<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

[ ] 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)

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

101 S. Washington Street, Berkeley Springs, WV               25411
----------------------------------------------             ----------
    (Address of principal executive offices)               (Zip Code)

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 an accelerated filer (as
defined in Exchange Act Rule 12b-2).

                                 YES [ ]         NO [X]

The aggregate value of the common stock of the Registrant that was held by
non-affiliates as of the most recently completed second fiscal quarter (June 30,
2004), was approximately $30.9 million. This amount was based on the last
closing sale price of a share of common stock of $80.00 as of the same date.

    Common Stock $1 par value, 458,048 shares outstanding as of May 12, 2005.

<PAGE>

                          CNB FINANCIAL SERVICES, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

PART 1:        FINANCIAL INFORMATION
                                                                                                               PAGE

<S>                                                                                                            <C>
   Item 1    Financial Statements

               Consolidated Statements of Financial Condition as of March 31, 2005 (Unaudited)
                  and December 31, 2004.......................................................................   3

               Consolidated  Statements  of  Income  for the  Three  Months  ended  March  31,  2005 and 2004
                  (Unaudited).................................................................................   4

               Consolidated Statements of Changes in Shareholders' Equity for the Three
                   Months Ended March 31, 2005 (Unaudited) and the Year Ended December 31, 2004...............   5

               Consolidated Statements of Cash Flows for the Three Months

                   Ended March 31, 2005 and 2004 (Unaudited)..................................................   6

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

   Item 2.     Management's Discussion and Analysis of Financial Condition and

                 Results of Operations for the Three Months ended March 31, 2005..............................  13

   Item 3.     Quantitative and Qualitative Disclosures about Market Risk.....................................  21

   Item 4.     Controls and Procedures........................................................................  22

PART II:       OTHER INFORMATION

   Item 1.     Legal  Proceedings.............................................................................  23

   Item 6.     Exhibits and Reports on Form 8-K...............................................................  23

               SIGNATURES.....................................................................................  24
</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; and (5)
competitors may have greater financial resources and develop products that
enable them to compete more successfully than CNB.

                                       2

<PAGE>

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

<TABLE>
<CAPTION>
                                                                             MARCH 31,      DECEMBER 31,
                                ASSETS                                        2005             2004
                                                                          -------------    -------------
                                                                           (Unaudited)
<S>                                                                       <C>              <C>
Cash and due from banks                                                   $   7,206,423    $  10,047,939
Federal funds sold                                                                7,000           91,000
Securities available for sale
   (at approximate market value)                                             54,482,243       59,740,291
Federal Home Loan Bank stock, at cost                                           881,000        1,169,800
Federal Reserve Bank stock, at cost                                             129,650          129,650
Loans and lease receivable, net                                             159,198,466      154,919,582
Accrued interest receivable                                                   1,010,446        1,042,573
Premises and equipment, net                                                   6,216,349        6,044,446
Deferred income taxes                                                           858,595          512,224
Cash surrender value of life insurance                                        1,174,843        1,168,922
Intangible assets                                                               708,691          738,057
Other assets                                                                    517,278        1,393,582
                                                                          -------------    -------------

         TOTAL ASSETS                                                     $ 232,390,984    $ 236,998,066
                                                                          =============    =============
           LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
   Deposits:
        Demand                                                            $  39,246,846    $  36,965,406
        Interest-bearing demand                                              48,618,047       48,055,089
        Savings                                                              32,183,577       31,981,754
        Time, $100,000 and over                                              30,503,972       34,265,305
        Other time                                                           55,648,559       56,460,984
                                                                          -------------    -------------
                                                                          $ 206,201,001    $ 207,728,538
   Accrued interest payable                                                     512,576          543,551
   FHLB borrowings                                                            5,500,000        8,600,000
  Securities sold under repurchase agreement                                    222,023          216,909
   Accrued expenses and other liabilities                                     1,880,150        1,760,328
                                                                          -------------    -------------

         TOTAL LIABILITIES                                                $ 214,315,750    $ 218,849,326
                                                                          -------------    -------------

SHAREHOLDERS' EQUITY
   Common stock, $1 par value; 5,000,000  shares
       authorized; 458,048 shares outstanding                             $     458,048    $     458,048
   Capital surplus                                                            3,863,592        3,863,592
   Retained earnings                                                         14,700,363       14,172,144
   Accumulated other comprehensive income                                      (946,769)        (345,044)
                                                                          -------------    -------------

         TOTAL SHAREHOLDERS' EQUITY                                       $  18,075,234    $  18,148,740
                                                                          -------------    -------------

         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $ 232,390,984    $ 236,998,066
                                                                          =============    =============
</TABLE>

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

                                       3

<PAGE>

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

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                                  MARCH 31,
                                                        ----------------------------
                                                          2005              2004
                                                        -----------      -----------
<S>                                                     <C>              <C>
INTEREST INCOME
   Interest and fees on loans                           $ 2,509,694      $ 2,384,198
   Interest and dividends on securities
      U.S. Government agencies and
         corporations                                       357,226          243,549
      Mortgage backed securities                             91,304           89,731
      State and political subdivisions                      107,681           44,978
      Other                                                   6,957            2,863
   Interest on federal funds sold                               230            2,785
                                                        -----------      -----------
                                                        $ 3,073,092      $ 2,768,104
                                                        -----------      -----------
INTEREST EXPENSE
   Interest on interest bearing demand,                 $   771,006      $   778,859
     savings and time deposits
   Interest on FHLB borrowings                               37,096            2,900
                                                        -----------      -----------
                                                        $   808,102      $   781,759
                                                        -----------      -----------

