<PAGE>

                    U.S. Securities And Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)
 _X_ Annual Report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934 (Fee required) For the fiscal year ended December 31, 1999
                   or
___  Transition Report under Section 13 or 15(d) of the Securities Exchange
     Act of 1934 (No fee required) For the transition period  from ________
     to _______

                          Commission file no. 33-69326

                               CNB HOLDINGS, INC.
                           --------------------------
                 (Name of small business issuer in its charter)

                Virginia                             54-1663340
               ---------                             ----------
   (State or other jurisdiction                     (IRS Employer
  of incorporation or organization)              Identification No.)

    900 Memorial Drive
    Pulaski, Virginia                            24301
     ----------------                            -----

(Address of principal executive offices)       (Zip Code)

                                 (540) 994-0831
                         ------------------------------
                 Issuer's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:  None

          Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $5.00 per share
                           --------------------------
Title of Class

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days.
  Yes __X__ No_____

Check if there is no disclosure of delinquent  filers in response to Item
405 of regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

The issuer's revenues for its most recent fiscal year were $3,912,801.

The aggregate market value of the voting stock as of March 20, 2000, held by
non-affiliates of the registrant computed by reference to the price at which
<PAGE>

the stock was sold, or the average bid and asked prices of such stock, as of
a specified date within the last 60 days  was $7,411,192.

926,399 shares of the Issuer's common stock were issued and outstanding as
of March 20, 2000.

Transitional Small Business Disclosure Format. (Check one):  Yes___  No _X_

                       DOCUMENTS INCORPORATED BY REFERENCE

The annual report to security holders for fiscal year ended December 31, 1999
is incorporated by reference into Form 10-KSB Part II, Items 7 and 8, and
Part III, Item 13.   The issuer's Proxy Statement dated March 10, 2000 is
incorporated by reference into Form 10-KSB Part III, Items 9, 10, 11 and 12.


                                     PART I
                                     ------

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

GENERAL

CNB Holdings, Inc.  (the "Company") was incorporated as a Virginia stock
corporation on April 29, 1993, primarily to own and control all of the
capital stock of Community National Bank (the "Bank").  The Company
presently  engages in no business other than owning and managing the Bank.
The Bank is a national banking association which engages in a commercial
banking business from its main office in Pulaski, Virginia.  The Bank's
deposits are insured by the Federal Deposit Insurance Corporation (the
"FDIC"), and it is a member of the Federal Reserve System.

In July 1994, the Company completed its initial public offering of 437,225
shares of its common stock, $5.00 par value per share (the "Common Stock"),
at a price of $10.00 per share, pursuant to its Prospectus dated November 16,
1993.  The Company received final approval of its application to charter the
Bank from the Office of Comptroller of the Currency (the "OCC") and final
approval of its application for deposit insurance for the bank from the
Federal Deposit Insurance Corporation ("FDIC") on August 29, 1994.
On August 29, 1994, the Bank opened for business.

During 1997, the Board of Directors approved a 25% stock dividend for
shareholders of record as of May 1, 1997.  Also during 1997, the Company
filed for and received approval from the SEC for a secondary stock offering
of up to 380,000 shares of its common stock, $5.00 par value per share (the
"Common Stock"), at a price of $9.00 per share, pursuant to its Prospectus
dated December 11, 1997.  All 380,000 shares were sold during the first quarter
of 1998.  Net proceeds were approximately $3.1 million and were used for general
banking purposes.

LOCATION AND SERVICE AREA

The Bank's primary service area is Pulaski County and includes portions of
Giles, Montgomery, Bland, and Wythe Counties and the City of Radford, Virginia.
The Bank conducts a general commercial banking business in its service area,
emphasizing the banking needs of small-to-medium sized businesses, professional
concerns and individuals.  The Bank operates from its main office at 900
Memorial Drive, Pulaski, Virginia, which is at the corner of Memorial Drive and
Lee Highway (U.S. Route 11).  See "Item 2.  Description of Property" below.  The
<PAGE>

Bank draws most of its customer deposits and conducts most of its lending
transactions from within its primary service area.  The Bank is the only locally
owned and operated commercial bank in Pulaski County.

Pulaski County is located in the New River Valley area of Southwest Virginia.
Pulaski, the county seat, is approximately 53 miles southwest of Roanoke, 90
miles northeast of the Tri-Cities, Tennessee (Johnson City, Kingsport and
Bristol), and 150 miles north of Charlotte, North Carolina.  Pulaski County
had a population of 34,500 in 1994 and a median family income of $28,057 in
1989.  Virginia Polytechnic Institute and State University ("Virginia Tech"),
a four-year, comprehensive land grant university with over 22,000 students,
is located approximately 15 miles from Pulaski County.

