<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 MARCH 31, 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 May 14, 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
               March 31, 2007 (Unaudited) and December 31, 2006..........     3
            Consolidated Statements of Income for the Three Months ended
               March 31, 2007 and 2006 (Unaudited).......................     4
            Consolidated Statements of Changes in Shareholders' Equity
               for the Three Months Ended March 31, 2007 (Unaudited) and
               the Year Ended December 31, 2006..........................     5
            Consolidated Statements of Cash Flows for the Three Months
               Ended March 31, 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 Months
               ended March 31, 2007......................................    15

   Item 3.  Quantitative and Qualitative Disclosures about Market Risk...    24

   Item 4.  Controls and Procedures......................................    25

PART II: OTHER INFORMATION

   Item 1.  Legal Proceedings............................................    26

   Item 1a. Risk Factors.................................................    26

   Item 6.  Exhibits and Reports on Form 8-K.............................    26

            SIGNATURES...................................................    27
</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>
                                                     MARCH 31,    DECEMBER 31,
                                                       2007           2006
                                                   ------------   ------------
                                                    (Unaudited)     (Audited)
<S>                                                <C>            <C>
                     ASSETS
Cash and due from banks                            $  8,140,612   $  7,358,773
Federal funds sold                                    1,685,000          9,000
Securities available for sale
   (at approximate market value)                     48,720,114     50,873,335
Federal Home Loan Bank stock, at cost                 1,448,300      1,753,000
Loans and lease receivable, net                     202,731,147    204,318,993
Accrued interest receivable                           1,271,426      1,354,041
Premises and equipment, net                           6,272,198      6,327,294
Deferred income taxes                                 1,512,778      1,482,166
Cash surrender value of life insurance                1,400,442      1,394,521
Intangible assets                                       469,299        497,178
Other assets                                            446,756        700,240
                                                   ------------   ------------
      TOTAL ASSETS                                 $274,098,072   $276,068,541
                                                   ============   ============
      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Deposits:
      Demand                                       $ 44,143,813   $ 42,751,409
      Interest-bearing demand                        49,698,026     52,549,478
      Savings                                        26,889,069     27,548,990
      Time, $100,000 and over                        41,074,203     37,760,199
      Other time                                     76,192,014     72,472,664
                                                   ------------   ------------
                                                   $237,997,125   $233,082,740
   Accrued interest payable                           1,181,211      1,071,990
   FHLB borrowings                                   10,500,000     18,500,000
   Accrued expenses and other liabilities             3,420,906      3,091,549
                                                   ------------   ------------
      TOTAL LIABILITIES                            $253,099,242   $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                                 18,047,539     17,421,402
   Accumulated other comprehensive income            (1,670,349)    (1,720,780)
                                                   ------------   ------------
      TOTAL SHAREHOLDERS' EQUITY                   $ 20,998,830   $ 20,322,262
                                                   ------------   ------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $274,098,072   $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
                                                           MARCH 31
                                                    -----------------------
                                                       2007         2006
                                                    ----------   ----------
<S>                                                 <C>          <C>
INTEREST INCOME
   Interest and fees on loans                       $3,657,862   $3,085,093
   Interest and dividends on securities
      U.S. Government agencies and
         corporations                                  331,078      378,921
      Mortgage backed securities                       102,402      101,293
      State and political subdivisions                 103,512      103,488
      Dividend income                                   26,570       12,709
   Interest on FHLB deposits                               483        2,929
   Interest on federal funds sold                        8,153          402
                                                    ----------   ----------
                                                    $4,230,060   $3,684,835
                                                    ----------   ----------
INTEREST EXPENSE
   Interest on interest bearing demand,
      savings and time deposits                     $1,611,881   $1,093,368
   Interest on FHLB borrowings                         224,461      188,974
                                                    ----------   ----------
                                                    $1,836,342   $1,282,342
                                                    ----------   ----------
         NET INTEREST INCOME                        $2,393,718   $2,402,493
PROVISION FOR LOAN LOSSES                               62,499      112,000
                                                    ----------   ----------
         NET INTEREST INCOME AFTER
            PROVISION FOR LOAN LOSSES               $2,331,219   $2,290,493
                                                    ----------   ----------
NONINTEREST INCOME
   Service charges on deposit accounts              $  303,346   $  288,233
   Other service charges, commissions
      and fees                                         183,074      152,263
   Other operating income                               18,786       20,317
   Net gain on sales of loans                           26,216           --
   Income from title company                             3,144        3,873
                                                    ----------   ----------
                                                    $  534,566   $  464,686
                                                    ----------   ----------
NONINTEREST EXPENSES
   Salaries                                         $  742,601   $  755,012
   Employee benefits                                   324,230      299,300
   Occupancy of premises                               128,978      120,500
   Furniture and equipment expense                     208,674      211,861
   Other operating expenses                            508,684      542,704
   Net loss on sales of securities                       2,117       41,178
   Net loss on disposal of premises and equipment        1,046       17,189
                                                    ----------   ----------
                                                    $1,916,330   $1,987,744
                                                    ----------   ----------
         INCOME FROM CONTINUING OPERATIONS
            BEFORE INCOME TAXES                     $  949,455   $  767,435
PROVISION FOR INCOME TAXES                             323,318      236,887
                                                    ----------   ----------
         INCOME FROM CONTINUING OPERATIONS          $  626,137   $  530,548
                                                    ----------   ----------
         DISCONTINUED OPERATIONS
         NET RESULTS FROM DISCONTINUED OPERATIONS
            OF CNB INSURANCE SERVICES, INC
            BEFORE INCOME TAXES                     $       --   $    2,354
PROVISION FOR INCOME TAXES                          $       --   $      902
                                                    ----------   ----------
         NET RESULTS ON DISCOUNTINUED OPERATIONS    $       --   $    1,452
                                                    ----------   ----------
            NET INCOME                              $  626,137   $  532,000
                                                    ==========   ==========
BASIC EARNINGS PER SHARE                            $     1.37   $     1.16
