CNB : 2021 4th Quarter Statement of Condition

DIRECTORS - CNB CORPORATION AND

CITIZENS NATIONAL BANK

RICK A. TROMBLE

Chairman, CNB Corporation

Chairman, Citizens National Bank

Owner, Tromble Bay Farms

DANA F. ANDREWS

President, Sturgeon River Pottery, Inc.

*STEPHANIE V. BALDWIN

President, Edgewater Design Group

*MELISSA K. BRIDGES

Attorney, Bodman LLP

SUSAN A. ENO

Retired President/Chief Executive Officer,

Citizens National Bank & CNB Corporation

*BRIAN B. EWBANK

President & COO, Stafford's Hospitality

MATTHEW E. KEENE

President/Chief Executive Officer,

Citizens National Bank & CNB Corporation

SCOTT D. LANDON

President, Landon Auto Parts

CHRISTOPHER B. SHEPLER

President, Shepler's Mackinac Island Ferry Service

R. JEFFERY SWADLING

Audit Committee Chairman, CNB Corporation Vice President, Ken's Village Market

DIRECTORS EMERITI

JOHN P. WARD

STEVEN J. BAKER, D.V.M.

JAMES C. CONBOY, JR.

KATHLEEN M. DARROW

THOMAS J. ELLENBERGER

VINCENT J. HILLESHEIM

KATHLEEN A. LIEDER

THOMAS J. REDMAN

FRANCIS J. VANANTWERP, JR.

*Citizens National Bank Director

CNB CORPORATION OFFICERS

MATTHEW E. KEENE . . . . . . . . . . . .	President & Chief Executive Officer
VICTORIA J. HAND . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . Secretary
AMY E. ESSEX . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . Treasurer

CITIZENS NATIONAL BANK OFFICERS

LEADERSHIP:

MATTHEW E. KEENE. . . . . . . . . . . . . President & Chief Executive Officer VICTORIA J. HAND . . Executive Vice President, Chief Operating Officer, Cashier & Compliance Officer AMY E. ESSEX . . . . . . . . . Senior Vice President & Chief Financial Officer

JOSEPH P. GARBER. . . . . . . . Senior Vice President & Chief Credit Officer DAVID A. WOODS . . . . . . . . . . Senior Vice President & Chief Loan Officer TRISHA M. DOBIAS . . . . . . . . . . . . . . . Vice President, Human Resources VALERIE A. JONES. . . . . . . . . . . . . . . . . Vice President, Cash Management NANCY K. LINDSAY . . . . . . . . . . . . . . . . . . . . . . Vice President, Marketing AMANDA J. NICHOLSON. . . . . . . . . . . . . . . . . . Universal Banking Officer

BUSINESS BANKING:

JOSEPH M. DALY . . . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

NICOLE M. DRAKE . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

TIMOTHY J. TIMMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President

CYNTHIA D. LAMBERSON . . . . . . . . . . . . . . . . . . Assistant Vice President

STEPHEN J. DALY . . . . . . . . . . . . . . . . . . . . . . . . Business Banking Officer

RESIDENTIAL BANKING:

STEPHEN J. CRUSOE . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice President

DARREN M. SELDEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President

MICHELLE M. MILLER . . . . . . . . . . . . . . . . . . . . Assistant Vice President

SHARON L. COPPERNOLL . . . . . . . . . . . . . . . . . . . . . . Residential Officer

DENNIS S. MYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residential Officer

REGINA H. PATTON . . . . . . . . . . . . . . . . . . . . . . . . . . . Residential Officer

WEALTH & RETIREMENT STRATEGIES:

MATTHEW H. DEWILDT . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President

OPERATIONS:

QUINN C. BONNETT . . . . . . . . . . . . Facilities Manager & Security Officer

MARILY J. GALLOWAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk Officer

CHANDLAR E. RUSH . . . . . . . . . . . . . . . . . . . . . . . . . . . Technology Officer

SHERRY M. WICHLACZ . . . . . . . . . . . . . . . . . . . . . . . . Operations Officer

Citizens National Bank has offices in:

Cheboygan•Onaway•Mackinaw City

Pellston•Indian River•Alanson•Petoskey

You can also visit our website at

www.CNBisMyBank.com

our 90 year tradition continues

STATEMENT OF CONDITION

December 31, 2021

CONSOLIDATED BALANCE SHEET

(UNAUDITED) In thousands of dollars

		December 31,
ASSETS	2021		2020
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . .	$ 8,585		$ 7,786
Interest-bearing deposits with other financial
institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13,305		37,109
	______		______
Total cash and cash equivalents. . . . . . . . . . . . . . . . . .	21,890		44,895
Time deposits with other financial institutions	9,653		12,632
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . .	267,609		148,049
Securities held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . .	4,665		3,524
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,644		957
	______		______
Total investment securities. . . . . . . . . . . . . . . . . . . . . . . .	273,918		152,530
PPP Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,268		13,800
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,271		5,484
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	166,624		156,516
Less: allowance for loan losses. . . . . . . . . . . . .	(2,770)	(3,004)
	______		______
Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	167,393		172,796
Premises and equipment, net. . . . . . . . . . . . . . . . . . . . .	7,525		5,750
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,714		10,271
	______		______
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$492,093		$398,874
	_______		_______
LIABILITIES	_______		_______
Deposits:
Noninterest-bearingdemand . . . . . . . . . . . . . . . . . . .	$ 165,687		$ 123,493
Interest-bearingdeposits . . . . . . . . . . . . . . . . . . . . . . . .	291,533		239,426
	______		______
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	457,220		362,919
Accrued and other liabilities. . . . . . . . . . . . . . . . . . . . . .	5,726		5,286
	______		______
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	462,946		368,205
SHAREHOLDERS' EQUITY
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,027		3,027
Additional Paid-InCapital . . . . . . . . . . . . . . . . . . . . . . . . .	19,472		19,472
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,251		6,337
Accumulated other
Comprehensive Income/(Loss), net . . . . . . . . .	(1,603)		1,833
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . .	29,147		30,669
Total liabilities and shareholders' equity . . . . . . .	$492,093		$398,874
	_______		_______
	_______		_______

