNB

      GENERAL.  CNB, as a national banking association, is subject to
regulation and examination by the OCC.  The federal laws that apply to CNB
regulate, among other things, the scope of its business, its investments, its
reserves against deposits, the timing of the availability of deposited funds
and the nature and amount of and collateral for loans.  The laws and
regulations governing CNB generally have been promulgated to protect depositors
and not to protect shareholders of the Company or CNB.


                                       7
<PAGE>
      COMMUNITY REINVESTMENT ACT.  The CRA requires that, in connection with
examinations of financial institutions within their jurisdiction, the OCC
evaluate the record of the financial institutions in meeting the credit needs
of their local communities, including low and moderate income neighborhoods,
consistent with the safe and sound operation of those banks.  These factors
are also considered in evaluating mergers, acquisitions, and applications to
open a branch or facility.

      INSIDER CREDIT TRANSACTIONS.  Banks are also subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to
executive officers, directors, principal shareholders, or any related interests
of such persons.  Extensions of credit must be made on substantially the same
terms, including interest rates and collateral, and follow credit underwriting
procedures that are not less stringent than those prevailing at the time for
comparable transactions with persons not covered above and who are not
employees.  Also, such extensions of credit must not involve more than the
normal risk of repayment or present other unfavorable features.

      FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT.  Under the Federal
Deposit Insurance Corporation Improvement Act of 1991 (the "FDICIA"), each
federal banking agency has prescribed, by regulation, noncapital safety and
soundness standards for institutions under its authority. These standards cover
internal controls, information systems, and internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, fees and benefits, such other operational and managerial
standards as the agency determines to be appropriate, and standards for asset
quality, earnings and stock valuation.

      INTERSTATE BANKING AND BRANCHING.  The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "IBBEA") permits nationwide interstate
banking and branching under certain circumstances.  This legislation generally
authorizes interstate branching and relaxes federal law restrictions on
interstate banking.  Currently, bank holding companies may purchase banks in
any state, and states may not prohibit such purchases.  Additionally, banks are
permitted to merge with banks in other states as long as the home state of
neither merging bank has "opted out."  The IBBEA requires regulators to consult
with community organizations before permitting an interstate institution to
close a branch in a low-income area.  The IBBEA also prohibits the interstate
acquisition of a bank if, as a result, CNB holding company would control more
than ten percent of the total United States insured depository deposits or more
than thirty percent, or the applicable state law limit, of deposits in the
acquired bank's state.  The federal banking agencies prohibit banks from using
their interstate branches primarily for deposit production and have accordingly
implemented a loan-to-deposit ratio screen to ensure compliance with this
prohibition.

      Georgia has "opted in" to the IBBEA and allows in-state banks to merge
with out-of-state banks subject to certain requirements.  Georgia law generally
authorizes the acquisition of an in-state bank by an out-of-state bank by
merger with a Georgia financial institution that has been in existence for at
least 3 years prior to the acquisition.  With regard to interstate bank
branching, out-of-state banks that do not already operate a branch in Georgia
may not establish de novo branches in Georgia.

      DEPOSIT INSURANCE.  The deposits of CNB are currently insured to a
maximum of $100,000 per depositor through a fund administered by the FDIC.  All
insured banks are required to pay semi-annual deposit insurance premium
assessments to the FDIC.


                                       8
<PAGE>
      CAPITAL ADEQUACY

      Federal bank regulatory agencies use capital adequacy guidelines in the
examination and regulation of bank holding companies and banks.  If capital
falls below minimum guideline levels, the holding company or bank may be denied
approval to acquire or establish additional banks or nonbank businesses or to
open new facilities.

      The FDIC, the OCC and the Federal Reserve Board use risk-based capital
guidelines for banks and bank holding companies.  These are designed to make
such capital requirements more sensitive to differences in risk profiles among
banks and bank holding companies, to account for off-balance sheet exposure and
to minimize disincentives for holding liquid assets.  Assets and off-balance
sheet items are assigned to broad risk categories, each with appropriate
weights.  The resulting capital ratios represent capital as a percentage of
total risk-weighted assets and off-balance sheet items.  The guidelines are
minimums, and the Federal Reserve Board has noted that bank holding companies
contemplating significant expansion programs should not allow expansion to
diminish their capital ratios and should maintain ratios well in excess of the
minimum.  The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital.  Tier 1 capital for
bank holding companies includes common shareholders' equity, certain qualifying
perpetual preferred stock and minority interests in equity accounts of
consolidated subsidiaries, less intangibles except as described above.

      The FDIC, the OCC and the Federal Reserve Board also employ a leverage
ratio, which is Tier 1 capital as a percentage of total assets less intangibles,
to be used as a supplement to risk-based guidelines. The principal objective of
the leverage ratio is to constrain the maximum degree to which a bank holding
company or bank may leverage its equity capital base.  A minimum leverage ratio
of 3% is required for the most highly rated bank holding companies and banks.
Other bank holding companies and banks and bank holding companies seeking to
expand, however, are required to maintain leverage ratios of at least 4% to 5%.

      The FDICIA created a statutory framework of supervisory actions indexed
to the capital level of the individual institution.  Under regulations adopted
by the FDIC, the OCC and the Federal Reserve Board, an institution is assigned
to one of five capital categories depending on its total risk-based capital
ratio, Tier 1 risk-based capital ratio, and leverage ratio, together with
certain subjective factors.  Institutions which are deemed to be
"undercapitalized" depending on the category to which they are assigned are
subject to certain mandatory supervisory corrective actions.


      OTHER LAWS AND REGULATIONS

      INTERNATIONAL MONEY LAUNDERING ABATEMENT AND ANTI-TERRORIST FINANCING ACT
OF 2001.  On October 26, 2001, the USA PATRIOT Act was enacted.  It includes
the International Money Laundering Abatement and Anti-Terrorist Financing Act
of 2001 (the "IMLAFA") and strong measures to prevent, detect and prosecute
terrorism and international money laundering.  As required by the IMLAFA, the
federal banking agencies, in cooperation with the U.S. Treasury Department,
established rules that generally apply to insured depository institutions and
U.S. branches and agencies of foreign banks.

      Among other things, the new rules require that financial institutions
implement reasonable procedures to (1) verify the identity of any person
opening an account; (2) maintain records of the information used to verify the
person's identity; and (3) determine whether the person appears on any list of
known or suspected terrorists or terrorist organizations.  The rules also
prohibit banks from establishing correspondent accounts with foreign shell
banks with no physical presence and encourage cooperation among financial
institutions, their regulators and law enforcement to share information
regarding individuals, entities and organizations engaged in terrorist acts or
money laundering activities.   The rules also limit a financial institution's
liability for submitting a report of suspicious activity and for voluntarily
disclosing a possible violation of law to law enforcement.


                                       9
<PAGE>
      SARBANES-OXLEY ACT OF 2002.  The Sarbanes-Oxley Act of 2002 (the "SOX")
was enacted to address corporate and accounting fraud.  It established a new
accounting oversight board that enforces auditing standards and restricts the
scope of services that accounting firms may provide to their public company
audit clients.  Among other things, it also (i) requires chief executive
officers and chief financial officers to certify to the accuracy of periodic
reports filed with the SEC; (ii) imposes new disclosure requirements regarding
internal controls, off-balance-sheet transactions, and pro forma (non-GAAP)
disclosures; (iii) accelerates the time frame for reporting of insider
transactions and periodic disclosures by certain public companies; and (iv)
requires companies to disclose whether or not they have adopted a code of
ethics for senior financial officers and whether the audit committee includes
at least one "audit committee financial expert."

      The SOX requires the SEC, based on certain enumerated factors, to
regularly and systematically review corporate filings.  To deter wrongdoing,
it (i) subjects bonuses issued to top executives to disgorgement if a
restatement of a company's financial statements was due to corporate
misconduct; (ii) prohibits an officer or director from misleading or coercing
an auditor; (iii) prohibits insider trades during pension fund "blackout
periods"; (iv) imposes new criminal penalties for fraud and other wrongful
acts; and (v) extends the period during which certain securities fraud lawsuits
can be brought against a company or its officers.

      PRIVACY.  Under the Modernization Act, federal banking regulators adopted
rules limiting the ability of banks and other financial institutions to
disclose nonpublic information about consumers to nonaffiliated third parties.
The rules require disclosure of privacy policies to consumers and, in some
circumstances, allow consumers to prevent disclosure of certain personal
information to nonaffiliated third parties.  The privacy provisions of the
Modernization Act affect how consumer information is transmitted through
diversified financial services companies and conveyed to outside vendors.

      FUTURE LEGISLATION.  Changes to federal and state laws and regulations
can affect the operating environment of bank holding companies and their
subsidiaries in substantial and unpredictable ways.  From time to time, various
legislative and regulatory proposals are introduced.  These proposals, if
codified, may change banking statutes and regulations and the Company's
operating environment in substantial and unpredictable ways.  If codified,
these proposals could increase or decrease the cost of doing business, limit or
expand permissible activities or affect the competitive balance among banks,
savings associations, credit unions and other financial institutions.  The
Company cannot accurately predict whether those changes in laws and regulations
will occur, and, if those changes occur, the ultimate effect they would have
upon the Company's financial condition or results of operation.


MONETARY POLICIES

      The results of operations of CNB are affected by credit policies of
monetary authorities, particularly the Federal Reserve.  The instruments of
monetary policy employed by the Federal Reserve include open market operations
in U.S. Government securities, changes in the discount rate on member bank
borrowings, changes in reserve requirements against member bank deposits and
limitations on interest rates which member banks may pay on time and savings
deposits.  In view of the changing conditions in the national economy and the
money markets, as well as the effect of action by monetary and fiscal
authorities, including the Federal Reserve, no prediction can be made as to
possible future changes in interest rates, deposit levels, loan demand or the
business and earnings of CNB.


                                       10
<PAGE>
REGULATORY AGREEMENTS

      On June 10, 2003, CNB entered into a Memorandum of Understanding (the
"MOU") with the OCC pursuant to which CNB agreed to take certain corrective
actions to ensure its operation in a safe and sound manner, including:

      * Establishing a compliance committee to monitor and coordinate CNB's
        adherence to the MOU and to evaluate CNB's board of directors;

      * Engaging an independent outside management consultant to conduct a
        management and board supervision study;

      * Achieving certain capital levels above regulatory minimums;

      * Adopting and following a written program to improve CNB's loan
        portfolio management;

      * Reviewing and revising CNB's lending policies;

      * Adopting and following a three-year capital plan; and

      * Adopting and following a three-year strategic plan.

