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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, 2005 0-20159 
  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)
 (419) 332-7301 
  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ 1,891,713 common shares were outstanding as of March 31, 2005   This document contains
22 pages.




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CROGHAN BANCSHARES, INC.
Index 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
    
    
    12Item 4. Controls and Procedures
    
    
    13PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    14Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    14Item 3. Defaults Upon Senior Securities
    
    
    14Item 4. Submission of Matters to a Vote of Security Holders
    
    
    14Item 5. Other Information
    
    
    15Item 6. Exhibits
    
    
    17Exhibit 31.1  Rule 13a-14(a)/15d-14(a) CEOs Certification
    
    
    19Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Treasurers Certification
    
    
    20Exhibit 32.1  Section 1350 CEOs Certification
    
    
    21Exhibit 32.2  Section 1350 Treasurers Certification
    
    
    22Signatures
    
    
    18EX-31.1 302 CertificationEX-31.2 302 CertificationEX-32.1 906 CertificationEX-32.2 906 Certification
 2




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PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENTS CROGHAN BANCSHARES, INC.
Consolidated Balance Sheets (Unaudited) March 31,
    
    
    December 31,2005
    
    
    2004(Dollars in thousands, except par value)ASSETSCASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    10,050
    
    
    $
    11,587Federal funds sold
    
    
    2,725
    
    
    
    Total cash and cash equivalents
    
    
    12,775
    
    
    
    11,587SECURITIESAvailable-for-sale, at fair value
    
    
    64,759
    
    
    
    57,109Held-to-maturity, at amortized cost, fair value of $1,565 in 2005 and $1,595 in 2004
    
    
    1,534
    
    
    
    1,538Restricted stock
    
    
    3,405
    
    
    
    2,676Total securities
    
    
    69,698
    
    
    
    61,323LOANS
    
    
    346,711
    
    
    
    322,489Less: Allowance for loan losses
    
    
    3,566
    
    
    
    3,431Net loans
    
    
    343,145
    
    
    
    319,058Premises and equipment, net
    
    
    7,788
    
    
    
    7,166Cash surrender value of life insurance
    
    
    9,302
    
    
    
    9,229Goodwill
    
    
    10,267
    
    
    
    6,113Other intangible asset
    
    
    447
    
    
    
    Accrued interest receivable
    
    
    2,031
    
    
    
    1,929Other assets
    
    
    1,170
    
    
    
    829TOTAL ASSETS
    
    $
    456,623
    
    
    $
    417,234LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESDeposits:Demand, non-interest bearing
    
    $
    40,800
    
    
    $
    43,658Savings, NOW and Money Market deposits
    
    
    159,889
    
    
    
    147,582Time
    
    
    166,160
    
    
    
    134,853Total deposits
    
    
    366,849
    
    
    
    326,093Federal funds purchased and securities sold under repurchase agreements
    
    
    5,938
    
    
    
    9,794Borrowed funds
    
    
    30,950
    
    
    
    28,950Dividends payable
    
    
    549
    
    
    
    530Other liabilities
    
    
    3,140
    
    
    
    2,951Total liabilities
    
    
    407,426
    
    
    
    368,318STOCKHOLDERS EQUITYCommon stock, $12.50 par value. Authorized 3,000,000 shares;
issued 1,914,109 shares
    
    
    23,926
    
    
    
    23,926Surplus
    
    
    139
    
    
    
    133Retained earnings
    
    
    26,012
    
    
    
    25,091Accumulated other comprehensive income (loss)
    
    
    (190
    )
    
    
    375Treasury stock, 22,396 shares in 2005 and 20,336 shares in 2004, at cost
    
    
    (690
    )
    
    
    (609
    )Total stockholders equity
    
    
    49,197
    
    
    
    48,916TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    456,623
    
    
    $
    417,234
 See notes to consolidated financial statements. 3




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CROGHAN BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited) Three months endedMarch 312005
    
    
    2004(Dollars in thousands,except per share data)INTEREST INCOMELoans, including fees
    
    $
    5,470
    
    
    $
    4,739Securities:Obligations of U.S. Government agencies and
corporations
    
    
    385
    
    
    
    346Obligations of states and political subdivisions
    
    
    223
    
    
    
    165Other
    
    
    59
    
    
    
    53Federal funds sold
    
    
    11
    
    
    
    Total interest income
    
    
    6,148
    
    
    
