CNB News & Events

CONWAY NATIONAL BANK PROVIDES OUTLET FOR PROPER AMERICAN FLAG RETIREMENT | e-STATEMENTS NOW AVAILABLE | 3rd QUARTER '12 SHAREHOLDER LETTER | TEACH CHILDREN TO SAVE | EMPLOYEE RECOGNITION

CONWAY NATIONAL BANK PROVIDES OUTLET FOR PROPER AMERICAN FLAG RETIREMENT

Conway, SC - As a tribute to our wonderful nation, Conway National Bank is proud to serve as a drop-off location for those individuals wishing to retire their American flag. When the flag becomes worn, torn, faded or badly soiled, it is time to replace it with a new one, and the old one should be retired with all the dignity and respect befitting our nation's flag.

The U.S. Flag Code states, "The flag, when it is in such condition that it is no longer a fitting emblem for display, should be destroyed in a dignified way, preferably by burning."

CNB delivers the flags to the Boy Scouts of America to ensure proper retirement is carried out. They are one of a select few service organizations permitted to actually retire a flag.

While the ceremony for flag retirement varies by organization, the Boy Scouts offer a carefully choreographed ceremony. These emotional ceremonies, also known as 'final honors', are performed with precision and care. The organization takes this civic duty very seriously and performs the ceremonies under the watchful eye of Scoutmasters and District Executives.

"It is both an honor and privilege to have a hand in something as sacred to our country as retiring the American flag," says Jennings Duncan, President and CEO of CNB. "We have offered the service of being a drop-off location for years, and it is something we will continue to offer for years to come."

Flags can be dropped off at any of CNB's fourteen (14) locations, Monday-Thursday, 9 am - 5 pm, and Friday, 9 am - 6 pm. For physical addresses for each of CNB's locations, please visit our Locations page.

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e-STATEMENTS NOW AVAILABLE

CNB e-Statements are online bank statements that look exactly like your mailed paper statements. They are a safe, convenient way to view, print, or download your account statements from our Online Banking website. We can alert you when your statements are ready and it's FREE. To find out how you can sign up for this service, visit one of our 14 offices today.

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TO OUR SHAREHOLDERS AND FRIENDS:

The U.S. national and local economies continue to slowly recover. During the third quarter of 2012 real gross domestic product (GDP) grew at an annual rate of 2.0%, as compared to the second quarter of 2012 at 1.3%, according to the Bureau of Economic Analysis, a division of the U.S. Department of Commerce, in its advance estimate. The increase in the rate of growth reflects increased personal consumption expenditures, federal government spending, and residential fixed investment, partly offset by decreased exports, nonresidential fixed investment, and private inventory investment. Locally, the real estate sector increased 13% in total number of transactions for the third quarter of 2012, as compared to 8% and -4.4% for the first and second quarters of 2012, respectively.

The Company's net income for the nine-month period ended September 30, 2012 totaled $2,485,000, up 213.8% from $792,000 for the same period in 2011, for a return on average assets of .35% and a return on average equity of 3.65% as compared to .11% and 1.20%, respectively, for 2011. The Company continues to experience improving profitability, although profitability remains low in comparison to historical operating results. On a per share basis, earnings increased 212.5% from $.48 for the first nine months of 2011 to $1.50 for the same period in 2012.

Total assets increased to $955.2 million at September 30, 2012, an increase of 1.0% from $945.5 million at September 30, 2011, and capital stood at $92.0 million at September 30, 2012 compared to $89.1 million at September 30, 2011, up 3.2%. Total deposits were $771.8 million at September 30, 2012, an increase of 2.2% from $755.4 million at September 30, 2011. During the first nine months of 2012, repurchase agreements further reduced, decreasing 8.4%, from $95.2 million at September 30, 2011 to $87.2 million at September 30, 2012. Loans totaled $462.7 million at September 30, 2012, a decrease of 6.3% from September 30, 2011; and investment securities were $388.2 million, an increase of 22.3% from September 30, 2011.

