UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington D.C. 20549

                                   FORM 10-Q

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

               For the Quarterly period ending September 30, 2000

                         Commission File Number 33-45522

                               CNB FINANCIAL CORP.
                               -------------------
             (Exact name of registrant as specified in its charter)

           New York                                            22-3203747
           --------                                            ----------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                    24 Church Street, Canajoharie N.Y. 13317
                    ----------------------------------------
               (Address of principal executive offices - Zip code)

         Registrant's telephone number, include area code (518) 673-3243

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

           Yes   [X]    No  [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                                          Number of shares outstanding
             Class                            on October 31, 2000
             -----                            -------------------

     Common Stock, $1.25 par value                 7,473,691



<PAGE>


PART I. FINANCIAL INFORMATION                                              Page
                                                                          ------
     Item 1. Consolidated Interim Financial
       Statements and Notes

             1. Consolidated Balance Sheets ............................      3

             2. Consolidated Statements of Income ......................      4

             3. Consolidated Statements of Cash Flows ..................      5

             4. Notes to Unaudited Consolidated
                  Interim Financial Statements .........................    6-8

     Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of Operations ...........   8-26

     Item 3. Quantitative and Qualitative Disclosures
               About Market Risk .......................................  26-28

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings .........................................     29

     Item 2. Changes in Securities and Use of Proceeds .................     29

     Item 3. Defaults Upon Senior Securities ...........................     29

     Item 4. Submission of Matters to a Vote
               of Security Holders .....................................     29

     Item 5. Other Information .........................................     29

     Item 6. Exhibits and Reports on Form 8-K ..........................     29

SIGNATURES .............................................................     30


                                       2

<PAGE>


                          Part 1. Financial Information

Item 1. Consolidated Financial Statements


                      CNB Financial Corp. and Subsidiaries
                           Consolidated Balance Sheets
                 (In thousands, except share and per share data)


                                                    September 30,  December 31,
                                                        2000           1999
                                                        ----           ----
Assets                                                    (Unaudited)

Cash and due from banks ...........................   $  19,024    $  25,051
Federal funds sold ................................          --        6,150
                                                      ---------    ---------
  Total cash and cash equivalents .................      19,024       31,201
Securities available for sale, at fair value ......     367,697      387,765
Net loans & leases receivable .....................     512,917      449,064
Accrued interest receivable .......................       6,340        6,281
Premises and equipment, net .......................      12,809       12,999
Other real estate owned and repossessed assets ....         970        1,258
Goodwill ..........................................      18,466       19,428
Other assets ......................................       6,438        6,176
                                                      ---------    ---------
               Total assets .......................   $ 944,661    $ 914,172
                                                      =========    =========

Liabilities, Guaranteed Preferred Beneficial
Interests in Corporation's Junior Subordinated
Debentures and Stockholders' Equity

Noninterest-bearing deposits ......................   $  70,994    $  58,064
Interest-bearing deposits .........................     714,250      738,180
                                                      ---------    ---------
               Total deposits .....................     785,244      796,244
                                                      ---------    ---------
Short-term borrowings:
 Securities sold under agreements to repurchase ...      21,989       29,054
 Borrowings from the Federal Home Loan Bank
  of New York .....................................      45,175           --
 Borrowings from the U.S. Treasury ................         517          530
                                                      ---------    ---------
               Total short-term borrowings ........      67,681       29,584
                                                      ---------    ---------
Long-term borrowings ..............................       5,723        6,103
Other liabilities .................................      10,753        9,618
                                                      ---------    ---------
               Total liabilities ..................     869,401      841,549
                                                      ---------    ---------
Guaranteed preferred beneficial interests
 in Corporation's junior subordinated debentures ..      18,000       18,000
                                                      ---------    ---------

Stockholders' equity:

Common stock, $1.25 par value, 20,000,000 shares
 authorized (7,805,115 issued at September 30, 2000
 and 7,805,128 issued at December 31, 1999) .......       9,756        9,756
Additional paid-in capital ........................       6,202        6,202
Retained earnings .................................      52,354       48,265
Accumulated other comprehensive loss ..............      (5,678)      (5,075)
Treasury stock, at cost (331,424 shares at
 September 30, 2000 and 268,263
 at December 31, 1999) ............................      (5,374)      (4,525)
                                                      ---------    ---------
                Total stockholders' equity ........      57,260       54,623
                                                      ---------    ---------
                Total liabilities, guaranteed
                 preferred beneficial interests
                 in Corporation's junior
                 subordinated debentures and
                 stockholders' equity .............   $ 944,661    $ 914,172
                                                      =========    =========


See accompanying notes to unaudited consolidated interim financial statements.

                                       3

<PAGE>


                      CNB Financial Corp. and Subsidiaries
                        Consolidated Statements of Income
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                            Three months ended              Nine months ended
                                       -----------------------------  -----------------------------
                                       September 30,   September 30,  September 30,   September 30,
                                          2000             1999           2000           1999
                                          ----             ----           ----           ----
                                                                (Unaudited)
Interest and dividend income:
<S>                                      <C>            <C>            <C>             <C>
 Loans & leases, including fees ......   $ 10,622       $  8,722       $ 30,358        $ 25,481
Securities:
 Taxable .............................      6,605          4,406         20,001          11,942
 Nontaxable ..........................        354            800          1,662           2,637
Federal funds sold and other .........         46            368            174             439
                                         --------       --------       --------        --------
                                           17,627         14,296         52,195          40,499
                                         --------       --------       --------        --------
Interest expense:
 Deposits ............................      8,331          6,259         24,696          18,314
 Short-term borrowings ...............      1,144            491          1,984             948
 Long-term borrowings ................         90             88            295             265
                                         --------       --------       --------        --------
                                            9,565          6,838         26,975          19,527
                                         --------       --------       --------        --------
   Net interest income ...............      8,062          7,458         25,220          20,972
Provision for loan  and lease losses .        330            340          1,070           1,060
                                         --------       --------       --------        --------
   Net interest income after provision
    for loan losses ..................      7,732          7,118         24,150          19,912
                                         --------       --------       --------        --------
Other income:
 Service charges on deposit accounts .        645            547          1,869           1,541
 Net gain (loss) on securities
  transactions .......................         88             32           (238)           (620)
 Other ...............................        470            451          1,539           1,375
                                            1,203          1,030          3,170           2,296
                                         --------       --------       --------        --------
Other expenses:
 Salaries and employee benefits ......      2,394          2,579          7,376           7,142
 Occupancy and equipment .............        662            567          2,089           1,596
 Data processing .....................        678            662          1,909           1,837
 Professional fees ...................        223            134            613             621
 Advertising and marketing ...........        258            176            738             331
 Postage and courier .................        148            139            441             391
 Office supplies and stationery ......        141            218            473             541
 Other real estate owned and
  repossessed assets .................         12            151            397             505
 Goodwill amortization ...............        332            110            995             110
 Capital securities ..................        465            227          1,300             227
 Other ...............................        898            890          2,703           2,347
                                         --------       --------       --------        --------
                                            6,211          5,853         19,034          15,648
                                         --------       --------       --------        --------
Income before income tax expense .....      2,724          2,295          8,286           6,560
Income tax expense ...................        707            637          2,173           1,756
                                         --------       --------       --------        --------
  Net income .........................   $  2,017       $  1,658       $  6,113        $  4,804
                                         ========       ========       ========        ========
Earnings per share:
  Basic ..............................   $   0.27       $   0.22       $   0.82        $   0.63
  Diluted ............................   $   0.27       $   0.22       $   0.81        $   0.63
</TABLE>



See accompanying notes to unaudited consolidated interim financial statements.

                                        4

<PAGE>


                      CNB Financial Corp. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                 (In thousands)

<TABLE>
<CAPTION>

                                                            Nine months ended,
                                                       -----------------------------
                                                       September 30,   September 30,
                                                            2000           1999
                                                            ----           ----
                                                               (Unaudited)
<S>                                                      <C>         <C>
Increase (decrease) in cash and cash equivalents:

Cash flows from operating activities:
 Net income ..........................................   $   6,113    $   4,804
 Adjustments to reconcile net income to net cash
  provided by operating activities:

   Depreciation and amortization .....................       1,953        1,141
   Provision for loan and lease  losses ..............       1,070        1,060
   Net loss on securities transactions ...............         238          620
   Net loss on sales and writedowns of other
    real estateowned and repossessed assets ..........          87          118
   Net gain from mortgage loan sales .................         (83)          --
   Proceeds from sales of loans held for sale ........       5,199           --
   Origination of loans held for sale ................      (5,116)          --
   Purchases of trading securities ...................      (5,250)     (24,257)
   Proceeds from sales of trading securities .........       5,261       24,304
   Increase in accrued interest receivable ...........         (59)        (564)
   Net change in other assets and other liabilities ..       1,230        1,893
                                                         ---------    ---------
      Net cash provided by operating activities ......      10,643        9,119
                                                         ---------    ---------

Cash flows from investing activities:

 Purchases of securities:
   Available for sale ................................     (89,236)    (159,899)
   Held to maturity ..................................          --       (5,831)

 Proceeds from sales of securities:
   Available for sale ................................      70,793       74,881

 Proceeds from maturities and calls of securities:
   Available for sale ................................      37,376       30,975
   Held to maturity ..................................          --        6,417
 Net loans and leases made to customers ..............     (66,355)     (46,548)
 Proceeds from sales of other real estate owned and
  repossessed assets .................................       1,559        1,100
 Proceeds used from  premises and equipment acquired
  in branch transaction ..............................          --       (2,900)
 Purchase of premises and equipment,
  exclusive of branch transaction ....................        (801)        (881)
                                                         ---------    ---------
    Net cash used in investing activities ............     (46,664)    (102,686)
                                                         ---------    ---------

Cash flows from financing activities:

 Net (decrease) in deposits, exclusive of
  branch acquisition .................................     (11,000)     (24,208)
 Deposits assumed in branch transaction, net
  of premium .........................................          --      135,866
 Net increase (decrease) in short term borrowings ....      38,097       (3,727)
 Payments on long-term borrowings ....................        (380)        (335)
 Proceeds from the issuance of capital securities ....          --       18,000
 Dividends paid ......................................      (2,024)      (1,858)
 Proceeds from issuance of shares for options and
  Dividend Reinvestment Plan .........................          --          446
 Purchases of treasury stock .........................        (849)      (1,257)
                                                         ---------    ---------
   Net cash provided by financing activities .........      23,844      122,927
                                                         ---------    ---------
Net (decrease) increase in cash and cash equivalents .     (12,177)      29,360
Cash and cash equivalents at beginning of period .....      31,201       16,128
                                                         ---------    ---------
Cash and cash equivalents at end of period ...........   $  19,024    $  45,488
                                                         =========    =========
</TABLE>


Additional disclosure relative to non-cash investing activities:

On May 1, 1999, the Company transferred its held-to-maturity
investment  security portfolio  to  the  available  for sale
investment security  portfolio.  The amortized cost of held-
to-maturity  investment  securities  at the time of transfer
amounted to $112,870.