    5,303INTEREST EXPENSEDeposits
    
    
    1,348
    
    
    
    1,130Other borrowings
    
    
    320
    
    
    
    299Total interest expense
    
    
    1,668
    
    
    
    1,429Net interest income
    
    
    4,480
    
    
    
    3,874PROVISION FOR LOAN LOSSES
    
    
    90
    
    
    
    130Net interest income, after
provision for loan losses
    
    
    4,390
    
    
    
    3,744NON-INTEREST INCOMETrust income
    
    
    146
    
    
    
    134Service charges on deposit accounts
    
    
    313
    
    
    
    298Gain (loss) on sale
of securities
    
    
    (42
    )
    
    
    65Other
    
    
    240
    
    
    
    219Total non-interest income
    
    
    657
    
    
    
    716NON-INTEREST EXPENSESSalaries, wages and employee benefits
    
    
    1,711
    
    
    
    1,517Occupancy of premises
    
    
    189
    
    
    
    164Amortization of other intangible asset
    
    
    15
    
    
    
    Other operating
    
    
    1,056
    
    
    
    820Total non-interest expenses
    
    
    2,971
    
    
    
    2,501Income before federal
income taxes
    
    
    2,076
    
    
    
    1,959FEDERAL INCOME TAXES
    
    
    606
    
    
    
    588NET INCOME
    
    $
    1,470
    
    
    $
    1,371Net income per share, based on 1,892,970 shares in
2005 and 1,898,416 shares in 2004
    
    $
    0.78
    
    
    $
    0.72Dividends declared, based on 1,891,713 shares in 2005
and 1,897,696 shares in 2004
    
    $
    0.29
    
    
    $
    0.28
 See notes to consolidated financial statements. 4




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CROGHAN BANCSHARES, INC.
Condensed Consolidated Statements of Stockholders Equity (Unaudited) Three months endedMarch 312005
    
    
    2004(Dollars in thousands,except per share data)BALANCE AT BEGINNING OF PERIOD
    
    $
    48,916
    
    
    $
    46,196Comprehensive Income:Net income
    
    
    1,470
    
    
    
    1,371Change in net unrealized gain (loss) on securities available-for-sale,
net of reclassification adjustments and related income taxes
    
    
    (565
    )
    
    
    99Total comprehensive income
    
    
    905
    
    
    
    1,470Issuance of treasury shares, 564 shares in 2005 and 142 shares in 2004
    
    
    21
    
    
    
    4Purchase of treasury shares, 2,624 shares in 2005 and 2,200 in 2004
    
    
    (96
    )
    
    
    (78
    )Cash dividends declared, $.29 per share in 2005 and $.28 per share in 2004
    
    
    (549
    )
    
    
    (531
    )BALANCE AT END OF PERIOD
    
    $
    49,197
    
    
    $
    47,061
 See notes to consolidated financial statements. 5




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CROGHAN BANCSHARES, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited) Three months endedMarch 312005
    
    
    2004(Dollars in thousands)NET CASH FLOW FROM OPERATING ACTIVITIES
    
    $
    2,323
    
    
    $
    2,162CASH FLOWS FROM INVESTING ACTIVITIESPurchase of The Custar State Bank, net of $2,357 cash and cash equivalents acquired
    
    
    (11,682
    )
    
    
    Purchases of available-for-sale securities
    
    
    (1,520
    )
    
    
    (2,025
    )Purchases of restricted stock
    
    
    (305
    )
    
    
    Proceeds from maturities of securities
    
    
    2,200
    
    
    
    3,718Proceeds from sales of available-for-sale securities
    
    
    6,717
    
    
    
    1,614Net decrease (increase) in loans
    
    
    6,409
    
    
    
    (3,728
    )Additions to premises and equipment
    
    
    (372
    )
    
    
    (251
    )Net cash from investing activities
    
    
    1,447
    
    
    
    (672
    )CASH FLOWS FROM FINANCING ACTIVITIESNet change in deposits
    
    
    (60
    )
    
    
    (5,792
    )Net change in federal funds purchased and securities sold under repurchase agreements
    
    
    (3,856
    )
    
    
    4,272Net change in borrowed funds
    
    
    2,000
    
    
    
    Proceeds from issuance of treasury shares
    
    
    21
    
    
    
    4Cash dividends paid
    
    
    (531
    )
    
    
    (532
    )Purchase of treasury stock
    
    
    (96
    )
    
