##### Table of Contents



Ohio
    
    
    
    31-1073048(State or other jurisdiction of
    
    
    
    (I.R.S. Employerincorporation or organization)
    
    
    
    Identification No.)323 Croghan Street, Fremont, Ohio
    
    
    
    43420(Address of principal executive offices)
    
    
    
    (Zip Code)




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##### 



PART I. FINANCIAL INFORMATION
    
    Page(s)Item 1.
    
    Financial Statements
    
    3 - 18Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    19 -24Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    24Item 4.
    
    Controls and Procedures
    
    24-25PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    25Item 1A.
    
    Risk Factors
    
    25Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    25-26Item 3.
    
    Defaults Upon Senior Securities
    
    26Item 4.
    
    [Reserved]
    
    26Item 5.
    
    Other Information
    
    26Item 6.
    
    Exhibits
    
    26Signatures
    
    
    
    27EX-31.1EX-31.2EX-32
  2




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##### Table of Contents



March 31
    
    
    December 31ASSETS
    
    2011
    
    
    2010Dollars in thousands, except par value)CASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    9,690
    
    
    $
    15,592Interest-bearing deposits due from banks
    
    
    2,616
    
    
    
    6,264Total cash and cash equivalents
    
    
    12,306
    
    
    
    21,856SECURITIESAvailable-for-sale, at fair value
    
    
    157,961
    
    
    
    140,279Held-to-maturity, at amortized cost, fair value of $505 in 2010
    
    
    -
    
    
    
    500Restricted stock
    
    
    3,844
    
    
    
    3,844Total securities
    
    
    161,805
    
    
    
    144,623LOANS
    
    
    291,093
    
    
    
    293,305Less: Allowance for loan losses
    
    
    4,742
    
    
    
    4,955Net loans
    
    
    286,351
    
    
    
    288,350Premises and equipment, net
    
    
    6,470
    
    
    
    6,613Cash surrender value of life insurance
    
    
    11,428
    
    
    
    11,357Goodwill
    
    
    10,430
    
    
    
    10,430Core deposit intangible asset, net
    
    
    101
    
    
    
    115Accrued interest receivable
    
    
    2,311
    
    
    
    1,980Other real estate owned
    
    
    865
    
    
    
    1,443Other assets
    
    
    3,122
    
    
    
    2,960TOTAL ASSETS
    
    $
    495,189
    
    
    $
    489,727LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESDeposits:Demand, non-interest bearing
    
    $
    63,335
    
    
    $
    61,409Savings, NOW, and Money Market deposits
    
    
    197,986
    
    
    
    189,412Time
    
    
    128,821
    
    
    
    133,336Total deposits
    
    
    390,142
    
    
    
    384,157Federal funds purchased and securities sold under repurchase agreements
    
    
    22,571
    
    
    
    20,989Federal Home Loan Bank borrowings
    
    
    22,500
    
    
    
    25,500Dividends payable
    
    
    535
    
    
    
    536Other liabilities
    
    
    1,997
    
    
    
    2,032Total liabilities
    
    
    437,745
    
    
    
    433,214STOCKHOLDERS EQUITYCommon stock, $12.50 par value. Authorized 6,000,000 shares;
issued 1,914,109 shares
    
    
    23,926
    
    
    
    23,926Surplus
    
    
    179
    
    
    
    179Retained earnings
    
    
    40,524
    
    
    
    40,050Accumulated other comprehensive income
    
    
    1,040
    
    
    
    507Treasury stock, 240,729 shares in 2011 and 237,729 shares in 2010, at cost
    
    
    (8,225
    )
    
    
    (8,149
    )Total stockholders equity
    
    
    57,444
    
    
    
    56,513TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    495,189
    
    
    $
    489,727
  3




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##### Table of Contents



Three months endedMarch 312011
    
    
    2010(Dollars in thousands,except per share data)INTEREST INCOMELoans, including fees
    
    $
    4,114
    
    
    $
    4,627Securities:Obligations of U.S. Government agencies and corporations
    
    
    641
    
    
    
    693Obligations of states and political subdivisions
    
    
    527
    
    
    
    367Other
    
    
    54
    
    
    
    56Deposits in other banks
    
    
    5
    
    
    
    5Total interest income
    
    
    5,341
    
    
    
