Santa Rosa-based Exchange Bank earned $12.2 million in net income over the course of 2011, a 19 percent increase from the prior year that the bank attributed to developments such as strong core earnings and a reduction in problem assets.

The 122-year-old bank announced today that its total assets grew to $1.6 billion in 2011, up from $1.52 billion at the end of 2010. Problem assets decreased by 26 percent at the end of 2011, and non-performing assets decreased by 8.5 percent.

Earnings per diluted share were $5.74 in 2011, up from $4.96 in 2010. Exchange Bank will not yet reinstate its cash dividend to common shareholders, which was suspended in 2009 as part of an effort to strengthen the bank’s position during the financial crisis.

That dividend is the primary funding mechanism for the Frank P. Doyle and Polly O’Meara Doyle Scholarship Fund, which has distributed $76 million to over 115,000 students at Santa Rosa Junior College since 1948.

“Our financial performance in 2011 puts us closer to our highest priority objective of reinstating a cash dividend to our shareholders. Continued improvement in problem credit resolution and overall economic stability, which is being tempered by high levels of unemployment and weak consumer spending, will be necessary for us to obtain our primary objective,” said President and CEO William Schrader, in a statement.

Net interest income was $66 million in 2011, and non-interest income was $20.8 million. An increase in core, non-interest bearing accounts lead a $65.7 million increase in deposits over 2011.

Net loans increased by $2.3 million in 2011, to a total of $1.02 billion. In its report, the bank said that the flat growth was “reflective of a cautious approach to additional debt by both customers and businesses.” The bank’s year-end risk-based capital ratio was 15.2 percent.

Net income in the fourth quarter of 2011 was also higher than the same period in 2010, at $3.2 million versus $2.2 million. Total interest income in the quarter was lower, at $17.6 million versus $18.2 million for the quarter ending Dec. 31 in 2010.***

After a spillover of borrowing demand from October, Redwood Credit Union lent a record amount to businesses in December.

Much of that volume involved relatively large real estate acquisitions and debt refinancing, said Michael Downey, the credit union’s senior vice president of business services.

Yet Mr. Downey pointed to a specific metric -- a 40 percent increase in smaller “general business” loans -- as an indicator that the region’s small businesses could be picking up steam going into 2012.

“That’s a big increase in a smaller number, but I think it’s significant,” he said.

The smaller-sized loans represent the lines of credit that business owners use to finance their day-to-day operations, including inventory and some equipment. Matching that cash flow with a forecast for future demand is a constant challenge, particularly at a time of economic uncertainty.

That uncertainty may have diminished for the businesses that have survived the recession: Mr. Downey said that he has observed a growing sense of economic confidence among business owners. While he couldn’t directly credit that sentiment with the uptick, he said it was an “encouraging sign.”

Mr. Downey said that small businesses were the force behind the lending increase, though no particular industry or region stood out. Napa County could prove to be a standout area for commercial lending in the future, however, and Mr. Downey said that he is watching the area with interest as it experiences month-over-month job growth.

A low-interest-rate environment and low valuations for real estate valuations have driven larger-value commercial loans recently, he said.

“We’re in a situation where it’s almost a once-in-a-lifetime chance for business owners to acquire the building from which they do business,” Mr. Downey said.***

Several other North Bay-based financial institutions released their quarterly financial reports recently, describing earnings up to the end of 2011.

Westamerica Bancorporation (NASDAQ: WABC), the parent company of Westamerica Bank, cited a low interest rate environment and other pressure on the banking industry as a cause for a 7.1 percent drop in net income in 2011 versus 2010.

The bank, which held $5 billion in assets at the end of 2011, earned $87.89 million last year. Net income for the final quarter was down 8.1 percent.

Those earnings represented a diluted $3.06 per common share for the year, down from $3.24 in 2010. The company announced an increased shareholder dividend of 37 cents per share for the fourth quarter of the year.

Nonperforming assets decreased by $43 million, to $101 million, and operating costs were reduced by $850,000 compared to the same quarter last year.

Bank of Marin Bancorp (NASDAQ: BMRC), parent company of Bank of Marin, announced that net income had increased by 14.8 percent in 2011 versus 2010.

The Novato-based bank earning $15.6 million in 2011e, equaling earnings of $2.89 per diluted share. The bank’s board of directors approved a quarterly dividend of 17 cents per share.

The bank earned 13.4 percent less in the fourth quarter of the year than in 2010, a reduction that bank CEO Russ Colombo attributed to costs associated with the Federal Deposit Insurance Corp.-assisted acquisition of Napa’s former Charter Oak Bank in February.

Nonperforming loans decreased from 1.37 to 1.16 percent compared to the prior year, and deposits grew by 18.4 percent in 2011. Total assets reached $1.4 billion at the end of the year.

Bank of Napa, N.A. (OTCBB: BNNP) rode a trend of “strong core deposit growth” to a 2011 net income of $1.14 million, up from $247,000 in 2010.

Total assets grew to $140 million, a 32.1 percent increase from assets at the end of 2010. The bank reported $18.2 million in equity capital at the end of 2011 and noted that it exceeded the regulatory definition of “well capitalized.”

Hennessy Advisors (OTCBB: HNNA), reported an 11.9 percent decrease in net revenue from the same quarter in 2010, at $1.72 million.

The Novato-based investment firm attributed that decrease to a 12 percent reduction in total assets under their management and a 13 percent decrease in average assets.

The board of directors for the firm announced a 25 percent increase in its annual cash dividend, from 10 cents to 12.5 cents. President, Chairman and CEO Neil Hennessy said that, despite the decrease, the firm remained profitable in the first quarter of fiscal year 2012 and was continuing to grow an already strong cash position.***Submit items for this column to Eric Gneckow, eric.gneckow@busjrnl.com or 707-521-4259.