See accompanying notes to unaudited consolidated interim financial statements.

                                       5



<PAGE>


                               CNB Financial Corp.
          Notes to Unaudited Consolidated Interim Financial Statements

1.   The accompanying  unaudited  consolidated interim financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for  interim  financial  information  and with  instructions  to Form 10-Q.
     Accordingly,  they do not  include  all of the  information  and  footnotes
     required by generally accepted accounting principles for complete financial
     statements.  In the  opinion of  management,  all  adjustments  (consisting
     solely  of  normal  recurring  accruals)  considered  necessary  for a fair
     presentation have been included.  The accompanying  unaudited  consolidated
     interim  financial  statements  should  be read  in  conjunction  with  the
     Company's  Annual Report on Form 10-K as of and for the year ended December
     31, 1999. Operating results for the nine-month and three-month period ended
     September 30, 2000 are not  necessarily  indicative of the results that may
     be expected for the full year.

2.   Earnings  Per  Share - Basic  EPS  excludes  dilution  and is  computed  by
     dividing income  available to common  stockholders by the weighted  average
     number of common shares  outstanding  for the period.  Diluted EPS reflects
     the potential dilution that could occur if securities or other contracts to
     issue  common  stock were  exercised  or  converted  into  common  stock or
     resulted in the  issuance of common  stock that then shared in the earnings
     of the entity (such as the Company's stock options).

     The following  table provides the  calculation of basic and diluted EPS for
     the three and nine months ended September 30:

<TABLE>
<CAPTION>

                                     Three Months Ended 9/30/00                Three Months Ended 9/30/99
                                 -----------------------------------      -------------------------------------
                                            Weighted          Per                      Weighted            Per
                                  Net        Average         Share         Net          Average           Share
                                 Income      Shares         Amount        Income         Shares          Amount
                                 -------------------------------------------------------------------------------
<S>                             <C>          <C>           <C>           <C>            <C>            <C>
Basic EPS:
    Net income available to
       common stockholders ...   $2,017       7,474         $   0.27      $1,658          7,564         $   0.22
Effect of dilutive securities:
    Stock options ............                   12                                          34
                                 -------------------------------------------------------------------------------
Diluted EPS ..................   $2,017       7,486         $   0.27      $1,658          7,598         $   0.22
                                 ===============================================================================
</TABLE>


<TABLE>
<CAPTION>

                                       Nine Months Ended 9/30/00                  Nine Months Ended 9/30/99
                                 -----------------------------------      -------------------------------------
                                            Weighted          Per                      Weighted            Per
                                  Net        Average         Share         Net          Average           Share
                                 Income      Shares         Amount        Income         Shares          Amount
                                 -------------------------------------------------------------------------------
<S>                             <C>          <C>           <C>           <C>            <C>            <C>
Basic EPS:
    Net income available to
       common stockholders ...   $6,113       7,498         $   0.82      $4,804          7,579         $   0.63
Effect of dilutive securities:
    Stock options ............                   19                                          39
                                 -------------------------------------------------------------------------------
Diluted EPS ..................   $6,113       7,517         $   0.81      $4,804          7,618         $   0.63
                                 ===============================================================================
</TABLE>


                                       6


<PAGE>


3.   Comprehensive  Income  -  Comprehensive  income  represents  the sum of net
     income and items of other comprehensive  income or loss, which are reported
     directly in stockholders' equity, net of tax, such as the change in the net
     unrealized gain or loss on securities available for sale. Accumulated other
     comprehensive  income or loss, which is included in  stockholders'  equity,
     represents  the net  unrealized  gain or loss on  securities  available for
     sale, net of tax.

     Total comprehensive income for the nine months ended September 30, 2000 and
     1999 was  $5.510  million  and  $3.679  million,  respectively,  and  total
     comprehensive  income (loss) for the three months ended  September 30, 2000
     and 1999 was $3.816 million and ($733,000), respectively.

4.   Recent Accounting Pronouncements:

     FASB Statement 133

     The Company will adopt the provisions of Statement of Financial  Accounting
     Standards  ("SFAS") No. 133,  "Accounting  for Derivative  Instruments  and
     Hedging Activities,"  effective January 1, 2001. This Statement establishes
     accounting and reporting  standards for derivative  instruments,  including
     certain derivative instruments embedded in other contracts, and for hedging
     activities.  It requires that an entity recognize all derivatives as either
     assets or liabilities in the balance sheet and measure those instruments at
     fair  value.  Changes  in  the  fair  value  of  the  derivative  financial
     instruments  will be reported in either earnings or  comprehensive  income,
     depending on the use of the  derivative and whether or not it qualifies for
     hedge accounting.  Consequently,  there may be increased  volatility in net
     income  and  stockholders'  equity  on an  ongoing  basis  as a  result  of
     accounting for derivatives in accordance with SFAS No. 133.

     Special hedge accounting  treatment is permitted only if specific  criteria
     are met,  including a requirement  that the hedging  relationship be highly
     effective both at inception and on an ongoing basis.  Accounting for hedges
     varies  based on the type of hedge - fair  value or cash  flow.  Results of
     effective  hedges are recognized in current  earnings for fair value hedges
     and in  other  comprehensive  income  for  cash  flow  hedges.  Ineffective
     portions  of hedges are  recognized  immediately  in  earnings  and are not
     deferred.

     As of September  30, 2000,  the Company has certain debt  securities  which
     have embedded  derivatives  that will have to be accounted  for  separately
     under  SFAS No.  133.  The  purpose of these  debt  securities  is to hedge
     against the exposure associated with certain of the Company's variable rate
     assets that have a decrease in interest payments in a falling interest rate
     environment.  The  Company is in the  process of  determining  if the above
     mentioned hedge will qualify for cash flow hedge accounting treatment under
     SFAS No.  133. If the  intended  cash flow hedge does not qualify for hedge
     accounting  under SFAS No. 133,  changes in the fair value of the  embedded
     derivatives  will need to be reported in net income in the first quarter of
     2001. As of September 30, 2000, the book value and market value of the debt

                                       7

<PAGE>


     securities  with  embedded  derivatives  amounted to  approximately  $3.854
     million and $2.619 million, respectively.

     In addition, the Company has certain other embedded derivatives (related to
     a time  deposit with returns  linked to an equity  index) which  management
     expects will need to be  separately  accounted  for at fair value.  At this
     time,  management  expects that the net  adjustment  to fair value upon the
     adoption  of SFAS No. 133 for these  embedded  derivatives  will not have a
     material effect on the Company's consolidated financial statements.

     The  above  estimates  are  based on  current  market  rates  and  economic
     conditions,  which are subject to change. The effect of adoption on January
     1, 2001 cannot be estimated  with  certainty at this time, as it is subject
     to unknown  variables  such as (1) actual  derivatives  and  related  hedge
     positions,  (2) market values of derivatives and related hedged items,  and
     (3) further ongoing interpretation on SFAS No. 133 by the FASB.

Item 2: Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

General

CNB Financial  Corp.  (the Company) is a one-bank  holding  company,  registered
under the Bank Holding  Company Act of 1956, as amended.  It was organized under
the laws of the State of New York and became a bank  holding  company on January
5, 1993 through the consummation of a reorganization  plan with Central National
Bank,  Canajoharie,  (Bank)  which  became the wholly  owned  subsidiary  of the
Company.  The Company  maintains its headquarters in Canajoharie,  New York. The
principal business of the Company is to provide, through the Bank, comprehensive
banking  services  through its network of twenty nine branches and two financial
services  centers  located in Central New York in the  counties  of  Montgomery,
Fulton, Chenango, Herkimer, Oneida, Otsego, Schoharie, Saratoga and Schenectady.
In 1996, Central Asset Management,  Inc. (CAM) was formed as a second subsidiary
of the  Company.  The  main  business  activity  of CAM is to  offer  investment
management  services  for a fee to a  focused  customer  base of high net  worth
individuals and businesses.

The Company's  principal  business is attracting  deposits from customers within
its market area and investing those funds primarily in mortgage loans,  consumer
loans  and  leases,  commercial  and  agricultural  loans,  and  government  and
corporate debt securities.  The financial condition and operating results of the
Company are dependent on its net interest income which is the difference between
the interest  and  dividend  income  earned on its assets,  primarily  loans and
investments,  and  the  interest  expense  paid  on its  liabilities,  primarily
deposits and borrowings.  Net income is also affected by other operating income,
such as fees on deposit related services,  loan servicing income,  and fiduciary
activities;  other operating expenses, such as salaries and benefits,  occupancy
expenses, and data processing expense;  provision for loan and lease losses; and
federal and state income taxes.