           NET INTEREST INCOME                          $ 2,264,990      $ 1,986,345

PROVISION FOR LOAN LOSSES                                   106,000           87,000
                                                        -----------      -----------
           NET INTEREST INCOME AFTER
            PROVISION FOR LOAN LOSSES                   $ 2,158,990      $ 1,899,345
                                                        -----------      -----------

NONINTEREST INCOME
   Service charges on deposit accounts                  $   257,481      $   257,189
   Other service charges, commissions
      and fees                                              129,994           89,247
   Insurance commissions                                     38,139           33,002
   Other operating income                                    17,215           17,531
   Net gain on sale of securities                                 -           49,876
   Income from title company                                  6,510            9,829
                                                        -----------      -----------
                                                        $   449,339      $   456,674
                                                        -----------      -----------
NONINTEREST EXPENSES
   Salaries                                             $   704,829      $   595,918
   Employee benefits                                        268,530          217,879
   Occupancy of premises                                     90,333           77,906
   Furniture and equipment expense                          202,741          202,054
   Other operating expenses                                 504,306          415,888
   Net loss on sale of securities                             2,065                -
                                                        -----------      -----------
                                                        $ 1,772,804      $ 1,509,645
                                                        -----------      -----------

            INCOME BEFORE INCOME TAXES                  $   835,525      $   846,374

PROVISION FOR INCOME TAXES                                  307,306          277,505
                                                        -----------      -----------

            NET INCOME                                  $   528,219      $   568,869
                                                        ===========      ===========
BASIC EARNINGS PER SHARE                                $      1.15      $      1.24
                                                        ===========      ===========
</TABLE>

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

                                       4

<PAGE>

                   CNB FINANCIAL SERVICES, INC. AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

<TABLE>
<CAPTION>
                                                                                       ACCUMULATED
                                                                                          OTHER           TOTAL
                                                    COMMON    CAPITAL      RETAINED   COMPREHENSIVE    SHAREHOLDERS'
                                                    STOCK     SURPLUS      EARNINGS      INCOME           EQUITY
                                                  ---------  -----------  ----------- -------------    ------------
<S>                                               <C>        <C>          <C>         <C>              <C>
BALANCE, DECEMBER 31, 2003                        $ 458,048  $ 3,863,592  $12,460,556   $ (213,255)    $ 16,568,941
                                                                                                       ------------
Comprehensive income:
   Net income for 2004                                    -            -    2,343,693            -        2,343,693
  Change in unrealized gains
    (losses) on securities
    available for sale (net of tax of $65,354)            -            -            -     (106,630)        (106,630)
  Change in minimum pension liability
     adjustment (net of tax of $15,419)                                                    (25,159)         (25,159)
                                                                                                       ------------
Total Comprehensive Income                                -            -            -            -        2,211,904
                                                                                                       ------------
Cash dividends ($1.38 per share)                          -            -     (632,105)           -         (632,105)
                                                  ---------  -----------  -----------   ----------     ------------

BALANCE, DECEMBER 31, 2004                        $ 458,048  $ 3,863,592  $14,172,144   $ (345,044)    $ 18,148,740
                                                                                                       ------------
Comprehensive income:
   Net income for three months
     ended March 31, 2005                                 -            -      528,219            -          528,219
  Change in unrealized gains
    (losses) on securities
    available for sale (net of tax of $368,799)           -            -            -     (601,725)        (601,725)
                                                                                                       ------------
Total Comprehensive Income (Loss)                         -            -            -            -          (73,506)
                                                  ---------  -----------  -----------   ----------     ------------
BALANCE, MARCH 31, 2005                           $ 458,048  $ 3,863,592  $14,700,363   $ (946,769)    $ 18,075,234
                                                  =========  ===========  ===========   ==========     ============
</TABLE>

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

                                       5

<PAGE>

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

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                                                 MARCH 31,
                                                                       ----------------------------
                                                                           2005            2004
                                                                       ------------    ------------
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                             $    528,219    $    568,869
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                                          195,698         171,462
     Provision for loan losses                                              106,000          87,000
     Deferred income taxes                                                   22,428               -
     Net loss (gain) on sale of securities                                    2,065         (49,876)
     Decrease in accrued interest receivable                                 32,127          63,708
     Decrease in other assets                                               819,149         317,494
     (Decrease) in accrued interest payable                                 (30,975)        (33,585)
     Increase in accrued expenses and other liabilities                     119,822          74,450
     Amortization of deferred loan (fees) cost                               13,128             484
     Amortization (accretion) of premium and discount on investments         14,394          19,291
                                                                       ------------    ------------
         NET CASH PROVIDED BY OPERATING ACTIVITIES                     $  1,822,055    $  1,219,297
                                                                       ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Net (increase) in loans                                           $ (4,398,012)   $ (3,308,211)
     Proceeds from sales of securities                                   14,832,347       3,900,535
     Proceeds from maturities, repayments and calls of securities           396,697       9,144,734
     Purchases of securities                                            (10,957,979)     (6,920,919)
     Purchases of Federal Home Loan Bank stock                           (1,209,700)       (230,100)
     Redemptions of Federal Home Loan Bank stock                          1,498,500         388,400
     Purchases of premises and equipment                                   (281,080)       (177,996)
     Net (increase) decrease in federal funds sold                           84,000      (3,915,000)
     Premiums paid on life insurance                                         (5,921)         (5,921)
                                                                       ------------    ------------
         NET CASH (USED IN) INVESTING ACTIVITIES                       $    (41,148)   $ (1,124,478)
                                                                       ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in demand and savings deposits                        $  3,046,221    $  5,197,282
    Net (decrease) in time deposits                                      (4,573,758)     (1,348,005)
    Net increase in securities sold under repurchase agreement                5,114               -
    Net (decrease) in FHLB borrowings                                    (3,100,000)     (1,200,000)
                                                                       ------------    ------------
         NET CASH PROVIDED BY (USED IN)  FINANCING ACTIVITIES          $ (4,622,423)   $  2,649,277
                                                                       ------------    ------------

         NET INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS         $ (2,841,516)   $  2,744,096
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           10,047,939       7,641,280
                                                                       ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $  7,206,423    $ 10,385,376
                                                                       ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period:
               Interest                                                $    839,077    $    815,344
</TABLE>

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

                                       6

<PAGE>

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

Note 1. Basis of Presentation and Contingencies

            In the opinion of CNB Financial Services, Inc. ("CNB" or the
      "Company"), the accompanying unaudited consolidated financial statements
      contain all adjustments (consisting of only normal recurring accruals)
      necessary for a fair presentation of CNB financial condition as of March
      31, 2005 and the results of operations for the three months ended March
      31, 2005 and 2004 and cash flows for the three months ended March 31, 2005
      and 2004.