    5,748INTEREST EXPENSEDeposits
    
    
    765
    
    
    
    997Other borrowings
    
    
    226
    
    
    
    341Total interest expense
    
    
    991
    
    
    
    1,338Net interest income
    
    
    4,350
    
    
    
    4,410PROVISION FOR LOAN LOSSES
    
    
    100
    
    
    
    500Net interest income, after provision for loan losses
    
    
    4,250
    
    
    
    3,910NON-INTEREST INCOMEGain on sale of loans
    
    
    39
    
    
    
    30Loss on write down of securities
    
    
    (111
    )
    
    
    -Trust income
    
    
    284
    
    
    
    255Service charges on deposit accounts
    
    
    332
    
    
    
    339Other
    
    
    222
    
    
    
    228Total non-interest income
    
    
    766
    
    
    
    852NON-INTEREST EXPENSESSalaries, wages, and employee benefits
    
    
    2,095
    
    
    
    1,996Occupancy of premises
    
    
    231
    
    
    
    226Amortization of core deposit intangible asset
    
    
    14
    
    
    
    14Other operating
    
    
    1,452
    
    
    
    1,327Total non-interest expenses
    
    
    3,792
    
    
    
    3,563Income before federal income taxes
    
    
    1,224
    
    
    
    1,199FEDERAL INCOME TAXES
    
    
    215
    
    
    
    267NET INCOME
    
    $
    1,009
    
    
    $
    932Net income per share, based on 1,674,980 shares in 2011 and 1,708,015 shares in 2010
    
    $
    0.60
    
    
    $
    0.55Dividends declared per share
    
    $
    0.32
    
    
    $
    0.32
  4




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Three months endedMarch 312011
    
    
    2010(Dollars in thousands,except per share data)BALANCE AT BEGINNING OF PERIOD
    
    $
    56,513
    
    
    $
    56,127Comprehensive Income:Net income
    
    
    1,009
    
    
    
    932Change in net unrealized gain on securities available-for-sale,
net of reclassification adjustments and related income taxes
    
    
    533
    
    
    
    94Total comprehensive income
    
    
    1,542
    
    
    
    1,026Purchase of 3,000 treasury shares in 2011 and 10,759 in 2010
    
    
    (76
    )
    
    
    (259
    )Cash dividends declared, $.32 per share in 2011 and 2010
    
    
    (535
    )
    
    
    (545
    )BALANCE AT END OF PERIOD
    
    $
    57,444
    
    
    $
    56,349
  5




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##### Table of Contents



Three months endedMarch 312011
    
    
    2010(Dollars in thousands)NET CASH FLOW FROM OPERATING ACTIVITIES
    
    $
    1,653
    
    
    $
    1,207CASH FLOWS FROM INVESTING ACTIVITIESProceeds from maturities of securities
    
    
    8,930
    
    
    
    4,698Purchases of available-for-sale securities
    
    
    (25,917
    )
    
    
    (7,723
    )Net decrease in loans
    
    
    1,874
    
    
    
    10,295Additions to premises and equipment
    
    
    (45
    )
    
    
    (78
    )Net cash provided by (used in) investing activities
    
    
    (15,158
    )
    
    
    7,192CASH FLOWS FROM FINANCING ACTIVITIESNet change in deposits
    
    
    5,985
    
    
    
    (2,893
    )Net change in federal funds purchased and securities sold 
under agreements to repurchase
    
    
    1,582
    
    
    
    361Payments on Federal Home Loan Bank borrowings
    
    
    (3,000
    )
    
    
    -Cash dividends paid
    
    
    (536
    )
    
    
    (549
    )Purchase of treasury stock
    
    
    (76
    )
    
    
    (259
    )Payment of deferred compensation
    
    
    -
    
    
    
    (72
    )Net cash provided by (used in) financing activities
    
    
    3,955
    
    
    
    (3,412
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (9,550
    )
    
    
    4,987CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    21,856
    
    
    
    16,724CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    12,306
    
    
    $
    21,711SUPPLEMENTAL CASH FLOW DISCLOSURESCash paid during the year for:Interest
    
    $
    1,095
    
    
    $
    1,394Federal income taxes
    
    $
    -
    
    
    $
    21NON-CASH OPERATING ACTIVITY:Change in deferred income taxes on net unrealized gain on 
available-for-sale securities
    