      In November 2005, upon being satisfied that CNB had substantially
complied with each of the terms of the MOU and that CNB had satisfied each
of the above requirements, the OCC terminated the MOU.

      BOARD RESOLUTION.  Following the Federal Reserve's on-site inspection of
the Company on December 9, 2002, the Federal Reserve requested that the
Company's Board of Directors adopt resolutions that, among other things,
prohibit the Company from incurring additional debt, declaring or paying
dividends or redeeming stock without the approval of the Federal Reserve.  The
Company adopted these resolutions in February, 2003.  After the OCC terminated
the MOU in November 2005, in December 2005, the Company's Board of Directors
canceled these resolutions with the consent of the Federal Reserve.


EMPLOYEES

      As of March 1, 2006, the Company and CNB employed 45 full-time employees
and 3 part-time employees.  The Company and CNB believe that its employee
relations are good.  There are no collective bargaining agreements covering any
employees of the Company or CNB.


ASSET/LIABILITY MANAGEMENT

      CNB seeks to manage assets and liabilities to provide a satisfactory,
consistent level of profitability within the framework of established cash,
loan investment, borrowing and capital policies.  Certain of its officers are
responsible for monitoring policies and procedures that are designed to ensure
acceptable composition of the asset/liability mix, stability and leverage of
all sources of funds while adhering to prudent banking practices.  Management
seeks to stimulate asset growth primarily through growth of core deposits of
all categories made by individuals, partnerships and corporations.  CNB invests
the largest portion of its assets in commercial, consumer and real estate
loans.


                                       11
<PAGE>
      The management of CNB continually monitors its asset/liability mix.  The
board of directors of CNB receives periodic reports reflecting interest-
sensitive assets and interest-sensitive liabilities, and a committee of the
board is responsible for monitoring assets and liabilities.  The objective of
these policies is to control interest-sensitive assets and liabilities so as to
minimize the impact of substantial movements in interest rates on their
respective earnings.


                                       12
<PAGE>
STATISTICAL DISCLOSURES FOR BANK HOLDING COMPANIES

      The following section contains the information required to be disclosed
by bank holding companies pursuant to Industry Guide 3 promulgated under the
Securities Act of 1933.  The presentations below reflect the sale of Tarpon to
an unaffiliated third party in October 2004.  See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" below for more
information on the impact of the Tarpon sale on the Company's financial
condition and operating results.


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

      The following is a presentation of the average consolidated balance sheet
of the Company for the years ended December 31, 2005 and 2004.  This
presentation includes all major categories of interest-earning assets and
interest-bearing liabilities:

AVERAGE CONSOLIDATED ASSETS

                                          Year Ended           Year Ended
                                       December 31, 2005    December 31, 2004
                                       -----------------    -----------------
                                                   (In thousands)
Cash and due from banks                       $   2,548         $   3,140
                                               --------          --------
Interest-bearing bank balances                      191             4,315
Taxable securities                                7,742             8,509
Non-taxable securities                            2,021             2,934
Federal funds sold                                5,343            10,020
Net loans                                       109,039           127,119
                                               --------          --------
Total interest-earning assets                 $ 124.336         $ 152,897
Other assets                                      6,191             7,267
                                               --------          --------
Total assets                                  $ 133,075         $ 163,304
                                               ========          ========


AVERAGE CONSOLIDATED LIABILITIES AND STOCKHOLDERS' EQUITY

Non-interest-bearing deposits                 $  10,690         $  12,457
NOW and money market deposits                    21,162            26,911
Savings deposits                                  3,344             6,347
Time deposits                                    79,033            95,458
Other borrowings                                     32             3,140
Other liabilities                                   513             1,157
                                               --------          --------
Total liabilities                             $ 114,774         $ 145,470
                                               --------          --------
Common stock                                     11,488            11,488
Retained earnings                                 6,862             6,272
Unrealized gain/(loss) on securities                (49)               74
                                               --------          --------
Total stockholders' equity                    $  18,301         $  17,834
                                               --------          --------
Total liabilities and stockholders' equity    $ 133,075         $ 163,304
                                               ========          ========


                                       13
<PAGE>
      The following is a presentation of an analysis of the net interest
earnings of the Company for the periods indicated with respect to each major
category of interest-earning asset and each major category of interest-bearing
liability:

                   Year Ended December 31, 2005    Year Ended December 31, 2004
                   -----------------------------   -----------------------------
                               Interest  Average              Interest  Average
                    Average    Earned/   Yield/     Average    Earned/   Yield/
                     Amount     Paid      Rate       Amount     Paid      Rate
                     ------     ----      ----       ------     ----      ----
                                      (Dollars in thousands)
     Assets
     ------
Interest-bearing
  bank balances    $    191   $     7     3.66%    $  4,315   $   107     2.48%
Taxable securities    7,742       269     3.47%       8,509       284     3.34%
Non-taxable
  securities          2,021        86     6.45%       2,934       124     6.40%
Federal funds sold    5,343       165     3.09%      10,020       113     1.13%
Net loans           109,039(1)  8,876(2)  8.14%     127,119(3)  9,290(4)  7.31%
                    -------    ------               -------    ------
Total
 earning assets    $124,336   $ 9,403     7.56%    $152,897   $ 9,918     6.49%
                    =======    ======               =======    ======
   Liabilities
   -----------
NOW and money
 market deposits   $ 21,162   $   294     1.39%    $ 26,911   $   247      .92%
Savings deposits      3,344        29      .87%       6,347        49      .77%
Time deposits        79,033     2,464     3.12%      95,458     2,487     2.61%
Other borrowings         32         1     3.13%       3,140       315    10.03%
                    -------    ------               -------    ------
Total interest
 bearing
 liabilities       $103,571   $ 2,788     2.69%    $131,856   $ 3,098     2.35%
                    =======    ======               =======    ======
Net yield on
 earning assets                           5.32%                           4.46%

______________________

(1)   At December 31, 2005, approximately $1.1 million in loans were not
      accruing interest.
(2)   Interest earned on net loans included $.6 million in loan fees and loan
      service fees.
(3)   At December 31, 2004, approximately $2.1 million in loans were not
      accruing interest.
(4)   Interest earned on net loans included $.7 million in loan fees and loan
      service fees.


RATE/VOLUME ANALYSIS OF NET INTEREST INCOME

      The effect on interest income, interest expense and net interest income,
during the periods indicated, of changes in average balance and rate from the
corresponding prior period is shown below.  The effect of a change in average
balance has been determined by applying the average rate in the earlier period
to the change in average balance in the later period, as compared with the
earlier period.  Changes resulting from average balance/rate variances are
included in changes resulting from rate.  The balance of the change in interest
income or expense and net interest income has been attributed to a change in
average rate.


                                       14
<PAGE>
                                Year Ended               Year Ended
                              December 31, 2005        December 31, 2004
                               compared with            compared with
                                Year Ended               Year Ended
                              December 31, 2004        December 31, 2003
                              -----------------        -----------------
                                 Increase (decrease) due to:

                          Volume   Rate    Total    Volume   Rate    Total
                          ------   ----    -----    ------   ----    -----
                                           (In thousands)
Interest earned on:
  Interest-bearing
    bank balances         $  (200) $   100  $ (100)  $    31  $    (8) $    23
  Taxable securities          (26)      11     (15)      (67)     (57)    (124)
  Non-taxable securities      (38)       0     (38)      (11)      (1)     (12)
  Federal funds sold          (19)      71      52       (76)     (14)     (90)
  Net loans                (2,050)   1,636    (414)   (1,645)  (2,738)  (4,383)
                           ------   ------   -----    ------   ------   ------
Total interest income     $(2,333) $ 1,818  $ (515)  $(1,768) $(2,818) $(4,586)
                           ------   ------   -----    ------   ------   ------

Interest paid on:
  NOW deposits
   and money market       $   (34) $    81  $   47   $   (91) $   (98) $  (189)
  Savings deposits            (27)       7     (20)       (8)     (15)     (23)
  Time deposits              (429)     406     (23)   (1,303)  (1,168)  (2,471)
  Other borrowings           (186)    (128)   (314)     (284)     199      (85)
                           ------   ------   -----    ------   ------   ------
Total interest expense    $  (676)  $  366  $ (310)  $(1,686) $(1,082) $(2,768)
                           ------   ------   -----    ------   ------   ------

Change in net
 interest income          $(1,657)  $1,452  $ (205)  $   (82) $(1,736) $(1,818)
                           ======    =====   =====    ======   ======   ======


DEPOSITS

      CNB offers a full range of deposit services, including commercial and
retail checking accounts, savings accounts, and other deposits ranging from
daily money market accounts to longer-term certificates of deposit and
individual retirement accounts.  See "Products and Services Offered by CNB"
above for more information about the types of deposits offered by CNB.

      The following table presents, for the periods indicated, the average
amount of and average rate paid on each of the following deposit categories:

                                          Year Ended            Year Ended
                                       December 31, 2005     December 31, 2004
                                       -----------------     -----------------
                                       Average   Average     Average   Average
Deposit Category                       Amount   Rate Paid    Amount   Rate Paid
----------------                       ------   ---------    ------   ---------
                                               (Dollars in thousands)
Non-interest-bearing demand deposits   $10,690     N/A       $12,457     N/A
NOW and money
Now and money market deposits           21,162     1.39%      26,911     .92%
Savings deposits                         3,344      .87%       6,347     .77%
Time deposits                           79,033     3.12%      95,458    2.61%


                                       15
<PAGE>
      The following table indicates amounts outstanding of time certificates
of deposit of $100,000 or more and respective maturities at December 31, 2005:

   Time Certificates of Deposit             At December 31, 2005
   ----------------------------             --------------------
                                              (In thousands)
      3 months or less                           $ 4,989
      3-6 months                                   3,265
      6-12 months                                 10,249
      over 12 months                               5,757
                                                  ------
           Total                                 $24,260
                                                  ======


LOAN PORTFOLIO

      CNB engages in a full complement of lending activities, including
commercial/industrial, consumer and real estate loans.  See "Lending
Activities" above for more detail about the types of loans made by CNB.

      While risk of loss in CNB's loan portfolio is primarily tied to the
credit quality of its various borrowers, risk of loss may also increase due to
factors beyond CNB's control, such as local, regional and/or national economic
downturns.  General conditions in the real estate market may also impact the
relative risk in CNB's real estate portfolio.  Of CNB's target areas of lending
activities, commercial loans are generally considered to have greater risk than
real estate loans or consumer installment loans.