The principal components of the economy of Pulaski County are manufacturing
(which accounts for the largest share of all economic activity), agriculture,
and tourism.  Manufacturing employment is concentrated in the automotive,
furniture and textile industries.  The largest industrial employers in the
county include Volvo-GM Heavy Trucks (3,500 employees),  Pulaski Furniture
(1,500 employees),  Renfro Corporation (a textile manufacturer with 1,000
employees) and Jefferson Mills, Inc. (350 employees).  Agricultural production,
consisting primarily of beef cattle and dairy farming contributes over $12
million per year to the county's economy.  Claytor Lake State Park, located in
the county, attracts over 800,000 visitors each year, offering swimming,
boating, fishing, hiking and other outdoor sports.

BANKING SERVICES

The Bank offers a full range of deposit services that are typically available
in most banks and savings and loan associations, including checking accounts,
NOW accounts, savings accounts and other time deposits of various types, ranging
from daily money market accounts to longer-term certificates of deposit.  The
transaction accounts and time certificates are tailored to the Bank's principal
market area at rates competitive to those offered in the area.  In addition,
the Bank offers certain retirement account services, such as Individual
Retirement Accounts (IRAs). All deposits accounts are insured by the FDIC up to
the maximum amount allowed by law (generally, $100,000 per depositor subject to
aggregation rules).  The Bank solicits these accounts from individuals,
businesses, associations, organizations, and governmental entities.
<PAGE>

The Bank also offers a full range of short-to-medium term commercial and
personal loans.  Commercial loans include  both secured and unsecured loans
for working capital (including inventory and receivables), business expansion
(including acquisition of real estate and improvements), and purchase of
equipment and machinery.  Consumer loans include secured and unsecured loans
for financing automobiles, home improvements, education and personal
investments.   The Bank also makes real estate construction and acquisition
loans and originates and holds fixed and variable rate mortgage loans.
The Bank's lending activities are subject to a variety of lending limits
imposed by federal law.  While differing limits apply in certain circumstances
based on the type of loan or the nature of the borrower (including borrowers'
relationship to the Bank), in general the Bank is subject to  a loan-to-one
borrower limit of an amount equal to 15% of the Bank's unimpaired capital and
surplus, or 25% of the unimpaired capital and surplus if the excess over 15%
is approved by the board of directors of the Bank and is fully secured by
readily marketable collateral.  The Bank may not make loans to any director,
officer, employee or 10% shareholder of the Company or the Bank unless the
loan is approved by the Board of Directors of the Bank and is made on terms
not more favorable than would be available to a person not affiliated with
the Bank.

Other bank services include mortgage loan origination, cash management services,
travelers checks, direct deposit of payroll and social security checks, and
automated drafts for various accounts.  The Bank is associated with Most Plus &
VISA shared networks of automated teller machines and debit card retail
locations that Bank customers may use throughout Virginia and other regions.
The Bank also offers VISA credit card services.

The Bank does not plan to exercise trust powers during its initial years of
operation.  The Bank may in the future offer a full-service trust department,
but cannot do so without the prior approval of the OCC.

COMPETITION

The banking business is highly competitive.  The Bank competes as a financial
intermediary with other commercial banks, savings and loan associations,
credit unions and money market funds operating in Pulaski County and else-
where, most of which are larger and have greater resources than the Bank.
As of March 20, 2000, there were six commercial banks operating a total of
eleven offices in Pulaski County, Virginia.  The Bank is the only one of these
institutions that is locally owned and operated. First Virginia Bank is an
in-state bank with three offices in Pulaski County, but is headquartered in
Northern Virginia.  Crestar Bank with one office in the county, is a statewide
bank based in Richmond. First Union Bank, a Charlotte, North Carolina based
regional bank operates one branch in the county.  Bank of America, with two
offices in Pulaski County, is an affiliate bank of southeast regional bank
holding company also headquartered in Charlotte, North Carolina.  First Citizens
Bank, a regional bank with offices in North Carolina and Virginia, headquartered
in Raleigh, operates one branch in Pulaski County.  First National Bank of
Christiansburg, a community bank which is headquartered in nearby Montgomery
County, operates a branch in Pulaski County.
<PAGE>

In addition to the commercial banks described above, First American Bank,
a federally chartered savings association, operates two branches in Pulaski
County.  Two credit unions also operate in the county.  In addition, the
Bank is subject to aggressive competition from a wide variety of financial
service companies offering an expansive array of financial products and
services.

The Company believes that the community focus of the Bank, with its emphasis
on service to small businesses, individuals, and professional concerns, gives
it an advantage in some segments of this market.

EMPLOYEES

The Bank presently has 21 full-time employees and 8 part-time employees for a
total of 25 full-time equivalents.  The Company does not have any employees
other than its officers, none of whom receive any remuneration for their
services to the Company.

SUPERVISION AND REGULATION

The Company and the Bank are subject to state and federal banking laws and
regulations.  These impose specific requirements and restrictions and provide
for general regulatory oversight with respect to virtually all aspects of
operations.  These laws and regulations are generally intended to protect
depositors, not shareholders.  To the extent that the following summary
describes statutory or regulatory provisions, it is qualified in its entirety
by reference to the particular statutory and regulatory provisions.  Any
change in applicable laws or regulations may have a material effect on the
business and prospects of the Company.  Beginning with the enactment of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")
and following with the Federal Deposit Insurance Corporation Improvement Act
("FDICIA"), enacted in 1991, numerous additional regulator requirements have
been placed on the banking industry in the past five years, and additional
changes have been proposed.  The operations of the Company and the Bank may
be affected by legislative changes and the policies of various regulatory
authorities.  The Company is unable to predict the nature or the extent of
the effect on its business and earnings that  fiscal or monetary policies,
economic control, or new federal or state legislation may have in the future.