    
    (78
    )Payment of deferred compensation
    
    
    (60
    )
    
    
    (6
    )Net cash from financing activities
    
    
    (2,582
    )
    
    
    (2,132
    )NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    1,188
    
    
    
    (642
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    11,587
    
    
    
    10,984CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    12,775
    
    
    $
    10,342SUPPLEMENTAL DISCLOSURESCash paid during the period for:Interest
    
    $
    1,591
    
    
    $
    1,410Federal income taxes
    
    $
    184
    
    
    $
    
 See notes to consolidated financial statements. 6




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CROGHAN BANCSHARES, INC.
Notes to Consolidated Financial Statements
March 31, 2005
(Unaudited) (1) Consolidated Financial Statements The consolidated financial statements of Croghan Bancshares, Inc. (the Corporation) and its
wholly-owned subsidiary, The Croghan Colonial Bank (the Bank), have been prepared without
audit. In the opinion of management, all adjustments (including normal recurring
adjustments) necessary to present fairly the Corporations consolidated financial position,
results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been omitted. The
Corporations Annual Report to shareholders for the year ended December 31, 2004, contains
consolidated financial statements and related footnote disclosures which should be read in
conjunction with the accompanying consolidated financial statements. The results of
operations for the period ended March 31, 2005 are not necessarily indicative of the
operating results for the full year. The March 31, 2005 consolidated balance sheet includes the assets and liabilities of The
Custar State Bank (Custar) and the consolidated statements of operations and cash flows
include the operations of Custar from January 1, 2005 as discussed in Note (2). (2) Purchase of The Custar State Bank Effective January 1, 2005, the Corporation acquired all of the outstanding shares of Custar,
an Ohio banking corporation with one office located in Custar, Ohio. Custar was subsequently
merged into the Bank. The cash purchase price, including $145,000 of acquisition costs paid through March 31, 2005,
totaled $14,039,000. The acquisition was financed with a $10,000,000 special dividend from
the Bank and the proceeds of a $4,000,000 four-year term loan from a correspondent bank
with interest indexed to the prime rate minus .5% (aggregating 5.25% at March 31, 2005).
Interest payments on the loan are due annually with principal due in full by the end of the
four-year term. The transaction was accounted for as a purchase and, accordingly, the
results of operations of Custar are included in the 2005 consolidated results of the
Corporation beginning on January 1, 2005. The fair values of assets acquired and liabilities assumed totaled $50,472,000 and
$41,048,000, respectively. Major assets acquired included securities of $16,504,000 and net
loans of $30,794,000, and the major liability assumed was deposits of $40,821,000. The
excess of the purchase price, including acquisition costs, over the fair value of the net
assets acquired totaled $4,615,000. Of this amount, $461,000 was allocated to a core deposit
intangible asset and $4,154,000 was allocated to goodwill. Acquisition costs expected to be
incurred in connection with the acquisition approximate $155,000, including $145,000 paid
through March 31, 2005. The termination of the Custar defined benefit pension plan was not
settled as of March 31, 2005. It is estimated the final plan settlement will result in an
additional liability of $200,000, net of taxes, which will result in an addition to goodwill. 7