      CNB participates with other banks with respect to loans originated by CNB
which exceed CNB's lending limits.  Management of CNB does not believe that
loan participations necessarily pose any greater risk of loss than other loans.

      The following table presents various categories of loans contained in the
Company's loan portfolio as of the dates indicated and the total amount of all
loans for such periods:

                                                    As of        As of
                                                 December 31,  December 31,
                                                     2005         2004
                                                     ----         ----
Type of Loan                                          (In thousands)
------------
Commercial, financial and agricultural            $  68,175    $  77,283
Real estate - construction                            1,277        1,170
Real estate - mortgage                               22,407       24,325
Installment and other loans to individuals            8,277        9,626
                                                   --------     --------
Subtotal                                          $ 100,136    $ 112,404
Less:  allowance for possible loan losses            (2,101)      (2,085)
                                                   --------     --------
Total (net of allowances)                         $  98,035    $ 110,319
                                                   ========     ========

      The following is a presentation of an analysis of maturities of certain
loans as of December 31, 2005:

                                                 Due         Due
                                 Due 1       After 1 to     After
   Type of Loan               Year or Less     5 Years     5 Years     Total
   ------------               ------------     -------     -------     -----
                                              (In thousands)
Commercial, financial
 and agricultural               $52,097       $13,980      $ 2,098    $68,175
Real Estate - construction        1,244            33            0      1,277
Real Estate - mortgage           10,208        11,338          861     22,407
                                 ------        ------       ------     ------
     Total                      $63,549       $25,351      $ 2,959    $91,859
                                 ======        ======       ======     ======


                                       16
<PAGE>
      For the above loans, the following is a presentation of an analysis of
sensitivities to changes in interest rates as of December 31, 2005:

                                                  Due        Due
                                   Due 1      After 1 to    After
   Interest Category            Year or Less    5 Years    5 Years     Total
   -----------------            ------------    -------    -------     -----
                                                 (In thousands)
Predetermined interest rate      $27,038       $23,212      $ 2,959   $53,209
Floating interest rate            36,511         2,139            0    44,227
                                  ------        ------       ------    ------
     Total                       $63,549       $25,351      $ 2,959   $91,859
                                  ======        ======       ======    ======

      At December 31, 2005 and 2004, the total recorded investment in impaired
loans, all of which had allowances determined in accordance with FASB
Statements No. 114 and No. 118, amounted to approximately $3,477,799 and
$8,477,316, respectively.  The average recorded investment in impaired loans
amounted to approximately $6,350,692 and $9,409,587 for 2005 and 2004,
respectively.  The allowance related to impaired loans amounted to
approximately $506,265 and $1,009,020 at December 31, 2005 and 2004,
respectively.  The balance of the allowance in excess of the above specific
reserves is available to absorb the inherent losses of all other loans.
Interest income recognized on impaired loans for the years ended December 31,
2005 and 2004 amounted to $255,693 and $506,493, respectively.  The amount of
interest recognized on impaired loans using the cash method of accounting was
not material for the years ended December 31, 2005 and 2004.  Loans on non-
accrual status at December 31, 2005 and 2004 had outstanding balances of
$1,106,483 and $2,107,437, respectively.  Interest recognized on non-accruing
loans at December 31, 2005 and 2004 was $18,471 and $54,666, respectively.  The
Company has no commitments to lend additional funds to borrowers whose loans
have been modified.

      As of December 31, 2005, there were no loans not disclosed above that
were classified for regulatory purposes as doubtful, substandard or special
mention which (i) represent or result from trends or uncertainties which
management reasonably expects will materially impact future operating results,
liquidity, or capital resources, or (ii) represent material credits about which
management is aware of any information which causes management to have serious
doubts as to the ability of such borrowers to comply with the loan repayment
terms.

      Accrual of interest is discontinued on a loan when management determines
upon consideration of economic and business factors affecting collection
efforts that collection of interest is doubtful.  At December 31, 2005, one
loan with an aggregate principal of approximately $267,541 was over 90 days
past due but still accruing interest, compared with five such loans with an
aggregate principal of approximately $176,000 as of December 31, 2004.  As of
December 31, 2005, no loans were considered to be "troubled-debt restructured."
As of December 31, 2005, forty-seven loans with an aggregate balance of
approximately $1,106,483 were on non-accrual status, compared to 51 such loans
with an aggregate principal of approximately $2,107,000 as of December 31,
2004.


                                       17
<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE

      An analysis of the Company's loss experience is furnished in the
following table for the periods indicated:

            ANALYSIS OF THE ALLOWANCE FOR POSSIBLE LOAN LOSSES

                                               Year Ended December 31,
                                               -----------------------
                                                   2005      2004
                                                   ----      ----
                                                (Dollars in thousands)
Balance at beginning of period                   $ 2,085   $ 2,676
Charge-offs:
   Real estate loans                                (121)     (433)
   Installments and other loans to individuals      (234)     (568)
   Commercial loans                               (1,020)   (2,616)
                                                  ------    ------
   Total charge-offs                              (1,357)   (3,617)
                                                  ------    ------
Recoveries:
   Real estate loans                                   3         3
   Installments and other loans to individuals        30        89
   Commercial loans                                  133       454
                                                  ------    ------
   Total recoveries                                  166       546
                                                  ------    ------
Net charge-offs                                   (1,191)   (3,071)
Additions charged to operations                    1,207     2,893
                                                  ------    ------
Balance before sale of subsidiary                  2,101     2,498
Sale of subsidiary                                     0      (413)
                                                  ------    ------
Balance at end of period                         $ 2,101   $ 2,085
                                                 ======     ======
Ratio of net charge-offs during the
  period to average loans outstanding
  during the period                                1.07%      2.37%
                                                 ======     ======

      At December 31, 2005 and 2004 the allowance was allocated as follows:

                                                    At December 31,
                                            --------------------------------
                                                 2005              2004
                                            --------------     -------------
                                                    Percent           Percent
                                                    of loans          of loans
                                                    in each           in each
                                                    category          category
                                                    to total          to total
                                            Amount   loans    Amount   loans
                                            ------   -----    ------   -----
                                                  (Dollars in thousands)
Commercial, Financial and Agricultural      $ 1,510   68.1%   $ 1,550   68.8%
Real Estate - Construction                       40    1.3%        25    1.0%
Real Estate - Mortgage                          230   22.4%       265   21.6%
Installment and Other Loans to Individuals      225    8.2%       215    8.6%
Unallocated                                      96    N/A         30    N/A
                                             ------  -----     ------  -----
Total                                       $ 2,101  100.0%   $ 2,085  100.0%
                                             ======  =====     ======  =====


LOAN LOSS RESERVE

      As of December 31, 2005, 68.1% of outstanding loans were in the category
of commercial loans, which includes commercial, industrial and agricultural
loans.  Although commercial loans are generally considered by management as
having greater risk than other categories of loans in the Bank's loan
portfolio, 92% of these commercial loans at December 31, 2005 were made on a
secured basis.  Management believes that the secured condition of the
preponderant portion of the Bank's commercial loan portfolio greatly reduces
any risk of loss inherently present in commercial loans.  The Company has
experienced significant loan losses in this category of loans in the past
primarily due to insufficiently rigorous underwriting criteria.  The Company
has taken steps to strengthen its underwriting practices in recent years,
including establishing and staffing a computerized credit analysis department
and increasing board oversight of credit practices.  In addition, the sale of
Cumberland was instrumental in improving underwriting criteria and practices at
the Company.  As a result of these steps, management believes that the
Company's risk exposure in its commercial loan portfolio has been significantly
reduced.

      CNB's consumer loan portfolio is also largely secured.  At December 31,
2005, 85% of CNB's consumer loans were secured by collateral primarily
consisting of automobiles, boats and other personal property.  Management
believes that these loans involve less risk than commercial loans.


                                       18
<PAGE>
      Real estate mortgage loans constituted 22.4% of outstanding loans at
December 31, 2005.  The loans in this category represent residential and
commercial real estate mortgages where the amount of the original loan
generally does not exceed 90% of the appraised value of the collateral.  Losses
from this loan category have also been heavy in recent periods, primarily
attributable to commercial real estate mortgages.  These losses are primarily
due to losses on the sale of properties that secured non-performing commercial
loans, as management took steps to reduce its levels of impaired and non-
accruing loans.

      The allowance for loan losses reflects an amount which, in management's
judgment, is adequate to provide for anticipated loan losses.  For more
information about the methods employed and the factors considered in setting
the allowance for loan losses, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Critical Accounting Policies"
below.


INVESTMENTS

      As of December 31, 2005, investment securities comprised approximately
7.6% of CNB's assets and net loans comprised approximately 77.5% of CNB's
assets.  CNB invests primarily in direct obligations of the United States,
obligations guaranteed as to principal and interest by the United States,
obligations of agencies of the United States and certificates of deposit issued
by commercial banks.  In addition, CNB enters into Federal Funds transactions
with its principal correspondent banks, and act as net sellers of such funds.
The sale of Federal Funds amounts to a short-term loan from CNB to another
bank.

      The following table presents, for the dates indicated, the book value of
the Company's investments.  All securities held at December 31, 2005 and 2004
were categorized as available for sale.

                                                         December 31,
                                                       -----------------
                                                         2005      2004
                                                         ----      ----
                                                          (In thousands)

Obligations of U.S. Treasury and other U.S. Agencies    $ 7,263    $ 7,433
Municipal securities                                      1,934      2,706
Federal Reserve Bank and Federal Home Loan Bank Stock       402        430
                                                         ------     ------
Total                                                   $ 9,599    $10,569
                                                         ======     ======

      The following table indicates as of December 31, 2005 the amount of
investments due in (i) one year or less, (ii) one to five years, (iii) five
to ten years, and (iv) over ten years:

                                                       At December 31, 2005
                                                       --------------------
                                                                   Weighted
                                                                   Average
                                                         Amount     Yield
                                                         ------     -----
                                                      (Dollars in thousands)
Obligations of U.S. Treasury and other U.S. Agencies:
   Over 1 through 5 years                               $ 7,262      3.34%
Municipal securities:
   0 - 1 year                                               200      7.55%
   Over 1 through 5 years                                   925      6.58%
   Over 5 through 10 years                                  810      7.21%
Federal Reserve Bank and Federal
   Home Loan Bank Stock, no maturity                        402      5.10%
                                                         ------      ----
Total                                                   $ 9,599      4.14%
                                                         ======      ====


                                       19
<PAGE>
RETURN ON EQUITY AND ASSETS

      Returns on average consolidated assets and average consolidated equity
for the periods indicated were as follows:

                                                  Year Ended
                                                  December 31,
                                                ----------------
                                                 2005      2004
                                                 ----      ----
     Return on average assets                     .92%      .12%
     Return on average equity                    6.69%     1.13%
     Average equity to average assets ratio     13.75%    10.92%
     Dividend payout ratio                      16.42%     --  %



ITEM 2.   DESCRIPTION OF PROPERTY
-------   -----------------------

      CNB's main banking facility is located in an approximately 9,500 square
foot facility at 561 East Washington Avenue, Ashburn, Georgia  31714.  The
Hudson Avenue side of the property contains a house that has been remodeled and
is used for various activities, including banking and civic functions.  CNB's
main facility also houses the Company's executive offices.  CNB's second Turner
County location, also in Ashburn, is in a 1,500 square foot facility with three
drive-through windows and an automatic teller.  CNB's Crisp County branch is
located in a 5,600 square foot, two story facility.  Each of these buildings is
owned by CNB.



