<PAGE>

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

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

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

                FOR THE TRANSITION PERIOD FROM _______ TO _______

                         Commission file number 0-30665

                          CNB Financial Services, Inc.
             (Exact Name of Registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
                 West Virginia                                   55-0773918
        (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                       Identification No.)
</TABLE>

<TABLE>
<S>                                                               <C>
101 S. Washington Street, Berkeley Springs, WV                      25411
   (Address of principal executive offices)                       (Zip Code)
</TABLE>

Issuer's telephone number, (304) 258 - 1520

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

                                YES [X]   NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one)

Large Accelerated Filer [ ]   Accelerated Filer [ ]   Non-Accelerated Filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                YES [ ]   NO [X]

The aggregate value of the common stock of the Registrant that was held by
non-affiliates as of the most recently completed second fiscal quarter (June 30,
2006) was approximately $22.5 million. This amount was based on the last closing
sale price of a share of common stock of $80.00 as of the same date.

  Common Stock $1 par value, 458,048 shares outstanding as of August 14, 2006.

<PAGE>

                          CNB FINANCIAL SERVICES, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
PART 1: FINANCIAL INFORMATION

   Item 1. Financial Statements

           Consolidated Statements of Financial Condition as of June 30,
              2006 (Unaudited) and December 31, 2005.....................     3

           Consolidated Statements of Income for the Six Months ended
              June 30, 2006 and 2005 (Unaudited).........................     4

           Consolidated Statements of Changes in Shareholders' Equity for
              the Six Months Ended June 30, 2006 (Unaudited) and the Year
              Ended December 31, 2005....................................     5

           Consolidated Statements of Cash Flows for the Six Months
              Ended June 30, 2006 and 2005 (Unaudited)...................     6

           Notes to Consolidated Financial Statements (Unaudited)........     7

   Item 2. Management's Discussion and Analysis of Financial Condition
              and Results of Operations for the Six Months
              ended June 30, 2006........................................    14

   Item 3. Quantitative and Qualitative Disclosures about Market Risk....    23

   Item 4. Controls and Procedures.......................................    24

PART II: OTHER INFORMATION

   Item 1. Legal Proceedings.............................................    25

   Item 4. Submission of Matters to a Vote of Security Holders...........    25

   Item 6. Exhibits and Reports on Form 8-K..............................    25
           SIGNATURES....................................................    26
</TABLE>

                           Forward-Looking Statements

     The Private Securities Litigation Reform Act of 1995 indicates that the
disclosure of forward-looking information is desirable for investors and
encourages such disclosure by providing a safe harbor for forward-looking
statements that involve risk and uncertainty. All statements other than
statements of historical fact included in this Form 10-Q including statements in
Management's Discussion and Analysis of Financial Condition and Results of
Operations are, or may be deemed to be, forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. In order to comply with the terms of the safe
harbor, CNB notes that a variety of factors could cause CNB's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in those forward-looking statements. These factors could
include the following possibilities: (1) competitive pressures among depository
and other financial institutions may increase significantly; (2) changes in the
interest rate environment may reduce margins; (3) general economic conditions
may become unfavorable resulting in reduced credit quality or demand for loans;
(4) legislative or regulatory changes could increase expenses; (5) loan growth
does not continue to increase through the end of 2006 as expected; and (6)
competitors may have greater financial resources and develop products that
enable them to compete more successfully than CNB.


                                        2
<PAGE>

                   CNB FINANCIAL SERVICES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                     JUNE 30,     DECEMBER 31,
                                                       2006           2005
                                                   ------------   ------------
                                                    (Unaudited)     (Audited)
<S>                                                <C>            <C>
                     ASSETS
Cash and due from banks                            $  9,739,255   $ 10,085,252
Federal funds sold                                       13,000         38,000
Securities available for sale
   (at approximate market value)                     56,121,659     55,194,216
Federal Home Loan Bank stock, at cost                 1,694,700      1,669,900
Federal Reserve Bank stock, at cost                     138,650        138,650
Loans and lease receivable, net                     192,557,144    180,207,390
Accrued interest receivable                           1,282,044      1,230,777
Premises and equipment, net                           6,452,340      6,601,463
Deferred income taxes                                 1,689,514      1,159,595
Cash surrender value of life insurance                1,392,409      1,279,690
Intangible assets                                       552,936        620,593
Other assets                                            733,357        727,896
                                                   ------------   ------------
      TOTAL ASSETS                                 $272,367,008   $258,953,422
                                                   ============   ============
      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
   Deposits:
      Demand                                       $ 45,892,961   $ 42,669,886
      Interest-bearing demand                        60,343,990     54,900,737
      Savings                                        31,868,357     32,342,957
      Time, $100,000 and over                        33,353,221     30,659,767
      Other time                                     65,593,945     58,715,079
                                                   ------------   ------------
                                                   $237,052,474   $219,288,426
   Accrued interest payable                             811,423        611,512
   FHLB borrowings                                   13,000,000     17,800,000
   Accrued expenses and other liabilities             2,188,637      2,245,443
                                                   ------------   ------------
      TOTAL LIABILITIES                            $253,052,534   $239,945,381
                                                   ------------   ------------
SHAREHOLDERS' EQUITY
   Common stock, $1 par value; 5,000,000  shares
      authorized; 458,048 shares outstanding       $    458,048   $    458,048
   Capital surplus                                    4,163,592      4,163,592
   Retained earnings                                 16,710,125     15,658,134
   Accumulated other comprehensive income            (2,017,291)    (1,271,733)
                                                   ------------   ------------
      TOTAL SHAREHOLDERS' EQUITY                   $ 19,314,474   $ 19,008,041
                                                   ------------   ------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $272,367,008   $258,953,422
                                                   ============   ============
</TABLE>

The Notes to Consolidated Financial Statements are an integral part of these
statements.


                                        3

<PAGE>
                   CNB FINANCIAL SERVICES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                                         JUNE 30,                              JUNE 30,
                                                             -------------------------------         ------------------------------
                                                                 2006               2005                2006               2005
                                                             -----------         -----------         -----------        -----------
<S>                                                         <C>                 <C>                <C>                 <C>
INTEREST INCOME
   Interest and fees on loans                                $ 3,273,477         $ 2,686,015         $ 6,358,570        $ 5,195,709
   Interest and dividends on securities
      U.S. Government agencies and
         corporations                                            396,260             390,111             775,181            747,337
      Mortgage backed securities                                 105,403              83,257             206,696            174,561
      State and political subdivisions                            97,383             109,772             200,871            217,453
      Other                                                       27,595              12,475              43,233             19,432
   Interest on federal funds sold                                    352                 412                 754                642
                                                             -----------         -----------         -----------        -----------
                                                             $ 3,900,470         $ 3,282,042         $ 7,585,305        $ 6,355,134
                                                             -----------         -----------         -----------        -----------
INTEREST EXPENSE
   Interest on interest bearing demand,                      $ 1,282,151         $   833,210         $ 2,375,520        $ 1,604,216
     savings and time deposits
   Interest on FHLB borrowings                                   179,592              54,876             368,566             91,972
                                                             -----------         -----------         -----------        -----------
                                                             $ 1,461,743         $   888,086         $ 2,744,086        $ 1,696,188
                                                             -----------         -----------         -----------        -----------

           NET INTEREST INCOME                               $ 2,438,727         $ 2,393,956         $ 4,841,219        $ 4,658,946

PROVISION FOR LOAN LOSSES                                         74,500             102,000             186,500            208,000
                                                             -----------         -----------         -----------        -----------

           NET INTEREST INCOME AFTER
               PROVISION FOR LOAN LOSSES                     $ 2,364,227         $ 2,291,956         $ 4,654,719        $ 4,450,946
                                                             -----------         -----------         -----------        -----------

NONINTEREST INCOME
   Service charges on deposit accounts                       $   322,379         $   311,907         $   610,612        $   569,388
   Other service charges, commissions
      and fees                                                   167,229             136,106             319,492            266,100
   Insurance commissions                                            --                39,902                --               78,041
   Other operating income                                         13,976              16,609              34,293             33,824
   Income from title company                                       7,167               8,727              11,040             15,237
                                                             -----------         -----------         -----------        -----------
                                                             $   510,751         $   513,251         $   975,437        $   962,590
                                                             -----------         -----------         -----------        -----------
NONINTEREST EXPENSES
   Salaries                                                  $   752,195         $   766,896         $ 1,507,206        $ 1,471,725
   Employee benefits                                             338,540             265,638             637,840            534,168
   Occupancy of premises                                         125,988             110,084             246,488            200,417
   Furniture and equipment expense                               202,826             227,414             414,687            430,155
   Other operating expenses                                      488,166             555,975           1,030,870          1,060,281
   Net (gain) loss on sale of securities                            (437)             (1,491)             40,741                574
   Net loss on disposal of premises and equipment                  2,567                --                19,756               --
                                                             -----------         -----------         -----------        -----------
                                                             $ 1,909,845         $ 1,924,516         $ 3,897,588        $ 3,697,320
                                                             -----------         -----------         -----------        -----------


