<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, 2007

[ ]  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]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 458,048 shares of common stock,
par value $1 per share, as of August 13, 2007.

<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, 2007 (Unaudited) and December 31, 2006.........        3

            Consolidated Statements of Income for the Three and Six
               Months ended June 30, 2007 and 2006 (Unaudited).........        4

            Consolidated Statements of Changes in Shareholders' Equity
               for the Three and Six Months Ended June 30, 2007
               (Unaudited) and the Year Ended December 31, 2006........        5

            Consolidated Statements of Cash Flows for the Six Months
               Ended June 30, 2007 and 2006 (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 Three and Six Months
               ended June 30, 2007.....................................       15

   Item 3.  Quantitative and Qualitative Disclosures about Market
               Risk....................................................       25

   Item 4.  Controls and Procedures....................................       26

PART II: OTHER INFORMATION

   Item 1.  Legal Proceedings..........................................       27

   Item 1a. Risk Factors...............................................       27

   Item 4.  Submission of Matters to a Vote of Security Holders........       27

   Item 6.  Exhibits and Reports on Form 8-K...........................       27

            SIGNATURES.................................................       28
</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 2007 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,
                                                       2007           2006
                                                   ------------   ------------
                                                    (Unaudited)     (Audited)
<S>                                                <C>            <C>
                     ASSETS
Cash and due from banks                            $  8,689,589   $  7,358,773
Federal funds sold                                    2,418,000          9,000
Securities available for sale
   (at approximate market value)                     53,162,734     50,873,335
Federal Home Loan Bank stock, at cost                 1,230,000      1,753,000
Loans and lease receivable, net                     201,247,424    204,318,993
Accrued interest receivable                           1,323,721      1,354,041
Premises and equipment, net                           6,258,077      6,327,294
Deferred income taxes                                 1,676,455      1,482,166
Cash surrender value of life insurance                1,511,276      1,394,521
Intangible assets                                       441,420        497,178
Other assets                                            404,975        700,240
                                                   ------------   ------------
      TOTAL ASSETS                                 $278,363,671   $276,068,541
                                                   ============   ============
      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
   Deposits:
      Demand                                       $ 45,407,159   $ 42,751,409
      Interest-bearing demand                        50,451,718     52,549,478
      Savings                                        25,808,447     27,548,990
      Time, $100,000 and over                        45,371,576     37,760,199
      Other time                                     79,314,236     72,472,664
                                                   ------------   ------------
                                                   $246,353,136   $233,082,740
   Accrued interest payable                           1,212,084      1,071,990
   FHLB borrowings                                    6,800,000     18,500,000
   Accrued expenses and other liabilities             2,993,823      3,091,549
                                                   ------------   ------------
      TOTAL LIABILITIES                            $257,359,043   $255,746,279
                                                   ------------   ------------
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                                 18,474,984     17,421,402
   Accumulated other comprehensive income            (2,091,996)    (1,720,780)
                                                   ------------   ------------
      TOTAL SHAREHOLDERS' EQUITY                   $ 21,004,628   $ 20,322,262
                                                   ------------   ------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $278,363,671   $276,068,541
                                                   ============   ============
</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,
                                                           -----------------------   -----------------------
                                                              2007         2006         2007         2006
                                                           ----------   ----------   ----------   ----------
<S>                                                        <C>          <C>          <C>          <C>
INTEREST INCOME
   Interest and fees on loans                              $3,598,134   $3,273,477   $7,255,996   $6,358,570
   Interest and dividends on securities
      U.S. Government agencies and corporations               326,642      396,260      657,720      775,181
      Mortgage backed securities                              102,957      105,403      205,359      206,696
      State and political subdivisions                         99,210       97,383      202,722      200,871
      Dividend income                                          24,130       23,231       50,700       35,940
   Interest on FHLB deposits                                    2,482        4,364        2,965        7,293
   Interest on federal funds sold                              28,142          352       36,295          754
                                                           ----------   ----------   ----------   ----------
                                                           $4,181,697   $3,900,470   $8,411,757   $7,585,305
                                                           ----------   ----------   ----------   ----------
INTEREST EXPENSE
   Interest on interest bearing demand, savings and time
      deposits                                             $1,778,088   $1,282,151   $3,389,969   $2,375,520
   Interest on FHLB borrowings                                 70,525      179,592      294,986      368,566
                                                           ----------   ----------   ----------   ----------
                                                           $1,848,613   $1,461,743   $3,684,955   $2,744,086
                                                           ----------   ----------   ----------   ----------
         NET INTEREST INCOME                               $2,333,084   $2,438,727   $4,726,802   $4,841,219
PROVISION FOR LOAN LOSSES                                      35,500       74,500       97,999      186,500
                                                           ----------   ----------   ----------   ----------
         NET INTEREST INCOME AFTER PROVISION FOR LOAN
            LOSSES                                         $2,297,584   $2,364,227   $4,628,803   $4,654,719
                                                           ----------   ----------   ----------   ----------
NONINTEREST INCOME
   Service charges on deposit accounts                     $  336,762   $  322,379   $  640,108   $  610,612
   Other service charges, commissions and fees                200,356      167,229      383,430      319,492
   Insurance commissions                                           --           --           --           --
   Other operating income                                      78,676       13,976       97,462       34,293
   Net gain on sales of loans                                  28,953           --       55,169           --
   Income from title company                                    2,695        7,167        5,839       11,040
                                                           ----------   ----------   ----------   ----------
                                                           $  647,442   $  510,751   $1,182,008   $  975,437
                                                           ----------   ----------   ----------   ----------
NONINTEREST EXPENSES
   Salaries                                                $  784,139   $  752,195   $1,526,740   $1,507,206
   Employee benefits                                          302,757      338,540      626,987      637,840
   Occupancy of premises                                      134,270      125,988      263,248      246,488
   Furniture and equipment expense                            210,692      202,826      419,366      414,687
