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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 0-20159
 
 (Commission File Number)
 CROGHAN BANCSHARES, INC.
  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)
 
  þ o
 o o
 
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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Page(s)PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    3 - 7Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    8 - 12Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    13Item 4T.
    
    Controls and Procedures
    
    13PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    14Item 1A.
    
    Risk Factors
    
    14Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    14Item 3.
    
    Defaults Upon Senior Securities
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    15Item 5.
    
    Other Information
    
    15Item 6.
    
    Exhibits
    
    15Exhibit 31.1  Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer
    
    18Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Officer
    
    19Exhibit 32  Section 1350 Certification - Principal Executive Officer and Principal Financial Officer
    
    20Signatures
    
    16EX-31.1EX-31.2EX-32
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March 31
    
    
    December 312009
    
    
    2008(Dollars in thousands, except par value)ASSETSCASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    10,259
    
    
    
    10,100Interest-bearing deposits due from banks
    
    
    7,782
    
    
    
    32Total cash and cash equivalents
    
    
    18,041
    
    
    
    10,132SECURITIESAvailable-for-sale, at fair value
    
    
    66,901
    
    
    
    68,748Held-to-maturity, at amortized cost, fair value of $523 in 2009 and $512 in 2008
    
    
    503
    
    
    
    504Restricted stock
    
    
    3,729
    
    
    
    3,729Total securities
    
    
    71,133
    
    
    
    72,981LOANS
    
    
    340,056
    
    
    
    349,433Less: Allowance for loan losses
    
    
    3,816
    
    
    
    3,287Net loans
    
    
    336,240
    
    
    
    346,146Premises and equipment, net
    
    
    7,023
    
    
    
    7,181Cash surrender value of life insurance
    
    
    10,695
    
    
    
    10,601Goodwill
    
    
    10,430
    
    
    
    10,430Core deposit intangible asset, net
    
    
    216
    
    
    
    230Accrued interest receivable
    
    
    1,850
    
    
    
    1,874Other assets
    
    
    1,278
    
    
    
    901TOTAL ASSETS
    
    $
    456,906
    
    
    $
    460,476LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESDeposits:Demand, non-interest bearing
    
    $
    47,483
    
    
    $
    49,820Savings, NOW, and Money Market deposits
    
    
    149,187
    
    
    
    143,922Time
    
    
    154,815
    
    
    
    151,335Total deposits
    
    
    351,485
    
    
    
    345,077Federal funds purchased and securities sold under repurchase agreements
    
    
    10,942
    
    
    
    17,351Federal Home Loan Bank borrowings
    
    
    35,500
    
    
    
    39,500Dividends payable
    
    
    551
    
    
    
    551Other liabilities
    
    
    3,094
    
    
    
    3,178Total liabilities
    
    
    401,572
    
    
    
    405,657STOCKHOLDERS EQUITYCommon stock, $12.50 par value. Authorized 6,000,000 shares;
issued 1,914,109 shares
    
    
    23,926
    
    
    
    23,926Surplus
    
    
    179
    
    
    
    179Retained earnings
    
    
    37,601
    
    
    
    37,281Accumulated other comprehensive income
    
    
    679
    
    
    
    471Treasury stock, 193,779 shares in 2009 and 193,251 shares in 2008, at cost
    
    
    (7,051
    )
    
    
    (7,038
    )Total stockholders equity
    
    
    55,334
    
    
    
    54,819TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    456,906
    
    
    $
    460,476
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Three months endedMarch 312009
    
    
    2008(Dollars in thousands,except per share data)INTEREST INCOMELoans, including fees
    
    $
    5,196
    
    
    $
    5,876Securities:Obligations of U.S. Government agencies and corporations
    
    
    540
    
    
    
    382Obligations of states and political subdivisions
    
    
    217
    
    
    
    190Other
    
    
    56
    
    
    
    60Federal funds sold
    
    
    
    
    
    
    66Interest on deposits due from banks
    
    
    5
    
    
    
    57Total interest income
    
    
    6,014
    
    
    
    6,631INTEREST EXPENSEDeposits
    
    
    1,261
    
    
    
    2,006Other borrowings
    
    
    384
    
    
    
    342Total interest expense
    
    
    1,645
    
    
    
    2,348Net interest income
    
    
    4,369
    
    
    
    4,283PROVISION FOR LOAN LOSSES
    
    
    600
    
    
    
    650Net interest income, after provision for loan losses
    
    
    3,769
    
    
    
    3,633NON-INTEREST INCOMEGain on sale of loans
    
    
    56
    
    
    
    Trust income
    
    
    219
    
    
    
    210Service charges on deposit accounts
    
    
    364
    
    
    
    378Other
    
    
    214
    
    
    
    242Total non-interest income
    
    
    853
    
    
    
    830NON-INTEREST EXPENSESSalaries, wages, and employee benefits
    
    
    1,939
    
    
    
    1,836Occupancy of premises
    
    
    238
    
    
    
    234Amortization of core deposit intangible asset
    
    
    14
    
    
    
    14Other operating
    
    
    1,255
    
    
    
    1,275Total non-interest expenses
    
    
    3,446
    
    
    
    3,359Income before federal income taxes
    
    
    1,176
    
    
    
    1,104FEDERAL INCOME TAXES
    
    
    305
    
    
    
    292NET INCOME
    
    $
    871
    
    
    $
    812Net income per share, based on 1,720,659 shares in 2009 and 1,745,418 shares in 2008
    
    $
    0.51
    
    
    $
    0.47Dividends declared
    
    $
    0.32
    
    
    $
    0.32
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Three months endedMarch 312009
    