            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 consolidated financial
      statements and the notes included in CNB's Annual Report for the year
      ended December 31, 2004.

            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.

Note 2. Business Combinations

            On June 11, 2004, Citizens National Bank purchased certain assets
      and liabilities associated with the Hancock Branch of Fidelity Bank, a
      subsidiary bank of Mercantile Bankshares Corporation (formerly Home
      Federal). The results of the Hancock Branch's operations have been
      included in the consolidated financial statements since that date.

            The following table provides information concerning the allocations
      of the purchase price and the fair values of the assets and liabilities
      acquired of the Hancock branch:

                   AT JUNE 11, 2004

<TABLE>
<S>                                          <C>
Assets acquired:

     Loans                                   $  8,419,973
      Accrued interest receivable                  34,526
      Fixed assets                                324,166
      Intangible asset-premium on deposits        780,616
      Prepaid expenses                              2,139
                                             ------------
Total assets acquired                        $  9,561,420
                                             ------------

Liabilities assumed:

      Deposit accounts                       $(14,574,856)
      Accrued expenses                             (6,581)
                                             ------------

Total liabilities assumed                    $(14,581,437)
                                             ------------

Cash from acquired branch                    $ (5,020,017)
                                             ============
</TABLE>

                                       7

<PAGE>

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

Note 2. Business Combinations (continued)

            Citizens National Bank recorded $781,000 of core deposit intangible,
        which has a weighted-average useful life of 7 years.

Note 3. Securities

            The amortized cost and estimated market value of debt securities at
        March 31, 2005 and December 31, 2004 by contractual maturity are shown
        below. Expected maturities will differ from contractual maturities
        because borrowers may have the right to call or prepay obligations with
        or without call or prepayment penalties.

            Securities are summarized as follows:

<TABLE>
<CAPTION>

                                                                    MARCH 31, 2005                      WEIGHTED
                                         -----------------------------------------------------------    AVERAGE
                                                            GROSS           GROSS         ESTIMATED       TAX
                                         AMORTIZED        UNREALIZED      UNREALIZED         FAIR      EQUIVALENT
                                            COST            GAINS           LOSSES          VALUE        YIELD
                                         -----------      ----------     -----------     -----------   ----------
<S>                                      <C>              <C>            <C>             <C>           <C>
Available for sale:
    U.S. Government agencies
     and corporations
     Within one year                     $ 2,003,406      $        -     $    38,606     $ 1,964,800      4.25%
     After 1 but within 5 years            4,917,209               -         115,384       4,801,825      3.99%
     After 5 but within 10 years          27,457,351               -         626,973      26,830,378      4.44
                                         -----------      ----------     -----------     -----------
                                         $34,377,966      $        -     $   780,963     $33,597,003      4.37%
                                         -----------      ----------     -----------     -----------
States and political subdivisions
     Within one year                     $   873,762      $    9,345     $         -     $   883,107      3.83%
     After 1 but within 5 years            2,012,255           3,106          26,527       1,988,834      2.83%
     After 5 but within 10 years          10,271,762          45,506         132,765      10,184,503      3.51
                                         -----------      ----------     -----------     -----------
                                         $13,157,779      $   57,957     $   159,292     $13,056,444      3.43%
                                         -----------      ----------     -----------     -----------
    Mortgage backed securities           $ 7,996,674      $        -     $   167,878     $ 7,828,796      4.49%
                                         -----------      ----------     -----------     -----------

Total securities available for sale      $55,532,419      $   57,957     $ 1,108,133     $54,482,243      4.16%
                                         ===========      ==========     ===========     ===========
Restricted:

    Federal Reserve Bank stock           $   129,650      $        -     $         -     $   129,650      6.00%
    Federal Home Loan Bank stock             881,000               -               -         881,000      2.86
                                         -----------      ----------     -----------     -----------
Total restricted investments             $ 1,010,650      $        -     $         -     $ 1,010,650      3.26%
                                         ===========      ==========     ===========     ===========
</TABLE>

                                       8
<PAGE>

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

Note 3. Securities (continued)

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 2004                    WEIGHTED
                                         -----------------------------------------------------      AVERAGE
                                                          GROSS       GROSS         ESTIMATED        TAX
                                          AMORTIZED     UNREALIZED  UNREALIZED        FAIR        EQUIVALENT
                                            COST          GAINS       LOSSES          VALUE          YIELD
                                         -----------    ----------  -----------    -----------    ----------
<S>                                      <C>            <C>         <C>            <C>            <C>
Available for sale:
    U.S. Government agencies
      and corporations
      Within one year                    $11,846,301    $  109,738  $    49,839    $11,906,200          3.81%
      After 1 but within 5 years           8,906,924        49,196       35,373      8,920,747          4.14
      After 5 but within 10 years         18,454,860        40,148      207,732     18,287,276          4.16
                                         -----------    ----------  -----------    -----------
                                         $39,208,085    $  199,082  $   292,944    $39,114,223          4.05%
                                         -----------    ----------  -----------    -----------