            INCOME FROM CONTINUING OPERATIONS
               BEFORE INCOME TAXES                           $   965,133         $   880,691         $ 1,732,568        $ 1,716,216

PROVISION FOR INCOME TAXES                                       317,934             281,329             554,821            588,635
                                                             -----------         -----------         -----------        -----------

            INCOME FROM CONTINUING OPERATIONS                $   647,199         $   599,362         $ 1,177,747        $ 1,127,581
                                                             -----------         -----------         -----------        -----------

                       DISCONTINUED OPERATIONS

             NET RESULTS FROM DISCONTINUED OPERATIONS
                   OF CNB INSURANCE SERVICES, INC
                   BEFORE INCOME TAXES                       $   121,509         $      --           $   123,863        $      --

PROVISION FOR INCOME TAXES                                   $    42,595         $      --           $    43,497        $      --
                                                             -----------         -----------         -----------        -----------

              NET RESULTS ON DISCONTINUED OPERATIONS         $    78,914         $      --           $    80,366        $      --

              NET INCOME                                     $   726,113         $   599,362         $ 1,258,113        $ 1,127,581
                                                             ===========         ===========         ===========        ===========

BASIC EARNINGS PER SHARE                                     $      1.59         $      1.31         $      2.75        $      2.46
                                                             ===========         ===========         ===========        ===========

</TABLE>


The Notes to Consolidated Financial Statements are an integral part of these
statements.



                                       4
<PAGE>

                   CNB FINANCIAL SERVICES, INC. AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                     ACCUMULATED
                                                                                                        OTHER           TOTAL
                                                      COMMON          CAPITAL        RETAINED       COMPREHENSIVE    SHAREHOLDERS'
                                                       STOCK          SURPLUS        EARNINGS          INCOME           EQUITY
                                                   ------------    ------------    ------------     ------------     ------------

<S>                                               <C>             <C>             <C>              <C>              <C>
BALANCE, JANUARY 1, 2005                           $    458,048    $  3,863,592    $ 14,172,144     $   (345,044)    $ 18,148,740
                                                                                                                     ------------
Comprehensive income:
   Net income for six months
      ended June 30, 2005                                  --              --         1,127,581             --          1,127,581
  Change in unrealized gains
    (losses) on securities
    available for sale (net of tax of $69,741)             --              --              --           (113,790)        (113,790)
                                                                                                                     ------------
Total Comprehensive Income                                 --                                                           1,013,791
                                                                                                                     ------------
Cash dividends ($0.42 per share)                           --              --          (192,380)            --           (192,380)
                                                   ------------    ------------    ------------     ------------     ------------

BALANCE, JUNE 30, 2005                             $    458,048    $  3,863,592    $ 15,107,345     $   (458,834)    $ 18,970,151
                                                   ============    ============    ============     ============     ============

BALANCE, JANUARY 1, 2006                           $    458,048    $  4,163,592    $ 15,658,134     $ (1,271,733)    $ 19,008,041
                                                                                                                     ------------
Comprehensive income:
   Net income for six months
     ended June 30, 2006                                   --              --         1,258,113             --          1,258,113
  Change in unrealized gains
    (losses) on securities
    available for sale (net of tax of $456,956)            --              --              --           (745,558)        (745,558)
                                                                                                                     ------------
Total Comprehensive Income                                 --                                                             512,555
                                                                                                                     ------------
Cash dividends ($.45 per share)                            --              --          (206,122)            --           (206,122)
                                                   ------------    ------------    ------------     ------------     ------------

BALANCE, JUNE 30, 2006                             $    458,048    $  4,163,592    $ 16,710,125     $ (2,017,291)    $ 19,314,474
                                                   ============    ============    ============     ============     ============

</TABLE>
  The Notes to Consolidated Financial Statements are an integral part of these
                                  statements.


                                       5

<PAGE>
                  CNB FINANCIAL SERVICES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                         SIX MONTHS ENDED
                                                                                             JUNE 30,
                                                                                  -------------------------------
                                                                                      2006               2005
                                                                                  ------------       ------------
<S>                                                                              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                        $  1,258,113       $  1,127,581
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                                                     370,182            399,299
     Provision for loan losses                                                         186,500            208,000
     Deferred income taxes                                                             (72,963)            (4,757)
     Net loss on sale of securities                                                     40,741                573
     Net loss on disposal of premises and equipment                                     19,756               --
     (Increase) in accrued interest receivable                                         (51,267)           (56,315)
     (Increase) decrease in other assets                                               (36,970)           624,056
     Gain on sale of CNB Insurance Services, Inc                                      (143,913)              --
     Increase (decrease) in accrued interest payable                                   199,911            (28,445)
     (Increase) in cash surrender value on life insurance in excess
          of premiums paid                                                             (53,897)           (50,940)
     Increase (decrease) in accrued expenses and other liabilities                     (56,806)           120,195
     Amortization of deferred loan (fees) cost                                          32,830             18,900
     Amortization (accretion) of premium and discount on investments                    18,352             31,578
                                                                                  ------------       ------------
         NET CASH PROVIDED BY OPERATING ACTIVITIES                                $  1,710,569       $  2,389,725
                                                                                  ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Net (increase) in loans                                                      $(12,569,084)      $(14,548,039)
     Proceeds from sales of securities                                               3,133,464         28,614,750
     Proceeds from maturities, repayments and calls of securities                    1,170,569            830,255
     Purchases of securities                                                        (6,493,083)       (22,476,503)
     Purchases of Federal Home Loan Bank stock                                      (4,080,000)        (2,807,200)
     Redemptions of Federal Home Loan Bank stock                                     4,055,200          2,983,300
     Purchases of premises and equipment                                              (151,068)          (777,830)
     Proceeds from sale of CNB Insurance Services Inc                                  153,332               --
     Net (increase) decrease in federal funds sold                                      25,000             59,000
     Premiums paid on life insurance                                                   (58,822)           (58,822)
     Cash from acquired branch                                                            --                 --
                                                                                  ------------       ------------
         NET CASH (USED IN) INVESTING ACTIVITIES                                  $(14,814,492)      $ (8,181,089)
                                                                                  ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in demand and savings deposits                                   $  8,191,728       $ 13,876,655
    Net increase (decrease) in time deposits                                         9,572,320         (3,233,237)
    Net increase in securities sold under repurchase agreement                            --               12,421
    Net (decrease) in FHLB borrowings                                               (4,800,000)        (4,700,000)
    Cash dividends paid                                                               (206,122)          (192,380)
                                                                                  ------------       ------------
         NET CASH PROVIDED BY FINANCING ACTIVITIES                                $ 12,757,926       $  5,763,459
                                                                                  ------------       ------------

         NET INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS                    $   (345,997)      $    (27,905)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                      10,085,252         10,047,939
                                                                                  ------------       ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        $  9,739,255       $ 10,020,034
                                                                                  ============       ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period:
               Interest                                                           $  2,543,339       $  1,724,633
               Income taxes                                                       $    665,500       $    606,000


</TABLE>


  The Notes to Consolidated Financial Statements are an integral part of these
                                  statements.


                                       6

<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1. Basis of Presentation and Contingencies

          In the opinion of CNB Financial Services, Inc. ("CNB" or the
     "Company"), the accompanying unaudited consolidated financial statements
     contain all adjustments (consisting of only normal recurring accruals)
     necessary for a fair presentation of CNB financial condition as of June 30,
     2006 and the results of operations for the three and six months ended June
     30, 2006 and 2005, changes in shareholders' equity and cash flows for the
     six months ended June 30, 2006 and 2005.

          The accompanying unaudited financial statements have been prepared in
     accordance with the instructions for Form 10-Q. These financial statements
     should be read in conjunction with the audited consolidated financial
     statements and the notes included in CNB's Annual Report for the year ended
     December 31, 2005.

          In the ordinary course of business, the company and its subsidiary are
     involved in various legal proceedings. In the opinion of the management of
     CNB, there are no proceedings pending to which CNB is a party or to which
     its property is subject, which, if determined adversely to CNB, would be
     material in relation to CNB's financial condition. There are no proceedings
     pending other than ordinary routine litigation incident to the business of
     CNB. In addition, no material proceedings are pending or are known to be
     threatened or contemplated against CNB by government authorities.