    
    2008(Dollars in thousands,except per share data)BALANCE AT BEGINNING OF PERIOD
    
    $
    54,819
    
    
    $
    53,288Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    (149
    )Comprehensive Income:Net income
    
    
    871
    
    
    
    812Change in net unrealized gain on securities available-for-sale,
net of reclassification adjustments and related income taxes
    
    
    208
    
    
    
    440Total comprehensive income
    
    
    1,079
    
    
    
    1,252Purchase of 528 treasury shares in 2009
    
    
    (13
    )
    
    
    Cash dividends declared, $.32 per share in 2009 and 2008
    
    
    (551
    )
    
    
    (559
    )BALANCE AT END OF PERIOD
    
    $
    55,334
    
    
    $
    53,832
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Three months endedMarch 312009
    
    
    2008(Dollars in thousands)NET CASH FLOW FROM OPERATING ACTIVITIES
    
    $
    1,844
    
    
    $
    1,657CASH FLOWS FROM INVESTING ACTIVITIESProceeds from maturities of securities
    
    
    6,298
    
    
    
    3,762Purchases of available-for-sale securities
    
    
    (4,168
    )
    
    
    (19,873
    )Net decrease in loans
    
    
    9,074
    
    
    
    6,830Additions to premises and equipment
    
    
    (76
    )
    
    
    (130
    )Net cash from investing activities
    
    
    11,128
    
    
    
    (9,411
    )CASH FLOWS FROM FINANCING ACTIVITIESNet change in deposits
    
    
    6,408
    
    
    
    (1,126
    )Net change in federal funds purchased and securities sold
under agreements to repurchase
    
    
    (6,409
    )
    
    
    (1,372
    )Net change in borrowed funds
    
    
    (4,000
    )
    
    
    Cash dividends paid
    
    
    (551
    )
    
    
    (541
    )Purchase of treasury stock
    
    
    (13
    )
    
    
    Payment of deferred compensation
    
    
    (498
    )
    
    
    (11
    )Net cash from financing activities
    
    
    (5,063
    )
    
    
    (3,050
    )NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    7,909
    
    
    
    (10,804
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    10,132
    
    
    
    25,349CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    18,041
    
    
    $
    14,545SUPPLEMENTAL CASH FLOW DISCLOSURESCash paid during the year for:Interest
    
    $
    1,788
    
    
    $
    2,172Federal income taxes
    
    $
    20
    
    
    $
    160Non-cash investing activity  transfer of loans to other real estate owned
    
    $
    200
    
    
    $
    
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7




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 "
        8




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Three months ended
    
    Three months endedMarch 31, 2009
    
    March 31, 2008(Dollars in thousands)Provision for loan losses charged to expense
    
    $
    600
    
    
    $
    650Net loan charge-offs
    
    
    71
    
    
    
    947Annualized net loan charge-offs as a percent
of average outstanding loans
    
    
    .02
    %
    
    
    .28
    %
  March 31, 2009
    
    December 31, 2008(Dollars in thousands)Nonaccrual loans
    
    $
    4,132
    
    
    $
    1,845Loans contractually past due 90 days or more
and still accruing interest
    
    
    390
    
    
    
    334Restructured loans
    
    
    
    
    
    
    Potential problem loans, other than those past due
90 days or more, nonaccrual, or restructured
    
    
    10,762
    
    
    
    13,140Total potential problem and non-performing loans
    
    $
    15,284
    
    
    $
    15,319Allowance for loan losses
    
    $
    3,816
    
    
    $
    3,287Allowance for loan losses as a percent
of period-end loans
    
    
    1.12
    %
    
    
    .94
    %
   10




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March 31,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Potential problem loans not currently past due
    
    $
    4,532
    
    
    $
    10,139Potential problem loans past due one day or more but less than 10 days
    
    
    157
    
    
    
    2,193Potential problem loans past due 10 days or more but less than 30 days
    
    
    3,835
    
    
    
    487Potential problem loans past due 30 days or more but less than 60 days
    
    
    2,206
    
    
    
    224Potential problem loans past due 60 days or more but less than 90 days
    
    
    32
    
    
    
    97Total potential problem loans
    
    $
    10,762
    
    
    $
    13,140
   March 31,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Collateralized by an interest in real property
    
    $
    10,529
    
    
    $
    12,381Collateralized by an interest in assets other than real property
    
    
    220
    
    
    
    747Unsecured
    
    
    13
    
    
    
    12Total potential problem loans
    
    $
    10,762
    
    
    $
    13,140
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12




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(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.
   13




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(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, 2009:
 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)01/01/09

 through 

01/31/09
    
    None
    
    None
    
    None
    
    77,80702/01/09

 through 

02/28/09
    
    528
    
    $25.00
    
    528
    
    85,51503/01/09

 through 

03/31/09
    
    None
    
    None
    
    None
    
    85,515
 (1)
    
    An extension of Croghans stock repurchase program was approved on July 15, 2008, in which up
to 86,476 shares could be repurchased from August 1, 2008 to February 1, 2009 (with a total of
8,669 shares being repurchased prior to its expiration). An extension of Croghans stock
repurchase program commencing February 1, 2009 and ending August 1, 2009 was announced on January
30, 2009, in which up to 86,043 shares may be repurchased (with 528 shares purchased on February
26, 2009).
 14




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CROGHAN BANCSHARES, INC.

RegistrantDate:      April 28, 2009
    By:
    /s/  Steven C. FutrellSteven C. Futrell, President and CEO(Principal Executive Officer)Date:      April 28, 2009
    By:
    /s/  Kendall W. RiemanKendall W. Rieman, Treasurer(Principal Financial Officer) 16




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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
 17