    States and political subdivisions
      After 1 but within 5 years         $ 1,663,643    $    4,690  $     3,714    $ 1,664,619          3.95%
      After 5 but within 10 years         10,541,257       106,488       48,389     10,599,356          6.09
                                         -----------    ----------  -----------    -----------
                                         $12,204,900    $  111,178  $    52,103    $12,263,975          5.80%
                                         -----------    ----------  -----------    -----------

    Mortgage backed securities           $ 8,406,958    $   17,066  $    61,931    $ 8,362,093          4.49%
                                         -----------    ----------  -----------    -----------

Total securities available for sale      $59,819,943    $  327,326  $   406,978    $59,740,291          4.38%
                                         ===========    ==========  ===========    ===========

Restricted:
    Federal Reserve Bank stock           $   129,650    $        -  $         -    $   129,650          6.00%
    Federal Home Loan Bank stock           1,169,800             -            -      1,169,800          2.43
                                         -----------    ----------  -----------    -----------
Total restricted investments             $ 1,299,450    $        -  $         -    $ 1,299,450          2.79%
                                         ===========    ==========  ===========    ===========
</TABLE>

            The carrying value of securities pledged to secure public deposits
      and for other purposes as required or permitted by law totaled $31,999,255
      at March 31, 2005 and $32,538,864 at December 31, 2004. Also, a security
      with a carrying value of $242,025 is designated for customer repurchase
      agreements at March 31, 2005 and $247,275 at December 31, 2004.

            Proceeds from sales of securities available for sale (excluding
      maturities) during the three months ended March 31, 2005 and the year
      ended December 31, 2004 were $14,832,347 and $6,391,436, respectively.
      Gross gains (losses) of $77,075 and $(79,140) during the three months
      ended March 31, 2005 and $135,546 and $(0) for the year ended December 31,
      2004 were realized on the respective sales.

                                       9

<PAGE>

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

Note 3. Securities (continued)

            The following table shows our investments' gross unrealized losses
        and fair value, aggregated by investment category and length of time
        that individual securities have been in a continuous unrealized loss
        position, at March 31, 2005.

<TABLE>
<CAPTION>
                                       LESS THAN 12 MONTHS        12 MONTHS OR MORE                TOTAL
                                    -------------------------  ------------------------  -------------------------
                                       FAIR        UNREALIZED     FAIR       UNREALIZED      FAIR       UNREALIZED
   DESCRIPTION OF SECURITIES           VALUE         LOSSES       VALUE        LOSSES       VALUE         LOSSES
--------------------------------    -----------    ----------  ----------    ----------  -----------    ----------
<S>                                 <C>            <C>         <C>           <C>         <C>            <C>
U.S. government agenices
  and corporations                  $25,543,222    $  571,507  $4,023,950    $  209,455  $29,567,172    $  780,962

State and political subdivisions      9,993,902       159,292           -             -    9,993,902       159,292

Mortgage backed securities            7,008,791       131,911     820,005        35,967    7,828,796       167,878
                                    -----------    ----------  ----------    ----------  -----------    ----------
Total temporarily impaired
  securities                        $42,545,915    $  862,710  $4,843,955    $  245,422  $47,389,870    $1,108,132
                                    ===========    ==========  ==========    ==========  ===========    ==========
</TABLE>

Note 4. Loans and Leases Receivable

            Major classifications of loans at March 31, 2005 and December 31,
        2004, were as follows:

<TABLE>
<CAPTION>
                                     MARCH 31,      DECEMBER 31,
                                      2005             2004
                                  -------------     -------------
<S>                               <C>               <C>
Loans:
 Real estate                      $ 111,291,187     $ 108,158,901
 Commercial real estate              23,897,552        22,758,761
 Consumer                            16,185,733        16,404,853
 Commercial                           9,173,378         8,880,771
 Overdrafts                              66,884            82,556
                                  -------------     -------------
                                  $ 160,614,734     $ 156,285,842

Leases:                                 161,945           166,389
                                  -------------     -------------
                                  $ 160,776,679     $ 156,452,231
Net deferred loan fees, costs,
  premiums and discounts                276,315           274,800
Allowance for loan losses            (1,854,528)       (1,807,449)
                                  -------------     -------------
                                  $ 159,198,466     $ 154,919,582
                                  =============     =============
</TABLE>

                                       10

<PAGE>

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

Note 4. Loans and Leases Receivable (continued)

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

<TABLE>
<CAPTION>
                                     MARCH 31,              DECEMBER 31,
                            ---------------------------     ------------
                               2005            2004            2004
                            -----------     -----------     ------------
<S>                         <C>             <C>             <C>
Balance, Beginning          $ 1,807,449     $ 1,607,763     $  1,607,763
    Provision charged to
        operations              106,000          87,000          393,000
    Recoveries                   41,130          77,705          158,850
    Loans charged off          (100,051)       (100,067)        (352,164)
                            -----------     -----------     ------------
Balance, Ending             $ 1,854,528     $ 1,672,401     $  1,807,449
                            ===========     ===========     ============
</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:

<TABLE>
<CAPTION>
                                                                MARCH 31,         DECEMBER 31,
                                                          --------------------    ------------
                                                            2005       2004           2004
                                                          --------    --------    ------------
<S>                                                       <C>         <C>         <C>
Nonaccrual  loans                                         $276,387    $780,530    $    380,731
Loans past due 90 days or more still accruing interest           -           -               -
                                                          --------    --------    ------------
     Total                                                $276,387    $780,530    $    380,731
                                                          ========    ========    ============
</TABLE>

Note 5. Time Deposits

            At March 31, 2005, the scheduled maturities of time deposits are as
            follows:

<TABLE>
<CAPTION>
                             TIME DEPOSITS           ALL TIME
                           $100,000 AND OVER         DEPOSITS
                           -----------------        -----------
<S>                        <C>                      <C>
Within 3 months              $ 2,004,774            $ 6,375,373
3 months thru 6 months           774,681              3,890,602
6 months thru 12 months        1,263,594              7,080,046
Over 12 months                26,460,923             68,806,510
                             -----------            -----------
                             $30,503,972            $86,152,531
                             ===========            ===========
</TABLE>

                                       11
<PAGE>

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

Note 6. Federal Home Loan Bank Borrowings

<TABLE>
<CAPTION>
                                          MARCH 31,          DECEMBER 31,
                                 -------------------------  --------------
                                     2005          2004          2004
                                 -----------  ------------  --------------
<S>                              <C>          <C>           <C>
Federal Home Loan Bank advances  $ 5,500,000  $          -  $    8,600,000
</TABLE>

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

Note 7. Supplemental Retirement Plan

            On January 2, 2004, the Bank entered into a nonqualified
      supplemental retirement benefit agreement with the President which when
      fully vested would pay the President or his beneficiary an amount of
      $30,000 per year for 10 years beginning June 11, 2011, if he retires on or
      after May 29, 2011. Termination of employment prior to that date other
      than by reasons of death or disability will result in a reduced benefit.
      The expense for the three months ended March 31, 2005 was $8,160.

Note 8. New Branch

            On December 15, 2003, the Bank purchased a parcel of land in Falling
      Waters, Berkeley County, West Virginia for $503,261 to construct a new
      branch facility. Construction on the new facility began August 2004 and
      was completed in April 2005. The Bank's total cost to construct the new
      branch location totaled $966,005.

Note 9. Supplemental Health Insurance Plan

            Effective January 1, 2005, the Bank changed its health insurance
      program to a high deductible plan and concurrently established health
      reimbursement accounts for each employee on the plan. The Bank has
      committed for 2005 to fund $750 for each participant.

                                       12
<PAGE>

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

   GENERAL

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

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

         The Bank was organized on June 20, 1934, and has operated in Berkeley
   Springs in Morgan County, West Virginia, as a national banking association
   continuously since that time. The Bank is a full-service commercial bank
   conducting general banking and trust activities through five full-service
   offices and five automated teller machines located in Morgan and Berkeley
   Counties, West Virginia and Washington County, Maryland. The Bank's sixth
   full-service branch and ATM opened in April 2005 in Berkeley County, West
   Virginia. The Bank formed CNB Insurance Services, Inc., a wholly owned
   subsidiary, which is a property and casualty insurance agency selling
   primarily personal lines of insurance.

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

         On January 26, 2004, CNB entered into an agreement to purchase certain
   assets and liabilities associated with the Hancock Branch of Fidelity Bank, a
   subsidiary bank of Mercantile Bankshares Corporation (formerly Home Federal).
   The purchase, which took place on June 11, 2004, increased the assets and
   liabilities of CNB by $14.6 million. CNB assumed responsibility for all the
   deposit services including checking, savings and certificates of deposit.
   Additionally, CNB acquired loans, equipment and leasehold improvements and
   assumed the lease for the real estate located at 333 East Main Street,
   Hancock, Maryland.

         The following discussion and analysis presents the significant changes
   in financial condition and results of operations of CNB for the three months
   ended March 31, 2005 and 2004. 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, 2004, 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,

                                       13
<PAGE>

   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.

         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, 2004.

   EARNINGS SUMMARY

         Net income for the three months ended March 31, 2005 was $528,000 or
   $1.15 per share compared to $569,000 or $1.24 per share for the same period
   in 2004. Annualized return on average assets and average equity were .9% and
   11.4% respectively, for the three months ended March 31, 2005, compared with
   1.1% and 13.5%, respectively, for the three months ended March 31, 2004.

         Earnings projections for the remainder of 2005 show net income to
   decrease due to the additional expenses related to the opening of the new
   branch facility and the additional costs of compliance with the provisions of
   the Sarbanes-Oxley Act of 2002.

   NET INTEREST INCOME

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

         Net interest income for the three months ended March 31, 2005 increased
   by $279,000 or 14.0% over the same period in 2004. Interest income for the
   three months ended March 31, 2005 increased by $305,000 or 11.0% compared to
   the same period in 2004, while interest expense increased by $26,000 or 3.4%
   during the three months ended March 31, 2005, as compared to the same period
   in the prior year.

         Increased net interest income for the three month period is
   attributable in part to a higher level of net interest earning assets offset
   by a decrease in the rates earned thereon. Although interest expense paid on
   interest bearing liabilities increased due to an increase in the outstanding
   balance of interest bearing liabilities, the increase in deposit growth was
   at a slower pace than the increase in loan and investment growth. While the
   Bank experienced a shift in the asset mix from higher yielding loans to lower
   yielding investment securities, there was also a shift in the deposit mix
   from higher interest bearing time deposits to lower interest bearing deposit
   accounts. The decrease in the rates earned on interest earning assets is due
   to the current economic conditions.

         During the first quarter of 2005 compared to the same period in 2004,
   average net interest earning assets increased $27.3 million or 14.6% and
   average net interest bearing liabilities increased $21.4 million or 14.0%
   contributed to increased net interest income. CNB experienced a 2 basis point
   decrease in the ratio of net interest income to average interest earning
   assets. The 19 point decrease in rates earned on average interest earning
   assets offset by a 20 basis point decrease in rates paid on average interest
   bearing liabilities resulted in the decrease in the net interest margin.