                                                    ==========   ==========
</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 three months
      ended March 31, 2006                              --           --       532,000             --         532,000
   Change in unrealized gains (losses) on
      securities available for sale (net of
      tax of $140,473)                                  --           --            --       (229,193)       (229,193)
                                                                                                         -----------
Total Comprehensive Income                                                                                   302,807
                                                  --------   ----------   -----------    -----------     -----------
BALANCE, MARCH 31, 2006                           $458,048   $4,163,592   $16,190,134    $(1,500,926)    $19,310,848
                                                  ========   ==========   ===========    ===========     ===========
BALANCE, JANUARY 1, 2007                          $458,048   $4,163,592   $17,421,402    $(1,720,780)    $20,322,262
                                                                                                         -----------
Comprehensive income:
   Net income for three months
      ended March 31, 2007                              --           --       626,137             --         626,137
Change in unrealized gains
   (losses) on securities
   available for sale (net of tax of $30,910)           --           --            --         50,431          50,431
                                                                                                         -----------
Total Comprehensive Income                                                                                   676,568
                                                  --------   ----------   -----------    -----------     -----------
BALANCE, MARCH 31, 2007                           $458,048   $4,163,592   $18,047,539    $(1,670,349)    $20,998,830
                                                  ========   ==========   ===========    ===========     ===========
</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>
                                                                         THREE MONTHS ENDED
                                                                             MARCH 31,
                                                                     -------------------------
                                                                         2007          2006
                                                                     -----------   -----------
<S>                                                                  <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                           $   626,137   $   532,000
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization                                         142,075       189,974
   Provision for loan losses                                              62,499       112,000
   Deferred income taxes                                                 (61,522)      (81,316)
   Net loss on sale of securities                                          2,118        41,178
   Net loss on disposal of premises and equipment                          1,045        17,189
   Net gain on loans sold                                                (26,216)           --
   Loans originated for sale                                          (1,670,200)           --
   Proceeds from loans sold                                            1,696,416            --
   Decrease in accrued interest receivable                                82,615        29,094
   Decrease in other assets                                              266,704       250,554
   Increase in accrued interest payable                                  109,221        77,226
   Increase in accrued expenses and other liabilities                    329,357       219,546
   Amortization of deferred loan (fees) cost                              20,792        13,074
   Amortization (accretion) of premium and discount on investments         8,043        12,633
                                                                     -----------   -----------
      NET CASH PROVIDED BY OPERATING ACTIVITIES                      $ 1,589,084   $ 1,413,152
                                                                     -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Net (increase) decrease in loans, not originated for sale         $ 1,504,555   $(6,162,126)
   Proceeds from sales of securities                                   1,753,618     3,133,463
   Proceeds from maturities, repayments and calls of securities          570,343       336,525
   Purchases of securities                                               (99,560)           --
   Purchases of Federal Home Loan Bank stock                            (240,000)   (1,880,000)
   Redemptions of Federal Home Loan Bank stock                           544,700     1,963,700
   Purchases of premises and equipment                                   (73,365)      (78,489)
   Net (increase) decrease in federal funds sold                      (1,676,000)       21,000
   Premiums paid on life insurance                                        (5,921)       (5,921)
                                                                     -----------   -----------
      NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES            $ 2,278,370   $(2,671,848)
                                                                     -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in demand and savings deposits            $(2,118,969)  $ 2,638,999
   Net increase in time deposits                                       7,033,354     6,233,588
   Net (decrease) in FHLB borrowings                                  (8,000,000)   (7,800,000)
                                                                     -----------   -----------
      NET CASH PROVIDED BY(USED IN) FINANCING ACTIVITIES             $(3,085,615)  $ 1,072,587
                                                                     -----------   -----------
      NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS           $   781,839   $  (186,109)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                         7,358,773    10,085,252
                                                                     -----------   -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $ 8,140,612   $ 9,899,143
                                                                     ===========   ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period:
      Interest                                                       $ 1,727,121   $ 1,205,024
</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 March
     31, 2007 and the results of operations for the three months ended March 31,
     2007 and 2006, changes in shareholders' equity and cash flows for the three
     months ended March 31, 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
     March 31, 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>
                                                          MARCH 31, 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       $25,565,589     $   --      $567,736    $24,997,853      4.20%
      After 5 but within 10 years        4,493,869         --        40,669      4,453,200      5.01
                                       -----------     ------      --------    -----------
                                       $30,059,458     $   --      $608,405    $29,451,053      4.32%
                                       -----------     ------      --------    -----------
   States and political subdivisions
      Within one year                  $   790,133     $   --      $  3,507    $   786,626      3.10%
      After 1 but within 5 years         1,739,476      2,581        31,608      1,710,449      3.28
      After 5 but within 10 years        9,316,361         --       194,628      9,121,733      3.50
                                       -----------     ------      --------    -----------
                                       $11,845,970     $2,581      $229,743    $11,618,808      3.44%
                                       -----------     ------      --------    -----------
   Mortgage backed securities          $ 7,790,382     $6,454      $146,583    $ 7,650,253      4.97%
                                       -----------     ------      --------    -----------
Total securities available for sal     $49,695,810     $9,035      $984,731    $48,720,114      4.21%
                                       ===========     ======      ========    ===========
Restricted:
   Federal Home Loan Bank stock        $ 1,448,300     $   --      $     --    $ 1,448,300      5.83%
                                       ===========     ======      ========    ===========
</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 sal     $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 $37,128,631 at March
     31, 2007 and $37,066,060 at December 31, 2006.