    $
    274
    
    
    $
    (48
    )NON-CASH INVESTING ACTIVITY:Change in net unrealized gain on available-for-sale securities
    
    $
    807
    
    
    $
    142NON-CASH OPERATING AND INVESTING ACTIVITY:Transfer of loans to other real estate owned
    
    $
    25
    
    
    $
    13
  6




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##### Table of Contents



CROGHAN BANCSHARES, INC.
Notes to Consolidated Financial Statements
March 31, 2011
(Unaudited)
 NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
    NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS
 A Creditors
Determination of whether a Restructuring Is a Troubled Debt Restructuring.
 Deferral of the Effective Date of Disclosures about TDR in Update No. 2010-20
 7




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Improving Disclosures about Fair Value Measurements
 NOTE 3  FAIR VALUE OF FINANCIAL INSTRUMENTS
  March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairamount
    
    
    value
    
    
    amount
    
    
    value(Dollars in thousands)FINANCIAL ASSETSCash and cash equivalents
    
    $
    12,306
    
    
    $
    12,306
    
    
    $
    21,856
    
    
    $
    21,856Securities
    
    
    161,805
    
    
    
    161,805
    
    
    
    144,623
    
    
    
    144,628Loans, net
    
    
    286,351
    
    
    
    289,036
    
    
    
    288,350
    
    
    
    290,603Total
    
    $
    460,462
    
    
    $
    463,147
    
    
    $
    454,829
    
    
    $
    457,087FINANCIAL LIABILITIESDeposits
    
    $
    390,142
    
    
    $
    391,742
    
    
    $
    384,157
    
    
    $
    386,087Federal funds purchased and
securities sold under 
repurchase agreements
    
    
    22,571
    
    
    
    22,571
    
    
    
    20,989
    
    
    
    20,988Federal Home Loan Bank 
borrowings
    
    
    22,500
    
    
    
    23,223
    
    
    
    25,500
    
    
    
    26,359Total
    
    $
    435,213
    
    
    $
    437,536
    
    
    $
    430,646
    
    
    $
    433,434
   8




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##### Table of Contents



Cash and Cash Equivalents
  Securities
  Loans
  Deposit Liabilities
  Other Financial Instruments
   9




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##### Table of Contents



NOTE 4  FAIR VALUE MEASUREMENTS
       Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Totalinputs
    
    
    inputs
    
    
    inputs
    
    
    fair value(Dollars in thousands)March 31, 2011Recurring:Securities available-for-sale:Obligations of U.S. Government 
agencies and corporations
    
    $
    -
    
    
    $
    95,296
    
    
    $
    -
    
    
    $
    95,296Obligations of states and political
subdivisions
    
    
    -
    
    
    
    62,315
    
    
    
    -
    
    
    
    62,315Other
    
    
    -
    
    
    
    350
    
    
    
    -
    
    
    
    350Total
    
    $
    -
    
    
    $
    157,961
    
    
    $
    -
    
    
    $
    157,961Nonrecurring:Other real estate owned
    
    $
    -
    
    
    $
    -
    
    
    $
    865
    
    
    $
    865Impaired loans
    
    
    -
    
    
    
    -
    
    
    
    18,832
    
    
    
    18,832Total
    
    $
    -
    
    
    $
    -
    
    
    $
    19,697
    
    
    $
    19,697
 10




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##### Table of Contents



Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Totalinputs
    
    
    inputs
    
    
    inputs
    
    
    fair value(Dollars in thousands)December 31, 2010Recurring:Securities available-for-sale:Obligations of U.S. Government 
agencies and corporations
    
    $
    -
    
    
    $
    83,006
    
    
    $
    -
    
    
    $
    83,006Obligations of states and political
subdivisions
    
    
    -
    
    
    
    56,923
    
    
    
    -
    
    
    
    56,923Other
    
    
    -
    
    
    
    350
    
    
    
    -
    
    
    
    350Total
    
    $
    -
    
    
    $
    140,279
    
    
    $
    -
    
    
    $
    140,279Nonrecurring:Other real estate owned
    
    $
    -
    
    
    $
    -
    
    
    $
    1,443
    
    
    $
    1,443Impaired loans
    
    
    -
    
    
    
    -
    
    
    
