General.Table As a commercial bank, the Bank makes a wide variety of different types of loans. Among the Bank’s lending activities are the origination of commercial, financial, and agricultural loans, which may be secured by various assets of the borrower or unsecured; loans secured by mortgages on residential and non-residential real estate; construction loans secured by mortgages on the underlying property; consumer loans which may be on an unsecured basis or secured by vehicles or other assets of the borrower; and credit card loans which are typically unsecured. Contents

TheTable above maturity information is based on the contract terms at December 31, 2011, and does not include any possible “rollover” at maturity date. In the normal course of business, the Bank considers and acts upon the borrower’s request for renewal of a loan at maturity. Evaluation of such a request includes a review of the borrower’s credit history, the collateral securing the loan, and the purpose for such request. Contents

AtTable December 31, 2011, the Bank had $126,415,000, or 41.9% of total loans, invested in non-residential real estate loans, a majority of which were secured by properties located in the Northwestern Ohio area. At December 31, 2011, the Bank had $1,054,000 of nonperforming loans of this type. Contents

CreditTable Cardof and Other Loans. Credit card and other loans are made to individuals for personal expenditures and principally arise from bank credit cards. Such loans generally pose the most risk as they are most frequently unsecured. Contents

TheTable following table presents information concerning the amount of loans which contain certain risk elements at the dates indicated: Contents

11Table of Contents

TheTable Bank’s earnings are highly dependent upon its net interest income, which is the difference between the interest income derived from interest-earning assets, such as loans and securities, and interest expense paid on interest-bearing liabilities, consisting of deposits and borrowings. Interest rate risk is one of the Bank’s most significant financial exposures. This risk, which is common to the financial institution sector, is an integral part of the Bank’s operations and impacts the rate-pricing strategies for essentially all of the Bank’s loan and deposit products. Contents

(2)Table Non-accrualof loans are included in loan totals and do not have a material impact on the analysis presented.Contents

TheTable ratio of net income to daily average total assets and average stockholders’ equity, and certain other ratios, for the periods noted are as follows: Contents

TheTable Corporation’s only subsidiary is the Bank. The Bank’s only subsidiary is Croghan Insurance, which engages in activities related to the sale of insurance and, as a licensed insurance agency, receives commissions from insurance sales. Contents

CroghanTable Insurance, the Bank’s wholly-owned insurance agency subsidiary, is also subject to the insurance laws and regulations of the State of Ohio and the Ohio Department of Insurance. The insurance laws and regulations require education and licensing of agencies and individual agents, require reports, and impose business conduct rules. Contents

•Table the federal law prohibiting the payment of interest on commercial demand deposit accounts was eliminated effective in July 2011;Contents

InsuranceTable premiums for each insured institution, including the Bank, are determined based upon the institution’s capital level and supervisory rating provided to the FDIC by the institution’s primary federal regulatory agency (the FRB in the case of the Bank) and other information the FDIC deems relevant to the risk posed to the deposit insurance fund by the institution. The assessment rate determined by considering such information is then applied to the amount of the institution’s assets to determine the institution’s insurance premium. An increase in the assessment rate could have a material adverse effect on the earnings of the affected institutions, depending on the amount of the increase. Contents

ChangesTable in interest rates could have a material adverse effect on our financial condition and results of operations. Contents

FDICTable insuranceof premiums may increase materially, which would negatively affect our net income. Contents

TheTable Dodd-Frank Act may adversely impact our results of operations and financial condition. Contents

OurTable continuedof success depends upon our ability to attract and retain key personnel. Contents

ManagementTable is aware of no pending legal proceedings to which the Corporation, the Bank, or Croghan Insurance is a party or of which any of their property is subject, other than ordinary routine litigation to which the Bank is a party incidental to its banking business. The Corporation considers none of those proceedings to be material. Similarly, management is aware of no material proceedings involving the Corporation, the Bank, or Croghan Insurance that are contemplated by any governmental authority. Contents

ITEM 7A. QuantitativeTable andof Qualitative Disclosures About Market Risk Contents

ITEM 9. ChangesTable inof and Disagreements with Accountants on Contents

ITEM 10. Directors,Table Executiveof Officers, and Corporate Governance Contents

29Table of Contents

ITEM 13. CertainTable Relationshipsof and Related Transactions, and Director Independence Contents

(a)(1) FinancialTable Statementsof Contents

ConsolidatedTable Balanceof Sheets – December 31, 2011 and 2010 Contents

NotesTable toof Consolidated Financial Statements Contents

33Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, ~~2011~~2013.

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission File Number 0-20159

CROGHAN BANCSHARES, INC.

(Exact name of Registrant as specified in its charter)

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

Registrant’s telephone number, including area code (419) 332-7301

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

~~Common~~None ~~Shares, Par Value $12.50 Per Share~~

(Title of class)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ~~Yes [ ] No [X]~~

Yes [ ] No [X]

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 [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [X] ~~(Do not check if a smaller reporting company)~~

(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ X ]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter: The aggregate market value of the Registrant’s common shares, par value $12.50 per share, held by non-affiliates as of June 30, 2013, based on the closing price quoted on the OTC Bulletin Board on such date, was $54,619,560.

The Registrant had 2,270,729 common shares, par value $12.50 per share, outstanding as of February 28, 2014.

This Annual Report on Form 10K contains 124 pages. The Exhibit Index is on pages 51 through 52 and also immediately preceding the filed exhibits on pages 47 through 49.

~~Indicate~~DOCUMENTS byINCORPORATED ~~check~~BY ~~mark~~REFERENCE ~~whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]~~

~~State~~Portions ~~the aggregate market value~~ of the ~~voting~~Registrant’s ~~and~~Annual ~~non-voting~~Report ~~common equity held by non-affiliates computed by reference~~ to ~~the~~Shareholders ~~price~~for ~~at which~~ the ~~common~~fiscal ~~equity~~year ~~was~~ended ~~last sold~~December 31, or2013 (the ~~average~~“2013 ~~bid~~Annual ~~and~~Report ~~asked~~to ~~price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter:~~Shareholders”) ~~The~~are ~~aggregate~~incorporated ~~market~~by ~~value~~reference ofinto ~~the~~PART ~~Registrant’s~~II ~~common shares, par value $12.50 per share, held by non-affiliates as~~ of ~~June 30,~~this ~~2011,~~Annual ~~based~~Report on ~~the~~Form ~~closing price quoted on the OTC Bulletin Board on such date was $38,543,595~~10-K.

The Registrant had 1,673,380 common shares, par value $12.50 per share, outstanding as of February 29, 2012.

This Annual Report on Form 10K contains 116 pages. The Exhibit Index is on pages 36 through 38 and also immediately preceding the filed exhibits on pages 31 through 34.

~~DOCUMENTS~~INDEX ~~INCORPORATED BY REFERENCE~~

1. Portions of the Registrant’s Annual Report to Shareholders for the fiscal year ended December 31, 2011 (the “2011 Annual Report to Shareholders”) are incorporated by reference into PART II of this Annual Report on Form 10-K.


Part I
Item 1.	Business	4 - 23
Item 1A.	Risk Factors	24 - 28
Item 1B.	Unresolved Staff Comments	28
Item 2.	Properties	28
Item 3.	Legal Proceedings	28
Item 4.	Mine Safety Disclosures	28

Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	29
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	30
Item 9A.	Controls and Procedures	30 - 31
Item 9B.	Other Information	31

Part III
Item 10.	Directors, Executive Officers, and Corporate Governance	32 - 36
Item 11.	Executive Compensation	36 - 42
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	43 - 44
Item 13.	Certain Relationships and Related Transactions, and Director Independence	44 - 45
Item 14.	Principal Accountant Fees and Services	45 - 46

Part IV
Item 15.	Exhibits and Financial Statement Schedules	47 - 49

Signatures		50

2. Portions of the Registrant’s Proxy Statement for its Annual Meeting of Shareholders to be held on May 8, 2012 (the “2012 Proxy Statement”) are incorporated by reference into PART III of this Annual Report on Form 10-K.

INDEX

Part I
Item 1.	Business	5 - 22
Item 1A.	Risk Factors	23 - 26
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, andIssuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition andResults of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 8.	Financial Statements and Supplementary Data	28
Item 9.	Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure	28
Item 9A.	Controls and Procedures	28
Item 9B.	Other Information	28
Part III
Item 10.	Directors, Executive Officers, and Corporate Governance	29
Item 11.	Executive Compensation	29
Item 12.	Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder Matters	30
Item 13.	Certain Relationships and Related Transactions, and Director Independence	30
Item 14.	Principal Accountant Fees and Services	30
Part IV
Item 15.	Exhibits and Financial Statement Schedules	31 - 34
Signatures		35

PART I

ITEM 1. BUSINESS

GENERAL

Croghan Bancshares, Inc. (the “Corporation”), was organized under the laws of the State of Ohio on September 27, 1983, and is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”). As the result of a reorganization effective in 1984, the Corporation acquired all of the voting shares of The Croghan Colonial Bank (the “Bank”), an Ohio chartered bank organized in 1888. The Bank is the only direct subsidiary of the Corporation and substantially all of the Corporation’s operations are conducted through the Bank. The Bank has one wholly-owned insurance company subsidiary, Croghan Insurance Agency LLC (“Croghan Insurance”), which was organized on August 21, 2009 as an Ohio limited liability company for the purpose of allowing the Bank to participate in certain commission revenue generated through its third party insurance agreement. The principal offices of the Corporation, the Bank, and Croghan Insurance are located at 323 Croghan Street, Fremont, Ohio. The Bank operates 1316 Ohio ~~branch~~ offices, including one in Bellevue, one in Clyde, one in ~~Custar~~Curtice, ~~four~~five in Fremont, one in Green Springs, one in Monroeville, one in Norwalk, one in Oak Harbor, one in Oregon, one in Port Clinton, and two in Tiffin.

~~The~~On ~~Corporation~~December 6, ~~maintains~~2013, athe ~~website~~Corporation atcompleted ~~www.croghan.com~~the ~~(this~~acquisition ~~uniform~~of ~~resource~~Indebancorp ~~locator,~~and orits ~~URL~~bank subsidiary, National isBank anof ~~inactive~~Ohio ~~textual~~(“NBOH”), ~~reference~~in ~~only~~a stock and iscash ~~not~~merger ~~intended~~transaction. toUnder ~~incorporate~~the terms of the ~~Corporation’s~~merger ~~website~~agreement, ~~into~~the ~~this Annual~~shareholders ~~Report~~of onIndebancorp ~~Form~~received ~~10-K)~~either $55.00 ~~The~~in ~~Corporation~~cash, ~~makes~~1.63 ~~available~~common ~~free~~shares of ~~charge~~the onCorporation, or ~~through~~a ~~its~~combination thereof ~~website,~~subject ~~its~~to ~~annual~~the ~~reports~~overall onconsideration ~~Form~~being ~~10-K,~~70% ~~quarterly~~stock ~~reports~~and 30% cash. Based on ~~Form~~the ~~10-Q,~~closing ~~current~~price ~~reports~~of the Corporation’s common shares on ~~Form~~December 6, ~~8-K~~2013 (i.e., ~~and~~the ~~amendments~~date toof ~~those~~closing), ~~reports~~the ~~filed~~transaction orwas ~~furnished~~valued at $29.15 million and is ~~pursuant~~expected to ~~Section 13(~~qualify as a) ortax-free ~~15(d)~~reorganization. ofIndebancorp ~~the~~and ~~Securities~~NBOH ~~Exchange~~were ~~Act~~headquartered ofin ~~1934~~Oak Harbor, asOhio, ~~amended~~and ~~(the~~operated ~~“Exchange~~four ~~Act”)~~full-service branches and two loan production offices, asall ~~soon~~located aswithin ~~reasonably~~30 ~~practicable~~miles ~~after~~of its corporate headquarters. In the transaction, ~~Corporation~~the ~~electronically~~Bank ~~files~~acquired ~~such~~a ~~material~~total of $223,095,000 in total assets, with $163,453,000 orin ~~furnishes~~net ~~such~~loans ~~material to~~and $22,876,000 ~~the~~in ~~Securities~~securities, and ~~Exchange~~assumed ~~Commission~~$194,491,000 ~~(the~~in ~~“SEC”)~~deposits.

~~Through~~In ~~the~~December ~~Bank~~2013, the ~~Corporation operates in one industry segment – the commercial banking industry. The~~ Bank ~~conducts~~also acompleted ~~general banking business embracing~~ the ~~usual~~sale ~~functions~~ of ~~commercial,~~its ~~retail,~~Custar ~~and~~Branch ~~savings~~to ~~banking,~~another ~~including~~financial ~~time,~~institution. ~~savings,~~The ~~money~~branch ~~market~~sale ~~and~~included ~~demand deposits; commercial~~$28, ~~industrial~~328,000 ~~agricultural~~of assets, ~~real~~including ~~estate~~$16, ~~consumer installment~~590,000 ~~and~~of ~~credit~~cash ~~card~~paid ~~lending; safe deposit box rental; automatic teller machines; trust department services;~~ and ~~other~~cash ~~services~~on ~~tailored~~hand ~~for individual customers. The Bank originates~~ and ~~services secured and unsecured loans to individuals~~$11, ~~firms~~467,000 ~~and~~of ~~corporations. Direct~~ loans ~~are made to individuals and installment obligations are purchased from retailers~~, ~~both with~~ and ~~without~~the ~~recourse.~~transfer ~~The Bank makes a variety~~ of ~~residential~~$29, ~~industrial~~500,000 ~~commercial,~~of ~~and agricultural loans secured by real estate~~liabilities, including ~~interim construction financing. Additionally~~$29,483,000 ~~investment~~of ~~products bearing no Federal Deposit Insurance Corporation (“FDIC”) insurance are offered through the Bank’s Trust and Investment Services Division~~deposits.

~~Interest~~The Corporation ~~and~~maintains ~~fees~~a onwebsite ~~loans~~at ~~are~~www.croghan.com ~~the~~(this ~~Bank’s~~uniform ~~primary~~resource ~~sources~~locator, ofor ~~income.~~URL, ~~The~~is ~~Bank’s~~an ~~principal~~inactive ~~expenses~~textual ~~are~~reference ~~interest~~only ~~paid~~and onis ~~deposit accounts~~not ~~and~~intended ~~borrowed~~to ~~funds,~~incorporate ~~and~~the ~~personnel~~Corporation’s ~~and~~website ~~operating~~into ~~costs.~~this ~~Operating~~Annual ~~results~~Report ~~are~~on ~~dependent~~Form to10-K). aThe ~~significant~~Corporation makes ~~degree~~available onfree ~~the~~of ~~“net~~charge ~~interest~~on ~~income”~~or ofthrough ~~the~~its ~~Bank~~website, ~~which~~its isannual ~~the~~reports ~~difference~~on ~~between~~Form ~~the~~10-K, ~~interest~~quarterly ~~income~~reports ~~derived~~on ~~from~~Form ~~its interest~~10-~~earning assets~~Q, ~~such~~current asreports ~~loans~~on ~~and~~Form ~~securities~~8-K, and ~~the~~amendments ~~interest~~to ~~expense~~those ~~paid~~reports onfiled ~~its~~or ~~interest-bearing~~furnished ~~liabilities,~~pursuant ~~consisting~~to ofSection 13(a) ~~deposits~~or ~~and~~15(d) ~~borrowings.~~of ~~Interest~~the Securities ~~income~~Exchange ~~and~~Act ~~interest~~of ~~expense~~1934, ~~are~~as ~~significantly~~amended ~~affected~~(the by“Exchange ~~general~~Act”), ~~economic conditions~~as ~~and~~soon ~~the~~as ~~policies~~reasonably ofpracticable ~~various~~after ~~regulatory~~the ~~authorities.~~Corporation ~~See~~electronically ~~“EFFECTS~~files OFsuch ~~GOVERNMENT~~material ~~MONETARY~~with, ~~POLICY”~~or onfurnishes ~~page~~such 22material ofto, ~~this~~the ~~Annual~~Securities ~~Report~~and onExchange ~~Form~~Commission ~~10-K~~(the “SEC”).

~~The~~Through the Bank, the Corporation’s ~~only~~operates ~~sources~~in one industry segment – the commercial banking industry. The Bank conducts a general banking business embracing the usual functions of ~~funds~~commercial, ~~are~~retail, ~~dividends~~and savings banking, including time, savings, money market and ~~interest~~demand ~~paid~~deposits; bycommercial, ~~the~~industrial, ~~Bank~~agricultural, real estate, consumer installment, and credit card lending; safe deposit box rental; automatic teller machines; trust department services; and other services tailored for individual customers. The ~~ability~~Bank oforiginates ~~the~~and ~~Bank~~services secured and unsecured loans to ~~pay~~individuals, ~~dividends~~firms, isand ~~subject~~corporations. toDirect ~~limitations~~loans ~~under~~are made ~~various~~to ~~laws~~individuals and ~~regulations~~installment obligations are purchased from retailers, both with and towithout ~~prudent~~recourse. The Bank makes a variety of residential, industrial, commercial, and ~~sound~~ ~~banking~~agricultural ~~principles~~loans secured by real estate, including interim construction financing. ~~See~~Additionally, ~~“DIVIDEND~~investment ~~RESTRICTIONS~~products bearing no Federal Deposit Insurance Corporation (“FDIC”) oninsurance ~~page~~are 22offered ofthrough ~~this~~the ~~Annual~~Bank’s ~~Report~~Trust onand ~~Form~~Investment ~~10-K~~Services Division.

AsInterest aand ~~bank~~fees ~~holding~~on ~~company,~~loans are the ~~Corporation~~ isBank’s ~~subject~~primary tosources ~~regulation,~~of ~~supervision,~~income. ~~and~~The ~~examination~~Bank’s byprincipal ~~the~~expenses ~~Board~~are ofinterest ~~Governors~~paid ofon ~~the~~deposit ~~Federal~~accounts ~~Reserve~~and ~~System~~borrowed ~~(the~~funds, and ~~“FRB”).~~personnel ~~The~~and ~~deposits~~operating ofcosts. ~~the~~Operating ~~Bank~~results are ~~insured~~dependent up to ~~the~~a ~~applicable~~significant ~~limits~~degree byon the ~~FDIC~~“net ~~and,~~interest ~~therefore,~~income” of the Bank ~~is subject to regulation~~, ~~supervision,~~which ~~and~~is ~~examination by~~ the ~~FDIC.~~difference Asbetween athe ~~bank~~interest ~~incorporated~~income ~~under~~derived ~~the~~from ~~laws~~its ofinterest-earning ~~the~~assets, ~~State~~such ofas loans ~~Ohio~~and securities, and the ~~Bank~~interest isexpense ~~also~~paid ~~subject~~on toits ~~regulation,~~interest-bearing ~~supervision~~liabilities, ~~and~~consisting ~~examination~~of bydeposits ~~the~~and ~~Division~~borrowings. ofInterest ~~Financial~~income ~~Institutions~~and ofinterest ~~the Ohio~~expense ~~Department~~are ofsignificantly ~~Commerce~~affected ~~(the~~by ~~“Division”).~~general ~~See~~economic ~~“REGULATION~~conditions ~~AND~~and ~~SUPERVISION”~~the ~~beginning~~policies onof various ~~page~~regulatory ~~18,~~authorities. ~~and~~See “~~REGULATORY~~EFFECTS ~~CAPITAL~~OF ~~REQUIREMENTS”~~GOVERNMENT ~~beginning~~MONETARY POLICY” on page 2022 of this Annual Report on Form 10-K.

~~Because~~The ~~the~~ Corporation’s ~~activities~~only sources ~~have~~of ~~been~~funds ~~limited~~are ~~primarily~~dividends toand ~~holding~~interest paid by the ~~common~~Bank. ~~shares~~The ability of the Bank, ~~the~~to ~~following~~pay ~~discussion~~dividends ofis ~~operations~~subject ~~focuses primarily~~to onlimitations ~~the~~under ~~business~~various oflaws ~~the~~and ~~Bank.~~regulations, ~~The~~and ~~following~~to ~~discussion~~prudent ~~encompasses~~and ~~only~~sound ~~domestic~~banking ~~operations~~principles. ~~since~~See ~~neither~~“DIVIDEND ~~the~~RESTRICTIONS” on ~~Corporation~~page ~~nor~~22 ~~the~~of ~~Bank~~this ~~have~~Annual ~~any~~Report ~~foreign~~on ~~operations~~Form ~~or foreign loans~~10-K.

~~FORWARD-LOOKING~~As ~~STATEMENTS~~a bank holding company, the Corporation is subject to regulation, supervision, and examination by the Board of Governors of the Federal Reserve System (the “FRB”). The deposits of the Bank are insured up to the applicable limits by the FDIC and, therefore, the Bank is subject to regulation, supervision, and examination by the FDIC. As a bank incorporated under the laws of the State of Ohio, the Bank is also subject to regulation, supervision, and examination by the Division of Financial Institutions of the Ohio Department of Commerce (the “Division”). See “REGULATION AND SUPERVISION” beginning on page 18, and “REGULATORY CAPITAL REQUIREMENTS” beginning on page 20 of this Annual Report on Form 10-K.

~~Certain~~Because ~~statements in this Annual Report on Form 10-K which are not historical fact are forward-looking statements within~~ the ~~meaning of the Private Securities Litigation Reform Act of 1995. Words such as~~ ~~“expects”,~~Corporation’s ~~“believes”,~~activities ~~“anticipates”,~~have ~~“targets”,~~been ~~“plans”,~~limited ~~“will”,~~primarily ~~“would”, “should”, “could”, and similar expressions are intended~~ to ~~identify~~holding ~~these forward-looking statements but are not~~ the ~~exclusive~~common ~~means~~shares of ~~identifying~~the ~~such statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Factors that might cause such difference include~~Bank, ~~but are not limited to,~~ the ~~factors~~following ~~discussed~~discussion ~~under “ITEM 1A – RISK FACTORS” beginning on page 23~~ of ~~this~~operations ~~Annual~~focuses ~~Report~~primarily on ~~Form~~the ~~10-K.~~business ~~Forward-looking statements speak only as~~ of the ~~date~~Bank. onThe ~~which~~following ~~they~~discussion ~~are~~encompasses ~~made~~only ~~and,~~domestic ~~except as~~operations ~~required~~since byneither ~~law,~~ the Corporation ~~undertakes~~nor nothe ~~obligation~~Bank tohave ~~update~~ any ~~forward-looking~~foreign ~~statement~~operations ~~to reflect events~~ or ~~circumstances~~foreign ~~after the date on which the statement is made to reflect unanticipated events~~loans. ~~All subsequent written and oral forward-looking statements attributable to the Corporation or any person acting on its behalf are qualified by these cautionary statements.~~

~~LENDING~~5 ~~ACTIVITIES~~

~~The~~FORWARD-LOOKING ~~following~~STATEMENTS ~~table sets forth the composition of the Bank’s loan portfolio by type of loan at the dates indicated:~~

	December 31,
	2011		2010		2009		2008		2007
	(Dollars in thousands)
Type of Loan: (1)
Commercial, financial, and agricultural (2)	$	28,963	$	21,576	$	27,311	$	32,566	$	38,057
Real estate – mortgage		253,865		254,371		276,416		289,502		282,407
Real estate – construction		5,237		4,084		5,828		9,952		11,427
Consumer		11,203		10,676		12,333		14,843		15,838
Credit card and other		2,697		2,598		2,596		2,570		2,785
	$	301,965	$	293,305	$	324,484	$	349,433	$	350,514

Certain statements in this Annual Report on Form 10-K which are not historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, “believes”, “anticipates”, “targets”, “plans”, “will”, “would”, “should”, “could”, and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Factors that might cause such difference include, but are not limited to, the factors discussed under “ITEM 1A – RISK FACTORS” beginning on page 24 of this Annual Report on Form 10-K. Forward-looking statements speak only as of the date on which they are made and, except as required by law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to the Corporation or any person acting on its behalf are qualified by these cautionary statements.

~~(1)~~LENDING ~~The~~ACTIVITIES ~~Bank made no foreign loans in 2011, 2010, 2009, 2008, or 2007.~~

~~(2)~~General. ~~Lease~~As ~~financing~~a ~~receivables~~commercial ~~included~~bank, inthe Bank makes a wide variety of different types of loans. Among the Bank’s lending activities are the origination of commercial, financial, and agricultural loans, ~~were~~which ~~$311,000~~may inbe ~~2011,~~secured ~~$650,000~~by invarious ~~2010,~~assets ~~$859,000~~of inthe ~~2009,~~borrower ~~$1,065,000~~or inunsecured; ~~2008,~~loans secured by mortgages on residential and ~~$1,268,000~~non-residential inreal ~~2007~~estate; construction loans secured by mortgages on the underlying property; consumer loans which may be on an unsecured basis or secured by vehicles or other assets of the borrower; and credit card loans which are typically unsecured.

6The following table sets forth the composition of the Bank’s loan portfolio by type of loan at the dates indicated:


	December 31,

	2013		2012		2011		2010		2009

	(Dollars in thousands)
Type of Loan: (1)
Commercial, financial, and agricultural (2)		$ 44,134		$ 35,303		$ 28,963		$ 21,576		$ 27,311
Real estate – mortgage		387,936		264,189		253,865		254,371		276,416
Real estate – construction		11,608		3,635		5,237		4,084		5,828
Consumer		27,515		15,234		11,203		10,676		12,333
Credit card and other		3,555		2,916		2,697		2,598		2,596

		$474,748		$321,277		$301,965		$293,305		$324,484

~~Loan~~(1) ~~Maturity Schedule.~~ The ~~following~~Bank ~~table~~made ~~sets~~no ~~forth~~foreign ~~certain~~loans ~~information~~in 2013, ~~as of December 31~~2012, 2011, ~~regarding~~ ~~the~~2010, ~~dollar amount of loans maturing in the Bank’s portfolio based on their contractual terms to maturity and the dollar amount of such loans that have fixed~~ or ~~variable rates within certain maturity ranges after 2011:~~ 2009.

	Maturing
			After one
	Within		but within		After
	one year		five years		five years		Total
	(Dollars in thousands)
Commercial, financial, and agricultural		$3,626		$14,108		$11,229		$28,963
Real estate – construction		748		1,791		2,698		5,237
Total		$4,374		$15,899		$13,927		$34,200

(2)	Lease financing receivables included in commercial, financial, and agricultural, were $313,000 in 2013, $184,000 in 2012, $311,000 in 2011, $650,000 in 2010, and $859,000 in 2009.

	Interest
	Sensitivity
	Fixed		Variable
	Rate		Rate
	(Dollars in thousands)
Due after one but within five years		$14,117		$1,782
Due after five years		1,112		12,815
		$15,229		$14,597

~~Commercial,~~Loan ~~Financial,~~Maturity ~~and Agricultural Loans~~Schedule. The ~~Bank~~following ~~makes~~table ~~loans for~~sets ~~commercial~~forth ~~purposes,~~certain ~~including industrial and professional purposes~~information, toas ~~sole~~of ~~proprietorships~~December 31, ~~partnerships~~2013, ~~corporations, limited liability companies, and other business enterprises. The Bank makes agricultural loans for~~ regarding the ~~purpose~~dollar amount of ~~financing agricultural production, including all costs associated with growing crops or raising livestock. Commercial, financial, and agricultural~~ loans ~~may~~maturing bein ~~secured,~~the ~~other~~Bank’s ~~than~~portfolio bybased ~~real estate, or unsecured, requiring one single repayment, or~~ on ~~an installment~~their ~~repayment~~contractual ~~schedule.~~terms ~~Commercial,~~to ~~financial,~~maturity and ~~agricultural~~the ~~loans~~dollar ~~generally~~amount ~~have final maturities~~ of ~~five~~such ~~years~~loans ~~or less and are made with interest rates~~ that ~~adjust~~have ~~either~~fixed ~~daily~~ or ~~annually~~variable ~~based upon the national prime rate in effect at the time of the applicable rate change. However, under the current low rate environment there has been a shift to lock in fixed~~ rates towithin certain maturity. ~~Such~~ranges ~~loans~~after ~~typically~~2013: ~~do not contain any periodic rate adjustment caps or lifetime rate caps.~~

Commercial lending involves certain risks relating to changes in local and national economic conditions and the resulting effect on the borrowing entities. Such loans are subject to greater risk of default during periods of adverse economic conditions. Because such loans may be secured by equipment, inventory, accounts receivable, and other non-real estate assets, the collateral may not be sufficient to ensure full payment of the loan in the event of a default. To reduce such risk, the Bank may obtain the personal guarantees of one or more of the principals of the borrowers.


	Maturing

	Within one year		After one but within five years		After five years		Total

	(Dollars in thousands)

Commercial, financial, and agricultural		$10,079		$21,484		$12,571		$44,134
Real estate – construction		2,715		1,816		7,077		11,608

Total		$12,794		$23,300		$19,648		$55,742

At December 31, 2011, the Bank had $28,963,000, or 9.6% of total loans, invested in commercial, financial, and agricultural loans. At December 31, 2011, the Bank had $88,000 of nonperforming loans of this type (i.e., those loans in nonaccrual status or past due 90 days or more).


	Interest Sensitivity

	Fixed Rate		Variable Rate

	(Dollars in thousands)

Due after one but within five years		$21,587		$1,713
Due after five years		7,623		12,025

		$29,210		$13,738

~~Real~~The ~~Estate~~above –maturity ~~Mortgage~~information ~~Loans.~~is ~~The~~based ~~Bank~~on ~~makes~~the ~~non-residential real~~contract ~~estate~~terms ~~loans~~at ~~secured~~December 31, by2013, ~~first~~and ~~mortgages~~does ~~and/or~~not ~~junior~~include ~~mortgages~~any onpossible “rollover” ~~non-residential~~at ~~real~~maturity ~~estate,~~date. ~~including~~In ~~retail~~the ~~stores,~~normal ~~office~~course ~~buildings,~~of ~~warehouses~~business, ~~apartment~~the ~~buildings,~~Bank considers and ~~residential~~acts ~~real~~upon ~~estate~~the ~~loans~~borrower’s ~~secured~~request byfor ~~first~~renewal ~~mortgages~~of ona loan at maturity. Evaluation of such a request includes a review of the borrower’s credit ~~one-to-four~~history, ~~family~~the ~~residences~~collateral securing the loan, ~~with~~and athe ~~majority~~purpose ~~being~~for ~~single-family~~such ~~residences~~request.

7Commercial, Financial, and Agricultural Loans. The Bank makes loans for commercial purposes, including industrial and professional purposes, to sole proprietorships, partnerships, corporations, limited liability companies, and other business enterprises. The Bank makes agricultural loans for the purpose of financing agricultural production, including all costs associated with growing crops or raising livestock. Commercial, financial, and agricultural loans may be secured, other than by real estate, or unsecured, requiring one single repayment, or on an installment repayment schedule. Commercial, financial, and agricultural loans generally have final maturities of five years or less and are made with interest rates that adjust either daily or annually based upon the national prime rate in effect at the time of the applicable rate change. However, under the current low rate environment there has been a shift to lock in fixed rates to maturity. Such loans typically do not contain any periodic rate adjustment caps or lifetime rate caps.

~~Table~~Commercial lending involves certain risks relating to changes in local and national economic conditions and the resulting effect on the borrowing entities. Such loans are subject to greater risk of ~~Contents~~default during periods of adverse economic conditions. Because such loans may be secured by equipment, inventory, accounts receivable, and other non-real estate assets, the collateral may not be sufficient to ensure full payment of the loan in the event of a default. To reduce such risk, the Bank may obtain the personal guarantees of one or more of the principals of the borrowers.

~~Non-Residential~~At ~~Real~~December 31, ~~Estate~~2013, ~~Loans.~~the ~~The~~ Bank’s ~~non-residential~~had ~~real~~$44,134,000, ~~estate~~or ~~loans~~9.3% ~~generally have final maturities~~ of ~~between~~total 10loans, ~~and~~invested 20in ~~years~~commercial, financial, and ~~are~~agricultural ~~typically made with adjustable interest rates (“ARMs”)~~loans. ~~Interest~~At ~~rates on the ARMs adjust either daily~~December 31, ~~annually~~2013, ~~every three years, or every five years based upon~~ the ~~national prime or~~ ~~U.S.~~Bank ~~Treasury~~had ~~Note~~$188,000 ~~rates~~of innonperforming ~~effect~~loans ~~at the time~~ of ~~the~~this ~~applicable~~type ~~rate change~~(i.e., ~~Such~~those loans ~~typically~~in dononaccrual ~~not~~status ~~contain~~or ~~periodic~~past ~~rate~~due ~~adjustment~~90 ~~caps~~days or ~~lifetime rate caps~~more).