Federal Bank Holding Company Regulation

The Company is a bank holding company within the meaning of the Bank Holding
Company Act of 1956 (the "BHCA"),  Under the BHCA, the Company is subject to
periodic examination by the Board of Governors of the Federal Reserve System
(the "Federal Reserve") and is required to file periodic reports of it
operations and such information as the Federal Reserve may require.  Company
and Bank activities are limited  to banking, managing  or controlling banks,
furnishing  services to or performing services  for its subsidiaries, or
engaging in any other activity that the Federal Reserve determines to be so
closely related to banking or managing or controlling banks as to be a proper
incident thereto.
<PAGE>

Investments, Control, and Activities.  With certain limited exceptions, the
BHCA requires every bank holding company to obtain the prior approval of the
Federal Reserve before (i) acquiring substantially all the assets of any
bank, (ii) acquiring direct or indirect ownership or control of any voting
shares of any bank if after such an acquisition it would own  or control more
than 5% of the voting shares of such bank (unless it already owns or controls
the majority of such shares), or (iii) merging or consolidating with another
bank holding company.

In addition, and subject to certain exceptions, the BHCA and the Change in
Bank Control Act, together with regulations thereunder, require Federal
Reserve approval (or, depending on the circumstances, no notice of
disapproval) prior to any person or company acquiring "control" of a bank
holding company, such as the Company.  Control is conclusively presumed to
exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company.  In the case of the Company, under
Federal Reserve regulations control will be rebuttably presumed to exist if
a person acquires at least 10% of the outstanding shares of any class of
voting securities once the Company's Common Stock is registered  under the
Securities Exchange Act of 1934 (the "Exchange Act").  The Company registered
the Common Stock under the Exchange Act by April 30, 1995.  The regulations
provide a procedure for challenge of the rebuttable control presumption.

Under the BHCA, the Company is generally prohibited from engaging in, or
acquiring direct or indirect control of more than 5% of the voting shares of
any company engaged in, nonbanking activities, unless the Federal Reserve,
by order or regulation, has found those activities to be so closely related
to banking or managing or controlling banks as to be a proper incident
thereto.  Some of the activities that the Federal Reserve has determined by
regulation to be proper incidents to the business of banking include making
or servicing loans and certain types of leases, engaging in certain
insurance and discount brokerage activities, performing certain data
processing services, acting in certain circumstances as a fiduciary or
investment or financial advisor, owning savings associations, and making
investments in certain corporations or projects designed primarily to
promote community welfare.

Source of Strength; Cross-Guarantee.  In accordance with Federal Reserve
policy, the Company is expected to act as a source of financial strength to
the Bank and to commit resources to support the Bank in circumstances in
which the Company might not otherwise do so.  Under the BHCA, the Federal
Reserve may require a bank holding company to terminate any activity or
relinquish control of a nonbank subsidiary (other than a nonbank subsidiary
of a bank) upon the Federal Reserve's determination that such activity or
control constitutes a serious risk to the financial soundness or stability
of any subsidiary depository institution of the bank holding company.
Further, federal bank regulatory authorities have additional discretion to
require a bank holding company to divest itself of any bank or nonbank
subsidiary if the agency determines that divestiture may aid the depository
institution's financial condition.  The Bank may be required to indemnify, or
cross-guarantee, the FDIC against losses it incurs with respect to any other
bank which the Company controls, which in effect makes the Company's equity
investments in healthy bank subsidiaries available to the FDIC to assist any
failing or failed bank subsidiary of the Company.
<PAGE>

Virginia Bank Holding Company Regulation

All Virginia bank holding companies must register with the Virginia State
Corporation Commission (the "Virginia Commission") under  Title 6.1 of the
Code of Virginia (the "Virginia Act").  A registered bank holding company
must provide the Virginia Commission with information with respect to the
financial condition, operations, management, and intercompany relationships
of the holding company and its subsidiaries.  The Virginia Commission may
also require such other information as is necessary to keep itself informed
about whether the provisions of Virginia law and the regulations and orders
issued thereunder by the Virginia Commission have been complied with, and
may make examinations of any bank holding company and its subsidiaries.

Under the Virginia Act, it is unlawful without prior approval of the Virginia
Commission for any company to acquire 25% or more of the voting securities of
any bank and for any Virginia bank holding company to acquire direct to
indirect ownership or control of more than 5% of the voting securities of
any bank or other  bank holding company.  In addition, the Virginia Act
allows regional interstate banking by permitting banking organizations in
certain Southeastern states to acquire Virginia banking organizations if
Virginia banking associations are allowed to acquire banking organizations
in their states and the Virginia banking organization to be acquired has been
in existence and continuously operated as a bank for a period of two years.
As a result of this reciprocal banking provisions, banking organizations in
other states, most significantly North Carolina, have entered the Virginia
market through acquisitions of Virginia institutions.  Those acquisitions are
subject to federal and Virginia approval.  Recent legislation has broadened
these statutes to permit nationwide reciprocal bank acquisitions.  See "The
Bank-Branching" below.