   Other operating expenses                                   526,144      488,166    1,034,828    1,030,870
   Net (gain) loss on sale of securities                         (238)        (437)       1,879       40,741
   Net (gain) loss on disposal of premises and equipment       (1,100)       2,567          (54)      19,756
                                                           ----------   ----------   ----------   ----------
                                                           $1,956,664   $1,909,845   $3,872,994   $3,897,588
                                                           ----------   ----------   ----------   ----------
         INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
            TAXES                                          $  988,362   $  965,133   $1,937,817   $1,732,568
PROVISION FOR INCOME TAXES                                    331,893      317,934      655,211      554,821
                                                           ----------   ----------   ----------   ----------
         INCOME FROM CONTINUING OPERATIONS                 $  656,469   $  647,199   $1,282,606   $1,177,747
                                                           ----------   ----------   ----------   ----------
               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 DISCOUNTINUED OPERATIONS           $       --   $   78,914   $       --   $   80,366
         NET INCOME                                        $  656,469   $  726,113   $1,282,606   $1,258,113
                                                           ==========   ==========   ==========   ==========
BASIC EARNINGS PER SHARE                                   $     1.43   $     1.59   $     2.80   $     2.75
                                                           ==========   ==========   ==========   ==========
</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, 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
                                  =========   ==========   ===========    ===========     ===========
BALANCE, JANUARY 1, 2007          $ 458,048   $4,163,592   $17,421,402    $(1,720,780)    $20,322,262
                                                                                          -----------
Comprehensive income:
   Net income for six months
      ended June 30, 2007                --           --     1,282,606             --       1,282,606
   Change in unrealized gains
      (losses) on securities
      available for sale
      (net of tax of $227,520)           --           --            --       (371,216)       (371,216)
                                                                                          -----------
Total Comprehensive Income                                                                    911,390
                                                                                          -----------
Cash dividends ($.50 per share)          --           --      (229,024)            --        (229,024)
                                  ---------   ----------   -----------    -----------     -----------
BALANCE, JUNE 30, 2007            $ 458,048   $4,163,592   $18,474,984    $(2,091,996)    $21,004,628
                                  =========   ==========   ===========    ===========     ===========
</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,
                                                                       ---------------------------
                                                                           2007           2006
                                                                       ------------   ------------
<S>                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                             $  1,282,606   $  1,258,113
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization on premises, equipment and software        287,306        370,182
   Provision for loan losses                                                 97,999        186,500
   Deferred income taxes                                                     33,231        (72,963)
   Net loss on sale of securities                                             1,879         40,741
   Net (gain) loss on disposal of premises and equipment                        (54)        19,756
   Net gain on loans sold                                                   (55,169)            --
   Loans originated for sale                                             (3,248,550)            --
   Proceeds from loans sold                                               3,303,719             --
   (Increase) decrease in accrued interest receivable                        30,320        (51,267)
   (Increase) decrease in other assets                                      387,908        (36,970)
   Gain on sale of CNB Insurance Services Inc                                    --       (143,913)
   Gain on sale of stock                                                    (59,369)            --
   Increase in accrued interest payable                                     140,094        199,911
   (Increase) in cash surrender value on life insurance in excess
      of premiums paid                                                      (58,321)       (53,897)
   (Decrease) in accrued expenses and other liabilities                     (97,726)       (56,806)
   Amortization of deferred loan (fees) cost                                 38,478         32,830
   Amortization (accretion) of premium and discount on investments           16,182         18,352
                                                                       ------------   ------------
      NET CASH PROVIDED BY OPERATING ACTIVITIES                        $  2,100,533   $  1,710,569
                                                                       ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Net (increase) decrease in loans, not originated for sale           $  2,935,092   $(12,569,084)
   Proceeds from sales of securities                                      1,977,492      3,133,464
   Proceeds from maturities, repayments and calls of securities           1,439,269      1,170,569
   Purchases of securities                                               (6,322,957)    (6,493,083)
   Purchases of Federal Home Loan Bank stock                               (656,000)    (4,080,000)
   Redemptions of Federal Home Loan Bank stock                            1,179,000      4,055,200
   Purchases of premises, equipment and software                           (256,020)      (151,068)
   Proceeds from sales of premises and equipment                              1,100             --
   Proceeds from sale of CNB Insurance Services Inc                              --        153,332
   Proceeds from sale of stock                                               59,369             --
   Net (increase) decrease in federal funds sold                         (2,409,000)        25,000
   Premiums paid on life insurance                                          (58,434)       (58,822)
                                                                       ------------   ------------
      NET CASH (USED IN) INVESTING ACTIVITIES                          $ (2,111,089)  $(14,814,492)
                                                                       ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in demand and savings deposits              $ (1,182,553)  $  8,191,728
   Net increase in time deposits                                         14,452,949      9,572,320
   Net (decrease) in FHLB borrowings                                    (11,700,000)    (4,800,000)
   Cash dividends paid                                                     (229,024)      (206,122)
                                                                       ------------   ------------
      NET CASH PROVIDED BY FINANCING ACTIVITIES                        $  1,341,372   $ 12,757,926
                                                                       ------------   ------------
      NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             $  1,330,816   $   (345,997)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                            7,358,773     10,085,252
                                                                       ------------   ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $  8,689,589   $  9,739,255
                                                                       ============   ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period:
      Interest                                                         $  3,544,861   $  2,543,339
      Intcome taxes                                                    $    440,000   $    665,500
</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's financial condition as of June
     30, 2007 and the results of operations for the three and six months ended
     June 30, 2007 and 2006, changes in shareholders' equity and cash flows for
     the six months ended June 30, 2007 and 2006.

          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, 2006.