    16,041
    
    
    
    16,041Total
    
    $
    -
    
    
    $
    -
    
    
    $
    17,484
    
    
    $
    17,484
 
 Balance as of December 31, 2010
    
    $
    1,443Transfer of loans
    
    
    25Impairment
    
    
    (40
    )Net proceeds from sales
    
    
    (518
    )Loss on sales
    
    
    (45
    )Balance as of March 31, 2011
    
    $
    865
 
 Balance as of December 31, 2010
    
    $
    16,041Net changes in impaired loans
    
    
    3,259Charge off of principal
    
    
    (314
    )Net principal payments and advances
    
    
    (154
    )Balance as of March 31, 2011
    
    $
    18,832
   11




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##### Table of Contents



Securities Available-for-Sale
  Impaired Loans
  Other Real Estate Owned
  12




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##### Table of Contents



NOTE 5  SECURITIES
  March 31, 2011
    
    
    December 31, 2010Amortized
    
    
    Fair
    
    
    Amortized
    
    
    Faircost
    
    
    value
    
    
    cost
    
    
    valueObligations of U.S. Government 
agencies and corporations
    
    $
    94,398
    
    
    $
    95,296
    
    
    $
    81,845
    
    
    $
    83,006Obligations of states and 
political subdivisions
    
    
    61,637
    
    
    
    62,315
    
    
    
    57,316
    
    
    
    56,923Other
    
    
    350
    
    
    
    350
    
    
    
    350
    
    
    
    350Total available-for-sale
    
    
    156,385
    
    
    
    157,961
    
    
    
    139,511
    
    
    
    140,279Held-to-maturity - corporate 
debt obligation
    
    
    -
    
    
    
    -
    
    
    
    500
    
    
    
    505Restricted stock
    
    
    3,844
    
    
    
    3,844
    
    
    
    3,844
    
    
    
    3,844Total
    
    $
    160,229
    
    
    $
    161,805
    
    
    $
    143,855
    
    
    $
    144,628
  March 31, 2011
    December 31, 2010Gross
    Gross
    Gross
    Grossunrealized gains
    unrealized losses
    unrealized gains
    unrealized lossesObligations of U.S. Government agencies and corporations
    
    $
    1,419
    
    
    $
    520
    
    
    $
    1,558
    
    
    $
    396Obligations of states and
    
    
    1,193
    
    
    
    516
    
    
    
    725
    
    
    
    1,119political subdivisionsTotal available-for-sale
    
    
    2,612
    
    
    
    1,036
    
    
    
    2,283
    
    
    
    1,515Held-to-maturity - corporate debt obligation
    
    
    -
    
    
    
    -
    
    
    
    5
    
    
    
    -Total
    
    $
    2,612
    
    
    $
    1,036
    
    
    $
    2,288
    
    
    $
    1,515
 13




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##### Table of Contents



NOTE 6  LOANS
  Non-Residential
    
    residential
    
    Constructionreal
    
    real
    
    real
    
    
    
    
    
    
    CreditCommercial
    
    estate
    
    estate
    
    estate
    
    Consumer
    
    card
    
    Total(Dollars in thousands)Balance at December 31, 2010
    
    
    $
    542
    
    
    
    $
    1,857
    
    
    
    $
    2,049
    
    
    
    $
    347
    
    
    
    $
    85
    
    
    $
    75
    
    
    $
    4,955Provision charged to expense
    
    
    
    49
    
    
    
    
    10
    
    
    
    
    153
    
    
    
    
    (85
    )
    
    
    
    (11
    )
    
    
    (16
    )
    
    
    100Losses charged off
    
    
    
    (19
    )
    
    
    
    (105
    )
    
    
    
    (209
    )
    
    
    
    -
    
    
    
    
    (3
    )
    
    
    (3
    )
    
    
    (339
    )Recoveries
    
    
    
    4
    
    
    
    
    2
    
    
    
    
    1
    
    
    
    
    -
    
    
    
    
    14
    
    
    
    5
    
    
    
    26Balance at March 31, 2011
    
    
    $
    576
    
    
    
    $
    1,764
    
    
    
    $
    1,994
    
    
    
    $
    262
    
    
    
    $
    85
    
    
    $
    61
    
    
    $
    4,742
  Non-Residential
    
    residential
    
    Constructionreal
    
    real
    
    real
    
    
    