          Proceeds from sales of securities available for sale (excluding
     maturities and calls) during the three months ended March 31, 2007 and the
     year ended December 31, 2006 were $1,753,618 and $12,218,693, respectively.
     Gross gains (losses) of $885 and $(3,002) during the three months ended
     March 31, 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.


                                        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 March 31, 2007 and December 31, 2006.

          Securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                  MARCH 31, 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                $     --     $   --     $29,451,053    $608,405    $29,451,053    $608,405
State and political subdivisions    923,151      9,788      10,583,076     219,955     11,506,227     229,743
Mortgage backed securities               --         --       6,178,132     146,583      6,178,132     146,583
                                   --------     ------     -----------    --------    -----------    --------
Total temporarily impaired
   securities                      $923,151     $9,788     $46,212,261    $974,943    $47,135,412    $984,731
                                   ========     ======     ===========    ========    ===========    ========
</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 March 31, 2007 and December 31,
     2006, were as follows:

<TABLE>
<CAPTION>
                                   MARCH 31,    DECEMBER 31,
                                     2007           2006
                                 ------------   ------------
<S>                              <C>            <C>
Loans:
   Real estate                   $143,330,381   $143,766,546
   Commercial real estate          36,925,891     36,966,855
   Consumer                        15,508,270     15,933,470
   Commercial                       8,470,158      9,172,160
   Overdrafts                         214,391        163,469
                                 ------------   ------------
                                 $204,449,091   $206,002,500
Leases:                               120,506        123,733
                                 ------------   ------------
                                 $204,569,597   $206,126,233
Net deferred loan fees, costs,
   premiums and discounts             313,655        324,283
Allowance for loan losses          (2,152,105)    (2,131,523)
                                 ------------   ------------
                                 $202,731,147   $204,318,993
                                 ============   ============
</TABLE>