          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, 2007 and December 31, 2006 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, 2007                       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       $28,068,812     $   --     $  899,588   $27,169,224      4.27%
      After 5 but within 10 years        3,993,898         --         46,348     3,947,550      5.52
                                       -----------     ------     ----------   -----------
                                       $32,062,710     $   --     $  945,936   $31,116,774      4.43%
                                       -----------     ------     ----------   -----------
   States and political subdivisions
      Within one year                  $   340,263     $   --     $    2,780   $   337,483      2.62%
      After 1 but within 5 years         2,036,024      1,185         46,751     1,990,458      3.29
      After 5 but within 10 years        8,761,552         --        355,205     8,406,347      3.49
                                       -----------     ------     ----------   -----------
                                       $11,137,839     $1,185     $  404,736   $10,734,288      3.43%
                                       -----------     ------     ----------   -----------
   Mortgage backed securities          $11,617,958     $   23     $  306,309   $11,311,672      5.33%
                                       -----------     ------     ----------   -----------
Total securities available for sale    $54,818,507     $1,208     $1,656,981   $53,162,734      4.42%
                                       ===========     ======     ==========   ===========
Restricted:
   Federal Home Loan Bank stock        $ 1,230,000     $   --     $       --   $ 1,230,000      6.00%
                                       ===========     ======     ==========   ===========
</TABLE>


                                        8

<PAGE>

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

Note 2. Securities (continued)

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 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
      After 1 but within 5 years       $24,562,491     $    --    $  634,791   $23,927,700      4.17%
      After 5 but within 10 years        6,486,929       2,059        69,338     6,419,650      5.06
                                       -----------     -------    ----------   -----------
                                       $31,049,420     $ 2,059    $  704,129   $30,347,350      4.35%
                                       -----------     -------    ----------   -----------
   States and political subdivisions
      Within one year                  $   840,774     $    --    $    4,922   $   835,852      2.78%
      After 1 but within 5 years         1,850,578       3,003        34,366     1,819,215      3.24
      After 5 but within 10 years        9,527,281          10       162,575     9,364,716      3.50
                                       -----------     -------    ----------   -----------
                                       $12,218,633     $ 3,013    $  201,863   $12,019,783      3.41%
                                       -----------     -------    ----------   -----------
   Mortgage backed securities          $ 8,662,318     $ 6,841    $  162,957   $ 8,506,202      4.99%
                                       -----------     -------    ----------   -----------
Total securities available for sale    $51,930,371     $11,913    $1,068,949   $50,873,335      4.24%
                                       ===========     =======    ==========   ===========
Restricted:
   Federal Home Loan Bank stock        $ 1,753,000     $    --    $       --   $ 1,753,000      5.25%
                                       ===========     =======    ==========   ===========
</TABLE>

          The fair value of securities pledged to secure public deposits and for
     other purposes as required or permitted by law totaled $34,688,483 at June
     30, 2007 and $37,066,060 at December 31, 2006.

          Proceeds from sales of securities available for sale (excluding
     maturities and calls) during the six months ended June 30, 2007 and the
     year ended December 31, 2006 were $1,977,492 and $12,218,693, respectively.
     Gross gains (losses) of $1,066 and $(3,002) during the six months ended
     June 30, 2007 on respective sales of securities and $27,291 and $(65,000)
     for the year ended December 31, 2006 were realized on the respective sales.
     Gross gains of $57 during the six months ended June 30, 2007 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, 2007 and December 31, 2006.

          Securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                   JUNE 30, 2007
                                   -----------------------------------------------------------------------------
                                     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 agencies
   and corporations                $       --     $    --    $29,116,774   $  945,936   $29,116,774   $  945,936
State and political subdivisions      809,969      22,592      9,813,134      382,144    10,623,103      404,736
Mortgage backed securities          5,073,793      20,154      5,736,004      286,155    10,809,797      306,309
                                   ----------     -------    -----------   ----------   -----------   ----------
Total temporarily impaired
   securities                      $5,883,762     $42,746    $44,665,912   $1,614,235   $50,549,674   $1,656,981
                                   ==========     =======    ===========   ==========   ===========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 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 agencies
   and corporations                $       --     $   --     $29,352,749   $  704,129   $29,352,749   $  704,129
State and political subdivisions      985,973      5,087      10,415,625      196,776    11,401,598      201,863
Mortgage backed securities          1,235,741      1,581       6,402,302      161,376     7,638,043      162,957
                                   ----------     ------     -----------   ----------   -----------   ----------
Total temporarily impaired
   securities                      $2,221,714     $6,668     $46,170,676   $1,062,281   $48,392,390   $1,068,949
                                   ==========     ======     ===========   ==========   ===========   ==========
</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, 2007 and December 31, 2006,
     were as follows:

<TABLE>
<CAPTION>
                                   JUNE 30,     DECEMBER 31,
                                     2007           2006
                                 ------------   ------------
<S>                              <C>            <C>
Loans:
   Real estate                   $142,694,918   $143,766,546
   Commercial real estate          35,961,441     36,966,855
   Consumer                        15,774,310     15,933,470
   Commercial                       8,299,123      9,172,160
   Overdrafts                         224,560        163,469
                                 ------------   ------------
                                 $202,954,352   $206,002,500
Leases:                               117,106        123,733
                                 ------------   ------------
                                 $203,071,458   $206,126,233
Net deferred loan fees, costs,
   premiums and discounts             315,448        324,283
Allowance for loan losses          (2,139,482)    (2,131,523)
                                 ------------   ------------
                                 $201,247,424   $204,318,993
                                 ============   ============
</TABLE>

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

<TABLE>
<CAPTION>
                                  JUNE 30,
                          -----------------------   DECEMBER 31,
                             2007         2006         2006
                          ----------   ----------   ------------
<S>                       <C>          <C>          <C>
Balance, Beginning        $2,131,523   $2,022,130    $2,022,130
   Provision charged to
      operations              97,999      186,500       275,500
   Recoveries                 75,625       65,724       151,513
   Loans charged off        (165,665)    (119,335)     (317,620)
                          ----------   ----------    ----------
Balance, Ending           $2,139,482   $2,155,019    $2,131,523
                          ==========   ==========    ==========
</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,
                            2007       2006         2006
                          --------   --------   ------------
<S>                       <C>        <C>        <C>
Nonaccrual  loans         $658,768   $204,942     $402,014
Loans past due 90 days
   or more still
   accruing interest            --         --        4,942
                          --------   --------     --------
   Total                  $658,768   $204,942     $406,956
                          ========   ========     ========
</TABLE>