                                       7
<PAGE>

Note 2. Securities

          The amortized cost and estimated market value of debt securities at
     June 30, 2006 and December 31, 2005 by contractual maturity are shown
     below. Expected maturities will differ from contractual maturities because
     borrowers may have the right to call or prepay obligations with or without
     call or prepayment penalties.

          Securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                  JUNE 30, 2006                       WEIGHTED
                                               ---------------------------------------------------     AVERAGE
                                                                GROSS        GROSS      ESTIMATED       TAX
                                                AMORTIZED    UNREALIZED   UNREALIZED       FAIR      EQUIVALENT
                                                   COST         GAINS       LOSSES        VALUE         YIELD
                                               -----------   ----------   ----------   -----------   ----------
<S>                                            <C>           <C>          <C>          <C>           <C>
Available for sale:
   U.S. Government agencies and corporations
      Within one year                          $   503,197     $   --     $    1,129   $   502,068      5.20%
      After 1 but within 5 years                25,064,653         --      1,225,300    23,839,353      4.23
      After 5 but within 10 years               12,003,100         --        367,690    11,635,410      5.12
                                               -----------     ------     ----------   -----------
                                               $37,570,950     $   --     $1,594,119   $35,976,831      4.53%
                                               -----------     ------     ----------   -----------
   States and political subdivisions
      Within one year                          $   609,825     $   --     $    7,756   $   602,069      2.84%
      After 1 but within 5 years                 2,029,320        643         60,433     1,969,530      3.10
      After 5 but within 10 years                8,798,753      1,793        324,592     8,475,954      3.51
                                               -----------     ------     ----------   -----------
                                               $11,437,898     $2,436     $  392,781   $11,047,553      3.40%
                                               -----------     ------     ----------   -----------
   Mortgage backed securities                  $ 9,534,360     $   --     $  437,085   $ 9,097,275      4.91%
                                               -----------     ------     ----------   -----------
Total securities available for sale            $58,543,208     $2,436     $2,423,985   $56,121,659      4.37%
                                               ===========     ======     ==========   ===========
Restricted:
      Federal Reserve Bank stock               $   138,650     $   --     $       --   $   138,650      6.00%
      Federal Home Loan Bank stock               1,694,700         --             --     1,694,700      5.36
                                               -----------     ------     ----------   -----------
Total restricted investments                   $ 1,833,350     $   --     $       --   $ 1,833,350      5.41%
                                               ===========     ======     ==========   ===========
</TABLE>


                                       8

<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 2. Securities (continued)

<TABLE>
<CAPTION>
                                                                DECEMBER 31, 2005                     WEIGHTED
                                               ---------------------------------------------------     AVERAGE
                                                                GROSS        GROSS      ESTIMATED       TAX
                                                AMORTIZED    UNREALIZED   UNREALIZED       FAIR      EQUIVALENT
                                                   COST         GAINS       LOSSES        VALUE         YIELD
                                               -----------   ----------   ----------   -----------   ----------
<S>                                            <C>           <C>          <C>          <C>           <C>
Available for sale:
   U.S. Government agencies and corporations
      After 1 but within 5 years               $16,826,758     $  225     $  485,392   $16,341,591      4.10%
      After 5 but within 10 years               18,217,740         --        324,090    17,893,650      4.77
                                               -----------     ------     ----------   -----------
                                               $35,044,498     $  225     $  809,482   $34,235,241      4.45%
                                               -----------     ------     ----------   -----------
   States and political subdivisions
      After 1 but within 5 years               $ 2,641,897     $1,376     $   52,169   $ 2,591,104      3.04%
      After 5 but within 10 years                9,980,628      4,224        160,963     9,823,889      3.51
                                               -----------     ------     ----------   -----------
                                               $12,622,525     $5,600     $  213,132   $12,414,993      3.41%
                                               -----------     ------     ----------   -----------
   Mortgage backed securities                  $ 8,746,228     $   --     $  202,246   $ 8,543,982      4.72%
                                               -----------     ------     ----------   -----------
Total securities available for sale            $56,413,251     $5,825     $1,224,860   $55,194,216      4.26%
                                               ===========     ======     ==========   ===========
Restricted:
      Federal Reserve Bank stock               $   138,650     $   --     $       --   $   138,650      6.00%
      Federal Home Loan Bank stock               1,669,900         --             --     1,669,900      3.00
                                               -----------     ------     ----------   -----------
Total restricted investments                   $ 1,808,550     $   --     $       --   $ 1,808,550      3.23%
                                               ===========     ======     ==========   ===========
</TABLE>

          The fair value of securities pledged to secure public deposits and for
     other purposes as required or permitted by law totaled $39,727,107 at June
     30, 2006 and $40,610,746 at December 31, 2005.

          Proceeds from sales of securities available for sale (excluding
     maturities and calls) during the six months ended June 30, 2006 and the
     year ended December 31, 2005 were $3,133,464 and $37,026,097, respectively.
     Gross gains (losses) of $0 and $(41,178) during the six months ended
     June 30, 2006 and $145,013 and $(161,178) for the year ended December 31,
     2005 were realized on the respective sales. Gross gains of $437 during the
     six months ended June 30, 2006 were realized on called securities.


                                       9
<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 2. Securities (continued)

          The following tables show our investments' gross unrealized losses and
     fair value, aggregated by investment category and length of time that
     individual securities have been in a continuous unrealized loss position,
     at June 30, 2006 and December 31, 2005.

          Securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                            JUNE 30, 2006
                                            ------------------------------------------------------------------------------
                                               Less than 12 months         12 months or more                Total
                                            ------------------------   ------------------------   ------------------------
                                                Fair      Unrealized       Fair      Unrealized       Fair      Unrealized
Description of Securities                      Value        Losses        Value        Losses        Value        Losses
-----------------------------------------   -----------   ----------   -----------   ----------   -----------   ----------
<S>                                         <C>           <C>          <C>           <C>          <C>           <C>
U.S. government agenices and corporations   $11,026,309    $252,376    $24,451,303   $1,341,743   $35,477,612   $1,594,119
State and political subdivisions              3,312,067      95,013      7,578,050      297,768    10,890,117      392,781
Mortgage backed securities                    3,229,849      77,308      5,867,426      359,777     9,097,275      437,085
                                            -----------   ----------   -----------   ----------   -----------   ----------
Total temporarily impaired securities       $17,568,225    $424,697    $37,896,779   $1,999,288   $55,465,004   $2,423,985
                                            ===========   ==========   ===========   ==========   ===========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                           DECEMBER 31, 2005
                                            ------------------------------------------------------------------------------
                                               Less than 12 months         12 months or more                Total
                                            ------------------------   ------------------------   ------------------------
                                                Fair      Unrealized       Fair      Unrealized       Fair      Unrealized
Description of Securities                      Value        Losses        Value        Losses        Value        Losses
-----------------------------------------   -----------   ----------   -----------   ----------   -----------   ----------
<S>                                         <C>           <C>          <C>           <C>          <C>           <C>
U.S. Government agenices and corporations   $18,797,616    $281,814    $13,938,525    $527,668    $32,736,141   $  809,482
State and political subdivisions              9,722,997     134,731      2,531,396      78,401     12,254,393      213,132
Mortgage backed securities                    4,418,522      69,934      4,125,462     132,312      8,543,984      202,246
                                            -----------    --------    -----------    --------    -----------   ----------
Total temporarily impaired securities       $32,939,135    $486,479    $20,595,383    $738,381    $53,534,518   $1,224,860
                                            ===========    ========    ===========    ========    ===========   ==========
</TABLE>


                                       10

<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 3. Loans and Leases Receivable

          Major classifications of loans at June 30, 2006 and December 31, 2005,
were as follows:

<TABLE>
<CAPTION>
                                   JUNE 30,     DECEMBER 31,
                                     2006           2005
                                 ------------   ------------
<S>                              <C>            <C>
Loans:
   Real estate                   $136,676,281   $125,722,303
   Commercial real estate          31,306,939     29,492,744
   Consumer                        16,447,955     16,801,986
   Commercial                       9,669,376      9,314,491
   Overdrafts                         106,190        356,329
                                 ------------   ------------
                                 $194,206,741   $181,687,853
Leases:                               133,569        144,869
                                 ------------   ------------
                                 $194,340,310   $181,832,722
Net deferred loan fees, costs,
   premiums and discounts             371,853        396,798
Allowance for loan losses          (2,155,019)    (2,022,130)
                                 ------------   ------------
                                 $192,557,144   $180,207,390
                                 ============   ============
</TABLE>

          An analysis of the allowance for possible loan losses is as follows:

<TABLE>
<CAPTION>
                                             JUNE 30,          DECEMBER 31,
                                     -----------------------   ------------
                                        2006         2005          2005
                                     ----------   ----------   ------------
<S>                                  <C>          <C>          <C>
Balance, Beginning                   $2,022,130   $1,807,449    $1,807,449
   Provision charged to operations      186,500      208,000       352,000
   Recoveries                            65,724      103,332       168,413
   Loans charged off                   (119,335)    (160,503)     (305,732)
                                     ----------   ----------    ----------
Balance, Ending                      $2,155,019   $1,958,278    $2,022,130
                                     ==========   ==========    ==========
</TABLE>

          Loans are placed in nonaccrual status when, in the judgment of
     management, the probability of collection of interest is deemed to be
     insufficient to warrant further accrual. When interest accruals are
     discontinued, interest credited to income is reversed. Nonaccrual loans are
     restored to accrual status when all delinquent principal and interest
     becomes current or the loan is considered secured and in the process of
     collection. Certain loans that are determined to be sufficiently
     collateralized may continue to accrue interest after reaching 90 days past
     due. A summary of nonperforming loans is as follows:


                                       11

<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 3. Loans and Leases Receivable (continued)

<TABLE>
<CAPTION>
                                                               JUNE 30,        DECEMBER 31,
                                                         -------------------   ------------
                                                           2006       2005         2005
                                                         --------   --------   ------------
<S>                                                      <C>        <C>        <C>
Nonaccrual loans                                         $204,942   $192,159     $789,684
Loans past due 90 days or more still accruing interest         --     44,060           --
                                                         --------   --------     --------
   Total                                                 $204,942   $236,219     $789,684
                                                         ========   ========     ========
</TABLE>

Note 4. Time Deposits

          At June 30, 2006, the scheduled maturities of time deposits are as
follows:

<TABLE>
<CAPTION>
                            TIME DEPOSITS       ALL TIME
                          $100,000 AND OVER     DEPOSITS
                          -----------------   -----------
<S>                       <C>                 <C>
Within 3 months              $ 2,271,958      $ 5,356,169
3 months thru 6 months           958,500        4,338,405
6 months thru 12 months        3,032,690        7,552,760
Over 12 months                27,090,073       81,699,832
                             -----------      -----------
                             $33,353,221      $98,947,166
                             ===========      ===========
</TABLE>

Note 5. Federal Home Loan Bank Borrowings

<TABLE>
<CAPTION>
                                          JUNE 30,           DECEMBER 31,
                                  ------------------------   ------------
                                      2006         2005          2005
                                  -----------   ----------   ------------
<S>                               <C>           <C>          <C>
Federal Home Loan Bank advances   $13,000,000   $3,900,000    $17,800,000
</TABLE>

          Citizens National Bank is a member of the Federal Home Loan Bank
     ("FHLB") of Pittsburgh and, as such, can take advantage of the FHLB program
     for overnight and term advances at published daily rates. Under the terms
     of a blanket collateral agreement, advances from the FHLB are
     collateralized by qualifying mortgages and US government agencies and
     mortgage-backed securities. In addition, all of the Bank's stock in the
     FHLB is pledged as collateral for such debt. Advances available under this
     agreement are limited by available and qualifying collateral and the amount
     of FHLB stock held by the borrower.

Note 6. Pension Plan

          Citizens National Bank has an obligation under a defined benefit plan
     covering all eligible employees. See Note 13 "Pension Plan" to our
     consolidated financial statements in our most recently filed Annual Report
     on Form 10-K for further information.


                                       12
<PAGE>

                          CNB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 6. Pension Plan (continued)

          The components of net periodic plan cost charged to operations are as
follows:

<TABLE>
<CAPTION>
                                             JUNE 30,
                                      ---------------------
                                         2006        2005
                                      ---------   ---------
<S>                                   <C>         <C>
Service cost                          $ 116,196   $  73,368
Interest cost                           124,236     103,848
Expected return on plan assets         (124,210)   (104,400)
Amortization of prior service costs       6,172       3,720
Recognized net actuarial loss            40,550      16,964
                                      ---------   ---------
   Net periodic plan cost             $ 162,944   $  93,500
                                      =========   =========
</TABLE>

          Employer contributions paid during the quarters ended June 30, 2006
and 2005 were $161,104 and $116,994, respectively.

Note 7. Supplemental Retirement Plan

          On January 2, 2004, the Bank entered into a nonqualified supplemental
     retirement benefit agreement with the President which when fully vested
     would pay the President or his beneficiary an amount of $30,000 per year
     for 10 years beginning June 11, 2011, if he retires on or after May 29,
     2011. Termination of employment prior to that date other than by reasons of
     death or disability will result in a reduced benefit. The expense for the
     six months ended June 30, 2006 was $16,321.

Note 8. New Branch

          On December 15, 2003, the Bank purchased a parcel of land in Falling
     Waters, Berkeley County, West Virginia for $503,261 to construct a new
     branch facility. Construction on the new facility began August 2004 and was
     completed in April 2005.

Note 9. Supplemental Health Insurance Plan

          Effective January 1, 2005, the Bank changed its health insurance
     program to a high deductible plan and concurrently established health
     reimbursement accounts for each employee in the plan. The Bank has
     committed for 2006 to fund $750 for each participant. The expense incurred
     for the health reimbursement accounts for the six months ended June 30,
     2006 was $32,069.

Note 10. Discontinued Operations

          On April 27, 2006, CNB Insurance Services, Inc., a wholly-owned
     subsidiary of Citizens National Bank of Berkeley Springs, West Virginia,
     which is a wholly-owned subsidiary of CNB Financial Services, Inc., entered
     into an agreement. Under the terms of the agreement, CNB Insurance
     Services, Inc. sold to Maiden Financial Inc. certain assets constituting
     CNB Insurance Services, Inc.'s insurance business for a purchase price of
     $153,332 on June 1, 2006 resulting in a gain on sale of $143,913.


          The following table summarizes the net results of the discontinued
     operations of CNB Insurance Services, Inc.:

<TABLE>
<CAPTION>
                                                      Quarter ended        Quarter ended       Six months ended
                                                      March 31, 2006       June 30, 2006         June 30, 2006
                                                     ----------------------------------------------------------
<S>                                                     <C>                 <C>                   <C>
Net income (loss) from operations
of CNB Insurance Services, Inc.                           $ 2,354            $ (22,404)            $ (20,050)

Gain on sale of CNB Insurance Services, Inc.                    -              143,913               143,913
                                                     --------------------------------------------------------


Net Income before taxes                                   $ 2,354            $ 121,509             $ 123,863

Taxes                                                         902               42,595                43,497
                                                     --------------------------------------------------------

Net income                                                $ 1,452             $ 78,914              $ 80,366
                                                     ========================================================
</TABLE>

          For the three and six month periods ended June 30, 2005, CNB Insurance
     Services, Inc. had net income of $3,607 and $8,824 respectively, which was
     reported in continuing operations.



                                       13

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     GENERAL

          CNB Financial Services, Inc. ("CNB" or the "Company") was organized
     under the laws of West Virginia in March 2000 at the direction of the Board
     of Directors of Citizens National Bank (the "Bank") for the purpose of
     becoming a financial services holding company. The Company's primary
     function is to direct, plan and coordinate the business activities for the
     Bank and its subsidiary. We refer to the Company and its subsidiary as
     "CNB".

          On August 31, 2000, the Bank, via merger, became a wholly-owned
     subsidiary of the Company and the shareholders of the Bank became
     shareholders of the Company. Each Bank shareholder received two shares of
     the Company stock for each share of the Bank's common stock. The merger was
     accounted for as a pooling of interests.

          The Bank was organized on June 20, 1934, and has operated in Berkeley
     Springs in Morgan County, West Virginia, as a national banking association
     continuously since that time. The Bank is a full-service commercial bank
     conducting general banking and trust activities through six full-service
     offices and six automated teller machines located in Morgan and Berkeley
     Counties, West Virginia and Washington County, Maryland. The Bank's sixth
     full-service branch and ATM opened in April 2005 in Berkeley County, West
     Virginia. The Bank formed CNB Insurance Services, Inc., a wholly owned
     subsidiary, which was a property and casualty insurance agency selling
     primarily personal lines of insurance. On April 27, 2006, CNB Insurance
     Services, Inc. entered into an agreement with Maiden Financial, Inc. Under
     the terms of the agreement, which was completed on June 1, 2006, CNB
     Insurance Services, Inc. sold to Maiden Financial Inc. certain assets
     constituting CNB Insurance Services, Inc.'s insurance business for a
     purchase price of $153,332 resulting in a gain of $143,913.

