SANTA ROSA – Summit State Bank (NASDAQ: SSBI) today reported net income increased 23 percent in 2011 from 2010.

The Santa Rosa-based bank's net income was $2.2 million last year. Earnings per diluted share increased 7 cents compared to 2010, to 33 cents at the end of 2011. A quarterly dividend of 9 cents per share will be paid on Feb. 23 to all shareholders as of Feb. 15.

Net income for the quarter ended Dec. 31 increased to $552,000 compared with $436,000 for the same quarter in 2010.

“As a local community bank, we continue to attract new full banking relationships including core deposits that are reducing our cost of funds, enabling us to provide new loans to small businesses and nonprofits that are strengthening our local Sonoma County community,” said Thomas Duryea, president and CEO.

The bank ended 2011 with a lower net interest margin -- 4.34 percent versus 4.55 percent at the end of the prior year. That decline was attributed to the purchase of investment securities to augment the bank’s growth as well as a fourth-quarter reversal of interest from loans placed in nonaccrual status.

The allowance for loan losses was $5.4 million at the end of 2011, down from $6 million in the prior year. Chief Credit Officer Bill Fogarty said that the bank was encouraged with the progress in resolving its nonperforming assets, which decreased to $13.37 million from $13.47 million during 2011.

The bank ended 2011 with a regulatory capital ratio of 14.5 percent for its tier 1 capital, and a total risk-based-capital ratio of 19.8 percent.

Total assets grew to $387.6 million at the end of 2011, compared with $347.9 million at end of 2010. Core deposits increased 22 percent in 2011, to $124.4 million.