    
    
    
    CreditCommercial
    
    estate
    
    estate
    
    estate
    
    Consumer
    
    card
    
    
    Total(Dollars in thousands)Allowance for loan losses:Ending allowance balance 
attributable to loans:Individually 
evaluated for 
impairment
    
    
    $
    39
    
    
    
    $
    419
    
    
    
    $
    747
    
    
    
    $
    130
    
    
    
    $
    -
    
    
    $
    -
    
    
    $
    1,335Collectively 
evaluated for 
impairment
    
    
    
    537
    
    
    
    
    1,345
    
    
    
    
    1,247
    
    
    
    
    132
    
    
    
    
    85
    
    
    
    61
    
    
    
    3,407Total
    
    
    $
    576
    
    
    
    $
    1,764
    
    
    
    $
    1,994
    
    
    
    $
    262
    
    
    
    $
    85
    
    
    $
    61
    
    
    $
    4,742Loans:Loans individually 
evaluated for 
impairment
    
    
    $
    340
    
    
    
    $
    2,530
    
    
    
    $
    14,487
    
    
    
    $
    1,475
    
    
    
    $
    -
    
    
    $
    -
    
    
    $
    18,832Loans collectively 
evaluated for 
impairment
    
    
    
    22,270
    
    
    
    
    108,934
    
    
    
    
    124,118
    
    
    
    
    3,457
    
    
    
    
    11,028
    
    
    
    2,454
    
    
    
    272,261Total
    
    
    $
    22,610
    
    
    
    $
    111,464
    
    
    
    $
    138,605
    
    
    
    $
    4,932
    
    
    
    $
    11,028
    
    
    $
    2,454
    
    
    $
    291,093
 14




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##### Table of Contents



AllowanceUnpaid
    
    
    
    
    for loanprincipal
    Recorded
    lossesbalance
    investment
    allocated(Dollars in thousands)With no related allowance recorded:Agricultural loans
    
    $
    -
    
    
    $
    -
    
    
    $
    -Commercial loans
    
    
    229
    
    
    
    229
    
    
    
    -Commercial overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -Commercial non-profit/political subdivisions
    
    
    -
    
    
    
    -
    
    
    
    -Open-end home equity
    
    
    9
    
    
    
    9
    
    
    
    -1  4 family real estate (1st mortgages)
    
    
    842
    
    
    
    750
    
    
    
    -1  4 family real estate (Jr. mortgages)
    
    
    -
    
    
    
    -
    
    
    
    -Multifamily real estate
    
    
    -
    
    
    
    -
    
    
    
    -Farm real estate
    
    
    -
    
    
    
    -
    
    
    
    -Non-farm/non-residential real estate
    
    
    10,443
    
    
    
    9,858
    
    
    
    -Construction real estate
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  vehicle
    
    
    -
    
    
    
    -
    
    
    
    -Consumer overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  mobile home
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  home improvement
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  other
    
    
    -
    
    
    
    -
    
    
    
    -MasterCard/VISA
    
    
    -
    
    
    
    -
    
    
    
    -With an allowance recorded:Agricultural loans
    
    
    -
    
    
    
    -
    
    
    
    -Commercial loans
    
    
    46
    
    
    
    46
    
    
    
    7Commercial overdraft LOC
    
    
    65
    
    
    
    65
    
    
    
    30Commercial non-profit/political subdivisions
    
    
    -
    
    
    
    -
    
    
    
    -Open-end home equity
    
    
    18
    
    
    
    18
    
    
    
    181  4 family real estate (1st mortgages)
    
    
    1,764
    
    
    
    1,602
    
    
    
    3671  4 family real estate (Jr. mortgages)
    
    
    151
    
    
    
    151
    
    
    
    35Multifamily real estate
    
    
    -
    
    
    
    -
    
    
    
    -Farm real estate
    
    
    -
    
    
    
    -
    
    
    
    -Non-farm/non-residential real estate
    
    
    4,714
    
    
    
    4,629
    
    
    
    748Construction real estate
    
    
    1,845
    
    
    
    1,475
    
    
    
    130Consumer loans  vehicle
    
    
    -
    
    
    
    -
    
    
    
    -Consumer overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  mobile home
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  home improvement
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  other
    
    
    -
    
    
    
    -
    
    
    
    -MasterCard/VISA
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    $
    20,126
    
    
    $
    18,832
    
    
    $
    1,335
 15




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##### Table of Contents




    
    Special Mention Loans classified special mention possess some credit deficiency or
potential weakness that deserves close attention, but which do not yet warrant substandard
classification. Such loans pose unwarranted financial risk that, if not corrected, could
weaken the loan and increase risk of losses in the future.
    