                                       8

<PAGE>


The  Company's  results of  operations  are  significantly  affected  by general
economic and  competitive  conditions  (particularly  changes in market interest
rates),  government  polices,  changes in  accounting  standards  and actions of
regulatory  agencies.   Future  changes  in  applicable  laws,   regulations  or
government  policies may have a material  impact on the Company.  The demand for
and supply of real  estate,  competition  among  lenders,  the level of interest
rates and the availability of funds substantially  influence lending activities.
The  ability  to  gather  deposits  and the  cost of  funds  are  influenced  by
prevailing market interest rates, fees and terms on deposit products, as well as
the availability of alternative investments, including mutual funds and stocks.

Forward Looking Statements

When used in this filing or future  filings by the Company  with the  Securities
and Exchange  Commission,  in the  Company's  press  releases or other public or
shareholder  communications,  or in oral statements made with the approval of an
authorized  executive officer,  the words or phrases "will likely result",  "are
expected  to",  "will  continue",  "is  anticipated",   "estimate",   "project",
"believe",  or similar  expressions  are  intended to identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995. In addition,  certain disclosures and information  customarily provided
by financial institutions,  such as an analysis of the adequacy of the allowance
for loan and lease losses or an analysis of the interest rate sensitivity of the
Company's  assets and  liabilities,  are  inherently  based upon  predictions of
future events and circumstances. Furthermore, from time to time, the Company may
publish other forward-looking statements relating to such matters as anticipated
financial performance, business prospects, and similar matters.

A variety of factors could cause the Company's  actual results and experience to
differ materially from the anticipated  results or other expectations  expressed
in the Company's forward-looking statements. Some of the risks and uncertainties
that may affect the  operations,  performance,  development  and  results of the
Company's business, the interest rate sensitivity of its assets and liabilities,
and the adequacy of its allowance for loan and lease losses, include but are not
limited to the following:

a.   Deterioration in local,  regional,  national or global economic  conditions
     which  could  result,   among  other   things,   in  an  increase  in  loan
     delinquencies,  a decrease in property  values,  or a change in the housing
     turnover rate;

b.   Changes in market  interest  rates or changes in the speed at which  market
     interest rates change;

c.   Changes in laws and regulations affecting the financial service industry;

d.   Changes in competition and continued  pricing pressures on loan and deposit
     products;

e.   Changes  in  consumer   preferences  and  customer  borrowing,   repayment,
     investment and deposit practices;

                                       9

<PAGE>


f.   The introduction,  withdrawal,  success and timing of business  initiatives
     and  strategies,  several  of  which  are in  early  stages  and  therefore
     susceptible to greater uncertainty than more mature businesses; and

g.   Ability of the Bank to implement  successfully its strategy to increase the
     level of loans on its balance sheet at acceptable levels of risk.

The  Company  wishes to  caution  readers  not to place  undue  reliance  on any
forward-looking statements,  which speak only as of the date made, and to advise
readers that various factors,  including those described above, could affect the
Company's financial  performance and could cause the Company's actual results or
circumstances  for future periods to differ materially from those anticipated or
projected.  The Company  does not  undertake,  and  specifically  disclaims  any
obligations, to publicly release the result of any revisions that may be made to
any  forward-looking  statements  to reflect the  occurrence of  anticipated  or
unanticipated events or circumstances after the date of such statements.

Results of Operations

Net income for the quarter ended  September 30, 2000 amounted to $2.017 million,
compared to the $1.658  million  reported  for the same period in 1999 while net
income for the nine months ended  September 30, 2000 amounted to $6.113 million,
compared to the $4.804 million  reported for the nine months ended September 30,
1999.  Return on average  equity and return on average  assets  were  14.66% and
0.86%,  respectively,  for the quarter  ended  September 30, 2000 and 14.92% and
0.87%,  respectively,  for the nine months ended  September  30,  2000.  Diluted
earnings per share  amounted to $.27 for the quarter  ended  September  30, 2000
compared to diluted  earnings per share of $.22 for the quarter ended  September
30, 1999, and diluted earnings per share for the nine months ended September 30,
2000  amounted to $.81  compared to diluted  earnings  per share of $.63 for the
nine months ended September 30, 1999.

Net income for the nine months ended September 30, 2000 and 1999 was affected by
a  write-down  of a  corporate  debt  security  that is other  than  temporarily
impaired.  The  write-down of the corporate  debt security  amounted to $875,000
(pre-tax) for the nine months ended September 30, 2000, $720,000 was recorded in
the second quarter of 2000 and $155,000 in the third quarter of 2000; and $1.187
million (pre-tax) in the second quarter of 1999. The write-downs were recognized
in net loss on securities  transactions.  Excluding the write-downs,  net income
would have been $2.110  million for the quarter  ended  September  30, 2000,  or
$0.28 diluted  earnings per share, up 27.3% from the $0.22 diluted  earnings per
share, or $1.658 million earned for the same quarter in 1999. Net income for the
nine months ended  September 30, 2000 would have been $6.638  million,  or $0.88
diluted  earnings per share, up 22.2% from the $0.72 diluted earnings per share,
or $5.516  million in net income  that  would  have been  recorded  for the same
period in 1999 excluding the 1999 write-down of this corporate debt security.

Net interest income for the quarter ended September 30, 2000 was $8.062 million,
an 8.1%  increase  over the $7.458  million  for the same  quarter in 1999.  Net
interest  income  for the nine  months  ended  September  30,  2000 was  $25.220
million,  a 20.3% increase over the $20.972 million for the same period in 1999.
The increases in net interest

                                       10

<PAGE>


income were due primarily to an increase the average  balance of earning  assets
in the third quarter and nine-month  period ended 2000 when compared to the same
periods in 1999.  The increase in earning  assets can mainly be attributed to an
acquisition  of five bank  branches  in August  of 1999 with  deposits  totaling
$135.866  million (net of premium paid),  and opening five new branches from the
third  quarter  of 1999  through  the third  quarter  of 2000.  (See  additional
discussion under the caption "Net Interest Income").

The  Company  establishes  an  allowance  for loan and  lease  losses  through a
provision for loan and lease losses charged to  operations.  The adequacy of the
amount of the allowance is determined by management's evaluation of various risk
factors  inherent  in the loan and lease  portfolio.  This  analysis  takes into
consideration  such factors as the  historical  loan and lease loss  experience,
changes  in the  nature  and  volume  of the loan and lease  portfolio,  overall
portfolio  quality,  review  of  specific  problem  loans and  current  economic
conditions that may affect borrowers' ability to pay.

The provision for loan and lease losses for the quarter ended September 30, 2000
was $330,000,  which is a $10,000 decrease from the provision for loan and lease
losses for the third  quarter of 1999.  The  provision for loan and lease losses
for the nine months  ended  September  30, 2000 was $1.070  million,  which is a
$10,000  increase  over  the  same  nine-month  period  in  1999.  The  relative
consistency  in the  provision for loan and lease losses is due primarily to the
slight decrease in the level of non-performing loans offset by the growth in the
loan and lease  portfolio.  Non-performing  loans as a percentage of total loans
were 1.02% at September 30, 2000  compared to 1.21% at September  30, 1999.  The
allowance for loan losses as a percentage of non-performing  loans was 166.7% at
September  30, 2000 compared to 165.6% at September  30, 1999.  Net  charge-offs
decreased from $936,000 for the nine months ended September 30, 1999 to $756,000
for the same period in 2000. The decrease in net  charge-offs  can be attributed
to the sale of the Company's credit card portfolio in the fourth quarter of 1999
and a decrease in  manufactured  housing  lending which  comprised a significant
portion of net charge-offs in 1999.

Total  non-interest  income for the quarter ended  September 30, 2000 was $1.203
million,  an  increase  of  $173,000  when  compared to the same period in 1999.
Services charges on deposit accounts  increased  $98,000 (17.9%),  from $547,000
for the quarter  ended  September  30,  1999 to $645,000  for the same period in
2000. The increase in service  charges on deposit  accounts can be attributed to
an increase in the number of  transaction  accounts  the Company  services  that
resulted from the Company's branch expansion activities.  Net gain on securities
transactions  increased  $56,000  despite a $155,000  write-down  on an impaired
corporate debt security during the quarter ended September 30, 2000. The gain on
securities resulted primarily from the sale of tax-exempt  investment securities
during the quarter.  The Company's  securities  available for sale  portfolio is
used to maintain its liquidity  position and to maximize its tax position;  from
time to time,  securities are sold when deemed prudent by management,  to adjust
the interest rate  sensitivity  of the Company's  balance sheet and maximize the
Company's tax position. Other income increased $19,000 (4.2%), from $451,000 for
the quarter  ended  September  30, 1999 to $470,000 for the same period in 2000.
Merchant  fees on credit cards  decreased  $98,000 in the third  quarter of 2000
when  compared  to the  same  period  in 1999  due to the  sale of the  merchant
processing business in the second quarter of 2000.

                                       11

<PAGE>


Offsetting this decrease was an increase in mortgage banking revenue of $94,000,
which resulted from commissions on the sale of title insurance of $48,000 and an
increase in gains on the sale of residential real estate loans of $46,000.