Net income for the nine months ended September 30, 2012 of $2,485,000 is primarily the result of the Bank's net interest income. However, net interest income decreased 5.7%, to $21,440,000 for the first nine months of 2012 from $22,736,000 for the first nine months of 2011. Other factors which affect earnings include the provision for possible loan losses, noninterest expense, and noninterest income. The provision for possible loan losses decreased significantly, 45.2%, from $7,473,000 for the first nine months of 2011 to $4,093,000 for the first nine months of 2012. The allowance for loan losses, as a percentage of gross loans, stood at 2.48% at September 30, 2012 as compared to 2.45% at September 30, 2011. Although the level of the allowance for loan losses at September 30, 2012 slightly exceeds the level for the same period in 2011, the allowance for loan losses has declined from its cycle high of 2.70%, and we anticipate that due to declining provisions for loan losses, the allowance for loan losses will continue to decline. Noninterest expense decreased .3% from $19,126,000 for the first half of 2011 to $19,061,000 for the same period in 2012; and noninterest income increased 9.2% from $4,662,000 to $5,093,000 for the same periods, respectively. The decrease in noninterest expense was primarily due to decreased examination and professional fees, decreased FDIC deposit insurance assessments, and decreased other operating expenses, partially offset by increased salaries and employee benefits and an increase in the net cost of operation of other real estate owned. Noninterest income increased primarily due to increased gains on sales of investment securities and other operating income, partially offset by decreased service charges on deposit accounts.

Although the national and local economies are slowly recovering, we anticipate that the Company's profitability will continue to steadily improve; and, at the same time, we expect that the Bank will continue to grow, further strengthen, and generally prosper. The Bank is still addressing some remaining credit concerns. However, these concerns have diminished in comparison to recent operating years. Still, we will continue to address credit concerns during the remainder of 2012 and into 2013. Loan losses are expected to remain above historical levels during 2012, but at levels lower than those experienced for 2011, 2010, and 2009. The Bank has been well positioned and prepared to meet future demands and opportunities.

Conway National continues to maintain a substantial financial position and improving profitability, both of which compare favorably to local markets. Conway National remains dedicated to its conservative and prudent banking practices; and, as always, we are very appreciative of your continued support. We look forward to the future and continuing to build your bank steeped in our traditions of exceptional customer service, trust, and dedication to all of the communities we serve.

W. Jennings Duncan, President
CNB Corporation and The Conway National Bank

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CNB Educates Children on the Value of Saving

Our current economic times serve as a great reminder of how important it is to teach our young children the value of saving. Conway National Bank is proud, once again, to partner with the American Bankers Association by participating in their annual Teach Children To Save Day. This event brings students and bankers together to increase savings education. Since it was started by the ABA Education Foundation in 1997, more than 60,000 bankers have reached some 2.8 million young people.

CNB has participated in this event several years and has had the privilege of reaching thousands of second graders throughout their service area in Horry County and the Waccamaw Neck area of Georgetown County. While the national program focuses on children of all ages, CNB felt if you could teach them early enough, it would become a lifelong lesson. "CNB firmly believes that teaching children about money and savings is a crucial part of providing our youth with a superior education," says Jennings Duncan, President and CEO of CNB. "Children are typically fascinated by money and enjoy spending. That's why CNB has joined the nationwide effort to help educate children on these issues."

While this year's Teach Children to Save Day was April 21, CNB will implement its program May-June to accommodate the school system's academic calendar and statewide testing. Spreading it over two months rather than just one day also allows the Bank to reach a lot more children. The 45-minute program is conducted by several bank representatives and includes games and activities allowing students to apply the concepts of saving money. "Financial literacy is critical to personal and professional success. Money is not just a resource that you work for; it is a resource that should work for you. CNB has taken a leadership role in helping educate children about financial responsibility. It is just another example that shows they are invested in our children and in our community for the long haul." says Teal Britton, Horry County Public Information Officer. At the end of the program, each student receives a CNB piggy bank and a $5.00 savings certificate, which they can deposit in their previously opened or new CNB savings account. "These children are our future. Everything we do for them today helps secure a better tomorrow," says Duncan. "We are pleased to offer this program, and are encouraged by the enormous support we receive from our community educators. Without their support, none of this would be possible."

Plans are already underway for this year's program, and schedules are being set with the schools. If you have not participated in the past, but would like a visit from CNB, call Marcie Shannon, Banking Service Representative, at 488-8310.

In addition to the Teach Children to Save program, CNB works with high school students in the Fall with a Get Smart About Credit program.

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EMPLOYEE RECOGNITION:

Conway National Bank Honors Margie Faust
Conway, SC - The Conway National Bank has recognized Margie Faust for five years of continued service to the bank, CNB officials have announced.

