<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 SEPTEMBER 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>
<C>                                                               <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: 455,949 shares of common stock,
par value $1 per share, as of November 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
                  September 30, 2007 (Unaudited) and December 31, 2006...     3

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

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

               Consolidated Statements of Cash Flows for the Nine Months
                  Ended September 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 Nine Months
               ended September 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 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. Additionally, consideration
should be given to the cautionary language contained elsewhere in this Form 10-Q
and in the section on "Risk Factors," Item 1A in the company's Annual Report to
Shareholders on Form 10-K.


                                        2

<PAGE>

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

<TABLE>
<CAPTION>
                                                  SEPTEMBER 30,   DECEMBER 31,
                                                       2007           2006
                                                  -------------   ------------
                                                   (Unaudited)      (Audited)
<S>                                               <C>             <C>
                     ASSETS
Cash and due from banks                           $  6,934,088    $  7,358,773
Federal funds sold                                          --           9,000
Securities available for sale
   (at approximate market value)                    61,569,318      50,873,335
Federal Home Loan Bank stock, at cost                2,090,100       1,753,000
Loans and lease receivable, net                    200,734,523     204,318,993
Accrued interest receivable                          1,433,753       1,354,041
Foreclosed real estate (held for sale), net            178,081              --
Premises and equipment, net                          6,210,324       6,327,294
Deferred income taxes                                1,389,549       1,482,166
Cash surrender value of life insurance               1,536,276       1,394,521
Intangible assets                                      413,541         497,178
Other assets                                           728,880         700,240
                                                  ------------    ------------
      TOTAL ASSETS                                $283,218,433    $276,068,541
                                                  ============    ============
      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
   Deposits:
      Demand                                      $ 41,105,896    $ 42,751,409
      Interest-bearing demand                       35,812,885      52,549,478
      Savings                                       24,396,923      27,548,990
      Time, $100,000 and over                       46,754,636      37,760,199
      Other time                                    81,226,879      72,472,664
                                                  ------------    ------------
                                                  $229,297,219    $233,082,740
   Accrued interest payable                          1,408,204       1,071,990
   FHLB borrowings                                  27,300,000      18,500,000
   Accrued expenses and other liabilities            3,110,461       3,091,549
                                                  ------------    ------------
      TOTAL LIABILITIES                           $261,115,884    $255,746,279
                                                  ------------    ------------
SHAREHOLDERS' EQUITY
   Common stock, $1 par value; 5,000,000 shares
      authorized; 458,048 shares issued at
      September 30, 2007 and December 31, 2006
      and 455,949 and 458,048 outstanding at
      September 30, 2007 and December 31, 2006    $    458,048    $    458,048
   Capital surplus                                   4,163,592       4,163,592
   Retained earnings                                19,136,660      17,421,402
   Accumulated other comprehensive income           (1,515,118)     (1,720,780)
                                                  ------------    ------------
                                                  $ 22,243,182    $ 20,322,262
   Less treasury stock, at cost, 2,099 shares
      in 2007                                         (140,633)             --
                                                  ------------    ------------
      TOTAL SHAREHOLDERS' EQUITY                  $ 22,102,549    $ 20,322,262
                                                  ------------    ------------
      TOTAL LIABILITIES AND SHAREHOLDERS'
         EQUITY                                   $283,218,433    $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         NINE MONTHS ENDED
                                                      SEPTEMBER 30,              SEPTEMBER 30,
                                                 -----------------------   -------------------------
                                                    2007         2006          2007          2006
                                                 ----------   ----------   -----------   -----------
<S>                                              <C>          <C>          <C>           <C>
INTEREST INCOME
   Interest and fees on loans                    $3,660,461   $3,471,261   $10,916,457   $ 9,829,831
   Interest and dividends on securities
      U.S. Government agencies and
         corporations                               363,928      427,750     1,021,648     1,202,931
      Mortgage backed securities                    207,845      123,720       413,204       330,416
      State and political subdivisions               95,851      102,477       298,573       303,348
      Dividend income                                17,703       22,295        68,403        58,235
   Interest on FHLB deposits                          1,762        5,212         4,727        12,505
   Interest on federal funds sold                       589          311        36,884         1,065
                                                 ----------   ----------   -----------   -----------
                                                 $4,348,139   $4,153,026   $12,759,896   $11,738,331
                                                 ----------   ----------   -----------   -----------
INTEREST EXPENSE
   Interest on interest bearing demand,
      savings and time deposits                  $1,750,569   $1,401,742   $ 5,140,538   $ 3,777,262
   Interest on FHLB borrowings                      254,965      324,246       549,951       692,812
                                                 ----------   ----------   -----------   -----------
                                                 $2,005,534   $1,725,988   $ 5,690,489   $ 4,470,074
                                                 ----------   ----------   -----------   -----------
      NET INTEREST INCOME                        $2,342,605   $2,427,038   $ 7,069,407   $ 7,268,257
PROVISION FOR LOAN LOSSES                            31,500       44,500       129,499       231,000
                                                 ----------   ----------   -----------   -----------
      NET INTEREST INCOME AFTER
         PROVISION FOR LOAN LOSSES               $2,311,105   $2,382,538   $ 6,939,908   $ 7,037,257
                                                 ----------   ----------   -----------   -----------
NONINTEREST INCOME
   Service charges on deposit accounts           $  367,138   $  317,854   $ 1,007,246   $   928,466
   Other service charges, commissions
      and fees                                      194,985      168,548       578,415       488,040
   Other operating income                            15,170       14,710       112,632        49,003
   Net gain on sales of loans                        17,162           --        72,331            --
   Income from title company                          6,323        4,889        12,162        15,929
                                                 ----------   ----------   -----------   -----------
                                                 $  600,778   $  506,001   $ 1,782,786   $ 1,481,438
                                                 ----------   ----------   -----------   -----------
NONINTEREST EXPENSES
   Salaries                                      $  737,043   $  754,698   $ 2,263,783   $ 2,261,904
   Employee benefits                                296,893      305,337       923,880       943,177
   Occupancy of premises                            121,452      126,756       384,700       373,244
   Furniture and equipment expense                  225,130      199,401       644,496       614,088
   Other operating expenses                         554,651      486,636     1,589,479     1,517,506
   Net loss on sale of securities                       809           --         2,688        40,741
   Net (gain) loss on disposal of premises and
      equipment                                        (116)          --          (170)       19,756
                                                 ----------   ----------   -----------   -----------
                                                 $1,935,862   $1,872,828   $ 5,808,856   $ 5,770,416
                                                 ----------   ----------   -----------   -----------
      INCOME FROM CONTINUING OPERATIONS
         BEFORE INCOME TAXES                     $  976,021   $1,015,711   $ 2,913,838   $ 2,748,279
