b'CNB FINANCIAL SERVICES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2019 AND 20182019 2018CASH FLOWS FROM OPERATING ACTIVITIES Net income $2,784,086 $2,869,509 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on premises, equipment and software825,769527,741 Provision for loan losses435,000201,259 Deferred income taxes315,055454,686 Net (gain) on sales and calls of securities(413,292) (18,549) Net (gain) on sale of other real estate owned (25,369) (9,370) Writedowns of other real estate owned4,59044,600 Net loss on disposal of premises, equipment and software7,5431,140 Net (gain) on loans sold (459,156) (225,001) Loans originated for sale(23,273,718)(11,972,733) Proceeds from loans sold 23,732,874 12,197,733 (Increase) decrease in accrued interest receivable31,260 (99,751) (Increase) decrease in other assets(1,789,390) 1,427,842 Increase (decrease) in accrued interest payable (5,195)4,554 (Increase) in cash surrender value on life insurance in excessof premiums paid (165,087) (199,628) Increase (decrease) in accrued expenses and other liabilities (506,766)548,005 Amortization of deferred loan (fees) cost585,721516,575 Amortization (accretion) of premium and discount on investments336,161394,305 NET CASH PROVIDED BY OPERATING ACTIVITIES $2,420,086 $6,662,917CASH FLOWS FROM INVESTING ACTIVITIESNet (increase) in loans $ (18,726,987) $ (30,817,130)Proceeds from sales of securities 23,713,382 3,269,294Proceeds from maturities, repayments and calls of securities 8,734,611 7,592,780Purchases of securities(25,190,146)(9,344,343)Redemptions of Federal Home Loan Bank stock 1,192,400 2,661,900Purchases of Federal Home Loan Bank stock (476,000)(2,790,000)Purchases of premises, equipment and software(2,021,165) (969,746)Proceeds from sale of other real estate owned219,179193,099Proceeds from sale of premises, equipment and software1,500-Net (increase) in federal funds sold(5,650,000)-Premiums paid on life insurance (718,512) (51,129) NET CASH (USED IN) INVESTING ACTIVITIES $ (18,921,738) $ (30,255,275)CASH FLOWS FROM FINANCING ACTIVITIES Net increase in demand and savings deposits $22,853,190 $22,662,118 Net increase (decrease) in time deposits 14,218,677(1,471,354) Net increase (decrease) in FHLB borrowings(16,300,000) 2,900,000 Purchase of treasury stock (65,409) (147,288) Cash dividends paid (854,864) (859,137) NET CASH PROVIDED BY FINANCING ACTIVITIES $19,851,594 $23,084,339 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $3,349,942 $(508,019)CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 6,925,658 7,433,677CASH AND CASH EQUIVALENTS AT END OF YEAR $10,275,600 $6,925,658SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year:Interest paid on deposits and borrowed funds $3,518,616 $2,451,976 Income taxes $ 284,000 $ 20,000 Non cash investing and financing activities:Net transfer to foreclosed real estate, held for sale from loans receivable $3,490,079 $ 379,988Unrealized gain (loss) on investment securities available for sale (net of tax) $1,337,526 $(335,606)The Notes to Consolidated Financial Statements are an integral part of these statements.5'