ITEM 3.   LEGAL PROCEEDINGS
-------   -----------------

      Neither the Company nor either of CNB is a party to, nor is any of their
property the subject of, any material pending legal proceeding.



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

      No matter was submitted to a vote of security-holders during the fourth
quarter ended December 31, 2005.



                                      PART II

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
-------   ---------------------------------------------------------------
          BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
          ----------------------------------------------

      The Company's common stock is traded on the OTC Bulletin Board under the
symbol "CBAC.OB." The high and low bid price for the Common Stock for each
quarter of 2005 and 2004, as reported by the OTC Bulletin Board, is set forth
in the table below.  Note that these prices reflect inter-dealer prices,
without retail mark-up, mark-down or commission, and may not represent actual
transactions.

                                         High       Low
                                         ----       ---
        2004
        First Quarter                   $11.55     $10.90
        Second Quarter                   11.30       9.85
        Third Quarter                    10.00       9.95
        Fourth Quarter                   10.00       9.50

        2005
        First Quarter                    11.00       9.60
        Second Quarter                   13.50      10.70
        Third Quarter                    13.50      13.15
        Fourth Quarter                   13.25      12.20


                                       20
<PAGE>
      As of December 31, 2005, there were 1,117 holders of record of the
Company's common stock.


PAYMENT OF DIVIDENDS

      The Company is a legal entity separate and distinct from CNB.  The
principal sources of the Company's cash flow, including cash flow to pay any
dividends to its shareholders, are dividends that CNB pays to its sole
shareholder, the Company.  Statutory and regulatory limitations apply to CNB's
payment of dividends to the Company as well as to the Company's payment of
dividends to its shareholders.

      CNB is required by federal law to obtain prior approval of the OCC for
payments of dividends if the total of all dividends declared by CNB in any year
will exceed (1) the total of CNB's net profits for that year, plus (2) CNB's
retained net profits of the preceding two years, less any required transfers to
surplus.

      The payment of dividends by the Company and CNB may also be affected by
other factors, such as the requirement to maintain adequate capital above
regulatory guidelines.  If, in the opinion of the OCC, CNB was engaged in or
about to engage in an unsafe or unsound practice, the OCC could require, after
notice and a hearing, that CNB stop or refrain engaging in the practice.  The
federal banking agencies have indicated that paying dividends that deplete a
depository institution's capital base to an inadequate level would be an unsafe
and unsound banking practice.  Under the Federal Deposit Insurance Corporation
Improvement Act of 1991, a depository institution may not pay any dividend if
payment would cause it to become undercapitalized or if it already is
undercapitalized.  Moreover, the federal agencies have issued policy statements
that provide that bank holding companies and insured banks should generally
only pay dividends out of current operating earnings.

      In February 2003, at the request of the Federal Reserve, the Company's
Board of Directors adopted resolutions that, among other things, prohibited the
Company from paying dividends without the approval of the Federal Reserve.
After the OCC terminated the MOU in November 2005, the Board of Directors
terminated this resolution.  In December 2005, the Board of Directors requested
and was granted approval by the Federal Reserve to pay dividends.



ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-------   ---------------------------------------------------------

      The purpose of the disclosure in this section is to convey information
relating to the financial condition and results of operations of the Company
that may not be readily apparent from a review of the consolidated financial
statements and the notes thereto included in this report.  The following
discussion of the Company's financial condition and results of operations
should be read in conjunction with the Company's consolidated financial
statements, related notes and other financial information, including the
statistical information appearing under "Statistical Disclosures for Bank
Holding Companies" in Item 1.


OVERVIEW

      The Company's results of operations are largely dependent on net interest
income, which is the difference between the interest earned on loans and
securities and interest paid on deposits and borrowings.  The results of
operations are also affected by the level of income/fees from loans, deposits
and borrowings, as well as operating expenses, the provision for loan losses,
the impact of federal and state income taxes, and the relative levels of
interest rates and economic activity.


                                       21
<PAGE>
      After operating profitably as a one-bank holding company for several
years, the Company formed Cumberland in 1999 and acquired Tarpon in 2000.
Since 2000, the Company experienced heavy loan losses which required it to
increase its borrowings to supplement the capital accounts of its subsidiary
banks.  In response to these losses, management has taken a number of steps
designed to strengthen the Company's asset quality and reposition the Company
as a one-bank holding company.  These actions include:

      *   The sales of Cumberland in September 2003 and Tarpon in October 2004.
          While the Company recognized a net loss on these sales of
          approximately $900,000, the Company determined that these sales were
          critical steps toward reversing the Company's losses and
          strengthening the Company's asset quality and underwriting
          procedures.  A disproportionate amount of the Company's loan losses
          were attributable to Cumberland, and management believes that
          returning the Company to a one-bank holding company has improved the
          financial strength of the Company.

      *   Eliminating the Company's debt load with a substantial portion of the
          proceeds of the Cumberland and Tarpon sales.

      *   Focus on strengthening underwriting practices.  The Company has
          established a computerized credit analysis department staffed with
          four full-time employees.  Management believes that this department,
          originally formed in 2000 with one full-time and one part-time
          employee, has matured and is operating effectively.  The board of CNB
          has also increased its involvement in credit decisions and placed an
          increased emphasis on credibility in credit and collateral
          evaluation.  As a result of these actions, management believes that
          the credit "culture" at CNB is significantly improved.

      *   Contract the Company's size and lower its risk profile.  As part of
          its effort to improve the financial strength of the Company,
          management has contracted the size of the Company by eliminating a
          number of impaired and higher risk loans, and has also managed a
          corresponding reduction in deposits.

      The Company believes that the above actions have been effective in
strengthening the quality of the Company's assets and in improving the
Company's underwriting practices, as evidenced by the following improvements in
the Company's loan portfolio:

      *   A reduction in the aggregate balance of impaired loans from
          approximately $10.1 million as of December 31, 2003 to $8.5 million
          as of December 31, 2004, and to $3.5 million as of December 31, 2005;
          and

      *   A reduction of the aggregate balance of non-accruing loans from $2.4
          million as of December 31, 2003 to $2.1 million at December 31, 2004,
          and to $1.1 million as of December 31, 2005.

      The short-term priority of the Company continues to be strengthening its
balance sheet and the quality of its loan portfolio.  As a result, the Company
continues to focus on credit evaluation and collateral valuation in its lending
decisions, and is emphasizing lowered risk profile and minimizing loan losses
over growth.


                                       22
<PAGE>
CRITICAL ACCOUNTING POLICIES

      he Company has adopted various accounting policies which govern the
application of accounting principles generally accepted in the U.S. in the
preparation of financial statements.  The Company's significant accounting
policies are described in Note 2 to the Company's consolidated financial
statements included in this report.  Certain accounting policies require the
Company to make significant assumptions and estimates, the use of which has a
material impact on the carrying value of certain assets and liabilities, and
could potentially result in materially different results under different
assumptions and conditions.  Management believes that the most critical
accounting policy upon which the Company's financial condition depends, and
which involve the most complex or subjective decisions or assessments is the
allowance for loan losses.

      Arriving at an appropriate level of allowance for loan losses involves a
high degree of judgment.  CNB's allowance for loan losses provides for probable
losses based upon evaluations of known and inherent risks in the loan
portfolio.  Management uses historical information to assess the adequacy of
the allowance for loan losses as well as the prevailing business environment;
as it is affected by changing economic conditions and various external factors,
which may impact the portfolio in ways currently unforeseen.  The allowance is
increased by provisions for loan losses and by recoveries of loans previously
charge-off and reduced by loans charged-off.

      A review of the loan portfolio by an independent firm is conducted on a
semi-annual basis.  The purpose of this review is to assess the risk in the
loan portfolio and to determine the adequacy of the allowance for loan losses.
The review includes analyses of historical performance, the level of non-
conforming and rated loans, loan volume and activity, review of loan files and
consideration of economic conditions and other pertinent information.  Upon
completion, the report is approved by the Board and management of the Company.
In addition to the above review, CNB's primary regulator, the OCC, also
conducts an annual examination of the loan portfolio.  Upon completion, the OCC
presents its report of findings to the Board and management of CNB.
Information provided from the above two independent sources, together with
information provided by the management of CNB and other information known to
the Board, are utilized by the Board to monitor, on a quarterly basis, the loan
portfolio.  Specifically, the Board attempts to identify risks inherent in the
loan portfolio (e.g., problem loans, potential problem loans and loans to be
charged off), assess the overall quality and collectibility of the loan
portfolio, and determine amounts of the allowance for loan losses and the
provision for loan losses to be reported based on the results of their review.

      The process of reviewing the adequacy of the allowance for loan losses
requires management to make numerous judgments and assumptions about future
events and subjective judgments, including the likelihood of loan repayment,
risk evaluation, extrapolation of historical losses, and similar judgments and
assumptions.  If these assumptions prove to be incorrect, charge-offs in future
periods could exceed the allowance.


RESULTS OF OPERATIONS

      For the years ended December 31, 2005 and 2004, the Company had a net
income of $1.2 million and $.2 million, respectively.  For 2005, basic and
diluted income per share of common stock were $.61 and $.60, respectively.
Basic and diluted income per share in 2004 were both $.10.  Total assets
decreased by $12.7 million from $139.2 million as of December 31, 2004 to
$126.5 million as of December 31, 2005.  The reduction in loans accounted for
the majority of the decrease in total assets.  In 2005 and 2004, management
focused on reducing the level of high risk loans in order to reduce the risk
profile of the Bank and improve the quality of assets.