PROVISION FOR INCOME TAXES                          314,345      386,187       969,556       941,008
                                                 ----------   ----------   -----------   -----------
      INCOME FROM CONTINUING OPERATIONS          $  661,676   $  629,524   $ 1,944,282   $ 1,807,271
                                                 ----------   ----------   -----------   -----------
         DISCONTINUED OPERATIONS
      NET RESULTS FROM DISCONTINUED OPERATIONS
         OF CNB INSURANCE SERVICES, INC
         BEFORE INCOME TAXES                     $       --   $      (58)  $        --   $   123,805
PROVISION FOR INCOME TAXES                       $       --   $       --   $        --   $    43,497
                                                 ----------   ----------   -----------   -----------
      NET RESULTS ON DISCOUNTINUED OPERATIONS    $       --   $      (58)  $        --   $    80,308
      NET INCOME                                 $  661,676   $  629,466   $ 1,944,282   $ 1,887,579
                                                 ==========   ==========   ===========   ===========
BASIC EARNINGS PER SHARE                         $     1.44   $     1.37   $      4.24   $      4.12
                                                 ==========   ==========   ===========   ===========
</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      TREASURY     CAPITAL      RETAINED    COMPREHENSIVE   SHAREHOLDERS'
                                     STOCK       STOCK       SURPLUS      EARNINGS        INCOME          EQUITY
                                  ----------   ---------   ----------   -----------   -------------   -------------
<S>                               <C>          <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 nine months
      ended September 30, 2006           --           --           --     1,887,579             --       1,887,579
   Change in unrealized gains
      (losses) on securities
      available for sale
      (net of tax of $14,972)            --           --           --            --         24,427          24,427
                                                                                                       -----------
Total Comprehensive Income                                                                               1,912,006
                                                                                                       -----------
Cash dividends ($.45 per share)          --           --           --      (206,121)            --        (206,121)
                                   --------    ---------   ----------   -----------    -----------     -----------
BALANCE, SEPTEMBER 30, 2006        $458,048    $      --   $4,163,592   $17,339,592    $(1,247,306)    $20,713,926
                                   ========    =========   ==========   ===========    ===========     ===========
BALANCE, JANUARY 1, 2007           $458,048    $      --   $4,163,592   $17,421,402    $(1,720,780)    $20,322,262
                                                                                                       -----------
Comprehensive income:
   Net income for nine months
      ended September 30, 2007           --           --           --     1,944,282             --       1,944,282
   Change in unrealized gains
      (losses) on securities
      available for sale
      (net of tax of $126,051)           --           --           --            --        205,662         205,662
                                                                                                       -----------
Total Comprehensive Income                                                                               2,149,944
                                                                                                       -----------
Acquisition of treasury stock,
   at cost, 2,099 shares                 --     (140,633)          --            --             --        (140,633)
                                                                                                       -----------
Cash dividends ($.50 per share)          --           --           --      (229,024)            --        (229,024)
                                   --------    ---------   ----------   -----------    -----------     -----------
BALANCE, SEPTEMBER 30, 2007        $458,048    $(140,633)  $4,163,592   $19,136,660    $(1,515,118)    $22,102,549
                                   ========    =========   ==========   ===========    ===========     ===========
</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>
                                                           NINE MONTHS ENDED
                                                             SEPTEMBER 30,
                                                      ---------------------------
                                                          2007           2006
                                                      ------------   ------------
<S>                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                            $  1,944,282   $  1,887,579
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization on premises,
      equipment and software                               435,384        543,420
   Provision for loan losses                               129,499        231,000
   Deferred income taxes                                   (33,434)       (92,478)
   Net loss on sale of securities                            2,688         40,741
   Net (gain) loss on disposal of premises and
      equipment                                               (170)        19,756
   Net (gain) on loans sold                                (72,331)            --
   Loans originated for sale                            (4,212,550)            --
   Proceeds from loans sold                              4,284,882             --
   (Increase) in accrued interest receivable               (79,712)      (112,749)
   (Increase) decrease in other assets                     138,545        (37,831)
   (Gain) on sale of CNB Insurance Services Inc                 --       (143,913)
   (Gain) on sale of stock                                 (59,369)            --
   Increase in accrued interest payable                    336,214        324,305
   (Increase) in cash surrender value on life
      insurance in excess of premiums paid                 (83,321)       (53,897)
   Increase in accrued expenses and other
      liabilities                                           18,912         87,474
   Amortization of deferred loan (fees) cost                64,955         48,329
   Amortization (accretion) of premium and discount
      on investments                                        17,653         16,032
                                                      ------------   ------------
      NET CASH PROVIDED BY OPERATING ACTIVITIES       $  2,832,127   $  2,757,768
                                                      ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Net (increase) decrease in loans, not originated
      for sale                                        $  3,217,122   $(17,628,153)
   Proceeds from sales of securities                     3,796,972      3,133,464
   Proceeds from maturities, repayments and calls
      of securities                                      2,406,371      1,662,261
   Purchases of securities                             (16,609,965)    (8,096,914)
   Purchases of Federal Home Loan Bank stock            (1,740,000)    (5,662,000)
   Redemptions of Federal Home Loan Bank stock           1,402,900      5,183,400
   Purchases of premises, equipment and software          (380,996)      (191,651)
   Proceeds from sales of premises and equipment             1,215             --
   Net (increase) in real estate owned, net                 (5,188)            --
   Proceeds from sale of CNB Insurance Services Inc             --        153,332
   Proceeds from sale of stock                              59,369             --
   Net (increase) decrease in federal funds sold             9,000         (8,000)
   Premiums paid on life insurance                         (58,434)       (58,822)
                                                      ------------   ------------
      NET CASH (USED IN) INVESTING ACTIVITIES         $ (7,901,634)  $(21,513,083)
                                                      ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net (decrease) in demand and savings deposits      $(21,534,173)  $ (5,980,954)
   Net increase in time deposits                        17,748,652     15,166,310
   Net increase in FHLB borrowings                       8,800,000      7,320,000
   Purchase of treasury stock, cost                       (140,633)            --
   Cash dividends paid                                    (229,024)      (206,121)
                                                      ------------   ------------
      NET CASH PROVIDED BY FINANCING ACTIVITIES       $  4,644,822   $ 16,299,235
                                                      ------------   ------------
      NET (DECREASE) IN CASH AND CASH EQUIVALENTS     $   (424,685)  $ (2,456,080)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR           7,358,773     10,085,252
                                                      ------------   ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD            $  6,934,088   $  7,629,172
                                                      ============   ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period:
      Interest                                        $  5,354,275   $  4,145,769
      Income taxes                                    $    780,500   $  1,051,000
   Net transfer to foreclosed real estate, held for
      sale from loans receivable                      $    172,893   $         --
</TABLE>