          The Bank purchased a parcel of land in Falling Waters, Berkeley
     County, West Virginia on December 15, 2003 for $503,261 to construct a new
     branch facility. Construction on the new branch facility began in August
     2004 and was completed in April 2005. On April 27, 2005, the new branch
     building opened.

          On May 19, 2006, the Board of Directors of CNB voted unanimously to
     convert to a state chartered bank. The application has been filed with the
     West Virginia Board of Banking and Financial Industry for consent to
     convert from a national charter to a state charter under the title of CNB
     Bank, Inc. Management anticipates the conversion date to be about October
     15, 2006.

          The following discussion and analysis presents the significant changes
     in financial condition and results of operations of CNB for the three and
     six months ended June 30, 2006 and 2005. This discussion may include
     forward-looking statements based upon management's expectations. Actual
     results may differ. We have rounded amounts and percentages used in this
     discussion and have based all average balances on daily averages.

     CRITICAL ACCOUNTING POLICIES

          CNB has established various accounting policies which govern the
     application of accounting principles generally accepted in the United
     States of America in the preparation and presentation of CNB's consolidated
     financial statements. The significant accounting policies of CNB are
     described in "Item 1, Critical Accounting Policies" and Note 1: Summary of
     Significant Accounting Policies of the Consolidated Financial Statements on
     Form 10-K as of December 31, 2005, and along with the disclosures presented
     in other financial statement notes, provide information on how significant
     assets and liabilities are valued in the financial statements and how those
     values are determined. Certain accounting policies involve significant
     judgments, assumptions and estimates by management that have a material
     impact on the carrying value of certain assets and liabilities, which
     management considers to be critical accounting policies. The judgments,
     assumptions and estimates used by management are based on historical
     experience, knowledge of the accounts and other factors, which are believed
     to be reasonable under the circumstances. Because of the nature of the
     judgment and assumptions made by management, actual results could differ
     from these judgments and estimates, which could have a material impact on
     the carrying values of assets and liabilities and the results of operations
     of the Company.


                                       14

<PAGE>

          CNB views the determination of the allowance for loan losses as a
     critical accounting policy that requires the most significant judgments,
     assumptions and estimates used in the preparation of its consolidated
     financial statements. For a more detailed discussion on the allowance for
     loan losses, see Nonperforming Loans and Allowance For Loan Losses in the
     Management's Discussion and Analysis and Allowance for Loan Losses in Note
     1: Summary of Significant Accounting Policies and Note 5: Loans and Leases
     Receivable in the Notes to Consolidated Financial Statements in the Form
     10-K for December 31, 2005.

     EARNINGS SUMMARY

          Net income for the three months ended June 30, 2006 was $726,000 or
     $1.59 per share compared to $599,000 or $1.31 per share for the same period
     in 2005. Annualized return on average assets and average equity were 1.1%
     and 14.9% respectively, for the three months ended June 30, 2006, compared
     with 1.0% and 13.1%, respectively, for the three months ended June 30,
     2005.

          Net income for the six months ended June 30, 2006 was $1.3 million or
     $2.75 per share compared to $1.1 million or $2.46 per share for the same
     period in 2005. Annualized return on average assets and average equity were
     1.0% and 12.9% respectively, for the six months ended June 30, 2006,
     compared with 1.0% and 12.2% respectively, for the six months ended June
     30, 2005.

          Earnings projections for the remainder of 2006 are expected to be
     consistent with second half 2005 earnings. Compared to previous years, we
     do not expect earnings to grow at the same rate due to the increased
     interest costs paid by the Bank on its growing deposit base and the slowing
     of the real estate market caused by the higher interest costs for consumers
     resulting in a lower net interest margin for the Bank.

     NET INTEREST INCOME

          Net interest income represents the primary component of CNB's
     earnings. It is the difference between interest and fee income related to
     earning assets and interest expense incurred to carry interest-bearing
     liabilities. Changes in the volume and mix of interest earning assets and
     interest bearing liabilities, as well as changing interest rates, impact
     net interest income. To manage these changes, their impact on net interest
     income and the risk associated with them, CNB utilizes an ongoing
     asset/liability management program. This program includes analysis of the
     difference between rate sensitive assets and rate sensitive liabilities,
     earnings sensitivity to rate changes, and source and use of funds. A
     discussion of net interest income and the factors impacting it is presented
     below.

          Net interest income for the three months ended June 30, 2006 increased
     by $45,000 or 1.9% over the same period in 2005. Interest income for the
     three months ended June 30, 2006 increased by $618,000 or 18.8% compared to
     the same period in 2005, while interest expense increased by $574,000 or
     64.6% during the three months ended June 30, 2006, as compared to the same
     period in the prior year.

          Net interest income for the six months ended June 30, 2006 increased
     by $182,000 or 3.9% over the same period in 2005. Interest income for the
     six months ended June 30, 2006 increased by $1.2 million or 19.4% compared
     to the same period in 2005, while interest expense increased by $1.0
     million or 61.8% during the six months ended June 30, 2006, as compared to
     the same period in the prior year.

          Increased net interest income for the three and six month periods is
     attributable to a higher level of net interest earning assets and an
     increase in the rates earned thereon. The Bank continues to experience an
     increase in the average balance of higher yielding loans. The increase in
     the rates earned on interest earning assets is due to the current rising
     rate environment. The Bank has continued to experience steady deposit
     growth. The average balance on interest bearing liabilities increased along
     with the total interest expense paid on those interest bearing liabilities,
     in all categories except for savings deposits. The Bank's higher loan
     demand and steady deposit growth has resulted in an increased loan to
     deposit ratio.

          During the second quarter of 2006 compared to the same period in 2005,
     average net interest earning assets increased $25.1 million or 11.3% and
     average net interest bearing liabilities increased $19.4 million or 10.8%
     resulting in increased net interest income. CNB experienced a 35 basis
     point decrease in the ratio of net interest income to average interest
     earning assets. The 97 basis point increase in rates paid on average
     interest bearing liabilities offset by a 41 basis point increase in rates
     earned on average interest earning assets contributed to the decrease in
     the net interest margin.


                                       15

<PAGE>

          During the first six months of 2006 compared to the same period in
     2005, average net interest earning assets increased $26.2 million or 12.0%
     and average net interest bearing liabilities increased $20.0 million or
     11.2% resulting in increased net interest income. CNB experienced a 29
     basis point decrease in the ratio of net interest income to average
     interest earning assets. The 87 basis point increase in rates paid on
     average interest bearing liabilities offset by a 40 basis point increase in
     rates earned on average interest earning assets contributed to the decrease
     in the net interest margin.

          See Table 1 and Table 2 - Distribution of Assets, Liabilities, and
     Shareholders' Equity; Interest Rates and Interest Differential.

          The net interest margin is impacted by the change in the spread
     between yields on earning assets and rates paid on interest bearing
     liabilities.


                                       16
<PAGE>

     TABLE 1. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
                    INTEREST RATES AND INTEREST DIFFERENTIAL

<TABLE>
<CAPTION>
                                                         JUNE 30, 2006                    JUNE 30, 2005
                                                ------------------------------   ------------------------------
                                                   QTR                              QTR
                                                 AVERAGE       QTR      YIELD/    AVERAGE       QTR      YIELD/
                                                 BALANCE    INTEREST   RATE(4)    BALANCE    INTEREST   RATE(4)
                                                ---------   --------   -------   ---------   --------   -------
                                                                   (IN THOUSANDS OF DOLLARS)

<S>                                              <C>         <C>        <C>       <C>         <C>        <C>
Interest earning assets:
    Federal funds sold                            $      30   $     1     4.82%    $      26   $     -     2.85%
    Securities:
      Taxable                                        44,591       531     4.76        43,488       486     4.47
      Tax-exempt (1)                                 10,893        94     5.23        12,778       109     5.17
    Loans (net of unearned interest) (2)(5)(6)      191,700     3,201     6.68       165,783     2,614     6.31
                                                  ---------   -------    ------    ---------   -------    -----
        Total interest earning assets (1)         $ 247,214   $ 3,827     6.19%    $ 222,075   $ 3,209     5.78%
                                                  ---------   -------    ------    ---------   -------    -----

Nonearning assets:
    Cash and due from banks                       $   9,822                        $   8,613
    Bank premises and equipment, net                  6,507                            6,423
    Other assets                                      5,069                            4,194
    Allowance for loan losses                        (2,150)                          (1,933)
                                                  ---------                        ----------
        Total assets                              $ 266,462                        $ 239,372
                                                  =========                        ==========

Interest bearing liabilities:
    Savings deposits                              $  31,692   $    39     0.49%    $  32,472   $    40     0.49%
    Time deposits                                    97,381       879     3.61        86,459       565     2.61
    NOW accounts                                     44,603       326     2.92        42,615       206     1.93
    Money market accounts                            10,619        37     1.39        10,179        22     0.86
    Borrowings                                       14,024       180     5.13         7,240        55     3.04
                                                  ---------   -------    ------    ---------   -------    -----
        Total interest bearing liabilities        $ 198,319   $ 1,461     2.95%    $ 178,965   $   888     1.98%
                                                  ---------   -------    ------    ---------   -------    -----

Noninterest bearing liabilities:
    Demand deposits                               $  45,469                        $  39,833
    Other liabilities                                 3,119                            2,219
    Shareholders' equity                             19,555                           18,355
                                                  ---------                        ---------
        Total liabilities and
           shareholders' equity                   $ 266,462                        $ 239,372
                                                  =========                        =========

                                                              -------                          -------
Net interest income (1)                                       $ 2,366                          $ 2,321
                                                              =======                          =======

Net interest spread (3)                                                   3.26%                            3.81%
                                                                         =====                            =====

Net interest income to average
    interest earning assets (1)                                           3.83%                            4.18%
                                                                         =====                            =====
</Table>

(1)  Yields are expressed on a tax equivalent basis using a 34% tax rate.