Note 4. Time Deposits

          At June 30, 2007, 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              $ 6,761,890      $ 18,521,937
3 months thru 6 months        10,732,738        24,565,151
6 months thru 12 months       12,188,440        31,885,126
Over 12 months                15,688,508        49,713,598
                             -----------      ------------
                             $45,371,576      $124,685,812
                             ===========      ============
</TABLE>

Note 5. Federal Home Loan Bank Borrowings

<TABLE>
<CAPTION>
                                  JUNE 30,
                          ------------------------   DECEMBER 31,
                             2007          2006          2006
                          ----------   -----------   ------------
<S>                       <C>          <C>           <C>
Federal Home Loan Bank
   advances               $6,800,000   $13,000,000    $18,500,000
</TABLE>

          CNB Bank, Inc. 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. At June 30, 2007, the
     Bank only has term advances with FHLB. 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. Term 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

          CNB Bank, Inc. has an obligation under a defined benefit plan covering
     all eligible employees. See Note 11 "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,
                                 ---------------------
                                    2007        2006
                                 ---------   ---------
<S>                              <C>         <C>
Service cost                     $ 123,911   $ 116,196
Interest cost                      133,622     124,236
Expected return on plan assets    (133,577)   (124,210)
Amortization of prior service
   costs                             6,172       6,172
Recognized net actuarial loss       39,707      40,550
                                 ---------   ---------
   Net periodic plan cost        $ 169,835   $ 162,944
                                 =========   =========
</TABLE>

          Employer contributions paid during the periods ended June 30, 2007 and
     2006 were $386,764 and $161,104, 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, 2007 and 2006 was $19,713 and $16,321,
     respectively.

Note 8. 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 2007 to fund $750 for each participant. The expense incurred
     for the health reimbursement accounts for the six months ended June 30,
     2007 and 2006 was $28,519 and $32,069, respectively.

Note 9. Discontinued Operations

          On April 27, 2006, CNB Insurance Services, Inc., a wholly-owned
     subsidiary of CNB Bank, Inc. of Berkeley Springs, West Virginia, which is a
     wholly-owned subsidiary of CNB Financial Services, Inc., entered into an
     agreement with Maiden Financial Inc. 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.


                                       13

<PAGE>

     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>


                                       14
<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 CNB Bank, Inc. formerly 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 until October 16, 2006 at which time the Bank obtained a West
     Virginia state charter and began operating as a state banking association.

          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 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 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, 2007 and 2006. 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, 2006, 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.


                                       15

<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 4: Loans and Leases
     Receivable in the Notes to Consolidated Financial Statements in the Form
     10-K for December 31, 2006.

     EARNINGS SUMMARY

          Net income for the three months ended June 30, 2007 was $656,000 or
     $1.43 per share compared to $726,000 or $1.59 per share for the same period
     in 2006. Annualized return on average assets and average equity were 1.0%
     and 12.5% respectively, for the three months ended June 30, 2007, compared
     with 1.1% and 14.9%, respectively, for the three months ended June 30,
     2006.

          Net income for the six months ended June 30, 2007 was $1.3 million or
     $2.80 per share compared to $1.3 million or $2.75 per share for the same
     period in 2006. Annualized return on average assets and average equity were
     .9% and 12.4% respectively, for the six months ended June 30, 2007,
     compared with 1.0% and 12.9% respectively, for the six months ended June
     30, 2006.

          Earnings projections for the remainder of 2007 are expected to
     slightly exceed 2006 earnings. The Bank continues to have strong core
     deposit growth; however, during the third quarter of 2007, the Bank will
     lose a large public fund depositor of approximately $14.5 million at June
     30, 2007. The Bank will experience an increase in interest expense due to
     the increase in borrowings to fund this outflow of deposits in addition to
     the Bank paying competitive rates on their growing time deposit base. The
     Bank does not project loan growth to be as strong in 2007 as it was in 2006
     due to the slowing of the real estate market caused by the unstable
     interest rate environment for consumers and the fact that in 2007 the Bank
     began selling all new fixed rate residential mortgage loans to secondary
     market investors. Both these factors will play a role in a lower net
     interest margin for the Bank. Although, the Bank will experience increased
     noninterest expenses from compliance with the provisions of the
     Sarbanes-Oxley Act of 2002 during this fiscal year, the Bank will continue
     to improve operating efficiencies to improve noninterest income and reduce
     all other noninterest expenses. These operating efficiencies and the gain
     on the sales of loans to secondary market investors will positively impact
     the Bank's earnings for the remainder of 2007.

     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, 2007 decreased
     by $106,000 or 4.3% over the same period in 2006. Interest income for the
     three months ended June 30, 2007 increased by $281,000 or 7.2% compared to
     the same period in 2006, while interest expense increased by $387,000 or
     26.5% during the three months ended June 30, 2007, as compared to the same
     period in the prior year.

          Net interest income for the six months ended June 30, 2007 decreased
     by $114,000 or 2.4% over the same period in 2006. Interest income for the
     six months ended June 30, 2007 increased by $826,000 or 10.9% compared to
     the same period in 2006, while interest expense increased by $941,000 or
     34.3% during the six months ended June 30, 2007, as compared to the same
     period in the prior year.

          Although, average interest earning assets and the interest earned on
     these assets increased, interest expense paid increased resulting in net
     interest income to decrease for the three and six month periods ending June
     30, 2007.