                                        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
     September 30, 2007 and the results of operations for the three and nine
     months ended September 30, 2007 and 2006, changes in shareholders' equity
     and cash flows for the nine months ended September 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.

          Earnings per share have been computed based on the following weighted
     average shares outstanding:

<TABLE>
<CAPTION>
                      9/30/2007   9/30/2006
                      ---------   ---------
<S>                   <C>         <C>
Quarter ending         457,957     458,048
Year to date ending    458,017     458,048
</TABLE>


                                       7

<PAGE>

Note 2. Securities

          The amortized cost and estimated market value of debt securities at
     September 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>
                                                       SEPTEMBER 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      $29,142,859    $     50     $361,561    $28,781,348      4.31%
      After 5 but within 10 years       2,969,685      20,232        2,367      2,987,550      5.67
                                      -----------    --------     --------    -----------
                                      $32,112,544    $ 20,282     $363,928    $31,768,898      4.44%
                                      -----------    --------     --------    -----------
   States and political subdivisions
      Within one year                 $   516,563    $     --     $  2,385    $   514,178      2.68%
      After 1 but within 5 years        1,842,746       1,616       26,421      1,817,941      3.32
      After 5 but within 10 years       8,352,359          15      182,810      8,169,564      3.51
                                      -----------    --------     --------    -----------
                                      $10,711,668    $  1,631     $211,616    $10,501,683      3.43%
                                      -----------    --------     --------    -----------
   Mortgage backed securities         $19,470,430    $ 47,502     $219,195    $19,298,737      5.52%
                                      -----------    --------     --------    -----------
Total securities available for sale   $62,294,642    $ 69,415     $794,739    $61,569,318      4.60%
                                      ===========    ========     ========    ===========
Restricted:
   Federal Home Loan Bank stock       $ 2,090,100    $     --     $     --    $ 2,090,100      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 $17,597,249 at
     September 30, 2007 and $37,066,060 at December 31, 2006.