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

<TABLE>
<CAPTION>
                                 MARCH 31,
                          -----------------------   DECEMBER 31,
                             2007         2006          2006
                          ----------   ----------   ------------
<S>                       <C>          <C>          <C>
Balance, Beginning        $2,131,523   $2,022,130    $2,022,130
   Provision charged to
      operations              62,499      112,000       275,500
   Recoveries                 32,873       32,994       151,513
   Loans charged off         (74,790)     (55,745)     (317,620)
                          ----------   ----------    ----------
Balance, Ending           $2,152,105   $2,111,379    $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>
                         MARCH 31,
                    ------------------   DECEMBER 31,
                      2007      2006         2006
                    -------   --------   ------------
<S>                 <C>       <C>        <C>
Nonaccrual  loans   $71,496   $149,700     $402,014
Loans past due 90
   days or more
   still accruing
   interest         $    --   $     --     $  4,942
                    -------   --------     --------
   Total            $71,496   $149,700     $406,956
                    =======   ========     ========
</TABLE>

Note 4. Time Deposits

          At March 31, 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              $ 2,843,991      $  9,342,134
3 months thru 6 months         7,378,416        18,457,329
6 months thru 12 months       12,454,225        31,339,052
Over 12 months                18,397,571        58,127,702
                             -----------      ------------
                             $41,074,203      $117,266,217
                             ===========      ============
</TABLE>

Note 5. Federal Home Loan Bank Borrowings

<TABLE>
<CAPTION>
                                          MARCH 31,
                                  -------------------------   DECEMBER 31,
                                      2007          2006          2006
                                  -----------   -----------   ------------
<S>                               <C>           <C>            <C>
Federal Home Loan Bank advances   $10,500,000   $10,000,000    $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 March 31, 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>
                                           MARCH 31,
                                      -------------------
                                        2007       2006
                                      --------   --------
<S>                                   <C>        <C>
Service cost                          $ 64,882   $ 40,304
Interest cost                           68,638     43,093
Expected return on plan assets         (67,471)   (43,084)
Amortization of prior service costs      3,086      2,141
Recognized net actuarial loss           22,005     14,065
                                      --------   --------
   Net periodic plan cost             $ 91,139   $ 56,519
                                      ========   ========
</TABLE>

          There were no employer contributions paid during the quarters ended
     March 31, 2007 and 2006.

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
     three months ended March 31, 2007 and 2006 was $9,856 and $8,160,
     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 2006 to fund $750 for each participant. The expense incurred
     for the health reimbursement accounts for the three months ended March 31,
     2007 and 2006 was $13,950 and $15,866, 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
                                               March 31, 2006
                                               --------------
<S>                                            <C>
Net income (loss) from operations
   of CNB Insurance Services, Inc.                 $2,354
Gain on sale of CNB Insurance Services, Inc.           --
                                                   ------
Net Income before taxes                            $2,354
Taxes                                                 902
                                                   ------
Net income                                         $1,452
                                                   ======
</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
     months ended March 31, 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 March 31, 2007 was $626,000 or
     $1.37 per share compared to $532,000 or $1.16 per share for the same period
     in 2006. Annualized return on average assets and average equity were .9%
     and 12.3% respectively, for the three months ended March 31, 2007, compared
     with .8% and 11.0%, respectively, for the three months ended March 31,
     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 be
     losing a large public fund depositor. The Bank will experience an increase
     in interest expense due to the increase in borrowings to fund this outflow
     of deposits and also, in general, interest expense will continue to
     increase due to the competitive rates being paid on the Bank's 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 March 31, 2007
     decreased by $9,000 or .4% over the same period in 2006. Interest income
     for the three months ended March 31, 2007 increased by $545,000 or 14.8%
     compared to the same period in 2006, while interest expense increased by
     $554,000 or 43.2% during the three months ended March 31, 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 also increased resulting in
     net interest income remaining relatively the same for the three month
     period.