Total  non-interest  income for the nine  months  ended  September  30, 2000 was
$3.170 million,  an increase of $874,000 when compared to the $2.296 million for
same period in 1999.  As noted above,  the nine months ended  September 30, 2000
and 1999 were  affected  by a  write-down  of a  corporate  debt  security.  The
write-down of the corporate debt security amounted to $875,000 (pre-tax) for the
nine months ended  September 30, 2000 and $1.187 million  (pre-tax) for the same
period in 1999.  Excluding the write-down,  total non-interest income was $4.045
million for the nine months ended  September 30, 2000, up $562,000  (16.1%) from
the $3.483  million  recognized  in the same  period in 1999.  The  increase  in
non-interest  income  resulted from services  charges on deposit  accounts which
increased  $328,000  (21.3%),  from $1.541  million  for the nine  months  ended
September  30, 1999 to $1.869  million for the nine months ended  September  30,
2000. The increase in service  charges on deposit  accounts can be attributed to
an increase in the number of  transaction  accounts  the Company  services  that
resulted from the Company's branch  expansion  activities.  Additionally,  other
income increased $164,000 (11.9%), from $1.375 million for the nine months ended
September  30,1999 to $1.539  million for the nine months  ended  September  30,
2000.  The increase in other income can be primarily  attributed  to the sale of
the Company's merchant processing business for $82,000,  commissions on the sale
of title  insurance  totaling  $82,000,  and an  increase in the gain on sale of
residential real estate loans of $39,000.  Partially  offsetting these increases
was a decrease in merchant fee income of $65,000 due to the sale of the merchant
processing business.

Total non-interest  expenses were $6.211 million for the quarter ended September
30, 2000, up $358,000 from the same period in 1999. The increase in non-interest
expenses was due primarily to the branch expansion activity that occurred in the
second  half of 1999.  Capital  securities  expense  and  goodwill  amortization
amounted to $465,000 and $332,000, respectively, for the quarter ended September
30, 2000 compared to $227,000 and $110,000, respectively, for the same period in
1999.  These  expenses  are a result  of the  capital  securities  offering  and
branches  acquisition  that  occurred in August of 1999.  Salaries  and employee
benefits  decreased $185,000 from $2.579 million for the quarter ended September
30,  1999 to $2.394  million for the  quarter  ended  September  30,  2000.  The
decrease in salaries and benefits can be primarily  attributed to an increase in
loan origination activity.  Salaries and benefits deferrals associated with loan
origination  activity  increased  $285,000  in the  third  quarter  of 2000 when
compared to the same period in 1999. Occupancy and equipment and advertising and
marketing  increased  $95,000 and $82,000,  respectively,  for the quarter ended
September 30, 2000 when  compared to the same period in 1999.  The increases are
due  mainly  to the  branch  expansion  noted  previously.  Additionally,  these
branches are located in new markets, which required expenditures for advertising
and marketing  campaigns.  Professional  fees  increased  $89,000 and other real
estate owned and repossessed  assets decreased  $139,000 in the third quarter of
2000  when  compared  to 1999.  These  two  expense  items  were  affected  by a
reclassification  of a $55,000 legal expense that was  mistakenly  classified as
other real estate owned and repossessed  assets expense in the second quarter of
2000. Excluding this  reclassification,  other real estate owned and repossessed
assets expense

                                       12

<PAGE>


would have been $67,000 and  professional  fees would have been $168,000 for the
third quarter of 2000.

Other expenses  increased  $8,000 from $890,000 for the quarter ended  September
30, 1999 to $898,000 for the quarter ended  September 30, 2000. The stable level
of other expense for the quarter  ended  September 30, 2000 when compared to the
same  period in 1999 can be  primarily  attributed  to the sale of the  merchant
processing  business in the second quarter of 2000. Expenses associated with the
merchant  processing  business decreased $86,000 for the quarter ended September
30, 2000 when  compared to the same period in 1999.  Partially  offsetting  this
decrease was an increase in telephone and fax expenses of $32,000  primarily due
to an increase in branch expansion  activities.  Additionally,  leasing fees and
insurance  associated with the Company's leasing portfolio increased $27,000 due
to the continued growth in the Company's leasing portfolio.

Total  non-interest  expenses  were  $19.034  million for the nine months  ended
September  30, 2000,  up $3.386  million  from the same period in 1999.  Capital
securities  expense and  goodwill  amortization  amounted to $1.300  million and
$995,000, respectively, for the nine months ended September 30, 2000 compared to
$227,000 and $100,000, respectively, for the same period in 1999. These expenses
are a result of the capital securities  offering and the branch acquisition that
occurred in August of 1999.  Salaries and employee benefits  increased  $234,000
from  $7.142  million  for the nine months  ended  September  30, 1999 to $7.376
million for the nine  months  ended  September  30,  2000.  Total  salaries  and
compensation  increased  $855,000 for the nine months ended  September  30, 2000
compared to the same  period  1999,  even  though  there was an increase in loan
origination cost deferrals of $637,000 and a $106,000 decrease in pension costs.
Occupancy and equipment and  advertising  and marketing  increased  $493,000 and
$407,000,  respectively,  for the nine  months  ended  September  30,  2000 when
compared to the same period in 1999.  The increases are due mainly to the branch
expansion.

Other expenses  increased $356,000 from $2.347 million for the nine months ended
September  30, 1999 to $2.703  million for the nine months ended  September  30,
2000. The increase in other expenses  resulted mainly from an increase in losses
incurred on the sale of vehicles  sold at the end of the lease term of $109,000,
insurance  and fees on leased  vehicles of $68,000,  correspondent  bank service
charges  of  $58,000,  and  tele-communications  expense of  $64,000.  Partially
offsetting  these increases was a $127,000  decrease in expenses  related to the
merchant processing business that was sold in the second quarter of 2000.

Income tax expense was $707,000 for the quarter  ended  September  30, 2000,  up
$70,000 from the $637,000  recognized in the same period in 1999.  The effective
tax  rate  for  the  third  quarter  of 2000  and  1999  was  26.0%  and  27.8%,
respectively.  Income tax expense was $2.173  million for the nine months  ended
September 30, 2000, up $417,000 from the $1.756 million  recognized for the same
period in 1999.  The effective tax rate for the nine months ended  September 30,
2000 and 1999 was 26.2% and 26.8%, respectively.


                                       13

<PAGE>


Net Interest Income

(The  accompanying  schedule entitled  "Average  Balances/Net  Interest Margin -
Fully  Taxable  Equivalent  Basis  (FTE)" is the basis of and  should be read in
conjunction with this discussion).

Net Interest Income FTE Basis

FTE net interest  income was $8.171 million for the quarter ended  September 30,
2000, up from the $7.732  million for the same period in 1999.  The net interest
margin for the quarter ended  September 30, 2000 was 3.63%,  down from the 4.09%
for the same period in 1999. FTE net interest income was $25.761 million for the
nine months ended  September 30, 2000, up from the $21.847  million for the same
period in 1999. The net interest  margin for the nine months ended September 30,
2000 was 3.85%, down from the 4.07% for the same period in 1999. The decrease in
net  interest  margin  is  primarily  a result  of the  percentage  increase  in
interest-bearing  liabilities  and interest  expense  exceeding  the  percentage
increase in earning  assets and FTE  interest  income for the  quarters and nine
months ended September 30, 2000 and 1999. Additionally, the Company is liability
sensitive,  which  means  interest-bearing   liabilities  re-price  faster  than
interest  earning assets.  In a rising rate  environment,  the Company's cost of
funds will increase faster than its yield on interest earning assets.  Since the
end of the second  quarter  of 1999,  the  Federal  Reserve  Bank has  increased
borrowing rates 150 basis points which has resulted in a decreasing net interest
margin.  The Company  anticipates  that its trend in a  decreasing  net interest
margin will continue if short-term borrowing rates remain stable.

Earning Assets

Total average earning assets  increased  $142.945  million from $757.076 million
for the quarter ended September 30, 1999 to $900.021 million for the same period
in 2000. This increase was primarily the result of the branch acquisition during
the quarter ended  September 30, 1999.  Total average  earning assets  increased
$176.079  million from $716.123  million for the nine months ended September 30,
1999 to $892.202  million for the same period in 2000. This increase can also be
attributed to the branch acquisition.  FTE interest income for the quarter ended
September 30, 2000 was $17.737  million,  up $3.167 million from the same period
in 1999.  The increase in average  earning assets was the primary reason for the
increase in FTE  interest  income.  The yield on earning  assets for the quarter
ended  September 30, 2000 was 7.88%,  a 18 basis point ("bp")  increase over the
same period in 1999.  The primary  reason for the  increase in yield was a 52 bp
increase in yield from  taxable  securities.  FTE  interest  income for the nine
months ended September 30, 2000 was $52.737 million, up $11.363 million from the
same  period in 1999.  The  increase in average  earning  assets was the primary
reason for the increase in FTE interest income.  The yield on earning assets for
the nine months ended  September 30, 2000 was 7.88%,  an 18 bp increase over the
same period in 1999.  The primary  reason for the  increase in yield was a 93 bp
increase in yield from taxable securities.

Loans

The average balance of loans increased  $98.748  million,  from $412.723 million
for the quarter  ended  September  30, 1999 to $511.471  million for the quarter
ended  September

                                       14

<PAGE>


30, 2000.  The increase in the average  balance of loans resulted in an increase
of $1.907  million in FTE interest  income for the quarter  ended  September 30,
2000 when  compared to the same  period in 1999.  The  increase in FTE  interest
income was offset by a decrease in yield of 14 basis points,  from 8.47% for the
quarter ended September 30, 1999 to 8.33% for the same period in 2000. On a year
to date basis,  average loans were $488.440 million, up from $396.632 million in
1999. The yield on loans for the nine months ended September 30, 2000 was 8.30%,
down 28 bp from the 8.58% in 1999. FTE interest income was up $4.906 million for
the nine months  ended  September  30, 2000 when  compared to the same period in
1999, due primarily to the increase in the average  balance of loans offset by a
decrease in the yield on loans.