          Proceeds from sales of securities available for sale (excluding
     maturities and calls) during the nine months ended September 30, 2007 and
     the year ended December 31, 2006 were $3,796,972 and $12,218,693,
     respectively. Gross gains (losses) of $5,537 and $(8,282) during the nine
     months ended September 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 nine months ended
     September 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 September 30, 2007 and December 31, 2006.

          Securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 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                $  483,750     $    50    $28,777,948   $363,878     $29,261,698    $363,928
State and political subdivisions    1,033,970      10,872      9,090,214    200,744      10,124,184     211,616
Mortgage backed securities          7,255,077      35,217      5,626,947    183,978      12,882,024     219,195
                                   ----------     -------    -----------   --------     -----------    --------
Total temporarily impaired
   securities                      $8,772,797     $46,139    $43,495,109   $748,600     $52,267,906    $794,739
                                   ==========     =======    ===========   ========     ===========    ========
</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 September 30, 2007 and December 31,
     2006, were as follows:

<TABLE>
<CAPTION>
                                 SEPTEMBER 30,   DECEMBER 31,
                                      2007           2006
                                 -------------   ------------
<S>                              <C>             <C>
Loans:
   Real estate                    $142,268,486   $143,766,546
   Commercial real estate           36,007,074     36,966,855
   Consumer                         15,753,444     15,933,470
   Commercial                        8,257,518      9,172,160
   Overdrafts                          201,935        163,469
                                  ------------   ------------
                                  $202,488,457   $206,002,500
Leases:                                115,025        123,733
                                  ------------   ------------
                                  $202,603,482   $206,126,233
Net deferred loan fees, costs,
   premiums and discounts              292,308        324,283
Allowance for loan losses           (2,161,267)    (2,131,523)
                                  ------------   ------------
                                  $200,734,523   $204,318,993
                                  ============   ============
</TABLE>

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

<TABLE>
<CAPTION>
                               SEPTEMBER 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             129,499      231,000       275,500
   Recoveries                161,574      107,708       151,513
   Loans charged off        (261,329)    (212,404)     (317,620)
                          ----------   ----------    ----------
Balance, Ending           $2,161,267   $2,148,434    $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>
                                                            SEPTEMBER 30,
                                                         -------------------   DECEMBER 31,
                                                           2007       2006         2006
                                                         --------   --------   ------------
<S>                                                      <C>        <C>        <C>
Nonaccrual loans                                         $773,275   $423,733     $402,014
Loans past due 90 days or more still accruing interest         --         --        4,942
                                                         --------   --------     --------
   Total                                                 $773,275   $423,733     $406,956
                                                         ========   ========     ========
</TABLE>

Note 4. Time Deposits

          At September 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              $10,872,893      $ 25,826,858
3 months thru 6 months        10,220,734        22,084,840
6 months thru 12 months       13,439,978        37,314,179
Over 12 months                12,221,031        42,755,639
                             -----------      ------------
                             $46,754,636      $127,981,516
                             ===========      ============
</TABLE>

Note 5. Federal Home Loan Bank Borrowings

<TABLE>
<CAPTION>
                                        SEPTEMBER 30,
                                  ------------------------   DECEMBER 31,
                                      2007         2006          2006
                                  -----------   ----------   ------------
<S>                               <C>           <C>          <C>
Federal Home Loan Bank advances   $27,300,000   25,120,000    $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 September 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>
                                          SEPTEMBER 30,
                                      ---------------------
                                         2007        2006
                                      ---------   ---------
<S>                                   <C>         <C>
Service cost                          $ 185,866   $ 174,294
Interest cost                           200,433     186,354
Expected return on plan assets         (200,365)   (186,315)
Amortization of prior service costs       9,257       9,258
Recognized net actuarial loss            59,561      60,825
                                      ---------   ---------
   Net periodic plan cost             $ 254,752   $ 244,416
                                      =========   =========
</TABLE>

          Employer contributions paid during the periods ended September 30,
     2007 and 2006 were $387,767 and $242,787, 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 September 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 nine months ended September 30, 2007 and 2006 was $29,569
     and $24,481, respectively.