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Where appropriate, the following discussion relating to Croghan Bancshares, Inc. (Croghan or the
Corporation) contains the insights of management into known events and trends that have or may be
expected to have a material effect on Croghans operations and financial condition. The
information presented may also contain certain forward-looking statements regarding future
financial performance, which are not historical facts and which involve various risks and
uncertainties. When or if used in any Securities and Exchange Commission filings, or other public or shareholder
communications, or in oral statements made with the approval of an authorized executive officer,
the words or phrases: anticipate, would be, will allow, intends to, will likely result,
are expected to, will continue, is anticipated, is estimated, is projected, or similar
expressions are intended to identify forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any such statements are subject to risks and
uncertainties that include but are not limited to: changes in economic conditions in the
Corporations market area, changes in policies by regulatory agencies, fluctuations in interest
rates, demand for loans in the Corporations market area, and competition. All or some of these
factors could cause actual results to differ materially from historical earnings and those
presently anticipated or projected. The Corporation cautions readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made, and advises readers that various factors
including regional and national economic conditions, substantial changes in the levels of market
interest rates, credit and other risks associated with lending and investing activities, and
competitive and regulatory factors could affect the Corporations financial performance and cause
the actual results for future periods to differ materially from those anticipated or projected.
The Corporation does not undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or circumstances after
the date of such statements. ACQUISTION OF THE CUSTAR STATE BANK On January 1, 2005, Croghan completed its acquisition of The Custar State Bank (Custar) in an
all-cash transaction. The sole Custar banking center in Custar, Wood County, Ohio, is being
operated as a branch office of The Croghan Colonial Bank. Under the terms of the agreement,
Croghan paid $74.10 in cash for each outstanding share of Custar. The acquisition was accounted for using the purchase method of accounting resulting in Custars
assets and liabilities being recorded at their estimated fair values at the time of acquisition.
The fair values of the assets acquired and liabilities assumed totaled $50,472,000 and $41,048,000,
respectively, resulting in a net book value of $9,424,000. The total purchase price amounted to $14,039,000, which is comprised of $13,894,000 paid directly
to shareholders and $145,000 of acquisition costs incurred through March 31, 2005. The excess of
the purchase price over the net book value of the assets acquired through March 31, 2005 totaled
$4,615,000. Of this amount, $461,000 was allocated to a core deposit intangible asset and
$4,154,000 has been allocated to goodwill. The termination of the Custar defined benefit pension
plan is not yet settled as of March 31, 2005. It is estimated the final plan settlement will
result in an additional $200,000 liability, net of taxes, which will result in an addition to
goodwill. The core deposit intangible asset is currently being amortized on a straight-line basis
over a period of eight years. The goodwill created in the Custar transaction will be aggregated
with the goodwill remaining from the 1996 purchase of Union Bancshares Corp. and the total will be tested for impairment as of July 1,
2005. 8




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PERFORMANCE SUMMARY Subsequent to the Custar acquisition, assets at March 31, 2005 totaled $456,623,000 compared to
$417,234,000 at 2004 year end. Total loans increased to $346,711,000 at March 31, 2005 compared to
$322,489,000 at 2004 year end. Total securities increased to $69,698,000 from $61,323,000 at 2004
year end and total deposits increased to $366,849,000 from $326,093,000 at 2004 year end. Net income for the three-month period ended March 31, 2005 was $1,470,000 or $.78 per common share
compared to $1,371,000 or $.72 per common share for the same period in 2004. The March 31, 2005
operating results were positively impacted by the Custar acquisition and the related improvement in
net interest income. FINANCIAL POSITION The following comments are based upon a comparison of Croghans financial position at March 31,
2005 to 2004 year end. Total loans, net of the effect of the Custar acquisition, decreased $6,791,000 or 1.9 percent from
year-end. The loan category experiencing the most significant decline in the first quarter of 2005
was construction real estate loans. Many of the construction projects reached completion during
the first quarter of 2005 with the permanent financing having been obtained elsewhere. Total securities, net of the Custar acquisition, decreased $8,129,000 or 10.4% from year-end. The
available-for-sale security category was actively managed following the Custar acquisition and was
used to fund the payments made to Custar shareholders. Total deposits, net of the Custar acquisition, decreased only $60,000 from year-end. The liquid
deposit category (demand, savings, NOW and money market deposit accounts) decreased $7,261,000 or
3.5 percent and the time deposit category increased $7,201,000 or 4.5 percent. The competitive
environment for core deposits from traditional sources (e.g., other banks and credit unions) and
non-traditional sources (e.g., brokerage firms) remains quite strong. Croghan continuously strives
to strike a balance between its deposit growth needs for funding anticipated loan demand and the
necessary deposit pricing structure to maintain or improve interest margin. Stockholders equity at March 31, 2005 increased to $49,197,000 or $26.01 book value per common
share compared to $48,916,000 or $25.83 book value per common share at December 31, 2004. The
balance in stockholders equity at March 31, 2005 included an accumulated other comprehensive loss
consisting of net unrealized losses on securities classified as available-for-sale. At March 31,
2005, Croghan held $64,759,000 in available-for-sale securities with an unrealized loss of
$190,000, net of income taxes. This compares to 2004 year-end holdings of $57,109,000 in
available-for-sale securities with an unrealized gain of $375,000, net of income taxes. Beginning in February, 2002, Croghan instituted a stock buy-back program, which has subsequently
been extended through August 1, 2005. Since the inception of the program, a total of 26,724 shares
have been repurchased as treasury shares. The 22,396 remaining treasury shares held as of March
31, 2005 and 20,336 shares held as of December 31, 2004 are reported at their acquired cost. Consistent with the Corporations quarterly dividend policy, a cash dividend of $.29 per share was
declared on March 8, 2005, payable on April 29, 2005. 9




