b'Cash and Cash Equivalents: For purposes of the Consolidated Statements of Cash Flows, cash and cash equivalents include all highly liquid debt instruments purchased with a maturity of three months or less except for federal funds sold. Those amounts are included in the balance sheet captions "Cash and due from banks."Included in Cash and due from banks are interest bearing deposits with FHLB, TCM Bank and First State Bank in the amount of $593,804 and $24,908 at December 31, 2018 and 2017, respectively and deposits with the Federal Reserve Bank of Richmond in the amount of $3,458,635 and $4,697,466 at December 31, 2018 and 2017, respectively.Earnings and Dividends Per Share:Earnings and dividends per share are computed using the two-class method.The two-class method is an earnings allocation formula that determines earnings per share (EPS) separately for common stock and Class A common stock according to dividends declared and participation rights in undistributed earnings.Basic EPS is calculated based on the following formula:income from continuing operations (or net income) is reduced by the amount of dividends declared/paid in the current period for each class of stock ($834,818 and $726,621 for common and $24,319 and $21,577 for Class A common in 2018 and 2017, respectively).The remaining earnings are allocated to common stock and Class A common stock to the extent that each security class may share in earnings as if all of the earnings for the period had been distributed.The total earnings allocated to each security class are determined by adding together the amount allocated for dividends and the amount allocated for a participation feature.Class A common stock receives a ten percent premium; therefore, the participation rate on Class A is 1.10, while the participation rate on common stock is 1.00.Finally, the total earnings allocated to each security are divided by the weighted number of outstanding shares of the security (399,851 and 404,476 shares of common stock and 10,644 and 10,942 shares of Class A common stock in 2018 and 2017, respectively) to determine basic and diluted earnings per share.Off-Balance Sheet Financial Instruments: In the ordinary course of business, CNB has entered into off-balance sheet financial instruments consisting of commitments to extend credit, commercial lines of credit and letters of credit.Such financial instruments are recorded in the financial statements when they become due or payable.Postretirement and Postemployment Benefits Other Than Pensions: Postretirement insurance benefits are provided to selected officers and employees.During the years that the employee renders the necessary service, the Bank accrues the cost of providing postretirement health and life insurance benefits to the employee.The Bank has recorded a liability of $483,695 and $588,316 as of December 31, 2018 and 2017, respectively.Foreclosed Real Estate: Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value at the date of actual or in-substance foreclosure (also referred to as other real estate owned or OREO), establishing a new cost basis.After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of carrying amount or fair value less estimated cost to sell.Revenue and expenses from operations and changes in the valuation allowance are included in gain/loss on foreclosed real estate.The historical average holding period for such properties is twelve to eighteen months.At December 31, 2018 and 2017, CNB owned properties acquired through loan foreclosure with a carrying value of $191,070 and $135,541, respectively.Trust Assets: Assets held by CNB in a fiduciary or agency capacity are not included in the consolidated financial statements since such assets are not assets of CNB.In accordance with banking industry practice, income from fiduciary activities is generally recognized on the cash basis which is not significantly different from amounts that would have been recognized on the accrual basis.Advertising Costs: The Company expenses advertising costs in the period in which they are incurred. Advertising costs amounted to $368,417 and $337,639 for the years ended December 31, 2018 and 2017, respectively.Reclassifications: Certain amounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements.11'