Note 8. 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 nine months ended September
     30, 2007 and 2006 was $43,313 and $47,873, 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     Quarter      Quarter       Nine months
                                                 ended       ended        ended           ended
                                               March 31,   June 30,   September 30,   September 30,
                                                  2006       2006          2006            2006
                                               ---------   --------   -------------   -------------
<S>                                            <C>         <C>        <C>             <C>
Net income (loss) from operations
   of CNB Insurance Services, Inc.               $2,354    $(22,404)      $(58)         $(20,050)
Gain on sale of CNB Insurance Services, Inc.         --     143,913         --           143,913
                                                 ------    --------       ----          --------
Net Income before taxes                          $2,354    $121,509       $(58)         $123,863
Taxes                                               902      42,595         --            43,497
                                                 ------    --------       ----          --------
Net income                                       $1,452    $ 78,914       $(58)         $ 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
     nine months ended September 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 September 30, 2007 was $662,000
     or $1.44 per share compared to $629,000 or $1.37 per share for the same
     period in 2006. Annualized return on average assets and average equity were
     .9% and 12.6% respectively, for the three months ended September 30, 2007,
     compared with .9% and 12.8%, respectively, for the three months ended
     September 30, 2006.

          Net income for the nine months ended September 30, 2007 was $1.9
     million or $4.24 per share compared to $1.9 million or $4.12 per share for
     the same period in 2006. Annualized return on average assets and average
     equity were .9% and 12.5% respectively, for the nine months ended September
     30, 2007, compared with .9% and 12.9% respectively, for the nine months
     ended September 30, 2006.

          Earnings projections for the remainder of 2007 are expected to
     slightly exceed 2006 earnings. Although the Bank lost a large public fund
     depositor of approximately $14.5 million during the third quarter of 2007,
     the Bank continues to have strong core deposit growth. The Bank has and
     will continue to 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 or 2008 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. 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 September 30, 2007
     decreased by $84,000 or 3.5% over the same period in 2006. Interest income
     for the three months ended September 30, 2007 increased by $195,000 or 4.7%
     compared to the same period in 2006, while interest expense increased by
     $280,000 or 16.2% during the three months ended September 30, 2007, as
     compared to the same period in the prior year.

          Net interest income for the nine months ended September 30, 2007
     decreased by $199,000 or 2.7% over the same period in 2006. Interest income
     for the nine months ended September 30, 2007 increased by $1.0 million or
     8.7% compared to the same period in 2006, while interest expense increased
     by $1.2 million or 27.3% during the nine months ended September 30, 2007,
     as compared to the same period in the prior year.

          Although, average interest earning assets increased at a slightly
     greater pace than average interest bearing liabilities, the interest
     expense paid on the liabilities outpaced the interest earned on the assets
     resulting in a decrease in net interest income for the three and nine month
     periods ending September 30, 2007.

          During the third quarter of 2007 compared to the same period in 2006,
     average net interest earning assets increased $5.5 million or 2.2% while
     average net interest bearing liabilities increased $1.7 million or .8%.
     During the nine months ended September 30, 2007 compared to the same period
     in 2006, average net interest earning


                                       16

<PAGE>

     assets increased $10.4 million or 4.2% while average net interest bearing
     liabilities increased $7.6 million or 3.8%. CNB has continued to experience
     a shift in the deposit mix from lower yielding demand and savings deposits
     to higher yielding money market and time deposits due to higher interest
     rates paid on these deposits. This shift added to the 50 basis point
     increase in rates paid on average interest bearing liabilities for the
     quarter and the 67 basis point increase in rates paid on average interest
     bearing liabilities for the nine month period ending September 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 18 basis point increase in
     rates earned on average interest earning assets for the quarter and a 29
     basis point increase in rates earned on average interest earning assets for
     the nine month period ending September 30, 2007, both time frames compared
     to the same periods in 2006. The 50 basis point increase in rates, for the
     quarter, paid on average interest bearing liabilities offset by only a 18
     basis point increase in rates earned on average interest earning assets
     contributed to the decrease in the net interest margin of 32 basis points
     while the ratio of net interest income to average interest earning assets
     decreased 19 basis points. The 67 basis point increase in rates, for the
     nine month period, paid on average interest bearing liabilities offset by
     only a 29 basis point increase in rates earned on average interest earning
     assets contributed to the decrease in the net interest margin of 38 basis
     points while the ratio of net interest income to average interest earning
     assets decreased 24 basis points. The Bank's loan demand since the
     beginning of 2007 has increased at the same percentage as the Bank's
     deposit growth which 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>
                                            SEPTEMBER 30, 2007               SEPTEMBER 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                 $    118    $    1      5.05%    $     24    $   --      5.15%
   Securities:
      Taxable                           48,661       594      4.88       47,866       583      4.87
      Tax-exempt (1)                    10,574        93      5.33       11,347        99      5.29
   Loans (net of unearned interest)
      (2)(5)(6)                        203,199     3,604      7.09      197,777     3,403      6.88
                                      --------    ------      ----     --------    ------      ----
         Total interest earning
            assets (1)                $262,552    $4,292      6.54%    $257,014    $4,085      6.36%
                                      --------    ------      ----     --------    ------      ----
Nonearning assets:
   Cash and due from banks            $  7,269                         $  9,711
   Bank premises and equipment, net      6,250                            6,422
   Other assets                          5,589                            5,618
   Allowance for loan losses            (2,178)                          (2,160)
                                      --------                         --------
         Total assets                 $279,482                         $276,605
                                      ========                         ========
Interest bearing liabilities:
   Savings deposits                   $ 25,112    $   32      0.51%    $ 30,689    $   39      0.51%
   Time deposits                       128,235     1,513      4.72      101,321     1,016      4.01
   NOW accounts                         24,911       130      2.09       42,300       307      2.90
   Money market accounts                13,329        76      2.28       10,647        40      1.50
   Borrowings                           19,539       255      5.22       24,449       324      5.30
                                      --------    ------      ----     --------    ------      ----
         Total interest bearing
            liabilities               $211,126    $2,006      3.80%    $209,406    $1,726      3.30%
                                      --------    ------      ----     --------    ------      ----
Noninterest bearing liabilities:
   Demand deposits                    $ 42,912                         $ 44,270
   Other liabilities                     4,412                            3,259
   Shareholders' equity                 21,032                           19,670
                                      --------                         --------
         Total liabilities and
            shareholders' equity      $279,482                         $276,605
                                      ========                         ========
                                                  ------                           ------
Net interest income (1)                           $2,286                           $2,359
                                                  ======                           ======
Net interest spread (3)                                       2.74%                            3.06%
                                                              ====                             ====
Net interest income to average
   interest earning assets (1)                                3.48%                            3.67%
                                                              ====                             ====
</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 $56,223 in 2007 and $67,909 in
     2006.