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NET INTEREST INCOME Net interest income, which represents the excess revenue generated from interest-earning assets
over the interest cost of funding those assets, increased $606,000 for the three-month period ended
March 31, 2005 as compared to the same period in 2004. Net interest income for the quarterly
period ended March 31, 2005 includes the operations of the Custar office from the beginning of 2005
and thus the comparability of the amounts presented is significantly impacted. The net interest
yield (net interest income divided by average interest-earning assets) was 4.23 percent for the
three-month period ended March 31, 2005 compared to 4.20 percent for the same period in 2004. As the result of improving economic conditions, both market interest rates and managed interest
rates have increased. Two managed interest rate increases, totaling 50 basis points, have been
instituted by the Federal Reserve Open Market Committee since January 1, 2005. These gradual
managed interest rate increases have afforded some improvement in interest margin and net interest
income. PROVISION FOR LOAN LOSSES AND THE ALLOWANCE FOR LOAN LOSSES Croghans comprehensive loan policy provides guidelines for managing credit risk and asset quality.
The policy details acceptable lending practices, establishes loan-grading classifications, and
stipulates the use of a loan review process. Croghan employs credit analysis staff to
aid in facilitating the early identification of problem loans, to help ensure sound credit
decisions, and to assist in the determination of the allowance for loan losses. Croghan also
engages an outside credit review firm to supplement the credit analysis function and to provide an
independent assessment of the loan review process. Croghans loan policy, loan review process, and
credit analysis staff facilitate managements evaluation of the credit risk inherent in the lending
function. The following table details factors relating to the provision and allowance for loan losses for the
periods noted: Three months ended
    
    
    Three months endedMarch 31, 2005
    
    
    March 31, 2004(Dollars in thousands)Provision for loan losses charged to expense
    
    $
    90
    
    
    $
    130Net loan charge-offs
    
    
    196
    
    
    
    159Net loan charge-offs as a percent of
average outstanding loans
    
    
    .06
    %
    
    
    .05
    %
 The following table details factors relating to non-performing and potential problem loans as of
the dates noted: March 31, 2005
    
    
    December 31, 2004(Dollars in thousands)Nonaccrual loans
    
    $
    971
    
    
    $
    933Loans contractually past due 90 days or more
and still accruing interest
    
    
    638
    
    
    
    459Restructured loans
    
    
    
    
    
    
    Potential problem loans, other than those past due
90 days or more, nonaccrual, or restructured
    
    
    17,581
    
    
    
    15,393Total potential problem and non-performing loans
    
    $
    19,190
    
    
    $
    16,785
 10




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March 31, 2005
    
    
    December 31, 2004(Dollars in thousands)Allowance for loan losses
    
    $
    3,566
    
    
    $
    3,431Allowance for loan losses as a percent
of period-end loans
    
    
    1.03
    %
    
    
    1.06
    %
 The provision for loan losses for the first three months of 2005 totaled $90,000 compared to
$130,000 for the same period in 2004. Actual net loan charge-offs increased to $196,000 for the
first three months of 2005 compared to $159,000 during the same period in 2004. Total potential
problem and non-performing loans, which are summarized in the preceding table, increased $2,405,000
or 14.3 percent to $19,190,000 at March 31, 2005 compared to $16,785,000 at December 31, 2004. The
trends at March 31, 2005 compared to December 31, 2004 included a $38,000 increase in nonaccrual
loans, a $179,000 increase in loans past due 90 days or more and still accruing interest, and a
$2,188,000 increase in potential problem loans, other than those past due 90 days or more,
nonaccrual, or restructured. Croghan typically classifies a loan as a potential problem loan, regardless of its
collateralization or any contractually obligated guarantors, when a review of the borrowers
financial statements indicates that the borrowing entity does not generate sufficient operating
cash flow to adequately service its debts. All of the above-noted potential problem loans totaling
$17,581,000 at March 31, 2005 are currently performing loans and a majority are collateralized by
an interest in real property. The following table provides additional detail pertaining to the past due status of Croghans
potential problem loans as of March 31, 2005 (dollars in thousands): Potential problem loans not currently past due
    
    $
    14,255Potential problem loans past due one day or more but less than 10 days
    