THE BANK

General.  The Company is the holding company for the bank, which is a national
banking association.  Substantially all company revenues are earned through the
operations of the bank. The Office of Comptroller of the Currency (the "OCC") is
the primary regulator for the Bank.  The OCC regulates or monitors all areas of
the Bank's operations, including security devices and procedures, adequacy of
capitalization and loss reserves, loans, investments, borrowings, deposits,
mergers, issuances of securities, payment of dividends, interest rates payable
on deposits, interest rates or fees chargeable on loans, establishment of
branches, corporate reorganizations, maintenance of books and records, and
adequacy of staff training to carry on safe lending and deposit gathering
practices.  The Bank must maintain certain capital ratios and is subject to
limitations on aggregate investments in real estate, bank premises, and
furniture and fixtures.
<PAGE>

Under FDICIA, all insured institutions must undergo regular on-site
examinations by their appropriate banking agency.  The cost of examinations
of insured depository institutions and any affiliates may be assessed by the
appropriate agency against each institution or affiliate as it deems necessary
or appropriate.  Insured institutions are required to submit annual reports
to the Federal Deposit Insurance Corporation ("FDIC") and the appropriate agency
(and state supervisor when applicable).  FDICIA also directs the FDIC to develop
with other appropriate agencies a method for insured depository institutions to
provide supplemental disclosure of the estimated fair market value of assets
and liabilities, to the extent feasible and practicable, in any balance sheet,
financial statement, report of condition or any other report of any insured
depository institution.  FDICIA also requires the Federal banking regulatory
agencies to prescribe, by regulation, standards for all insured depository
institutions and depository institution holding companies relating, among other
things, to: (i) internal controls, information systems and audit systems; (ii)
loan documentation; (iii) credit underwriting;  (iv) interest rate risk
exposure;  and (v) asset quality.

Transactions With Affiliates and Insiders.  The Bank is subject to the
provisions on Section 23A of the Federal Reserve Act, which place limits on
the amount of loans or extensions of credit to, or investments in, or certain
other transactions with, affiliates and on the amount of advances to third
parties collateralized by the securities or obligations of affiliates.  In
addition, most of these loans and certain other transactions must be secured
in prescribed amounts.  The Bank is also subject to the provisions of Section
23B of the Federal Reserve Act that, amoung other things, prohibit an
institution from engaging in certain transactions with certain affiliates
unless the transactions are on terms substantially the same, or at least as
favorable to such institution or its subsidiaries, as those prevailing at
the time for comparable transactions with non-affiliated companies.  The Bank
is subject to certain restrictions on extensions of credit to executive
officers, directors, certain principal shareholders and their related
interests.  Such extensions of credit (i) must be made on substantially the
same terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with third parties and (ii) must
not involve more than the normal risk of repayment or present other
unfavorable features.

Branching.  The Bank is permitted to branch freely within the state of
Virginia.  The Virginia Act permits statewide branching for Virginia state
banks.  As  a national bank located in Virginia, these state branch banking
laws also apply to the Bank.  On September 29, 1994, the federal Interstate
Banking Efficiency Act (the "Interstate Act), which expands the ability of
banks to compete interstate, was enacted.  The Interstate Act permits nation-
wide interstate acquisitions of banks by bank holding companies beginning
September 29, 1995, and permits nationwide interstate mergers of banks
beginning June 1, 1997.  States can legislatively opt not to permit inter-
state banks mergers or can legislatively opt to permit interstate bank
merges before the June 1, 1997, effective date.  The Virginia General
Assembly has adopted legislation which opts to permit nationwide inter-
state bank mergers effective July 1, 1995.


Community Reinvestment Act.  The Community Reinvestment Act (the "CRA")
requires that, in connection with examinations of financial institutions
within their respective jurisdictions, the federal regulators of financial
institutions to evaluate the record of the financial institutions in meeting
<PAGE>

the credit needs of their local communities, including low and moderate
income neighborhoods, consistent with the safe and sound operation of those
institutions.  These factors are also considered in evaluating mergers,
acquisitions, and applications to open a branch or facility.  The Bank has
not yet received a CRA evaluation.