A native of West Columbia, she is a graduate of Airport High School and South Piedmont Community College. She is a switchboard operator and receptionist at the Operations and Administration Center in Conway. She lives in Nichols and has two children, Nicholas and Tarah.

Conway National Bank Honors Kindal Anderson
Conway, SC - The Conway National Bank has recognized Kindal Anderson for five years of continued service to the bank, CNB officials have announced.

A native of Aynor, she is a graduate of Aynor High School and is attending Horry-Georgetown Technical College. She is a teller and loan processor at the Aynor Office. She is a member of the Pilot Club of Aynor.

Conway National Bank Honors Carmen Thorpe
Conway, SC - The Conway National Bank has recognized Carmen Thorpe for ten years of continued service to the bank, CNB officials have announced.

She is the head teller at the Myrtle Beach Office and lives in Murrells Inlet with her husband, Damien.

Conway National Bank Honors Rebecca Hardee
Conway, SC - The Conway National Bank has recognized Rebecca Hardee for fifteen years of continued service to the bank, CNB officials have announced.

A native of Myrtle Beach, she is a teller at the Myrtle Beach area offices. She lives in Myrtle Beach with her husband, Ricky, and has a daughter, Chevis.

Conway National Bank Honors Tim Phillips
Conway, SC - The Conway National Bank has promoted Tim Phillips to the position of Vice President, CNB officials have announced.

A native of Bennettsville, SC, he is a graduate of Bennettsville High School and Coastal Carolina University. He is the loan review officer at the Operations and Administration Center in Conway. He lives in Conway with his wife, Audrea, and has two children, Ben and Shelby. He is a member of the Carolina Forest Area Schools Advisory Board and Black Water Middle School Improvement Council. He attends Carolina Forest Community Church.

Conway National Bank Honors Karen Singleton
Conway, SC - The Conway National Bank has promoted Karen Singleton to the position of Banking Officer, CNB officials have announced.

A native of Conway, she is a graduate of Conway High School and The American Institute of Banking. She is the branch operations manager at the North Conway Office. She lives in Conway with her husband Dale, and has two children, Brandon and Jenna-Grace. She is a board member of Conway Solid Gold Booster Club at Conway High School and a member of High Point Baptist Church.

Conway National Bank Honors Amber Rabon
Conway, SC - The Conway National Bank has promoted Amber Rabon to Banking Officer, CNB officials have announced.

A native of Aynor, she is a graduate of Aynor High School and Coastal Carolina University. She is the senior auditor at the Operations and Administration Center in Conway. She is responsible for supervising daily operations of the internal audit department. She lives in Aynor with her husband, Kevin, and has a son, Conner.

Conway National Bank Honors Patsy Martin
Conway, SC - The Conway National Bank has promoted Patsy Martin to Banking Officer, CNB officials have announced.

A native of Aynor, she is a graduate of Aynor High School and Florence-Darlington Technical College. She is the wire transfer supervisor at the Operations and Administration Center in Conway. She lives in Galivants Ferry and has a son, Chase, and a daughter, Jade. She is a member of Berea Baptist Church.

Conway National Bank Honors Pam Clifton
Conway, SC - The Conway National Bank has promoted Pam Clifton to the position of Banking Officer, CNB officials have announced.

A native of Rockford, IL, she attended Virginia Tech and is a graduate of The American Institute of Banking. She is a compliance management assistant at the Operations and Administration Center in Conway. She lives in Conway and has two children, Jennifer and Jonathan. She is a member of the United Way Community Outreach Council, Horry County Library Endowment Board, and Friends of Conway Library.

Conway National Bank Honors Kyle Hawley
Conway, SC - The Conway National Bank has promoted Kyle Hawley to Banking Officer, CNB officials have announced.

A native of Murrells Inlet, he is a graduate of Socastee High School and Clemson University. He is a consumer and commercial lender at the Pawleys Island Office. He lives in the south strand area with his wife, Lauren, and daughter, Miller Grace.

He is active with the Georgetown County Chamber Leadership, Coastal FCA board member, Waccamaw Regional Foundation for DSN board member, IPTAY representative for Horry/Georgetown County for Clemson University, Coastal Conservation Assoc. committee member, Belin United Methodist Church member and endowment committee member.