                                       14
<PAGE>

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

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

                                       15
<PAGE>

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

<TABLE>
<CAPTION>
                                                                MARCH 31, 2005                    MARCH 31, 2004
                                                       --------------------------------  -------------------------------
                                                          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                                  $      40   $       -     2.37%   $   1,258   $       3    0.91%
   Securities:
     Taxable                                              43,018         456     4.24       31,602         336    4.25
     Tax-exempt (1)                                       12,674         108     5.16        5,361          45    5.09
   Loans (net of unearned interest) (2)(5)(6)            158,168       2,437     6.16      148,420       2,322    6.26
                                                       ---------   ---------     ----    ---------   ---------    ----
        Total interest earning assets (1)              $ 213,900   $   3,001     5.61%   $ 186,641   $   2,706    5.80%
                                                       ---------   ---------     ----    ---------   ---------    ----

Nonearning assets:
   Cash and due from banks                             $   9,850                         $   9,008
   Bank premises and equipment, net                        6,116                             5,264
   Other assets                                            4,247                             3,017
   Allowance for loan losses                              (1,872)                           (1,663)
                                                       ---------                         ---------
        Total assets                                   $ 232,241                         $ 202,267
                                                       =========                         =========

Interest bearing liabilities:
   Savings deposits                                    $  31,778   $      39     0.49%   $  25,197   $      31    0.49%
   Time deposits                                          87,734         541     2.47       92,450         661    2.86
   NOW accounts                                           39,128         170     1.74       25,290          69    1.09
   Money market accounts                                  10,011          21     0.84        9,082          18    0.79
   Borrowings                                              5,633          37     2.63          893           3    1.34
                                                       ---------   ---------     ----    ---------   ---------    ----
        Total interest bearing liabilities             $ 174,284   $     808     1.85%   $ 152,912   $     782    2.05%
                                                       ---------   ---------     ----    ---------   ---------    ----

Noninterest bearing liabilities:
   Demand deposits                                     $  37,195                         $  30,159
   Other liabilities                                       2,291                             2,287
   Shareholders' equity                                   18,471                            16,909
                                                       ---------                         ---------
        Total liabilities and
           shareholders' equity                        $ 232,241                         $ 202,267
                                                       =========                         =========

                                                                   ---------                         ---------
Net interest income (1)                                            $   2,193                         $   1,924
                                                                   =========                         =========

Net interest spread (3)                                                          3.76%                            3.75%
                                                                                 ====                             ====

Net interest income to average
   interest earning assets (1)                                                   4.10%                            4.12%
                                                                                 ====                             ====
</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 annualized basis.

(5)   Interest income on loans excludes fees of $72,000 in 2005 and $62,000 in
      2004.

(6)   Interest income on loans includes fees of $15,484 in 2005 and $36,431 in
      2004 from the Business Manager Program, student loans and lease
      receivables.

                                       16
<PAGE>

   PROVISION FOR LOAN LOSSES

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

         The provision for loan losses is a charge to earnings which is made to
   maintain the allowance for loan losses at a sufficient level. The provision
   for loan losses for the three months ended March 31, 2005, and March 31,
   2004, amounted to $106,000 and $87,000, respectively. Loan quality remains
   stable, past dues are minimal and nonaccruals have decreased for the same
   period. Management believes the allowance for loan losses is adequate and is
   not aware of any information relating to the loan portfolio which it expects
   will materially impact future operating results, liquidity or capital
   resources. In addition, federal regulators may require additional reserves as
   a result of their examination of the bank. See "Nonperforming Assets and
   Allowance for Loan Losses" for further discussion.

   NONINTEREST INCOME

         Noninterest income for the three months ended March 31, 2005 decreased
   $8,000 or 1.6% to $449,000 from $457,000 in the first quarter of 2005. The
   decrease in noninterest income is attributable to a decrease in gain on sale
   of investment securities offset by an increase in fees generated from the
   insurance commissions, ATM and debit card fees and trust fee income.
   Insurance commissions increased due to general rate increases from the
   insurance companies and a slight increase in new written business for the
   first quarter. The increase in fees related to the ATM and debit card have a
   direct correlation to the increased deposit base of the bank. Trust fees
   increased due to the assets under management increased 20% over the same
   period last year, the fee schedule for trust fees was increased by 10% during
   the fourth quarter of 2004 and fee income was received for the settlement of
   an estate during the first quarter of 2005.

   NONINTEREST EXPENSES

         Noninterest expenses for the three months ended March 31, 2005,
   increased $263,000 or 17.4%. Salaries increased due to normal merit
   increases, several new hires and salaries for employees of the Hancock branch
   acquired during the second quarter 2004. Employee benefits increased due to
   an increase in pension expense and the increased number of employees.
   Although, the bank changed its health insurance program, effective January 1,
   2005, to a high deductible plan with reduced per employee premiums the
   insurance expense for the first quarter 2005 showed a slight increase over
   the same period last year due to the increased number of employees.
   Concurrent with the creation of the high deductible insurance plan, the Bank
   established a vested health contribution plan which enables the Bank to
   contribute to health reimbursement accounts for each employee on the plan. A
   $14,000 expense was incurred in the first quarter of 2005 for the health
   reimbursement accounts. The increase in occupancy expense was due to
   increases in general utilities costs and supply costs for operating the bank.
   The increase in other operating expenses was due to an increase in postage,
   data processing expense, debit card expense, outside service fees, audit, tax
   and accounting fees and the amortization of premium purchased for the Hancock
   branch facility. These increases were offset by decreases in bounce
   protection expense and business manager expense. The increase in postage and
   debit card expense is a direct result of the increased deposit base of the
   bank. Outside service fees and audit, tax and accounting fees increased due
   to additional costs of compliance with new banking regulations and the
   provisions of the Sarbanes-Oxley Act of 2002. Bounce protection expense
   decreased due to the expiration of the Bank's contract with Pinnacle
   Financial Strategies in February 2004. Business manager expense decreased due
   to a decrease in the volume of receivables the bank purchased in the first
   quarter of 2005 due to a decline in customer need for the program.