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

In thousands of dollars, except per share data

For the twelve months ended December 31,

INTEREST INCOME		2021	2020		2019
Interest and fees on loans . . . . . . . . . . . . . .	$ 9,348	$ 9,069	$ 8,321
Interest on securities:
Taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,852	1,607		1,610
Tax exempt . . . . . . . . . . . . . . . . . . . . . . . . . .		320	310		307
Other interest income . . . . . . . . . . . . . . . . . . .		299	435		687
	______	______	______
Total interest income . . . . . . . . . . . . . . . . . . . .		11,819	11,421		10,925
INTEREST EXPENSE ON DEPOSITS		617	469		346
	______	______	______
NET INTEREST INCOME . . . . . . . . . . . .		11,202	10,952		10,579
Provision for loan losses . . . . . . . . . . . . . . . .		(250)	1,225		0
	______	______	______
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES . . . .		11,452	9,727		10,579
	______	______	______
NONINTEREST INCOME
Service charges and fees . . . . . . . . . . . . . . . . . .		1,249	1,032		1,067
Net gain from sale of loans . . . . . . . . . . . . . .		2,323	3,182		706
Gain on sale of assets . . . . . . . . . . . . . . . . . . . .		0	12		0
Gain (Loss) of sale of securities . . . . . . . .		122	0		0
Loan servicing fees, net of amortization		(56)	(127)		48
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		769	597		772
	______	______	______
Total noninterest income . . . . . . . . . . . . . . .		4,407	4,696		2,593
NONINTEREST EXPENSES
Salaries and benefits . . . . . . . . . . . . . . . . . . . . . . . . .		7,026	6,200		5,327
Occupancy and equipment . . . . . . . . . . . . .		1,378	1,286		1,367
FDIC insurance premiums . . . . . . . . . . . . . .		255	142		122
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .		3,533	3,367		3,262
	______	______	______
Total noninterest expenses . . . . . . . . . . . . .		12,192	10,995		10,078
	______	______	______
INCOME BEFORE INCOME TAXES . . . . . . . .		3,667	3,428		3,094
2019 Pension adjustment . . . . . . . . . . . . . . .		0	0		788
Income tax expense . . . . . . . . . . . . . . . . . . . . .		663	616		378
	______	______	______
NET INCOME (LOSS) . . . . . . . . . . . . . . . . .	$	3,004	$ 2,812	$	1,928
	______	______	______
	______	______	______
BASIC NET INCOME PER SHARE . . . . . . . . .	$	2.48	$ 2.32	$	1.59
	______	______	______
	______	______	______

February 11, 2022

Dear Shareholder,

At its January 13, 2022 meeting, the CNB Corporation (Corporation) Board of Directors approved two dividends payable to shareholders of record as of January 27, 2022. The enclosed represent a regular dividend of $0.40 per share and a special dividend of $0.10 per share.

Looking back on 2021, it is hard to remember that our lobbies had remained restricted to customers all the way into May. Despite being closed to the public for nearly six months, the Corporation and its subsidiary, Citizens National Bank (Bank), maintained positive financial performance throughout the year ending December 31, 2021:

• Continued growth in all our markets fueled the 26% year- over-year increase in the Bank's total deposits. Bolstered by that growth, the Bank's investment portfolio increased by 79.6% compared to the same quarter 2020.
• The Bank's business banking team worked diligently with their clients to navigate Paycheck Protection Program (PPP) loan forgiveness; as a result, only one PPP loan still remains to be forgiven in 2022.
• Despite ongoing pandemic restrictions at the beginning of 2021, the Bank's core loans grew by $10.1 million year-over- year.
• As a result of the Bank's 2021 performance, net income was $3.0 million.

Staff changes during the quarter include the promotion of Michelle M. Miller to Assistant Vice President - Residential Banking. Assistant Vice President of Shareholder Relations Rebecca L. Tomaski officially retired as of year-end. Her years of dedication to Bank staff and Corporation shareholders are appreci- ated, and I congratulate her on a well-deserved retirement. Directors Steven J. Baker, D.V.M and Kathleen A. Lieder also announced their retirement from the Bank and Corporation board of directors, and both served at their final meeting December 16, 2021. The directors and I wish them the best and thank them for their many years of service.

The renovation of our new Petoskey branch has begun, and I hope to have our team moved in by the end of 2022. I know they all look forward to serving our customers in their permanent office space. As a reminder, planning for our annual meeting of shareholders is underway, and information regarding the meeting will be sent out in early April; I hope to see you all there.

Looking ahead into 2022, I remain positive about the Bank's future and the strong foundations we continue to build throughout our northern Michigan communities. If you have questions or concerns regarding the Corporation or the Bank, please feel free to stop by my office in Cheboygan or give me a call.

Sincerely,

Matthew E. Keene

President & CEO