(2)  For the purpose of these computations, nonaccruing loans are included in
     the amounts of average loans outstanding. (3) Net interest spread is the
     difference between the weighted average yield on interest-earning assets
     and the weighted average cost of interest-bearing liabilities.

(4)  Yields/Rates are expressed on an annualized basis.

(5)  Interest income on loans excludes fees of $73,000 in 2006 and $73,000 in
     2005.

(6)  Interest income on loans includes fees of $22,076 in 2006 and $16,393 in
     2005 from the Business Manager Program, student loans and lease
     receivables.



                                       17

<PAGE>

     TABLE 2. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
                    INTEREST RATES AND INTEREST DIFFERENTIAL

<TABLE>
<CAPTION>
                                                         JUNE 30, 2006                    JUNE 30, 2005
                                                ------------------------------   ------------------------------
                                                   YTD                              YTD
                                                 AVERAGE      YTD       YIELD/    AVERAGE       YTD      YIELD/
                                                 BALANCE    INTEREST   RATE(4)    BALANCE    INTEREST   RATE(4)
                                                ---------   --------   -------   ---------   --------   -------
                                                                   (IN THOUSANDS OF DOLLARS)
<S>                                             <C>         <C>        <C>       <C>         <C>        <C>

Interest earning assets:
   Federal funds sold                          $      33    $     1     4.59%    $      33   $     1     2.61%
   Securities:
     Taxable                                      44,145      1,031     4.67        43,254       941     4.35
     Tax-exempt (1)                               11,296        194     5.20        12,726       217     5.17
   Loans (net of unearned interest) (2)(5)(6)    188,758      6,221     6.59       161,997     5,051     6.24
                                               ---------    -------    -----     ---------   -------    -----
        Total interest earning assets (1)      $ 244,232    $ 7,447     6.10%    $ 218,010   $ 6,210     5.70%
                                               ---------    -------    -----     ---------   -------    -----

Nonearning assets:
   Cash and due from banks                     $   9,631                         $   9,228
   Bank premises and equipment, net                6,533                             6,270
   Other assets                                    4,986                             4,221
   Allowance for loan losses                      (2,113)                           (1,903)
                                               ---------                         ---------
        Total assets                           $ 263,269                         $ 235,826
                                               =========                         =========

Interest bearing liabilities:
   Savings deposits                            $  31,721    $    78     0.49%    $  32,127   $    79     0.49%
   Time deposits                                  95,154      1,622     3.41        87,093     1,106     2.54
   NOW accounts                                   43,889        607     2.77        40,881       376     1.84
   Money market accounts                          10,455         67     1.28        10,095        43     0.85
   Borrowings                                     15,272        369     4.83         6,442        92     2.86
                                               ---------    -------    -----     ---------   -------    -----
        Total interest bearing liabilities     $ 196,491    $ 2,743     2.79%    $ 176,638   $ 1,696     1.92%
                                               ---------    -------    -----     ---------   -------    -----

Noninterest bearing liabilities:
   Demand deposits                             $  44,260                         $  38,521
   Other liabilities                               3,076                             2,254
   Shareholders' equity                           19,442                            18,413
                                               ---------                         ---------
        Total liabilities and
           shareholders' equity                $ 263,269                         $ 235,826
                                               =========                         =========

                                                            -------                          -------
Net interest income (1)                                     $ 4,704                          $ 4,514
                                                            =======                          =======

Net interest spread (3)                                                 3.31%                            3.78%
                                                                       =====                            =====

Net interest income to average                                          3.85%                            4.14%
                                                                       =====                            =====
   interest earning assets (1)

</Table>

(1)  Yields are expressed on a tax equivalent basis using a 34% tax rate.

(2)  For the purpose of these computations, nonaccruing loans are included in
     the amounts of average loans outstanding.

(3)  Net interest spread is the difference between the weighted average yield on
     interest-earning assets and the weighted average cost of interest-bearing
     liabilities.

(4)  Yields/Rates are expressed on an annualized basis.

(5)  Interest income on loans excludes fees of $138,000 in 2006 and $145,000 in
     2005.

(6)  Interest income on loans includes fees of $43,250 in 2006 and $31,876 in
     2005 from the Business Manager Program, student loans and lease
     receivables.


                                       18
<PAGE>

PROVISION FOR LOAN LOSSES

     The amount charged to provision for loan losses is based on management's
evaluation of the loan portfolio. Management determines the adequacy of the
allowance for loan losses, based on past loan loss experience, current economic
conditions and composition of the loan portfolio. The allowance for loan losses
is the best estimate of management of the probable losses which have been
incurred as of a balance sheet date.

     The provision for loan losses is a charge to earnings which is made to
maintain the allowance for loan losses at a sufficient level. The provision for
loan losses for the three months ended June 30, 2006 and June 30, 2005 amounted
to $74,500 and $102,000, respectively. The provision for loan losses for the six
months ended June 30, 2006, and June 30, 2005, amounted to $186,500 and
$208,000, respectively. Loan quality remains stable and non performing loans
decreased from the same period in 2005. Management believes the allowance for
loan losses is adequate and is not aware of any information relating to the loan
portfolio which it expects will materially impact future operating results,
liquidity or capital resources. In addition, federal regulators may require an
adjustment to the reserves as a result of their examination of the bank. See
"Nonperforming Assets and Allowance for Loan Losses" for further discussion.

NONINTEREST INCOME

     Noninterest income for the three months ended June 30, 2006 decreased
$2,000 or 0.5% to $511,000 from $513,000 in the second quarter of 2006.
Noninterest income for the six months ended June 30, 2006 increased $12,000 or
1.3% to $975,000 from $963,000 during the first six months of 2005. The decrease
in noninterest income for the three months ended June 30, 2006 is a direct
result of reporting income for CNB Insurance Services, Inc. in discontinued
operations for 2006 offset by increases in Bounce Protection fees, ATM and
debit card fees and trust fee income. The increase in noninterest income for the
six months ended June 30, 2006 is attributable to an increase in Bounce
Protection fees, ATM and debit card fees and trust fee income offset by a
decrease in income from the title insurance company and the decrease in income
from discontinued operations of CNB Insurance Services, Inc. The decrease in
income from the title insurance company is a direct result of a decrease in the
number of policies written during the period. The increase in fees related to
the Bounce Protection, ATM and debit cards have a direct correlation to the
increased deposit base of the bank. Trust fees increased due to the assets under
management increased 13% over the same period last year.