          During the second quarter of 2007 compared to the same period in 2006,
     average net interest earning assets increased $8.4 million or 3.4% whereas
     average net interest bearing liabilities increased $6.5


                                       16

<PAGE>

     million or 3.3% resulting in a decrease in net interest income. During the
     six months ended June 30, 2007 compared to the same period in 2006, average
     net interest earning assets increased $12.8 million or 5.3% whereas average
     net interest bearing liabilities increased $10.6 million or 5.4% resulting
     in a decrease in net interest income. CNB has experienced a shift in the
     deposit mix from lower yielding demand and savings deposits to higher
     yielding money market and time deposits. This shift added to the 66 basis
     point increase in rates paid on average interest bearing liabilities for
     the quarter and the 77 basis point increase in rates paid on average
     interest bearing liabilities for the six month period ending June 30, 2007,
     both time frames compared to the same periods in 2006. During both time
     frames previously mentioned, CNB also experienced a shift in the interest
     earning assets from lower yielding taxable securities to very liquid,
     higher yielding federal funds sold. This shift along with a higher average
     balance in the loan portfolio contributed to the 27 basis point increase in
     rates earned on average interest earning assets for the quarter and a 35
     basis point increase in rates earned on average interest earning assets for
     the six month period ending June 30, 2007, both time frames compared to the
     same periods in 2006. The 66 basis point increase in rates, for the
     quarter, paid on average interest bearing liabilities offset by only a 27
     basis point increase in rates earned on average interest earning assets
     contributed to the decrease in the net interest margin of 39 basis points
     while the ratio of net interest income to average interest earning assets
     decreased 26 basis points. The 77 basis point increase in rates, for the
     six month period, paid on average interest bearing liabilities offset by
     only a 35 basis point increase in rates earned on average interest earning
     assets contributed to the decrease in the net interest margin of 42 basis
     points while the ratio of net interest income to average interest earning
     assets decreased 27 basis points. The Bank's slower loan demand since the
     beginning of 2007 and continued steady deposit growth has resulted in the
     Bank's loan to deposit ratio remaining relatively unchanged..

          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.


                                       17

<PAGE>

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

<TABLE>
<CAPTION>
                                                        JUNE 30, 2007                   JUNE 30, 2006
                                                ----------------------------    ----------------------------
                                                   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                           $  2,042    $   28      5.16%   $     30    $    1      4.82%
   Securities:
      Taxable                                     39,165       460      4.70      44,591       531      4.76
      Tax-exempt (1)                              11,093        96      5.24      10,893        94      5.23
   Loans (net of unearned interest) (2)(5)(6)    203,318     3,544      6.97     191,700     3,201      6.68
                                                --------    ------      ----    --------    ------      ----
         Total interest earning assets (1)      $255,618    $4,128      6.46%   $247,214    $3,827      6.19%
                                                --------    ------      ----    --------    ------      ----
Nonearning assets:
   Cash and due from banks                      $  9,082                        $  9,822
   Bank premises and equipment, net                6,259                           6,507
   Other assets                                    5,076                           5,069
   Allowance for loan losses                      (2,193)                         (2,150)
                                                --------                        --------
         Total assets                           $273,842                        $266,462
                                                ========                        ========
Interest bearing liabilities:
   Savings deposits                             $ 25,840    $   32      0.50%   $ 31,692    $   39      0.49%
   Time deposits                                 120,504     1,381      4.58      97,381       879      3.61
   NOW accounts                                   40,080       291      2.90      44,603       326      2.92
   Money market accounts                          13,213        74      2.24      10,619        37      1.39
   Borrowings                                      5,148        71      5.52      14,024       180      5.13
                                                --------    ------      ----    --------    ------      ----
         Total interest bearing liabilities     $204,785    $1,849      3.61%   $198,319    $1,461      2.95%
                                                --------    ------      ----    --------    ------      ----
Noninterest bearing liabilities:
   Demand deposits                              $ 43,905                        $ 45,469
   Other liabilities                               4,221                           3,119
   Shareholders' equity                           20,931                          19,555
                                                --------                        --------
         Total liabilities and shareholders'
            equity                              $273,842                        $266,462
                                                ========                        ========
                                                            ------                          ------
Net interest income (1)                                     $2,279                          $2,366
                                                            ======                          ======
Net interest spread (3)                                                 2.85%                           3.24%
                                                                        ====                            ====
Net interest income to average
   interest earning assets (1)                                          3.57%                           3.83%
                                                                        ====                            ====
</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 $54,003 in 2007 and $72,722 in
     2006.

(6)  Interest income on loans includes fees of $20,314 in 2007 and $22,076 in
     2006 from the Business Manager Program, student loans and lease
     receivables.


                                       18

<PAGE>

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

<TABLE>
<CAPTION>
                                                        JUNE 30, 2007                   JUNE 30, 2006
                                                ----------------------------    ----------------------------
                                                   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                           $  1,354    $   36      5.16%   $     33    $    1      4.59%
   Securities:
      Taxable                                     39,532       924      4.67      44,145     1,031      4.67
      Tax-exempt (1)                              11,383       196      5.22      11,296       194      5.20
   Loans (net of unearned interest) (2)(5)(6)    204,783     7,135      6.97     188,758     6,221      6.59
                                                --------    ------      ----    --------    ------      ----
         Total interest earning assets (1)      $257,052    $8,291      6.45%   $244,232    $7,447      6.10%
                                                --------    ------      ----    --------    ------      ----
Nonearning assets:
   Cash and due from banks                      $  8,443                        $  9,631
   Bank premises and equipment, net                6,286                           6,533
   Other assets                                    5,192                           4,986
   Allowance for loan losses                      (2,176)                         (2,113)
                                                --------                        --------
         Total assets                           $274,797                        $263,269
                                                ========                        ========
Interest bearing liabilities:
   Savings deposits                             $ 26,332    $   65      0.49%   $ 31,721    $   79      0.50%
   Time deposits                                 117,702     2,636      4.48      95,154     1,622      3.41
   NOW accounts                                   39,026       549      2.81      43,889       607      2.77
   Money market accounts                          13,166       140      2.13      10,455        67      1.28
   Borrowings                                     10,845       295      5.44      15,272       369      4.83
                                                --------    ------      ----    --------    ------      ----
         Total interest bearing liabilities     $207,071    $3,685      3.56%   $196,491    $2,744      2.79%
                                                --------    ------      ----    --------    ------      ----
Noninterest bearing liabilities:
   Demand deposits                              $ 42,719                        $ 44,260
   Other liabilities                               4,324                           3,076
   Shareholders' equity                           20,683                          19,442
                                                --------                        --------
         Total liabilities and shareholders'
            equity                              $274,797                        $263,269
                                                ========                        ========
                                                            ------                          ------
Net interest income (1)                                     $4,606                          $4,703
                                                            ======                          ======
Net interest spread (3)                                                 2.89%                           3.31%
                                                                        ====                            ====
Net interest income to average
   interest earning assets (1)                                          3.58%                           3.85%
                                                                        ====                            ====
</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 $120,779 in 2007 and $137,608 in
     2006.