Four product  lines  experienced  significant  growth  during the quarter  ended
September 30, 2000 when compared to the same period in 1999. The average balance
of loans secured by residential real estate  increased  $34.424 million (52.8%),
from an average  balance of $65.245  million for the quarter ended September 30,
1999 to $99.669  million for the same period in 2000.  FTE interest  income from
loans secured by residential  real estate  increased  40.4%  comparing the third
quarter  of 2000 to the same  period in 1999,  despite a 52.8%  increase  in the
average balance during the same period. This is primarily a result of a decrease
in the yield from loans secured by residential  real estate of 68 bp, from 8.40%
for the third quarter of 1999 to 7.72% for the same period in 2000. The decrease
in the yield on loans  secured by  residential  real estate can be attributed to
loans,  which have been paid off or re-financed  and have been replaced with new
loans,  which  yield  lower  rates.  The  average  balance  of loans  secured by
commercial real estate  increased  $21.180  million,  from an average balance of
$66.012  million for the quarter ended September 30, 1999 to $87.192 million for
the same period in 2000. The yield on commercial real estate  increased 51 basis
points, from 8.46% for the third quarter of 1999 to 8.97% for the same period in
2000.

The  average  balance  of  auto  lease  financed  receivables,  net of  unearned
discounts,  increased $26.058 million from $54.555 million for the quarter ended
September 30, 1999 to $80.613  million for the same period in 2000.  The average
balance of consumer auto loans increased  $17.548 million,  from $44.029 million
for the third  quarter of 1999 to $61.577  million  for the same period in 2000.
The average balance of manufactured housing loans decreased $4.493 million, from
$57.613  million  for the third  quarter  1999 to $53.120  million  for the same
period in 2000.  Management  intends  to  continue  to reduce  the  manufactured
housing loan portfolio  through normal  pay-down  activity while it continues to
focus on commercial real estate and commercial  lending,  auto lease  financing,
consumer auto lending, as well as residential lending.

Securities

The yield on taxable  securities  increased  52 basis  points from 6.88% for the
quarter ended  September  30, 1999 to 7.40% for the quarter ended  September 30,
2000. Interest income on taxable securities increased $2.199 million from $4.406
million  for the quarter  ended  September  30,  1999 to $6.605  million for the
quarter  ended  September 30, 2000.  The increase in interest  income on taxable
securities  can be attributed to the increase in yield of 52 basis points and an
increase in the average balance of taxable securities of $100.758 million,  from
$256.241 million for the quarter ended September 30, 1999 to


                                       15

<PAGE>


$356.996  million for the quarter ended  September 30, 2000. For the nine months
ended  September 30, 2000,  interest  income on taxable  securities  amounted to
$20.001 million, up $8.059 million when compared to the same period in 1999. The
yield on taxable  securities  for the nine months ended  September  30, 2000 was
7.46%, up 93 basis points when compared to the same period in 1999.

The increase in the average  balance of taxable  securities is due mainly to the
acquisition  of  five  bank  branches  and the  assumption  of  related  deposit
liabilities,  which resulted in a net cash payment of $133.900 million in August
of 1999.  The lower yield on taxable  securities  in 1999 is due to  accelerated
pay-downs on mortgage-backed  securities and collaterlized  mortgage obligations
(CMOs) that  resulted from a substantial  decrease in long-term  mortgage  rates
which led to a higher than normal  re-finance period that occurred at the end of
the  fiscal  year 1998 and into the  beginning  of fiscal  year  1999.  As these
mortgage-backed  securities and CMOs paid down, the  amortization  of associated
premiums  was  accelerated.   Additionally,   funds  received  from  the  branch
acquisition  were  deployed  in  securities  in a rising rate  environment.  The
average balance of tax-exempt securities decreased $29.772 million, from $58.377
million for the quarter ended September 30, 1999 to $28.605 million for the same
period  in 2000.  Consistent  with the  Company's  tax  planning  strategy,  the
tax-exempt securities portfolio will continue to decrease.

Funding Sources

The Company utilizes deposit  products such as time,  savings,  N.O.W. and money
market  deposits  as its  primary  source for  funding.  Other  sources  such as
short-term  borrowings  and long-term  debt are utilized as necessary to support
the  Company's  growth  in  assets  and to  achieve  interest  rate  sensitivity
objectives.  The average balance of  interest-bearing  liabilities  increased to
$792.454  million for the quarter ended September 30, 2000 from $646.921 million
for the same period in 1999.  For the nine months ended  September 30, 2000, the
average balance of  interest-bearing  liabilities was $788.388 million,  up from
the $615.003  million for the same period in 1999.  This increase in the average
balances is attributed primarily to the branch acquisition in August 1999, which
resulted in the assumption of approximately  $155.700  million in deposits.  The
average rate paid on  interest-bearing  liabilities  increased 60 bp, from 4.23%
for the quarter  ended  September 30, 1999 to 4.83% for the same period in 2000.
For the nine months ended  September 30, 2000, the average rate paid on interest
bearing  liabilities  was 4.56%,  up from the 4.23%  paid in the same  period in
1999.  The  increase in the rate paid for  interest-bearing  liabilities  can be
attributed to an increase in short-term interest rates (the Federal Reserve Bank
has  raised its  overnight  borrowing  rate 150 bp since the  second  quarter of
1999).

Deposits

The average balance for time deposits  increased $78.353 million,  from $343.869
million for the quarter  ended  September  30, 1999 to $422.222  million for the
same  period in 2000.  For the nine months  ended  September  2000,  the average
balance of time deposits was $438.782 million,  up from $333.160 million for the
same period in 1999. The increase in the average balance of time deposits can be
attributed  primarily to two factors.  The  acquisition of five bank branches in
the third quarter of 1999 resulted in the


                                       16

<PAGE>


assumption of $103.508  million in time  deposits.  Additionally,  due to recent
market expansion,  average municipal time deposits greater than $100,000,  which
are primarily  comprised of deposits from  municipalities  and school districts,
increased  $62.541  million,  from  $78.077  million for the nine  months  ended
September  30,  1999 to $140.618  million for the same period in 2000.  The rate
paid on time  deposits for the quarter ended  September  30, 2000 was 5.81%,  up
from the 5.22% for the same  period in 1999.  If  short-term  rates  continue to
rise, the Company anticipates that the rate paid on time deposits will increase,
as municipal time deposits  greater than $100,000 have terms generally less than
six months and re-price more quickly than other time deposit products.

The average balance of N.O.W.  accounts increased $15.387 million,  from $83.072
million for the quarter ended September 30, 1999 to $98.459 million for the same
period in 2000.  The  average  balance of  savings  accounts  increased  $13.476
million,  from  $120.493  million for the quarter  ended  September  30, 1999 to
$133.969 million for the same period in 2000. The increase in N.O.W. and savings
accounts can be primarily  attributed to the  assumption of deposit  liabilities
associated  with the branch  acquisition.  The total amount of N.O.W and savings
accounts assumed from the branch acquisition totaled $12.754 million and $25.273
million,  respectively.  The  remaining  increase  in N.O.W.  accounts of $2.633
million resulted from the Company's continued market expansion. The rate paid on
N.O.W. and savings accounts remained  relatively  unchanged from 1.89% and 2.85%
for the quarter ended  September 30, 1999 to 1.81% and 2.85% for the same period
in 2000. The rate paid on money market accounts increased 130 bp, from 3.72% for
the quarter ended  September 30, 1999 to 5.02% for the same period in 2000.  The
increase in the rate paid on money market  accounts is due mainly to a municipal
money market  product which amounted to  approximately  53% and 65% of the total
average  balance of money market  accounts for the quarters ended  September 30,
2000 and 1999, respectively. The municipal money market product re-prices weekly
and is indexed to an overnight  borrowing rate. The average overnight  borrowing
rate was 5.09% for the quarter  ended  September  30, 1999 compared to 6.52% for
the quarter ended September 30, 2000.

The average balance of non-interest bearing deposits was $68.647 million for the
quarter ended September 30, 2000, up from $64.479 million for the same period in
1999. The average balance of non-interest  bearing  deposits for the nine months
ended  September 30, 2000 was $66.207  million,  up from the $62.887 million for
the same period in 1999. The increases in non-interest  bearing  deposits can be
attributed to the Company's continued market expansion.

Short-Term Borrowings

The average balance of short-term borrowings was $68.292 million for the quarter
ended  September 30, 2000, up from $37.256  million for the same period in 1999.
For the nine months ended  September 30, 2000, the average balance of short-term
borrowings was $42.966  million,  up from $25.507 million for the same period in
1999.  The rate paid on short-term  borrowings  increased 143 bp, from 5.27% for
the quarter ended  September 30, 1999 to 6.70% for the same period in 2000.  The
increase in the rate paid on short-term  borrowings is a result of the 125 basis
point increase in the Federal  Reserve Bank overnight  borrowing rate during the
past four quarters. The increase in short-term

                                       17

<PAGE>


borrowings  is primarily the result of funding loan and lease growth and run-off
of municipal time deposits.

Average Balances/Net Interest Margin - Fully Taxable Equivalent (FTE) Basis
The following  table sets forth average  balance and interest rate  information.
The average  balances  used for these tables and other  statistical  disclosures
were calculated  using daily averages.  Tax exempt income has been adjusted to a
tax  equivalent  basis by tax  effecting  such  income at the  Federal tax rate.
Non-accruing  loans have been included in loans with interest earned  recognized
on a  cash  basis  only.  Securities  include  securities  available  for  sale,
investment securities held to maturity,  and trading securities,  if any, all at
amortized cost.