                                       23
<PAGE>
      Cash and cash equivalents increased by $.5 million from 12.6 million as
of December 31, 2004 to $13.1 as of December 31, 2005.

      Securities decreased by $1.0 million from $10.6 million as of December
31, 2004 to $9.6 million as of December 31, 2005.  Loans contracted by $12.3
million from $110.3 as of December 31, 2004 to $98.0 as of December 31, 2005.

      Deposits decreased by $13.6 million, from $120.8 million as of December
31, 2004 to $107.2 million as of December 31, 2005.  This decrease was planned
because the Bank did not require as many deposits while it was reducing the
size of its loan portfolio.


      NET INTEREST INCOME

      The Company's results of operations are determined by its ability to
effectively manage interest income and expense, minimize loan and investment
losses, generate non-interest income, and control non-interest expense.  Since
interest rates are determined by market forces and economic conditions beyond
the control of the Company, the ability to generate net interest income is
dependent upon the Company's ability to maintain an adequate spread between the
rate earned on earning assets and the rate paid on interest-bearing
liabilities, such as deposits and borrowings. Thus, net interest income is a
key performance measure for the Company.

      Presented below are various components of assets and liabilities,
interest income and expense as well as their yield/cost for the periods
indicated.

                                 Year Ended                Year Ended
                              December 31, 2005         December 31, 2004
                              -----------------         -----------------
                                   Interest                   Interest
                           Average  Income/  Yield/   Average  Income/ Yield/
                           Balance  Expense   Cost    Balance  Expense  Cost
                           -------  -------   ----    -------  -------  ----
                                        (Dollars in thousands)
Interest-bearing
   bank balances           $    191  $     7  3.66%  $  4,315  $   107  2.48%
Federal funds sold            5,343      165  3.09%    10,020      113  1.13%
Securities                    9,763      355  4.09%    11,443      408  3.57%
Loans, net                  109,039    8,876  8.14%   127,119    9,290  7.31%
                            -------   ------          -------   ------
   Total earning assets    $124,336  $ 9,403  7.56%  $152,897  $ 9,918  6.49%
                            =======   ======          =======   ======

Interest bearing deposits  $103,539  $ 2,787  2.69%  $128,716  $ 2,783  2.16%
Other borrowings                 32        1  3.13%     3,140      315 10.03%
                            -------   ------          -------   ------
   Total interest
   -bearing liabilities    $103,571  $ 2,788  2.69%  $131,856  $ 3,098  2.35%
                            =======   ======          =======   ======

Net yield on earning assets                   5.32%                     4.46%

      The net interest yield is computed by subtracting interest expense from
interest income and dividing the resulting figure by average interest-earning
assets.  Net yield on interest-earning assets for the years ended December 31,
2005 and 2004 was 5.32% and 4.46%, respectively.  The cause for the increase
in the net yield on interest earning assets from 2004 to 2005 is due to the
fact that the increase in the yield on earning assets (107 basis points)
outpaced the increase in the cost of funds (34 basis points).

      Gross interest income decreased by $.5 million, or 5.2%, from $9.9
million in 2004 to $9.4 million in 2005.  Net interest income, before provision
for loan losses, decreased by approximately $.2 million, or 3.0%, from
approximately $6.8 million in 2004 to approximately $6.6 million in 2005.  This
decrease was less than the 18.7% decrease in average earning assets from $152.9
million in 2004 to $124.3 million in 2005.


                                       24
<PAGE>
      NON-INTEREST INCOME

      Non-interest income for the years ended December 31, 2005 and 2004
amounted to $1.1 million and $2.2 million, respectively.  Note that the 2004
results include a $1.2 million gain on the sale of Tarpon.  Non-interest income
excluding the effects of the gain on the sale of the former subsidiary amounted
to $1.1 million and $1.1 million for 2005 and 2004, respectively.  As a percent
of average assets, non-interest income, as adjusted for the effect of the sale
of Tarpon, was .83% for 2005 and .67% for 2004.

      The following table summarizes the major components of non-interest
income for the years ended December 31, 2005 and 2004.

                                            Year ended December 31,
                                            -----------------------
                                              2005            2004
                                              ----            ----
                                                 (In thousands)
   Service fees on deposit accounts         $   895         $   994
   Miscellaneous, other                         207              96
                                            -------         -------
   Total non-interest income, as diluted      1,102           1,090
   Gain/(loss) on sale of subsidiary              0           1,184
                                            -------         -------
      Total non-interest income             $ 1,102         $ 2,274
                                            =======         =======


      NON-INTEREST EXPENSE

      Non-interest expense decreased from $6.0 million in 2004 to $4.9 million
in 2005.  As a percent of total average assets, non-interest expenses decreased
from 3.90% in 2004 to 3.68% in 2005.  Of the $1.1 million decrease in non-
interest expense, approximately $1.0 million of the above decrease was
triggered by the fact that the Company no longer has any operating expenses
associated with Tarpon.

      The following table summarizes the major components of non-interest
expense for the years ended December 31, 2005 and 2004.

                                            2005            2004
                                            ----            ----
                                               (In thousands)
     Salaries and benefits                $  2,571        $  3,118
     Data processing, ATM                      282             349
     Depreciation, amortization                187             270
     Professional fees                         470             648
     Other operating expenses                1,394           1,579
                                           -------         -------
        Total non-interest expense        $  4,904        $  5,964
                                           =======         =======


                                       25
<PAGE>
      ALLOWANCE FOR LOAN LOSSES

      During 2005, the allowance for loan losses increased from $2,084,800 to
$2,100,858.  During 2005, the allowance for loan losses as a percent of gross
loans increased from 1.85% to 2.10%.  Net charge-offs during 2005 amounted to
$1,190,942, or 1.07% of average loans.  Net charge-offs during 2004 amounted to
$3,070,813, or 2.37% of average loans.  As of December 31, 2005, management
considers the allowance for loan losses to be adequate to absorb future losses.
However, there can be no assurance that charge-offs in future periods will not
exceed the allowance for loan losses or that additional provisions to the
allowance will not be required.  For more information about the methods
employed and the factors considered in determining the allowance for loan
losses, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Critical Accounting Policies" above.


INTEREST RATE SENSITIVITY

      Net interest income, the Company's primary source of earnings, fluctuates
with significant interest rate movements.  To lessen the impact of these margin
swings, management seeks to structure the balance sheet so that repricing
opportunities exist for both assets and liabilities in roughly equivalent
amounts at approximately the same time intervals.  Imbalances in these
repricing opportunities at any point in time constitute interest rate
sensitivity.

      Interest rate sensitivity refers to the responsiveness of interest-
earning assets and interest-bearing liabilities to changes in market interest
rates.  The rate sensitive position, or gap, is the difference in the volume of
rate sensitive assets and liabilities at a given time interval.  The general
objective of gap management is to manage rate sensitive assets and liabilities
so as to reduce the impact of interest rate fluctuations on the net interest
margin.  Management generally attempts to maintain a balance between rate
sensitive assets and liabilities as the exposure period is lengthened to
minimize the Company's overall interest rate risk.

      The asset mix of the balance sheet is continually evaluated in terms of
several variables:  yield, credit quality, appropriate funding sources and
liquidity.  To effectively manage the liability mix of the balance sheet, there
should be a focus on expanding the various funding sources.  The interest rate
sensitivity position at December 31, 2005 is presented in the following table.
The difference between rate sensitive assets and rate sensitive liabilities, or
the interest rate sensitivity gap, is shown at the bottom of the table.  Since
all interest rates and yields do not adjust at the same pace, the gap is only a
general indicator of rate sensitivity.

                                   After
                                   three    After     After
                                   months    six       one
                                    but     months   year but
                          Within   within    but      within   After
                          three     six     within     five    five
                          months   months  one year    years   years   Total
                         ------   ------  --------  --------  -----    -----
                                     (Dollars in thousands)
EARNING ASSETS
Loans                   $ 46,384 $  7,555  $ 12,006  $30,743 $ 3,448  $100,136
Available-for-sale
 securities                  200     --        --      8,187   1,212     9,599
Federal funds sold         6,601     --        --       --      --       6,601
                         -------  -------   -------   ------  ------   -------
Total earning assets    $ 53,185 $  7,555  $ 12,006  $38,930 $ 4,660  $116,336
                         =======  =======   =======   ======  ======   =======

SUPPORTING SOURCE OF FUNDS
Interest-bearing
  demand deposits
  and savings           $ 26,345 $   --    $   --    $  --   $  --    $ 26,345
Certificates,
  less than $100M         10,562    8,556    21,408    3,661    --      44,277
Certificates,
  $100M and over           4,989    3,265    10,249    5,757    --      24,260
                         -------  -------   -------   ------  ------   -------
Total interest-
  bearing liabilities   $ 41,986 $ 11,821  $ 31,657  $ 9,418 $  --    $ 94,882
                          ======  =======   =======   ======  ======   =======

Interest rate
  sensitivity gap      $ 11,199  $ (4,266) $(19,651) $29,512 $ 4,660  $ 21,454

Cumulative gap         $ 11,199  $  6,933  $(12,718) $16,794 $21,454  $ 21,454

Interest rate
  sensitivity gap ratio    1.27      0.64      0.38     4.13    N/A       1.23

Cumulative interest rate
  sensitivity gap ratio    1.27      1.13      0.85     1.18    1.23      1.23


                                       26
<PAGE>
      As evidenced by the table above, at December 31, 2005, the Company was
liability sensitive from 7 to 12 months and asset sensitive in all other time
periods.  In a declining interest rate environment, a liability sensitive
position (a gap ratio of less than 1.0) is generally more advantageous since
liabilities are repriced sooner than assets.  Conversely, in a rising interest
rate environment, an asset sensitive position (a gap ratio over 1.0) is
generally more advantageous as earning assets are repriced sooner than the
liabilities.  With respect to the Company, an increase in interest rates would
reduce income for the period of three-to-twelve months, and increase income in
all other time periods.  Conversely, a decline in interest rates will increase
income in the period of three-to-twelve months, and reduce income in all other
time periods.

      As circumstances change, management will seek to structure its rate
sensitivity position to best hedge against rapidly rising or falling interest
rates.  The Asset/Liability Committee of each of the Banks meets on a quarterly
basis and develops management's strategy for the upcoming period.  Such
strategy includes anticipations of future interest rate movements.