~~The~~Real ~~Bank~~Estate ~~limits~~– ~~the~~Mortgage ~~amount~~Loans. The ofBank ~~each~~makes non-residential real estate ~~loan~~loans insecured ~~relationship~~by tofirst ~~the~~mortgages ~~appraised~~and/or ~~value~~junior ofmortgages ~~the~~on non-residential real estate, ~~and~~including ~~improvements~~retail atstores, ~~the~~office ~~time~~buildings, ofwarehouses, ~~origination~~apartment ofbuildings, ~~such~~and ~~loans. The maximum loan-to-value ratio (the “LTV”) on non-~~residential real estate loans secured ~~made~~ by ~~the~~first ~~Bank~~mortgages ison ~~80%~~one-to-four family residences, ~~subject~~with toa ~~certain~~majority ~~exceptions~~being single-family residences.

~~Non-residential~~7 real estate lending is generally considered to involve a higher degree of risk than residential lending. Such risk is due primarily to the dependence of the borrower on the cash flow from the property to service the loan. If the cash flow from the property is reduced due to a downturn in the economy for example, or due to any other reason, the borrower’s ability to repay the loan may be impaired. To reduce such risk, the decision to underwrite a non-residential real estate loan is based primarily on the quality and characteristics of the income stream generated by the property and/or the business of the borrower. The Bank carefully evaluates the location of the real estate, the quality of the management operating the property, the debt service ratio, and appraisals supporting the property’s valuation. In addition, the Bank may obtain the personal guarantees of one or more of the principals of the borrower.

Non-Residential Real Estate Loans. The Bank’s non-residential real estate loans generally have ~~either~~final maturities ~~fixed~~of orbetween 10 and 20 years and are typically made with adjustable interest rates (“ARMs”). Interest rates on the ARMs adjust either daily, annually, every ~~six~~three ~~months~~years, or every five years based upon the ~~Federal~~national ~~Home~~prime ~~Loan~~or ~~Mortgage Company (“FHLMC”) 15 year rate,~~U.S. ~~plus~~Treasury anNote ~~additional~~rates ~~margin, that is~~ in effect at the time of the applicable rate change. ~~The~~Such ~~six-month~~loans ~~ARMs~~ typically ~~have~~do ~~periodic~~not ~~adjustment~~contain ~~caps~~periodic ofrate ~~0.5% and lifetime~~ adjustment caps ofor ~~5%. The five-year ARMs typically have periodic adjustment caps of 1% and~~ lifetime ~~adjustment~~rate caps ~~of 3%~~. The maximum amortization period for such loans is 30 years, although a 20-year term is the most common. The Bank does not engage in the practice of deeply discounting the initial rates on such loans, nor does the Bank engage in the practice of putting payment caps on loans which could lead to negative amortization. In addition to a five year balloon program, where the loan is retained and serviced by the Bank, loans are originated by the Bank and sold into the secondary market (e.g., to Freddie Mac). The Bank retains the servicing and related support functions on loans that are sold into the secondary market. The establishment of this arrangement allows the Bank to maintain its customer relationships by providing very competitive residential real estate loan offerings, while at the same time eliminating the risks associated with long-term fixed-rate mortgage loan financing.

The Bank limits the amount of each non-residential real estate loan in relationship to the appraised value of the real estate and improvements at the time of origination of asuch ~~residential~~loans. ~~real~~The ~~estate~~maximum loan.-to-value ~~The~~ratio ~~maximum~~ (the “LTV”) on non-residential real estate loans made by the Bank is 9080%, subject to certain exceptions.

~~The Bank’s~~ Non-residential real estate ~~loans~~lending ~~amounted~~is generally considered to involve a higher degree of risk than residential lending. Such risk is due primarily to the dependence of ~~$127,450,000~~the atborrower ~~December 31~~on the cash flow from the property to service the loan. If the cash flow from the property is reduced due to a downturn in the economy for example, ~~2011~~or due to any other reason, ~~which~~the ~~represented~~borrower’s 42ability to repay the loan may be impaired.2% To reduce such risk, the decision to underwrite a non-residential real estate loan is based primarily on the quality and characteristics of ~~total~~the ~~loans~~income stream generated by the property and/or the business of the borrower. AtThe ~~December 31~~Bank carefully evaluates the location of the real estate, ~~2011~~the quality of the management operating the property, the ~~Bank~~debt ~~had~~service $3ratio,~~136~~ and appraisals supporting the property’s valuation. In addition,~~000~~ the Bank may obtain the personal guarantees of ~~nonperforming~~one ~~loans~~or more of ~~this~~the ~~type~~principals of the borrower.

~~Real~~At ~~Estate~~December 31, –2013, ~~Construction~~the ~~Loans. The~~ Bank ~~makes~~had ~~construction~~$211,852,000, ~~loans to finance land development prior to erecting new structures and the construction of new buildings~~ or ~~additions to existing buildings~~44. ~~During~~6% ~~the~~of ~~construction~~total ~~period~~loans, ~~these~~invested ~~loans are structured with either fixed rates or adjustable rates of interest tied to changes~~ in ~~the~~non-residential ~~national~~real ~~prime~~estate ~~interest~~loans, ~~rate.~~a majority ~~Many~~ of ~~the~~which ~~construction~~were ~~loans~~secured ~~originated~~ by ~~the~~properties ~~Bank~~located ~~are~~in ~~made to owner-occupants for~~ the ~~construction~~Northwestern ofOhio ~~single-family homes~~area. ~~Other~~At ~~loans~~December 31, ~~are made to builders and developers for various projects~~2013, ~~including~~ the ~~construction~~Bank ofhad ~~homes and other buildings that have not been pre-sold~~$2,842,000 ~~and~~of ~~the~~nonperforming ~~preparation~~loans of ~~land~~this ~~for site and project development~~type.

~~Construction~~Residential ~~loans~~Real ~~involve~~Estate ~~greater~~Loans. ~~underwriting~~The ~~and~~Bank’s ~~default~~residential ~~risks~~real ~~than~~estate do loans ~~secured~~have byeither ~~mortgages~~fixed onor ~~improved~~adjustable ~~and~~interest ~~developed~~rates ~~properties~~(“ARMs”). Interest ~~due~~rates toon ARMs adjust every three or five years based upon the ~~effects~~three ~~that~~or ~~general~~five ~~economic~~year ~~conditions~~Constant ~~have~~Treasury onMaturity ~~real~~(“CMT”) ~~estate~~as ~~developments,~~published ~~developers~~by the Wall Street Journal, ~~managers~~plus an additional margin, ~~and~~that ~~builders~~is in effect at the time of the applicable rate change. InThe ~~addition,~~three ~~such~~and ~~loans~~five ~~are~~year ~~more~~ARMs ~~difficult~~typically tohave ~~evaluate~~periodic adjustment caps of 2% and ~~monitor~~lifetime adjustment caps of 6%. ~~Loan~~The ~~funds~~maximum ~~are~~amortization ~~advanced~~period ~~upon~~for such loans is 30 years. The Bank does not engage in the ~~security~~practice of ~~the~~deeply ~~project~~discounting the ~~under~~initial ~~construction,~~rates ~~which~~on issuch ~~more~~loans, ~~difficult~~nor todoes ~~value~~the ~~before~~Bank engage in the ~~completion~~practice of ~~construction~~putting payment caps on loans which could lead to negative amortization. ~~Moreover,~~In ~~because~~addition ofto the ~~uncertainties~~three ~~inherent~~and infive ~~estimating~~year ~~construction~~ARM ~~costs~~programs, itwhere the loan is ~~relatively~~retained ~~difficult~~and toserviced ~~accurately~~by ~~evaluate~~the Bank, loans are originated by the ~~LTVs~~Bank and sold into the ~~total loan~~secondary ~~funds~~market ~~required~~(e.g., to ~~complete~~Freddie aMac ~~project~~and Fannie Mae). InThe ~~the~~Bank ~~event~~retains ~~that~~the aservicing ~~default~~and orrelated ~~foreclosure~~support functions on aloans ~~construction~~that orare ~~land~~sold ~~development~~into ~~loan~~the ~~occurs,~~secondary market. The establishment of this arrangement allows the Bank ~~must~~to ~~take~~maintain ~~control~~its ofcustomer ~~the~~relationships ~~project~~by ~~and~~providing ~~attempt~~very ~~either~~competitive toresidential ~~arrange~~real ~~for~~estate ~~completion~~loan ofofferings, ~~construction~~while ~~or dispose~~at ofthe same time eliminating the ~~unfinished~~risks ~~project~~associated with long-term fixed-rate mortgage loan financing.

AtThe ~~December 31,~~Bank ~~2011,~~limits the ~~Bank’s~~amount ~~construction~~of ~~loans~~each ~~amounted~~residential real estate loan in relationship to ~~$5,237,000,~~the orappraised ~~1.7%~~value of ~~total~~the ~~loans.~~real ~~At December 31,~~estate ~~2011,~~and improvements at the ~~Bank~~time ~~had~~of ~~$1,059,000~~origination of a ~~nonperforming~~residential real estate loan. The maximum LTV on residential real estate loans ofmade ~~this~~by ~~type~~the Bank is 85%, subject to certain exceptions.

8The Bank’s residential real estate loans amounted to $176,084,000 at December 31, 2013, which represented 37.1% of total loans. At December 31, 2013, the Bank had $2,663,000 of nonperforming loans of this type.

~~Table~~Real Estate – Construction Loans. The Bank makes construction loans to finance land development prior to erecting new structures and the construction of ~~Contents~~new buildings or additions to existing buildings. During the construction period, these loans are structured with either fixed rates or adjustable rates of interest tied to changes in the national prime interest rate. Many of the construction loans originated by the Bank are made to owner-occupants for the construction of single-family homes. Other loans are made to builders and developers for various projects, including the construction of homes and other buildings that have not been pre-sold, and the preparation of land for site and project development.

~~Consumer~~Construction ~~Loans.~~loans ~~The~~involve ~~Bank~~greater ~~makes~~underwriting aand ~~variety~~default ofrisks ~~consumer~~than do loans secured by mortgages on improved and developed properties due to ~~individuals~~the ~~for~~effects ~~family~~that general economic conditions have on real estate developments, ~~household~~developers, managers, and ~~other personal expenditures~~builders. ~~These~~In addition, such loans ~~often~~are more difficult to evaluate and monitor. Loan funds are ~~made~~advanced ~~for~~upon the ~~purpose~~security of ~~financing~~the project under construction, which is more difficult to value before the ~~purchase~~completion of ~~vehicles,~~construction. ~~furniture~~Moreover, ~~educational~~because ~~expenses,~~of ~~medical~~the ~~expenses,~~uncertainties ~~taxes~~inherent in estimating construction costs, orit ~~vacation~~is ~~expenses~~relatively difficult to accurately evaluate the LTVs and the total loan funds required to complete a project. ~~Consumer~~In ~~loans~~the ~~may~~event bethat ~~secured,~~a ~~other~~default ~~than~~or byforeclosure ~~real~~on ~~estate,~~a construction or ~~unsecured~~ land development loan occurs, ~~and~~the ~~generally~~Bank ~~require~~must ~~repayment~~take ~~pursuant~~control of the project and attempt either to arrange anfor ~~installment~~completion ~~repayment~~of ~~schedule~~construction or dispose of the unfinished project.

~~Consumer~~At ~~loans involve a higher risk of default than residential real estate loans~~December 31, ~~particularly in the case of loans that are unsecured or secured by rapidly depreciating assets~~2013, ~~such as vehicles. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of~~ the outstanding loan balance as a result of the greater likelihood of damage or depreciation, and the remaining deficiency may not warrant further collection efforts against the borrower. In addition, consumer loan collections depend on the borrowerBank’s ~~continuing~~construction ~~financial~~loans ~~stability,~~amounted ~~and thus are more likely~~ to ~~be adversely affected by job loss~~$11, ~~illness~~608, 000, or ~~personal bankruptcy~~2.5% ~~Various~~of ~~federal~~total ~~and~~loans. ~~state~~At ~~laws~~December 31, ~~including federal and state bankruptcy and insolvency laws~~2013, ~~may also limit~~ the ~~amount~~Bank ~~which~~had ~~can~~no benonperforming ~~recovered~~loans onof ~~such~~this ~~loans~~type.

At8 ~~December 31, 2011, the Bank had $11,203,000, or 3.7% of total loans, invested in consumer loans, and less than $1,000 were nonperforming.~~

~~At December 31~~Consumer Loans. The Bank makes a variety of consumer loans to individuals for family, ~~2011~~household, and other personal expenditures. These loans often are made for the ~~Bank~~purpose ~~had~~of $2financing the purchase of vehicles,~~697~~ furniture,~~000~~ educational expenses, medical expenses, taxes, or 0vacation expenses.9% ofConsumer ~~total~~ loans, ~~invested~~may inbe ~~credit~~secured, ~~card~~other ~~and~~than ~~other~~by ~~loans~~real estate, ~~and~~or $6unsecured,~~000~~ and ofgenerally ~~which~~require ~~were~~repayment ~~nonperforming~~pursuant to an installment repayment schedule.

~~Loan~~Consumer ~~Solicitation~~loans ~~and~~involve ~~Processing~~a higher risk of default than residential real estate loans, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets, such as vehicles. ~~The~~Repossessed ~~Bank’s~~collateral for a defaulted consumer loan ~~originations~~may ~~are~~not ~~developed~~provide ~~from~~an adequate source of repayment of the outstanding loan balance as a ~~number~~result of ~~sources,~~the ~~including~~greater ~~continuing~~likelihood ~~business~~of ~~with~~damage ~~depositors~~or depreciation, ~~borrowers,~~ and, ~~real~~the ~~estate~~remaining ~~developers,~~deficiency ~~periodic~~may ~~newspaper~~not ~~and~~warrant ~~radio~~further ~~advertisements~~collection efforts against the borrower. In addition, ~~solicitations~~consumer byloan collections depend on the ~~Bank~~borrower’s ~~lending~~continuing ~~staff~~financial stability, ~~walk-in~~and ~~customers~~thus are more likely to be adversely affected by job loss, ~~director~~illness, ~~referrals~~or personal bankruptcy. Various federal and state laws, including federal and ~~loan~~state ~~participations~~bankruptcy ~~purchased~~and ~~from~~insolvency ~~other~~laws, ~~financial~~may ~~institutions.~~also limit the amount which can be recovered on such loans.

~~For~~At ~~non-residential~~December 31, ~~real estate loans~~2013, the Bank ~~obtains~~had ~~information~~$27,515,000, ~~with respect to the credit and business history of the borrower and prior projects completed by the borrower. Personal guarantees of one~~ or ~~more principals of the borrower are obtained as deemed necessary~~5.8% ~~An environmental study~~ of ~~the~~total ~~real estate might also be conducted when deemed necessary. Upon the completion of the appraisal of the non-residential real estate and the receipt of information on the borrower~~loans, ~~the~~invested ~~loan application may be submitted to the Loan Committee for approval or rejection if the loan amount is~~ in ~~excess~~consumer ~~of established limits contained in the Bank’s Loan Policy. Additionally~~loans, ~~loans in material amounts as established in the Bank’s Loan Policy must be submitted to the Executive Committee~~ of ~~the~~which ~~Board~~$34,000 ofwere ~~Directors for approval or rejection~~nonperforming.

InCredit ~~connection~~Card ~~with~~and ~~residential~~Other ~~real~~Loans. ~~estate~~Credit ~~loans,~~card ~~the Bank may obtain a credit report, verification of employment~~ and other ~~documentation~~loans ~~concerning~~are ~~the creditworthiness~~made ~~of the borrower. An appraisal of the fair market value of the real estate on which the Bank will be granted a mortgage~~ to ~~secure~~individuals ~~the~~for ~~loan~~personal isexpenditures ~~generally~~and ~~prepared~~principally byarise anfrom ~~independent~~bank ~~appraiser~~credit ~~approved by the Board of Directors~~cards. AnSuch ~~environmental~~loans ~~study~~generally ofpose the ~~real~~most ~~estate~~risk isas ~~conducted~~they ~~only~~are ifmost ~~the~~frequently ~~appraiser has reason to believe that an environmental problem may exist~~unsecured.

~~When~~At ~~either~~December 31, ~~a residential~~2013, orthe ~~non-residential~~Bank ~~real~~had ~~estate loan application is approved~~$3,555,000, ~~a lawyer’s opinion of title~~ or ~~title insurance is obtained with respect to the real estate which will secure the loan~~0.7% ~~Borrowers~~of ~~are~~total ~~required~~loans, toinvested ~~carry satisfactory fire~~in ~~and~~credit ~~casualty~~card ~~insurance~~ and ~~flood~~other ~~insurance~~loans, ifof ~~applicable~~which $37,000 ~~and~~were ~~to name the Bank as an insured mortgagee~~nonperforming.

~~Commercial,~~Loan ~~financial,~~Solicitation and ~~agricultural loans are underwritten primarily on the basis of the stability of the income generated by the business and/or property~~Processing. The ~~personal~~Bank’s ~~guarantees~~loan oforiginations ~~one or more principals of the borrower also~~ are ~~generally~~developed ~~obtained.~~from ~~Consumer loans are underwritten on the~~a ~~basis~~number of ~~the~~sources, ~~borrower’s~~including ~~credit~~continuing ~~history~~business ~~and~~with andepositors, ~~analysis~~borrowers, ofand ~~the~~real ~~borrower’s~~estate ~~income and expenses~~developers, ~~ability~~periodic tonewspaper ~~repay the loan~~ and ~~the~~radio ~~value of the collateral~~advertisements, ifsolicitations ~~any.~~by ~~The procedure for approval of real estate - construction loans is~~ the ~~same~~Bank’s ~~as for~~lending ~~real~~staff, ~~estate~~ walk-in ~~mortgage loans~~customers, ~~except~~director ~~that an appraiser evaluates the building plans~~referrals, ~~construction specifications~~ and ~~estimates of construction costs. The Bank also evaluates the feasibility of the proposed construction project and the experience~~loan ~~and~~participations ~~record~~purchased offrom ~~the~~other ~~builder~~financial institutions.

~~Loan~~For ~~Origination~~non-residential ~~and~~real ~~Other~~estate ~~Fees.~~loans, ~~The~~the Bank ~~realizes~~obtains ~~loan~~information ~~origination~~with ~~fees~~respect to the credit and business ~~other~~history ~~fee~~of ~~income~~the ~~from~~borrower ~~its~~and ~~lending activities.~~prior ~~The~~projects ~~Bank~~completed ~~also~~by ~~realizes~~the ~~income~~borrower. ~~from~~Personal ~~late~~guarantees ~~payment~~of ~~charges,~~one ~~application~~or ~~fees,~~more ~~and~~principals ~~fees~~of ~~for~~the ~~other~~borrower ~~miscellaneous~~are ~~services~~obtained as deemed necessary. ~~Loan~~An ~~origination~~environmental ~~fees~~study ~~and~~of ~~other~~the ~~fees~~real ~~realized~~estate bymight ~~the~~also ~~Bank~~be ~~are~~conducted awhen deemed ~~volatile~~necessary. ~~source~~Upon the completion of ~~income,~~the ~~and~~appraisal ~~vary~~of ~~with~~the non-residential real estate and the ~~volume~~receipt of ~~lending~~ information on the borrower, the loan ~~repayments~~application ~~and~~may ~~general~~be ~~economic~~submitted ~~conditions.~~to ~~Nonrefundable~~the ~~loan~~Loan ~~origination~~Committee ~~fees~~for ~~and~~approval ~~certain~~or ~~direct~~rejection if the loan ~~origination~~amount ~~costs~~is ~~are~~in excess ~~deferred~~of ~~and~~established ~~recognized~~limits contained in the Bank’s Loan Policy. Additionally, loans in material amounts as anestablished ~~adjustment~~in tothe ~~yield~~Bank’s ~~over~~Loan Policy must be submitted to the ~~life~~Executive Committee of the ~~related~~Board ~~loan~~of Directors for approval or rejection.

9In connection with residential real estate loans, the Bank may obtain a credit report, verification of employment and other documentation concerning the creditworthiness of the borrower. An appraisal of the fair market value of the real estate on which the Bank will be granted a mortgage to secure the loan is generally prepared by an independent appraiser approved by the Board of Directors. An environmental study of the real estate is conducted only if the appraiser has reason to believe that an environmental problem may exist.

~~Table~~When either a residential or non-residential real estate loan application is approved, a lawyer’s opinion of ~~Contents~~title or title insurance is obtained with respect to the real estate which will secure the loan. Borrowers are required to carry satisfactory fire and casualty insurance and flood insurance, if applicable, and to name the Bank as an insured mortgagee.

~~Delinquent Loans~~Commercial, ~~Nonperforming Assets~~financial, and ~~Classified~~agricultural ~~Assets~~loans are underwritten primarily on the basis of the stability of the income generated by the business and/or property. ~~When~~The apersonal guarantees of one or more principals of the borrower ~~fails~~also toare ~~make~~generally aobtained. ~~required~~Consumer ~~payment~~ loans are underwritten on athe ~~loan,~~basis of the borrower’s ~~Bank~~credit ~~attempts~~history toand ~~cause~~an analysis of the ~~deficiency~~borrower’s income and expenses, ability to berepay ~~cured~~the byloan ~~contacting~~and the ~~borrower.~~value Inof ~~most~~the ~~cases~~collateral, ~~deficiencies~~if ~~are~~any. ~~cured~~The ~~promptly~~procedure for approval of real estate - construction loans is the same as afor ~~result~~real estate - mortgage loans, except that an appraiser evaluates the building plans, construction specifications and estimates of ~~these~~construction ~~efforts~~costs. The Bank also evaluates the feasibility of the proposed construction project and the experience and record of the builder.

~~When~~Loan aOrigination ~~borrower~~and ~~fails~~Other toFees. ~~make~~The aBank ~~timely~~realizes ~~payment,~~loan ~~the~~origination ~~borrower~~fees ~~will~~and ~~receive~~other afee ~~series~~income offrom ~~scheduled~~its ~~delinquency~~lending ~~notices~~activities. ~~and~~The ~~possibly~~Bank also ~~follow-up~~realizes ~~calls~~income from anlate ~~employee~~payment ofcharges, ~~the~~application ~~Bank.~~fees, Inand ~~most~~fees ~~cases,~~for ~~delinquencies~~other ~~are~~miscellaneous ~~paid promptly~~services. ~~Generally,~~Loan iforigination afees ~~real~~and ~~estate~~other ~~loan~~fees ~~becomes~~realized 90by ~~days~~the ~~delinquent,~~Bank ~~the~~are ~~borrower~~a volatile source of income and ~~collateral~~vary ~~will~~with bethe ~~assessed~~volume toof ~~determine~~lending, ~~whether~~loan repayments ~~foreclosure~~and ~~action~~general iseconomic ~~required~~conditions. ~~When~~Nonrefundable ~~deemed~~loan ~~appropriate~~origination byfees ~~management,~~and acertain ~~foreclosure~~direct ~~action~~loan ~~will~~origination becosts ~~instituted or~~are adeferred ~~deed~~and inrecognized ~~lieu~~as ofan ~~foreclosure~~adjustment ~~will~~to beyield ~~pursued~~over the life of the related loan.

~~Loans~~9 are placed into nonaccrual status when, in the opinion of management, full collection of principal and interest is unlikely. Under-collateralized loans are then fully or partially charged-off against the allowance for loan losses, and interest is recognized on a cash basis where future collections of principal are probable.

	December 31,
	2011		2010		2009		2008		2007
	(Dollars in thousands)
Loans accounted for on a nonaccrual basis includingTrouble Debt Restructuring (“TDR”) non-accruing (1)	$	4,671	$	4,127	$	5,903	$	1,845	$	2,285
Loans contractually past due 90 days or more as toprincipal or interest payments and still accruing interest (2)		672		586		45		334		237
Loans whose terms have been renegotiated to provide areduction or deferral of principal or interest because of a deterioration in the financial position of the borrower (3)		3,532		4,665		3,191		0		0

Delinquent Loans, Nonperforming Assets, and Classified Assets. When a borrower fails to make a required payment on a loan, the Bank attempts to cause the deficiency to be cured by contacting the borrower. In most cases, deficiencies are cured promptly as a result of these efforts.

~~(1)~~When ~~The~~a ~~amount~~borrower offails ~~gross~~to ~~interest~~make ~~income~~a ~~that~~timely ~~would~~payment, ~~have~~the ~~been~~borrower ~~recorded~~will ~~had~~receive ~~all~~a ~~nonaccrual~~series ~~loans~~of ~~been~~scheduled ~~current~~delinquency innotices ~~accordance~~and ~~with~~possibly ~~their~~follow-up ~~terms~~calls ~~approximated~~from ~~$200,000~~an inemployee ~~2011,~~of ~~$270,000~~the Bank. inIn ~~2010,~~most ~~$375~~cases,~~000~~ indelinquencies ~~2009,~~are ~~$132~~paid promptly. Generally,~~000~~ inif ~~2008~~a real estate loan becomes 90 days delinquent, the borrower and ~~$44,000~~collateral inwill ~~2007.~~be ~~Actual~~assessed ~~interest~~to ~~included~~determine inwhether ~~interest~~foreclosure ~~income~~action onis ~~these~~required. ~~loans~~When ~~amounted~~deemed toappropriate ~~$33~~by management,~~000~~ ina ~~2011,~~foreclosure ~~$36,000~~action inwill ~~2010,~~be ~~$33,000~~instituted inor ~~2009,~~a ~~$39,000~~deed in ~~2008,~~lieu ~~and~~of ~~$176,000~~foreclosure inwill ~~2007~~be pursued.

~~(2)~~Loans ~~Excludes~~are placed into nonaccrual status when, in the opinion of management, full collection of principal and interest is unlikely. Under-collateralized loans ~~accounted~~are then fully or partially charged-off against the allowance for loan losses, and interest is recognized on a ~~nonaccrual~~cash basis where future collections of principal are probable.

~~(3)~~The ~~Excludes~~following ~~loans~~table ~~accounted~~presents ~~for~~information onconcerning athe ~~nonaccrual~~amount ~~basis~~of ~~and~~ loans ~~contractually~~which ~~past~~contain ~~due~~certain 90risk ~~days~~elements orat ~~more~~the asdates toindicated: ~~principal or interest payments.~~

In addition to the loan amounts identified in the preceding table, there was $18,161,000 of potential problem loans at December 31, 2011. While these loans are all currently performing, management has some doubt about the ability of the borrowers to continue to comply with all of their present loan repayment terms. Management 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 the borrowing entity does not generate sufficient operating cash flow to adequately service its debts.


	December 31,

	2013		2012		2011		2010		2009

	(Dollars in thousands)

Loans accounted for on a nonaccrual basis including Troubled Debt Restructuring (“TDR”) non-accruing (1)		$4,604		$2,753		$4,671		$4,127		$5,903

Loans contractually past due 90 days or more as to principal or interest payments and still accruing interest (2)		1,160		967		672		586		45

Loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest because of a deterioration in the financial position of the borrower (3)		6,081		4,342		3,532		4,665		3,191

(1) The ~~Bank’s~~amount of gross interest income that would have been recorded had all nonaccrual loans ~~are~~been ~~spread~~current ~~over~~in aaccordance ~~broad~~with ~~range~~their ofterms ~~industrial~~approximated ~~classifications.~~$151,000 Asin of2013, ~~December 31~~$161,000 ~~2011~~in 2012, ~~the~~$200,000 ~~Bank~~in ~~had~~2011, no$270,000 ~~significant~~in ~~concentrations~~2010, ~~of loans~~and ~~(i.e.~~$375,000 ~~greater~~in ~~that~~2009. ~~10%~~Actual ofinterest ~~total~~included in interest income on these loans) amounted to ~~borrowers~~$33,000 ~~engaged~~in 2013, $39,000 in ~~the~~2012, ~~same~~$33,000 orin ~~similar~~2011, ~~industries.~~$36,000 in 2010, and $33,000 in 2009.

~~Allowance~~(2) ~~for~~Excludes ~~Loan Losses. The Bank maintains an allowance for loan losses to provide for~~ loans ~~that~~accounted ~~might not be repaid. At December 31, 2011, the Bank’s allowance~~ for ~~loan~~on ~~losses totaled $4,778,000. To determine the adequacy of the allowance for loan losses, the Bank performs~~ a ~~detailed quarterly analysis that focuses on delinquency trends within each loan category (i.e., commercial, real estate, and consumer loans), the status of nonperforming loans (i.e., impaired,~~ nonaccrual and restructured loans, and loans past due 90 days or more), current and historic trends of charged-off loans within each category, existing local and national economic conditions, and changes in the volume and mix within each loan categorybasis. Additionally, loans that are identified as impaired are individually evaluated and specific reserves provided to the extent the loan amount exceeds anticipated future cash flows, including cash flows from the sale of the underlying collateral.

~~Regular~~(3) ~~provisions~~Excludes ~~are~~loans ~~made~~accounted ~~in amounts sufficient to maintain the balance in the allowance~~ for ~~loan~~on ~~losses at~~ a ~~level~~nonaccrual ~~considered~~basis by management to be adequate for losses within the Bank’s portfolio. While management believes that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in adjustments, and ~~net~~loans ~~earnings~~contractually ~~could~~past ~~be significantly~~due ~~affected~~90 ifdays ~~circumstances~~or ~~differ~~more ~~substantially~~as ~~from the assumptions used in making the final determination. The regulatory agencies that periodically review the Bank’s allowance for loan losses may also require adjustments~~ to ~~the allowance~~principal or ~~the~~interest ~~charge-off of specific loans based upon the information available to them at the time of their examinations~~payments.

10In addition to the loan amounts identified in the preceding table, there was $7,079,000 of potential problem loans at December 31, 2013. While these loans are all currently performing, management has some doubt about the ability of the borrowers to continue to comply with all of their present loan repayment terms. Management 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 the borrowing entity does not generate sufficient operating cash flow to adequately service its debts.

~~Table~~The Bank’s loans are spread over a broad range of ~~Contents~~industrial classifications. As of December 31, 2013, the Bank had no significant concentrations of loans (i.e., greater that 10% of total loans) to borrowers engaged in the same or similar industries.

Allowance for Loan Losses. The ~~following~~Bank ~~table~~maintains ~~shows~~an allowance for loan losses to provide for loans that might not be repaid. At December 31, 2013, the ~~daily~~Bank’s ~~average~~allowance for loan ~~balances~~losses totaled $4,042,000. To determine the adequacy of the allowance for loan losses, the ~~periods~~Bank ~~indicated~~performs a detailed quarterly analysis that focuses on delinquency trends within each loan category (i.e., commercial, real estate, and consumer loans), the status of nonperforming loans (i.e., impaired, nonaccrual and restructured loans, and loans past due 90 days or more), current and historic trends of charged-off loans within each category, existing local and national economic conditions, and changes in the ~~allowance~~volume ~~for~~and mix within each loan category. Additionally, loans that are identified as impaired are individually evaluated and specific reserves provided to the extent the loan ~~losses~~amount ~~for~~exceeds ~~such~~anticipated ~~years:~~future cash flows, including cash flows from the sale of the underlying collateral.

	December 31,
	2011		2010		2009		2008		2007
	(Dollars in thousands)
Daily average amount of loans		$286,576		$306,924		$334,648		$344,638		$347,445
Allowance for loan losses at beginning of year		$4,955		$4,433		$3,287		$3,358		$3,600
Loan charge-offs:
Commercial, financial, and agricultural		(56)		(4)		(212)		(1,128)		(3)
Real estate – mortgage		(1,649)		(1,169)		(1,594)		(379)		(259)
Consumer		(38)		(97)		(141)		(152)		(182)
Credit card and other		(43)		(39)		(74)		(82)		(55)
		(1,786)		(1,309)		(2,021)		(1,741)		(499)
Recoveries of loans previously charged off:
Commercial, financial, and agricultural		203		15		66		15		38
Real estate – mortgage		598		93		34		17		36
Consumer		23		42		57		74		70
Credit card and other		10		6		10		14		13
		834		156		167		120		157
Net charge-offs		(952)		(1,153)		(1,854)		(1,621)		(342)
Additions to allowance charged to expense		775		1,675		3,000		1,550		100
Allowance for loan losses at end of year		$4,778		$4,955		$4,433		$3,287		$3,358
Allowance for loan losses as a percent ofyear-end loans		1.58%		1.69%		1.37%		.94%		.96%
Ratio of net charge-offs during the year toaverage net loans outstanding during the year		.34%		.38%		.56%		.47%		.10%

Regular provisions are made in amounts sufficient to maintain the balance in the allowance for loan losses at a level considered by management to be adequate for losses within the Bank’s portfolio. While management believes that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in adjustments, and net earnings could be significantly affected if circumstances differ substantially from the assumptions used in making the final determination. The regulatory agencies that periodically review the Bank’s allowance for loan losses may also require adjustments to the allowance or the charge-off of specific loans based upon the information available to them at the time of their examinations.