(6)  Interest income on loans includes fees of $20,422 in 2007 and $32,712 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>
                                            SEPTEMBER 30, 2007               SEPTEMBER 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                 $    938    $    37     5.13%    $     30    $     1     4.77%
   Securities:
      Taxable                           42,608      1,518     4.75       45,397      1,614     4.74
      Tax-exempt (1)                    11,110        289     5.26       11,313        293     5.23
   Loans (net of unearned interest)
      (2)(5)(6)                        204,249     10,739     7.01      191,797      9,624     6.69
                                      --------    -------     ----     --------    -------     ----
         Total interest earning
            assets (1)                $258,905    $12,583     6.48%    $248,537    $11,532     6.19%
                                      --------    -------     ----     --------    -------     ----
Nonearning assets:
   Cash and due from banks            $  8,047                         $  9,658
   Bank premises and equipment, net      6,274                            6,496
   Other assets                          5,328                            5,203
   Allowance for loan losses            (2,177)                          (2,129)
                                      --------                         --------
         Total assets                 $276,377                         $267,765
                                      ========                         ========
Interest bearing liabilities:
   Savings deposits                   $ 25,921    $    96     0.49%    $ 31,373    $   117     0.50%
   Time deposits                       121,252      4,149     4.56       97,232      2,639     3.62
   NOW accounts                         34,269        678     2.64       43,353        914     2.81
   Money market accounts                13,221        217     2.19       10,520        107     1.36
   Borrowings                           13,780        550     5.32       18,371        693     5.03
                                      --------    -------     ----     --------    -------     ----
         Total interest bearing
            liabilities               $208,443    $ 5,690     3.64%    $200,849    $ 4,470     2.97%
                                      --------    -------     ----     --------    -------     ----
Noninterest bearing liabilities:
   Demand deposits                    $ 42,784                         $ 44,263
   Other liabilities                     4,350                            3,133
   Shareholders' equity                 20,800                           19,520
                                      --------                         --------
         Total liabilities and
            shareholders' equity      $276,377                         $267,765
                                      ========                         ========
                                                  -------                          -------
Net interest income (1)                           $ 6,893                          $ 7,062
                                                  =======                          =======
Net interest spread (3)                                       2.84%                            3.22%
                                                              ====                             ====
Net interest income to average
   interest earning assets (1)                                3.55%                            3.79%
                                                              ====                             ====
</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 $177,002 in 2007 and $205,516 in
     2006.

