CNB News & Events

CONWAY NATIONAL BANK PROVIDES OUTLET FOR PROPER AMERICAN FLAG RETIREMENT | e-STATEMENTS NOW AVAILABLE | 3rd QUARTER '13 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.


__________________________________________________

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.


__________________________________________________

TO OUR SHAREHOLDERS AND FRIENDS:

The U.S. national and local economies continue to recover. The U.S. national real gross domestic product (GDP) grew at an annual rate of 2.8% during the third quarter of 2013, as compared to second quarter growth of 2.5%, 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 increases in personal consumption expenditures, private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending, partly offset by decreased federal government spending. Locally, the real estate sector increased significantly, 27%, in the total number of transactions for the first nine months of 2013, at 9,710, as compared to the first nine months of 2012, at 7,619.

The Company's net income for the nine-month period ended September 30, 2013 totaled $3,261,000, up 31.2% from $2,485,000 for the same period in 2013, for a return on average assets of .46% and a return on average equity of 4.72% as compared to .35% and 3.65%, respectively, for the first nine months of 2012. The Company expects profitability to continue to improve, but profitability is expected to remain below historical operating results for 2013. On a per share basis, earnings increased 31.3% from $1.50 for the first nine months of 2012 to $1.97 for the same period in 2013.

Total assets increased to $959.0 million at September 30, 2013, an increase of 0.4% from $955.2 million at September 30, 2012, and capital stood at $92.9 million at September 30, 2013, compared to $92.0 million at September 30, 2012, up 1.1%. Total deposits were $793.1 million at September 30, 2013, an increase of 2.8% from $771.8 million at September 30, 2012. Repurchase agreements decreased to $68.5 million at September 30, 2013, a decline of 21.4% from $87.2 million at September 30, 2012. Loans totaled $437.0 million at September 30, 2013, a decrease of 5.6% from September 30, 2012; and investment securities were $432.6 million, an increase of 11.4% from September 30, 2012.

Net income for the nine-month period ended September 30, 2013 of $3,261,000 is primarily the result of the Bank's net interest income. However, net interest income decreased 3.7%, to $20,645,000 for the first nine months of 2013 from $21,440,000 for the same period in 2012. 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, 44.7%, from $4,093,000 for the first nine months of 2012 to $2,262,000 for the first nine months of 2013. The allowance for loan losses, as a percentage of net loans, stood at 2.42% at September 30, 2013 as compared to 2.54% at September 30, 2012. We anticipate that due to declining provisions for loan losses, the allowance for loan losses will continue to decline. Noninterest expense decreased during the period, 2.7%, from $19,061,000 for the first nine months of 2012 to $18,542,000 for the first nine months of 2013; and noninterest income decreased 4.5% from $5,093,000 to $4,866,000 for the first nine months of 2012 and 2013, respectively. The decrease in noninterest expense was due to decreased occupancy expense, FDIC deposit insurance assessments, and net costs associated with foreclosed real estate, partially offset by increased salaries and employee benefits, examination and professional fees, and other operating expenses. Noninterest income decreased due to decreased service charges on deposit accounts and the elimination of gains on sales of investment securities, partially offset by increased other operating income.

As we informed you in previous shareholder communications, in June of 2011 the Bank entered into a formal agreement with the Office of the Comptroller of the Currency (OCC). On August 29, 2013 the OCC determined that the Bank was in full compliance with all articles of the agreement, and the formal agreement was terminated as of that date. Our many thanks to you for your support of our efforts to develop and implement the required plans, policies, and associated procedures necessary to comply with the provisions of this agreement.

Conway National continues to maintain a substantial financial position and continually 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


__________________________________________________

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.


__________________________________________________

EMPLOYEE RECOGNITION:

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

She is a native of Conway and a graduate of Conway High School. She is a loan processor II at the Conway Banking Office. She lives in Conway with her husband, Aubrey, and has two children, Audrey and Kyle. She is president of the Conway Christian School booster club.


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

A native of Sturgis, Michigan, she is a graduate of Sturgis High School. She is a branch operations manager and customer service representative at the West Conway Office. She lives in Conway with her husband, Chuck, and has two children, Austin and Ashley. She is active in Conway Church of God.


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

She is a graduate of Northeast High School and the Art Institute of Ft. Lauderdale. She is a loan insurance specialist at the Operations and Administration Center in Conway. She lives is Conway with her husband, Doug, and daughter, Jordan.


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

She is a graduate of West Florence High School and The University of South Carolina. She is a teller at the Murrells Inlet Office and lives in Myrtle Beach with her husband, Tom, and children, Hannah and Addelyn.


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

A native of Aynor, she is a graduate of Aynor High School and attended Horry-Georgetown Technical College. She is the branch manager and a lender at the Aynor Office. She lives in Galivants Ferry with her husband, Casey, and son, Jordan. She is a member of Mt. Hermon Baptist Church.


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

A native of Conway, she is a graduate of Conway Christian School. She is the head teller at the Red Hill Office. She lives in Conway with her husband, David.