    Substandard Loans classified as substandard are inadequately protected by the current
net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans
classified as substandard have well-defined weakness or weaknesses that jeopardize the
liquidation of the debt. They are categorized by the distinct possibility that the
institution will sustain some loss if the deficiencies are not corrected.
    
    Doubtful Loans classified as doubtful have all of the weaknesses of those classified
as substandard. Additionally, however, these weaknesses make collection or liquidation in
full based on existing conditions improbable.
  Special
    Sub-
    
    
    
    
    NotPass
    mention
    standard
    Doubtful
    rated(Dollars in thousands)Agricultural loans
    
    $
    2,488
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -Commercial loans
    
    
    18,191
    
    
    
    132
    
    
    
    312
    
    
    
    -
    
    
    
    -Commercial overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    266Commercial non-profit/political subdivisions
    
    
    881
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Open-end home equity
    
    
    22,383
    
    
    
    127
    
    
    
    228
    
    
    
    -
    
    
    
    -1  4 family real estate (1st mortgages)
    
    
    76,353
    
    
    
    2,797
    
    
    
    2,725
    
    
    
    -
    
    
    
    -1  4 family real estate (Jr. mortgages)
    
    
    3,931
    
    
    
    58
    
    
    
    332
    
    
    
    -
    
    
    
    -Multifamily real estate
    
    
    9,638
    
    
    
    -
    
    
    
    2,971
    
    
    
    -
    
    
    
    -Farm real estate
    
    
    8,673
    
    
    
    -
    
    
    
    306
    
    
    
    -
    
    
    
    -Non-farm/non-residential real estate
    
    
    90,085
    
    
    
    6,900
    
    
    
    5,545
    
    
    
    -
    
    
    
    -Construction real estate
    
    
    2,265
    
    
    
    222
    
    
    
    970
    
    
    
    -
    
    
    
    -Consumer loans  vehicle
    
    
    2,763
    
    
    
    9
    
    
    
    9
    
    
    
    -
    
    
    
    -Consumer overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    171Consumer loans  mobile home
    
    
    858
    
    
    
    25
    
    
    
    5
    
    
    
    -
    
    
    
    -Consumer loans  home improvement
    
    
    160
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  other
    
    
    6,961
    
    
    
    18
    
    
    
    49
    
    
    
    -
    
    
    
    -MasterCard/VISA
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    2,454Total
    
    $
    245,630
    
    
    $
    10,288
    
    
    $
    13,452
    
    
    $
    -
    
    
    $
    2,891
 16




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##### Table of Contents



30  89
    90+days
    days
    Total
    Notpast due
    past due
    past due
    past due
    Total(Dollars in thousands)Agricultural loans
    
    $
    -
    
    
    $
    -
    
    
    $
    -
    
    
    $
    2,488
    
    
    $
    2,488Commercial loans
    
    
    1
    
    
    
    -
    
    
    
    1
    
    
    
    18,634
    
    
    
    18,635Commercial overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    266
    
    
    
    266Commercial non-profit/political subdivisions
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    881
    
    
    
    881Open-end home equity
    
    
    134
    
    
    
    26
    
    
    
    160
    
    
    
    22,578
    
    
    
    22,7381  4 family real estate (1st mortgages)
    
    
    2,020
    
    
    
    419
    
    
    
    2,439
    
    
    
    79,436
    
    
    
    81,8751  4 family real estate (Jr. mortgages)
    
    
    5
    
    
    
    31
    
    
    
    36
    
    
    
    4,285
    
    
    
    4,321Multifamily real estate
    
    
    339
    
    
    
    -
    
    
    
    339
    
    
    
    12,270
    
    
    
    12,609Farm real estate
    
    
    47
    
    
    
    -
    
    
    
    47
    
    
    
    8,932
    
    
    
    8,979Non-farm/non-residential real estate
    
    
    497
    
    
    