~~The~~10 amount of charge-offs and recoveries fluctuate from year to year due to factors relating to the condition of the general economy and specific business segments. During 2007, there were five real estate charge-offs exceeding $25,000, with the largest charge-off being $67,000 and the aggregate being $213,000, and one consumer loan charge-off of $28,000. Otherwise, there were no individual charge-offs or recoveries exceeding $25,000 during 2007. During 2008, there were four commercial loan charge-offs exceeding $25,000, with the two largest being $495,000 and $490,000, both related to the same borrower, and the aggregate being $1,098,000; four real estate charge-offs exceeding $25,000, with the largest charge-off being $31,000 and the aggregate being $110,000; and one consumer loan charge-off of $29,000. There were no other individual charge-offs or recoveries exceeding $25,000 during 2008. During 2009, there were no commercial loan charge-offs exceeding $25,000; however, there was one recovery that totaled $34,000 that was recovered from a commercial loan that was charged off in 2008. Also during 2009, there were 15 real estate loan charge-offs individually exceeding $25,000 with the largest being $518,000, and others including $253,000, $224,000, and $178,000. There were no individual recoveries over $25,000 in the real estate loan category during 2009. There were also two consumer loan charge-offs that individually exceeded $25,000 during 2009 with the largest being $31,000. During 2010, there were no commercial loan charge-offs or recoveries exceeding $25,000. Also during 2010, there were 11 real estate loan charge-offs individually exceeding $25,000 with the largest being $273,000, and others including $180,000, $138,000, and $85,000. There were two individual recoveries over $25,000 in the real estate loan category during 2010. There were no consumer loan charge-offs or recoveries that individually exceeded $25,000 during 2010. During 2011, there was one commercial loan charge-off exceeding $25,000 that totaled $36,000 and there was a recovery from one borrower totaling $169,000. Also during 2011, there were 15 real estate loan charge-offs individually exceeding $25,000 with the largest being $335,000, and others including $308,000, $120,000, $112,000, and $100,000. There were two individual recoveries over $25,000 in the real estate loan category during 2011 totaling $519,000 and $66,000. There were no consumer loan charge-offs or recoveries that individually exceeded $25,000 during 2011. There were no lease financing charge-offs or recoveries in any of the years presented.

~~Table~~The offollowing ~~Contents~~table shows the daily average loan balances, for the periods indicated, and changes in the allowance for loan losses for such years:

The Corporation recognized a provision for loan losses of $775,000 for the year ended December 31, 2011. The decrease in the provision for loan losses in 2011, as compared to 2010, was due to a decrease in the level of net loan charge-offs in 2011, as compared to 2010, which was a result of the Bank experiencing a large recovery in the commercial and real estate – mortgage categories of $754,000 which resulted in overall decrease in net loan charge-offs in 2011 of $201,000. The Bank will continue to monitor the credit quality of its entire loan portfolio to maintain the allowance for loan losses at an appropriate level.


	December 31,
	2013		2012		2011		2010		2009

	(Dollars in thousands)

Daily average amount of loans		$331,291		$306,343		$286,576		$306,924		$334,648


Allowance for loan losses at beginning of year		$4,325		$4,778		$4,955		$4,433		$3,287


Loan charge-offs:
Commercial, financial, and agricultural		(-)		(2)		(56)		(4)		(212)
Real estate – mortgage		(529)		(984)		(1,649)		(1,169)		(1,594)
Consumer		(73)		(75)		(38)		(97)		(141)
Credit card and other		(47)		(23)		(43)		(39)		(74)

		(649)		(1,084)		(1,786)		(1,309)		(2,021)


Recoveries of loans previously charged off:
Commercial, financial, and agricultural		13		15		203		15		66
Real estate – mortgage		18		72		598		93		34
Consumer		51		13		23		42		57
Credit card and other		9		6		10		6		10

		91		106		834		156		167

Net charge-offs		(558)		(978)		(952)		(1,153)		(1,854)


Additions to allowance charged to expense		275		525		775		1,675		3,000

Allowance for loan losses at end of year		$4,042		$4,325		$4,778		$4,955		$4,433

Allowance for loan losses as a percent of year-end loans		.85%		1.35%		1.58%		1.69%		1.37%

Ratio of net charge-offs during the year to average net loans outstanding during the year		.17%		.32%		.34%		.38%		.56%

The ~~following~~amount ~~table~~of ~~allocates~~charge-offs and recoveries fluctuate from year to year due to factors relating to the ~~allowance~~condition ~~for~~of the general economy and specific business segments. During 2009, there were no commercial loan ~~losses~~charge-offs ~~for~~exceeding $25,000; however, there was one recovery that totaled $34,000 that was recovered from a commercial loan that was charged off in 2008. Also during 2009, there were 15 real estate loan charge-offs individually exceeding $25,000 with the ~~periods~~largest ~~indicated~~being to$518,000, ~~each~~and others including $253,000, $224,000, and $178,000. There were no individual recoveries over $25,000 in the real estate loan category during 2009. ~~The~~There ~~allowance~~were ~~has~~also two consumer loan charge-offs that individually exceeded $25,000 during 2009 with the largest being $31,000. During 2010, there were no commercial loan charge-offs or recoveries exceeding $25,000. Also during 2010, there ~~been~~were ~~allocated~~11 toreal estate loan charge-offs individually exceeding $25,000 with the ~~categories~~largest ofbeing ~~loans~~$273,000, ~~noted~~and ~~according~~others toincluding $180,000, $138,000, and $85,000. There were two individual recoveries over $25,000 in the ~~amount~~real ~~deemed~~estate toloan becategory ~~reasonably~~during 2010. ~~necessary~~There towere ~~provide~~no ~~for~~consumer loan charge-offs or recoveries that individually exceeded $25,000 during 2010. During 2011, there was one commercial loan charge-off exceeding $25,000 that totaled $36,000 and there was a recovery from one borrower totaling $169,000. Also during 2011, there were 15 real estate loan charge-offs individually exceeding $25,000 with the ~~possibility~~largest being $335,000, and others including $308,000, $120,000, $112,000, and $100,000. There were two individual recoveries over $25,000 in the real estate loan category during 2011 totaling $519,000 and $66,000. There were no consumer loan charge-offs or recoveries that individually exceeded $25,000 during 2011. During 2012, there were no commercial loan charge-offs or recoveries exceeding $25,000. Also during 2012, there were 15 real estate loan charge-offs individually exceeding $25,000 with the largest being $150,000, and others including $83,000, $65,000, and two each of ~~losses~~$59,000. There were no recoveries over $25,000 in the real estate loan category during 2012. There were no consumer loan charge-offs or recoveries that individually exceeded $25,000 during 2012. During 2013, there were no commercial loan charge-offs or recoveries exceeding $25,000, five real estate charge-offs exceeding $25,000 (with the largest charge-off being ~~incurred~~$159,000 ~~based~~and onthe ~~specific~~aggregate ~~credit~~being ~~analyses:~~$305,000), and one consumer loan charge-off of $29,000. There were no other individual charge-offs or recoveries exceeding $25,000 during 2013. There were no lease financing charge-offs or recoveries in any of the years presented.

	December 31, 2011					December 31, 2010
				Percentage					Percentage
				of loans to					of loans to
		Allowance		total loans			Allowance		total loans
		(Dollars in thousands)					(Dollars in thousands)
Commercial, financial, and agricultural			$615		9.6%			$542		7.4%
Real estate – mortgage			3,831		84.1%			3,906		86.7%
Real estate – construction			179		1.7%			347		1.4%
Consumer			84		3.7%			85		3.6%
Credit card and other			69		.9%			75		.9%
			$4,778		100.0%			$4,955		100.0%
	December 31, 2009					December 31, 2008
				Percentage					Percentage
				of loans to					of loans to
		Allowance		total loans			Allowance		total loans
		(Dollars in thousands)					(Dollars in thousands)
Commercial, financial, and agricultural			$526		8.4%			$200		9.3%
Real estate – mortgage			3,649		85.2%			2,536		82.9%
Real estate – construction			72		1.8%			291		2.8%
Consumer			115		3.8%			196		4.3%
Credit card and other			71		.8%			64		.7%
			$4,433		100.0%			$3,287		100.0%

	December 31, 2007
				Percentage
				of loans to
		Allowance		total loans
		(Dollars in thousands)
Commercial, financial, and agricultural			$413		10.9%
Real estate – mortgage			2,528		80.5%
Real estate – construction			35		3.3%
Consumer			303		4.5%
Credit card and other			79		.8%
			$3,358		100.0%

The ~~Bank~~Corporation ~~decreased~~recognized ~~its~~a ~~allowance~~provision for loan losses toof $4275,~~778,~~000 atfor the year ended December 31, ~~2011,~~2013. ~~from~~The $4decrease in the provision for loan losses in 2013,~~955,000~~ atas ~~December 31~~compared to 2012, ~~2010.~~ ~~There~~was ~~were~~due ~~specific~~to ~~reserves~~a ofdecrease ~~$1,195,000~~in onthe ~~individual~~level ~~credits~~of atspecifically ~~December 31~~analyzed loans in 2013, ~~2011.~~as ~~Because~~compared ~~the~~to ~~loan~~2012, ~~loss~~and ~~allowance~~a isreduction ~~based~~in onnet ~~estimates~~loan charge-offs of $420,000. itThe isBank ~~monitored~~will oncontinue anto ~~ongoing~~monitor ~~basis~~the credit ~~and~~quality ~~adjusted~~of asits ~~necessary~~entire loan portfolio to ~~provide~~maintain the allowance for loan losses at an ~~adequate~~appropriate ~~allowance~~level.

12The following table allocates the allowance for loan losses for the periods indicated to each loan category. The allowance has been allocated to the categories of loans noted according to the amount deemed to be reasonably necessary to provide for the possibility of losses being incurred based on specific credit analyses:


	December 31, 2013				December 31, 2012
	Allowance		Percentage of loans to total loans		Allowance		Percentage of loans to total loans

	(Dollars in thousands)				(Dollars in thousands)

Commercial, financial, and agricultural		$ 456		9.3%		$ 621		11.0%
Real estate – mortgage		2,885		81.7%		3,315		82.2%
Real estate – construction		464		2.5%		184		1.1%
Consumer		164		5.8%		127		4.8%
Credit card and other		73		.7%		78		.9%

		$4,042		100.0%		$4,325		100.0%


	December 31, 2011				December 31, 2010
	Allowance		Percentage of loans to total loans		Allowance		Percentage of loans to total loans

	(Dollars in thousands)				(Dollars in thousands)

Commercial, financial, and agricultural		$ 615		9.6%		$ 542		7.4%
Real estate – mortgage		3,831		84.1%		3,906		86.7%
Real estate – construction		179		1.7%		347		1.4%
Consumer		84		3.7%		85		3.6%
Credit card and other		69		.9%		75		.9%

		$4,778		100.0%		$4,955		100.0%

INVESTMENT ACTIVITIES


	December 31, 2009
	Allowance		Percentage of loans to total loans

	(Dollars in thousands)

Commercial, financial, and agricultural		$ 526		8.4%
Real estate – mortgage		3,649		85.2%
Real estate – construction		72		1.8%
Consumer		115		3.8%
Credit card and other		71		.8%

		$4,433		100.0%

The Bank’s ~~investment~~decreased ~~policy~~its isallowance ~~designed~~for toloan ~~effectively~~losses ~~utilize excess funds and~~ to ~~provide~~$4,042,000 ~~for~~at ~~liquidity~~December 31, ~~needs~~2013, asfrom ~~dictated~~$4,325,000 byat ~~loan~~December 31, ~~demand and daily operations~~2012. There ~~The~~were ~~Bank’s~~specific ~~federal~~reserves ~~income~~of ~~tax~~$437,000 ~~position~~on ~~is also~~individual acredits ~~consideration~~at inDecember 31, ~~its investment decisions~~2013. ~~Investments~~Because inthe ~~tax-exempt~~loan ~~securities~~loss ~~with~~allowance ~~maturities~~is ofbased ~~less~~on ~~than~~estimates, 20it ~~years~~is ~~are~~monitored ~~often~~on ~~desirable~~an ~~when~~ongoing ~~the~~basis ~~net yield exceeds that of taxable securities~~ and ~~the~~adjusted ~~Bank’s~~as ~~effective~~necessary ~~tax~~to ~~rate~~provide ~~warrants such~~an ~~investments~~adequate allowance.

~~The~~12 ~~following sets forth the carrying amount of securities at December 31, 2011, 2010, and 2009:~~

	December 31,
		2011		2010		2009
		(Dollars in thousands)
Obligations of U.S. Government agencies andcorporations (1)			$137,244		$83,006		$66,729
Obligations of states and political subdivisions (2)			87,688		56,923		38,713
Other securities (2)			4,194		4,694		4,696
			$229,126		$144,623		$110,138

~~(1)~~INVESTMENT ~~There~~ACTIVITIES ~~were no holdings of U.S. Treasury securities at December 31, 2011, 2010, or 2009.~~

~~(2)~~The ~~There~~Bank’s ~~were~~investment nopolicy is designed to effectively utilize excess funds and to provide for liquidity needs as dictated by loan demand and daily operations. The Bank’s federal income tax position is also a consideration in its investment decisions. Investments in tax-exempt securities with maturities of ~~any~~less ~~single~~than ~~“issuer”~~20 ~~where~~years are often desirable when the ~~aggregate~~net ~~carrying~~yield ~~amount~~exceeds that of ~~such~~taxable securities ~~exceeded~~and the ~~ten~~Bank’s ~~percent~~effective oftax ~~stockholders’~~rate ~~equity~~warrants such investments.

The following sets forth the ~~maturities~~carrying amount of securities at December 31, ~~2011~~2013, 2012, and ~~the weighted average yields of such securities~~2011:

	Maturing
	December 31,
					After one				After five
	2013		2012		2011
	Within				but within				but within				After
	(Dollars in thousands)
	one year				five years				ten years				ten years
Obligations of U.S. Government agencies and corporations (1)		$153,465		$131,990		$137,244
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
Obligations of states and political subdivisions (2)		98,657		105,881		87,688
	(Dollars in thousands)
Other securities (2)		5,387		4,524		4,194
Obligations of U.S. Government agencies andcorporations		$ -		- %		$7,283		2.74%		$11,285		4.03%		$118,603		3.69%
		$257,509		$242,395		$229,126
Obligations of states and political subdivisions (1)		5,178		2.73%		10,610		3.47%		31,273		3.40%		40,700		3.77%
Total (2)		$5,178		2.73%		$17,893		3.17%		$42,558		3.57%		$159,303		3.71%

(1) ~~Weighted~~There ~~average~~were ~~yields~~no onholdings ~~non-taxable~~of ~~obligations~~U.S. ~~have~~Treasury ~~been~~securities ~~computed~~at onDecember a31, ~~fully~~2013, ~~tax-equivalent~~2012, ~~basis~~or ~~assuming a tax rate of 34%~~2011.

(2) ~~Excludes~~There ~~equity~~were ~~investments~~no securities of ~~$4,194,000~~any ~~which~~single ~~have~~“issuer” nowhere ~~stated~~the ~~maturity~~aggregate carrying amount of such securities exceeded ten percent of stockholders’ equity.

~~DEPOSITS~~The ~~AND~~following ~~BORROWINGS~~sets forth the maturities of securities at December 31, 2013 and the weighted average yields of such securities:

General. Deposits have traditionally been the Bank’s primary funding source for use in lending and other investment activities. In addition to deposits, the Bank derives funds from interest and principal repayments on loans and income from other earning assets. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows tend to fluctuate in response to economic conditions and interest rates. The Bank has established lines of credit with its major correspondent banks to purchase federal funds to meet liquidity needs. At December 31, 2011, the Bank did not have any federal funds purchased, out of the $17,000,000 available under such lines of credit.


	Maturing
	Within one year				After one but within five years				After five but within ten years				After ten years
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield

	(Dollars in thousands)

Obligations of U.S. Government agencies and corporations		$23,321		.63%		$114,046		2.21%		$15,397		2.70%		$ 701		5.68%
Obligations of states and political subdivisions (1)		5,066		3.37%		22,631		3.26%		58,319		3.18%		12,641		2.72%

Total (2)		$28,387		1.12%		$136,677		2.20%		$73,716		3.07%		$13,342		2.86%

~~The~~(1) ~~Bank~~Weighted ~~also uses~~average ~~retail~~yields ~~repurchase~~on ~~agreements~~non-taxable asobligations ahave ~~source~~been ofcomputed ~~funds.~~on ~~These~~a ~~agreements~~fully ~~essentially~~tax-equivalent ~~represent~~basis ~~borrowings~~assuming bya ~~the~~tax ~~Bank~~rate ~~from customers with maturities~~ of ~~three months or less~~34%. ~~Certain securities are pledged as collateral for these agreements. At December 31, 2011, the Bank had $40,861,000 in retail repurchase agreements.~~

13(2) Excludes equity investments of $5,387,000 which have no stated maturity.

~~Table~~DEPOSITS ofAND ~~Contents~~BORROWINGS

~~Neither~~General. ~~the~~Deposits ~~Corporation~~have ~~nor~~traditionally been the Bank’s ~~had~~primary ~~any~~funding ~~capital~~source ~~lease~~for ~~obligations~~use asin oflending ~~December 31,~~and ~~2011~~other investment activities. ~~The~~In ~~Bank~~addition ~~had~~to ~~future~~deposits, ~~operating~~the ~~lease~~Bank ~~obligations~~derives ~~totaling~~funds ~~$171,000~~from atinterest ~~December 31,~~and ~~2011,~~principal ~~related~~repayments toon ~~the~~loans ~~following~~and ~~lease~~income ~~arrangements:~~from ~~the~~other ~~Port~~earning ~~Clinton~~assets. ~~banking~~Loan ~~center~~repayments ~~located~~are in a ~~retail~~relatively ~~supermarket~~stable insource ~~the~~of ~~Knollcrest~~funds, ~~Shopping~~while ~~Center,~~deposit inflows and anoutflows ~~ATM~~tend ~~site~~to ~~north~~fluctuate ofin response to ~~Fremont.~~economic ~~Additionally,~~conditions ~~the~~and interest rates. The Bank ~~had~~has ~~various~~established ~~future~~lines ~~operating~~of ~~lease~~credit ~~obligations~~with ~~aggregating~~its ~~$116,000~~major atcorrespondent banks to purchase federal funds to meet liquidity needs. At December 31, ~~2011~~2013, ~~for~~the ~~photocopying~~Bank ~~and~~did ~~mail~~not ~~processing~~have ~~equipment~~any federal funds purchased, out of the $17,000,000 available under such lines of credit.

~~Deposits.~~The ~~Deposits are attracted principally from within the~~ Bank’s ~~designated~~also ~~market~~uses ~~area~~retail byrepurchase ~~offering~~agreements as a ~~variety~~source of ~~deposit~~funds. ~~instruments,~~These ~~including~~agreements ~~regular savings accounts, negotiable order of~~essentially ~~withdrawal~~represent ~~(“NOW”)~~borrowings ~~accounts,~~by ~~money~~the ~~market~~Bank ~~deposit~~from ~~accounts,~~customers ~~term~~with ~~certificate~~maturities ~~accounts,~~of ~~and~~three ~~individual~~months ~~retirement~~or ~~accounts (“IRAs”)~~less. ~~Interest~~Certain ~~rates~~securities ~~paid,~~are ~~maturity~~pledged ~~terms,~~as ~~service~~collateral ~~fees, and withdrawal penalties~~ for ~~the~~these ~~various~~agreements. ~~types of~~At ~~accounts~~December 31, ~~are~~2013, ~~established periodically by~~ the Bank’s ~~management~~had ~~based on the Bank’s liquidity requirements~~$24, ~~growth goals~~577,000 ~~and~~in ~~market~~retail ~~trends.~~repurchase ~~The Bank does not use brokers to attract deposits~~agreements. ~~The amount of deposits from outside the Bank’s market area is not significant.~~

~~The~~13 ~~average daily amount of deposits (all in domestic offices) and average rates paid on such deposits for 2011, 2010, and 2009 as set forth in the following table:~~

	2011				2010				2009
	Average		Average		Average		Average		Average		Average
	balance		rate paid		balance		rate paid		balance		rate paid
	(Dollars in thousands)
Non-interest bearing demand deposits		$68,977		-		$57,537		-		$52,480		-
Interest-bearing demand deposits		66,335		.07%		60,180		.07%		52,625		.08%
Savings, including Money Market, deposits		133,603		.28%		113,573		.51%		98,197		.50%
Time deposits		131,081		1.67%		143,955		2.16%		154,890		2.78%
Total		$399,996				$375,245				$358,192

~~Maturities~~Neither ofthe ~~time~~Corporation ~~deposits~~nor the Bank had any capital lease obligations as of ~~$100~~December 31,~~000~~ or2013. ~~more~~The ~~outstanding~~Bank had future operating lease obligations totaling $85,000 at December 31, ~~2011~~2013, ~~were~~related asto ~~follows~~the ~~(dollars~~following inlease ~~thousands)~~arrangements: the Port Clinton banking center located in a retail supermarket in the Knollcrest Shopping Center, an ATM site north of Fremont, a loan production office in Perrysburg Ohio, and an ATM and Night Drop box in two separate locations on the Put In Bay Islands. Additionally, the Bank had various future operating lease obligations aggregating $47,000 at December 31, 2013, for photocopying and mail processing equipment.

3 months or less			$12,694
Over 3 through 6 months			9,408
Over 6 through 12 months			11,085
Over 12 months			20,600
Total			$53,787

Deposits. Deposits are attracted principally from within the Bank’s designated market area by offering a variety of deposit instruments, including regular savings accounts, negotiable order of withdrawal (“NOW”) accounts, money market deposit accounts, term certificate accounts, and individual retirement accounts (“IRAs”). Interest rates paid, maturity terms, service fees, and withdrawal penalties for the various types of accounts are established periodically by the Bank’s management based on the Bank’s liquidity requirements, growth goals, and market trends. The Bank does not use brokers to attract deposits. The amount of deposits from outside the Bank’s market area is not significant.

~~Borrowings.~~The Inaverage ~~addition to repurchase agreements, the Bank has agreements with correspondent banks to purchase federal funds as needed to meet~~ daily ~~liquidity~~amount ~~needs. As a member~~ of deposits ~~the~~(all ~~Federal~~in ~~Home~~domestic ~~Loan Bank of Cincinnati (“FHLB”~~offices) ~~since~~and ~~1993,~~average ~~the~~rates ~~Bank~~paid ison ~~authorized~~such todeposits ~~obtain~~for ~~advances from the FHLB provided certain credit standards are met. The Bank had $12~~2013,~~500,000~~ ~~in FHLB advances outstanding at December 31~~2012, ~~2011,~~ and ~~had~~2011 anas ~~additional~~set ~~borrowing~~forth ~~capacity~~in ofthe ~~$78,357,000.~~following table:

The following table sets forth the maximum month-end balance for the Bank’s outstanding short-term borrowings (i.e., federal funds purchased and repurchase agreements), along with the average aggregate balances and weighted average interest rates, for 2011, 2010, and 2009:


	2013					2012					2011
	Average balance		Average rate paid			Average balance		Average rate paid			Average balance		Average rate paid

	(Dollars in thousands)

Non-interest bearing demand deposits		$102,355		-			$ 87,396		-			$ 68,977		-
Interest-bearing demand deposits		95,840		.07	%		82,390		.08	%		66,335		.07	%
Savings, including Money Market, deposits		183,372		.13	%		168,352		.19	%		133,603		.28	%
Time deposits		155,904		.84	%		178,121		1.09	%		131,081		1.67	%

Total		$537,471					$516,259					$399,996

	2011		2010		2009
	(Dollars in thousands)
Balance at year-end		$40,861		$20,989		$16,375
Maximum balance at any month-end during the period		40,861		25,906		23,404
Average balance		23,432		20,002		13,482
Weighted average interest rate		.19%		.24%		.39%

Maturities of time deposits of $100,000 or more outstanding at December 31, 2013 were as follows (dollars in thousands):



3 months or less					$ 8,991
Over 3 through 6 months					6,385
Over 6 through 12 months					7,530
Over 12 months					36,154

Total					$59,060

~~Table~~Borrowings. In addition to repurchase agreements, the Bank has agreements with correspondent banks to purchase federal funds as needed to meet daily liquidity needs. As a member of ~~Contents~~the Federal Home Loan Bank of Cincinnati (“FHLB”) since 1993, the Bank is authorized to obtain advances from the FHLB provided certain credit standards are met. The Bank had $10,276,000 in FHLB advances outstanding at December 31, 2013 and had an additional borrowing capacity of $43,033,000.

The following table sets forth the maximum month-end balance for the Bank’s outstanding ~~long~~short-term borrowings (i.e., ~~FHLB~~ ~~advances~~federal ~~and~~funds apurchased ~~note~~and ~~payable~~repurchase ~~to a correspondent bank~~agreements), along with the average aggregate ~~balance~~balances and weighted average interest rates, for ~~2011~~2013, ~~2010~~2012, and ~~2009~~2011:

	2011		2010		2009
	2013		2012		2011
	(Dollars in thousands)
Balance at year-end	$	18$24,~~500~~577	$	25$32,~~500~~344	$	35$40,~~500~~861
Maximum balance at any month-end during the period		3024,~~500~~577		3532,~~500~~344		3940,~~500~~861
Average balance		2017,~~075~~192		3423,~~815~~552		3723,~~089~~432
Weighted average interest rate		3.4409%		3.7612%		3.7219%

~~ASSET/LIABILITY~~14 ~~MANAGEMENT~~

The ~~Bank monitors~~following ~~its~~sets ~~interest~~forth ~~rate risk through a sensitivity analysis, which strives to measure potential changes in future earnings and~~ the ~~fair~~maximum ~~values~~month-end ofbalance ~~its~~for ~~financial instruments that could result from hypothetical changes in interest rates. The first step in this analysis is to estimate~~ the ~~expected cash flows from the~~ Bank’s ~~financial~~outstanding ~~instruments~~long-term ~~using~~borrowings ~~the interest rates in effect at December 31, 2011~~(i. ~~To arrive at fair value estimates~~e., ~~the cash flows from the Bank’s financial~~FHLB ~~instruments~~advances ~~are discounted to their approximated present values. Hypothetical changes in interest rates are applied to those financial instruments,~~ and ~~the~~a ~~cash~~note ~~flows~~payable ~~and fair value estimates are then simulated. When calculating the net interest income estimations, hypothetical rates are applied~~ to ~~the~~a ~~financial~~correspondent ~~instruments based upon the assumed cash flows. The Bank applies interest rate “shocks” to its financial instruments of 100, 200, 300, and 400 basis points (1%, 2%, 3%, and 4%~~bank) ~~up and down for its net interest income~~, ~~and~~along ~~200~~with ~~basis points (2%) up and down for~~ the ~~value~~average ofaggregate ~~its~~balance ~~equity.~~and ~~However,~~weighted ~~because~~average interest rates ~~were below 1.0% at December 31~~, ~~2011,~~for ~~the sensitivity analysis could not be performed with respect to a negative 100~~2013, ~~200~~2012, ~~300,~~ and ~~400~~2011: ~~basis point change in market rates.~~

The following table presents the potential sensitivity in the Bank’s annual net interest income to 100, 200, 300, and 400 basis-point changes in market interest rates and the potential sensitivity in the present value of the Bank’s equity if a sudden and sustained 200 basis-point change in market interest rates occurred (dollars in thousands):


	2013		2012		2011

	(Dollars in thousands)

Balance at year-end		$14,346		$15,199		$18,500

Maximum balance at any month-end during the period		14,922		18,500		30,500

Average balance		14,826		18,015		20,075

Weighted average interest rate		3.86%		4.07%		3.44%

	December 31, 2011
	Change in Dollars ($)		Change in Percent (%)
Annual Net Interest Income Impact
For a Change of +100 Basis Points		(170)		(.4)
For a Change of - 100 Basis Points		N/A		N/A
For a Change of +200 Basis Points		1,220		3.0
For a Change of - 200 Basis Points		N/A		N/A
For a Change of +300 Basis Points		2,734		6.8
For a Change of - 300 Basis Points		N/A		N/A
For a Change of +400 Basis Points		4,151		10.4
For a Change of - 400 Basis Points		N/A		N/A
Impact on the Net Present Value of Equity
For a Change of +200 Basis Points		(10,314)		(14.1)
For a Change of - 200 Basis Points		N/A		N/A

ASSET/LIABILITY MANAGEMENT

The ~~preceding~~Bank’s ~~analysis~~earnings ~~encompasses~~are ~~the~~highly ~~use~~dependent ofupon aits ~~variety~~net ofinterest ~~assumptions~~income, ~~including~~which is the ~~relative~~difference ~~levels~~between ofthe ~~market~~interest income derived from interest-earning ~~rates~~assets, ~~loan~~such ~~prepayments,~~as loans and ~~the~~securities, ~~possible~~and ~~reaction~~interest ofexpense ~~depositors~~paid toon ~~changes in~~ interest-bearing ~~rates.~~liabilities, ~~The~~consisting ~~analysis~~of ~~simulates~~deposits ~~possible~~and ~~outcomes~~borrowings. ~~and~~Interest ~~should~~rate ~~not~~risk beis ~~relied~~one ~~upon~~of asthe ~~being~~Bank’s ~~indicative~~most ofsignificant ~~actual~~financial ~~results~~exposures. ~~Additionally~~This risk, ~~the~~which ~~analysis~~is ~~does~~common ~~not~~to ~~necessarily~~the ~~contemplate~~financial ~~all~~institution ofsector, ~~the~~is ~~actions~~an ~~that~~integral part of the Bank’s ~~could~~operations ~~undertake~~and inimpacts ~~response~~the torate-pricing ~~changes~~strategies infor ~~market~~essentially ~~interest~~all ~~rates.~~of ~~For example,~~ the Bank’s ~~could~~loan ~~enter~~and ~~into~~deposit ~~derivatives or swaps, which are not included in the model~~products.

15The Bank monitors its interest rate risk through a sensitivity analysis, which strives to measure potential changes in future earnings and the fair values of its financial instruments that could result from hypothetical changes in interest rates. The first step in this analysis is to estimate the expected cash flows from the Bank’s financial instruments using the interest rates in effect at December 31, 2013. To arrive at fair value estimates, the cash flows from the Bank’s financial instruments are discounted to their approximated present values. Hypothetical changes in interest rates are applied to those financial instruments, and the cash flows and fair value estimates are then simulated. When calculating the net interest income estimations, hypothetical rates are applied to the financial instruments based upon the assumed cash flows. The Bank applies interest rate “shocks” to its financial instruments of 100, 200, 300, and 400 basis points (1%, 2%, 3%, and 4%) up and down for its net interest income, and 200 basis points (2%) up and down for the value of its equity. However, because interest rates were below 1.0% at December 31, 2013, the sensitivity analysis could not be performed with respect to a negative 200, 300, and 400 basis point changes in market rates.

~~Table~~The following table presents the potential sensitivity in the Bank’s annual net interest income to 100, 200, 300, and 400 basis-point changes in market interest rates and the potential sensitivity in the present value of ~~Contents~~the Bank’s equity if a sudden and sustained 200 basis-point change in market interest rates occurred (dollars in thousands):

The following table sets forth, for the years ended December 31, 2011, 2010, and 2009, the distribution of assets, liabilities, and stockholders’ equity, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities:


	December 31, 2013
	Change in Dollars ($)	Change in Percent (%)

Annual Net Interest Income Impact
For a Change of +100 Basis Points	(904)	(1.7)
For a Change of - 100 Basis Points	740	1.4
For a Change of +200 Basis Points	(555)	(1.1)
For a Change of - 200 Basis Points	N/A	N/A
For a Change of +300 Basis Points	(939)	(1.8)
For a Change of - 300 Basis Points	N/A	N/A
For a Change of +400 Basis Points	(1,398)	(2.7)
For a Change of - 400 Basis Points	N/A	N/A

Impact on the Net Present Value of Equity
For a Change of +200 Basis Points	6,388	3.3
For a Change of - 200 Basis Points	N/A	N/A

	2011						2010						2009
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans (1) (2)	$	286,576	$	16,632		5.80%	$	306,923	$	18,157		5.92%	$	334,648	$	20,305		6.07%
Taxable securities		98,876		2,724		2.75%		76,954		2,855		3.71%		54,293		2,531		4.66%
Non-taxable securities (3)		64,809		2,254		3.48%		46,831		1,703		3.64%		27,844		1,064		3.82%
Interest-earning deposits		7,327		12		.16%		9,912		24		.24%		10,072		26		.26%
Total interest-earning assets (4)		457,588		21,622		4.73%		440,620		22,739		5.16%		426,857		23,926		5.61%
Non-interest-earning assets:
Cash and due from banks		14,638						16,579						13,338
Unrealized gains on securities		3,389						2,600						1,418
Bank premises and equipment, net		6,568						6,801						7,157
Other assets		28,964						28,456						23,219
Less allowance for loan losses		(4,729)						(4,858)						(3,819)
Total	$	506,418	$	21,622			$	490,198	$	22,739			$	468,170	$	23,926
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings, NOW and Money Market deposits	$	199,938	$	425		.21%	$	173,754	$	621		.36%	$	150,822	$	529		.35%
Time Deposits		131,081		2,195		1.67%		143,955		3,107		2.16%		154,890		4,313		2.78%
Federal funds purchased and securitiessold under repurchase agreements		23,432		44		.19%		20,002		47		.23%		13,482		53		.39%
Borrowed funds		20,075		691		3.44%		34,815		1,310		3.76%		37,089		1,380		3.72%
Total interest-bearing liabilities		374,526		3,355		.90%		372,526		5,085		1.37%		356,283		6,275		1.76%
Non-interest-bearing liabilities:
Demand deposits		68,977						57,537						52,480
Other liabilities		3,294						2,886						3,512
Total non-interest-bearing liabilities		72,271						60,423						55,992
Stockholders’ equity:
Stockholders’ equity		56,232						54,649						54,477
Unrealized gains on securities		3,389						2,600						1,418
Total stockholders’ equity		59,621						57,249						55,895
Total	$	506,418	$	3,355			$	490,198	$	5,085			$	468,170	$	6,275
Net interest income			$	18,267					$	17,654					$	17,651
Net yield on interest-earning assets						3.99%						4.01%						4.14%

The preceding analysis encompasses the use of a variety of assumptions, including the relative levels of market interest rates, loan prepayments, and the possible reaction of depositors to changes in interest rates. The analysis simulates possible outcomes and should not be relied upon as being indicative of actual results. Additionally, the analysis does not necessarily contemplate all of the actions that the Bank could undertake in response to changes in market interest rates. For example, the Bank could enter into derivatives or swaps, which are not included in the model.

