Summit State Bank reports decrease in net income

Summit State Bank reported on Tuesday net income of $1.25 million for the second quarter, which was a 27-percent decrease from the same period a year before.

The Santa Rosa-based institution said the three months ending on June 30 resulted in a diluted earnings per share of 26 cents compared with 35 cents from the same period in 2015.

The bank has declared a dividend of 12 cents per share to be paid on Aug. 26 to those owning stock as of Aug. 18.

The bank attributed the decrease to certain one-time occurrences. It paid out employee severance of $538,000 in the quarter, which included payments to former president Tom Duryea. Duryea resigned from his post in April under pressure from board member and largest shareholder Marshall Reynolds, who wanted better growth.

The bank in the second quarter of 2015 also benefited from a recapture of $800,000 in loan losses that it had put aside.

James Burch, the new president and chief executive officer, said his focus is on building the bank’s business within the confines of Sonoma County and growing organically from its existing business relationships.

Summit State Bank is the seventh-largest bank in the North Bay, with $518 million in assets.

“We’re going to do more of what we have so far,” Burch said. “Concentrating on Sonoma County. Concentrating on commercial banking. Concentrating on the relationships we have.”

About 85 percent of its business is on the commercial lending side, with about two-thirds of that in real estate lending.

Burch said the bank will keep the focus on managing the credit risk of its loans. He said Summit State Bank has an advantage over its competitors given that its business is not spread over a large geographic area and it can keep a better check on its territory.

While there has been speculation that it could be a takeover target by such banks as Bank of Marin, Burch said his executive team is charged with “showing the board why keeping the bank is a better investment.”

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.