LIQUIDITY

      Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations.  These funds can be obtained by converting assets to cash or by
attracting new deposits.  Deposits decreased by $13.6 million and $38.0
million, respectively, during 2005 and 2004.  In 2004, the majority of the
decline was caused by the sale of Tarpon.  In 2005, the Company sought to
reduce deposits as it encouraged weaker loans to move elsewhere.  Below are
the pertinent liquidity balances and ratios at December 31, 2005 and 2004:

                                                  December 31,
                                         ----------------------------
                                           2005                 2004
                                         -------              -------
                                              (Dollars in thousands)
  Cash and cash equivalents              $13,106              $12,461
  CDs, over $100,000
   to total deposits ratio                 22.6%                20.7%
  Loan to deposit ratio                    91.5%                91.3%
  Securities to total assets ratio          7.6%                 7.6%
  Brokered deposits                          --                   --

      Cash and cash equivalents are the primary source of liquidity.  At
December 31, 2005, cash and cash equivalents amounted to $13.1 million,
representing 10.3% of total assets.  Securities available for sale provide
a secondary source of liquidity.  At December 31, 2005, total securities
amounted to $9.6 million, representing 7.6% of total assets.

      At December 31, 2005, large denomination certificates accounted for 22.6%
of total deposits. As a percent of total deposits, large denomination
certificates increased from 20.7% at December 31, 2004 to 22.6% at December 31,
2005.  Large denomination CDs are generally more volatile than other deposits.
As a result, management continually monitors the competitiveness of the rates
it pays on its large denomination CDs and periodically adjusts its rates in
accordance with market demands.  Significant withdrawals of large denomination
CDs may have a material adverse effect on the Banks' liquidity.

      Brokered deposits are deposit instruments, such as certificates of
deposit, deposit notes, bank investment contracts and certain municipal
investment contracts that are issued through brokers and dealers who then offer
and/or sell these deposit instruments to one or more investors.  As of December
31, 2005, the Company had no brokered deposits in its portfolio.


                                       27
<PAGE>
      In October 2004, the Company consummated the sale of Tarpon to an
unaffiliated third party, for approximately $6 million.  A portion of the
proceeds from the sale of Tarpon were used to repay the balance of a loan from
the son of one of the Company's directors ($2,900,000) and to redeem the
Company's Series A Preferred Stock, including all accrued and unpaid dividends
($665,000).

      The primary source of funds available to the Company is dividends from
its subsidiary banks. The Banks are restricted in their ability to pay
dividends under the national banking laws and by regulations of the OCC.  A
national bank may not pay dividends from its capital.  Rather, all dividends
must be paid out of net profits then on hand, after deducting losses and bad
debts.  Furthermore, a national bank is generally prohibited from declaring a
dividend on its shares of common stock until its surplus equals its stated
capital.

      Under OCC regulations, the allowance for loan and lease losses will not
be considered an element of net profits then on hand for purposes of the above
dividend restrictions.  Further, under the regulations, a national bank may be
able to include a portion of its capital surplus account in net profits,
depending on the composition of that account.  In general, the regulations do
not impair a well-capitalized bank's ability to make cash payments to its
shareholders in the form of a return of capital.


CAPITAL ADEQUACY

      There are two primary measures of capital adequacy for banks and bank
holding companies:  (i) risk-based capital guidelines and (ii) the leverage
ratio.

      Risk-based capital guidelines measure the amount of a bank's required
capital in relation to the degree of risk perceived in its assets and its off-
balance sheet items.  Under the risk-based capital guidelines, capital is
divided into two "tiers."  Tier 1 capital consists of common shareholders'
equity, non-cumulative and cumulative (bank holding companies only) perpetual
preferred stock and minority interest.  Goodwill is subtracted from the total.
Tier 2 capital consists of the allowance for loan losses, hybrid capital
instruments, term subordinated debt and intermediate term preferred stock.
Banks are required to maintain a minimum risk-based capital ratio of 8.0%, with
at least 4.0% consisting of Tier 1 capital.

      The second measure of capital adequacy relates to the leverage ratio.
The OCC has established a 3.0% minimum leverage ratio requirement.  The
leverage ratio is computed by dividing Tier 1 capital by total assets.  For
banks that are not given the highest rating of their condition by their primary
regulator, the minimum leverage ratio should be 3.0% plus an additional cushion
of at least 1 to 2 percent, depending upon risk profiles and other factors.


                                       28
<PAGE>
      The table below illustrates the regulatory capital ratios of CNB and the
Company at December 31, 2005:

                                                          Minimum
                                                         Regulatory
                                    December 31, 2005    Requirement
                                    -----------------    -----------
 CNB
 ---
 Tier 1 Capital                           17.1%              4.0%
 Tier 2 Capital                            1.3%              N/A
    Total risk-based capital ratio        18.4%              8.0%
 Leverage ratio                           12.7%              3.0%

 Company - Consolidated
 ----------------------
 Tier 1 Capital                           19.2%              4.0%
 Tier 2 Capital                            1.3%              N/A
    Total risk-based capital ratio        20.5%              8.0%
 Leverage ratio                           14.1%              3.0%

      The Bank's MOU with the OCC imposed higher minimum capital ratios on each
of the banks, including a risk-based Tier 1 capital ratio of at least 10%, and
a total risk-based capital ratio of at least 11%.  However, in November 2005,
the MOU was terminated by the OCC.


OFF-BALANCE SHEET ARRANGEMENTS

      In the normal course of business, the Company has outstanding various
commitments to extend credit in the form of unused loan commitments and standby
letters of credit that are not reflected in the Company's consolidated
financial statements.  Since these commitments may expire without being
exercised, these commitments do not necessarily represent future funding
requirements.  The Company uses the same credit and collateral policies in
making commitments as those used in making loans.

      As of December 31, 2005 and 2004, the Company had outstanding unused loan
commitments of approximately $5.4 million and $8.3 million, respectively.
Additionally, standby letters of credit of approximately $0 and $800 were
outstanding as of December 31, 2005 and 2004, respectively.  Various assets
collateralize the majority of these commitments.  The Company does not
anticipate that it will suffer any material losses as a result of these
transactions.



ITEM 7.   FINANCIAL STATEMENTS
-------   --------------------

      The following financial statements are filed as Exhibit 99.1 to this
Report and incorporated herein by reference:

       Report of Independent Registered Public Accounting Firm

       Consolidated Balance Sheets as of December 31, 2005 and 2004

       Consolidated Statements of Income for the years ended
          December 31, 2005 and 2004

       Consolidated Statements of Shareholders' Equity for
          the years ended December 31, 2005 and 2004

       Consolidated Statements of Cash Flows for the years ended
          December 31, 2005 and 2004

       Notes to Consolidated Financial Statements


                                       29
<PAGE>
ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------   ---------------------------------------------------------------
          FINANCIAL DISCLOSURE
          --------------------

      Not applicable.

ITEM 8A.   CONTROLS AND PROCEDURES
--------   -----------------------

      The Company's Chief Executive Officer has evaluated the Company's
disclosure controls and procedures as of the end of the fiscal year covered
by this Report on Form 10-KSB and concluded that the Company's disclosure
controls and procedures are effective.  During the fourth quarter of 2005,
there were no changes in the Company's internal control over financial
reporting that have materially affected, or that are reasonably likely to
materially affect, the Company's internal control over financial reporting.



ITEM 8B.   OTHER INFORMATION
--------   -----------------

      Not Applicable



                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
-------   -------------------------------------------------------------
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
          -------------------------------------------------

      The Board of Directors is currently composed of the following thirteen
members:

      Name                       Age         Position
      ----                       ---         --------
      T. Brinson Brock, Sr.      49      Class I Director
      Willis R. Collins          60      Class I Director
      Shirley Crawford           69      Class I Director
      Donald M. Crews            58      Class I Director
      Benny W. Denham            75      Class I Director
      Lloyd G. Ewing             61      Class II Director
      Grady E. Moore             71      Class II Director
      Joe S. Sheppard            72      Class II Director
      Sara Ruth Raines           60      Chairman of the Board of Directors
                                           and Class II Director
      Bobby Y. Franklin          59      Class III Director
      Benjamin E. Walker         75      Class III Director
      Jimmie Ann Ward            68      Class III Director
      Freddie J. Weston, Jr.     68      Class III Director

      Directors of the Company are elected at the annual meeting of the
Company's shareholders.  In accordance with the Company's articles of
incorporation, the Board of Directors is divided into three classes, Class I,
Class II and Class III, whose terms are staggered so that approximately one-
third of the Board is elected at each annual meeting of the shareholders.
Members of each class serve for a term of three years and until their
successors are elected.  The terms of the Class I directors was set to expire
at the 2006 annual meeting of shareholders; however, because the Company is
not holding a 2006 annual meeting of shareholders due to its pending Merger
with South Georgia which is anticipated to close by June 30, 2006, the Class
I directors will serve until their successors are elected and qualified.  If
necessary, the Class II directors will serve until the expiration of their terms
at the 2007 Annual Meeting, and the Class III directors will serve until the
expiration of their terms at the 2008 Annual Meeting.


                                       30
<PAGE>
                            BIOGRAPHIES OF THE DIRECTORS

      The biographies of the directors are listed below.  Except as otherwise
indicated, each director has been or was engaged in his or her present or last
principal occupation, in the same or a similar position, for more than five
years.


CLASS I DIRECTORS

      T. BRINSON BROCK has served as a director of the Company since August
1989 and as President and Chief Executive Officer of Community National Bank
since March 24, 1998.  Mr. Brock raises beef cattle, including purebred Angus,
Clydesdale horses and draft horse crosses which he and his children show and
sell.   He serves as Vice President of the Turner County Cattlemen's
Association.  He is an active member of the Agricultural Committee of the
Georgia Banker's Association and has his certification for instruction in
various American Institute of Banking and bank training programs which includes
a Masters Degree from the University of Georgia ("UGA") in Adult Education.
Mr. Brock is a member of both the Turner and Crisp County Chambers of Commerce.
He is on the board of directors for the Easter Seal Foundation and is a deacon
of Ashburn First Baptist Church, where he serves in various music and committee
positions.  He is a former Abraham Baldwin Agricultural College ("ABAC")
Foundation board member, and he is a member of the ABAC President's Club and
the UGA President's Club.  He is a coordinator for the Governor's program of
entrepreneurship development for the State of Georgia, a program sponsored by
the local Chamber of Commerce and Moultrie Technical College.