~~(1)~~15 ~~Included in loan interest income are loan fees of $447,000 in 2011, $391,000 in 2010, and $498,000 in 2009.~~

~~(3)~~The ~~Interest~~following ~~and~~table ~~yield~~sets forth, for ~~non-taxable~~the ~~securities~~years ~~have~~ended ~~not~~December 31, ~~been~~2013, ~~tax-effected~~2012, ~~for~~and 2011, the ~~34%~~distribution ~~exception~~of ~~for~~assets, liabilities, ~~federal~~and ~~income~~stockholders’ ~~taxes.~~equity, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities:

(4) Excludes unrealized gains (losses) on taxable and non-taxable securities.


	2013						2012						2011
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate

	(Dollars in thousands)
Assets

Interest-earning assets:
Loans (1) (2)		$331,291		$16,713		5.04%		$306,343		$16,797		5.48%		$286,576		$16,632		5.80%
Taxable securities		143,863		1,578		1.10%		156,354		1,231		.79%		98,876		2,724		2.75%
Non-taxable securities (3)		98,039		3,137		3.20%		93,521		3,006		3.21%		64,809		2,254		3.48%
Interest-earning deposits		9,777		28		.39%		8,188		25		.31%		7,327		12		.16%

Total interest-earning assets (4)		582,970		21,456		3.68%		564,406		21,059		3.73%		457,588		21,622		4.73%


Non-interest-earning assets:
Cash and due from banks		15,656						17,524						14,638
Unrealized gains on securities		4,759						8,461						3,389
Bank premises and equipment, net		7,493						7,824						6,568
Other assets		33,632						33,986						28,964
Less allowance for loan losses		(4,167)						(4,010)						(4,729)

Total		$640,343		$21,456				$628,191		$21,059				$506,418		$21,622


Liabilities and Stockholders’ Equity

Interest-bearing liabilities:
Savings, NOW and Money Market deposits		$279,212		$ 302		.11%		$250,742		$ 376		.15%		$199,938		$ 425		.21%
Time Deposits		155,904		1,303		.84%		178,121		1,947		1.09%		131,081		2,195		1.67%
Federal funds purchased and securities sold under repurchase agreements		17,193		16		.09%		23,552		29		.12%		23,432		44		.19%
Borrowed funds		14,825		573		3.86%		18,015		734		4.07%		20,075		691		3.44%

Total interest-bearing liabilities		467,134		2,194		.47%		470,430		3,086		.90%		374,526		3,355		.90%

Non-interest-bearing liabilities:
Demand deposits		102,355						87,396						68,977
Other liabilities		3,450						4,935						3,294

Total non-interest-bearing liabilities		105,805						92,331						72,271

Stockholders’ equity:
Stockholders’ equity		62,645						56,969						56,232
Unrealized gains on securities		4,759						8,461						3,389

Total stockholders’ equity		67,404						65,430						59,621

Total		$640,343		$2,194				$628,191		$3,086				$506,418		$3,355

Net interest income				$19,262						$17,973						$18,267

Net yield on interest-earning assets						3.30%						3.18%						3.99%

16(1) Included in loan interest income are loan fees of $676 in 2013, $717 in 2012, and $447 in 2011 (in thousands).

~~Table~~(2) ofNon-accrual ~~Contents~~loans are included in loan totals and do not have a material impact on the analysis presented.

~~The~~(3) ~~following~~Interest ~~table~~and ~~sets~~yield ~~forth,~~ for ~~the~~non-taxable ~~periods~~securities ~~indicated,~~have anot ~~summary~~been oftax-effected for the ~~changes~~34% inexception ~~interest~~for federal income ~~and interest expense resulting from changes in volume and changes in rate:~~ taxes.

	2011 compared to 2010Increase (decrease)due to volume/rate (1)								2010 compared to 2009Increase (decrease)due to volume/rate (1)
	Volume			Rate		Net			Volume			Rate		Net
	(Dollars in thousands)
Interest income:
Loans receivable		$	(1,187)		$(338)		$	(1,525)		$	(1,650)		$(498)		$	(2,148)
Taxable securities			703		(834)			(131)			912		(588)			324
Non-taxable securities			628		(77)			551			693		(54)			639
Interest-earning deposits			(5)		(7)			(12)			0		(2)			(2)
Total interest-earning assets			139		(1,256)			(1,117)			(45)		(1,142)			(1,187)
Interest expense:
Savings, NOW, and Money Market deposits			82		(278)			(196)			82		10			92
Time deposits			(259)		(653)			(912)			(288)		(918)			(1,206)
Federal funds purchased and securities soldunder repurchase agreements			7		(10)			(3)			20		(26)			(6)
Borrowed funds			(516)		(103)			(619)			(85)		15			(70)
Total interest-bearing liabilities			(686)		(1,044)			(1,730)			(271)		(919)			(1,190)
Net interest income			$825		$(212)			$613			$226		$(223)			$3

(4)	Excludes unrealized gains on taxable and non-taxable securities.

~~(1)~~16 The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the absolute dollar change due to volume and the change due to rate.

	Year ended December 31,
	2011		2010		2009
Percentage of net income to:
Average total assets		.94%		.82%		.66%
Average stockholders’ equity		7.97%		7.03%		5.56%
Percentage of cash dividends declared per commonshare to net income per common share		45.06%		53.70%		70.83%
Percentage of average stockholders’ equity to averagetotal assets		11.77%		11.68%		11.94%

The following table sets forth, for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in volume and changes in rate:


	2013 compared to 2012 Increase (decrease) due to volume/rate (1)						2012 compared to 2011 Increase (decrease) due to volume/rate (1)
	Volume		Rate		Net		Volume		Rate		Net

	(Dollars in thousands)

Interest income:
Loans receivable		$1,313		$(1,397)		$(84)		$1,112		$(947)		$165
Taxable securities		(106)		453		347		1,076		(2,569)		(1,493)
Non-taxable securities		145		(14)		131		934		(182)		752
Interest bearing deposits		4		(1)		3		1		12		13

Total interest-earning assets		1,356		(959)		397		3,123		(3,686)		(563)


Interest expense:
Savings, NOW, and Money Market deposits		40		(114)		(74)		93		(142)		(49)
Time deposits		(223)		(421)		(644)		648		(896)		(248)
Federal funds purchased and securities sold under repurchase agreements		(7)		(6)		(13)		0		(15)		(15)
Borrowed funds		(126)		(35)		(161)		(76)		119		43

Total interest-bearing liabilities		(316)		(576)		(892)		665		(934)		(269)

Net interest income		$1,672		$(383)		$1,289		$2,458		$(2,752)		$(294)

~~Table~~(1) ofThe ~~Contents~~change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the absolute dollar change due to volume and the change due to rate.

~~COMPETITION~~The ratio of net income to daily average total assets and average stockholders’ equity, and certain other ratios, for the periods noted are as follows:

The Bank faces intense competition in its market areas. The Bank competes for commercial and individual deposits and/or loans with other commercial banks in Huron, Ottawa, Sandusky, Seneca, and Wood counties in Northwestern Ohio, as well as with savings and loan associations in the trade area, credit unions, brokerage firms, mutual funds, and loan production offices and other financial units of non-local bank holding companies. Many competitors of the Bank have substantially greater resources and lending limits and can offer services that the Bank does not or cannot provide. The primary factors in competing for loans are interest rates charged and overall services provided to borrowers, while the primary factors in competing for deposits are interest rates paid on deposits, account liquidity, convenience, hours of facilities, and quality of service provided to depositors. The Bank focuses on personalized service, convenience of facilities, pricing of products, community stature, and its local ownership and control in meeting its competition.


	Year ended December 31,
	2013			2012			2011

Percentage of net income to:
Average total assets		.69	%		.77	%		.94	%
Average stockholders’ equity		6.60	%		7.40	%		7.97	%

Percentage of cash dividends declared per common share to net income per common share -basic		49.61	%		44.29	%		45.07	%

Percentage of average stockholders’ equity to average total assets		10.53	%		10.42	%		11.77	%

~~SUBSIDIARY~~17 ~~ACTIVITIES~~

~~EMPLOYEES~~COMPETITION

AsThe Bank offaces ~~December 31~~intense competition in its market areas. The Bank competes for commercial and individual deposits and/or loans with other commercial banks in Huron, ~~2011~~Lucas, ~~the~~Ottawa, ~~Corporation~~Sandusky, Seneca, and ~~its~~Wood ~~subsidiaries~~counties ~~employed~~in ~~153~~Northwestern ~~full-time~~Ohio, ~~employees~~as well as with savings and 8loan ~~part~~associations in the trade area, credit unions, brokerage firms, mutual funds, and loan production offices and other financial units of non-~~time~~local ~~employees~~bank holding companies. ~~The~~Many ~~Corporation~~competitors ~~and~~of ~~its~~the ~~subsidiaries~~Bank have substantially greater ~~believe~~resources and lending limits and can offer services that ~~relations~~the ~~with~~Bank ~~its~~does ~~employees~~not ~~are~~or ~~excellent~~cannot provide. The ~~Corporation~~primary factors in competing for loans are interest rates charged and ~~its~~overall ~~subsidiaries~~services ~~provide~~provided ato ~~variety~~borrowers, while the primary factors in competing for deposits are interest rates paid on deposits, account liquidity, convenience, hours of ~~benefits~~facilities, and quality of service provided to ~~full-time~~depositors. ~~employees~~The Bank focuses on personalized service, ~~including~~convenience ~~health~~of facilities, ~~disability~~pricing of products, community stature, and ~~life~~its ~~insurance~~local ~~benefits~~ownership and control in meeting its competition.

~~REGULATION~~SUBSIDIARY ~~AND~~ACTIVITIES ~~SUPERVISION~~

The Corporation is’s ~~registered~~only assubsidiary ais ~~bank holding company under~~ the ~~BHCA~~Bank. AsThe aBank’s ~~bank~~only ~~holding~~subsidiary ~~company, the Corporation~~ is ~~required~~Croghan toInsurance, ~~file~~which ~~periodic~~engages ~~reports~~in ~~with,~~activities ~~and~~related ~~is subject~~ to ~~regulation, supervision and examination by,~~ the ~~FRB.~~sale ~~Such~~of ~~examination by the FRB~~insurance ~~determines~~and, ~~whether~~as ~~the~~a ~~Corporation~~licensed isinsurance ~~operating~~agency, inreceives ~~accordance~~commissions ~~with~~from ~~various~~insurance ~~regulatory requirements and in a safe and sound manner~~sales.

~~The~~EMPLOYEES FRB has extensive enforcement authority over bank holding companies, including the ability to assess civil money penalties, issue cease and desist orders, and require that a bank holding company divest subsidiaries. In general, the FRB may initiate enforcement actions for activities that are deemed by the FRB to constitute a serious risk to the financial safety, soundness, or stability of a bank holding company, that are inconsistent with sound banking principles, or that are in violation of law. Further, bank holding companies and their subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit or lease or sale of any property or the furnishing of services.

~~Subject~~As ~~to certain exceptions, the BHCA requires a bank holding company to obtain the prior approval~~ of ~~the FRB before (a)~~December ~~acquiring all or substantially all of the assets of any bank or bank holding company~~31, ~~(b) merging or consolidating with any other bank holding company~~2013, orthe ~~(c) acquiring~~Corporation ~~direct~~and orits ~~indirect~~subsidiaries ~~ownership~~employed or174 ~~control~~full-time ofemployees ~~any~~and ~~voting~~35 ~~shares~~part-time ofemployees. ~~any~~The ~~other~~Corporation ~~bank,~~and ifits ~~after such~~subsidiaries ~~acquisition,~~believe ~~the~~that ~~bank~~relations ~~holding~~with ~~company~~its ~~would~~employees ~~own~~are orexcellent. ~~control~~The ~~more~~Corporation ~~than~~and 5%its ofsubsidiaries ~~the~~provide ~~voting~~a ~~shares~~variety of ~~such~~benefits ~~bank.~~to Infull-time ~~making such determinations~~employees, ~~the~~including ~~FRB considers the effect of the acquisition on competition~~health, ~~the financial and managerial resources of the holding company~~disability, and ~~the~~life ~~convenience~~insurance ~~and needs of the affected communities~~benefits.

~~The~~REGULATION ~~BHCA~~AND ~~also~~SUPERVISION prohibits a bank holding company from acquiring more than 5% of the voting shares of any company that is not a bank and from engaging in any activities other than banking or managing or controlling banks or furnishing services to its subsidiaries. The primary exception to this prohibition allows a bank holding company to own shares in any company the activities of which the FRB has determined, by order or regulation, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.

The ~~Gramm-Leach-Bliley~~Corporation ~~Act~~is ofregistered ~~1999~~as a ~~(the “GLB Act”) permits qualifying~~ bank holding ~~companies~~company tounder ~~become~~the ~~financial holding companies and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature~~BHCA. AAs ~~bank holding company may become~~ a ~~financial~~bank holding company, ifthe ~~each~~Corporation ~~of its subsidiary banks~~ is ~~well~~required ~~capitalized~~to ~~under~~file ~~the~~periodic ~~prompt~~reports ~~corrective action~~with, ~~provisions~~and ofis ~~the~~subject ~~Federal~~to ~~Deposit Insurance Corporation Act of 1991~~regulation, issupervision ~~well managed,~~ and ~~has~~examination atby, ~~least a satisfactory rating under~~ the ~~Community~~FRB. ~~Reinvestment~~Such ~~Act,~~examination by ~~filing a declaration that~~ the ~~bank~~FRB ~~holding~~determines ~~company~~whether ~~wishes to become a~~the ~~financial holding company. The~~ Corporation ~~has~~is ~~not~~operating ~~elected~~in toaccordance ~~become~~with avarious ~~financial~~regulatory ~~holding~~requirements ~~company at this time, but intends to periodically re-evaluate the advantages~~ and ~~disadvantages~~in ~~of becoming~~ a ~~financial~~safe ~~holding~~and ~~company~~sound manner.

18The FRB has extensive enforcement authority over bank holding companies, including the ability to assess civil money penalties, issue cease and desist orders, and require that a bank holding company divest subsidiaries. In general, the FRB may initiate enforcement actions for activities that are deemed by the FRB to constitute a serious risk to the financial safety, soundness, or stability of a bank holding company, that are inconsistent with sound banking principles, or that are in violation of law. Further, bank holding companies and their subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit or lease or sale of any property or the furnishing of services.

~~Table~~Subject to certain exceptions, the BHCA requires a bank holding company to obtain the prior approval of ~~Contents~~the FRB before (a) acquiring all or substantially all of the assets of any bank or bank holding company, (b) merging or consolidating with any other bank holding company, or (c) acquiring direct or indirect ownership or control of any voting shares of any other bank, if after such acquisition, the bank holding company would own or control more than 5% of the voting shares of such bank. In making such determinations, the FRB considers the effect of the acquisition on competition, the financial and managerial resources of the holding company, and the convenience and needs of the affected communities.

AsThe anBHCA ~~Ohio-chartered~~also ~~bank,~~prohibits ~~the~~a ~~Bank~~bank isholding ~~further~~company ~~subject~~from toacquiring ~~regulation,~~more ~~supervision,~~than ~~and~~5% ~~examination~~of by the ~~Division. Chapter~~voting ~~1109~~ shares of ~~the~~any ~~Ohio~~company ~~Revised~~that ~~Code~~is ~~imposes~~not ~~limitations~~a onbank ~~the~~and ~~amount~~from ofengaging ~~certain~~in ~~types~~any ofactivities ~~loans~~other ~~and~~than ~~other~~banking ~~investments~~or ~~that~~managing anor ~~Ohio-chartered~~controlling ~~bank~~banks isor ~~permitted~~furnishing services to ~~make~~its subsidiaries. InThe ~~addition,~~primary ~~the~~exception ~~aggregate~~to ~~amount~~this ~~that~~prohibition anallows ~~Ohio-chartered~~a bank ~~can~~holding ~~lend~~company to ~~any~~own ~~one~~shares ~~borrower~~in isany ~~limited~~company bythe ~~Ohio~~activities ~~law to an amount equal to 15%~~ of which the ~~institution’s~~FRB ~~unimpaired~~has ~~capital.~~determined, Anby ~~Ohio-chartered~~order ~~bank~~or ~~may~~regulation, ~~lend~~ to ~~one~~be ~~borrower~~so anclosely ~~additional~~related ~~amount not~~ to ~~exceed~~banking ~~10%~~or ofmanaging ~~the~~or ~~institution’s~~controlling ~~unimpaired~~banks ~~capital,~~as ifto ~~the additional~~be ~~amount~~a isproper ~~fully~~incident ~~secured by certain forms of “readily marketable collateral~~thereto.” ~~Real estate is not considered “readily marketable collateral.”~~

The ~~Division~~Gramm-Leach-Bliley ~~conducts~~Act ~~periodic examinations~~ of 1999 (the ~~Bank,~~“GLB ~~often~~Act”) ~~times~~permits onqualifying abank ~~joint~~holding ~~basis~~companies to become financial holding companies and thereby affiliate with securities ~~the~~firms ~~FRB~~and ~~examiners~~insurance companies and engage in other activities that are financial in nature. ~~The~~A ~~Division~~bank holding company may ~~initiate~~become ~~certain~~a ~~supervisory~~financial ~~measures~~holding orcompany ~~formal~~if ~~enforcement~~each ~~actions~~of ~~against~~its ~~an Ohio-chartered~~subsidiary ~~bank.~~banks ~~Ultimately,~~is ifwell capitalized under the ~~grounds~~prompt ~~provided~~corrective action byprovisions ~~law~~of ~~exist~~the Federal Deposit Insurance Corporation Act of 1991, is well managed, and has at least a satisfactory rating under the ~~Division~~Community ~~may~~Reinvestment ~~place~~Act, anby ~~Ohio-chartered~~filing a declaration that the bank inholding ~~conservatorship~~company orwishes ~~receivership~~to become a financial holding company. ~~Any~~The ~~mergers,~~Corporation ~~acquisitions,~~has ornot ~~changes~~elected ofto ~~control~~become ~~involving~~a anfinancial ~~Ohio-chartered~~holding ~~bank~~company ~~must~~at ~~be approved~~this bytime, but intends to periodically re-evaluate the ~~Division~~advantages and disadvantages of becoming a financial holding company.

In18 ~~addition to Ohio laws relating to banks, the Bank is subject to the Ohio general corporation law to the extent such law does not conflict with the laws specifically governing banks.~~

~~The~~As ~~Bank~~an isOhio-chartered ~~also~~bank, ~~a member of~~ the ~~Federal~~Bank ~~Reserve System and~~ is further subject to regulation, supervision, and examination by the ~~FRB~~Division. ~~The FRB~~Chapter ~~issues~~1109 ~~regulations~~of ~~governing~~the Ohio Revised Code imposes limitations on the ~~operations~~amount of ~~state~~certain ~~member~~types ~~banks,~~of ~~examines~~loans ~~state~~and ~~member~~other ~~banks~~investments that an Ohio-chartered bank is permitted to make. In addition, ~~and~~the ~~may~~aggregate ~~initiate~~amount ~~enforcement~~that ~~actions~~an ~~against~~Ohio-chartered ~~state~~bank ~~member~~can ~~banks~~lend ~~and~~to ~~certain~~any ~~persons~~one borrower ~~affiliated~~is ~~with~~limited ~~them~~by ~~for~~Ohio ~~violations~~law ofto ~~laws~~an ~~and~~amount ~~regulations~~equal orto ~~for engaging~~15% inof ~~unsafe~~the orinstitution’s ~~unsound~~unimpaired ~~practices~~capital. IfAn ~~the~~Ohio-chartered ~~grounds~~bank ~~provided~~may bylend ~~law~~to ~~exist~~one borrower an additional amount not to exceed 10% of the institution’s unimpaired capital, if the additional ~~FRB~~amount ~~may~~is ~~appoint~~fully asecured ~~conservator~~by orcertain aforms ~~receiver~~of ~~for~~“readily amarketable ~~state~~collateral.” ~~member~~Real ~~bank~~estate is not considered “readily marketable collateral.”

~~Sections~~The ~~23A~~Division ~~and~~conducts ~~23B~~periodic examinations of the ~~Federal~~Bank, ~~Reserve~~often ~~Act~~times ~~and~~on ~~the~~a ~~FRB’s~~joint ~~Regulation~~basis ~~W restrict transactions by banks and their subsidiaries~~ with ~~their affiliates. Generally, Sections 23A and 23B and Regulation W: (a) limit~~ the ~~extent~~FRB toexaminers. ~~which~~The aDivision ~~bank or its subsidiaries~~ may ~~engage~~initiate incertain ~~“covered~~supervisory ~~transactions”~~measures ~~with~~or formal ~~any~~enforcement ~~one~~actions ~~affiliate~~against to an ~~amount~~Ohio-chartered ~~equal~~bank. toUltimately, ~~10%~~if of the ~~bank’s~~grounds ~~capital~~provided ~~stock~~by ~~and surplus~~law ~~(i.e.~~exist, ~~tangible capital); (b) limit~~ the ~~extent~~Division ~~to which a bank or its subsidiaries~~ may ~~engage~~place inan ~~“covered~~Ohio-chartered ~~transactions” with all affiliates to 20% of the~~ bank’s ~~capital~~in ~~stock~~conservatorship ~~and~~or ~~surplus;~~receivership. ~~and~~Any ~~(c) require~~mergers, ~~that all such covered transactions be on terms substantially the same~~acquisitions, or atchanges ~~least~~of ascontrol ~~favorable~~involving an toOhio-chartered ~~the~~ bank ormust ~~subsidiary,~~be asapproved ~~those~~by ~~provided to a non-affiliate. The term “covered transactions” includes~~ the ~~making of loans, the purchase of assets, the issuance of a guarantee, and other similar types of transactions~~Division.

AIn ~~bank’s~~addition ~~authority~~ to ~~extend~~Ohio ~~credit~~laws relating to ~~executive officers~~banks, ~~directors,~~the ~~and greater~~Bank ~~than 10% shareholders, as well as entities controlled by such persons,~~ is subject to ~~Sections 22(g) and 22(h) of~~ the ~~Federal~~Ohio ~~Reserve~~general ~~Act~~corporation ~~and~~law ~~Regulation~~to ~~O promulgated by~~ the ~~FRB. Among other requirements, these loans must be made on terms~~ ~~substantially~~extent ~~the~~such ~~same~~law asdoes ~~those offered to unaffiliated persons, or be made as part of a benefit or compensation program and on terms widely available to employees, and must~~ not ~~involve~~conflict awith ~~greater than normal risk of repayment. The amount of loans a bank may make to these persons is based, in part, on~~ the ~~bank’s~~laws ~~capital~~specifically ~~position,~~governing ~~and specified approval procedures must be followed in making loans which exceed specified amounts~~banks.

~~The~~Croghan ~~Corporation~~Insurance, ~~and~~ the Bank’s ~~are~~wholly-owned ~~subject~~insurance toagency ~~the Community Reinvestment Act of 1977~~subsidiary, ~~as amended (the “CRA”), which~~ is ~~designed~~also subject to ~~encourage~~the ~~financial~~insurance ~~institutions~~laws toand ~~give~~regulations ~~special~~of ~~attention to~~ the ~~needs~~State of ~~low~~ Ohio and ~~moderate income areas in meeting~~ the ~~credit~~Ohio ~~needs~~Department of ~~the~~Insurance. ~~communities~~The ininsurance ~~which~~laws ~~they~~and ~~operate.~~regulations Ifrequire ~~the~~education ~~CRA~~and ~~regulatory~~licensing ~~evaluation~~ of aagencies ~~bank’s~~and ~~activities~~individual ~~is less than satisfactory~~agents, ~~regulatory~~require ~~approval of proposed acquisitions~~reports, ~~branch openings,~~ and ~~other~~impose ~~applications~~business conduct ~~requiring FRB approval may be delayed until a satisfactory CRA evaluation is achieved~~rules. ~~The Bank currently has a CRA regulatory evaluation of satisfactory.~~

The Bank is also a member of the ~~FHLB~~Federal ofReserve ~~Cincinnati~~System and, ~~therefore,~~is ~~must~~subject ~~maintain~~to anregulation, ~~investment~~supervision, inand ~~the~~examination ~~capital~~by ~~stock of~~ the ~~FHLB~~FRB. ~~Upon~~The ~~the~~FRB ~~origination~~issues regulations orgoverning ~~renewal~~the operations of astate ~~loan~~member ~~or advance~~banks, ~~each~~examines ~~FHLB~~state ismember ~~required~~banks, ~~by law to obtain~~ and ~~maintain~~may ainitiate ~~security~~enforcement ~~interest~~actions inagainst ~~certain~~state ~~types~~member ofbanks ~~collateral.~~and ~~Each~~certain ~~FHLB~~persons isaffiliated ~~required~~with tothem ~~establish~~for ~~standards~~violations of ~~community~~laws ~~investment~~and regulations or ~~service~~for ~~that~~engaging in ~~its~~unsafe ~~members~~or ~~must~~unsound ~~maintain~~practices. ~~for~~If ~~continued~~the ~~access~~grounds toprovided ~~long-term~~by ~~advances~~law ~~from~~exist, the ~~FHLB.~~FRB ~~The standards~~may ~~take~~appoint ~~into account~~ a ~~member’s~~conservator ~~performance~~or ~~under~~a ~~the~~receiver ~~CRA~~for ~~and~~a ~~its~~state ~~record~~member ~~of lending to first-time home buyers~~bank.

19Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W restrict transactions by banks and their subsidiaries with their affiliates. Generally, Sections 23A and 23B and Regulation W: (a) limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of the bank’s capital stock and surplus (i.e., tangible capital); (b) limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to 20% of the bank’s capital stock and surplus; and (c) require that all such covered transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to a non-affiliate. The term “covered transactions” includes the making of loans, the purchase of assets, the issuance of a guarantee, and other similar types of transactions.

~~Table~~A bank’s authority to extend credit to executive officers, directors, and greater than 10% shareholders, as well as entities controlled by such persons, is subject to Sections 22(g) and 22(h) of ~~Contents~~the Federal Reserve Act and Regulation O promulgated by the FRB. Among other requirements, these loans must be made on terms substantially the same as those offered to unaffiliated persons, or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. The amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

The ~~Dodd-Frank~~Corporation ~~Wall~~and ~~Street~~the ~~Reform~~Bank ~~and~~are ~~Consumer~~subject ~~Protection~~to the Community Reinvestment Act of ~~2010~~1977, as amended (the “~~Dodd-Frank Act~~CRA”), ~~was~~which ~~enacted into~~is ~~law~~designed onto ~~July 21,~~encourage ~~2010.~~financial ~~The~~institutions ~~Dodd-Frank~~to ~~Act~~give isspecial ~~significantly~~attention ~~changing~~to the ~~regulation~~needs of ~~financial~~low ~~institutions~~ and ~~the~~moderate ~~financial~~income ~~services~~areas ~~industry.~~in ~~Because~~meeting the ~~Dodd-Frank~~credit ~~Act~~needs ~~requires~~of ~~various~~the ~~federal~~communities ~~agencies~~in towhich ~~adopt~~they operate. aIf ~~broad~~the ~~range~~CRA regulatory evaluation of ~~regulations~~ ~~with~~a ~~significant~~bank’s ~~discretion,~~activities ~~many~~is ofless ~~the~~than ~~details~~satisfactory, regulatory approval of ~~the~~proposed ~~new~~acquisitions, ~~law~~branch openings, and ~~the~~other ~~effects~~applications ~~they~~requiring ~~will~~FRB ~~have~~approval onmay ~~the~~be ~~Corporation~~delayed ~~will~~until ~~not~~a besatisfactory ~~known~~CRA evaluation ~~for~~is ~~months~~achieved. ~~and~~The ~~even~~Bank ~~years~~currently has a CRA regulatory evaluation of satisfactory.

~~Among~~The Bank is a member of the ~~provisions~~FHLB ~~already~~of ~~implemented~~Cincinnati ~~pursuant~~and, totherefore, must maintain an investment in the ~~Dodd-Frank~~capital ~~Act,~~stock of the ~~following~~FHLB. ~~provisions~~Upon ~~have~~the origination or ~~may~~renewal ~~have~~of ana ~~effect~~loan onor ~~the~~advance, ~~business~~each ofFHLB ~~the~~is ~~Corporation~~required by law to obtain and/ maintain a security interest in certain types of collateral. Each FHLB is required to establish standards of community investment or service that its members must maintain for continued access to long-term advances from the ~~Bank:~~FHLB. The standards take into account a member’s performance under the CRA and its record of lending to first-time home buyers.

•19 ~~a new Consumer Financial Protection Bureau has been formed with broad powers to adopt and enforce consumer protection regulations;~~

•The ~~the~~Dodd-Frank ~~standard~~Wall ~~maximum~~Street ~~amount~~Reform and Consumer Protection Act of ~~deposit~~2010 ~~insurance~~(the ~~per~~“Dodd-Frank ~~customer~~Act”) was ~~permanently~~enacted ~~increased~~into tolaw on ~~$250~~July 21,~~000~~ 2010. The Dodd-Frank Act is significantly changing the regulation of financial institutions and ~~non~~the financial services industry. Because the Dodd-~~interest-bearing~~Frank ~~transaction~~Act ~~accounts~~requires ~~have~~various ~~unlimited~~federal ~~insurance~~agencies ~~through~~to ~~December~~adopt 31a broad range of regulations with significant discretion, ~~2012;~~many of the details of the new law and the effects they will have on the Corporation will not be known for months and even years. The following summarizes significant aspects of the Dodd-Frank Act that may affect the Corporation and the Bank:

•— ~~the~~a ~~assessment~~new ~~base~~Consumer ~~for~~Financial ~~determining~~Protection ~~deposit~~Bureau ~~insurance premiums~~ has been ~~expanded~~established ~~from~~with ~~domestic~~broad ~~deposits~~powers to ~~average~~adopt ~~assets~~and ~~minus~~enforce ~~average~~consumer ~~tangible~~protection ~~equity~~regulations; ~~and~~

•— ~~public~~the ~~companies~~federal inlaw ~~all~~prohibiting ~~industries~~the ~~are~~payment orof ~~will~~interest beon ~~required~~commercial todemand ~~provide~~deposit ~~shareholders~~accounts ~~the~~was ~~opportunity~~eliminated toeffective ~~cast~~in aJuly ~~non-binding advisory vote on executive compensation.~~2011;

~~Additional~~— ~~provisions~~the ~~not~~standard ~~yet~~maximum ~~implemented~~amount ~~that~~of ~~may~~deposit ~~have~~insurance anper ~~effect~~customer onwas ~~the~~permanently ~~Corporation~~increased to $250,000 and~~/or~~ ~~the~~non-interest-bearing ~~Bank~~transaction ~~include~~accounts ~~the~~have ~~following:~~ unlimited insurance through December 31, 2012;

•— ~~new~~the ~~capital~~assessment ~~regulations~~base for ~~bank~~determining ~~holding~~deposit ~~companies~~insurance ~~will~~premiums behas ~~adopted,~~been ~~which~~expanded ~~may~~from ~~impose~~domestic ~~stricter~~deposits ~~requirements,~~to ~~and~~average ~~any~~assets ~~new~~minus ~~trust~~average ~~preferred~~tangible ~~securities issued after May 19, 2010 will no longer constitute Tier I capital~~equity; ~~and~~

•— ~~new corporate governance requirements applicable generally to all~~ public companies in all industries ~~will~~are ~~require~~or ~~new~~will ~~compensation~~be ~~practices~~required ~~and disclosure requirements, including requiring companies~~ to ~~“claw~~provide ~~back”~~shareholders ~~incentive compensation under certain circumstances, to consider~~ the ~~independence~~opportunity ~~of compensation advisors, and~~ to ~~make~~cast ~~additional~~a ~~disclosures~~non-binding inadvisory ~~proxy~~vote ~~statements~~on ~~with~~executive ~~respect to~~ compensation ~~matters.~~;

~~Many~~— ~~provisions~~new ofcapital ~~the~~regulations ~~Dodd-Frank~~for ~~Act~~bank ~~have~~holding ~~not~~companies ~~yet~~have been ~~implemented~~adopted, ~~and~~which will ~~require~~impose ~~interpretation~~stricter ~~and rule making by federal regulators. As a result~~requirements, ~~the~~and ~~ultimate~~any ~~effect~~new oftrust ~~the~~preferred ~~Dodd-Frank~~securities ~~Act~~issued onafter ~~the~~May ~~Corporation cannot yet be determined. However~~19, it2010 ~~is likely that the implementation of these provisions~~ will ~~increase~~no ~~compliance~~longer ~~costs~~constitute ~~and~~Tier ~~fees~~I ~~paid~~capital; ~~to regulators, along with possibly restricting the operations of the Corporation~~ and ~~the Bank.~~

~~REGULATORY~~— ~~CAPITAL~~new ~~REQUIREMENTS~~ corporate governance requirements applicable generally to all public companies in all industries require new compensation practices and disclosure requirements, including requiring companies to “claw back” incentive compensation under certain circumstances, to consider the independence of compensation advisors, and to make additional disclosures in proxy statements with respect to compensation matters.