Other Regulations.  Interest and certain other charges collected or contracted
by the Bank are subject to state usury laws and certain federal laws concerning
interest rates.  The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act governing disclosures of credit terms to consumer
borrowed, the Home Mortgage Disclosure Act of 1975 requiring financial
institutions to provide information to enable the public and public officials
to determine whether a financial institution is fulfilling its obligation to
help meet the housing needs of the community it serves, the Equal Credit
Opportunity Act prohibiting discrimination on the basis of race, creed, or
other prohibited factors in extending credit, the Fair Credit Reporting Act
of 1978 governing the use and provision of information to credit reporting
agencies, the Fair Debt Collection Act governing the manner in which consumer
debts may be collected by collection agencies, and the rules and regulations
of the various federal agencies charged with the responsibility of
implementing such federal laws.  The deposit operations of the Bank also are
subject to Truth-In-Savings Act, which requires detailed disclosure of the
yield and terms of deposit products, the Right to Financial Privacy Act,
which imposes a duty to maintain confidentiality of consumer financial
records and prescribes procedures for complying with administrative subpoena
of financial records, and the Electronic Funds Transfer Act and Regulation
E issued by the Federal Reserve Board to implement that act, which governs
automatic deposits to and withdrawals from deposit accounts and customers'
rights and liabilities arising from the use of automated teller machines and
other electronic banking services.

Deposit Insurance

The deposits of the Bank are currently insured to a maximum of $100,000 per
depositor, subject to certain aggregation rules.  The  FDIC establishes rates
for the payment of premiums by federally insured banks and thrifts for
deposit insurance.  Separate insurance funds (BIF and SAIF) are maintained
for commercial banks and thrifts, with insurance premiums from the industry
used to offset losses from insurance payouts when banks and thrifts fail.
Due to the lower rate of failures in recent years, the fees Banks and thrifts
pay BIF and SAIF have decreased.  The FDIC has adopted a risk-based deposit
insurance premium system for all insured depository institutions, including the
Bank, which requires that a depository institution pay to BIF or SAIF from $.00
to $.27 per $100 of insured deposits depending on its capital levels and risk
profile, as determined by its primary federal regulator on a semiannual basis.
The current assessment rate per $100 of insured deposits of the Bank is $.00, or
a minimum of $2,000 annually.

Dividends

The principal source of the Company's cash revenues comes from dividends
received from the Bank.  The amount of dividends that may be paid by the
Bank to the Company depends on the Bank's earnings and capital position
and is limited by federal law, regulations and policies.  As a national
bank, the Bank may  not pay dividends  from its paid-in-capital.  All
dividends must be paid out of undivided profits then on hand, after de-
<PAGE>

ducting expenses, including reserves from losses and bad debts.  In
addition, a national bank is prohibited from declaring a dividend on its
shares of common stock until its surplus equals its stated capital,
unless there has been transferred to surplus no less than one-tenth of
the bank's net profits of the preceding two consecutive half-year periods
(in the case of an annual dividend).  The approval of the OCC is required
if the total of all dividends declared by a national bank in any
calendar year exceeds the total if its net profits for that year combined
with its retained net profits for the preceding two years, less any
required transfers to surplus.  Under FDICIA, the Bank may not pay a
dividend if, after paying the dividend, the Bank would be undercapitalized.
See "Capital Regulations" below.

Capital Regulations

The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk
profile among banks and bank holding companies, account for off-balance
sheet exposure, and minimize disincentives for holding liquid assets.  The
resulting capital ratios represent qualifying capital as a percentage of
total risk-weighted assets and off-balance sheet items.  The guidelines are
minimums, and the federal regulators have noted that banks and bank holding
companies contemplating significant expansion programs should not allow
expansion to diminish their capital ratios and should maintain ratios well
in excess of the minimums.  The current guidelines require all federally
regulated banks and bank holding companies to maintain a minimum risk-based
total capital ratio equal to 8%, of which at least 4% must be Tier 1 capital.
Tier 1 capital includes common shareholders' equity, qualifying perpetual
preferred stock, and minority interests in  equity accounts of consolidated
subsidiaries, but excludes goodwill and most other intangibles and excludes
the allowance for loan and lease losses.  Tier 2 capital includes the excess
of any preferred stock not included in Tier 1 capital, mandatory convertible
securities, hybrid capital instruments, subordinated debt and intermediate
term-preferred stock, and general reserves for loan and lease losses up to
1.25% of risk-weighted assets.

Under these guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50% or 100%.  In addition, certain off-balance
sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight will apply.  These
computations result in the total risk-weighted assets.  Most loans are
assigned to the 100% risk category, except for first mortgage loans fully
secured by residential property and, under certain circumstances, residential
construction loans, both of which carry a 50% rating.  Most investment
securities are assigned to the 20% category, except for municipal or state
revenue bonds, which have a 50% rating, and direct obligations of or
obligations guaranteed by the United States Treasury of United States
Government agencies, which have a 0% rating.

The federal bank regulator authorities have also implemented a leverage ratio,
which is Tier 1 capital as a percentage of average total assets less
intangibles, to be used as a supplement to the risk-based guidelines.  The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank or bank holding company may leverage its
equity capital base.  The minimum required leverage ratio for top-rated
institutions is 3%, but most institutions are required to maintain an
additional cushion of at least 100 to 200 basis points.
<PAGE>

These guidelines apply on a consolidated basis to bank holding companies with
total consolidated assets of $150 million or more.  For bank holding companies
with less than $150 million in total consolidated assets (such as the
Company), the guidelines will be applied on a bank only basis unless the
bank holding company is engaged in a nonbanking activity involving
significant leverage or has a significant amount of debt outstanding that
is held by the general public.