    
    1,323Potential problem loans past due 10 days or more but less than 30 days
    
    
    833Potential problem loans past due 30 days or more but less than 60 days
    
    
    775Potential problem loans past due 60 days or more but less than 90 days
    
    
    395Total potential problem loans
    
    $
    17,581
 The following table provides additional detail pertaining to the collateralization of Croghans
potential problem loans as of March 31, 2005 (dollars in thousands): Collateralized by an interest in real property
    
    $
    13,262Collateralized by an interest in assets other than real property
    
    
    4,158Unsecured
    
    
    161Total potential problem loans
    
    $
    17,581
 The above-noted asset quality trends will continue to be monitored throughout 2005 to ensure
adequate provisions for loan losses are made in a timely manner. It is the Corporations policy to
maintain the allowance for loan losses at a level sufficient to provide for losses inherent in the
portfolio. Management considers the allowance at March 31, 2005 to be adequate to provide for
those losses identified as well as those losses inherent within the loan portfolio. NON-INTEREST INCOME Total non-interest income decreased $59,000 or 8.2 percent for the three-month period ended March 11




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31, 2005 compared to the same period in 2004. Non-interest income for the quarterly period ended
March 31, 2005 includes the operations of the Custar office from the beginning of 2005 and thus the
comparability of the amounts presented is significantly impacted. Included in non-interest income
for the period ended March 31, 2005 were losses from the sale of securities totaling $42,000. This
compares to $65,000 in securities gains reported for the period ended March 31, 2004. The 2005
losses were realized upon the sale of primarily callable U.S. Government Agency securities, and the
funds were used to provide cash to Custar shareholders. All of the securities sold were from the
available-for-sale portfolio. NON-INTEREST EXPENSES Total non-interest expenses increased $470,000 or 18.8 percent for the three-month period ended
March 31, 2005 as compared to the same period in 2004. Non-interest expenses for the quarterly
period ended March 31, 2005 include the operations of the Custar office from the beginning of 2005
and thus the comparability of the amounts presented is significantly impacted. Salaries, wages and
employee benefits increased $194,000 or 12.8 percent between comparable three-month periods.
Occupancy of premises expense increased $25,000 or 15.2 percent between comparable three-month
periods and other operating expenses increased $236,000 or 28.8 percent between comparable periods. FEDERAL INCOME TAX EXPENSE Federal income tax expense increased $18,000 or 3.1 percent between comparable three-month periods.
The increase is directly related to higher income before federal income taxes in 2005. The
Corporations effective tax rate for the three months ended March 31, 2005 was 29.2 percent
compared to 30.0 percent for the same period in 2004. LIQUIDITY AND CAPITAL RESOURCES Short-term borrowings of federal funds purchased and repurchase agreements averaged $6,702,000 for
the three-month period ended March 31, 2005. This compares to $14,151,000 for the three-month
period ended March 31, 2004 and $10,844,000 for the twelve-month period ended December 31, 2004. Borrowings from the Federal Home Loan Bank totaled $26,950,000 at March 31, 2005 as compared to
$28,950,000 at December 31, 2004. Additionally, Croghan had a $4,000,000 term loan outstanding
with a correspondent bank as of March 31, 2005, with the loan proceeds used to facilitate the
Custar purchase. The loan stipulates annual interest payments with principal due in full by the
loans maturity date of January 1, 2009. Capital expenditures for premises and equipment totaled $372,000 for the three-month period ended
March 31, 2005 compared to $251,000 for the same period in 2004. The 2005 expenditures include
$160,000 for property purchased in Clyde, Ohio. The property is adjacent to Croghans existing
Clyde branch drive-in facility and is contemplated to be the site for a future banking center. 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the quantitative and qualitative information about market
risk from the information provided in the December 31, 2004 Form 10-K. 12




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ITEM 4. CONTROLS AND PROCEDURES EVALUATION OF CONTROLS AND PROCEDURES With the participation of our management, including our chief executive officer and treasurer, we
have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our chief
executive officer and treasurer have concluded that:  (a)
    information required to be disclosed by Croghan in this Quarterly Report on Form 10-Q would
be accumulated and communicated to Croghans management, including its chief executive officer
and treasurer, as appropriate, to allow timely decisions regarding required disclosure;(b)
    information required to be disclosed by Croghan in this Quarterly Report on Form 10-Q would
be recorded, processed, summarized and reported within the time periods specified in the SECs
rules and forms; and(c)
    Croghans disclosure controls and procedures are effective as of the end of the period
covered by this Quarterly Report on Form 10-Q to ensure that material information relating to
Croghan and its consolidated subsidiaries is made known to them, particularly during the
period for which our periodic reports, including this Quarterly Report on Form 10-Q, are being
prepared. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes during the period covered by this Quarterly Report on Form 10-Q in our
internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting. 13