~~The~~Many ~~FRB~~provisions ~~has~~of ~~adopted~~the ~~risk~~Dodd-~~based~~Frank ~~capital~~Act ~~guidelines~~have ~~for~~not ~~bank~~yet ~~holding~~been ~~companies,~~implemented ~~such~~and aswill ~~the~~require ~~Corporation,~~interpretation and ~~for~~rule ~~state~~making ~~member~~by ~~banks,~~federal ~~such as the Bank~~regulators. ~~Bank~~As ~~holding~~a ~~companies~~result, ~~and state member banks must maintain adequate consolidated capital to meet~~ the ~~minimum~~ultimate effect ~~ratio~~ of ~~total capital to risk-weighted assets (including certain off-balance sheet items such as standby letters of credit) (~~the ~~“Total~~ ~~Risk~~Dodd-~~Based~~Frank ~~Ratio”)~~Act ofon ~~8%. At least half of~~ the ~~minimum-required~~Corporation ~~Total~~cannot ~~Risk-Based~~yet ~~Ratio (4%) must~~ be ~~composed~~determined. ~~of “Tier 1” capital~~However, ~~which~~it ~~consists~~is oflikely ~~common~~that ~~stockholders’~~the ~~equity,~~implementation ~~minority interests in certain equity accounts~~ of ~~consolidated~~these ~~subsidiaries,~~provisions ~~and~~will aincrease ~~limited~~compliance ~~amount~~costs ~~of perpetual preferred stock~~ and ~~qualified~~fees ~~trust~~paid ~~preferred~~to ~~securities~~regulators, ~~less~~along ~~goodwill~~with ~~and~~possibly ~~certain~~restricting ~~other~~the ~~intangibles.~~operations ~~The remainder~~ of ~~total risk-based capital (commonly referred to as~~ ~~“Tier~~the 2”Corporation ~~risk-based capital) may consist of certain amounts of hybrid capital instruments, mandatory convertible debt, subordinated debt, preferred stock not qualifying as Tier 1 capital, loan~~ and ~~lease loss allowances, and net unrealized gains on certain available-for-sale securities, all subject to limitations established by~~ the ~~guidelines~~Bank.

~~Under~~REGULATORY ~~the~~CAPITAL ~~guidelines,~~REQUIREMENTS capital is compared to the relative risk of the balance sheet. To derive the risk included in the balance sheet, one of four risk weights (0%, 20%, 50%, and 100%) is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The FRB ~~also~~ has ~~established~~adopted ~~minimum~~risk-based ~~leverage~~capital ~~ratio~~ guidelines for bank holding companies, such as the Corporation, and for state member banks, such as the Bank. ~~The~~Bank ~~guidelines~~holding companies ~~provide~~and ~~for~~state amember ~~minimum~~banks ~~ratio~~must ofmaintain ~~Tier~~adequate 1consolidated capital to ~~average~~meet the minimum ratio of total capital to risk-weighted assets (~~excluding~~including ~~the loan~~certain ~~and~~off-balance ~~lease~~sheet ~~loss~~items ~~allowance,~~such ~~goodwill,~~as ~~and~~standby ~~certain~~letters ~~other~~of ~~intangibles~~credit) (the “~~Leverage~~Total Risk-Based Ratio”) of 38%. ~~for~~At ~~bank~~least ~~holding~~half ~~companies~~of ~~and~~the ~~state~~minimum-required ~~member~~Total ~~banks~~Risk-Based ~~that~~Ratio ~~meet~~(4%) must ~~specified~~be ~~criteria~~composed of “Tier 1” capital, ~~including~~which ~~having~~consists ~~the~~of ~~highest~~common ~~regulatory~~stockholders’ ~~rating.~~equity, ~~All~~minority ~~other~~interests in certain equity accounts of ~~bank~~consolidated ~~holding~~subsidiaries, ~~companies~~and a limited amount of perpetual preferred stock and ~~state~~qualified ~~member~~trust ~~banks~~preferred ~~must~~securities, ~~maintain~~less agoodwill ~~Leverage~~and ~~Ratio~~certain other intangibles. The remainder of 4%total risk-based capital (commonly referred to ~~5%.~~as ~~The~~“Tier ~~guidelines~~2” risk-based ~~further~~capital) ~~provide~~may ~~that~~consist ~~bank~~of ~~holding~~certain ~~companies~~amounts ~~and~~of ~~state~~hybrid ~~member~~capital ~~banks~~instruments, ~~making~~mandatory ~~acquisitions~~convertible ~~will~~debt, besubordinated ~~expected~~debt, topreferred ~~maintain~~stock ~~strong~~not qualifying as Tier 1 capital, ~~positions~~loan and lease loss allowances, and net unrealized gains on certain ~~substantially~~available-for-sale ~~above~~securities, ~~the~~all ~~minimum~~subject ~~supervisory~~to ~~levels~~limitations established by the guidelines.

Under the guidelines, capital is compared to the relative risk of the balance sheet. To derive the risk included in the balance sheet, one of four risk weights (0%, 20%, 50%, and 100%) is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

~~Table~~The FRB also has established minimum leverage ratio guidelines for bank holding companies and state member banks. The guidelines provide for a minimum ratio of ~~Contents~~Tier 1 capital to average total assets (excluding the loan and lease loss allowance, goodwill, and certain other intangibles) (the “Leverage Ratio”) of 3% for bank holding companies and state member banks that meet specified criteria, including having the highest regulatory rating. All other bank holding companies and state member banks must maintain a Leverage Ratio of 4% to 5%. The guidelines further provide that bank holding companies and state member banks making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels.

~~The~~20 ~~following sets forth the Tier 1 Risk-Based Ratio, Total Risk-Based Ratio, and Leverage Ratio for the Corporation and the Bank at December 31, 2011:~~

	At December 31, 2011
	Corporation				Bank
	Amount		Percent		Amount		Percent
		(Dollars in thousands)
Tier 1 risk-based		$ 42,527		12.1%		$ 48,122		13.7%
Minimum capital requirement		14,097		4.0		14,083		4.0
Excess		$ 28,430		8.1%		$ 34,039		9.7%
Total risk-based		$ 46,942		13.3%		$ 52,537		14.9%
Minimum capital requirement		28,195		8.0		28,167		8.0
Excess		$ 18,747		5.3%		$ 24,370		6.9%
Leverage ratio		$ 42,527		8.4%		$ 48,122		9.6%
Minimum capital requirement		20,164		4.0		20,150		4.0
Excess		$ 22,363		4.4%		$ 27,972		5.6%

The ~~FRB~~following ~~and~~sets ~~other~~forth ~~federal~~the ~~banking~~Tier ~~agencies~~1 ~~have~~Risk-Based established a system of prompt corrective action to resolve certain problems of capital deficient and otherwise troubled banks under its regulation. This system is based on five capital level categories for insured depository institutions: “well capitalizedRatio,” ~~“adequately~~Total ~~capitalized,” “undercapitalized,”~~Risk-Based ~~“significantly undercapitalized~~Ratio,” and ~~“critically~~Leverage ~~undercapitalized.”~~Ratio Atfor ~~each~~the ~~successively~~Corporation ~~lower defined capital category, an institution is subject to more restrictive~~ and ~~numerous mandatory or~~ ~~discretionary regulatory actions or limits, and~~ the ~~federal~~Bank ~~banking~~at agencies have less flexibility in determining how to resolve the problems of the institution. An undercapitalized institution must submit a capital restoration plan to the FRB within 45 days after it becomes undercapitalized. Such an institution will be subject to increased monitoring and asset growth restrictions and will be required to obtain prior approval for acquisitionsDecember 31, ~~branching,~~2013: and engaging in new lines of business. Furthermore, critically undercapitalized institutions must be placed in conservatorship or receivership within 90 days of reaching that capitalization level, except under limited circumstances.

The Bank’s capital levels at December 31, 2011 met the standards for the highest level, a “well capitalized” institution.


	At December 31, 2013
	Corporation				Bank
	Amount		Percent		Amount		Percent
	(Dollars in thousands)

Tier 1 risk-based		$56,036		11.0%		$59,574		11.8%
Minimum capital requirement		20,339		4.0		20,277		4.0

Excess		$35,697		7.0%		$39,297		7.8%


Total risk-based		$60,078		11.8%		$63,616		12.6%
Minimum capital requirement		40,678		8.0		40,555		8.0

Excess		$19,400		3.8%		$23,061		4.6%


Leverage ratio		$56,036		8.6%		$59,574		9.1%
Minimum capital requirement		26,089		4.0		26,075		4.0

Excess		$29,947		4.6%		$33,499		5.1%

21The FRB and other federal banking agencies have established a system of prompt corrective action to resolve certain problems of capital deficient and otherwise troubled banks under its regulation. This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” At each successively lower defined capital category, an institution is subject to more restrictive and numerous mandatory or discretionary regulatory actions or limits, and the federal banking agencies have less flexibility in determining how to resolve the problems of the institution. An undercapitalized institution must submit a capital restoration plan to the FRB within 45 days after it becomes undercapitalized. Such an institution will be subject to increased monitoring and asset growth restrictions and will be required to obtain prior approval for acquisitions, branching, and engaging in new lines of business. Furthermore, critically undercapitalized institutions must be placed in conservatorship or receivership within 90 days of reaching that capitalization level, except under limited circumstances.

~~Table~~The ofBank’s ~~Contents~~capital levels at December 31, 2013 met the standards for the highest level, a “well capitalized” institution.

~~DIVIDEND~~In ~~RESTRICTIONS~~December 2010, the Basel Committee on Banking Supervision, an international forum for cooperation on banking supervisory matters, announced the “Basel III” capital standards, which proposed new capital requirements for banking organizations. On July 2, 2013, the Federal Reserve Board adopted a final rule implementing a revised capital framework based in part on the Basel III capital standards and, on July 9, 2013, the Office of the Comptroller of the Currency also adopted a final rule and the FDIC adopted an interim final rule implementing a revised capital framework based in part on the Basel III capital standards. The rule will not begin to phase in until January 1, 2014 for larger institutions and January 1, 2015 for smaller, less complex banking organizations such as the Corporation. The rule will be fully phased in by January 1, 2019.

The ~~ability~~implementation of the ~~Corporation~~final rule will lead to ~~obtain~~higher ~~funds~~capital ~~for~~requirements ~~the~~and ~~payment~~more ofrestrictive ~~dividends~~leverage onand ~~its~~liquidity ~~common~~ratios ~~shares~~than isthose currently ~~largely~~in ~~dependent~~place. onSpecifically, the ~~amount~~rule ofimposes ~~dividends~~the ~~which~~following ~~may~~minimum becapital ~~declared~~requirements ~~and~~on ~~paid~~federally byinsured ~~the~~financial ~~Bank~~institutions: (1) a new minimum common equity tier 1 capital to ~~the~~risk-weighted ~~Corporation~~assets ratio of 4.5%; (2) a leverage ~~However,~~capital ~~the~~ratio ~~FRB~~of ~~expects~~4%; ~~the~~(3) a ~~Corporation~~tier to1 ~~serve~~risk-based ascapital ratio of 6%; and (4) a ~~source~~total risk-based capital ratio of ~~strength~~8%. toUnder the ~~Bank~~rule, ~~which~~common ~~may~~equity ~~require~~generally ~~the~~consists ~~Corporation~~of tocommon ~~retain~~stock, ~~capital~~retained ~~for~~earnings ~~further~~and ~~investment~~limited amounts of minority interests in the ~~Bank,~~form ~~rather~~of ~~than~~common ~~pay~~stock. ~~dividends~~In addition, in order to ~~the~~avoid ~~Corporation’s~~limitations ~~shareholders.~~on ~~The ability~~capital ofdistributions, ~~the~~such ~~Bank~~as todividend ~~pay~~payments ~~dividends~~and certain bonus payments to executive officers, the ~~Corporation~~rule isrequires ~~subject~~insured financial institutions to ~~various~~hold ~~legal~~a ~~limitations~~capital conservation ~~and~~buffer toof ~~prudent~~common ~~and~~equity ~~sound~~tier ~~banking~~1 ~~principles.~~capital ~~Generally,~~above ~~the~~its ~~Bank~~minimum ~~may~~risk-based ~~declare~~capital arequirements. ~~dividend~~The ~~without~~capital ~~the~~conservation ~~approval~~buffer ofwill ~~the~~be ~~Division~~phased in over time, ~~unless~~becoming ~~the~~effective ~~total~~on ~~dividends in~~January 1, a2019, ~~calendar~~and ~~year~~will ~~exceed~~consist ~~the~~of ~~total~~an additional amount of ~~its~~common ~~net~~equity ~~profits~~equal ~~for~~to ~~the~~2.5% ~~year~~of ~~plus~~risk-weighted ~~its~~assets. ~~retained~~The ~~profits~~rule ~~for~~will ~~the~~also ~~preceding~~revise ~~two~~the ~~years,~~regulatory ~~less~~agencies’ ~~required~~prompt ~~transfers~~corrective toaction ~~surplus.~~framework ~~However,~~by incorporating the ~~Bank~~new isregulatory ~~prohibited~~capital ~~from~~minimums ~~paying~~and ~~dividends~~updating ~~out~~the definition of ~~its~~common ~~surplus~~equity. Until ~~if,~~the ~~after~~rule ~~paying such~~is ~~dividends,~~fully itphased ~~would~~in, ~~fail~~we tocannot ~~meet~~predict the ~~required~~ultimate ~~minimum~~impact ~~Total~~it ~~Risk-Based~~will ~~Ratio~~have ~~requirements~~upon ~~and~~the ~~minimum~~financial ~~Leverage~~condition ~~Ratio~~or ~~requirements~~results ~~under~~of ~~the~~operations ~~FRB~~of ~~guidelines~~the Corporation.

~~FDIC~~21 ~~DEPOSIT INSURANCE~~

~~Insurance of~~DIVIDEND ~~deposits~~RESTRICTIONS may be terminated by the FDIC upon the finding that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the institution’s regulatory agency.

The ability of the Corporation to obtain funds for the payment of dividends on its common shares is largely dependent on the amount of dividends which may be declared and paid by the Bank to the Corporation. However, the FRB ~~RESERVE~~expects ~~REQUIREMENTS~~the Corporation to serve as a source of strength to the Bank, which may require the Corporation to retain capital for further investment in the Bank, rather than pay dividends to the Corporation’s shareholders. The ability of the Bank to pay dividends to the Corporation is subject to various legal limitations and to prudent and sound banking principles. Generally, the Bank may declare a dividend without the approval of the Division, unless the total dividends in a calendar year exceed the total of its net profits for the year plus its retained profits for the preceding two years, less required transfers to surplus. However, the Bank is prohibited from paying dividends out of its surplus if, after paying such dividends, it would fail to meet the required minimum Total Risk-Based Ratio requirements and minimum Leverage Ratio requirements under the FRB guidelines.

~~For~~FDIC ~~2012,~~DEPOSIT ~~FRB~~INSURANCE regulations require depository institutions to maintain reserves of 3% of net transaction accounts (primarily demand and NOW accounts) up to and including $71,000,000 (subject to an exemption for the first $11,500,000 of net transaction accounts), and of 10% of net transaction accounts in excess of $71,000,000.

~~EFFECTS~~The OFFDIC ~~GOVERNMENT~~is ~~MONETARY~~an ~~POLICY~~independent federal agency which insures the deposits of federally-insured banks and savings associations up to certain prescribed limits and safeguards the safety and soundness of financial institutions. The deposits of the Bank are subject to the deposit insurance assessments of the FDIC. Under the FDIC’s deposit insurance assessment system, the assessment rate for any insured institution may vary according to regulatory capital levels of the institution and other factors such as supervisory evaluations.

The ~~business~~FDIC ~~and~~is ~~earnings~~authorized ofto ~~the~~prohibit ~~Bank~~any ~~are~~insured ~~affected~~institution byfrom ~~general~~engaging ~~and~~in ~~local economic~~any ~~conditions~~activity ~~and~~that byposes ~~the~~a ~~policies~~serious ofthreat ~~various~~to ~~governmental regulatory authorities. In particular,~~ the ~~FRB~~insurance ~~regulates~~fund ~~money~~ and ~~credit~~may ~~conditions~~initiate enforcement ~~and~~actions ~~interest~~against ~~rates~~a inbank, ~~order~~after tofirst ~~influence~~giving ~~general~~the ~~economic~~institution’s ~~conditions,~~primary ~~primarily~~regulatory ~~through~~authority ~~open~~an ~~market acquisitions~~opportunity orto ~~dispositions~~take ofsuch ~~United~~action. ~~States~~The ~~Government~~FDIC ~~securities,~~may ~~varying~~also terminate the ~~discount~~deposit ~~rate~~insurance onof ~~member~~any ~~bank~~institution ~~borrowings,~~that ~~and~~has ~~setting~~engaged ~~reserve~~in ~~requirements~~or ~~against~~is ~~member~~engaging ~~and~~in unsafe ~~nonmember~~or ~~bank~~unsound ~~deposits.~~practices, ~~FRB~~is ~~monetary~~in ~~policies~~an ~~have~~unsafe ~~had~~or aunsound ~~significant effect~~condition onto ~~the~~continue ~~interest~~operations ~~income~~or ~~and~~has ~~interest~~violated ~~expense~~any ofapplicable ~~commercial banks~~law, ~~including~~order ~~the~~or ~~Bank,~~condition ~~and~~imposed ~~are~~by ~~expected to continue to do so in~~ the ~~future~~FDIC.

~~SEC~~On ~~REGULATION~~February 7, 2011, the FDIC approved a final rule that changed the deposit insurance assessment base, as required by the Dodd-Frank Act. As adopted, the final rule changed the deposit insurance assessment base from domestic deposits to average assets minus average tangible equity. In addition, the final rule also adopted a new large-bank pricing assessment scheme and established a target size for the Deposit Insurance Fund. The final rule went into effect beginning with the second quarter of 2011.

~~The~~FRB ~~Corporation~~RESERVE isREQUIREMENTS subject to the jurisdiction of the SEC and certain state securities authorities relating to the offering and sale of the Corporation’s securities. The Corporation is subject to the registration, reporting, and other regulatory requirements of the Securities Act of 1933, as amended, the Exchange Act, and the rules adopted by the SEC under those Acts.

~~EFFECT~~For OF2013, ~~ENVIRONMENTAL~~FRB ~~REGULATION~~regulations required depository institutions to maintain reserves of 3% of net transaction accounts (primarily demand and NOW accounts) up to and including $79,500,000 (subject to an exemption for the first $12,400,000 of net transaction accounts), and of 10% of net transaction accounts in excess of $79,500,000. For 2014, the applicable threshold for net transaction accounts have been increased by the FRB to $89,000,000 (subject to an exemption for the first $13,300,000 of net transaction accounts).

~~Compliance~~EFFECTS ~~with~~OF ~~federal, state, and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the~~GOVERNMENT ~~environment,~~MONETARY ~~has~~POLICY not had a material effect upon the capital expenditures, earnings, or competitive position of the Corporation or the Bank. The Corporation believes the nature of the operations of the Bank has little, if any, environmental impact. The Corporation, therefore, does not anticipate any material capital expenditures for environmental control facilities for the foreseeable future. The Corporation believes that its primary exposure to environmental risk is through the lending activities of the Bank. In the event management believes there exists a potential environmental risk, the Bank attempts to mitigate the potential risk by requiring environmental site assessments at the time the loan is originated. In addition, the Bank typically requires an environmental assessment prior to any foreclosure of non-residential real estate collateral.

22The business and earnings of the Bank are affected by general and local economic conditions and by the policies of various governmental regulatory authorities. In particular, the FRB regulates money and credit conditions and interest rates in order to influence general economic conditions, primarily through open market acquisitions or dispositions of United States Government securities, varying the discount rate on member bank borrowings, and setting reserve requirements against member and nonmember bank deposits. FRB monetary policies have had a significant effect on the interest income and interest expense of commercial banks, including the Bank, and are expected to continue to do so in the future.

~~Table~~SEC ofREGULATION ~~Contents~~

~~ITEM 1A~~Through the third quarter of 2012, the Corporation was an SEC-reporting company and filed reports, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, with the SEC under the Exchange Act. ~~Risk~~ ~~Factors~~The Corporation was also required to comply with regulations governing proxy solicitations and certain shareholders were required to file security ownership reports. In April 2012, the JOBS Act was signed into law and amended Sections 12(g) and 15(d) of the Exchange Act to increase the holders of record threshold for banks and bank holding companies to terminate the proxy solicitation and security ownership reports and to suspend their obligations to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. With respect to the Corporation, the JOBS Act increased the holder of record threshold from 300 to 1,200. Because the Corporation had fewer than 700 holders of record of its common shares at the time of the adoption of the JOBS Act, the Corporation became eligible to suspend and terminate those obligations. Due to the expense associated with preparing and filing periodic reports with the SEC and the historically low trading volume of the

~~Set~~22 forth below is a description of risk factors related to the Corporation’s business, provided to enable investors to assess, and be appropriately apprised of, certain risks and uncertainties the Corporation faces in conducting its business. An investor should carefully consider the risks described below and elsewhere in this report, which could materially and adversely affect the Corporation’s business, results of operations, or financial condition. The risks and uncertainties discussed below are also applicable to forward-looking statements contained in this report and in other reports filed by the Corporation with the Securities and Exchange Commission. Given these risks and uncertainties, investors are cautioned not to place undue reliance on forward-looking statements.

~~Our operating results are dependent to a significant degree on the difference between the interest rates earned on interest-earning assets such as loans and~~ ~~investment~~Corporation’s ~~securities,~~common ~~and the interest rates paid on interest-bearing liabilities such as deposits and borrowings. These rates are highly sensitive to many factors beyond our control~~shares, ~~including~~among ~~general~~other ~~economic conditions~~reasons, ~~and~~ the ~~policies~~Board of ~~various~~ ~~governmental~~Directors ~~and~~of ~~regulatory authorities (in particular,~~ the ~~FRB).~~Corporation ~~Changes~~approved inderegistration ~~interest~~of ~~rates will influence~~ the ~~demand~~Corporation’s ~~for~~common ~~loans,~~shares ~~the~~under ~~prepayment~~Section 12(g) of ~~loans,~~ the Exchange ~~purchase~~Act ofand ~~investments,~~ the ~~generation~~suspension of ~~deposits, and~~ the ~~rates~~Corporation’s ~~received~~reporting ~~on loans~~obligations ~~and~~under ~~investment~~Section 15(d) ~~securities~~of ~~and~~the ~~paid~~Exchange onAct ~~deposits~~during ~~and~~the ~~borrowings,~~fourth ~~and~~quarter ~~these changes could have a material adverse effect on our financial condition and results~~ of ~~operations~~2012. The ~~impact~~Corporation ofsubsequently ~~these~~filed ~~changes~~with ~~may~~the beSEC ~~magnified~~Form if15 weon doNovember 13, ~~not~~2012 ~~effectively~~to ~~manage~~terminate the ~~relative~~registration ~~sensitivity~~ of ~~our~~its ~~assets~~common ~~and~~shares ~~liabilities~~under toSection 12(g) ~~changes~~and inForm ~~market~~15 ~~interest~~on ~~rates.~~March 27, ~~Additional~~2013 ~~information pertaining~~ to ~~the~~suspend ~~impact~~its ~~that~~reporting ~~changes~~obligations ~~in interest rates could have on our net income is contained in the section entitled “ASSET/LIABILITY MANAGEMENT”~~ under ~~Item~~Section ~~1 of this Annual Report on Form 10-K~~15(d).

~~Changes~~Because the common shares issued to shareholders of Indebancorp in ~~economic~~the ~~and~~merger ~~political~~that ~~conditions~~was ~~could~~completed in December 2013 were being registered with the SEC pursuant to a ~~adversely~~Registration ~~affect~~Statement ~~our~~on ~~financial~~Form ~~condition~~S-4, the Corporation was required to recommence filing reports with the SEC under Section 15(d) of the Exchange Act beginning with the filing of the Corporation’s Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2013. The Corporation’s obligation to file reports under Section 15(d) of the Exchange Act continues through the filing of this Annual Report on Form 10-K for the fiscal year ending December 31, 2013 (which is the year in which the Registration Statement on Form S-4 became effective) and ~~results~~will then automatically terminate because the Corporation had fewer than 1,200 holders of ~~operations~~record as of the first day of the 2014 fiscal year. As a result, the Corporation intends to suspend its reporting obligations under Section 15(d) of the Exchange Act following the filing of this Annual Report on Form 10-K.

~~Our~~EFFECT ~~success~~OF ~~depends,~~ENVIRONMENTAL toREGULATION a significant extent, upon economic and political conditions, local and national, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, change in interest rates, money supply, and other factors beyond our control may adversely affect our asset quality, deposit levels, and loan demand, and, therefore, our earnings. Because we have a significant amount of real estate loans, further decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings. In addition, a substantial portion of our loans are to individuals and businesses located in Northwest Ohio. Consequently, a significant continued decline in the economy of this market area could have a materially adverse effect on our financial condition and results of operations.

IfCompliance ~~our~~with ~~actual~~federal, state, ~~loan~~and ~~losses~~local ~~exceed~~provisions ~~our~~regulating ~~allowance~~the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material effect upon the capital expenditures, earnings, or competitive position of the Corporation or the Bank. The Corporation believes the nature of the operations of the Bank has little, if any, environmental impact. The Corporation, therefore, does not anticipate any material capital expenditures for environmental control facilities for the foreseeable future. The Corporation believes that its primary exposure to environmental risk is through the lending activities of the Bank. In the event management believes there exists a potential environmental risk, the Bank attempts to mitigate the potential risk by requiring environmental site assessments at the time the loan ~~losses~~is originated. In addition, ~~our~~the ~~net~~Bank ~~income~~typically ~~will~~requires ~~decrease~~an environmental assessment prior to any foreclosure of non-residential real estate collateral.

We23 maintain an allowance for loan losses based upon a number of relevant factors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current economic conditions in the primary lending area, past loss experience, possible losses arising from specific problem loans, and changes in the composition of the loan portfolio. Regular provisions are made in amounts sufficient to maintain the balance in the allowance for loan losses at a level considered by management to be adequate for losses within the portfolio. While management believes that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in material adjustments, and net earnings could be significantly adversely affected, if circumstances differ substantially from the assumptions and estimates used by management to determine the allowance for loan losses.

~~The~~ITEM ~~FDIC insures deposits at FDIC-insured financial institutions, including the Bank~~1A. ~~The~~Risk FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund at a certain level. The costs of resolving bank failures have increased during the last few years and decreased the Deposit Insurance Fund. The FDIC collected a special assessment in 2009 to replenish the Deposit Insurance Fund and also required a prepayment of an estimated amount of future deposit insurance premiums. If the costs of future bank failures increase, deposit insurance premiums may also increase. Factors

23Set forth below is a description of risk factors related to the Corporation’s business, provided to enable investors to assess, and be appropriately apprised of, certain risks and uncertainties the Corporation faces in conducting its business. An investor should carefully consider the risks described below and elsewhere in this report, which could materially and adversely affect the Corporation’s business, results of operations, or financial condition. The risks and uncertainties discussed below are also applicable to forward-looking statements contained in this report and in other reports filed by the Corporation with the Securities and Exchange Commission. Given these risks and uncertainties, investors are cautioned not to place undue reliance on forward-looking statements.

~~Table~~Changes in interest rates could have a material adverse effect on the Corporation’s financial condition and results of ~~Contents~~operations.

WeThe Corporation’s operating results are dependent to a significant degree on the difference between the interest rates earned on interest-earning assets such as loans and investment securities, and the interest rates paid on interest-bearing liabilities such as deposits and borrowings. These rates are highly sensitive to many factors beyond the Corporation’s control, including general economic conditions, and the policies of various governmental and regulatory authorities (in particular, the Board of Governors of the Federal Reserve System). Changes in interest rates will influence the demand for loans, the prepayment of loans, the purchase of investments, the generation of deposits, and the rates received on loans and investment securities and paid on deposits and borrowings, and these changes could have a material adverse effect on the Corporation’s financial condition and results of operations. The impact of these changes may be magnified if the Corporation does not beeffectively manage ~~able~~the torelative ~~pay~~sensitivity ~~dividends~~of its assets and liabilities to changes in market interest rates. Additional information pertaining to the ~~future~~impact that changes in ~~accordance~~interest ~~with~~rates ~~past~~could ~~practice~~have on our net income is contained in the section entitled “ASSET/LIABILITY MANAGEMENT” under Item 1 of this Annual Report on Form 10-K.

~~The~~Changes ~~ability~~in ofeconomic ~~the Bank to pay dividends to the Corporation is subject to various legal limitations~~ and topolitical ~~prudent~~conditions ~~and~~could ~~sound banking principles. Generally, subject~~adversely toaffect ~~certain minimum capital requirements,~~ the ~~Bank may declare a dividend without the approval of the Division, unless the total dividends in a calendar year exceed the total of the Bank~~Corporation’s ~~net~~financial ~~profits~~condition ~~for~~and ~~the~~results ~~year combined with the Bank’s retained profits~~ of ~~the two preceding years~~operations. In the event that the Bank was unable to pay dividends to us, we in turn would likely have to reduce or stop paying dividends on our common shares. Our failure to pay dividends on our common shares could, in turn, have a material adverse effect on the market price of our common shares.

~~Our~~The ~~credit~~Corporation’s ~~standards~~success depends, to a significant extent, upon economic and political conditions, local and national, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, change in interest rates, money supply, and other factors beyond the Corporation’s control may adversely affect its asset quality, deposit levels, and loan demand and, therefore, its earnings. Because the Corporation has a significant amount of real estate loans, further decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on~~-going~~ ~~process~~the ability of ~~credit~~the ~~assessment~~Corporation’s borrowers to make timely repayments of their loans, which would have an adverse impact on the ~~might~~Corporation’s ~~not~~earnings. ~~protect~~In usaddition, ~~from~~a substantial portion of the Corporation’s loans are to individuals and businesses located in Northwest Ohio. Consequently, a significant ~~credit~~continued ~~losses~~decline in the economy of this market area could have a materially adverse effect on the Corporation’s financial condition and results of operations.

WeThe ~~take~~Corporation’s ~~credit~~loan ~~risk~~portfolio ~~by virtue of making loans. Our exposure to credit risk~~ is ~~managed~~concentrated in ~~through~~Northwest ~~the~~Ohio, ~~use of consistent~~ and ~~conservative~~changes ~~underwriting~~in ~~standards.~~the ~~Our~~economic ~~credit~~conditions ~~administration function employs risk management techniques to ensure that loans adhere to corporate policy~~ and ~~problem~~real ~~loans~~estate ~~are~~valuations ~~promptly~~in ~~identified.~~this ~~While~~market ~~these procedures~~area ~~are~~could ~~designed~~adversely toimpact ~~provide~~results usof ~~with~~operations, ~~the~~financial ~~information~~condition ~~needed to implement policy adjustments where necessary,~~ and tocash ~~take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk~~flows.