(6)  Interest income on loans includes fees of $45,016 in 2007 and $43,250 in
     2006 from the Business Manager Program, student loans and lease
     receivables.


                                       19
<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, 2007 and June 30, 2006
     amounted to $35,500 and $74,500, respectively. The provision for loan
     losses for the six months ended June 30, 2007, and June 30, 2006, amounted
     to $97,999 and $186,500, respectively. Loan quality remains stable,
     however; non performing loans and past due loans have increased from the
     same period in 2006. 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, 2007 increased
     $136,000 or 26.8% to $647,000 from $511,000 in the second quarter of 2006.
     Noninterest income for the six months ended June 30, 2007 increased
     $207,000 or 21.2% to $1.2 million from $975,000 during the first six months
     of 2006. The increase in noninterest income for the three months ended June
     30, 2007 is partially a result of increases in overdraft account fees,
     debit card fees and trust fee income, in addition, to a gain on sale of
     stock and gain on sale of loans. The increase in fees related to overdrafts
     and debit cards have a direct correlation to the increased deposit base of
     the bank. Another factor impacting noninterest income was an increase in
     service charge fees relating to overdraft fees effective October 1, 2006.
     Trust fees increased due to the assets under management increasing to $42.8
     million, a 15.6% increase over the same period last year. Net gain on sales
     of loans is new in 2007 due to CNB selling $3.3 million in loans to
     secondary market investors at a gain of $55,000. In 2000, the Bank received
     shares of stock from the demutualization of an insurance company and sold
     the stock. The Bank was unaware of 1,644 shares which had been erroneously
     issued in the name of a bank director. Immediately upon knowledge of the
     existence of the stock, the bank took possession of the stock and sold it
     realizing a $59,000 gain..

     NONINTEREST EXPENSES

          Noninterest expenses for the three months ended June 30, 2007,
     increased $47,000 or 2.5%. Noninterest expenses for the six months ended
     June 30, 2007 decreased $25,000 or .6%. The fluctuations were for a variety
     of reasons. Salaries increased in the second quarter and for the six month
     period due to the top four executive officers received bonuses in May 2007
     totaling $36,000 based on the Bank's 2006 performance. Also, salaries
     increased due to normal merit increases offset by a decrease in salary
     expense caused by six employees leaving the bank and their positions not
     being replaced. Other employees who left the Bank's employment during this
     period were replaced at a lower salary base. Employee benefits decreased
     during these same time periods due to a reduction in the Bank's 401k match
     for 2007. These decreases were offset by an increase in the pension
     expense.

          During the second quarter 2007 and in turn the six months ending June
     30, 2007, occupancy expense increased due to the rising cost of property
     taxes, utilities costs, minor building repairs at the main office and
     painting at one of the Bank's branch facilities. Furniture and equipment
     expense showed an increase for the three and six months ended June 30, 2007
     as compared to the same period last year. This increase was due to the
     increased cost and number of maintenance contracts the bank carries on its
     equipment and increased depreciation on computer hardware offset by a
     reduction in software amortization expense due to items being fully
     amortized.

          The increase in other operating expenses for the three months ended
     June 30, 2007, was due to increases in marketing expense, ATM expense,
     debit card expense, other outside service fees and debit card losses.
     Marketing expense increased due to the cost of an outside agency and
     additional modes of advertising the bank is employing. Marketing expense
     for the six month period ending June 30, 2007 decreased due to the bank
     having increased its newspaper and radio exposure showcasing the Bank's
     deposit


                                       20

<PAGE>

     products in the first quarter of 2006. This exposure has significantly been
     reduced since that period of time. ATM expense and debit card expense
     increased in the second quarter of 2007 compared to the same period last
     year due to the monthly expense for these services is greater in 2007 than
     2006. During the second quarter of 2006, the debit card conversion had just
     taken place and the new billing had not started. For the six months ended
     June 30, 2007, ATM expense has decreased due to in the first quarter of
     2006 the cost of converting to a new system for processing was expensed.
     Outside service fees increased in 2007 due to the expenses related to
     complying with Sarbanes-Oxley Act of 2002. Debit card losses increased due
     to the bank experiencing numerous fraud issues in 2007. These increases
     were offset by decreased bad check and other losses which relates to
     numerous fraudulent items the Bank dealt with during the second quarter
     2006.

          An additional reason noninterest expenses decreased during the six
     month period ending June 30, 2007 is due to the decrease in loss on sales
     of securites and loss on disposal of premises and equipment in 2007
     compared to 2006.

     INCOME TAXES

          The Bank's provision for income taxes increased $15,000 or 4.1% to
     $332,000 for the three months ended June 30, 2007 and increased $101,000 or
     16.9% to $655,000 for the six months ended June 30, 2007. The effective tax
     rates for the second quarter of 2007 and 2006 were 33.6% and 32.9%,
     respectively and for the first six months of 2007 and 2006 were 33.8% and
     32.0%, 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 loans, and non-deductible expenses, such
     as life insurance premiums.

     FINANCIAL CONDITION

          The Bank's total assets as of June 30, 2007 increased $2.3 million or
     .8% to $278.4 million from December 31, 2006 due primarily to a $1.3
     million increase in cash and due from banks, $2.4 million increase in
     Federal funds sold, $2.3 million increase in investment securities offset
     by a $3.1 million decrease in loans and a $523,000 decrease in Federal Home
     Loan Bank stock. The Bank's total liabilities increased $1.6 million or .6%
     to $257.4 million from December 31, 2006 due to a $13.3 million increase in
     deposits offset by a $11.7 million decrease in borrowings. Shareholders'
     equity increased $682,000 to $21.0 million at June 30, 2007, due to net
     income of $1.3 million offset by the semi-annual cash dividend of $229,000
     and a $371,000 decrease in accumulated other comprehensive income. The
     $371,000 decrease in accumulated other comprehensive income is a direct
     result of the decrease in market value of available for sale securities.
     The components of accumulated other comprehensive income at June 30, 2007
     and December 31, 2006, were unrealized gains and losses on available for
     sale securities, net of deferred income taxes and unrecognized pension
     costs, 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, 2007, total loans decreased $3.1 million or 1.5% to $201.2
     million from $204.3 million at December 31, 2006. Beginning in January
     2007, the Bank began selling all fixed rate mortgage loans to secondary
     market investors. During the second quarter of 2007, CNB originated and
     sold $1.6 million of loans to secondary market investors and for the six
     months ended June 30, 2007, CNB originated and sold $3.3 million of loans
     to secondary market investors. The bank continues to experience a slow down
     in the loan demand due to the instability of the interest rate environment
     and the slowdown in the housing market, even though lending officers
     continue to be proactive in their marketing effort in the bank's lending
     area.