FDICIA established a new capital-based regulatory scheme designed to promote
early intervention  for troubled banks and requires the FDIC to choose the
least expensive resolution of  bank failures.  The new capital based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized,"  "adequately capitalized,"
"undercapitalized," "significantly undercapitalized,"  and "critically
undercapitalized."  To qualify as "well capitalized" institution, a bank
must have a leverage ratio of no less the 5%, a Tier 1 risk-based ratio of
no less than 6%, and a total risk-based  capital ratio of no less than 10%,
and the bank must not be under any  order or directive from the appropriate
regulatory agency to meet and maintain a specific capital level.  As of
December 31, 1996, the Bank qualified as "well-capitalized."  See "Item 6.
Management's Discussion and Analysis or Plan of Operation."

Under the FDICIA regulations, the applicable agency can treat an institution
as if it were in the next lower category of the agency determines (after
notice and an opportunity for hearing) that the institution is in an unsafe
or unsound condition or is engaging in an unsafe or unsound practice.  The
degree of regulatory scrutiny of a financial institution will increase, and
the permissible activities of the institution will decrease, as it moves
downward through the capital categories.  Institutions that fall into one of
the other three undercapitalized categories may be required to (i)submit a
capital restoration plan; (ii) raise additional capital; (iii) restrict their
growth, deposit interest rates, and other activities;(iv) improve their
management; (v) eliminate management fees; or (vi) divest themselves of all
or part of their operations.  Bank holding companies controlling financial
institutions can be called upon to boost the institutions' capital and to
partially guarantee the institutions' performance under their capital
restoration plans.
<PAGE>

These capital guidelines can affect the Company in several ways.  Rapid
growth, poor loan portfolio performance, or poor earnings performance, or a
combination of these factors, could change the Company's capital position in
a relatively short period of time, making additional capital infusion
necessary.

FDICIA requires the federal banking regulators to revise the risk-based
capital standards to provide for explicit consideration of interest-rate
risk, concentration of credit risk, and the risks of non-traditional
activities.  It is uncertain what affect these regulations, when
implemented, would have on the Company and the Bank.

Recent Legislative Developments

From time to time, various bills are introduced in the United States Congress
with respect to the regulation of financial institutions.  Certain of these
proposals, if  adopted, could significantly change the regulation of banks
and the financial services industry.  The Company cannot predict whether any
of these proposals will be adopted or, if adopted, how these proposals would
affect the Company.

YEAR 2000 READINESS

A detailed discussion of the Company's and Bank's year 2000 readiness and
compliance program in included in "Management's Discussion and Analysis", on
page 29 and is hereby incorporated by reference.


ITEM 2. DESCRIPTION OF PROPERTY.

Company and Bank main offices are located on a 4.9 acre plot at 900 Memorial
Drive in Pulaski.  The Bank opened for business on August 29, 1994, in a
temporary modular building on the site and  utilized the temporary facility
for 16 months  while the permanent Bank facility was constructed.  The Bank
began construction on the permanent facility on March 28, 1995.  Construction
was completed on December 1, 1995.  The cost  of the building was $933,000.
The furniture, fixtures and equipment for the facility cost $143,000.  The
permanent facility is a two-story brick building and contains approximately
10,500 square feet.  It features five inside teller windows, three drive-up
lanes, a drive-up night depository and a drive up automated teller machine.

The main office site was purchased from a partnership 100% owned by Jack W.
Bowling, a director of the Company, and five members of his immediate family
in an exchange transaction for 25,000 shares of common stock.  See "Item 12.
Certain Relationships and Related Transactions."

The second branch office of the Bank, which opened October 4, 1997, is located
at 202 N. Washington Ave, Pulaski, Virginia in CNB Center at the site of a
regional bank's former branch office.  It is a full-service branch, with three
inside teller windows, a drive-up lane, a night depository, an automated teller
machine, and safety deposit boxes. The Bank also recently installed a stand-
alone automated teller machine on the campus of the New River Community College
in Dublin, Virginia.

CNB Center was purchased in 1997 from NationsBank for $187,000.  This three
story building has approximately 20,000 square feet.  In addition to the branch,
the building houses the Bank's operations department. The second and third
floors are leased to unrelated third parties and is available for future
expansion.
<PAGE>

In the normal course of business, the Bank invests in debt securities
collateralized by real estate mortgages on residential properties. The Bank's
policies regarding investment in mortgage-backed securities are subject to
change by the Board of Directors with out a vote of stockholders.  The Bank
also originates and holds real estate mortgages.  These are secured by first
and second deeds of trust on residential and commercial properties.

ITEM 3.  LEGAL PRCEEDINGS.

Neither the Company nor the Bank is a party to, nor is any of their property
the subject of, any material pending legal proceedings incidental to the
business of the Company or the Bank.

ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

                                     PART II
                                     -------

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's articles of incorporation authorize it to issue up to 10,000,000
shares of common stock, par value $5.00 per share (the "Common Stock"), of
which 926,399 were issued and outstanding as of March 20, 2000.  There is no
established public trading market in the common stock, and one is not expected
to develop in the near future.   The Company's common stock trades thinly,
primarily on the local market.  However, three stock brokerage firms, Davenport
& Company, Scott & Stringfellow and Wheat First Securities, have been approved
by the Company as market makers.  As of March 20, 2000, there are approximately
654 stockholders of record.

The Company has never paid a dividend.  It is anticipated that earnings will
be retained for several years to expand the Bank's capital base to support
deposit growth and that no dividends will be paid on the Company's stock for
the next five years.  Dividends might not be paid for several years thereafter
even though the Company has achieved profitable operations.

Moreover, the National Banking Act limits dividend payments by national banks,
such as the Bank, which in turn could limit the Company's ability to pay
dividends.  The Bank may only pay dividends out of its net profits then on
hand, after deducting expenses, including losses and bad debts.  In addition,
the Bank is prohibited from declaring a dividend on its shares of common
stock until its surplus equals its stated capital, unless there has been
transferred to this surplus no less than one-tenth of the Bank's net profits
of the preceding two consecutive half-year periods (in the case of an annual
dividend).  The approval of the OCC will be required if the total of all
dividends declared in any calendar year by the Bank exceeds the Banks' net
profits to date, as defined, for that year combined with its retained net
profits for the preceding two years less any required transfers to surplus.
At December 31, 1999, the Bank was not yet cumulatively.  The OCC also
has the authority under federal law to enjoin a national bank engaging in
what in its opinion constitutes an unsafe or unsound practice in conducing
its business, including the payment of a dividend under certain circumstances.
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Management's Discussion and Analysis is herein incorporated by reference to
the Company's 1999 Annual Report to Stockholders, pages 24 through 39.

ITEM 7. FINANCIAL STATEMENTS.

The following consolidated financial statements of the registrant and the
Independent Auditors' Report set forth on pages 3 through 23 of the Company's
1999 Annual Reports to Stockholders are incorporated herein by reference:

  1. Independent Auditor's Report
  2. Consolidated Balance Sheets as of December 31, 1999 and 1998
  3. Consolidated Statements of Operations for the years
     ended December 31, 1999, 1998, and 1997
  4. Consolidated Statements of Stockholders' Equity for the years
     and period ended December 31, 1999, 1998, and 1997
  5. Consolidated Statements of Cash Flows for the years
     ended December 31, 1999, 1998, and 1997
  6. Notes to Consolidated Financial Statements


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
   FINANCIAL DISCLOSURE.

There were no changes in accountants during the year and there were no
disagreements on accounting and financial disclosure.

                                    PART III
                                   ----------

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
   COMPLIANCE WITH SECTION 16 (a) OF EXCHANGE ACT.

Executive Officers of the Company as of December 31, 1999 are listed on page
5 of the Company's Proxy statement dated March 10, 2000 and is incorporated
herein by reference.   Information with respect to the directors of the
Company is set out under the caption "Election of Directors" on page 2 of
The Company's Proxy statement dated March 10, 2000 which information is
incorporated herein by reference.

The disclosure required by item 405 of regulation S-K is set out under the
caption "Compliance with Section 16 of the Securities Exchange Act" on
page 7 of the Company's Proxy Statement dated March 10, 2000, which
information is incorporated herein by reference.


ITEM 10.  EXECUTIVE COMPENSATION.

The information set forth under "Executive and Board Compensation" on pages
5 through 6 of the Company's Proxy Statement dated March 10, 2000, is
incorporated herein by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information set forth under "Voting" on page 1, "Security Ownership of
Certain Beneficial Owners and Management" on pages 2 and 3  and under
"Election of Directors" on pages 3 and 4 of the Company's Proxy Statement
dated March 10, 2000, is incorporated herein by reference.
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information contained under "Certain  Relationships and Related Trans-
actions" on page 4 of the Company's Proxy statement dated March 10, 2000,
is incorporated herein by reference.


                                     PART IV
                                     -------

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

The following documents are filed as part of the report:

1. Financial Statements:

The following financial statements are incorporated in this report by
reference to the indicated pages of the 1998 Annual Report to Stockholder

                                                   1999 Annual Report to
                                                  Stockholders page number
                                                  ------------------------

Independent Auditor's Report                                 2
Consolidated Balance Sheets-December 31, 1999 and 1998       3
Consolidated Statements of Operations - Years ended
        December 31, 1999, 1998 and 1997                     4
Consolidated Statements of Stockholders' Equity - Years
        ended December 31, 1999, 1998 and 1997               5
Consolidated Statements of Cash Flows - Years ended
        December  31, 1999, 1998 and 1997                    6
Notes to Consolidated Financial Statements                7-23
Management's Discussion and Analysis                     24-39

2. Financial Statement Schedules

All schedules are omitted as the required information is inapplicable or the
information is presented in the Consolidated Financial Statements or related
notes.

3. Exhibits:

The exhibits filed as part of this report and exhibits incorporated herein by
reference to other documents are listed in the Index to Exhibits to this
Annual Report on Form 10-K.