                                       18





<PAGE>

<TABLE>
<CAPTION>

                                                                               Three months ended September 30,
                                                 -----------------------------------------------------------------------------------
                                                                    2000                                        1999
                                                 ----------------------------------------     --------------------------------------
                                                 Average                           Yield/     Average                         Yield/
                                                 Balance         Interest           Rate      Balance        Interest          Rate
                                                 -------         --------           ----      -------        --------          ----
                                                                                (Dollars in thousands)
Interest-earning assets:
<S>                                              <C>             <C>                <C>      <C>             <C>               <C>
Loans and Leases .........................       $511,471        $ 10,645           8.33%    $412,722        $  8,738          8.47%
Taxable Securities .......................        356,999           6,605           7.40%     256,241           4,406          6.88%
Tax-exempt Securities ....................         28,605             441           6.17%      58,377           1,058          7.25%
Federal Funds Sold .......................          2,946              46           6.25%      29,735             368          4.95%
                                                 --------        --------           ----     --------        --------          ----
Total interest-earning assets ............       $900,021          17,737           7.88%    $757,075          14,570          7.70%
                                                 ========        --------           ----     ========        --------          ----

Interest-bearing liabilities:
Deposits
NOW ......................................       $ 98,459             445           1.81%    $ 83,072             393          1.89%
Savings ..................................        133,969             953           2.85%     120,493             859          2.85%
Money Market .............................         63,706             800           5.02%      55,994             521          3.72%
Time Deposits ............................        422,222           6,133           5.81%     343,869           4,486          5.22%
                                                 --------        --------           ----     --------        --------          ----
Total Interest Bearing Deposits ..........        718,356           8,331           4.64%     603,428           6,259          4.15%
                                                 --------        --------           ----     --------        --------          ----
Short-term Borrowings ....................         68,292           1,144           6.70%      37,256             491          5.27%
Long-term Borrowings .....................          5,806              91           6.27%       6,237              88          5.64%
                                                 --------        --------           ----     --------        --------          ----
Total Interest-bearing
liabilities ..............................       $792,454           9,566           4.83%    $646,921           6,838          4.23%
                                                 ========        --------           ----     ========        --------          ----
Interest Rate Spread .....................                       $  8,171           3.05%                    $  7,732          3.47%
                                                                 ========                                    ========
Net Interest Margin ......................                                          3.63%                                      4.09%
</TABLE>


<TABLE>
<CAPTION>

                                                                               Nine months ended September 30,
                                                 -----------------------------------------------------------------------------------
                                                                    2000                                        1999
                                                 ----------------------------------------     --------------------------------------
                                                 Average                           Yield/     Average                         Yield/
                                                 Balance         Interest           Rate      Balance        Interest          Rate
                                                 -------         --------           ----      -------        --------          ----
                                                                                (Dollars in thousands)
Interest-earning assets:
<S>                                              <C>             <C>                <C>      <C>             <C>               <C>
Loans and Leases .........................       $488,440        $ 30,423           8.30%    $396,632        $ 25,517          8.58%
Taxable Securities .......................        357,392          20,001           7.46%     243,901          11,942          6.53%
Tax-exempt Securities ....................         42,292           2,139           6.74%      63,845           3,476          7.26%
Federal Funds Sold .......................          4,078             174           5.69%      11,745             439          4.98%
                                                 --------        --------           ----     --------        --------          ----
Total interest-earning assets ............       $892,202          52,737           7.88%    $716,123          41,374          7.70%
                                                 ========        --------           ----     ========        --------          ----

Interest-bearing liabilities:
Deposits
NOW ......................................         96,793           1,304           1.80%      78,806           1,095          1.85%
Savings ..................................        134,666           2,855           2.83%     111,190           2,328          2.79%
Money Market .............................         69,187           2,440           4.70%      59,978           1,649          3.67%
Time Deposits ............................        438,782          18,097           5.50%     333,160          13,242          5.30%
                                                 --------        --------           ----     --------        --------          ----
Total Interest Bearing Deposits ..........        739,428          24,696           4.45%     583,134          18,134          4.19%
                                                 --------        --------           ----     --------        --------          ----
Short-term Borrowings ....................         42,966           1,984           6.16%      25,507             948          4.96%
Long-term Borrowings .....................          5,994             295           6.56%       6,362             265          5.55%
                                                 --------        --------           ----     --------        --------          ----
Total Interest-bearing
liabilities ..............................       $788,388          26,975           4.56%    $615,003          19,527          4.23%
                                                 ========        --------           ----     ========        --------          ----
Interest Rate Spread .....................                       $ 25,762           3.32%                    $ 21,847          3.47%
                                                                 ========                                    ========
Net Interest Margin ......................                                          3.85%                                      4.07%
</TABLE>


                                       19


<PAGE>


Financial Condition and Liquidity

The  Company's  total assets at September  30, 2000 were  $944.661  million,  an
increase of $30.489  million  (4.4%  annual rate of increase)  when  compared to
December 31, 1999. The increase was primarily in net loans and leases of $63.853
million,  offset  in part by a  decrease  in  securities  available  for sale of
$20.068  million,  and cash and  cash  equivalents  of  $12.177  million.  Total
deposits decreased $11.000 million and short-term  borrowings  increased $38.097
million.   Stockholders'  equity  increased  $2.637  million,  due  to  earnings
retention  of $4.089  million,  partially  offset by an increase in  accumulated
other  comprehensive  losses  of  $603,000,  and  treasury  stock  purchases  of
$849,000.

Securities

The Company's  investment policy focuses  investment  decisions on maintaining a
balance of high  quality,  diversified  investments.  In making  its  investment
decisions,  the Company  also  considers  liquidity,  collateral  to be used for
pledging  purposes,  tax  position,  and  maximum  overall  returns.  Under  the
Company's  investment  policy,  securities  eligible for the Company to purchase
include: U.S. Government  securities,  U.S. Agency securities,  mortgaged-backed
securities,  collateralized  mortgage obligations (CMO),  municipal  securities,
corporate  debt  obligations,  bankers  acceptances,  certificates  of  deposit,
commercial paper, and asset-backed securities.

The following  table  represents  the  composition  of the Company's  securities
available  for sale  portfolio in dollar  amounts and  percentages  at the dates
indicated:

                                                           September 30, 2000
                                                     --------------------------
                                                     Carrying        Percent of
                                                       Value            Total
                                                       -----            -----
 CMO & asset-backed securities ....................   $139,264           37.9%
 Mortgaged backed securities ......................     38,126           10.4%
 Corporate and taxable municipal debt
 securities .......................................     77,376           21.0%
 U.S. government agency securities ................     71,956           19.6%
 State and municipal obligations ..................     23,458            6.4%
 U.S. treasury securities .........................      7,955            2.1%
                                                      --------           -----
          Total debt securities ...................    358,135           97.4%
 Non-marketable equity securities .................      4,040            1.1%
 Mutual funds and preferred stock .................      5,522            1.5%
                                                      --------           -----
                                                      $367,697          100.0%
                                                      ========           =====

                                       20

<PAGE>


                                                         At December 31, 1999
                                                     --------------------------
                                                     Carrying        Percent of
                                                       Value            Total
                                                       -----            -----
 CMO & asset-backed securities ....................   $145,940           37.6%
 Mortgaged backed securities ......................     36,861            9.5%
 Corporate and taxable municipal debt
 securities .......................................     75,270           19.4%
 U.S. government agency securities ................     58,065           15.0%
 State and municipal obligations ..................     57,746           14.9%
 U.S. treasury securities .........................      5,938            1.5%
                                                      --------           -----
          Total debt securities ...................    379,820           97.9%
 Non-marketable equity securities .................      4,040            1.1%
 Mutual funds and preferred stock .................      3,905            1.0%
                                                      --------           -----
                                                      $387,765          100.0%
                                                      ========           =====


CMOs and  asset-backed  securities  decreased  $6.676  million from December 31,
1999,  and  represent  37.9%  of the  securities  available  for  sale  ("SAFS")
portfolio at September 30, 2000. The weighted-average  life and weighted-average
rate of CMOs and asset-backed securities was 7.0 years and 7.99%,  respectively,
at September  30, 2000.  Mortgage-backed  securities  ("MBS")  increased  $1.265
million from  December 31, 1999,  and represent  10.4% of the SAFS  portfolio at
September 30, 2000. The weighted-average  life and weighted-average  rate of the
MBS was 7.2 years and 7.48%,  respectively,  at September  30, 2000. If interest
rates continue to rise, the Company anticipates that the weighted-average  lives
of CMOs  and MBS  will  increase  and the  fair  value  of the  securities  will
decrease.  Alternatively,  if rates decrease, the weighted-average lives of CMOs
and MBS will decrease and the fair value of the securities will increase.

Corporate and taxable  municipal debt securities  increased  $2.106 million from
December 31,  1999,  and  represent  21.0% of SAFS at  September  30, 2000.  The
weighted-average  life and  weighted-average  rate of the  corporate and taxable
municipal debt portfolio was 9.2 years and 9.44%, respectively, at September 30,
2000.  Included in corporate  debt  securities  is a corporate  obligation  that
management  believes  is  other-than-temporarily  impaired.  For the nine months
ended September 30, 2000, the Company  wrote-down this corporate debt security a
total of $875,000 to net (loss) gain on  securities  transactions.  During 1999,
the Company  wrote-down  this corporate debt security a total of $1.4 million to
net (loss) on  securities  transactions.  The  remaining  carrying  value of the
corporate obligation is $660,000,  which management will continue to monitor for
additional other-than-temporary impairment.

U.S.  government agency  securities  increased $13.891 million from December 31,
1999,   and   represents   19.6%  of  the  SAFS  at  September  30,  2000.   The
weighted-average  life and  weighted-average  rate of U.S. agency securities was
10.5 years and 8.01%, respectively,  at September 30, 2000. A substantial number
of U.S.  government  agency  securities have call features,  and in a decreasing
interest rate  environment,  these  securities may likely be called.  Consistent
with the Company's  tax planning  strategy,  the state and municipal  obligation
portfolio  decreased  $34.288 million from December 31, 1999 and represents 6.4%
of the SAFS  portfolio at September 30, 2000. The  weighted-average  life of the
total SAFS portfolio at September 30, 2000 was 8.5 years.