(6)  Interest income on loans includes fees of $45,016 in 2007 and $75,962 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 September 30, 2007 and September
     30, 2006 amounted to $31,500 and $44,500, respectively. The provision for
     loan losses for the nine months ended September 30, 2007, and September 30,
     2006, amounted to $129,499 and $231,000, respectively. 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 September 30, 2007
     increased $95,000 or 18.7% to $601,000 from $506,000 in the third quarter
     of 2006. Noninterest income for the nine months ended September 30, 2007
     increased $301,000 or 20.3% to $1.8 million from $1.5 million during the
     first nine months of 2006. The increase in noninterest income for the three
     and nine months ended September 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 $43.0 million, a 10.0%
     increase over the same period last year. Net gain on sales of loans is new
     in 2007 due to CNB selling loans to secondary market investors. For the
     third quarter, a gain of $17,000 was realized on these sales and for the
     nine months ending September 30, 2007, a gain of $72,000 was realized. 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 September 30, 2007,
     increased $63,000 or 3.4%. Noninterest expenses for the nine months ended
     September 30, 2007 increased $38,000 or .7%. The fluctuations were for a
     variety of reasons. Salaries decreased in the third quarter and for the
     nine month period showed only a slight increase. Compared to September 30,
     2006, the Bank has employed three less full time equivalent employees, one
     of which was an executive officer. Other employees who left the Bank's
     employment during this period were replaced at a lower salary base. By
     September 30, 2006, the bank had expensed six months of deferred
     compensation as stated in the retirement agreement for a former employee.
     The remainder of the agreement was expensed by December 31, 2006.
     Offsetting these decreases were increases due to the top four executive
     officers received bonuses in May 2007 totaling $36,000. The Board of
     Directors decided to pay bonuses in May 2007, and based the amounts in part
     on the Bank's 2006 performance. Also, salaries increased due to normal
     merit increases. 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 third quarter 2007, occupancy expense decreased due to the
     reduction in purchases of bank operating supplies and outside building
     related services. For the nine months ending September 30, 2007, occupancy
     expense increased due to the rising cost of property taxes, utilities
     costs, minor building repairs and painting at the main office and
     additional painting at one of the Bank's branch facilities. Furniture and
     equipment expense showed an increase for the three and nine months ended
     September 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 for the nine month
     period due to items being fully amortized. Also, equipment expense
     increased due to upgrades to LCD displays at a few of the Bank's ATM
     machines and numerous repairs to other bank equipment.


                                       20

<PAGE>

          The increase in other operating expenses for the three months ended
     September 30, 2007, was due to increases in marketing expense, data
     processing expense, ATM expense, debit card expense, other outside service
     fees and debit card losses. Marketing expense for the third quarter and the
     nine months ended September 30, 2007 increased due to the cost of an
     outside agency and additional modes of advertising the bank is employing.
     Also, the Bank launched a marketing campaign to increase loan demand such
     as the Bank gave away $100 gift cards to customers closing a home equity
     loan. Approximately $10,000 was expensed for this campaign. Even though the
     conversions to new systems for the ATM and debit cards happened early in
     2006 causing the expenses in 2006 to be higher than normal, the ATM expense
     and debit card expense for the third quarter and nine months ending
     September 30, 2007 exceeded the expense for the same period in 2006 due to
     the monthly expense for these services being greater in 2007 than 2006 due
     to increased charges to the Bank in addition to increased usage. 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 point of sale 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 2006.

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

     INCOME TAXES

          The Bank's provision for income taxes decreased $72,000 or 18.6% to
     $314,000 for the three months ended September 30, 2007 and increased
     $29,000 or 3.0% to $970,000 for the nine months ended September 30, 2007.
     The effective tax rates for the third quarter of 2007 and 2006 were 32.2%
     and 38.0%, respectively and for the first nine months of 2007 and 2006 were
     33.3% and 34.3%, respectively. The Bank's income tax expense differs from
     the amount computed at statutory rates primarily due to the tax-exempt
     earnings from certain investment securities and loans, and non-deductible
     expenses, such as life insurance premiums.

     FINANCIAL CONDITION

          The Bank's total assets as of September 30, 2007 increased $7.1
     million or 2.6% to $283.2 million from December 31, 2006 due primarily to a
     $10.7 million increase in investment securities offset by a $3.6 million
     decrease in loans. The Bank's total liabilities increased $5.4 million or
     2.1% to $261.1 million from December 31, 2006 due to a $8.8 million
     increase in borrowings and a $336,000 increase in accrued interest payable
     offset by a $3.8 million decrease in deposits. Shareholders' equity
     increased $1.8 million to $22.1 million at September 30, 2007, due to net
     income of $1.9 million and a $206,000 increase in accumulated other
     comprehensive income offset by the semi-annual cash dividend of $229,000.
     The $206,000 increase 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 September 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. During the third
     quarter 2007, the Bank instituted a stock repurchase program to repurchase
     issued shares of common stock of CNB Financial Services, Inc. Through this
     program as of September 30, 2007, the Bank has repurchased 2,099 shares of
     CNB Financial Services, Inc. common stock reducing shareholders' equity by
     $141,000.

     LOAN PORTFOLIO

          At September 30, 2007, total loans decreased $3.6 million or 1.8% to
     $200.7 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 third quarter of 2007, CNB
     originated and sold $981,000 of loans to secondary market investors and for
     the nine months ended September 30, 2007, CNB originated and sold $4.3
     million of loans to secondary market investors. The bank continues to
     experience a slow down in the loan demand due to 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>
                                            SEPTEMBER 30,
                                        -------------------   DECEMBER 31,
                                          2007       2006         2006
                                        --------   --------   ------------
<S>                                     <C>        <C>        <C>
Nonaccrual loans                        $773,275   $423,733     $402,014
Loans past due 90 days or more
   still accruing interest                    --         --        4,942
                                        --------   --------     --------
Total nonperforming loans               $773,275   $423,733     $406,956
                                        --------   --------     --------
Other real estate owned                 $178,081   $     --     $     --
                                        --------   --------     --------
Total nonperforming assets              $951,356   $423,733     $406,956
                                        ========   ========     ========
Nonperforming loans/Total loans             0.39%      0.21%        0.20%
Nonperforming assets/Total assets           0.34%      0.15%        0.15%
Allowance for loan losses/Total loans       1.09%      1.09%        1.03%
</TABLE>