          During the first quarter of 2007 compared to the same period in 2006,
     average net interest earning assets increased $17.3 million or 7.2% whereas
     average net interest bearing liabilities increased $14.3 million or 7.4%
     resulting in an unchanged net interest income. CNB 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 89 basis
     point increase in rates paid on average interest bearing liabilities. 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 44 basis point increase in rates earned on average interest earning
     assets. The 89 basis point increase in rates paid on average interest
     bearing liabilities offset by only a 44 basis point increase in rates
     earned on average interest earning assets contributed to the decrease in
     the net interest margin of 45 basis points while the ratio of net interest
     income to average interest earning assets decreased 28 basis points. The
     Bank's


                                       16

<PAGE>

     increased loan demand since the first quarter of 2006 and steady deposit
     growth has resulted in an increased loan to deposit ratio.

          See Table 1 - 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>
                                                               MARCH 31, 2007                  MARCH 31, 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                                  $    659    $    8      5.16%    $     36    $   --      4.36%
   Securities:
      Taxable                                            39,904       464      4.65       43,692       500      4.58
      Tax-exempt (1)                                     11,676       100      5.19       11,704       100      5.18
   Loans (net of unearned interest) (2)(5)(6)           206,265     3,591      6.96      185,783     3,020      6.50
                                                       --------    ------      ----     --------    ------      ----
         Total interest earning assets (1)             $258,504    $4,163      6.44%    $241,215    $3,620      6.00%
                                                       --------    ------      ----     --------    ------      ----
Nonearning assets:
   Cash and due from banks                             $  7,797                         $  9,439
   Bank premises and equipment, net                       6,313                            6,559
   Other assets                                           5,313                            4,903
   Allowance for loan losses                             (2,160)                          (2,075)
                                                       --------                         --------
         Total assets                                  $275,767                         $260,041
                                                       ========                         ========
Interest bearing liabilities:
   Savings deposits                                    $ 26,829    $   33      0.49%    $ 31,750    $   39      0.49%
   Time deposits                                        114,869     1,255      4.37       92,902       743      3.20
   NOW accounts                                          37,961       257      2.71       43,575       281      2.58
   Money market accounts                                 13,118        67      2.04       10,289        30      1.17
   Borrowings                                            16,605       224      5.40       16,534       189      4.57
                                                       --------    ------      ----     --------    ------      ----
         Total interest bearing liabilities            $209,382    $1,836      3.51%    $195,050    $1,282      2.63%
                                                       --------    ------      ----     --------    ------      ----
Noninterest bearing liabilities:
   Demand deposits                                     $ 41,522                         $ 42,628
   Other liabilities                                      4,432                            3,035
   Shareholders' equity                                  20,431                           19,328
                                                       --------                         --------
         Total liabilities and shareholders' equity    $275,767                         $260,041
                                                       ========                         ========
                                                                   ------                           ------
Net interest income (1)                                            $2,327                           $2,338
                                                                   ======                           ======
Net interest spread (3)                                                        2.92%                            3.37%
                                                                               ====                             ====
Net interest income to average interest earning
   assets (1)                                                                  3.60%                            3.88%
                                                                               ====                             ====
</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 $66,776 in 2007 and $64,886 in
     2006.

(6)  Interest income on loans includes fees of $24,702 in 2007 and $21,174 in
     2006 from the Business Manager Program, student loans and lease
     receivables.


                                       18

<PAGE>
     PROVISION FOR LOAN LOSSES

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

          The provision for loan losses is a charge to earnings which is made to
     maintain the allowance for loan losses at a sufficient level. The provision
     for loan losses for the three months ended March 31, 2007 and March 31,
     2006 amounted to $62,499 and $112,000, respectively. Loan quality remains
     stable and non performing loans have decreased from the same period in
     2006, however; past due loans have increased during this period. 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 March 31, 2007 increased
     $70,000 or 15.0% to $535,000 from $465,000 in the first quarter of 2006.
     The increase in noninterest income for the three months ended March 31,
     2007 is a result of increases in overdraft account fees, debit card fees
     and trust fee income. 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, in particular, overdraft account fees and, in
     general, noninterest income was an increase in service charge fees
     effective October 1, 2006. Trust fees increased due to the assets under
     management increasing 7.9% over the same period last year. Net gain on
     sales of loans is new in the first quarter of 2007 due to CNB selling $1.7
     million in loans to secondary market investors at a gain of $26,000.