      WILLIS R. COLLINS has served as director of the Company since August
1989.  Mr. Collins served as a Commissioner of Turner County, Georgia from 1986
to 1993.  He founded Cotton Warehouse, Inc. in 1988 and is a partner and
manager of Arabi Gin Company.

      SHIRLEY CRAWFORD has served as a director of the Company since July 2002.
She is a community volunteer in Turner County.

      DONALD M. CREWS has served as a director of the Company since May 1999.
Mr. Crews has been the owner and operator of Furniture Factory Outlet, St.
Marys, Georgia, since 1985.  Mr. Crews also owns and manages real estate.  Mr.
Crews is a past director of the Camden/Kingsbay Chamber of Commerce and the
Camden/Kingsbay Navy League and has served for seven years on the Better
Business Committee for Camden County.  Mr. Crews has served as a past president
for the Kiwanis Club and has served as a director for 18 years.

      BENNY W. DENHAM has served as a director of the Company since August
1989.  Mr. Denham is a co-owner of Denham Farms and has operated this farming
business since 1951.  Mr. Denham has been a director of Oglethorpe Power
Company since 1988, and serves as its Chairman.  He is also director of Irwin
Electric Membership Corporation and currently serves as Chairman.


                                       31
<PAGE>
CLASS II DIRECTORS

      LLOYD G. EWING has served as a director of the Company since August 1989.
Mr. Ewing joined Ewing Buick, Pontiac, GMC Trucks, Inc. in 1973 and has held
various positions in that company. He is now its President and General Manager.

      GRADY E. MOORE has served as a director of the Company since August 1989.
Mr. Moore retired from running G.M. Farms, Inc., a row crop operation which he
managed for 37 years.

      SARA RUTH RAINES currently serves as the Chairperson of the Board of the
Company.  She has served as a director of the Company since August 1989.  She
is the founder of Raines Investment Group, Inc., which is a franchisee of
Aaron's Sales and Leasing.

      JOE S. SHEPPARD has served as a director of the Company since May 1999.
He has served as Chairman of the Board of Resource Systems, Inc., an Atlanta-
based company engaged in the telecommunications business, for more than seven
years.


CLASS III DIRECTORS

      BOBBY Y. FRANKLIN has served as a director of the Company since May 1999.
Mr. Franklin has been the owner and operator of B&D Tire Company in Kingsland,
Georgia, since 1979 and the owner of Franklin Properties in Hilliard, Florida,
since 1979.  Mr. Franklin served as past director and past president of the
Georgia Tire and Retreaders Dealers Association.

      BENJAMIN E. WALKER has served as a director of the Company since August
1989. He served as Chairman of the Board of the Company from August 1994 to July
1996.  Mr. Walker is a part-owner of M & W Sportswear, Inc., a local garment
contracting company.

      JIMMIE ANN WARD has served as a director of the Company since August 1989.
Mrs. Ward is Secretary of Ward Land Company and is a community volunteer in
Turner County.

      FREDDIE J. WESTON, JR. has served as a director of the Company since
August 1989. Mr. Weston served in the U.S. Army for more than twenty-five years,
retiring in October 1981.  From 1983 until his retirement in 2002, he served as
the coordinator of Vocational Academic Education at Turner County High School,
where he was Assistant Principal and Principal.


EXECUTIVE OFFICER

      THERON G. REED, age 63, is the Company's only executive officer and has
served as the Company's President and Chief Executive Officer since June 2002.
He is a co-founding director of the Company and served as its first President
and Chief Executive Officer from November 1989 until March 1998.  Mr. Reed
served as president of Cornerstone Mfg. Co., Inc. from April 1998 through 2002.

      The Board elects executive officers to serve until they are removed,
replaced or resign.


IDENTIFICATION OF AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

      The Board of Directors has established a standing Audit Committee
composed of Willis R. Collins (Chairman), Lloyd G. Ewing and Benjamin E.
Walker, each of whom is independent as defined in the listing standards of
the Nasdaq Stock Market.  The Board of Directors has determined that there is
no "audit committee financial expert," as defined by the rules of the SEC,
serving on the Audit Committee at this time.  The Board believes that the
current Audit Committee, as a whole, possesses the necessary financial
sophistication, expertise, and understanding of the Company's business and
industry to effectively oversee the Company's audit process and financial


                                       32
<PAGE>
reporting, and to discharge the other responsibilities delineated in the
Company's Audit Committee Charter, a copy of which was attached as Appendix A
to the Company's proxy statement for its 2004 annual meeting of shareholders.
The Board also believes that, given the size, industry, and financial resources
of the Company, recruiting an individual who qualifies as an audit committee
financial expert would be prohibitively expensive, if such an individual could
be successfully recruited at all. The Board and the Audit Committee will
continue to monitor the Audit Committee's performance and continue to assess
the desirability of recruiting an audit committee financial expert.  In 2005,
the Audit Committee recommended the appointment of the Company's independent
auditors, met with the independent auditors to review their report on the
financial statements of the company, and carried out various other
responsibilities.


COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons who own more than 10% of the
outstanding common stock of the Company to file with the Securities and
Exchange Commission reports of changes in ownership of the common stock of the
Company held by such persons.  Officers, directors and greater than 10%
stockholders are also required to furnish the Company with copies of all forms
they file under this regulation.  To the Company's knowledge, based solely on a
review of copies of such reports furnished to the Company and representations
that no other reports were required, during the fiscal year ended December 31,
2005, all Section 16(a) filing requirements with respect to transactions
occurring in 2005 were complied with by its officers, directors and greater
than 10% stockholders.  With respect to prior years: Mr. Weston filed one late
report and failed to timely report one transaction; Ms. Crawford and Mr. Reed
each filed two late reports and each failed to timely report one transaction;
Mr. Sheppard filed two late reports and failed to timely report two
transactions; Mr. Walker filed two late reports and failed to timely report
three transactions; Ms. Ward and Messrs. Collins, Moore and Ewing each filed
two late reports and each failed to timely report four transactions; Mr. Crews
filed three late reports and failed to timely report three transactions; Mr.
Denham filed three late reports and failed to timely file six transactions; Mr.
Brock filed six late reports and failed to timely file twelve transactions; Mr.
Franklin filed six late reports and failed to timely file six transactions; Ms.
Raines filed three late reports and failed to timely file six transactions


CODE OF ETHICS

      The Company has adopted a Code of Ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer or controller, and any persons performing similar functions. The Code
of Ethics was filed as Appendix C to the Company's proxy statement for its 2004
annual meeting of shareholders.



ITEM 10.   EXECUTIVE COMPENSATION.
--------   -----------------------

      The following table sets forth the compensation paid to the Company's
Chief Executive Officer (the only executive officer of the Company and the only
officer of the Company whose salary and bonus exceeded $100,000) for each of
the Company's last three completed fiscal years.  No stock options were issued
to or exercised by the Chief Executive Office during 2005, and the Chief
Executive Officer did not hold any options to purchase the Company's common
stock at December 31, 2005.


                                       33
<PAGE>
                                                  Annual Compensation
                                        ---------------------------------------
                                                                      Other
                                                                      Annual
          Name and                      Fiscal                        Compen-
      Principal Position                 Year     Salary      Bonus   sation(1)
      ------------------                 ----     ------      -----   ---------
Theron G. Reed                           2005    $100,000    $55,000    $1,584
 President and Chief Executive Officer   2004    $100,000    $10,000    $1,584
                                         2003    $100,000    $10,000    $1,584
________________
(1)  Represents premiums paid by the Company in respect of a life insurance
     policy provided for Mr. Reed.


DIRECTOR COMPENSATION

      Each director of the Company receives a monthly retainer of $500.
Directors were not paid for attendance at scheduled or special meetings of the
Board of Directors during 2005.  Certain members of the Board of Directors also
serve on the board of the Company's subsidiary bank, and such directors receive
additional fees for attending the board meetings of the bank.



ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------   --------------------------------------------------------------

EQUITY COMPENSATION PLAN INFORMATION

      The following table provides information as of March 27, 2006 regarding
the Company's equity compensation plans.

                                                                    Number Of
                                                                    Securities
                                                                    Remaining
                                                                    Available
                                                                    For Future
                                   Number Of                         Issuance
                                  Securities         Weighted-         Under
                                     To Be            Average        The Plans
                                  Issued Upon         Exercise      (Excluding
                                  Exercise Of         Price Of      Securities
                                  Outstanding        Outstanding   Reflected In
         Plan Category              Options            Options      Column (a))
                                      (a)                (b)            (c)
Equity compensation plans
 approved by security holders        --                  --              --

Employee compensation plans not
 approved by security holders(1)   100,000(1)          $10.00            --
_________________________
(1)  Represents warrants to purchase 100,000 shares of the Company's common
     stock at an exercise price of $10.00 per share.

OWNERSHIP OF COMMON STOCK

      The following table sets forth, as of March 27, 2006, the number of
shares of the Company's common stock owned by the Company's directors and
executive officers.  To the Company's knowledge, no individual or entity owns
in excess of 5% of the Company's common stock.