WeThe Corporation’s lending and deposit gathering activities are concentrated in Huron, Lucas, Ottawa, Sandusky, Seneca and Wood Counties in Northwest Ohio. The Corporation’s success has and will continue to depend ~~upon~~on the ~~accuracy~~general economic conditions in Northwest Ohio, particularly given that a significant portion of the Corporation’s lending relates to real estate located in this area. Real estate values in these Ohio communities have been negatively impacted by the recent economic crisis. Although there has been some improvement recently in some economic measures, including home prices and ~~completeness~~unemployment rates in Ohio, adverse changes in the economic conditions in the Northwest Ohio markets could impair the Corporation’s ability to collect payments on loans, increase loan delinquencies, increase problem assets and foreclosures, increase claims and lawsuits, increase devaluations recognized within the Corporation’s OREO portfolio, decrease the demand for the Corporation’s products and services and decrease the value of ~~information~~collateral ~~about~~for ~~customers~~loans, especially real estate values, which could have a material adverse effect on the Corporation’s financial condition, results of operations and cash flows.

InIf ~~deciding~~actual ~~whether~~loan tolosses ~~extend~~exceed credit or enter into other transactions with customers, we may rely on information provided to us by customers, including financial statements and other financial information. We may also rely on representations of customers as to the ~~accuracy~~allowance ~~and~~for ~~completeness~~loan ~~of that information and~~losses, ~~with respect to financial statements, on reports of independent accountants. For example, in deciding whether to extend credit to a business, we may assume that~~ the ~~customer~~ Corporation’s ~~financial~~net ~~statements~~income ~~conform~~will ~~with generally accepted accounting principles and present fairly, in all material respects, the financial condition, results of operations, and cash flows of the customer~~decrease. We may also rely on the reports of accounting firms issuing an opinion or other assurances on those financial statements. Our financial condition and results of operation could be negatively impacted to the extent we rely on financial statements that do not comply with generally accepted accounting principles or that are materially misleading.

~~Government~~The ~~regulation~~Corporation ~~can~~maintains an allowance for loan losses based upon a number of relevant factors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current economic conditions in the primary lending area, past loss experience, possible losses arising from specific problem loans, and changes in the composition of the loan portfolio. Regular provisions are made in amounts sufficient to maintain the balance in the allowance for loan losses at a level considered by management to be adequate for losses within the portfolio. While the Corporation’s management believes that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in ~~limitations~~material onadjustments, ~~our~~and ~~operations~~net earnings could be significantly adversely affected, if circumstances differ substantially from the assumptions and estimates used by management to determine the allowance for loan losses.

~~The~~24 financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision, and legislation that govern almost all aspects of our business. The Bank is subject to extensive regulation, supervision, and examination by the Division and the FRB. As a holding company, the Corporation is also subject to regulation and oversight by the FRB. Federal and state laws and regulations are designed primarily to protect the deposit insurance funds and consumers, and not to benefit our shareholders. Such laws and regulations can at times impose significant limitations on our operations. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution, and the adequacy of an institution’s allowance for loan losses. In light of current conditions in the global financial markets and the global economy, regulators have increased their focus on the regulation of the financial services industry. Most recently, the federal government has intervened on an unprecedented scale in responding to the stresses experienced in the global financial markets. Some of the laws enacted by Congress and regulations promulgated by the federal banking regulators subject us, and other financial institutions, to additional restrictions, oversight or costs that may have an impact on our business, results of operations, or the trading price of our common shares.

OnFDIC ~~July 21,~~insurance ~~2010,~~premiums ~~the~~may ~~Dodd-Frank~~increase Act was signed into law. The Dodd-Frank Act represents a comprehensive overhaul of the financial services industry within the United States. There are a number of reform provisions that are likely to significantly impact the ways in which banks and bank holding companiesmaterially, ~~including~~ the Corporation and the Bank, do business. Many provisions of the Dodd-Frank Act will not be implemented immediately and will require interpretation and rule making by federal regulators. The Corporation is closely monitoring all relevant sections of the Dodd-Frank Act to ensure continued compliance with laws and regulations. While the ultimate effect of the Dodd-Frank Act on the Corporation and the Bank cannot currently be determined, the law and its implemented rules and regulations are likely to result in increased compliance costs and fees paid to regulators, along with possible restrictions on the operations of the Corporation and the Bank, all of which ~~may~~would ~~have~~negatively aaffect ~~material adverse effect on~~ the Corporation’s ~~operating~~ ~~results~~net ~~and financial condition~~income.

24The Federal Deposit Insurance Corporation (“FDIC”) insures deposits at FDIC-insured financial institutions, including the Bank. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund at a certain level. The costs of resolving bank failures have increased during the last few years and decreased the Deposit Insurance Fund. The FDIC collected a special assessment in 2009 to replenish the Deposit Insurance Fund and also required a prepayment of an estimated amount of future deposit insurance premiums. If the costs of future bank failures increase, deposit insurance premiums may also increase.

~~Table~~The ofCorporation’s ~~Contents~~businesses have been and may continue to be adversely affected by conditions in the financial markets and economic conditions generally.

WeThe ~~may~~capital ~~elect~~and orcredit bemarkets ~~compelled~~have been experiencing unprecedented levels of volatility since 2008. As a consequence of the U.S. economic recession, business activity across a wide range of industries has faced serious difficulties due to ~~seek~~the ~~additional~~lack ~~capital~~of consumer spending and the extreme lack of liquidity in the ~~future,~~global ~~but~~credit ~~that~~markets. ~~capital~~Unemployment ~~may~~has ~~not~~also beincreased ~~available~~significantly. A sustained ~~when~~weakness itor isweakening ~~needed.~~in business and economic conditions generally or specifically in the markets in which the Corporation does business could have one or more of the following adverse effects on its businesses:

We— ~~are~~A ~~required~~decrease by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. If we experience increased loan losses, additional capital may need to be infused. In addition, we may elect to raise additional capital to support our business or to finance acquisitions, or we may otherwise elect or be required to raise additional capital. Our ability to raise additional capital, if needed, will depend on our financial performance, conditions in the ~~capital~~demand ~~markets,~~for ~~economic~~loans ~~conditions,~~ and ~~a number of~~ other ~~factors,~~products ~~many~~and ofservices ~~which~~offered ~~are~~by ~~outside~~the ~~our control~~Corporation. Accordingly, there can be no assurance that we can raise additional capital if needed or on terms acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our financial condition and results of operations.

We— ~~operate~~An inimpairment anof ~~extremely~~certain ~~competitive~~intangible ~~market~~assets, ~~and~~such weas ~~will suffer if we are unable to compete effectively~~goodwill.

In— ~~our~~An ~~market~~increase ~~area,~~in wethe ~~encounter~~number ~~significant~~of ~~competition~~clients ~~from~~who ~~other~~become ~~commercial banks~~delinquent, asfile ~~well~~for asprotection ~~from~~under ~~savings~~bankruptcy ~~and~~laws ~~loan~~or ~~associations,~~default ~~credit~~on ~~unions,~~their ~~brokerage firms,~~loans ~~mutual~~or ~~funds, and loan production offices and~~ other ~~financial~~obligations ~~units~~to ofthe ~~non-local bank holding companies~~Corporation. ~~The~~An ~~increasingly~~increase ~~competitive environment is a result primarily of changes~~ in ~~regulation, changes in technology, product delivery systems, and~~ the ~~accelerating~~number ~~pace~~ of ~~consolidation~~delinquencies, ~~among~~bankruptcies ~~financial service providers. Many of our competitors have substantially greater resources and lending limits than we do and may offer services that we do not~~ or ~~cannot~~defaults ~~provide.~~could ~~Our~~result ~~ability~~in toa ~~maintain our~~higher ~~history~~level of ~~strong~~nonperforming ~~financial~~assets, ~~performance~~net ~~will~~charge-offs, ~~depend~~provision infor ~~part~~loan onlosses, ~~our~~and ~~continued~~valuation ~~ability~~adjustments ~~to compete successfully in our market area and~~ on ~~our~~loans ~~ability~~held tofor ~~expand our scope of available financial services as needed to meet the needs and demands of our customers~~sale.

~~There~~Legislative isor aregulatory ~~limited~~changes ~~trading~~or ~~market~~actions ~~for~~could ~~our~~adversely ~~common~~impact ~~shares, and thus~~ the ~~ability~~Corporation’s ~~to sell or purchase our common shares may be limited~~business.

The ~~ability~~financial toservices ~~sell~~industry ~~our~~is ~~common~~extensively ~~shares~~regulated. orBanking ~~purchase~~laws ~~additional~~and ~~common~~regulations ~~shares~~are ~~largely~~primarily ~~depends~~intended ~~upon~~for the ~~existence~~protection of anconsumers, ~~active~~depositors ~~market~~and ~~for our~~the ~~common~~deposit ~~shares.~~insurance ~~Although~~fund, ~~our~~not ~~common~~to ~~shares~~benefit ~~are~~our ~~quoted~~shareholders. onChanges ~~the~~to ~~OTC~~laws ~~Bulletin~~and ~~Board,~~regulations ~~they~~or ~~are~~other ~~not~~actions ~~listed~~by onregulatory ~~any~~agencies ~~securities~~may ~~exchange~~negatively ~~and~~impact the ~~volume~~Corporation, ofpossibly ~~trading~~limiting ofthe ~~our~~services ~~common~~it ~~shares~~provides, ~~has~~increasing ~~been~~the ~~limited~~ability ~~historically.~~of Asnon-banks to acompete ~~result,~~with it, ~~may~~or berequiring ~~difficult~~it to ~~sell~~change ~~or purchase~~the ~~our~~way ~~common~~it ~~shares~~operates. atRegulatory ~~the~~authorities ~~volume,~~have ~~time,~~extensive ~~and~~discretion ~~price~~in ~~that~~connection iswith ~~desired.~~their Insupervisory ~~addition~~and enforcement activities, aincluding ~~fair~~the ~~valuation~~ability to impose restrictions on the operation of an institution and the ~~purchase~~ability orto ~~sales~~determine ~~price~~the adequacy of ~~our~~an ~~common~~institution’s ~~shares~~allowance ~~also~~for ~~depends~~loan ~~upon~~losses. anFailure ~~active~~to ~~trading~~comply ~~market~~with applicable laws, regulations and ~~thus~~policies ~~the~~could ~~price~~result ~~received~~in ~~for~~sanctions abeing ~~thinly~~imposed ~~traded stock~~by the regulatory agencies, ~~such~~including the asimposition ~~our~~of ~~common~~civil ~~shares~~money penalties, ~~may~~which ~~not~~could ~~reflect~~have ~~its~~a ~~true~~material ~~value~~adverse effect on the Corporation’s operations and financial condition.

~~Changes~~In light of current conditions in ~~accounting~~the ~~standards~~global ~~could~~financial markets and the global economy, regulators have increased their focus on the regulation of the financial services industry. Recently, Congress and the federal bank regulators have acted on an unprecedented scale in responding to the stresses experienced in the global financial markets. Some of the laws enacted by Congress and regulations promulgated by federal bank regulators subject the Corporation, and other financial institutions, to additional restrictions, oversight and costs that may have an impact ~~our~~on the Corporation’s business and results of operations. The Dodd-Frank Act was signed into law on July 21, 2010 and, although it became generally effective in July 2010, many of its provisions have extended implementation periods and delayed effective dates and will require extensive rulemaking by regulatory authorities. The Dodd-Frank Act, including future rules implementing its provisions and the interpretation of those rules, could result in a number of adverse impacts. The levels of capital and liquidity with which the Corporation must operate may be subject to more stringent capital requirements. In addition, the Corporation may be subjected to higher deposit insurance premiums to the FDIC. The Corporation may also be subject to additional regulations under the newly established Consumer Financial Protection Bureau, which was given broad authority to implement new consumer protection regulations. These and other provisions of the Dodd-Frank Act may place significant additional costs on the Corporation, impede its growth opportunities and place it at a competitive disadvantage.

~~The~~25 accounting standard setters, including the Financial Accounting Standards Board, the SEC, and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements. These changes can be difficult to predict and can materially affect how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, which would result in the restatement of our financial statements for prior periods.

~~Our~~The ~~success depends,~~Corporation inmay ~~large~~not part, upon the continued service of our senior management team and our ability to attract and retain qualified personnel. There is significant competition for qualified personnel in the financial services industry. We cannot assure you that we will be able to ~~retain~~pay ~~our~~dividends ~~existing~~in ~~key personnel or attract new or additional qualified personnel if and when needed. If we lose~~ the ~~services~~future ofin ~~our~~accordance ~~key~~with ~~personnel,~~past ~~or are unable to attract new or additional qualified personnel, our financial condition and results of operations could be adversely affected~~practice.

WeAs ~~may~~a bebank aholding ~~defendant~~company, ~~from~~the ~~time~~Corporation’s principal source of funds to ~~time~~pay individends aon ~~variety~~its ofcommon ~~litigation~~shares ~~and~~is dividends from the Bank. In the event that the Bank ~~other~~is ~~actions,~~unable ~~which~~to ~~could~~pay ~~have~~dividends, athe ~~material~~Corporation ~~adverse~~may ~~effect~~not onbe ~~our~~able ~~financial~~to ~~condition~~pay ~~and~~dividends ~~results~~on ofits ~~operations~~common shares.

The ~~Corporation~~ability ~~and~~of the Bank to pay dividends to the Corporation is ~~may~~subject beto ~~involved~~various ~~from~~legal ~~time~~limitations and to ~~time~~prudent inand asound ~~variety~~banking ofprinciples. ~~litigation~~Generally, ~~arising~~subject ~~out~~to ofcertain ~~our~~minimum ~~business.~~capital ~~Our~~requirements, ~~insurance~~the Bank may ~~not~~declare ~~cover~~a ~~all~~dividend ~~claims~~without ~~that~~the ~~may~~approval beof ~~asserted~~the ~~against~~Division usof Financial Institutions of the Ohio Department of Commerce, ~~and~~unless ~~any~~the ~~claims~~total ~~asserted~~dividends ~~against~~in usa ~~may~~calendar ~~harm~~year ~~our~~exceed ~~reputation~~the ~~regardless~~total of the ~~merit~~Bank’s ~~or eventual~~net ~~outcome~~profits for the year combined with the Bank’s retained profits of ~~such~~the ~~claims~~two preceding years. IfIn the ~~ultimate~~event ~~judgments~~that orthe ~~settlements~~Bank is unable to pay dividends, the Corporation in ~~any~~turn ~~litigation~~would ~~exceed~~likely ~~our~~have ~~insurance~~to ~~coverage,~~reduce ~~they~~or stop paying dividends on its common shares. The Corporation’s failure to pay dividends on its common shares could, in turn, have a material adverse effect on ~~our~~the ~~financial~~market ~~condition~~price ~~and~~of the ~~results~~Corporation’s ofcommon ~~operation~~shares.

25The Corporation’s credit standards and on-going process of credit assessment might not protect it from significant credit losses.

~~Table~~The Corporation takes credit risk by virtue of ~~Contents~~making loans. The Corporation’s exposure to credit risk is managed through the use of consistent and conservative underwriting standards. The Corporation’s credit administration function employs risk management techniques to ensure that loans adhere to corporate policy and problem loans are promptly identified. While these procedures are designed to provide the Corporation with the information needed to implement policy adjustments where necessary, and to take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.

~~Unauthorized~~The ~~disclosure~~Corporation ofdepends ~~sensitive~~upon orthe ~~confidential~~accuracy ~~client~~and orcompleteness ~~customer~~of information, ~~whether~~about ~~through a breach of our computer systems or otherwise, could severely harm our business~~customers.

AsIn ~~part~~deciding ofwhether ~~our~~to ~~financial~~extend ~~institution~~credit ~~business,~~or weenter ~~collect,~~into ~~process~~other transactions with customers, ~~and retain~~the ~~sensitive~~Corporation ~~and~~may ~~confidential~~rely ~~client~~on information provided by customers, including financial statements and ~~customer~~other financial information. ~~Despite~~The ~~the~~Corporation ~~security~~may ~~measures~~also werely ~~have~~on inrepresentations ~~place,~~of ~~our~~customers ~~facilities~~as ~~and~~to ~~systems,~~the accuracy and ~~those~~completeness of ~~our~~that ~~third-party~~information ~~service providers~~and, ~~may~~with berespect ~~vulnerable~~ to ~~security~~financial ~~breaches~~statements, ~~acts~~on reports of ~~vandalism, computer~~independent ~~viruses~~accountants. For example, ~~misplaced~~in ordeciding ~~lost~~whether ~~data,~~to ~~programming~~extend ~~and/or~~credit ~~human~~to ~~errors~~a business, orthe ~~other~~Corporation ~~similar~~may ~~events.~~assume Ifthat ~~information~~the ~~security~~customer’s isfinancial ~~breached,~~statements ~~information~~conform ~~can~~with begenerally ~~lost~~accepted oraccounting ~~misappropriated,~~principles ~~resulting~~and present fairly, in all material respects, the financial condition, ~~loss~~results orof ~~costs~~operations, toand uscash flows of the customer. ~~Any~~The ~~security~~Corporation ~~breach involving~~may ~~confidential~~also ~~client~~rely oron ~~customer~~the ~~information,~~reports ~~whether~~of byaccounting usfirms issuing an opinion or byother ~~our~~assurances ~~vendors,~~on ~~could~~those ~~severely~~financial ~~damage~~statements. ~~our~~The ~~reputation,~~Corporation’s ~~expose~~financial uscondition and results of operation could be negatively impacted to the ~~risks~~extent ofit ~~litigation~~relies ~~and~~on ~~liability,~~financial orstatements ~~disrupt~~that ~~operations,~~do ~~and~~not ~~have~~comply awith ~~material~~generally ~~adverse~~accepted ~~effect~~accounting onprinciples ~~our business~~or that are materially misleading.

~~ITEM 1B. Unresolved~~The ~~Staff~~Corporation ~~Comments~~may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed.

~~Not~~The ~~applicable~~Corporation and the Bank are required by federal and state regulatory authorities to maintain adequate levels of capital to support their operations. If the Bank experiences increased loan losses, additional capital may need to be infused. In addition, the Corporation may elect to raise additional capital to support its business or to finance acquisitions, or it may otherwise elect or be required to raise additional capital. The Corporation’s ability to raise additional capital, if needed, will depend on its financial performance, conditions in the capital markets, economic conditions and a number of other factors, many of which are outside its control. Accordingly, there can be no assurance that the Corporation can raise additional capital if needed or on acceptable terms. If the Corporation cannot raise additional capital when needed, it may have a material adverse effect on the Corporation’s financial condition and results of operations. In addition, the Corporation’s issuance of additional common shares, preferred shares or other equity securities to raise additional capital may have a dilutive effect on our existing shareholders and could lead to a decline in the price of our common shares.

~~ITEM 2~~The Corporation operates in an extremely competitive market and the Corporation will suffer if it is unable to compete effectively. ~~Properties~~

~~The~~In the Corporation’s ~~neither~~market ~~owns~~area, ~~nor~~it ~~leases~~encounters ~~any~~significant ~~properties.~~competition ~~The~~from ~~principal~~other commercial ~~offices~~banks, ofas ~~the~~well ~~Corporation~~as from savings and loan associations, ~~the~~credit ~~Bank~~unions, brokerage firms, mutual funds, and ~~Croghan~~loan ~~Insurance~~production ~~are~~offices ~~located~~and atother ~~323~~financial ~~Croghan~~units ~~Street,~~of ~~Fremont,~~non-local ~~Ohio~~bank holding companies. InThe ~~addition,~~increasingly ~~the~~competitive ~~Bank~~environment ~~operates~~is 13a ~~banking~~result ~~centers,~~primarily ~~including~~of ~~one~~changes in ~~Bellevue~~regulation, ~~one~~changes in ~~Clyde~~technology, ~~one~~product indelivery ~~Custar~~systems, ~~four~~and inthe ~~Fremont,~~accelerating ~~one~~pace inof ~~Green~~consolidation ~~Springs,~~among ~~one~~financial inservice ~~Monroeville,~~providers. ~~one~~Many inof ~~Norwalk,~~the ~~one~~Corporation’s incompetitors ~~Port~~have ~~Clinton,~~substantially greater resources and ~~two~~lending inlimits ~~Tiffin~~than ~~Ohio~~it does and may offer services that it does not or cannot provide. The ~~Bank~~Corporation’s ~~operations~~ability ~~center~~to ismaintain ~~also~~its ~~located~~history of strong financial performance will depend in ~~Fremont,~~ ~~Ohio.~~part ~~With~~on ~~the~~its ~~exception~~continued ofability ~~the~~to ~~Port~~compete ~~Clinton~~successfully ~~banking~~in its ~~center~~market area and anon ~~ATM~~its ~~site~~ability ~~north~~to ofexpand ~~Fremont,~~its ~~which~~scope ~~are~~of ~~leased,~~available ~~all~~financial ~~premises~~services ~~are~~as ~~owned~~needed byto meet the ~~Bank~~needs and demands of its customers.

~~ITEM 3. Legal~~26 ~~Proceedings~~

~~ITEM 4. Mine~~There ~~Safety~~is ~~Disclosures~~a limited trading market for the Corporation’s common shares, thus the ability to sell or purchase the Corporation’s common shares may be limited.

~~Not~~The ~~applicable~~ability to sell common shares of the Corporation or purchase additional common shares of the Corporation largely depends upon the existence of an active market for the Corporation’s common shares. Although the Corporation’s common shares are quoted on the OTC Bulletin Board, they are not listed on any securities exchange and the volume of trading of the Corporation’s common shares has been limited historically. As a result, it may be difficult to sell or purchase the Corporation’s common shares at the volume, time and price that is desired. In addition, a fair valuation of the purchase or sales price of the Corporation’s common shares also depends upon an active trading market, and thus the price received for a thinly traded stock, such as the Corporation’s common shares, may not reflect its true value.

26Changes in accounting standards could impact the Corporation’s results of operations.

~~Table~~The accounting standard setters, including the Financial Accounting Standards Board, the SEC, and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of ~~Contents~~the Corporation’s consolidated financial statements. These changes can be difficult to predict and can materially affect how the Corporation records and reports its financial condition and results of operations. In some cases, the Corporation could be required to apply a new or revised standard retroactively, which would result in the restatement of its financial statements for prior periods.

~~PART~~Changes IIin tax laws could adversely affect the Corporation’s results of operations.

~~ITEM 5~~The Corporation is subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes. ~~Market~~ Changes ~~for~~to ~~Registrant~~the Corporation’s ~~Common~~taxes ~~Equity~~could have a material adverse effect on its results of operations. In addition, ~~Related~~the ~~Stockholder~~Corporation’s ~~Matters~~customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by the Corporation’s customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for loans and deposit products. In addition, such negative effects on the Corporation’s customers could result in defaults on the loans made by the Bank and decrease the value of mortgage-backed securities in which the Bank has invested.

~~Issuer~~The ~~Purchases~~Corporation relies heavily on its management team and the unexpected loss of ~~Equity~~key ~~Securities~~management may adversely affect its business and financial results.

The Corporation’s ~~common~~success ~~shares~~to ~~are~~date ~~quoted~~has onbeen ~~the~~strongly ~~OTC~~influenced ~~Bulletin~~by ~~Board~~its ~~under~~ability ~~the~~to ~~symbol~~attract ~~“CHBH”.~~and ~~The~~to ~~other~~retain ~~information~~senior ~~required~~management byexperienced ~~Items~~in ~~201(a),~~banking ~~201(b)~~in ~~and~~the ~~201(c)~~markets ofthat ~~SEC~~the ~~Regulation~~Corporation ~~S-K~~serves. isThe ~~contained~~Corporation’s inability ~~(a) Financial~~to ~~Statement~~retain ~~Note~~executive ~~18,~~officers ~~captioned~~and ~~“REGULATORY~~the ~~MATTERS,”~~current onmanagement ~~pages~~team 52will ~~through~~continue 53to ofbe ~~the~~important ~~2011 Annual Report~~ to ~~Shareholders,~~successful ~~(b) the~~implementation ~~section~~of ~~captioned~~its ~~“DIVIDEND~~strategies. ~~RESTRICTIONS”,~~The inunexpected ~~Item 1~~loss of ~~Part~~services 1 of ~~this~~any ~~Annual~~key ~~Report~~management ~~on Form 10-K~~personnel, ~~and (c)~~ or the ~~section~~inability ~~captioned~~to ~~“MARKET~~recruit ~~PRICE~~and ~~AND~~retain ~~DIVIDENDS~~qualified ONpersonnel ~~COMMON~~in ~~SHARES” on page 4 of~~ the ~~2011~~future, could ~~Annual~~have ~~Report~~an toadverse ~~Shareholders,~~effect ~~and~~on ~~each~~the ofCorporation’s ~~(a),~~business ~~(b)~~ and ~~(c) is~~financial ~~incorporated herein by reference~~results.

~~ITEM 6. Selected~~The ~~Financial~~Corporation ~~Data~~must stay current on technological changes in order to compete effectively and meet customer demands.

The ~~information~~financial ~~required~~services bymarket, ~~this~~including ~~Item 6~~banking services, is ~~contained~~undergoing ~~under~~rapid changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the ~~caption~~effective ~~“FIVE~~use ~~YEAR~~of ~~SUMMARY~~technology OFincreases ~~SELECTED~~efficiency ~~FINANCIAL~~and ~~DATA”~~may enable the Corporation to reduce costs. The Corporation’s future success will depend, in part, on ~~page~~its 5ability to use technology to provide products and services that provide convenience to customers and to create additional efficiencies in its operations. Some of the ~~2011~~Corporation’s ~~Annual~~competitors ~~Report~~have substantially greater resources to ~~Shareholders~~invest in technological improvements. The Corporation may not be able to effectively implement new technology-driven products and isservices ~~incorporated~~or ~~herein~~be ~~by reference~~successful in marketing these products and services to its customers.

~~ITEM 7. Management~~The Corporation’s ~~Discussion~~information ~~and~~systems ~~Analysis~~may ofexperience ~~Financial~~an ~~Condition~~interruption ~~and~~ or security breach.

~~Results~~The Corporation relies heavily on communications and information systems to conduct its business. Any failure, interruption or breach in security of ~~Operations~~these systems could result in failures or disruptions in the Corporation’s customer relationship management, general ledger, deposit, loan and other systems. While the Corporation has policies and procedures designed to prevent or limit the effect of the possible failure, interruption or security breach of its information systems, there can be no assurance that any such failure, interruption or security breach will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failure, interruption or security breach of the Corporation’s information systems could damage the Corporation’s reputation, result in a loss of customer business, subject the Corporation to additional regulatory scrutiny, or expose the Corporation to civil litigation and possible financial liability.

~~The information~~27 required by this Item 7 is contained under the caption “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” on pages 6 through 20 of the 2011 Annual Report to Shareholders and is incorporated herein by reference.

The ~~information~~Corporation ~~required~~may bybe ~~this Item 7A is contained in~~ the ~~discussion~~subject of interest rate sensitivity included in the section captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - INTEREST RATE RISK” on beginning on page 17 of the 2011 Annual Report to Shareholders and is incorporated herein by referencelitigation, ~~and~~which ~~in the~~could ~~section~~result ~~captioned “ASSET/LIABILITY MANAGEMENT”~~ in ~~Item 1~~legal ofliability ~~Part I of this Form 10-K. In addition, discussions of the Corporation’s contractual obligations, contingent liabilities~~ and ~~commitments,~~damage ~~and~~to ~~off-balance~~its ~~sheet~~business arrangements is included in the section captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS, AND CONTINGENT LIABILITIES AND COMMITMENTS” on page 18 and 19 of the 2011 Annual Report to Shareholders, and in Financial Statement Note 17, captioned “FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK” on page 51 of the 2011 Annual Report to Shareholders, and both are incorporated herein by referencereputation.

27From time to time, the Corporation and the Bank may be subject to claims or legal action from customers, employees or others. Financial institutions like the Corporation and the Bank are facing a growing number of significant class actions, including those based on the manner of calculation of interest on loans and the assessment of overdraft fees. Future litigation could include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The Corporation and the Bank are also involved from time to time in other reviews, investigations and proceedings (both formal and informal) by governmental and other agencies regarding their businesses. These matters also could result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Like other financial institutions, the Corporation and the Bank are also subject to risk from potential employee misconduct, including non-compliance with policies and improper use or disclosure of confidential information. Substantial legal liability or significant regulatory action against the Corporation could materially adversely affect its business, financial condition or results of operations and/or cause significant reputational harm to its business.

~~Table~~ITEM of1B. ~~Contents~~Unresolved Staff Comments

~~ITEM 8~~Not applicable. ~~Financial~~ ~~Statements and Supplementary Data~~

~~The~~ITEM ~~following~~2. ~~consolidated financial statements (and reports thereon) are set forth on pages 22 through 60 of the 2011 Annual Report to Shareholders and are incorporated herein by reference:~~ Properties

~~Report~~The Corporation neither owns nor leases any properties. The principal offices of ~~Independent~~the ~~Registered~~Corporation, ~~Public~~the ~~Accounting~~Bank, ~~Firm~~and Croghan Insurance are located at 323 Croghan Street, Fremont, Ohio. In addition, the Bank operates 15 banking centers, including one in Bellevue, one in Clyde, one in Curtice, four in Fremont, one in Green Springs, one in Monroeville, one in Norwalk, one in Oak Harbor, one in Oregon, one in Port Clinton, and two in Tiffin, Ohio. The Bank also operates a Loan Production Office in Perrysburg, Ohio. The Bank’s operations center is also located in Fremont, Ohio. With the exception of the Port Clinton banking center, located in a retail supermarket in the Knollcrest Shopping Center, Perrysburg office, an ATM site north of Fremont, and two ATM night deposits on the Put In Bay Islands, which are leased, all other premises are owned by the Bank.

~~Consolidated~~ITEM ~~Balance~~3. ~~Sheets~~Legal ~~– December 31, 2011 and 2010~~ Proceedings

~~Consolidated~~Management ~~Statements~~is aware of ~~Operations~~no –pending ~~Years~~legal ~~ended~~proceedings ~~December 31~~to which the Corporation, ~~2011~~the Bank, ~~2010~~or Croghan Insurance is a party or of which any of their property is subject, other ~~and~~than ~~2009~~ordinary routine litigation to which the Bank is a party incidental to its banking business. The Corporation considers none of those proceedings to be material. Similarly, management is aware of no material proceedings involving the Corporation, the Bank, or Croghan Insurance that are contemplated by any governmental authority.

~~Consolidated~~ITEM ~~Statements~~4. ofMine ~~Stockholders’~~Safety ~~Equity – Years ended December 31, 2011, 2010, and 2009~~ Disclosures

~~Consolidated~~Not ~~Statements~~applicable ~~of Cash Flows – Years ended December 31, 2011, 2010, and 2009~~

~~Notes~~28 ~~to Consolidated Financial Statements~~

~~Accounting~~PART ~~and~~II ~~Financial Disclosure~~

~~ITEM 9A. Controls~~Issuer ~~and~~Purchases ~~Procedures~~of Equity Securities

~~Evaluation~~The ~~of Controls and Procedures. With the participation of the~~ Corporation’s common ~~principal~~shares ~~executive~~are ~~officer~~quoted ~~and~~on ~~principal financial officer,~~ the ~~Corporation’s~~OTC ~~management~~Bulletin ~~has~~Board ~~evaluated~~under the ~~effectiveness~~ ofsymbol ~~the~~“CHBH”. ~~Corporation’s~~There ~~disclosure~~were ~~controls~~approximately ~~and~~998 ~~procedures~~holders ~~(as defined in Rule 13a-15(e) under the Exchange Act) as~~ of ~~the~~record ~~end~~ of the ~~period covered by this Annual Report on Form 10-K. Based upon that evaluation, the~~ Corporation’s ~~principal~~common ~~executive~~shares ~~officer~~as ~~and~~of ~~principal~~February 28, ~~financial~~2014. ~~officer have concluded that:~~

The other information required by Items 201(a), ~~information~~201(b) ~~required~~and to201(c) beof ~~disclosed~~SEC byRegulation ~~the~~S-K ~~Corporation~~is contained in ~~this~~(a) Financial ~~Annual~~Statement ~~Report~~Note 19, captioned “REGULATORY MATTERS,” on ~~Form~~pages ~~10-K~~51 ~~and~~through 52 of the ~~other~~2013 ~~reports~~Annual ~~which~~Report to Shareholders, (b) the ~~Corporation~~section ~~files~~captioned or“DIVIDEND ~~submits~~RESTRICTIONS”, ~~under~~in ~~the~~Item 1 ~~Exchange~~of ~~Act~~Part ~~would~~1 beof ~~accumulated~~this ~~and~~Annual ~~communicated~~Report toon Form 10-K, and (c) the ~~Corporation’s~~section ~~management,~~captioned “MARKET ~~including~~PRICE ~~its~~AND ~~principal~~DIVIDENDS ~~executive~~ON ~~officer~~COMMON ~~and~~SHARES” ~~principal~~on ~~financial~~page ~~officer~~5 of the 2013 Annual Report to Shareholders, asand ~~appropriate~~each of (a), to(b) and ~~allow~~(c) is ~~timely~~incorporated ~~decisions~~herein ~~regarding~~by ~~required~~reference. ~~disclosure;~~

~~(b)~~The ~~information required to be disclosed by the~~ Corporation indid ~~this~~not ~~Annual~~repurchase ~~Report~~any onof ~~Form~~its ~~10-K~~common ~~and~~shares ~~the~~during ~~other~~2012 ~~reports which the Corporation files~~ or ~~submits~~2013. ~~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)~~ITEM ~~the~~6. ~~Corporation’s~~Selected ~~disclosure~~Financial ~~controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.~~Data

~~Management’s~~The ~~Annual~~information ~~Report~~required onby ~~Internal~~this ~~Control~~Item 6 ~~Over~~is ~~Financial~~contained ~~Reporting.~~under ~~The~~the caption “~~MANAGEMENT’S~~FIVE ~~REPORT~~YEAR ONSUMMARY ~~INTERNAL~~OF ~~CONTROL~~SELECTED ~~OVER~~ FINANCIAL ~~REPORTING~~ DATA” ~~included~~ on page 216 of the ~~2011~~2013 Annual Report to Shareholders and is incorporated herein by reference.