    -
    
    
    
    497
    
    
    
    102,033
    
    
    
    102,530Construction real estate
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    3,457
    
    
    
    3,457Consumer loans  vehicle
    
    
    9
    
    
    
    -
    
    
    
    9
    
    
    
    2,772
    
    
    
    2,781Consumer overdraft LOC
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    169
    
    
    
    171Consumer loans  mobile home
    
    
    5
    
    
    
    -
    
    
    
    5
    
    
    
    883
    
    
    
    888Consumer loans  home improvement
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    160
    
    
    
    160Consumer loans  other
    
    
    23
    
    
    
    7
    
    
    
    30
    
    
    
    6,998
    
    
    
    7,028MasterCard/VISA
    
    
    89
    
    
    
    4
    
    
    
    93
    
    
    
    2,361
    
    
    
    2,454Total
    
    $
    3,170
    
    
    $
    488
    
    
    $
    3,658
    
    
    $
    268,603
    
    
    $
    272,261
  Loans past due
    
    
    
    
    Troubled90+ days
    
    
    
    
    debtstill accruing
    Nonaccrual
    restructurings(Dollars in thousands)Agricultural loans
    
    $
    -
    
    
    $
    -
    
    
    $
    -Commercial loans
    
    
    -
    
    
    
    34
    
    
    
    134Commercial overdraft LOC
    
    
    -
    
    
    
    -
    
    
    
    -Commercial non-profit/political subdivisions
    
    
    -
    
    
    
    -
    
    
    
    -Open-end home equity
    
    
    26
    
    
    
    27
    
    
    
    -1  4 family real estate (1st mortgages)
    
    
    419
    
    
    
    2,067
    
    
    
    4011  4 family real estate (Jr. mortgages)
    
    
    31
    
    
    
    36
    
    
    
    -Multifamily real estate
    
    
    -
    
    
    
    -
    
    
    
    -Farm real estate
    
    
    -
    
    
    
    -
    
    
    
    -Non-farm/non-residential real estate
    
    
    -
    
    
    
    3,819
    
    
    
    3,576Construction real estate
    
    
    -
    
    
    
    475
    
    
    
    1,000Consumer loans  vehicle
    
    
    -
    
    
    
    -
    
    
    
    -Consumer overdraft LOC
    
    
    1
    
    
    
    -
    
    
    
    -Consumer loans  mobile home
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  home improvement
    
    
    -
    
    
    
    -
    
    
    
    -Consumer loans  other
    
    
    7
    
    
    
    -
    
    
    
    -MasterCard/VISA
    
    
    4
    
    
    
    -
    
    
    
    -Total
    
    $
    488
    
    
    $
    6,458
    
    
    $
    5,111
 17




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##### Table of Contents



NOTE 7  OTHER COMPREHENSIVE INCOME
  2011
    
    
    2010Unrealized gains on available-for-sale securities
    
    $
    1,576
    
    
    $
    1,724Tax effect
    
    
    536
    
    
    
    586Net-of-tax amount
    
    $
    1,040
    
    
    $
    1,138
 18




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
  PERFORMANCE SUMMARY
   19




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##### Table of Contents



FINANCIAL POSITION
         NET INTEREST INCOME
  20




---



##### Table of Contents



PROVISION FOR LOAN LOSSES AND THE ALLOWANCE FOR LOAN LOSSES
   Three months ended
    
    Three months endedMarch 31, 2011
    
    March 31, 2010(Dollars in thousands)Provision for loan losses charged to expense
    
    $
    100
    
    
    $
    500Net loan charge-offs
    
    
    313
    
    
    
    37Annualized net loan charge-offs as a percent
of average outstanding loans
    
    
    .43
    %
    
    
    .01
    %
  March 31, 2011
    December 31, 2010(Dollars in thousands)Nonaccrual loans
    
    $
    6,458
    
    
    $
    4,127Loans contractually past due 90 days or more
and still accruing interest
    
    
    488
    
    
    
    586Restructured loans
    
    
    5,111
    
    
    
    4,665Potential problem loans, other than those past due
90 days or more, nonaccrual, or restructured
    
    
    22,616
    
    
    