NONINTEREST EXPENSES

     Noninterest expenses for the three months ended June 30, 2006, decreased
$15,000 or 0.8% and for the six months ended June 30, 2006, increased $200,000
or 5.4%. The expenses related to the discontinued operations of CNB Insurance
Services, Inc have a positive impact on the noninterest expenses for the three
and six month periods ending June 30, 2006. The following details explain the
increases to noninterest expenses. Salaries increased due to normal merit
increases and a full three months expense of salaries for the new Spring Mills
branch employees in 2006. Additionally in late January 2006, the Bank increased
all hourly salaries to become more inline with the area competition. Employee
benefits increased due to an increase in pension expense, an increase in health
insurance costs and increased salaries. Although, the bank changed its health
insurance program, effective January 1, 2005, to a high deductible plan with
reduced per employee premiums, the insurance expense for the first six months of
2006 showed an increase over the same period last year due to the increased
number of employees who were eligible and elected to be in the plan. Concurrent
with the creation of the high deductible insurance plan, the Bank established a
vested health contribution plan which enables the Bank to contribute to health
reimbursement accounts for each employee on the plan. Occupancy expense
increased due to the cost of needed building repairs at a few of the branch
buildings along with the added costs of depreciation and building supplies for
an additional branch facility in Spring Mills, West Virginia. Furniture and
equipment expense showed a decrease for the three and six months ended June 30,
2006 as compared to the same periods last year. This decrease was due to a
reduction in software amortization expense due to items related to the computer
conversion in 2003 being fully amortized in February 2006 offset by the
additional depreciation for equipment and software purchased for the new branch
facility in Spring Mills and the increased cost and number of maintenance
contracts the bank carries on its equipment. The decrease in other operating
expenses for the three and six months ended June 30, 2006 was due to decreases
in stationary, supplies and printing and outside service fees. Although,
advertising expense, master money expense and ATM expense showed decreases for
the second quarter of 2006, year to date expense for these categories exceeded
the same period last year. During the first quarter of 2006, the bank increased
its newspaper and radio exposure showcasing the Bank's deposit products. This
exposure was significantly reduced during the second quarter of 2006. Master
money and ATM expense


                                       19

<PAGE>

decreased due to the Bank converting to a new system for processing during the
second quarter of 2006. The ATM expense increase for the first quarter was a
direct result of the one time conversion costs for the new system. Offsetting
these decreases to other operating expenses was an increase to loss on sale of
securities and a loss on disposal of premises and equipment. The decrease in
outside service fees is due to additional costs in 2005 for compliance with new
banking regulations and the provisions of the Sarbanes-Oxley Act of 2002. In
2006, there was no expense for compliance with the Sarbanes-Oxley Act of 2002
due to the unknown outcome of this Act for banks of our size.

INCOME TAXES

     The Bank's provision for income taxes increased $37,000 or 13.0% to
$318,000 for the three months ended June 30, 2006 and decreased $34,000 or 5.7%
to $555,000 for the six months ended June 30, 2006. The effective tax rates for
the second quarter of 2006 and 2005 were 32.9% and 31.9%, respectively and for
the first six months of 2006 and 2005 were 32.0% and 34.3%, respectively. The
Bank's income tax expense differs from the amount computed at statutory rates
primarily due to the tax-exempt earnings from certain investment securities and
certain non deductible expenses.

FINANCIAL CONDITION

     The Bank's total assets as of June 30, 2006 increased $13.4 million or 5.2%
to $272.4 million from December 31, 2005 due primarily to a $12.3 million
increase in loans, $927,000 increase in investment securities offset by a
$346,000 decrease in cash and due from banks. The Bank's total liabilities
increased $13.1 million or 5.5% to $253.1 million from December 31, 2005 due to
a $17.8 million increase in deposits offset by a $4.8 million decrease in
borrowings. Shareholders' equity increased $306,000 to $19.3 million at June 30,
2006, due to net income of $1.3 million offset by the semi-annual cash dividend
of $206,000 and a $746,000 decrease in accumulated other comprehensive income.
The $746,000 decrease in accumulated other comprehensive income is a direct
result of the decline in market value of available for sale securities. The
components of accumulated other comprehensive income at June 30, 2006 and
December 31, 2005, were unrealized gains and losses on available for sale
securities, net of deferred income taxes and minimum pension liability
adjustment, net of deferred income taxes. The unrealized gains and losses are
primarily a function of available market interest rates relative to the yield
being generated on the available for sale portfolio. No earnings impact results
unless the securities are actually sold.

LOAN PORTFOLIO

     At June 30, 2006, total loans increased $12.3 million or 6.9% to $192.6
million from $180.2 million at December 31, 2005. The concentrated calling
effort in Berkeley County continues to show results into the second quarter of
2006 as loan demand stays strong. Bank customers are becoming more comfortable
with our new branch manager/loan officer at the Bank's Spring Mills branch
causing continued increased loan production at that branch. Another factor
contributing to the increase in loans is the number of bank mergers taking place
in our market area. The Bank's market area has begun to experience a slowdown in
the real estate market in turn loan demand has begun to slow also.

NONPERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES

     Nonperforming assets consist of nonaccrual loans, loans which are past due
90 days or more and still accruing interest, restructured loans and other real
estate owned. The following table summarized the Bank's nonperforming assets as
of the periods shown:


                                       20

<PAGE>

<TABLE>
<CAPTION>
                                              JUNE 30,
                                        -------------------   DECEMBER 31,
                                          2006       2005         2005
                                        --------   --------   ------------
<S>                                     <C>        <C>        <C>
Nonaccrual loans                        $204,942   $192,159     $789,684
Loans past due 90 days or more
   still accruing interest                    --     44,060           --
                                        --------   --------     --------
Total nonperforming loans               $204,942   $236,219     $789,684
                                        --------   --------     --------
Other real estate owned                 $     --   $     --          $--
                                        --------   --------     --------
Total nonperforming assets              $204,942   $236,219     $789,684
                                        ========   ========     ========
Nonperforming loans/Total loans             0.11%      0.14%        0.44%
Nonperforming assets/Total assets           0.08%      0.10%        0.31%
Allowance for loan losses/Total loans       1.12%      1.16%        1.12%
</TABLE>

     As of June 30, 2006, the Bank has no loans which management considers to be
impaired. Management is aware of seven borrowers who have exhibited weaknesses.
Their loans have aggregate uninsured balances of $1.3 million. The loans are
collateralized and management anticipates any additional potential loss would be
minimal.

     The allowance for loan losses is the best estimate by management of the
probable losses which have been incurred as of a balance sheet date. Management
makes this determination quarterly by its analysis of overall loan quality,
changes in the mix and size of the loan portfolio, previous loss experience,
general economic conditions, information about specific borrowers and other
factors. The Bank's methodology for determining the allowance for loan losses
established both an allocated and an unallocated component. The allocated
portion of the allowance represents the results of analyses of individual loans
that the Bank monitors for potential credit problems and pools of loans within
the portfolio. Management bases the allocated portion of the allowance for loans
principally on current loan risk ratings, historical loan loss rates adjusted to
reflect current conditions, as well as analyses of other factors that may have
affected the collectibility of loans in the portfolio. The Bank analyzes all
commercial loans it is monitoring as potential credit problems to determine
whether those loans are impaired, with impairment measured by reference to the
borrowers' collateral values and cash flows.

     The unallocated portion of the allowance for loan losses represents the
results of analyses that measure probable losses inherent in the portfolio that
are not adequately captured in the allocated allowance analyses. These analyses
include consideration of unidentified losses inherent in the portfolio resulting
from changing underwriting criteria, changes in the types and mix of loans
originated, industry concentrations and evaluations, allowance levels relative
to selected overall credit criteria and other economic indicators used to
estimate probable incurred losses. At June 30, 2006, the allowance for loan
losses totaled $2.2 million compared to $2.0 million at December 31, 2005. The
allowance for loan losses as a percentage of loans was 1.1% as of June 30, 2006
and December 31, 2005.

     An analysis of the allowance for loan losses is summarized below:

<TABLE>
<CAPTION>
                                   JUNE 30,               DECEMBER 31,
                                     2006                     2005
                            ----------------------   ----------------------
                                       PERCENT OF               PERCENT OF
                                     LOANS IN EACH            LOANS IN EACH
                                      CATEGORY TO              CATEGORY TO
In thousands                AMOUNT    TOTAL LOANS    AMOUNT    TOTAL LOANS
                            ------   -------------   ------   -------------
<S>                         <C>      <C>             <C>      <C>
Commercial, financial       $  938          21%      $1,056         21%
    and agriculture
Real estate - residential      481          69          528         69
     mortgage
Installment and other          332          10          303         10
Unallocated                    404         N/A          135        N/A
                            ------        ----       ------        ---
       Total                $2,155        100%       $2,022        100%
                            ======        ===        ======        ===
</TABLE>


                                       21

<PAGE>

DEPOSITS

     The Bank's deposits increased $17.8 million or 8.1% during the six months
ended June 30, 2006. $5.6 million of the increase is a direct result of a single
public fund deposit relationship which operates in the bank's market area.
During the first quarter the Bank offered an incentive program to all bank
employees to generate deposits at all bank locations. This incentive program
generated $6.2 million in new deposits for the Bank, of which approximately $4.0
million was in other time deposits and rate sensitive jumbo certificates of
deposit. In our Washington County, Maryland market area, there have been a
number of bank mergers and CNB is benefiting from these mergers with the
increased volume of new deposit accounts. The Bank's Washington County Maryland
branch has grown $3.1 million in deposits since December 31, 2005. Another
factor contributing to the increase in other time deposits and rate sensitive
jumbo certificates of deposit are the competitive rates the Bank was offering on
its certificates of deposit during the first six months of 2006.