~~Changes~~ITEM ~~in Internal Control Over Financial Reporting~~7. ~~There were no changes in the Corporation~~Management’s ~~internal~~Discussion ~~control~~and ~~over~~Analysis ~~financial~~of ~~reporting~~Financial ~~(as~~Condition defined in Rule 13a-15(f) under the Exchange Act) that occurred during the Corporation’s fiscal quarter ended December 31, 2011, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting. and

~~ITEM 9B. Other~~Results ~~Information~~of Operations

~~None~~The information required by this Item 7 is contained under the caption “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” on pages 7 through 21 of the 2013 Annual Report to Shareholders and is incorporated herein by reference.

28ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

~~Table~~The information required by this Item 7A is contained in the discussion of ~~Contents~~interest rate sensitivity included in the section captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - INTEREST RATE RISK”, beginning on page 19 of the 2013 Annual Report to Shareholders and is incorporated herein by reference, and in the section captioned “ASSET/LIABILITY MANAGEMENT” in Item 1 of Part I of this Form 10-K. In addition, discussions of the Corporation’s contractual obligations, contingent liabilities and commitments, and off-balance sheet arrangements is included in the section captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS, AND CONTINGENT LIABILITIES AND COMMITMENTS” on page 20 of the 2013 Annual Report to Shareholders, and in Financial Statement Note 18, captioned “FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK” on page 51 of the 2013 Annual Report to Shareholders, and both are incorporated herein by reference.

~~PART~~29 ~~III~~

~~Directors~~ITEM ~~and~~8. ~~Executive~~Financial ~~Officers~~Statements and Supplementary Data

The ~~information~~following ~~required by~~consolidated ~~Item 401~~financial ofstatements ~~SEC~~(and ~~Regulation~~reports ~~S-K~~thereon) ~~concerning~~are ~~the~~set ~~directors~~forth ofon ~~the~~pages ~~Corporation~~23 ~~and~~through ~~the~~59 ~~nominees for election as directors~~ of the ~~Corporation~~2013 ~~at the~~ Annual ~~Meeting~~Report ofto Shareholders toand ~~be held on May 8, 2012 (the “2012 Annual~~are ~~Meeting”) is~~ incorporated herein by reference: from the disclosure included under the caption “PROPOSAL 1 - ELECTION OF DIRECTORS” in the 2012 Proxy Statement. The information required by Item 401 of SEC Regulation S-K concerning the executive officers of the Corporation is incorporated herein by reference from the disclosure included under the caption “EXECUTIVE OFFICERS” in the 2012 Proxy Statement.

~~Compliance~~Report ~~With~~of ~~Section 16(a)~~Independent Registered Public Accounting Firm Consolidated Balance Sheets – December 31, 2013 and 2012 Consolidated Statements of ~~the~~Operations ~~Exchange~~– ~~Act~~Years ended December 31, 2013, 2012, and 2011 Consolidated Statements of Comprehensive Income – Years ended December 31, 2013, 2012 and 2011 Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2013, 2012, and 2011 Consolidated Statements of Cash Flows – Years ended December 31, 2013, 2012, and 2011 Notes to Consolidated Financial Statements

~~The~~ITEM ~~information~~9. ~~required~~Changes ~~by Item 405 of SEC Regulation S-K is incorporated herein by reference from the disclosure included under the caption “SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE”~~ in ~~the~~and ~~2012~~Disagreements ~~Proxy~~with ~~Statement.~~Accountants on

~~Nominating~~Accounting ~~Procedures~~and ~~for~~Financial ~~Directors~~Disclosure

~~The~~Not ~~information required~~applicable by Item 407(c)(3) of SEC Regulation S-K is incorporated herein by reference from the disclosure included under the caption “CORPORATE GOVERNANCE – Director Nominations” in the 2012 Proxy Statement.

~~Audit~~ITEM ~~Committee~~9A. Controls and Procedures

~~The~~Evaluation ~~information~~of ~~required~~Controls byand ~~Items 407(d)(4)~~Procedures. ~~and~~With ~~407(d)(5)~~the participation of ~~SEC~~the ~~Regulation~~Corporation’s ~~S-K~~principal isexecutive ~~incorporated~~officer ~~herein~~and byprincipal ~~reference~~financial ~~from~~officer, the Corporation’s ~~disclosure~~management ~~included~~has ~~under~~evaluated the ~~caption~~effectiveness ~~“MEETINGS~~of ~~AND~~the ~~COMMITTEES~~Corporation’s OFdisclosure ~~THE~~controls ~~BOARD~~and –procedures ~~Audit~~(as ~~Committee”~~defined in Rule 13a-15(e) under the ~~2012~~Exchange ~~Proxy~~Act) ~~Statement~~as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Corporation’s principal executive officer and principal financial officer have concluded that:

~~Code~~(a) ofinformation ~~Ethics~~required to be disclosed by the Corporation in this Annual Report on Form 10-K 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;

~~The~~(b) ~~Corporation~~information ~~has~~required ~~adopted~~to abe ~~Code~~disclosed ~~of Business~~by ~~Conduct~~the ~~and~~Corporation ~~Ethics~~in ~~(the~~this ~~“Code~~Annual ofReport ~~Ethics”)~~on ~~that~~Form is10-K ~~applicable~~and tothe ~~all~~other ~~employees~~reports ofwhich the Corporation ~~and~~files ~~the~~or ~~Bank,~~submits ~~including~~under the ~~Corporation’s~~Exchange ~~principal~~Act ~~executive~~would ~~officer~~be ~~and~~recorded, ~~principal~~processed, ~~financial~~summarized, ~~officer.~~and ~~The~~reported ~~Code~~within ofthe ~~Ethics~~time ~~is included~~periods specified in ~~Exhibit~~the 14SEC’s torules ~~this~~and ~~Annual~~forms; ~~Report on Form 10-K.~~ and

~~ITEM 11. Executive~~(c) ~~Compensation~~ the Corporation’s disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.

~~The~~30 information required by this Item 11 is incorporated herein by reference from the disclosure included under the captions “PROPOSAL 1 – ELECTION OF DIRECTORS – Compensation of Directors” and “COMPENSATION OF EXECUTIVE OFFICERS” in the 2012 Proxy Statement.

~~Table~~Management’s ofAnnual ~~Contents~~Report on Internal Control Over Financial Reporting.

~~ITEM 12~~The management of Croghan Bancshares, Inc. ~~Security~~ ~~Ownership~~is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of ~~Certain~~1934, ~~Beneficial~~designed ~~Owners~~to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in conformity with U.S. generally accepted accounting principles. Internal control over financial reporting of Croghan Bancshares, Inc. and ~~Management~~its subsidiary (the “Corporation”) includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and ~~Related~~fairly ~~Stockholder~~reflect ~~Matters~~the transactions and dispositions of the assets of the Corporation;

~~Beneficial~~(2) ~~Ownership~~provide ~~Information~~reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and

~~The~~(3) ~~information~~provide ~~required~~reasonable byassurance ~~Item 403~~regarding ofprevention ~~SEC~~or ~~Regulation~~timely ~~S-K~~detection ~~is incorporated~~of ~~herein~~unauthorized byacquisition, ~~reference~~use ~~from~~or ~~the~~disposition ~~disclosure~~of ~~included under~~ the ~~caption~~Corporation’s ~~“SECURITY~~assets ~~OWNERSHIP~~that OFcould ~~CERTAIN~~have ~~BENEFICIAL~~a ~~OWNERS~~material ~~AND~~effect ~~MANAGEMENT”~~on in the ~~2012~~financial ~~Proxy Statement~~statements.

~~Equity~~With ~~Plan~~the ~~Information~~supervision and participation of our President and Chief Executive Officer and our Treasurer, management assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2013. In making this assessment, management used the criteria set forth for effective internal control over financial reporting as described in the “Internal Control Integrated Framework (1992),” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that the Corporation’s system of internal control over financial reporting is effective as of December 31, 2013.

~~The~~This ~~Croghan~~Annual Report ~~Bancshares,~~does ~~Inc.~~not ~~Amended~~include ~~and~~an ~~Restated~~attestation ~~2002~~report ~~Stock~~of ~~Option and Incentive Plan (~~the ~~“Plan”) was previously approved by the~~ Corporation’s ~~shareholders~~registered atpublic ~~the~~accounting ~~2002~~firm ~~Annual~~regarding ~~Meeting.~~internal ~~The~~control ~~Plan~~over ~~permitted~~financial ~~the~~reporting. ~~Corporation~~Management’s toreport ~~award~~was ~~stock~~not ~~options~~subject ~~and/or stock appreciation rights~~ to ~~directors~~attestation ~~and~~by ~~managerial and other key employees of~~ the Corporation.’s registered ~~The~~public ~~Plan~~accounting ~~expired~~firm inpursuant ~~March 2012 and it is proposed~~ to beapplicable ~~replaced~~rules ~~by a new 2012 Equity Incentive Plan, which will be considered~~ and ~~voted upon at the 2012 Annual Meeting~~regulations. ~~At the time of its expiration, a total of 162,082 common shares remained available for issuance under the Plan. A total of 28,869 stock options were granted under the Plan prior to its expiration.~~

~~The~~Changes ~~following~~in ~~table~~Internal ~~provides~~Control ~~certain~~Over ~~information~~Financial ~~regarding~~Reporting. There were no changes in the Corporation’s ~~equity~~internal ~~compensation~~control ~~plans~~over financial reporting (as ofdefined in Rule 13a-15(f) under the Exchange Act) that occurred during the Corporation’s fiscal quarter ended December 31, ~~2011~~2013, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

	(a)	(b)	(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights	Weighted-average exercise price of outstanding options, warrants, and rights	Number of securities remaining available for future issuance under equity compensation plans(excluding securities reflected in column (a))
Equity compensation plansapproved by securityholders	28,869	24.99	162,082 (2)
Equity compensation plans notapproved by securityholders (1)	-	-	-
Total	28,869	24.99	162,082 (2)

ITEM 9B. Other Information

~~(1)~~None ~~The Corporation has no equity compensation plans that have not been approved by the Corporation’s shareholders.~~

~~(2)~~31 ~~The Plan expired in March 2012 and no further awards may be granted under the Plan.~~

~~Related~~PART ~~Party~~III ~~Transactions~~

~~The~~ITEM ~~information~~10. ~~required~~Directors, byExecutive ~~Item 404~~Officers, ofand ~~SEC~~Corporate ~~Regulation S-K is incorporated herein by reference from the disclosure included under the caption “CORPORATE GOVERNANCE – Related Party Transactions” in the 2012 Proxy Statement.~~ Governance

~~Director~~Directors ~~Independence~~and Executive Officers

The following sets forth information concerning ~~required~~each bydirector ~~Item 407~~of the Corporation (including each director nominated for re-election as a) director of ~~SEC~~the ~~Regulation~~Corporations ~~S-K~~at isthe ~~incorporated~~2014 Annual Meeting of Shareholders to be held on May 13, 2014). Unless otherwise indicated, each person has ~~herein~~held byhis ~~reference~~or ~~from~~her ~~the~~principal ~~disclosure~~occupation ~~included~~for ~~under~~more ~~the~~than ~~caption~~five ~~“CORPORATE~~years. ~~GOVERNANCE~~All –directors ~~Director~~of ~~Independence”~~the inCorporation also serve as members of the ~~2012~~Board ~~Proxy~~of ~~Statement~~Directors of the Bank.

~~ITEM 14. Principal~~Board ~~Accountant~~Nominations ~~Fees and Services~~

The following sets forth information, as of the ~~required~~date byof this ~~Item 14~~Proxy isStatement, ~~incorporated~~concerning ~~herein~~each byBoard ~~reference~~nominee ~~from~~for election as a director of the ~~disclosure~~Corporation. ~~included~~Unless ~~under~~otherwise indicated, each person has held his or her principal occupation for more than five years. All directors of the ~~caption~~Corporation also ~~“AUDIT~~serve ~~COMMITTEE~~as ~~DISCLOSURE”~~members inof the ~~2012~~Board ~~Proxy~~of ~~Statement~~Directors of the Bank.


Name	Age	Position(s) Held with the Company and the Bank and Principal Occupation(s)	Director of the Company Continuously Since	Nominee for Term Expiring In

John J. Caputo	67	Semi-Retired, Co-Owner/Vice President of Jack Bradley Realty Company located in Ottawa County since 1976 and operating in Sandusky County since 1990. Mr. Caputo was elected as a director of the Company and the Bank upon the closing of the merger of Indenbancorp with and into the Company on December 6, 2013.	2013	2017

James C. Dunn	67	Co-Owner of Dunn Chevrolet Buick located in Oregon, Ohio. Mr. Dunn was elected as a director of the Company and the Bank upon the closing of the merger of Indenbancorp with and into the Company on December 6, 2013.	2013	2016

Claire F. Johansen	60	Owner of Lane of Dreams Farm LLC, an equestrian training center located in Tiffin, Ohio.	2000	2017

Rick M. Robertson	61	President and Chief Executive Officer of the Company and the Bank since September 2010. Previously served as Executive Vice President and Chief Banking Officer at ViewPoint Bank headquartered in Plano, Texas, from February 2006 to August 2010, and served as Chairman at ViewPoint Bankers Mortgage, Inc., a wholly-owned subsidiary of ViewPoint Bank, from September 2007 to August 2010.	2010	2017

Gary L. Zimmerman	67	Owner and Partner of Swint-Reineck Company, a real estate holding company located in Fremont, Ohio. Formerly Owner and President of Swint-Reineck Hardware, Inc.	1991	2017

~~Table~~Continuing ofDirectors ~~Contents~~

~~PART~~The IVfollowing sets forth information, as of the date of this Proxy Statement, concerning the current directors whose terms will continue after the Annual Meeting. Unless otherwise indicated, each person has held his principal occupation for more than five years. All directors of the Company also serve as members of the Board of Directors of the Bank.

~~ITEM 15. Exhibits~~32 ~~and Financial Statement Schedules~~

The following consolidated financial statements (and reports thereon) are set forth on pages 22 through 60 of the Corporation’s 2011 Annual Report to Shareholders (included as Exhibit 13 to this Annual Report on Form 10-K) and are incorporated herein by reference:


Name	Age	Position(s) Held with the Company and the Bank and Principal Occupation(s)	Director of the Company Continuously Since	Term Expires In

Michael D. Allen Sr.	68	Executive Vice President and General Manager of International Metal Hose Company, a manufacturer of flexible conduit and metal tubing located in Bellevue, Ohio.	2002	2015

James E. Bowlus	65	President and Treasurer of Fremont Candy & Cigar Inc., located in Fremont, Ohio. Lead Independent Director of the Company and the Bank since October 2010.	2000	2016

James R. Faist	66	Retired in 2011 as Vice President of Finance of Crown Battery Manufacturing Company located in Fremont, Ohio.	2007	2016

Stephen A. Kemper	74	Owner and President of Kemper Iron and Metal Company, a recycler and scrap processor located in Bellevue, Ohio.	1996	2015

Daniel W. Lease	65	Vice President of Administration and CFO of WT Holdings LCC, a manufacturing holding company located in Cabot, Pennsylvania. Formerly President of KL&L, Inc., a refractory construction company located in Braddock, Pennsylvania. Formerly Vice President of Administration and CFO of Whetstone Technology, LLC, a refractory products manufacturer located in Cabot, Pennsylvania.	1994	2016

Thomas W. McLaughlin	61	Vice President of Underground Utilities, Inc., a construction company located in Monroeville, Ohio.	2006	2015

Allan E. Mehlow	59	Chief Financial Officer of The Mosser Group/WMOG Inc. located in Fremont, Ohio.	2000	2016

~~Report~~33 ~~of Independent Registered Public Accounting Firm~~

~~Consolidated~~The ~~Statements~~following are the executive officers of ~~Operations~~the –Company ~~Years~~and ~~ended~~the ~~December 31~~Bank, ~~2011,~~all ~~2010,~~of whom are elected annually and ~~2009~~serve at the pleasure of the Board of Directors of the Corporation and the Bank.

Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2011, 2010, and 2009


Name	Age	Position and Business Background

Charles T. Barteck	51	Mr. Barteck is Vice President and Retail Sales Manager of the Bank and has served in such position since December 2011. He previously served as President/Owner of Buckeye Land Title LTD in Genoa, Ohio from 2009 to 2011. Prior to joining Buckeye Land Title LTD, he served as Vice President of Commercial Lending from 2007 to 2009 and 2000 to 2004 at Genoa Banking Company. He also served as Vice President of Retail at Genoa Banking Company from 2004 to 2007.

Stacy A. Cox	46	Ms. Cox is Senior Vice President and Chief Operations Officer of the Bank and has served is such position since September 2011. She previously served as Vice President of Core Banking Operations and Information Technology at First National Bank in Omaha, Nebraska from September 2008 to September 2011. Prior to joining First National Bank Omaha, she worked at Huntington National Bank (Sky Financial Group) from 1992 until 2008 as Senior Vice President.

Thomas J. Elder Jr.	66	Mr. Elder was Executive Vice President/Chief Lending Officer of the Bank until his retirement on July 26, 2013. He had served in such position since May 2010. He joined the Bank in February 2003 and served as Senior Vice President/Chief Lending Officer of the Bank from May 2008 to May 2010, and as Vice President/Chief Lending Officer of the Bank from October 2003 to May 2008. He had also served as Vice President of the Corporation since July 2006.

Barry F. Luse	61	Mr. Luse is Senior Vice President & Trust Officer of the Bank and has served in such position since May 2010. He joined the Bank in 1990 and served as Trust Officer of the Bank from 1990 to 1993, as Vice President/Trust Officer of the Bank from 1993 to 2009, and as Vice President/Senior Trust Officer of the Bank from May 2009 to May 2010. He has also served as Secretary of the Corporation since March 2001. Mr. Luse is a lawyer and has been a member of the Ohio Bar since 1983.

~~Consolidated~~34 ~~Statements of Cash Flows – Years ended December 31, 2011, 2010, and 2009~~

(a)(2) Financial Statement Schedules



Kendall W. Rieman	43	Mr. Rieman is Executive Vice President and Chief Financial Officer of the Bank and has served in such position since September 2011. He joined the Bank in 2006 and served as Vice President and Chief Financial Officer/Chief Operations Officer of the Bank from June 2006 to May 2010, as Senior Vice President and Chief Financial Officer/Chief Operations Officer of the Bank from May 2010 to January 2011, and as Executive Vice President and Chief Financial Officer/Chief Operations Officer of the Bank from January 2011 to September 2011. He has also served as Treasurer of the Corporation since July 2006.

Rick M. Robertson	61	Mr. Robertson is President and Chief Executive Officer of the Corporation and the Bank and has served in such position since September 2010. Before joining the Corporation and the Bank, Mr. Robertson served as Executive Vice President and Chief Banking Officer of ViewPoint Bank headquartered in Plano, Texas, from February 2006 until August 2010, and served as Chairman of ViewPoint Bankers Mortgage, Inc., a wholly-owned subsidiary of ViewPoint Bank, from September 2007 until August 2010. Prior to joining ViewPoint Bank, Mr. Robertson worked for Key Bank as Michigan District President from February 2002 until February 2006.

Daniel N. Schloemer	57	Mr. Schloemer is Senior Vice President and Chief Lending Officer of the Bank and has served in such position since July 2013. He joined the Bank in 2002 and has served as Vice President and Commercial Loan Officer from 2002 to 2011 and as Senior Vice President and Commercial Loan Officer from 2011 to 2013.

~~Financial~~Compliance ~~statement schedules~~With ~~have~~Section 16(a) ~~been~~of ~~omitted either because they are not applicable or because~~ the ~~required~~Exchange ~~information~~Act ~~is provided in the consolidated financial statements, or in the notes thereto.~~

(Not applicable – The Corporation does not have a~~)(3)~~ ~~Exhibits~~class of equity securities registered pursuant to Section 12 of the Exchange Act.

~~The~~Nominating ~~following~~Procedures ~~exhibits~~for ~~are~~Directors ~~filed with or incorporated by reference in this Annual Report on Form 10-K:~~

Exhibit Number	Description	Location
3.1(a)	Amended Articles of Incorporation of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(i) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 0-20159)
3.1(b)	Certificate of Amendment to Articles of Incorporation of Croghan Bancshares, Inc. as filed with the Ohio Secretary of State on May 12, 2006	Incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (File No. 0-20159)
3.2	Amended and Restated Code of Regulations of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(ii) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (File No. 0-20159)

The Corporation does not currently have a separate nominating committee of the Board of Directors. Instead, all of the independent directors of the Corporation meet in executive session to consider and recommend nominees for election or re-election to the Board of Directors of the Corporation. The Board of Directors believes that the independent directors as a group are able to perform the nominating functions in a fair and impartial manner. As a result, the Board of Directors believes it is unnecessary to create a separate nominating committee at this time.

31The independent directors consider nominees proposed by shareholders of the Corporation in the same manner as nominees proposed by the Board of Directors. Section 2.04 of the Regulations prescribes the method by which a shareholder may nominate a candidate for election to the Board of Directors. Nominations for the election of directors at an annual meeting, other than those made by or on behalf of the existing Board of Directors of the Corporation, must be made in writing and must be received by the Secretary of the Corporation on or before the December 31st immediately preceding the annual meeting, or within a reasonable time as determined by the Board of Directors. Such notification must contain the following information:

~~Table~~— The name, age, business or residence address of ~~Contents~~each nominee;

4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt	Included in this filing
*10.1	Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (File No. 0-20159)
*10.2	Executive Supplemental Death Benefit Agreement	Incorporated herein by reference to Exhibit 10(v) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003 (File No. 0-20159)
*10.3(a)	Retirement Agreement and General Release, dated as of December 14, 2009, between Croghan Bancshares, Inc. and Steven C. Futrell	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (File No. 0-20159)
*10.3(b)	Amendment to Retirement Agreement and General Release, dated as of August 31, 2010, between Croghan Bancshares, Inc. and Steven C. Futrell	Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed September 7, 2010 (File No. 0-20159)
*10.4	Employment Agreement, dated as of November 9, 2010, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 16, 2010 (File No. 0-20159)
*10.5	Amendment to Employment Agreement, dated as of July 21, 2011, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 0-20159)

—

The principal occupation or employment of each nominee;

32— The number of common shares of the Corporation owned beneficially and/or of record by each nominee; and

~~Table~~— The length of ~~Contents~~time each nominee has owned such shares.

*10.6	Form of Incentive Stock Option Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-20159)
13	2011 Annual Report to Shareholders	Included with this filing (not deemed filed except for portions thereof which are specifically incorporated by reference into this Annual Report on Form 10-K)
14	Croghan Bancshares, Inc. Code of Business Conduct and Ethics	Included with this filing
21	Subsidiaries of the Registrant	Included with this filing
23	Consent of Independent Registered Public Accounting Firm	Included with this filing
31.1	Rule 13a-14(a)/15d-14(a) Certification – Principal Executive Officer	Included with this filing
31.2	Rule 13a-14(a)/15d-14(a) Certification – Principal Financial Officer	Included with this filing
32	Section 1350 Certification – Principal Executive Officer and Principal Financial Officer	Included with this filing
101	The following materials from Croghan Bancshares, Inc.’s 2011 Annual Report and incorporated therefrom in Croghan Bancshares, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2011 and 2010; (ii) the Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009; (iii) the Consolidated Statements Stockholders’ Equity for the years ended December 31, 2011, 2010 and 2009; (iv) the Consolidated Statements of	Filed herewith

CROGHAN BANCSHARES, INC.

Date: March 13, 2012

/s/ Rick M. Robertson

Rick M. Robertson

President and Chief Executive Officer

~~Table~~Audit ofCommittee ~~Contents~~

~~Cash~~The ~~Flows~~Board ~~for~~of Directors ~~the years ended December 31, 2011, 2010 and 2009; and (v) the Notes to Consolidated Financial Statements* *Pursuant to Rule 406T~~ of ~~SEC Regulation S-T,~~ the ~~Interactive~~Corporation ~~Data~~has ~~Files~~an onAudit ~~Exhibit~~Committee ~~101~~that ~~hereto~~is ~~are~~comprised ~~furnished and not deemed filed or part~~ of aMichael ~~registration~~D. ~~statement~~Allen ~~or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933~~Sr., asDaniel ~~amended,~~W. ~~and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934~~Lease, ~~as amended,~~ and ~~otherwise~~Thomas ~~are~~W. ~~not~~McLaughlin ~~subject to liability under those Sections~~(Chair).

*The Board of Directors of the Corporation has determined that each of Messrs. Lease and McLaughlin qualifies as an “audit committee financial expert” as defined in SEC rules. Mr. ~~Denotes~~Lease ~~management~~has ~~contract~~been ora ~~compensatory~~Certified ~~plan~~Public orAccountant ~~arrangement~~since 1976, has served as Chief Financial Officer of Whetstone Technology, LLC since 2001, and served as President and Chief Executive Officer of Wahl Refractories, Inc. prior to 2001. Mr. McLaughlin has been a Certified Public Accountant since 1976, has served as Vice President and Chief Financial Officer of Underground Utilities, Inc. since December 2005, and practiced in the public accounting profession for more than 30 years prior to joining Underground Utilities, Inc.

34Code of Ethics

~~Table~~The Corporation has adopted a Code of ~~Contents~~Business Conduct and Ethics (the “Code of Ethics”) that is applicable to all employees of the Corporation and the Bank, including the Corporation’s principal executive officer and principal financial officer. The Code of Ethics is included in Exhibit 14 to this Annual Report on Form 10-K.

~~SIGNATURES~~ITEM 11. Executive Compensation

~~Pursuant~~Compensation ~~to the requirements~~ of ~~Section 13~~Directors ~~or 15(d) 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.~~

During the 2013 fiscal year, each director of the Corporation received a fee of $900 for attendance at each meeting of the Board of Directors of the Bank and a fee of $450 for attendance at each committee meeting. Each chair of a committee of the Board of Directors received an additional fee of $100 for attendance at each meeting and the Board’s Lead Independent Director receives an additional fee of $100 for attendance at each Board of Directors meeting.

~~Pursuant~~No compensation was paid to ~~the~~directors ~~requirements~~for attendance at meetings of the ~~Securities~~Board ~~Exchange~~of ~~Act~~Directors of ~~1934,~~the ~~this~~Corporation ~~report~~in ~~has~~2013. ~~been~~Directors ~~signed~~who ~~below~~are byalso ~~the~~officers ~~following~~of ~~persons~~Corporation onor ~~behalf of~~ the ~~Registrant~~Bank indo ~~the~~not ~~capacities~~receive ~~and~~compensation onfor ~~the~~attendance ~~date~~at ~~indicated:~~committee meetings.

~~Signature~~The ~~Title(s)~~following ~~/s/~~contains ~~Rick~~information M.regarding ~~Robertson~~the ~~President~~compensation ~~and~~awarded ~~Chief~~or ~~Executive~~paid ~~Officer~~to, ~~(Principal~~or earned ~~Executive~~by, ~~Officer)~~the ~~and~~directors ~~Director~~during ~~Rick~~the M.2013 ~~Robertson~~fiscal ~~/s/ Kendall W~~year. Rieman Treasurer (Principal Financial Officer and Principal Accounting Officer) Kendall W. Rieman /s/ Michael D. Allen Sr. Director Michael D. Allen Sr. /s/ James E. Bowlus Director James E. Bowlus /s/ James R. Faist Director James R. Faist /s/ Claire F. Johansen Director Claire F. Johansen /s/ Stephen A. Kemper Director Stephen A. Kemper /s/ Daniel W. Lease Director Daniel W. Lease /s/ Thomas W. McLaughlin Director Thomas W. McLaughlin /s/ Allan E. Mehlow Director Allan E. Mehlow /s/ Gary L. Zimmerman Director Gary L. Zimmerman

~~Date: March 13,~~Director ~~2012~~Compensation


Name (1)	Fees Earned or Paid in Cash ($)	All Other Compensation ($)	Total ($)
Michael D. Allen Sr.	$26,200.00	$0		$26,200.00
James E. Bowlus (2)	$34,550.00	$0		$34,550.00
John J. Caputo (3)	$0.00	$0		$0.00
James C. Dunn (3)	$900.00	$0		$900.00
James R. Faist	$20,700.00	$0		$20,700.00
Claire F. Johansen	$25,300.00	$0		$25,300.00
Stephen A. Kemper	$25,200.00	$0		$25,200.00
Daniel W. Lease	$19,650.00	$0		$19,650.00
Thomas W. McLaughlin	$23,000.00	$0		$23,000.00
Allan E. Mehlow	$23,400.00	$0		$23,400.00
Gary L. Zimmerman	$18,900.00	$0		$18,900.00

~~Table~~(1) Rick M. Robertson is not included in the above table because he served as a named executive officer of ~~Contents~~the Corporation during the 2013 fiscal year, and the fees paid to Mr. Robertson in his capacity as director of the Bank are fully reflected in the Summary Compensation Table below.

~~EXHIBIT~~(2) ~~INDEX~~Includes a $5,000 fee paid to Mr. Bowlus in recognition of additional time and effort devoted to the Indebancorp merger transaction.

Exhibit Number	Description	Location
3.1(a)	Amended Articles of Incorporation of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(i) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 0-20159)
3.1(b)	Certificate of Amendment to Articles of Incorporation of Croghan Bancshares, Inc. as filed with the Ohio Secretary of State on May 12, 2006	Incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (File No. 0-20159)
3.2	Amended and Restated Code of Regulations of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(ii) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (File No. 0-20159)
4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt	Included with this filing
*10.1	Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (File No. 0-20159)
*10.2	Executive Supplemental Death Benefit Agreement	Incorporated herein by reference to Exhibit 10(v) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003 (File No. 0-20159)
*10.3(a)	Retirement Agreement and General Release, dated as of December 14, 2009, between Croghan Bancshares, Inc. and Steven C. Futrell	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (File No. 0-20159)

(3)

John J. Caputo and James C. Dunn were elected as directors of the Corporation and the Bank effective December 6, 2013.

Exhibit Number	Description	Location
*10.3(b)	Amendment to Retirement Agreement and General Release, dated as of August 31, 2010, between Croghan Bancshares, Inc. and Steven C. Futrell	Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed September 7, 2010 (File No. 0-20159)
*10.4	Employment Agreement, dated as of November 9, 2010, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 16, 2010 (File No. 0-20159)
*10.5	Amendment to Employment Agreement, dated as of July 21, 2011, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 0-20159)
*10.6	Form of Incentive Stock Option Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-20159)
13	2011 Annual Report to Shareholders	Included with this filing (not deemed filed except for portions thereof which are specifically incorporated by reference into this Annual Report on Form 10-K)
14	Croghan Bancshares, Inc. Code of Business Conduct and Ethics	Included with this filing
21	Subsidiaries of the Registrant	Included with this filing
23	Consent of Independent Registered Public Accounting Firm	Included with this filing
31.1	Rule 13a-14(a)/15d-14(a) Certification – Principal Executive Officer	Included with this filing
31.2	Rule 13a-14(a)/15d-14(a) Certification – Principal Financial Officer	Included with this filing

Compensation of Executive Officers

37Provided below is an overview of the Corporation’s compensation policies and practices for its executive officers, including named executive officers. The term “named executive officers” refers to the Corporation’s Chief Executive Officer and those other executive officers of the Corporation included in the Summary Compensation Table.