     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:


                                       21

<PAGE>

<TABLE>
<CAPTION>
                                              JUNE 30,
                                        -------------------   DECEMBER 31,
                                          2007       2006         2006
                                        --------   --------     --------
<S>                                     <C>        <C>        <C>
Nonaccrual loans                        $658,768   $204,942     $402,014
Loans past due 90 days or more
   still accruing interest                    --         --        4,942
                                        --------   --------     --------
Total nonperforming loans               $658,768   $204,942     $406,956
                                        --------   --------     --------
Other real estate owned                 $     --   $     --     $     --
                                        --------   --------     --------
Total nonperforming assets              $658,768   $204,942     $406,956
                                        ========   ========     ========
Nonperforming loans/Total loans             0.33%      0.11%        0.20%
Nonperforming assets/Total assets           0.24%      0.08%        0.15%
Allowance for loan losses/Total loans       1.06%      1.12%        1.03%
</TABLE>

          As of June 30, 2007, the Bank has no loans which management considers
     to be impaired. Management is aware of thirteen borrowers who have
     exhibited weaknesses. Their loans have aggregate uninsured balances of $1.9
     million. A specific allowance of $104,000 related to these loans has been
     established as part of the allowance for loan losses. 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, 2007 and December 31, 2006, the allowance for loan
     losses totaled $2.1 million. The allowance for loan losses as a percentage
     of loans was 1.1% as of June 30, 2007 and 1.0% as of December 31, 2006.

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


                                       22

<PAGE>

<TABLE>
<CAPTION>
                                 JUNE 30, 2007          DECEMBER 31, 2006
                            ----------------------   ----------------------
                                       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
   and agriculture          $1,211         22%       $1,231         22%
Real estate - residential
   mortgage                    405         71           508         70
Installment and other          250          7           225          8
Unallocated                    273        N/A           168        N/A
                            ------        ---        ------        ---
      Total                 $2,139        100%       $2,132        100%
                            ======        ===        ======        ===
</TABLE>

     DEPOSITS

          The Bank's deposits increased $13.3 million or 5.7% during the six
     months ended June 30, 2007. A factor contributing to the increase in time
     deposits are the competitive rates the Bank continues to offer on its
     certificates of deposit during the first six months of 2007. In our
     Washington County, Maryland market area, there have been a number of bank
     mergers and CNB continues to benefit from these mergers with the increased
     volume of new deposit accounts. The Bank's Washington County Maryland
     branch has grown $3.7 million in deposits since December 31, 2006.
     Offsetting these increases is a decrease in the bank's interest-bearing
     demand and savings deposits. These decreases are in part caused by
     customers shifting their deposits from lower yielding accounts to higher
     yielding certificates of deposits. An additional cause of the decrease in
     the interest-bearing demand accounts is a result of a $982,000 decrease in
     two public fund deposit relationships which operate in the bank's market
     area. One of these public fund relationships was out for bid during the
     first part of the second quarter of 2007. The Bank was unsuccessful in
     their rebid for this deposit relationship. Beginning in July 2007, these
     deposits, which carried a balance of $14.5 million at June 30, 2007, have
     begun to runoff.

     CAPITAL RESOURCES

          Shareholders' equity increased $682,000 or 3.4% during the first six
     months of 2007 due to $1.3 million in net income offset by the semi-annual
     cash dividend of $229,000 and a $371,000 decrease in accumulated other
     comprehensive income. The Bank is subject to various regulatory capital
     requirements administered by the banking regulatory agencies. Under each
     measure, the Bank was substantially in excess of the minimum regulatory
     requirements, and, by definition was "well capitalized" at June 30, 2007.
     The following table summarizes, as of June 30, 2007, the Bank's capital
     ratios.

<TABLE>
<CAPTION>
                           Components   Actual   Required
                           of Capital    Ratio     Ratio
                           ----------   ------   --------
<S>                        <C>          <C>      <C>
Tier 1 Capital               $21,213      7.8%     4.0%
Total Risk Based Capital     $23,298     14.0%     8.0%
</TABLE>

     RECENTLY ISSUED ACCOUNTING STANDARDS

          On March 17, 2006, the Financial Accounting Standards Board ("FASB")
     issued Statement of Financial Accounting Standards ("SFAS") No. 156,
     "Accounting for Servicing of Financial Assets." The new Standard, which is
     an amendment to SFAS 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.


                                       23

<PAGE>

          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 has determined that this new pronouncement will not
     have a material impact on their financial statements.

          In September 2006, the FASB issued SFAS No. 157, "Fair Value
     Measurements", which defines fair value, establishes a framework for
     measuring fair value under GAAP, and expands disclosures about fair value
     measurements. SFAS No. 157 applies to other accounting pronouncements that
     require or permit fair value measurements. The new guidance is effective
     for financial statements issued for fiscal years beginning after November
     15, 2007, and for interim periods within those fiscal years. CNB is
     currently evaluating the potential impact, if any, of the adoption of SFAS
     No. 157 on their consolidated financial position, results of operations and
     cash flows.