     NONINTEREST EXPENSES

          Noninterest expenses for the three months ended March 31, 2007,
     decreased $71,000 or 3.6%. The following details explain the differences.
     Salaries decreased due to 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. These
     decreases were offset by normal merit increases and in late January 2006,
     the Bank increased all hourly salaries to become more in line with the area
     competition. Employee benefits increased due to an increase in pension
     expense offset by the decrease in payroll taxes.

          Occupancy expense increased due to the rising cost of property taxes
     and utilities costs and some minor remodeling at the main office. Furniture
     and equipment expense showed a decrease for the three months ended March
     31, 2007 as compared to the same period last year. This decrease was due to
     a reduction in software amortization expense due to items related to the
     computer conversion in 2003 being fully amortized in February 2006 offset
     by the increased cost and number of maintenance contracts the bank carries
     on its equipment.

          The decrease in other operating expenses for the three months ended
     March 31, 2007, was due to decreases in marketing expense, stationary,
     supplies and printing, ATM expense, debit card expense and examination fees
     expense. Marketing expense decreased due to the bank had increased its
     newspaper and radio exposure showcasing the Bank's deposit products in the
     first quarter of 2006. This exposure has significantly been reduced since
     that period of time. Stationary, supplies and printing expense decreased
     due to the mass ordering of supplies in 2006 due to the Bank's name change
     in conjunction with the Bank's charter change. ATM expense and debit card
     expense decreased due to the Bank converting to a new system for processing
     during the second quarter of 2006. The ATM expense for the first quarter of
     2006 included the costs for the one time conversion for the new system.
     Examination fee expense decreased due to the Bank changing its charter from
     a national charter to a state charter in October 2006. State banking
     commission examination fees are lower than the OCC examination fees. These
     decreases were offset by increased board fees and other outside service
     fees for the period. Board fees payable to directors increased in April
     2006. Outside service fees are higher in 2007 due to the expenses related
     to complying with Sarbanes-Oxley Act of 2002 and the incurrence of service
     charges on our correspondent account with the Federal Reserve Bank.


                                       19

<PAGE>
          An additional reason noninterest expenses decreased 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 $86,000 or 36.5% to
     $323,000 for the three months ended March 31, 2007. The effective tax rates
     for the first quarter of 2007 and 2006 were 34.1% and 30.9%, 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 March 31, 2007 decreased $2.0 million or
     .7% to $274.1 million from December 31, 2006 due primarily to a $1.6
     million decrease in loans, $2.2 million decrease in investment securities
     offset by a $1.7 million increase in Federal funds sold and a $782,000
     increase in cash and due from banks. The Bank's total liabilities decreased
     $2.6 million or 1.0% to $253.1 million from December 31, 2006 due to a $8.0
     million decrease in borrowings offset by a $4.9 million increase in
     deposits. Shareholders' equity increased $677,000 to $21.0 million at March
     31, 2007, due to net income of $626,000 and a $50,000 increase in
     accumulated other comprehensive income. The $50,000 increase in accumulated
     other comprehensive income is a direct result of the increase in market
     value of available for sale securities. The components of accumulated other
     comprehensive income at March 31, 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 March 31, 2007, total loans decreased $1.6 million or .8% to $202.7
     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 first quarter of 2007, CNB originated and sold
     $1.7 million of loans to secondary market investors. Also, loan demand has
     slowed down due to the current 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:

<TABLE>
<CAPTION>
                                             MARCH 31,
                                        ------------------   DECEMBER 31,
                                          2007      2006         2006
                                        -------   --------   ------------
<S>                                     <C>       <C>        <C>
Nonaccrual loans                        $71,496   $149,700     $402,014
Loans past due 90 days or more
   still accruing interest                   --         --        4,942
                                        -------   --------     --------
Total nonperforming loans               $71,496   $149,700     $406,956
                                        -------   --------     --------
Other real estate owned                 $    --   $     --     $     --
                                        -------   --------     --------
Total nonperforming assets              $71,496   $149,700     $406,956
                                        =======   ========     ========
Nonperforming loans/Total loans            0.04%      0.08%        0.20%
Nonperforming assets/Total assets          0.03%      0.06%        0.15%
Allowance for loan losses/Total loans      1.06%      1.13%        1.03%
</TABLE>

          As of March 31, 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


                                       20
<PAGE>
     uninsured balances of $2.1 million. The loans are collateralized and
     management anticipates any additional potential loss would be minimal.