          As of September 30, 2007, the Bank has no loans which management
     considers to be impaired. Management is aware of eighteen borrowers who
     have exhibited weaknesses. Their loans have aggregate uninsured balances of
     $2.5 million. A specific allowance of $72,000 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 Bank has recently experienced some foreclosure
     activity in their mortgage loan portfolio. Although, the Bank's mortgage
     loan portfolio is well secured, if the Bank needs to go to foreclosure on a
     property, the value of the property may possibly be less than the current
     appraised value considering the current real estate market. In turn, the
     Bank may begin to see future write downs on foreclosed properties.

          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. During the third quarter, the Bank considered the general economic
     conditions in its market area and the significant slowdown in the
     residential housing market. At September 30, 2007, the Bank had outstanding
     loans for the development of residential property including loans for spec
     homes and subdivisions totaling $11.0 million with an additional
     undisbursed commitment of $3.4 million. At September 30, 2007 and December
     31, 2006, the allowance for loan losses totaled $2.2 million and $2.1
     million, respectively. The allowance for loan losses as a percentage of
     loans was 1.1% as of September 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>
                                 SEPTEMBER 30,            DECEMBER 31,
                                     2007                     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          $1,186         22%       $1,231         22%
Real estate - residential
   mortgage                    383         71           508         70
Installment and other          222          7           225          8
Unallocated                    370        N/A           168        N/A
                            ------        ---        ------        ---
   Total                    $2,161        100%       $2,132        100%
                            ======        ===        ======        ===
</TABLE>

     DEPOSITS

          The Bank's deposits decreased $3.8 million or 1.6% during the nine
     months ended September 30, 2007. A significant factor in the decrease of
     the Bank's interest-bearing demand deposits was the Bank's unsuccessful bid
     during the second quarter to retain a large public fund deposit
     relationship. This deposit relationship carried a balance of $14.5 million
     at June 30, 2007 and has almost completely runoff during the third quarter.
     An additional factor in the decrease in all demand deposit and savings
     accounts is caused by the continuing shift by customers of their deposits
     from lower yielding accounts to higher yielding certificates of deposits.
     In turn, this shift in deposits along with the competitive rates the Bank
     has continued to offer on its certificates of deposit during the first nine
     months of 2007, have led to an increase in the Bank's certificates of
     deposit.

          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 $4.4 million in deposits since December 31, 2006.

     CAPITAL RESOURCES

          Shareholders' equity increased $1.8 million or 8.8% during the first
     nine months of 2007 due to $1.9 million in net income, a $206,000 increase
     in accumulated other comprehensive income offset by the semi-annual cash
     dividend of $229,000. During the third quarter 2007, the Bank instituted a
     stock repurchase program to repurchase issued shares of common stock of CNB
     Financial Services, Inc. Through this program as of September 30, 2007, the
     Bank has repurchased 2,099 shares of CNB Financial Services, Inc. common
     stock reducing shareholders' equity by $141,000. 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 September 30, 2007. The following table summarizes, as of
     September 30, 2007, the Bank's capital ratios.

<TABLE>
<CAPTION>
                           Components   Actual   Required
                           of Capital    Ratio     Ratio
                           ----------   ------   --------
<S>                        <C>          <C>      <C>
Tier 1 Capital               $22,977      8.2%     4.0%
Total Risk Based Capital     $25,093     14.8%     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:


                                       23

<PAGE>

          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 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 September 2006, the Emerging Issues Task Force of the FASB (EITF)
     issued EITF 06-04. This pronouncement affects the recording of post
     retirement costs of insurance of bank owned life insurance policies in
     instances where the Company has promised a continuation of life insurance
     coverage to persons post retirement. EITF 06-04 requires that a liability
     equal to the present value of the cost of post retirement insurance be
     recorded


                                       24

<PAGE>

     during the insured employees' term of service. The terms of this
     pronouncement require the initial recording of this liability with a
     corresponding adjustment to retained earnings to reflect the implementation
     of the pronouncement. This EITF becomes effective for fiscal years ending
     after December 15, 2007. CNB is currently evaluating the potential impact
     of adopting EITF 06-04 on their consolidated financial condition, results
     of operations and cash flows but does not expect it to have a material
     impact.

          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.

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 $61.6 million, or
     21.7% of total assets at September 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 September 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 $2.8 million of cash from operations in the first nine
     months of 2007, which compares to $2.8 million during the same time period
     in 2006. Additional cash of $4.6 million was provided by net financing
     activities through September 30, 2007, which compares to $16.3 million for
     the first nine months of 2006. Net cash used in investing activities
     totaled $7.9 million during the first nine months of 2007, which compares
     to $21.5 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 7.75
     percent through September 2008. Based on the October 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.


                                       25

<PAGE>

     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.

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


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


                                       28