    15,873Total potential problem and non-performing loans
    
    $
    34,673
    
    
    $
    25,251Allowance for loan losses
    
    $
    4,742
    
    
    $
    4,955Allowance for loan losses as a percent
of period-end loans
    
    
    1.63
    %
    
    
    1.69
    %
 21




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##### Table of Contents



March 31,
    December 31,2011
    2010(Dollars in thousands)Potential problem loans not currently past due
    
    $
    15,592
    
    
    $
    8,746Potential problem loans past due one day or more but less than 10 days
    
    
    1,975
    
    
    
    3,079Potential problem loans past due 10 days or more but less than 30 days
    
    
    3,471
    
    
    
    3,051Potential problem loans past due 30 days or more but less than 60 days
    
    
    1,351
    
    
    
    641Potential problem loans past due 60 days or more but less than 90 days
    
    
    227
    
    
    
    356Total potential problem loans
    
    $
    22,616
    
    
    $
    15,873
  22




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##### Table of Contents



March 31,
    December 31,2011
    2010(Dollars in thousands)Collateralized by an interest in real property
    
    $
    22,189
    
    
    $
    15,427Collateralized by an interest in assets other than real property
    
    
    424
    
    
    
    438Unsecured
    
    
    3
    
    
    
    8Total potential problem loans
    
    $
    22,616
    
    
    $
    15,873
  NON-INTEREST INCOME
  NON-INTEREST EXPENSES
   FEDERAL INCOME TAX EXPENSE
  23




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
     
   
  EVALUATION OF CONTROLS AND PROCEDURES
  (a)
    
    information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q
and the other reports which the Corporation files or submits under the Exchange Act would be
accumulated and communicated to the Corporations management, including its principal executive
officer and principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure;(b)
    
    information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q
and the other reports which the Corporation files or submits under the Exchange Act would be
recorded, processed, summarized, and reported within the time periods specified in the SECs rules
and forms; and(c)
    
    the Corporations disclosure controls and procedures were effective as of the end of the period
covered by this Quarterly Report on Form 10-Q.
 24




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##### Table of Contents



CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
  
  
   
   
  (a)
    
    Not applicable(b)
    
    Not applicable(c)
    
    The table below includes certain information regarding Croghans repurchase of its common shares during the quarterly period ended March 31, 2011:
 Total Number of
    
    Maximum NumberShares Purchased
    
    of Shares that MayTotal Number
    
    Average
    
    as Part of Publicly
    
    Yet Be Purchasedof Shares
    
    Price Paid
    
    Announced Plans
    
    Under the PlansPeriod
    
    Purchased
    
    per Share
    
    or Programs
    
    or Programs (1)01/01/11

through 

01/31/11
    
    None
    
    None
    
    None
    
    
    68,69402/01/11
through 

02/28/11
    
    
    3,000
    
    
    $
    25.15
    
    
    
    3,000
    
    
    
    80,81903/01/11

through 

03/31/11
    
    None
    
    None
    
    None
    
    
    80,819
 25




---



##### Table of Contents



(1)
    
    An extension of Croghans stock repurchase program was approved on July 13, 2010, in which up
to 84,615 shares could be repurchased from August 1, 2010 to February 1, 2011 (with a total of
15,921 shares repurchased prior to its expiration). An extension of Croghans stock
repurchase program commencing February 1, 2011 and ending August 1, 2011 was announced on
January 28, 2011, in which up to 83,819 shares may be repurchased (with 3,000 shares purchased
on February 23, 2011).
 
   
  
   
  
 26




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##### Table of Contents



CROGHAN BANCSHARES, INC.RegistrantDate:      April 27, 2011
    By:
    /s/  Rick M. RobertsonRick M. Robertson, President and CEO(Principal Executive Officer)Date:    April 27, 2011
    By:
    /s/  Kendall W. RiemanKendall W. Rieman, Treasurer(Principal Financial Officer) 27




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##### Table of Contents



Exhibit Number
    
    Description
    
    Exhibit Location31.1
    
    Rule 13a-14(a)/15d-14(a)
Certification - Principal Executive
Officer
    
    Filed herewith31.2
    
    Rule 13a-14(a)/15d-14(a)
Certification - Principal Financial
Officer
    
    Filed herewith32
    
    Section 1350 Certification -
Principal Executive Officer and
Principal Financial Officer
    
    Filed herewith
 28