CAPITAL RESOURCES

     Shareholders' equity increased $306,000 or 1.6% during the first six months
of 2006 due to $1.3 million in net income offset by the semi-annual cash
dividend of $206,000 and a $746,000 decrease in accumulated other comprehensive
income. The Bank is subject to regulations of the Office of the Comptroller of
the Currency that impose certain minimum regulatory capital requirements. Under
each measure, the Bank was substantially in excess of the minimum regulatory
requirements, and, by definition was "well capitalized" at June 30, 2006. The
following table summarizes, as of June 30, 2006, the Bank's capital ratios.

<TABLE>
<CAPTION>
                           Components   Actual   Required
                           of Capital    Ratio     Ratio
                           ----------   ------   --------
<S>                        <C>          <C>      <C>
Tier 1 Capital               $20,731      7.8%     4.0%
Total Risk Based Capital     $22,752     14.1%     8.0%
</TABLE>

RECENTLY ISSUED ACCOUNTING STANDARDS

     On March 17, 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 156, "Accounting for Servicing
of Financial Assets." The new Standard, which is an amendment to FAS No. 140,
will simplify the accounting for servicing assets and liabilities, such as those
common with mortgage securitization activities.

     Specifically, the new Standard addresses the recognition and measurement of
separately recognized servicing assets and liabilities and provides an approach
to simplify efforts to obtain hedge-like (offset) accounting.

     The standard also:

               1.   Clarifies when an obligation to service financial assets
                    should be separately recognized as a servicing asset or a
                    servicing liability.

               2.   Requires that a separately recognized servicing asset or
                    servicing liability be initially measured at fair value, if
                    practicable.

               3.   Permits an entity with a separately recognized servicing
                    asset or servicing liability to choose either of the
                    following methods for subsequent measurement:

                         a.   Amortization Method

                         b.   Fair Value Method

     The new Standard is effective for all separately recognized servicing
assets and liabilities acquired or issued after the beginning of an entity's
fiscal year that begins after September 15, 2006, with early adoption permitted.
CNB is in the process of determining whether this new pronouncement will have a
material impact on their financial statements.


                                       22

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk is the exposure to economic loss that arises from changes in
the values of certain financial instruments. The types of market risk exposures
generally faced by banking entities include interest rate risk, bond market
price risk, foreign currency risk and commodity price risk. Due to the nature of
its operations, only bond market price risk and interest rate risk are
significant to the Bank.

     The objective of the Bank's liquidity management program is to ensure the
continuous availability of funds to meet the withdrawal demands of depositors
and the credit needs of borrowers. The basis of the Bank's liquidity comes from
the stability of its core deposits. Liquidity is also available through the
available for sale securities portfolio and short-term funds such as federal
funds sold which totaled $56.1 million, or 20.6% of total assets at June 30,
2006. In addition, liquidity may be generated through loan repayments and over
$7.5 million of available borrowing arrangements with correspondent banks. At
June 30, 2006, management considered the Bank's ability to satisfy its
anticipated liquidity needs over the next twelve months. Management believes
that the Bank is well positioned and has ample liquidity to satisfy these needs.
The Bank generated $1.9 million of cash from operations in the first six months
of 2006, which compares to $2.4 million during the same time period in 2005.
Additional cash of $12.8 million was generated through net financing activities
through June 30, 2006, which compares to $5.8 million used in financing
activities for the first six months of 2005. These proceeds, along with proceeds
from the sales and calls of investment securities, were used to fund loans and
purchase securities during each year. Net cash used in investing activities
totaled $15.0 million during the first six months of 2006 compared to $8.2
million during the same time period in 2005. Details on both the sources and
uses of cash are presented in the Consolidated Statements of Cash Flows
contained in the financial statements.

     The objective of the Bank's interest rate sensitivity management program,
also known as asset/liability management, is to maximize net interest income
while minimizing the risk of adverse effects from changing interest rates. This
is done by controlling the mix and maturities of interest sensitive assets and
liabilities. The Bank has established an asset/liability committee for this
purpose. Daily management of the Bank's sensitivity of earnings to changes in
interest rates within the Bank's policy guidelines are monitored by using a
combination of off-balance sheet and on-balance sheet financial instruments. The
Bank's Chief Executive Officer, Senior Lending Officer, Chief Financial Officer
and the Chief Operations Officer monitor day to day deposit flows, lending
requirements and the competitive environment. Rate changes occur within policy
guidelines if necessary to minimize adverse effects. Also, the Bank's policy is
intended to ensure the Bank measures a range of rate scenarios and patterns of
rate movements that are reasonably possible. The Bank measures the impact that
200 basis point changes in rates would have on earnings over the next twelve
months.

     In analyzing interest rate sensitivity for policy measurement, the Bank
compares its forecasted earnings in both a "high rate" and "low rate" scenario
to a base-line scenario. The Bank's base-line scenario is its estimated most
likely path for future short-term interest rates over the next 12 months. The
"high rate" and "low rate" scenarios assumes a 100 and 200 basis point increases
or decreases in the prime rate from the beginning point of the base-line
scenario over the most current 12-month period. The Bank's policy limit for the
maximum negative impact on earnings resulting from "high rate" or "low rate"
scenarios is 10 percent. The policy measurement period is 12 months in length,
beginning with the first month of the forecast.

     The Bank's base-line scenario holds the prime rate constant at 8.25 percent
through June 2007. Based on the July 2006 outlook, if interest rates increased
or decreased by 200 basis points, the model indicates that net interest income
during the policy measurement period would be affected by less than 10 percent,
in both an increasing or decreasing interest rate scenario.

CONTRACTUAL OBLIGATIONS

     There were no other material changes outside the normal course of business
to the quantitative and qualitative disclosures about contractual obligations
previously reported on Form 10-K for the year ended December 31, 2005. See Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Contractual Obligations" in the Form 10-K for December 31, 2005 for
a detailed discussion.


                                       23

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

     The Company's chief executive officer and chief financial officer, based on
their evaluation as of the end of the reporting period of this quarterly report
of the Company's disclosure controls and procedures (as defined in Rule 13 (a) -
14 (c) of the Securities Exchange Act of 1934), have concluded that the
Company's disclosure controls and procedures are adequate and effective for
purposes of Rule 13 (a) - 14 (c) and timely, alerting them to material
information relating to the Company required to be included in the Company's
filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934.

     There have been no changes in the Company's internal controls over
financial reporting in the fiscal quarter ended June 30, 2006, that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

     Presently, the Bank has delayed the documentation of internal controls as
part of the compliance with Section 404 of the Sarbanes-Oxley Act.


                                       24

<PAGE>

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

     None; however, CNB is involved in various legal proceedings occurring in
     the ordinary course of business. There are no material legal proceedings to
     which CNB or its subsidiary is a part, or to which any of their property is
     subject.

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

a.)  The 2005 annual meeting of stockholders of CNB Financial Services, Inc. was
     held April 5, 2006.

b.)  Proxies for the annual meeting were solicited pursuant to Regulation 14A
     under the Securities and Exchange Act of 1934. There was no solicitation in
     opposition to management's nominees as listed in the proxy statement, and
     all such nominees were reelected.

c.)  (1) Election of Directors

     Elected to serve as directors until the 2006 annual meeting of
     stockholders to be held in 2007:

<TABLE>
<CAPTION>
                                   Without
                          For     Authority
                        -------   ---------
<S>                     <C>       <C>
Kenneth W. Apple        277,106     1,214
J. Robert Ayers         277,106     1,214
John E. Barker          277,106     1,214
Margaret S. Bartles     277,106     1,214
Jay E. Dick             277,106     1,214
Herbert L. Eppinger     277,106     1,214
Robert L. Hawvermale    277,106     1,214
J. Philip Kesecker      277,106     1,214
Jerald McGraw           277,106     1,214
Martha H. Quarantillo   277,106     1,214
Thomas F. Rokisky       277,106     1,214
Charles S. Trump, IV    277,106     1,214
Arlie R. Yost           277,106     1,214
</TABLE>

Item 6. Exhibits

     31.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
     Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
     of 2002

     31.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
     Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
     of 2002

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

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


                                       25

<PAGE>

                                   SIGNATURES

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

                                      CNB Financial Services, Inc.
                                      (Registrant)


Date August 14, 2006                  /s/ Thomas F. Rokisky, President/CEO
                                      ------------------------------------------


Date August 14, 2006                  /s/ Rebecca S. Stotler, Vice President/CFO
                                      ------------------------------------------


                                       26