                                       21

<PAGE>


Loans and leases

Net loans and leases receivable  increased $63.853 million from $449.064 million
at December 31, 1999 to $512.917  million at September  30, 2000.  The following
schedule details the Company's loan and lease portfolio:

                                                    September 30,   December 31,
                                                        2000            1999
                                                        ----            ----
Loans secured by real estate:
Residential ..................................       $ 102,863        $  83,949
Commercial ...................................          89,932           79,349
Agricultural .................................          17,980           16,960
Construction .................................           2,716            2,286
Home equity ..................................          29,046           25,183
                                                     ---------        ---------
                                                       242,537          207,727
                                                     ---------        ---------
Other loans and leases:
Commercial ...................................          42,997           42,743
Agricultural .................................          17,286           17,252
Manufactured housing .........................          50,079           55,774
Lease receivables ............................          92,347           76,002
Tax exempt ...................................           8,361            6,116
Consumer .....................................          74,946           57,944
                                                     ---------        ---------
                                                       286,016          255,831
                                                     ---------        ---------
Net deferred loan fees/costs
and unearned discount ........................          (6,794)          (5,965)
Allowance for loan and lease losses ..........          (8,842)          (8,529)
                                                     ---------        ---------
Net loans and leases receivable ..............       $ 512,917        $ 449,064
                                                     =========        =========


Loans secured by residential real estate increased $18.914 million, from $83.949
million at December  31, 1999 to $102.863  million at September  30,  2000.  The
increase in residential  real estate is primarily  attributed to adjustable rate
consumer  mortgage  products  that the Company began  offering  during the first
quarter of 2000.  The  Company  anticipates  that its  residential  real  estate
activity will  continue to increase.  In light of this  anticipated  increase in
residential real estate  activity,  the Company has begun selling its fixed rate
residential  real estate loans on the  secondary  market,  and intends to retain
servicing  rights  on  the  majority  of  the  loans  it  sells.  The  Company's
residential  real estate  servicing  portfolio  increased  $4.377 million,  from
$8.389  million at December 31, 1999 to $12.766  million at September  30, 2000.
Commercial  real estate  increased  $10.583  million,  from  $79.349  million at
December  31, 1999 to $89.932  million at September  30,  2000.  The increase in
commercial  real estate can be attributed to successful  efforts in  penetrating
new markets. Home equity loans increased $3.863 million, from $25.183 million at
December 31, 1999 to $29.046 million at September 30, 2000.

Lease receivables  increased  $16.345 million,  from $76.002 million at December
31, 1999 to $92.347  million at September 30, 2000. The Company has expanded its
leasing  market  area,  which has led to the  increase.  Lease  receivables  are
secured by  automobiles  and sport  utility  vehicles and  generally  have terms
ranging from three to five years. Consumer loans increased $17.002 million, from
$57.944  million at December 31, 1999 to $74.946  million at September 30, 2000.
The increase in consumer loans was primarily related to


                                       22

<PAGE>


indirect  automobile  loans  which is the result of an increase in the number of
dealers the Company contracts. Manufactured housing decreased $5.695 million and
represents 9.6% of the total loan and lease portfolio at September 30, 2000. The
Company  will  continue  to focus its  efforts  in growth  related  to the lease
receivables, residential real estate, and commercial real estate/commercial loan
portfolios.  The  Company's  manufactured  housing  portfolio  will  continue to
decline as the Company is  de-emphasizing  its efforts in originating  this loan
type, due to competitive  pressures and higher credit risk  associated with this
product.

Deposits

Total deposits decreased $11.000 million,  from $796.244 million at December 31,
1999 to $785.244  million at September 30, 2000. The following  schedule details
the Company's deposit liabilities:


                                                  September 30,    December 31,
                                                      2000             1999
                                                      ----             ----
Non-interest bearing deposits ..................    $ 70,994        $ 58,064
NOW accounts ...................................      97,587          96,234
Savings accounts ...............................     131,973         136,150
Money market accounts ..........................      70,227          64,351
Time deposits of $100,000 or more ..............     142,305         184,594
Other time deposits ............................     272,158         256,851
                                                    --------        --------
Total deposits .................................    $785,244        $796,244
                                                    ========        ========


The Company's  primary  source of funds is deposits.  The Company offers deposit
accounts  having a range  of  interest  rates  and  terms.  The  Company  offers
transaction accounts,  savings accounts, money market accounts, N.O.W. accounts,
and  certificate  of deposit  accounts  with  various  terms.  The Company  only
solicits   deposits  from  its  primary  market  area  and  depositors   include
individuals, local governments and businesses.

The flow of deposits is influenced significantly by general economic conditions,
changes in prevailing  interest rates, and  competition.  The variety of deposit
accounts  offered by the Company has allowed it to be  competitive  in obtaining
funds and to respond with flexibility to changes in consumer demand. The Company
manages  the  pricing  of its  deposits  in  keeping  with  its  asset/liability
management,  liquidity and profitability  objectives.  Based on experience,  the
Company  believes  that its  transaction  accounts,  savings  accounts and money
market accounts are relatively stable sources of deposits.  However, the ability
of the Company to attract and maintain  certificates of deposits, as well as the
rates paid on those  deposits,  has been and will  continue to be  significantly
affected by market conditions.

Borrowings

Although  deposits  are the  Company's  primary  source  of funds,  the  Company
utilizes  security  repurchase  agreements  and  other  borrowings  as a funding
source.  The Company regularly has security  repurchase  agreements with several
Bank  customers in the ordinary  course of business.  For liquidity  management,
lines of credit  have also been  established  with  correspondent  banks to meet
short-term funding needs. At September 30, 2000, the


                                       23

<PAGE>


Company had short-term borrowings with the FHLB amounting to $45.175 million and
short-term re-purchase agreements totaling $21.989 million. The Company has $1.2
million in long-term  borrowings  with the Federal Home Loan Bank of New York at
September  30, 2000.  This FHLB  borrowing  bears  interest at 5.45%,  amortizes
monthly and matures in 2003.  In 1995 and 1996,  the Company  issued  Industrial
Revenue Bonds to fund the  construction  of its  administrative  and  operations
complex.  As of September 30, 2000, the remaining  balance on the bonds was $4.5
million and bears interest at a variable  interest rate,  which adjusts  weekly,
based on a commercial paper rate index. The bonds have annual principal payments
due through 2025.

Non-performing Assets

Non-performing assets are summarized in the following table:


                                                   September 30,   December 31,
                                                       2000           1999
                                                       ----           ----
Non-accrual loans ...............................     $4,838        $5,212
Accruing loans past due 90 days .................        468           722
                                                      ------        ------
Total non-performing loans ......................      5,306         5,934
Other real estate owned and
repossessed assets ..............................        970         1,258
                                                      ------        ------
Total non-performing assets (loan related) ......      6,276         7,192
Impaired corporate debt security ................        660         1,535
                                                      ------        ------
Total non-performing assets .....................     $6,936        $8,727
                                                      ======        ======
Non-performing loans as a % of total loans ......       1.02%         1.30%
Non-performing assets as a
of total assets (loan related) ..................       0.66%         0.79%
Allowance for loan and lease losses to
non-performing loans ............................     166.64%       143.73%


Non-accrual  loans at September  30, 2000 were  comprised  of $1.577  million of
commercial/commercial  real estate, $2.068 million of agricultural loans, $1.078
million of residential real estate, and $116,000 of manufactured  housing loans.
Loans  past due 90 days or more and  still  accruing  were  comprised  mainly of
manufactured housing loans at September 30, 2000.

The remaining carrying value of the impaired  corporate debt security,  which is
not accruing interest and is considered to be  non-performing is $660,000.  This
debt security,  which is not actively traded, is monitored closely by management
and at this time,  management  does not believe  any  additional  write-down  is
required.  However,  if adverse  conditions  continue or worsen,  an  additional
write-down may be necessary.

Gross  charge-offs  for the nine months  ended  September  30, 2000  amounted to
$996,000.  Charge-offs  were mainly comprised of  consumer/manufactured  housing
loans  amounting  to  $459,000  and  commercial  loans  amounting  to  $218,000.
Recoveries  for the nine months ended  September  30, 2000 amounted to $239,000.
Provisions  for loan and lease  losses  amounted to $1.070  million for the nine
months  ended  September  30,  2000.  The  allowance  for loan losses  increased
$313,000,  from  $8.529  million  at  December  31,  1999 to $8.842  million  at
September 30, 2000. The allowance for loan and lease losses


                                       24

<PAGE>



represents  management's  estimate of an amount adequate to provide for probable
losses inherent in the loan and lease portfolio. In its continuing evaluation of
the  allowance  and its adequacy,  management  considers the Company's  loan and
lease loss experience,  the amount of past-due and non-performing loans, current
economic  conditions,  underlying  collateral  values  securing  loans and other
factors which affect the allowance for loan and lease losses.

Liquidity and Capital Resources

Liquidity  is the  ability of the  Company to convert  assets  into cash or cash
equivalents without significant loss and to raise additional funds by increasing
liabilities.  Liquidity  management involves maintaining the ability to meet the
day-to-day cash flow  requirements of our customers,  whether they be depositors
wishing to withdraw  funds or  borrowers  requiring  funds to meet their  credit
needs.

Asset and liability  management  functions not only to assure adequate liquidity
in order to meet the needs of our customers, but also to maintain an appropriate
balance between interest-sensitive assets and interest-sensitive  liabilities in
order  to  generate  an  appropriate  return  to  stockholders.  In the  banking
environment,  both assets and  liabilities  are considered  sources of liquidity
funding  and both are  monitored  on a daily  basis.  The asset  portion  of the
balance sheet  provides  liquidity  primarily  through  loans,  mortgage  backed
security and collateralized mortgage obligation principal repayments, maturities
and  calls of  securities  and sales  from the  available  for sale and  trading
portfolios.