                                       17
<PAGE>

   INCOME TAXES

         The Bank's provision for income taxes increased $30,000 or 10.7% to
   $307,000 for the three months ended March 31, 2005. The effective tax rates
   for the first quarter of 2005 and 2004 were 36.8% and 32.8%, respectively.
   The Bank's income tax expense differs from the amount computed at statutory
   rates primarily due to the tax-exempt earnings from certain investment
   securities and certain non deductible expenses.

   FINANCIAL CONDITION

         The Bank's total assets as of March 31, 2005 decreased $4.6 million or
   1.9% to $232.4 million from December 31, 2004 due primarily to a $2.8 million
   decrease in cash and due from banks, $5.6 million decrease in investment
   securities and $876,000 decrease in other assets offset by a $4.3 million
   increase in loans. The decrease in other assets is due to WV Housing Clearing
   account for loans in process balance being greater at December 31, 2004 than
   March 31, 2005 due to the timing of the settlement of these loans. The Bank's
   total liabilities decreased $4.5 million or 2.1% to $214.3 million from
   December 31, 2004 due to a $1.5 million decrease in deposits and $3.1 million
   decrease borrowings. Shareholders' equity decreased $74,000 to $18.1 million
   at March 31, 2005, primarily due to net income of $528,000 offset by a
   $602,000 decrease in accumulated other comprehensive income. The $602,000
   decrease in accumulated other comprehensive income is a direct result of the
   decline in market value of available for sale securities. The components of
   accumulated other comprehensive income at March 31, 2005 and December 31,
   2004, were unrealized gains and losses on available for sale securities, net
   of deferred income taxes and minimum pension liability adjustment, net of
   deferred income taxes. The unrealized gains and losses are primarily a
   function of available market interest rates relative to the yield being
   generated on the available for sale portfolio. No earnings impact results
   unless the securities are actually sold.

   LOAN PORTFOLIO

         At March 31, 2005, total loans increased $4.3 million or 2.8% to $159.2
   million from $154.9 million at December 31, 2004. This increase is mainly a
   result of a focused effort by all loan officers to generate loans. Loan
   officers have increased personal contact with realtors, auto dealers and
   commercial businesses during the first three months of 2005. In addition, the
   Bank offered a fixed rate residential mortgage promotion and a mortgage
   program in which the Bank pays up to $2,000 of certain closing costs during
   the first quarter of 2005. The Bank and its branches are centered in a
   naturally growing part of West Virginia. Berkeley County was recently rated
   the 3rd most populous county in West Virginia and in the top 100 for the
   fastest growing counties in the United States.

   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:

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                     MARCH 31,                 DECEMBER 31,
                                           -----------------------------       -----------
                                              2005              2004              2004
                                           -----------       -----------       -----------
<S>                                        <C>               <C>               <C>
 Nonaccrual loans                          $   276,387       $   780,530       $   380,731

 Loans past due 90 days or more
    still accruing interest                          -                 -                 -
                                           -----------       -----------       -----------
 Total nonperforming loans                 $   276,387       $   780,530       $   380,731
                                           -----------       -----------       -----------

 Other real estate owned                   $         -       $         -       $         -
                                           -----------       -----------       -----------

 Total nonperforming assets                $   276,387       $   780,530       $   380,731
                                           ===========       ===========       ===========

 Nonperforming loans/Total loans                  0.17%             0.53%             0.25%
 Nonperforming assets/Total assets                0.12%             0.38%             0.16%
 Allowance for loan losses/Total loans            1.16%             1.13%             1.17%
</TABLE>

            As of March 31, 2005, the Bank has no loans which management
      considers to be impaired. Management is aware of four borrowers who have
      exhibited weaknesses. Their loans have aggregate uninsured balances of
      $2.1 million. A specific allowance of $65,000 related to these loans has
      been established as part of the allowance for loan losses. The loans are
      collateralized and management anticipates any additional potential loss
      would be minimal.

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

            The unallocated portion of the allowance for loan losses represents
      the results of analyses that measure probable losses inherent in the
      portfolio that are not adequately captured in the allocated allowance
      analyses. These analyses include consideration of unidentified losses
      inherent in the portfolio resulting from changing underwriting criteria,
      changes in the types and mix of loans originated, industry concentrations
      and evaluations, allowance levels relative to selected overall credit
      criteria and other economic indicators used to estimate probable incurred
      losses. At March 31, 2005, the allowance for loans losses totaled $1.9
      million compared to $1.8 million at December 31, 2004. The allowance for
      loans losses as a percentage of loans was 1.2% as of March 31, 2005 and
      December 31, 2004.

                                       19

<PAGE>

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

<TABLE>
<CAPTION>
In thousands                         MARCH 31,                   DECEMBER 31,
                              ------------------------     ------------------------
                                       2005                         2004
                              ------------------------     ------------------------
                                           PERCENT OF                  PERCENT OF
                                         LOANS IN EACH                LOANS IN EACH
                                          CATEGORY TO                  CATEGORY TO
                              AMOUNT      TOTAL LOANS      AMOUNT      TOTAL LOANS
                              ------     -------------     ------     -------------
<S>                           <C>        <C>               <C>        <C>
Commercial, financial         $  863          21 %         $  810          20 %
    and agriculture
Real estate - residential        476          69              467          69
     mortgage
Installment and other            304          10              323          11
Unallocated                      212         N/A              207         N/A
                              ------         ---           ------         ---
       Total                  $1,855         100 %         $1,807         100 %
                              ======         ===           ======         ===
</TABLE>

      DEPOSITS

            The Bank's deposits decreased $1.5 million or .7% during the three
      months ended March 31, 2005. The Bank has experienced a slight change in
      the deposit account mix during the first three months of 2005. Moderate
      growth continues in regular demand, interest-bearing demand and savings
      deposits. The increase is primarily due to the continued customer growth
      in the Bank's market area of Morgan and Berkeley Counties, West Virginia
      and Washington County, Maryland. The Bank experienced an overall decrease
      of $4.6 million other time deposits and rate sensitive jumbo certificates
      of deposit during the first three months of 2005. This decrease is
      attributable to customers withdrawing funds or closing their 36-month
      Ultimate Certificates of Deposit on the anniversary date or maturity date
      due to competitive rate market. The Bank began increasing their rates paid
      on their certificates of deposit during the end of the first quarter of
      2005.