3.1 Amended and Restated Articles of Incorporation (incorporated by
    reference to Exhibit 3.1 to the Company's Registration Statement
    No. 33-69326 on Form S-1).

3.2 By-laws (incorporated by reference to Exhibit 3.2 to the Company's
    Registration Statement No. 33-69326 on Form S-1).

4.1 Provisions in the Company's Articles of Incorporation and By-laws
    defining the rights of  holders of the Company's Common Stock
<PAGE>

     (incorporated by reference to Exhibit 4.1 to the Company's
     Registration Statement No. 33-69326 on Form S-1).

10.1 Employment Agreement dated June 21, 1993, by and between Wayne L.
     Carpenter and the Company incorporated by reference to Exhibit 3.2
     to the Company's Registration Statement No. 33-69326 on Form S-1).

10.2 Construction Agreement dated February 2, 1995, by and between the
     Bank and Turn-Key Financial Builders, Inc. (incorporated by reference
     to Exhibit 10.2 to the Company's 1995 Form 10-KSB).

10.3 Security Equipment Purchase Agreement dated February 15, 1995, by
     and between the Bank and Security Corporation (incorporated by
     reference to Exhibit 10.3 to the Company's 1995 Form 10-KSB).

10.4 CNB Holdings, Inc. 1995 Stock Option Plan (incorporated by reference
     to Exhibit 10.4 to the Company's 1995 Form 10-KSB).

12.1 1999 Report to Stockholders.

21.1 Subsidiaries of the Company (incorporated by reference to Exhibit
     10.4 to the Company's 1995 Form 10-KSB).

22.1 2000 Proxy Statement.
<PAGE>

                                   SIGNATURES
                                   ----------

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                 CNB HOLDINGS, INC.


Date:   March 24, 2000  By: s/Hiawatha Nicely, Jr.
                        -------------------------------
                             Hiawatha Nicely, Jr.
                           Chief Executive Officer

In accordance with the Exchange Act, this report has to be signed below by
the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

   Signature                      Title                 Date
   ---------                      -----                 ----

<TABLE>
<CAPTION>
<S><C>

s/Sybil S. Atkinson
_________________________    Director        March 24, 2000
Sybil S. Atkinson

s/Jack W. Bowling
_________________________   Director         March 24, 2000
Jack W. Bowling

s/Jackson M. Bruce
_________________________   Director         March 24, 2000
Jackson M. Bruce


s/Randolph V. Chrisley
_________________________   Director         March 24, 2000
Randolph V. Chrisley


                              Chairman,
                             President and
s/Hiawatha Nicely, Jr.      Chief Executive
_________________________      Officer       March 24, 2000
Hiawatha Nicely, Jr.

s/A. Carole Pratt
_________________________   Director         March 24, 2000
A. Carole Pratt

s/David W. Ratcliff, Jr.
_________________________   Director         March 24, 2000
David W. Ratcliff, Jr.


s/Nathanial R. Tuck
_________________________   Director         March 24, 2000
Nathaniel R. Tuck

s/J. David Wine
_________________________   Director         March 24, 2000
J. David Wine
</TABLE>
<PAGE>

               INDEX TO EXHIBITS
               -----------------

                            PAGE NO. IN
EXHIBIT NO.                DESCRIPTION                 EQUENTIAL SYSTEM
-----------                -----------                 ----------------

 3.1       Amended and Restated Articles of
           Incorporation (incorporated by reference
           to Exhibit 3.1 to the Company's Registration
           Statement No. 33-69326 on Form S-1).


 3.2       By-laws (incorporated by reference to Exhibit
           3.2 to the Company's Registration Statement No.
           33-69326 on Form S-1).

 4.1       Provisions in the Company's Articles of
           Incorporation and By-laws defining the rights
           of holders of the Company's Common Stock
           (incorporated by reference to Exhibit 4.1 to
           the Company's Registration Statement No.
           33-69326 on Form S-1).

10.1       Employment Agreement dated June 21, 1993, by
           and between Wayne L. Carpenter and the Company
           incorporated by reference to Exhibit 3.2 to
           the Company's Registration Statement No.
           33-69326 on Form S-1).

10.2       Construction Agreement dated February 2, 1995,
           by and between the Bank and Turn-Key Financial
           Builders, Inc. (incorporated by reference to
           Exhibit 10.2 to the Company's 1995 Form 10-KSB).

10.3       Security Equipment Purchase Agreement dated
           February 15, 1995, by and between the Bank and
           Security Corporation (incorporated by reference
           to Exhibit 10.3 to the Company's 1995 Form 10-KSB).

10.4       CNB Holdings, Inc. 1995 Stock Option Plan
           (incorporated by reference to Exhibit 10.4 to the
           Company's 1995 Form 10-KSB).

12.1       1999 Report to Stockholders.

21.1       Subsidiaries of the Company (incorporated by
           reference to Exhibit 10.4 to the Company's 1995
           Form 10-KSB).

22.1       2000 Proxy Statement.