Management  closely  monitors the timing of cash  inflows and outflows  although
changes in interest rates,  economic  conditions and competitive forces strongly
impact the  predictability  of these cash flows. The Company attempts to provide
stable and  flexible  sources of funding  through its branch  network as well as
with  limited  use of  borrowings.  Management  believes  that the  level of the
Company's  liquid  assets  combined  with daily  monitoring  of cash inflows and
outflows provide adequate  liquidity to fund outstanding loan commitments,  meet
daily  withdrawal   requirements  of  depositors,   and  meet  all  other  daily
obligations of the Company.

The  Company  and its  bank  subsidiary  are  currently  subject  to two sets of
regulatory  capital  measures,  a  leverage  ratio test and  risk-based  capital
guidelines.  The  risk-based  guidelines  assign  weightings  to all  assets and
certain  off-balance  sheet items and establish an 8% minimum ratio of qualified
total  capital to  risk-weighted  assets.  At least half of total  capital  must
consist of "Tier 1" capital,  which comprises common equity,  retained  earnings
and  a  limited  amount  of  minority  interest  in  consolidated   subsidiaries
(subordinated  debt), less goodwill.  Up to half of total capital may consist of
so-called "Tier 2" capital,  comprising a limited amount of  subordinated  debt,
other  preferred  stock,  certain other  instruments and a limited amount of the
allowance for loan and lease losses. The leverage ratio test establishes minimum
limits on the ratio of Tier 1 capital to total  tangible  assets,  without  risk
weighting.  For  top-rated  companies,  the  minimum  leverage  ratio is 4%, but
lower-rated or rapidly expanding companies may be required to meet substantially
higher minimum  leverage  ratios.  The FDIC  Improvement  Act of 1991 ("FDICIA")
mandated  actions to be taken by banking  regulators for financial  institutions
that are  undercapitalized as measured by these ratios.  FDICIA established five
levels of  capitalization  for financial  institutions  ranging from "critically
undercapitalized" to "well-

                                       25

<PAGE>


capitalized."  As of  September  30, 2000,  the Tier 1 leverage  and  risk-based
capital ratios for the Company and its bank subsidiary were as follows:

Summary of Capital Ratios


                                               Tier 1                Total
                                             Risk-Based            Risk-Based
                                               Capital   Leverage   Capital
                                                Ratio      Ratio      Ratio
                                                -----      -----      -----
CNB Financial Corp. ........................     9.32      6.81      10.58
Central National Bank ......................     8.98      6.51      10.23
Regulatory Minimum .........................     4.00      4.00       8.00
FDICIA's "Well-Capitalized" Standard .......     6.00      5.00      10.00


All capital ratios for the Company and its subsidiary bank at September 30, 2000
were above minimum capital standards for financial  institutions.  Additionally,
the  Company  and its  subsidiary  bank  capital  ratios at that date were above
FDICIA's "well-capitalized" standard.

Total  stockholders'  equity  amounted to $57.260 million at September 30, 2000,
which is a $2.637  million  increase  from the $54.623  million at December  31,
1999. The increase resulted  primarily from an increase in earnings retention of
$4.089  million,   partially   offset  by  an  increase  in  accumulated   other
comprehensive loss of $603,000 and an increase in treasury stock of $849,000.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Interest rate risk is the most  significant  market risk  affecting the Company.
Other types of market  risk,  such as foreign  currency  exchange  rate risk and
commodity  risk,  do not arise in the normal  course of the  Company's  business
activities.

Interest  rate risk is defined as an exposure  to a movement  in interest  rates
that could have an adverse  effect on the  Company's  net interest  income.  Net
interest  income  is  susceptible  to  interest  rate  risk to the  degree  that
interest-bearing  liabilities  mature or  re-price  on a  different  basis  than
earning  assets.  When  interest-bearing  liabilities  mature or  re-price  more
quickly than earning assets in a given period, a significant  increase in market
rates of interest could adversely  affect net interest income.  Similarly,  when
earning   assets   mature  or  re-price   more  quickly  than   interest-bearing
liabilities, falling interest rates could result in a decrease in net income.

An important element of both earnings performance and liquidity is management of
interest  rate  sensitivity.   Interest  rate  sensitivity  management  involves
comparison


                                       26

<PAGE>


between the maturity and re-pricing dates of earning assets and interest-bearing
liabilities,  with the goal being to minimize the impact on net interest  income
in periods of extreme fluctuations in interest rates.  Quarterly,  the change in
net interest income, as well as several other strategic  measurement ratios, are
presented  to the  Company's  Asset/Liability  Committee  (ALCO)  and  Board  of
Directors   and  compared  to   Company-established   guidelines.   The  Company
consistently maintains the ratios within the acceptable ranges of the guidelines
established.  On a  weekly  basis,  the  ALCO,  which  is  comprised  of  Senior
Management,  meets to  monitor  the  interest  rate  sensitivity  and  liquidity
position.

The ALCO  utilizes  the results of a detailed  and dynamic  simulation  model to
quantify the  estimated  exposure of net interest  income to sustained  interest
rate  changes.  While ALCO  routinely  monitors  simulated  net interest  income
sensitivity over a one-year period, it also utilizes additional tools to monitor
longer-term  interest rate risk.  The  simulation  model  captures the impact of
changing  interest rates on the interest  income  received and interest  expense
paid on all earning  assets and  interest-bearing  liabilities  reflected on the
Company's  balance sheet.  This sensitivity  analysis is compared to ALCO policy
limits which specify a maximum  tolerance level for net interest income exposure
over a one year horizon,  assuming no balance  sheet  growth,  a 200 basis point
upward and downward shift in interest  rates,  and the use of convexity  factors
which  estimate  the  change in  interest  rate risk  caused by  changes  in the
Company's  structure in response to the rate change.  As of September  30, 2000,
under this analysis,  a 200 basis point increase in interest rates resulted in a
$1.380  million  decrease  (4.1%) in annual net interest  income and a 200 basis
point  decrease in interest  rates  resulted  in a $986,000  decrease  (2.9%) in
annual net interest income.  These amounts were within the Company's ALCO policy
limits.

Interest rate risk analyses  performed by the Company indicates that the Company
is  liability  sensitive,  or its  interest-bearing  liabilities  re-price  more
quickly than its earning assets. As a result, rising interest rates could result
in a decrease in net interest income.  The Company has taken steps to manage its
interest  rate risk by  attempting  to match the  re-pricing  periods of earning
assets to its  interest-bearing  liabilities.  The Company's current emphasis in
growing loans with terms less than five years and selling  long-term  fixed rate
loans are  methods  the  Company  has  utilized  to manage  interest  rate risk.
Additionally,  the  Company  will focus on growing its core  deposit  base which
should be less volatile when rates change when compared to time deposits greater
than  $100,000  and   short-term   borrowings   (which   represented   24.5%  of
interest-bearing  liabilities  at September 30,  2000),  which are more volatile
when rates change due to their  short-terms  which typically range from 1 day to
six months.  Under a declining  rate scenario,  the analysis  indicates that the
Company's benefit from its miss-match in interest-bearing liabilities re-pricing
more quickly than earning assets is mitigated due to the  optionality of earning
assets.  The Company is asset sensitive in a rapidly declining rate environment,
as earning assets would re-price faster than interest-bearing  liabilities would
re-price.  Management makes certain assumptions in relation to prepayment speeds
for loans, CMOs and mortgaged-backed  securities, which would prepay much faster
in a falling rate scenario.  These assumptions are based on historical  analyses
and  industry  standards  for  prepayments.  Management  continuously  evaluates
various alternatives to address interest rate risk.


                                       27

<PAGE>



The preceding  sensitivity  analysis  does not represent a Company  forecast and
should not be relied upon as being  indicative  of expected  operating  results.
These hypothetical estimates are based upon numerous assumptions including:  the
nature  and  timing  of  interest  rate  levels  including  yield  curve  shape,
prepayments on loans and securities,  deposit decay rates,  pricing decisions on
loans and deposits,  reinvestment/replacement of asset and liability cash flows,
and others.  While  assumptions  are developed  based upon current  economic and
local market conditions, the Company cannot make assurances as to the predictive
nature of these  assumptions  including how customer  preferences  or competitor
influences might change.  Also, as market  conditions vary from those assumed in
the    sensitivity    analysis,    actual    results   will   differ   due   to:
prepayment/refinancing  levels likely deviating from those assumed,  the varying
impact of interest  rate changes on caps and floors on  adjustable  rate assets,
the  potential  effect  of  changing  debt  service  levels  on  customers  with
adjustable  rate loans,  depositor  early  withdrawals  and  product  preference
changes, and other  internal/external  variables.  Furthermore,  the sensitivity
analysis  does not  reflect  actions  that ALCO might take in  responding  to or
anticipating changes in interest rates.



                                       28



<PAGE>


                               CNB Financial Corp.
                           Part II - Other Information

Item 1 - Legal Proceedings

          No material changes since filing of the Registrant's Form 10-K for the
          year end December 31, 1999

Item 2 - Changes in Securities and Use of Proceeds

          None

Item 3 - Defaults upon Senior Securities

          None

Item 4 - Submission of Matters to a Vote of Security Holders

          None

Item 5 - Other Information

          None

Item 6 - Exhibits and reports on Form 8-K

          (A) Exhibits
          Exhibit 27 - Financial Data Schedule (electronic filing only)

          (B) Current Reports filed on Form 8-K
          None


                                       29



<PAGE>



SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





                                                 CNB FINANCIAL CORP.
                                                 Registrant




Date:  November 13, 2000                         By:  /s/ DONALD L. BRASS
       -----------------                              --------------------------
                                                      Donald L. Brass
                                                      President



Date:  November 13, 2000                         By:  /s/ PETER J. CORSO
       -----------------                              --------------------------
                                                      Peter J. Corso
                                                      Executive Vice President




                                       30