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PART II  OTHER INFORMATION 
 ITEM 1. LEGAL PROCEEDINGS   None 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  (a)
    None(b)
    None(c)
    The table below includes certain information regarding
Croghans purchase of Croghan common shares during the quarterly period ended March 31, 2005: 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 (1)
    
    per Share
    
    or Programs
    
    or Programs (2)01/01/05
through
01/31/05
    
    None
    
    None
    
    None
    
    None02/01/05
through
02/28/05
    
    2,624
    
    $36.55
    
    2,624
    
    92,06403/01/05
through
03/31/05
    
    None
    
    None
    
    None
    
    92,064
   (1)
    
    All share purchases were part of publicly announced plans and all were open-market
transactions.(2)
    
    A stock buy-back program commencing on August 1, 2004, pursuant to which 5,000 shares were
repurchased, expired on January 31, 2005. A stock buy-back program commencing February 1,
2005 and ending on August 1, 2005 was announced on January 21, 2005 in which up to 94,688
shares could be repurchased (2,624 shares were purchased on February 22, 2005). 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  None 14




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ITEM 5. OTHER INFORMATION The following paragraphs provide an updated summary of the material attributes of the common shares
of Croghan. The following statements are brief summaries of the provisions of the Amended Articles
of Incorporation of Croghan (the Articles) and the Amended and Restated Code of Regulations of
Croghan (the Regulations), and such statements are qualified in their entirety by reference to
the Articles and Regulations and to applicable Ohio law. Generally The authorized capital stock of Croghan consists of 3,000,000 common shares, par value of $12.50
per share. As of March 31, 2005, there were 1,891,713 common shares issued and outstanding. The
common shares are quoted on the OTC Bulletin Board under the symbol CHBH. Holders of the common shares are entitled to:  
    One vote for each common share held of record on all matters presented to a vote of
shareholders, including the election of directors;
    Receive dividends pro rata on a per share basis, if and when declared by the Board of
Directors from funds legally available therefor.The ability of Croghan to pay dividends in respect of the common shares largely depends
upon its receipt of dividends from its subsidiary, The Croghan Colonial Bank (the
Bank). The amount of dividends that the Bank may pay to Croghan is subject to various
legal limitations under federal and Ohio law and to prudent and sound banking practices.
Generally, subject to certain minimum capital requirements, the Bank may declare a
dividend without the approval of the Ohio Division of Financial Institutions, unless the
total dividends in a calendar year exceed the total of its net profits for the year
combined with its retained profits for the two preceding years. The Federal Reserve
Board generally considers it to be an unsafe and unsound banking practice for a bank
holding company to pay dividends except out of current operating income, although other
factors such as overall capital adequacy and projected income may also be relevant in
determining whether dividends can be paid.
    Share ratably in Croghans net assets, legally available to the shareholders in the
event of Croghans liquidation, dissolution, or winding up, after payment in full of all
amounts required to be paid to creditors or provision for such payment. Holders of Croghans common shares have no preemptive, subscription, redemption, conversion or
cumulative voting rights. The outstanding common shares of Croghan are fully paid and
non-assessable. Anti-Takeover Effects of the Articles, Regulations and the Ohio General Corporation Law
There are provisions in the Ohio General Corporation Law and the Articles and Regulations of
Croghan that could discourage potential takeover attempts and make attempts by shareholders to
change Croghans Board of Directors and management more difficult. Classified Board of Directors. Croghans Board of Directors is divided into three classes, each
with three-year staggered terms. This classification system increases the difficulty of replacing
a majority of the directors at any one time and may tend to discourage a third party from making a
tender offer
or otherwise attempting to gain control of Croghan. It also may tend to perpetuate the incumbency
of Croghans Board of Directors and management. 15