~~Table~~Objectives of ~~Contents~~Croghan Compensation Programs

Exhibit Number	Description	Location
32	Section 1350 Certification – Principal Executive Officer and Principal Financial Officer	Included with this filing
101	The following materials from Croghan Bancshares, Inc.’s 2011 Annual Report and incorporated therefrom in Croghan Bancshares, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2011 and 2010; (ii) the Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009; (iii) the Consolidated Statements Stockholders’ Equity for the years ended December 31, 2011, 2010 and 2009; (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009; and (v) the Notes to Consolidated Financial Statements* *Pursuant to Rule 406T of SEC Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections.	Filed herewith

The primary objective of the Corporation’s compensation programs is to provide competitive compensation to attract, retain, and motivate qualified employees who will contribute to the long-term success of the Corporation. In furtherance of this objective, the Corporation regularly evaluates the compensation provided to the Corporation’s executive officers to ensure that it remains competitive in relation to the compensation paid to similarly situated executive officers at other financial institutions of comparable size and performance. In addition, the Corporation endeavors to ensure that the compensation provided to the Corporation’s executive officers is internally equitable based upon the skill requirements and responsibilities associated with each executive position.

*The ~~Denotes~~Corporation’s ~~management~~compensation ~~contract~~programs orare ~~compensatory~~designed ~~plan~~to orreward ~~arrangement~~each executive officer’s job performance and contributions to the Corporation. These factors are generally determined in the subjective judgment of the Corporation’s Compensation Committee for the Chief Executive Officer and with the benefit of performance reviews and salary recommendations by the Chief Executive Officer and the Corporation’s human resources department for other executive officers.

38In making compensation decisions, the Compensation Committee places significant emphasis on the Corporation’s performance relative to the Corporation’s industry and peers. The Compensation Committee generally has not considered stock price as an indicator of company performance in making compensation decisions because the price of the Corporation’s common shares is subject to a variety of factors outside of the Corporation’s control.

Components of 2013 Executive Compensation

The following are general components to the annual compensation that the Corporation provides to its executive officers:

—

base salary

—

cash bonuses

—

retirement and death benefits

—

equity-based awards

—

perquisites and other benefits

Base Salary

Base salary represents the primary component of annual compensation paid to the Corporation’s executive officers. When recommending an executive officer’s salary within the pay range established by peer group comparison data, the Corporation’s Compensation Committee primarily considers the executive officer’s job performance and contribution to the objectives of the Corporation. As discussed above, these factors are determined in the subjective judgment of the Compensation Committee for the Chief Executive Officer and with the benefit of performance reviews and salary recommendations by the Chief Executive Officer for other executive officers of the Corporation and the Bank. To a lesser extent, the Compensation Committee also considers local and national economic conditions and future business prospects of the Bank in setting base salary levels.

Cash Bonuses

Effective January 1, 2003, the Bank introduced the “Performance Compensation for STAKEHOLDERS™” program in which all employees, including the named executive officers, participate. Pursuant to this program, employees of the Corporation and the Bank are eligible to receive annual cash bonuses based on the attainment of established company-wide performance goals. These goals focus on four general areas of company performance: growth, profitability, loan quality, and productivity. Performance targets and bonus levels under the program are established at the start of the each fiscal year through a collaborative effort involving management and the Compensation Committee, and are subject to final approval by the Board of Directors. Additionally, the Corporation and the Bank occasionally award discretionary cash bonuses to its executive officers to attract new executive officers, to reward exceptional job performance, or to address special circumstances. Discretionary bonuses are awarded on a limited basis and are not contemplated or anticipated when setting annual compensation for the Corporation’s executive officers.

Equity-Based Awards

The Corporation believes that it is also important to provide compensation which serves as an incentive for pursuing the long-term growth, profitability and financial success of the Corporation. Accordingly, the Board of Directors adopted the Croghan Bancshares, Inc. 2002 Stock Option and Incentive Plan (the “2002 Plan”), which was approved by the shareholders of the Corporation at the 2002 Annual Meeting of Shareholders. The 2002 Plan expired in accordance with its terms in March 2012, as a result of which no further awards may be granted under the 2002 Plan. The Board subsequently adopted the Croghan Bancshares, Inc. 2012 Equity Incentive Plan (the “2012 Plan”), which was approved by the shareholders of the Corporation at the 2012 Annual Meeting of Shareholders.

Perquisites and Other Benefits

The Corporation provides its executive officers with certain perquisites and other benefits that the Compensation Committee believes are reasonable to enable the Corporation to attract and retain qualified executive officers and to promote business development activities by the executive officers in the communities served by the Bank. In accordance with past practice, the Corporation approved cash bonuses in 2013 to reimburse certain executive officers, including certain named executive officers, for the cost of dues to the Fremont Country Club and the Catawba Island Club. The Compensation Committee believes that these perquisites and other benefits are reasonable in amount and consistent with those provided by similarly situated financial institutions in the Corporation’s market area.

The executive officers of the Corporation are eligible to participate in the Bank’s 401(k) Profit Sharing Plan on the same basis as all full-time employees of the Bank. For each executive officer or other employee who participates in the 401(k) Profit Sharing Plan, the Bank matches 50% of contributions up to 6% of the participant’s annual compensation, with a maximum match of 3% of annual compensation. The Corporation may also provide an annual discretionary contribution to the 401(k) Profit Sharing Plan on behalf of executive officers and other employees based upon a Board-established target percentage of employee compensation for those eligible to participate in the plan.

The executive officers of the Corporation are also eligible to participate in all of the employee benefit plans, such as medical, dental, group term life insurance, and disability insurance, which are generally available to all employees of the Corporation and the Bank on a non-discriminatory basis.

SUMMARY COMPENSATION TABLE

The following contains information regarding the compensation earned by the named executive officers of the Corporation during the fiscal years ended December 31, 2013 and 2012.

Summary Compensation Table


Name and Principal Position	Year	Salary ($)	Bonus & Non-Equity Incentive Plan Compensation ($) (1)	Stock Awards (2)	All Other Compensation ($)	Total ($)

Rick M. Robertson President and Chief Executive Officer of the Corporation and the Bank	2013 2012	$271,415 (3) $247,570 (5)	$60,000 $41,650	$0 $51,965	$29,051 (4) $24,469 (6)	$360,466 $365,654


Kendall W. Rieman Vice President and Treasurer of the Corporation and Executive Vice President and Chief Financial Officer of the Bank	2013 2012	$156,874 $145,711	$38,824 $16,759	$0 $26,060	$20,042 (7) $16,691 (8)	$215,740 $205,221

Thomas J. Elder Jr. Vice President of the Corporation and Executive Vice President and Chief Lending Officer of the Bank until July 26, 2013	2013 2012	$89,307 $138,027	$15,000 $15,183	$0 $15,605	$7,832 (9) $9,299 (10)	$112,139 $178,114

Stacy A. Cox Senior Vice President and Chief Operating Officer of the Bank	2013 2012	$126,311 $122,635	$35,157 $13,489	$0 $15,605	$10,940 (11) $6,891 (12)	$172,408 $158,620

(1)

Includes discretionary bonuses and non-equity incentive plan compensation paid pursuant to the Stakeholders^TM Program.

(2)

Stock awards consist of restricted stock awards granted to employees during the fiscal year ended December 31, 2012 under the 2012 Equity Incentive Plan. Shares awarded in 2012 will vest annually over a five year period, starting April 30, 2013. The dollar value shown in the Stock Awards Column above represent the aggregate grant date fair value computed using the Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation – Stock Compensation.” Grant date fair value for restricted stock is calculated using the closing stock price on the date of grant, which was $31.21 per share for all 2012 grants.

(3)

Includes director fees of $15,300 paid to Mr. Robertson for attendance at meetings of the Board of Directors of the Bank.

(4)

Includes (a) $10,018 reimbursed to Mr. Robertson for the payment of club dues and (b) $9,082 of matching contributions and a $9,951 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Mr. Robertson.

(5)

Includes director fees of $10,800 paid to Mr. Robertson for attendance at meetings of the Board of Directors of the Bank.

(6)

Includes (a) $7,831 reimbursed to Mr. Robertson for the payment of club dues and (b) $8,411 of matching contributions and $8,227 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan of behalf of Mr. Robertson.

(7)

Includes (a) $6,139 reimbursed to Mr. Rieman for the payment of club dues and (b) $5,833 of matching contributions and $8,070 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Mr. Rieman.

(8)

Includes (a) $6,645 reimbursed to Mr. Rieman for the payment of club dues and (b) $4,425 of matching contributions and $5,621 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Mr. Rieman.

(9)

Includes $3,323 of matching contributions and $4,509 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Mr. Elder.

(10)

Includes $4,140 of matching contributions and $5,159 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Mr. Elder.

(11)

Includes $4,794 of matching contributions and $6,146 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Ms. Cox.

(12)

Includes $2,709 of matching contributions and $4,182 discretionary contribution made by the Bank to the 401(k) Profit Sharing Plan on behalf of Ms. Cox.

Grants of Plan-Based Awards for 2012 Fiscal Year

Under the 2012 plan, the Corporation awarded 5,250 restricted shares to certain employees during the fiscal year ended December 31, 2012. Of the restricted shares awarded, Rick Robertson received 1,665 shares, Kendall Rieman 835 shares, Thomas Elder Jr. 500 shares, and Stacy Cox 500 shares. Shares awarded in 2012 vest annually over a five year period, starting April 30, 2013.

Grants of Plan-Based Awards for 2013 Fiscal Year

No plan-based awards were granted by the Corporation during the 2013 fiscal year.

Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth information regarding the unexercised stock options held by each of the named executive officers as of the end of the 2013 fiscal year. Dollar amounts have been rounded up to the nearest whole dollar.


	Option Awards				Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable (1)	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($) (2)	Option Expiration Date	Number of shares or units of stock that have not vested (#)	Market Value of shares or units of stock that have not vested (3)

Rick M. Robertson	5,500	2,750	$24.99	05-09-2021	1,332	$45,621

Kendall W. Rieman	2,750	1,375	$24.99	05-09-2021	668	$22,879

Barry F. Luse	2,750	1,375	$24.99	05-09-2021	400	$13,700

Daniel N. Schloemer	1,374	687	$24.99	05-09-2021	400	$13,700

Stacy A. Cox	--	--			400	$13,700

Charles T. Barteck	--	--			200	$6,850

(1)

All amounts reflect Common Shares of the Corporation underlying stock options granted pursuant to the 2002 Plan.

(2)

Stock options have 10-year terms and vest over a 3-year period. The portion of the stock options that are unexercisable will vest and become exercisable as follows: Provided that the participant has not terminated prior to such date, the option will vest and become exercisable with respect to one-third of the common shares subject to the option on each of the first three anniversaries of the grant date.

(3)

The market value was determined using the closing price of the Corporation’s common shares at the end of fiscal year 2013.

Option Exercises and Restricted Stock Vesting During 2013 Fiscal Year

None of the Corporation’s named executive officers exercised any stock options during the 2013 fiscal year.

Employment Agreement with Rick M. Robertson

On November 9, 2010, the Bank entered into an employment agreement with Rick M. Robertson with respect to Mr. Robertson’s service as President and Chief Executive Officer of the Bank (the “Robertson Agreement”).

The Robertson Agreement provides for an initial term of three years commencing on August 30, 2010. Beginning on August 30, 2011 and each day thereafter, the initial term is automatically extended for one (1) additional day unless either party provides the other with at least 90 days prior written notice that the term will not be extended, such that the term will have a rolling two (2) year term after August 30, 2011.

Pursuant to the Robertson Agreement, Mr. Robertson is entitled to receive an annual base salary of $230,000 that may be adjusted in accordance with the salary administration program in effect for Bank employees generally. Mr. Robertson was eligible to receive a discretionary annual bonus for the period ending December 31, 2010 and is eligible to receive an annual bonus for each period beginning after December 31, 2010 equal to between five percent (5%) and twenty percent (20%) of his annual base salary. The amount of this annual bonus is based on the satisfaction or attainment of mutually acceptable performance goals. Mr. Robertson is entitled to participate in the various employee benefit plans, programs, and arrangements available to other senior officers of the Bank.

If Mr. Robertson’s employment is terminated by the Bank without “cause” (as defined in the Robertson Agreement) or voluntarily terminates his employment for “good reason” (as defined in the Robertson Agreement), Mr. Robertson will be entitled to a payment equal to two times his annual base salary.

If Mr. Robertson’s employment is terminated without cause within twenty-four (24) months following a “change in control” (as defined in the Robertson Agreement), in lieu of any other payment under the Robertson Agreement, Mr. Robertson will be entitled to: (a) two times his annual base salary; (b) a payment equal to 14% of his annual base salary; and (c) a payment equal to his “target” bonus opportunity.

If any payment or distribution to Mr. Robertson under the Robertson Agreement or otherwise would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, the payments and or distributions under the Robertson Agreement or otherwise will be reduced to $1.00 less than the amount which would cause the payments or distributions to be subject to the excise tax.

If, following the termination of Mr. Robertson’s employment other than for cause, the Bank determines that cause to terminate Mr. Robertson existed, Mr. Robertson will forfeit any future rights to payment under the Robertson Agreement and will be required to repay any amounts paid under the Robertson Agreement upon written notice from the Board of Directors of the Bank.

The Robertson Agreement contains non-competition and non-solicitation covenants to prevent Mr. Robertson, during the term of the Robertson Agreement and for twenty-four (24) months thereafter, from competing with the Bank within a 100-mile radius of Fremont, Ohio, or soliciting customers or employees of the Bank to terminate their relationship with the Bank. The Robertson Agreement also contains a nondisclosure covenant that prevents Mr. Robertson from disclosing confidential information.

Employment Agreement with Kendall W. Rieman

On September 10, 2013, the Bank entered into an employment agreement with Kendall W. Rieman with respect to Mr. Rieman’s service as Executive Vice President and Chief Financial Officer of the Bank (the “Rieman Agreement”).

The Rieman Agreement provides for an initial term of two years. Thereafter, the Rieman Agreement will be extended for successive one-year renewal terms unless the Bank’s Board of Directors elects, in its sole discretion, to terminate the agreement by providing written notice of termination to Mr. Rieman not less than 90 days prior to the end of the initial term or then-applicable renewal term.

Pursuant to the Rieman Agreement, Mr. Rieman is entitled to receive an annual base salary of $160,000 that may be adjusted in accordance with the salary administration program in effect for Bank employees generally. Mr. Rieman may be eligible for any incentive bonus payment in each calendar year based on the satisfaction or attainment of performance goals or objectives and such other terms and conditions as the Board of Directors, in its sole discretion, may provide, and the Board of Directors, in its sole discretion, may also elect to provide Mr. Rieman with additional equity compensation. The Rieman Agreement also provides that the Bank will pay or reimburse Mr. Rieman for reasonable initiation fees, assessments and periodic membership dues in connection with establishing a membership at a country club or similar membership and a membership in an appropriate service organization. Mr. Rieman is also entitled to participate in the various employee benefit plans, programs, and arrangements available to other senior officers of the Bank.

If Mr. Rieman’s employment is terminated by the Bank without “cause” (as defined in the Rieman Agreement) or voluntarily terminates his employment for “good reason” (as defined in the Rieman Agreement), Mr. Rieman will be entitled to a payment equal to two times his annual base salary.

If Mr. Rieman’s employment is terminated without cause within twenty-four (24) months following a “change in control” (as defined in the Rieman Agreement), in lieu of any other payment under the Rieman Agreement, Mr. Rieman will be entitled to: (a) two times his annual base salary; (b) a payment equal to 7% of his annual base salary; and (c) a payment equal to his “target” bonus opportunity.

If any payment or distribution to Mr. Rieman under the Rieman Agreement or otherwise would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, the payments and or distributions under the Rieman Agreement or otherwise will be reduced to $1.00 less than the amount which would cause the payments or distributions to be subject to the excise tax.

If, following the termination of Mr. Rieman’s employment other than for cause, the Bank determines that cause to terminate Mr. Rieman existed, Mr. Rieman will forfeit any future rights to payment under the Rieman Agreement and will be required to repay any amounts paid under the Rieman Agreement upon written notice from the Board of Directors of the Bank.

The Rieman Agreement contains non-competition and non-solicitation covenants to prevent Mr. Rieman, during the term of the Rieman Agreement and for twenty-four (24) months thereafter, from competing with the Bank within a 100-mile radius of Fremont, Ohio, or soliciting customers or employees of the Bank to terminate their relationship with the Bank. The Rieman Agreement also contains a nondisclosure covenant that prevents Mr. Rieman from disclosing confidential information.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters

Beneficial Ownership Information

As of March 14, 2014, no person or entity beneficially owned more than five percent (5%) of the outstanding common shares of the Corporation.

As of March 14, 2014, the following sets forth certain information concerning the beneficial ownership of common shares by each director of the Corporation, by each person nominated by the Board of Directors for election as a director of the Corporation at the 2014 Annual Meeting of Shareholders, by each of the named executive officers of the Corporation and by all current executive officers and directors of the Corporation as a group.


Name of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)		Percent of Class (2)
Michael D. Allen Sr.		6,886	(3)
Charles T. Barteck		14	(3)
James E. Bowlus (4)		35,550	1.57%
John J. Caputo (5)		5,623	(3)
Stacy A. Cox		134	(3)
James C. Dunn (6)		14,824	(3)
James R. Faist (7)		2,500	(3)
Claire F. Johansen		4,330	(3)
Stephen A. Kemper		9,419	(3)
Daniel W. Lease (8)		5,433	(3)
Barry F. Luse (9)		7,587	(3)
Thomas W. McLaughlin		4,817	(3)
Allan E. Mehlow		3,773	(3)
Kendall W. Rieman		5,763	(3)
Rick M. Robertson		8,883	(3)
Daniel N. Schloemer		2,349	(3)
Gary L. Zimmerman		3,920	(3)
All current executive officers and directors as a group (17 persons)		121,805	5.36%

(1)

Unless otherwise noted, the beneficial owner is the owner of record and has sole voting and investment power with respect to all of the common shares and none of the common shares are pledged as security, except for 4,200 common shares held by Mr. McLaughlin which are pledged as security to an unaffiliated financial institution. The mailing address of each of the current executive officers and directors of the Corporation is 323 Croghan Street, Fremont, Ohio 43420.

(2)

The percent of class is based upon the sum of (a) 2,270,729 common shares of the Corporation outstanding on March 14, 2014 and (b) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will become exercisable within 60 days of March 14, 2014.

(3)

Reflects ownership of less than 1% of the outstanding common shares of the Corporation.

(4)

Includes 300 shares owned by Mr. Bowlus’ wife, as to which she exercises sole voting and investment power.

(5)

All shares are held jointly by Mr. Caputo and his wife, as to which they exercise shared voting and investment power.

(6)

Includes 4,793 shares owned by Mr. Dunn’s wife, as to which she exercises sole voting and investment power.

(7)

All shares are held jointly by Mr. Faist and his wife, as to which they exercise shared voting and investment power.

(8)

Includes 4,688 shares owned jointly by Mr. Lease and his wife, as to which they exercise shared voting and investment power.

(9)

Includes 130 shares owned by Mr. Luse’s wife, as to which she exercises sole voting and investment power, and 160 shares owned jointly by Mr. Luse and his wife, as to which they exercise shared voting and investment power.

Equity Plan Information

The following table provides certain information regarding the Corporation’s equity compensation plans as of December 31, 2013.


	(a)		(b)		(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights		Weighted-average exercise price of outstanding options, warrants, and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders		28,869		24.99		156,832	(2)

Equity compensation plans not approved by security holders (1)		-		-		-

Total		28,869		24.99		156,832

(1)	The Corporation has no equity compensation plans that have not been approved by the Corporation’s shareholders.

(2)	Represents common shares available for issuance under the 2012 plan. The 2002 Plan expired in March 2012 and no further awards may be granted under the 2002 Plan.

Related Party Transactions

Pursuant to its Charter, the Corporation’s Audit Committee is responsible for reviewing and overseeing the procedures designed to identify “related party” transactions that are material to the Corporation’s consolidated financial statements or otherwise require disclosure under applicable laws, and the Audit Committee has the authority to approve such “related party” transactions.

During the 2013 and 2012 fiscal years, the Bank entered into banking-related transactions in the ordinary course of business with certain executive officers, directors, and principal shareholders of the Corporation (including certain executive officers of the Bank), members of their immediate families and corporations or organizations with which they are affiliated. It is expected that similar transactions will be entered into in the future. Loans to such persons have been made on substantially the same terms, including the interest rate charged and collateral required, as those prevailing at the time for comparable transactions with persons not affiliated with the Corporation or the Bank. These loans have been, and are presently, subject to no more than the normal risk of collectibility and present no other unfavorable features.

Director Independence

The Board of Directors of the Corporation affirmatively determines whether each director of the Corporation is independent based on the definition of an “independent director” set forth in NASDAQ Marketplace Rule 5605(a)(2). In making this determination, the Board of Directors considered any transactions, relationships, or arrangements between each director (including his or her family members and affiliates) and the Corporation or the Bank, including those described above under “Related Party Transactions.”

Based on these considerations, the Board of Directors has determined that each of the following individuals who served as a director during the 2013 fiscal year qualifies as an “independent director”:


Michael D. Allen Sr.	Claire F. Johansen	Thomas W. McLaughlin
James E. Bowlus	James R. Faist	Allan E. Mehlow
John J. Caputo	Stephen A. Kemper	Gary L. Zimmerman
James C. Dunn	Daniel W. Lease

The Board of Directors has determined that Rick M. Robertson did not qualify as an “independent director” because he serves as President and Chief Executive Officer of the Corporation and the Bank.

ITEM 14. Principal Accountant Fees and Services

In accordance with the Audit Committee Charter and the requirements of the Sarbanes-Oxley Act of 2002 and related SEC rules, all services to be provided by the Corporation’s independent registered public accounting firm are subject to pre-approval by the Audit Committee. This includes audit services, audit-related services, tax services and other services. In some cases, the pre-approval of services is provided by the full Audit Committee. In other cases, the Chair of the Audit Committee has the delegated authority to pre-approve additional services, and such pre-approvals are then communicated to the full Audit Committee. All (100%) of the audit services, audit related services, tax services, and other services provided by the Corporation’s independent registered public accounting firm, CliftonLarsonAllen LLP during 2013 and 2012 were pre-approved by the Audit Committee.

The Sarbanes-Oxley Act and related SEC rules prohibit the Corporation from obtaining certain non-audit services from its auditing firm in order to avoid potential conflicts of interest. The Corporation has not obtained any of these prohibited services from CliftonLarsonAllen LLP since these rules went into effect.

The following lists the fees that the Corporation paid or accrued for the audit and other services provided by CliftonLarsonAllen LLP for the following fiscal years.


	2013		2012

Audit Fees		$102,648		$196,500
Audit-Related Fees		27,100		26,780
Tax Fees		12,575		14,925

Total		$142,323		$238,205

Audit Fees

This category includes the audit of the Corporation’s annual financial statements, review of financial statements included in the Corporations Quarterly Reports on Form 10-Q, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and the preparation of the annual “management letter” on internal control matters.

Audit-Related Fees

This category consists of assurance and related services provided by CliftonLarsonAllen LLP that are reasonably related to the performance of the audit or review of the Corporation’s financial statements and are not reported under “Audit Fees.” The services provided by CliftonLarsonAllen LLP under this category include: the annual audit of the Bank’s 401(k) Profit Sharing Plan, including review of the related Form 11-K for 2012; and reporting on the Trust Department and on the suitability of the design and operating effectiveness of its controls for both years.

Tax Fees

This category consists of professional services rendered by CliftonLarsonAllen for tax compliance, tax advice, and tax planning. The services provided by CliftonLarsonAllen LLP under this category include tax return preparation and miscellaneous technical tax advice.

All Other Fees

None

AUDIT COMMITTEE REPORT

In fulfilling its oversight responsibilities with respect to the Corporation’s audited financial statements for the year ended December 31, 2013, the Audit Committee has:

—

reviewed and discussed the Corporations’ audited financial statements with management;

—

discussed with CliftonLarsonAllen LLP, the Corporation’s independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T as currently in effect; and

—

received the written disclosures and the letter from CliftonLarsonAllen LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding CliftonLarsonAllen’s LLP communications with the Audit Committee concerning independence, and has discussed with CliftonLarsonAllen LLP its independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors of the Corporation (and the Board of Directors has approved) that the audited financial statements be included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, for filing with the SEC.

Submitted by the members of the Audit Committee.

Michael D. Allen Sr., Daniel W. Lease (Chair) and Thomas W. McLaughlin

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

The following consolidated financial statements (and reports thereon) are set forth on pages 23 through 59 of the Corporation’s 2013 Annual Report to Shareholders (included as Exhibit 13 to this Annual Report on Form 10-K) and are incorporated herein by reference:


Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets - December 31, 2013 and 2012
Consolidated Statements of Operations - Years ended December 31, 2013, 2012, and 2011
Consolidated Statements of Comprehensive Income – Years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2013, 2012, and 2011
Consolidated Statements of Cash Flows - Years ended December 31, 2013, 2012, and 2011
Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedules

Financial statement schedules have been omitted either because they are not applicable or because the required information is provided in the consolidated financial statements or in the notes thereto.

(a)(3) Exhibits

The following exhibits are filed with or incorporated by reference in this Annual Report on Form 10-K:


Exhibit Number	Description	Location

2.1	Agreement and Plan of Merger, dated as of June 20, 2013, by and between Croghan Bancshares, Inc. and Indebancorp	Incorporated herein by reference to Annex A to the Prospectus/Proxy Statement included in the Registration Statement on Form S-4/A of the Registrant filed on September 12, 2013 (File No. 333-190362)

3.1(a)	Amended Articles of Incorporation of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(i) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 0-20159)

3.1(b)	Certificate of Amendment to Articles of Incorporation of Croghan Bancshares, Inc. as filed with the Ohio Secretary of State on May 12, 2006	Incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (File No. 0-20159)

3.2	Amended and Restated Code of Regulations of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(ii) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (File No. 0-20159)

4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt	Included in this filing

*10.1	Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (File No. 0-20159)


Exhibit Number	Description	Location

*10.2	Form of Incentive Stock Option Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-20159)

*10.3	Croghan Bancshares, Inc. 2012 Equity Incentive Plan	Incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-4 of the Registrant filed on August 2, 2013 (File No. 333-190362)

*10.4	Form of Restricted Stock Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. 2012 Equity Incentive Plan	Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-4 of the Registrant filed on August 2, 2013 (File No. 333-190362)

*10.5	Executive Supplemental Death Benefit Agreement	Incorporated by reference to Exhibit 10(v) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003 (File No. 0-20159)

*10.6	Employment Agreement, dated as of November 9, 2010, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 16, 2010 (File No. 0-20159)

*10.7	Amendment to Employment Agreement, dated as of July 21, 2011, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 0-20159)

*10.8	Employment Agreement, dated as of September 10, 2013, between The Croghan Colonial Bank and Kendall W. Rieman	Included with this filing

13	2013 Annual Report to Shareholders	Included with this filing (not deemed filed except for portions thereof which are specifically incorporated by reference into this Annual Report on Form 10-K)

14	Croghan Bancshares, Inc. Code of Business Conduct and Ethics	Included with this filing

21	Subsidiaries of the Registrant	Included with this filing

31.1	Rule 13a-14(a)/15d-14(a) Certification – Principal Executive Officer	Included with this filing

31.2	Rule 13a-14(a)/15d-14(a) Certification – Principal Financial Officer	Included with this filing


Exhibit Number	Description	Location

32	Section 1350 Certification – Principal Executive Officer and Principal Financial Officer	Included with this filing

101	The following materials from Croghan Bancshares, Inc.’s 2013 Annual Report and incorporated therefrom in Croghan Bancshares, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2013 and 2012; (ii) the Consolidated Statements of Operations for the years ended December 31, 2013, 2012, and 2011; (iii) the Consolidated Statements of Comprehensive Income - Years ended December 31, 2013, 2012, and 2011; (iv) the Consolidated Statements Stockholders’ Equity for the years ended December 31, 2013, 2012, and 2011; (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012, and 2011; and (vi) the Notes to Consolidated Financial Statements	Included with this filing

*	Denotes management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date: March 28, 2014						/s/ Rick M. Robertson
						Rick M. Robertson
						President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated:


Signature		Title(s)

/s/ Rick M. Robertson Rick M. Robertson		President and Chief Executive Officer (Principal Executive Officer) and Director

/s/ Kendall W. Rieman Kendall W. Rieman		Treasurer (Principal Financial Officer and Principal Accounting Officer)

/s/ Michael D. Allen Sr. Michael D. Allen Sr.		Director

/s/ James E. Bowlus James E. Bowlus		Director

/s/ John J. Caputo John J. Caputo		Director

/s/ James C. Dunn James C. Dunn		Director

/s/ James R. Faist James R. Faist		Director

/s/ Claire F. Johansen Claire F. Johansen		Director

/s/ Stephen A. Kemper Stephen A. Kemper		Director

/s/ Daniel W. Lease Daniel W. Lease		Director

/s/ Thomas W. McLaughlin Thomas W. McLaughlin		Director

/s/ Allan E. Mehlow Allan E. Mehlow		Director

/s/ Gary L. Zimmerman Gary L. Zimmerman		Director

Date: March 28, 2014

EXHIBIT INDEX


Exhibit Number	Description	Location

2.1	Agreement and Plan of Merger, dated as of June 20, 2013, by and between Croghan Bancshares, Inc. and Indebancorp	Incorporated herein by reference to Annex A to the Prospectus/Proxy Statement included in the Registration Statement on Form S-4/A of the Registrant filed on September 12, 2013 (File No. 333-190362)

3.1(a)	Amended Articles of Incorporation of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(i) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 0-20159)

3.1(b)	Certificate of Amendment to Articles of Incorporation of Croghan Bancshares, Inc. as filed with the Ohio Secretary of State on May 12, 2006	Incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (File No. 0-20159)

3.2	Amended and Restated Code of Regulations of Croghan Bancshares, Inc.	Incorporated herein by reference to Exhibit 3(ii) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (File No. 0-20159)

4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt	Included in this filing

*10.1	Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (File No. 0-20159)

*10.2	Form of Incentive Stock Option Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. Amended and Restated 2002 Stock Option and Incentive Plan	Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-20159)

*10.3	Croghan Bancshares, Inc. 2012 Equity Incentive Plan	Incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-4 of the Registrant filed on August 2, 2013 (File No. 333-190362)

*10.4	Form of Restricted Stock Award Agreement to be used in connection with grants under the Croghan Bancshares, Inc. 2012 Equity Incentive Plan	Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-4 of the Registrant filed on August 2, 2013 (File No. 333-190362)

*10.5	Executive Supplemental Death Benefit Agreement	Incorporated by reference to Exhibit 10(v) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003 (File No. 0-20159)


Exhibit Number	Description	Location

*10.6	Employment Agreement, dated as of November 9, 2010, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 16, 2010 (File No. 0-20159)

*10.7	Amendment to Employment Agreement, dated as of July 21, 2011, between The Croghan Colonial Bank and Rick M. Robertson	Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 0-20159)

*10.8	Employment Agreement, dated as of September 10, 2013, between The Croghan Colonial Bank and Kendall W. Rieman	Included with this filing

13	2013 Annual Report to Shareholders	Included with this filing (not deemed filed except for portions thereof which are specifically incorporated by reference into this Annual Report on Form 10-K)

14	Croghan Bancshares, Inc. Code of Business Conduct and Ethics	Included with this filing

21	Subsidiaries of the Registrant	Included with this filing

31.1	Rule 13a-14(a)/15d-14(a) Certification – Principal Executive Officer	Included with this filing

31.2	Rule 13a-14(a)/15d-14(a) Certification – Principal Financial Officer	Included with this filing

32	Section 1350 Certification – Principal Executive Officer and Principal Financial Officer	Included with this filing

101	The following materials from Croghan Bancshares, Inc.’s 2013 Annual Report and incorporated therefrom in Croghan Bancshares, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2013 and 2012; (ii) the Consolidated Statements of Operations for the years ended December 31, 2013, 2012, and 2011; (iii) the Consolidated Statements of Comprehensive Income - Years ended December 31, 2013, 2012, and 2011; (iv) the Consolidated Statements Stockholders’ Equity for the years ended December 31, 2013, 2012, and 2011; (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012, and 2011; and (vi) the Notes to Consolidated Financial Statements	Included with this filing

*	Denotes management contract or compensatory plan or arrangement.

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