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

          The unallocated portion of the allowance for loan losses represents
     the results of analyses that measure probable losses inherent in the
     portfolio that are not adequately captured in the allocated allowance
     analyses. These analyses include consideration of unidentified losses
     inherent in the portfolio resulting from changing underwriting criteria,
     changes in the types and mix of loans originated, industry concentrations
     and evaluations, allowance levels relative to selected overall credit
     criteria and other economic indicators used to estimate probable incurred
     losses. At March 31, 2007, the allowance for loan losses totaled $2.2
     million compared to $2.1 million at December 31, 2006. The allowance for
     loan losses as a percentage of loans was 1.1% as of March 31, 2007 and 1.0%
     as of December 31, 2006.

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

<TABLE>
<CAPTION>
                                MARCH 31,          DECEMBER 31,
                                   2007                2006
                            -----------------   -----------------
                                      PERCENT             PERCENT
                                        OF                  OF
                                       LOANS               LOANS
                                      IN EACH             IN EACH
                                     CATEGORY            CATEGORY
                                        TO                  TO
                                       TOTAL               TOTAL
In thousands                AMOUNT     LOANS    AMOUNT     LOANS
                            ------   --------   ------   --------
<S>                         <C>      <C>        <C>      <C>
Commercial, financial       $1,169      22%     $1,231      22%
   and agriculture
Real estate - residential      493      70         508       70
   mortgage
Installment and other          230       8         225        8
Unallocated                    260     N/A         168      N/A
                            ------   --------   ------   --------
   Total                    $2,152     100%     $2,132     100%
                            ------   --------   ------   --------
</TABLE>

     DEPOSITS

          The Bank's deposits increased $4.9 million or 2.1% during the three
     months ended March 31, 2007. A factor contributing to the increase in time
     deposits are the competitive rates the Bank was continuing to offer on its
     certificates of deposit during the first three 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 $2.3 million in deposits since December 31, 2006.
     Offsetting these increases is a decrease in the bank's interest-bearing
     demand deposits which is a direct result of a $2.9 million 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 $11.8 million at March 31, 2007, will
     begin to runoff.

     CAPITAL RESOURCES

          Shareholders' equity increased $677,000 or 3.3% during the first three
     months of 2007 due to $626,000 in net income and a $50,000 increase 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


                                       21

<PAGE>
     definition was "well capitalized" at March 31, 2007. The following table
     summarizes, as of March 31, 2007, the Bank's capital ratios.

<TABLE>
<CAPTION>
                           Components   Actual   Required
                           of Capital    Ratio    Ratio
                           ----------   ------   --------
<S>                        <C>          <C>      <C>
Tier 1 Capital               $21,929      8.0%     4.0%
Total Risk Based Capital     $24,008     14.4%     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.

          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


                                       22

<PAGE>
     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 is effective for fiscal years beginning after December
     15, 2006. CNB has adopted FIN 48 for the year beginning January 1, 2007.

          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 is not expected to 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 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.


                                       23

<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

          The objective of the Bank's liquidity management program is to ensure
     the continuous availability of funds to meet the withdrawal demands of
     depositors and the credit needs of borrowers. The basis of the Bank's
     liquidity comes from the stability of its core deposits. Liquidity is also
     available through the available for sale securities portfolio and
     short-term funds such as federal funds sold which totaled $50.4 million, or
     18.4% of total assets at March 31, 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 March 31,
     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 $1.6 million of cash from operations in the first three
     months of 2007, which compares to $1.4 million during the same time period
     in 2006. Additional cash of $3.1 million was used in net financing
     activities through March 31, 2007, which compares to $1.1 million provided
     through financing activities for the first three months of 2006. Net cash
     provided by investing activities totaled $2.3 million during the first
     three months of 2007 compared to $2.7 million net cash used in investing
     activities 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 March 2008. Based on the April 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.


                                       24

<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 March 31, 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.


                                       25

<PAGE>

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

     There are no material legal proceedings to which CNB or its subsidiary is a
     part, 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 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


                                       26

<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 May 14, 2007                     /s/ Thomas F. Rokisky, President/CEO
                                      ------------------------------------------


Date May 14, 2007                     /s/ Rebecca S. Stotler, Vice President/CFO
                                      ------------------------------------------


                                       27