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Removal of Directors. Pursuant to the provisions of the Ohio General Corporation Law, a director
or directors of Croghan may be removed from office only for cause. The Regulations of Croghan
provide that a director or directors may be removed from office, only for cause, by the affirmative
vote of the holders of shares then entitling them to exercise not less than two-thirds of the
voting power of the corporation at an election of directors. Nomination Procedures. The Regulations of Croghan provide that a nominee for election to the Board
of Directors at an annual meeting, other than those nominated by or at the direction of the Board
of Directors, must be made in writing and delivered or mailed to and received by the Secretary of
Croghan on or before the December 31st immediately preceding the annual meeting, or
within a reasonable time as determined by the Board of Directors. In the case of a nominee
proposed for election as a director at a special meeting of shareholders at which directors are to
be elected, such written notice must be received by the Secretary of Croghan no later than the
close of business on the seventh day following the day on which the notice of the special meeting
was mailed to shareholders. The written notice of a proposed nominee must contain the following information:  
    the name, age, business or residence address of the proposed nominee;
    the principal occupation or employment of the proposed nominee;
    the number of Croghan common shares owned beneficially and/or of record by the
proposed nominee; and
    the length of time the proposed nominee has owned such shares. Supermajority Vote Requirement. The Ohio General Corporation Law provides that the holders of
shares entitling them to exercise at least two-thirds of the voting power of the corporation must
approve certain matters, including the following:  
    a proposal to adopt amended articles, or an amendment to the existing Articles;
    a proposal to sell, lease, exchange, transfer or otherwise dispose of all or
substantially all of Croghans property and assets;
    certain agreements of merger or combination;
    certain combinations and majority share acquisitions involving the issuance or
transfer of Croghan common shares; and
    a proposal to dissolve Croghan. The Ohio General Corporation Law permits a corporation to modify the two-thirds vote requirement
with respect to any or all of the foregoing matters by providing in its Articles that such matters
may be approved by the affirmative vote of a greater or lesser proportion, but not less than a
majority, of the voting power of the corporation. Croghans Articles do not modify such two-thirds
vote requirement. Control Share Acquisition Act.Section 1701.831 of the Ohio Revised Code, known as the Control
Share Acquisition Act, provides that certain notice and informational filings, and special
shareholder meeting and voting procedures, must occur prior to any persons acquisition of an
issuers shares that would entitle the acquirer to exercise or direct the exercise of the voting
power of the issuer in the election of directors within any of the following ranges:  
    one-fifth or more but less than one-third of such voting power;
    one-third or more but less than a majority of such voting power; or
    a majority or more of such voting power. 16




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The Control Share Acquisition Act does not apply to a corporation if its articles of incorporation
or code of regulations so provide. Croghan has not opted out of the application of the Control
Share Acquisition Act. Merger Moratorium Statute. If a person becomes the beneficial owner of 10% or more of an issuers
shares without the prior approval of its board of directors, Chapter 1704 of the Ohio Revised Code,
known as the Merger Moratorium Statute, prohibits the following transactions for at least three
years if they involve both the issuer and either the acquirer or anyone affiliated or associated
with the acquirer:  
    the disposition or acquisition of any interest in assets;
    mergers, consolidations, combinations and majority share acquisitions;
    voluntary dissolutions; and
    the issuance or transfer of shares or any rights to acquire shares in excess of 5% of
the outstanding shares. The prohibition imposed by Chapter 1704 continues indefinitely after the initial three-year period
unless the transaction is approved by the holders of at least two-thirds of the voting power of the
issuer or satisfies statutory conditions relating to the fairness of the consideration to be
received by the shareholders. The Merger Moratorium Statute does not apply to a corporation if its articles of incorporation or
code of regulations so provide. Croghan has not opted out of the application of the Merger
Moratorium Statute. Transfer Agent Croghan does not use a third-party transfer agent for its common shares and performs all transfer
agent functions internally. 
 ITEM 6. EXHIBITS EXHIBIT 31.1  Rule 13a-14(a)/15d-14(a) CEOs Certification
EXHIBIT 31.2  Rule 13a-14(a)/15d-14(a) Treasurers Certification
EXHIBIT 32.1  Section 1350 CEOs Certification
EXHIBIT 32.2  Section 1350 Treasurers Certification 17




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CROGHAN BANCSHARES, INC.Registrant Date: April 27, 2005
    /s/  Steven C. FutrellSteven C. Futrell, President & CEO Date: April 27, 2005
    /s/  Allan E. MehlowAllan E. Mehlow, Treasurer 18