      CAPITAL RESOURCES

            Shareholders' equity decreased $74,000 or .4% during the first three
      months of 2005 due to $528,000 in net income offset by $602,000 decrease
      in accumulated other comprehensive income. The Bank is subject to
      regulations of the Office of the Comptroller of the Currency that impose
      certain minimum regulatory capital requirements. Under each measure, the
      Bank was substantially in excess of the minimum regulatory requirements,
      and, by definition was "well capitalized" at March 31, 2005. The following
      table summarized, as of March 31, 2005, the Bank's capital ratios.

<TABLE>
<CAPTION>
                            Components    Actual    Required
                            of Capital    Ratio      Ratio
                            ----------    ------    --------
<S>                         <C>           <C>       <C>
Tier 1 Capital              $   17,915       7.7%        4.0%
Total Risk Based Capital    $   19,660      14.2%        8.0%
</TABLE>

      RECENTLY ISSUED ACCOUNTING STANDARDS

            In November 2003, the EITF reached consensus on Issue 03-1, "The
      Meaning of Other-Than-Temporary Impairment and Its Application to Certain
      Investments." Issue 03-1 provides guidance in the recognition and
      measurement of other-than-temporary impairment for certain securities,
      including:

                                       20
<PAGE>
      -     All debt securities and equity securities that are subject to the
            scope of SFAS No. 115, "Accounting for Certain Investments in Debt
            and Equity Securities"; and

      -     Equity securities that are not subject to the scope of SFAS No. 115
            and that are accounted for under the cost method of accounting, or
            cost method investments.

      Issue 03-1 also provides guidance on disclosure requirements for
other-than-temporary impairment for cost method investments. The guidance in
these areas of Issue 03-1 is effective for fiscal years ending after June 15,
2004. The implementation of these areas of Issue 03-1 is not anticipated to have
a material impact on our financial statements. We have previously adopted the
disclosure provisions of Issue 03-1 for debt and equity investments that are
accounted for under SFAS No. 115. Those requirements were effective for fiscal
years ending after December 15, 2003.

      On March 31, 2005, the FASB issued a final FSP EITF Issue 03-1-1 that
delays the effective date for the measurement and recognition guidance contained
within Issue 03-1. Disclosures required by Issue 03-1 have not been deferred.
The FASB noted that this delay does not suspend existing accounting requirements
for assessing whether impairments of held to maturity and available for sale
securities are other-than-temporary, including current guidance for cost method
investments.

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, equity market
price risk, foreign currency risk and commodity price risk. Due to the nature of
its operations, only equity 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 $54.5 million, or 23.5% of total assets at March 31,
2005. In addition, liquidity may be generated through loan repayments and over
$3.0 million of available borrowing arrangements with correspondent banks. At
March 31, 2005, management considered the Bank's ability to satisfy its
anticipated liquidity needs over the next twelve months. Management believes
that the Bank is well positioned and has ample liquidity to satisfy these needs.
The Bank generated $1.8 million of cash from operations in the first three
months of 2005, which compares to $1.2 million during the same time period in
2004. $4.6 million was used in net financing activities to paydown borrowings
and fund deposit runoff through March 31, 2005, which compares to $2.6 million
generated from financing activities for the first three months of 2004. These
proceeds along with proceeds from the sales and calls of investment securities
were used to fund loans and purchase securities during each year. Net cash used
in investing activities totaled $41,000 during the first three months of 2005
compared to $1.1 million during the same time period in 2004. 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

                                       21
<PAGE>

guidelines if necessary to minimize adverse effects. Also, the Bank's policy is
intended to ensure the Bank measures a range of rate scenarios and patterns of
rate movements that are reasonably possible. The Bank measures the impact that
200 basis point changes in rates would have on earnings over the next twelve
months.

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

      The Bank's base-line scenario holds the prime rate constant at 5.75
percent through March 2006. Based on the April 2005 outlook, if interest rates
increased or decreased by 200 basis points, the model indicates that net
interest income during the policy measurement period would be affected by less
than 10 percent, in both an increasing or decreasing interest rate scenario.

CONTRACTUAL OBLIGATIONS

      During the quarter ended March 31, 2005, the Bank entered into a contract
with a consulting firm related to the internal controls assessment, design
effectiveness and documentation, and internal control testing to be compliant
with the provisions of the Sarbanes-Oxley Act of 2002. This contract will not
exceed $160,000. 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,
2004. 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, 2004 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 March 31, 2005, that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

      Presently, the Bank has engaged consultants to assist in the documentation
of internal controls and make recommendations for improvements, if necessary, as
part of the compliance with Section 404 of the Sarbanes-Oxley Act.

                                       22
<PAGE>

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

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

      Item 6. Exhibits and Reports on Form 8-K

a.)   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

                                       23
<PAGE>

                                   SIGNATURES

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

CNB Financial Services, Inc.
----------------------------
        (Registrant)

Date       May 12, 2005               /s/ Thomas F. Rokisky, President/CEO
                                      ------------------------------------------

Date       May 12, 2005               /s/ Rebecca S. Stotler, Vice President/CFO
                                      ------------------------------------------

                                       24