          On September 29, 2006, the FASB issued SFAS No. 158, "Employers'
     Accounting for Defined Benefit Pension and Other Postretirement Plans",
     which amends SFAS No. 87 and SFAS No. 106 to require recognition of the
     over funded or under funded status of pension and other postretirement
     benefit plans on the balance sheet. Under SFAS No. 158, gains and losses,
     prior service costs and credits, and any remaining transition amounts under
     SFAS No. 87 and SFAS No. 106 that have not yet been recognized through net
     periodic benefit cost will be recognized in accumulated other comprehensive
     income, net of tax effects, until they are amortized as a component of net
     periodic cost. Under SFAS No. 158, the measurement date - the date at which
     the benefit obligation and plan assets is measured - is required to be the
     company's fiscal year end. The recognition requirements of SFAS No. 158 are
     effective for publicly held companies for fiscal years ending after
     December 15, 2006. CNB has implemented SFAS No. 158 effective December 31,
     2006 with the exception of the measurement date requirement. This
     requirement is effective for fiscal years ending after December 15, 2008.
     CNB does not anticipate early adoption of the measurement date requirement.

          In July 2006, the FASB issued Interpretation No. 48 (FIN 48),
     "Accounting for Uncertainty in Income Taxes." FIN 48 clarifies the
     accounting for uncertainty in income taxes recognized in an enterprise's
     financial statements in accordance with SFAS No. 109, "Accounting for
     Income Taxes." FIN 48 prescribes a recognition threshold and measurement
     attributable for the financial statement recognition and measurement of a
     tax position taken or expected to be taken in a tax return. FIN 48 also
     provides guidance on derecognition, classification, interest and penalties,
     accounting in interim periods, disclosures and transitions. FIN 48 was
     effective for fiscal years beginning after December 15, 2006. The Company
     adopted the provisions of FASB Interpretation No. 48 (FIN 48), "Accounting
     for Uncertainty in Income Taxes" on January 1, 2007. As a result of the
     implementation of FIN 48, the Company did not identify any material
     uncertain tax positions that it believes should be recognized in the
     financial statements. The Company has no unrecognized tax benefits and does
     not anticipate any increase in unrecognized benefits during 2007 relative
     to any tax positions taken prior to January 1, 2007. The Company files a
     consolidated U.S. federal income tax return and the Company and its
     subsidiaries file income tax returns in the state of West Virginia. The
     Bank also files an income tax return in the state of Maryland. These
     returns are subject to examination by taxing authorities for all years
     after 2003.

          In September 2006, the Securities and Exchange Commission issued Staff
     Accounting Bulletin (SAB) 108, "Considering the Effects of Prior Year
     Misstatements when Quantifying Misstatements in Current Year Financial
     Statements." SAB 108 provides guidance on how prior year misstatements
     should be taken into consideration when quantifying misstatements in
     current year financial statements for purposes of determining whether the
     current year's financial statements are materially misstated. SAB 108 is
     effective for fiscal years ending on or after November 15, 2006. The
     adoption of SAB 108 did not have a material impact on CNB's financial
     statements.

          In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
     for Financial Assets and Financial Liabilities." The fair value option
     established by this SFAS permits all entities to choose to measure eligible
     items at fair value at specified election dates. A business entity shall
     report unrealized gains and losses on items for which the fair value option
     has been elected in earnings at each subsequent


                                       24

<PAGE>

     reporting date. This SFAS is effective for fiscal years beginning after
     November 15, 2007. Early adoption is permitted as of the fiscal year that
     begins before November 15, 2007 provided the entity also elects to apply
     the provisions of SFAS No. 157, "Fair Value Measurements." CNB has elected
     not to early adopt SFAS No. 159.

     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 $55.6 million, or
     20.0% of total assets at June 30, 2007. In addition, liquidity may be
     generated through loan repayments, FHLB borrowings and over $7.5 million of
     available borrowing arrangements with correspondent banks. At June 30,
     2007, 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 $2.2 million of cash from operations in the first six months
     of 2007, which compares to $1.7 million during the same time period in
     2006. Additional cash of $1.3 million was provided by net financing
     activities through June 30, 2007, which compares to $12.8 million for the
     first six months of 2006. Net cash used in investing activities totaled
     $2.2 million during the first six months of 2007, which compares to $14.8
     million during the same time period in 2006. 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 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 2008. Based on the July 2007 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, 2006. 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, 2006 for a detailed discussion.


                                       25

<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, 2007, that have
     materially affected, or are reasonably likely to materially affect, our
     internal controls over financial reporting.

          Presently, the Bank is in the process of documenting internal controls
     as part of the compliance with Section 404 of the Sarbanes-Oxley Act.


                                       26

<PAGE>

     PART II: OTHER INFORMATION

     Item 1. Legal Proceedings

          There are no material legal proceedings to which CNB or its subsidiary
          is a party, or to which any of their property is subject. However, CNB
          is involved in various legal proceedings occurring in the ordinary
          course of business.

     Item 1a. Risk Factors

          There have been no material changes to CNB's risk factors since these
          factors were previously disclosed in CNB's annual report on Form 10K
          for the period ended December 31, 2006.

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

     a.)  The 2006 annual meeting of stockholders of CNB Financial Services,
          Inc. was held April 4, 2007.

     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 2007 annual meeting of
          stockholders to be held in 2008:

<TABLE>
<CAPTION>
                                   Without
                          For     Authority
                        -------   ---------
<S>                     <C>       <C>
Kenneth W. Apple        301,000     10,236
J. Robert Ayers         301,000     10,236
John E. Barker          301,000     10,236
Margaret S. Bartles     301,000     10,236
Jay E. Dick             301,000     10,236
Herbert L. Eppinger     301,000     10,236
Robert L. Hawvermale    301,000     10,236
J. Philip Kesecker      301,000     10,236
Jerald McGraw           301,000     10,236
Martha H. Quarantillo   301,000     10,236
Thomas F. Rokisky       301,000     10,236
Charles S. Trump, IV    301,000     10,236
Arlie R. Yost           301,000     10,236
</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


                                       27

<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 13, 2007                  /s/ Thomas F. Rokisky, President/CEO
                                      ------------------------------------------


Date August 13, 2007                  /s/ Rebecca S. Stotler, Vice President/CFO
                                      ------------------------------------------


                                       28