                                       34
<PAGE>
                                           Amount and
                                            Nature of         Percent
                                            Beneficial          of
    Name of Beneficial Owner               Ownership(1)        Class
    ------------------------               ------------        -----
T. Brinson Brock, Sr.                        85,826 (2)         4.3%
Willis R. Collins                            92,165 (3)         4.6%
Shirley Crawford                             95,222 (4)         4.7%
Donald M. Crews                              31,510 (5)         1.6%
Benny W. Denham                              32,830 (6)         1.6%
Lloyd G. Ewing                               30,211             1.5%
Bobby Y. Franklin                            37,492 (7)         1.9%
Grady E. Moore                               81,050 (8)         4.0%
Sara Ruth Raines                             70,509 (9)         3.5%
Theron G. Reed                               21,201             1.1%
Joe S. Sheppard                              22,000 (10)        1.1%
Benjamin E. Walker                           79,861 (11)        4.0%
Jimmie Ann Ward                              60,000             3.0%
Freddie J. Weston, Jr.                       15,000             0.7%
All directors and executive
 officers as a group (14 persons)           754,877            37.6%
_____________________
(1)   Information relating to beneficial ownership of common stock is based
      upon "beneficial ownership" concepts set forth in rules of the SEC under
      Section 13(d) of the Securities Exchange Act of 1934, as amended. Under
      such rules, a person is deemed to beneficially own shares of the
      Company's Common Stock if that person has or shares "voting power," which
      includes the power to vote or direct the voting of such security, or
      "investment power," which includes the power to dispose of or to direct
      the disposition of such security. For purposes of this table, a person is
      also deemed to be a beneficial owner of any security of which that person
      has the right to acquire beneficial ownership within 60 days of March 27,
      2004, such as by the exercise of stock options, and any such Common Stock
      not presently outstanding shall be deemed to be outstanding for the
      purpose of computing the percentage of outstanding securities owned by
      such person but shall not be deemed outstanding for the purpose of
      computing the percentage owned by any other person. The percentages are
      based on 2,008,595 shares of Common Stock outstanding as of March 27,
      2006.
(2)   Includes 1,024 shares owned by Mr. Brock's wife, as to which Mr. Brock
      disclaims beneficial ownership, and 2,928 shares held as custodian for
      Mr. Brock's children.
(3)   Includes 45,132 shares owned by Mr. Collins's wife as to which he
      disclaims beneficial ownership.
(4)   Includes 30,052 shares held by the Gene Crawford Family Trust, of which
      Ms. Crawford is a trustee.
(5)   Includes the right to acquire 15,000 shares pursuant to currently
      exercisable warrants.
(6)   Includes 4,788 shares owned by Mr. Denham's wife as to which he disclaims
      beneficial ownership.
(7)   Includes the right to acquire 16,000 shares pursuant to currently
      exercisable warrants.
(8)   Includes 5,000 shares owned by Mr. Moore's wife as to which he disclaims
      beneficial ownership.
(9)   Includes 40,019 shares owned by Mrs. Raines' husband, as to which she
      disclaims beneficial ownership.
(10)  Includes the right to acquire 11,000 shares pursuant to currently
      exercisable warrants.
(11)  Includes 35,061 owned by the Walker Family Partnership. Also includes
      12,300 shares owned by Mr. Walker's wife as to which he disclaims
      beneficial ownership.


                                       35
<PAGE>
ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------   ----------------------------------------------

      In July 2003, the Company borrowed $5.1 million from the son of Ms. Ward,
a Company director, and used the proceeds of this loan (the "Affiliated Loan")
to repay the outstanding balance on a bank line of credit.  The Affiliated Loan
had an interest rate tied to the prime rate, and called for quarterly interest
payments and annual reduction in principal of 10%.  The Affiliated Loan was
required to be repaid in full by April 12, 2012.  The Company used
approximately $2.2 million of the proceeds from the sale of Cumberland National
Bank, a wholly-owned subsidiary of the Company, in September 2003 to reduce the
outstanding principal amount due under the Affiliated Loan to approximately
$2.9 million.  In July 2004, the Company received a loan from an unaffiliated
commercial bank in the amount of $2.9 million, the proceeds of which were used
to retire the Affiliated Loan.  A portion of the proceeds of the sale of First
National Bank, a wholly-owned subsidiary of the Company, in October 2004 was
used to repay all remaining principal and interest outstanding under the loan
to the unaffiliated commercial bank.

      The Company's wholly owned subsidiary, Community National Bank, extends
loans from time to time to certain of the Company's directors, their associates
and members of the immediate families of the directors and executive officers
of the Company.  These loans are made in the ordinary course of business on
substantially the same terms, including interest rates, collateral and
repayment terms, as those prevailing at the time for comparable transactions
with persons not affiliated with the Company or the Community National Bank,
and do not involve more than the normal risk of collectability or present other
unfavorable features.



ITEM 13.   EXHIBITS.
--------   ---------

      Exhibits marked with an asterisk (*) are hereby incorporated by reference
to exhibits previously filed by the Registrant  as indicated in the description
of the exhibit.

   Exhibit No.              Description of Exhibit
   -----------              ----------------------

      3.1*          Amended and Restated Articles of Incorporation of the
                    Company (incorporated by reference to the Registrant's
                    Registration Statement on Form S-4/A filed on January 25,
                    2000 (SEC file no. 333-92407)).

      3.2*          Amendment to Amended and Restated Articles of Incorporation
                    of the Company, as amended April 8, 2003 (incorporated by
                    reference to Exhibit 3.2 of the Company's Form 10-KSB filed
                    on April 14, 2004).

      3.3*          Bylaws of the Company (incorporated by reference to the
                    Company's Statement on Form S-4/A filed on January 25, 2000
                     (SEC file no. 333-92407)).

      4.1*          Non-Voting Series A Preferred Stock Purchase Agreement
                    between the Company and 13 of its directors, effective
                    April 9, 2003 (incorporated by reference to Exhibit 4.1 of
                    the Company's Form 10-KSB filed on April 14, 2004).

      10.1*         Stock Purchase and Sale Agreement dated October 21, 2003,
                    between Gulf Atlantic Financial Group, Inc., and the
                    Company (incorporated by reference to the Company's
                    Definitive Additional Proxy Materials on Schedule 14A
                    Statement filed on January 5, 2004).

      10.2*         First Amendment to Stock Purchase and Sale Agreement dated
                    January 29, 2004, between Gulf Atlantic Financial Group,
                    Inc., and the Company  (incorporated by reference to the
                    Company's Definitive Schedule 14A Proxy Statement filed on
                    January 30, 2004).


                                       36
<PAGE>
      10.3*         Second Amendment to Stock Purchase and Sale Agreement
                    between Community National Bancorporation and Gulf Atlantic
                    Financial Group, Inc., dated June 29, 2004 (incorporated by
                    reference to Exhibit 2.1 to the Company's Form 8-K filed on
                    July 2, 2004).

      10.4*         Third Amendment to Stock Purchase and Sale Agreement
                    between Community National Bancorporation and Gulf Atlantic
                    Financial Group, Inc., dated September 22, 2004
                    (incorporated by reference to Company's Form 8-K filed on
                    September 28, 2004)

      10.5*         Loan and Stock Pledge Agreement dated July 7, 2003, between
                    the Company and Michael E. Ward (incorporated by reference
                    to Exhibit 10.3 of the Company's Form 10-KSB filed on April
                    14, 2004).

      10.6*         Promissory Note dated July 7, 2003 from the Company to
                    Michael E. Ward (incorporated by reference to Exhibit 10.4
                    of the Company's Form 10-KSB filed on April 14, 2004).

      10.7*         Forbearance Agreement dated July 7, 2003 between the
                    Company and Michael E. Ward (incorporated by reference to
                    Exhibit 10.5 of the Company's Form 10-KSB filed on April
                    14, 2004).

      14.1*         Code of Ethics (incorporated by reference to the Company's
                    Definitive Schedule 14A Proxy Statement filed on April 28,
                    2004).

      21.1          Subsidiaries of the Company.

      31.1          Certification Pursuant to Rule 13a-14(a) and Rule 15d-
                    14(a).

      32.1          Certification pursuant to 18 U.S.C. Section 1350, as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002.

      99.1          Financial Statements and Report of Independent Registered
                    Public Accounting Firm


                                       37
<PAGE>
ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.
--------   ---------------------------------------

FEES PAID TO THE COMPANY'S INDEPENDENT AUDITORS

      Upon the recommendation of the Company's Audit Committee, and appointment
by the Board, Francis & Company, C.P.A.s, has served as the Company's
independent public accounting firm to audit our financial statements.

      AUDIT FEES.  During the fiscal years ended December 31, 2005 and 2004,
audit fees of $57,800 and $61,900, respectively, were billed to the Company by
Francis & Company for audits of the annual consolidated financial statements
included in the Company's Annual Reports on Form 10-KSB and reviews of the
consolidated financial statements included in the Company's Quarterly Reports
on Form 10-QSB.

      AUDIT RELATED FEES.  During the fiscal years ended December 31, 2005 and
2004, audit-related fees of $21,400 and $42,300, respectively, were billed to
the Company by Francis & Company for services related to the sale of a
subsidiary and services related to various accounting matters.

      TAX FEES.  During the fiscal years ended December 31, 2005 and 2004,
tax fees of $9,300 and $14,400, respectively, were billed to the Company
by Francis & Company for services related to the preparation of the Company's
annual state and federal tax returns and for tax planning services.

      ALL OTHER FEES.  The Company was not billed any fees for any other
services by Francis & Company during 2005 and 2004.


                                       38
<PAGE>
                                    SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this ____th day of March, 2006.

                                        COMMUNITY NATIONAL BANCORPORATION

                                        /s/ Theron G. Reed
                                        -------------------------------------
                                        President and Chief Executive Officer
                                        (principal executive, financial and
                                         accounting officer)

      In accordance with the requirements Exchange Act, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:

        Signature                    Title                        Date
        ---------                    -----                        ----

/s/ Theron G. Reed                  President                March 31, 2006
--------------------------     Chief Executive Officer
Theron G. Reed

/s/ Sara Ruth Raines           Chairman of the Board         March 31, 2006
--------------------------         and Director
Sara Ruth Raines

/s/ T. Brinson Brock, Sr.            Director                March 31, 2006
--------------------------
T. Brinson Brock, Sr.

/s/ Willis R. Collins                Director                March 31, 2006
--------------------------
Willis R. Collins

/s/ Shirley Crawford                 Director                March 31, 2006
--------------------------
Shirley Crawford

/s/ Donald M. Crews                  Director                March 31, 2006
--------------------------
Donald M. Crews

/s/ Benny Warren Denham              Director                March 31, 2006
--------------------------
Benny Warren Denham

/s/ Lloyd Greer Ewing                Director                March 31, 2006
--------------------------
Lloyd Greer Ewing

/s/ Bobby Y. Franklin                Director                March 31, 2006
--------------------------
Bobby Y. Franklin

/s/ Grady Elmer Moore                Director                March 31, 2006
--------------------------
Grady Elmer Moore

/s/ Joe S. Sheppard                  Director                March 31, 2006
--------------------------
Joe S. Sheppard


                                       39
<PAGE>
/s/ Benjamin E. Walker               Director                March 31, 2006
--------------------------
Benjamin E. Walker

/s/ Jimmie Ann Ward                  Director                March 31, 2006
--------------------------
Jimmie Ann Ward

/s/ Freddie J. Weston, Jr.           Director                March 31, 2006
--------------------------
Freddie J. Weston, Jr.


                                       40
<PAGE>
                                   EXHIBIT INDEX


Exhibit No.                   Description of Exhibit
-----------                   ----------------------

   21.1          Subsidiaries of the Company.

   31.1          Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

   32.1          Certification pursuant to 18 U.S.C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   99.1          Financial Statements and Report of Independent Registered
                 Public Accounting Firm