Summit State Bank reported its annual profits dipped to $1.8 million, down from $2.1 million in 2009.
The Santa Rosa bank set aside more money for bad loans last year, increasing its provision for loan losses to $3.9 million, up from $3.7 million in 2009.
"The bank's core operating performance continues to strengthen, even in light of additional loan loss provisions," Thomas Duryea, the bank's president and chief executive, said in a statement.
The bank reported nonperforming assets increased to $13.5 million at year's end, up from $11.7 million in 2009.
The bank's capital ratios, which regulators use to measure financial health, remained well above the required limits.
Deposits increased last year to $293 million, up from $285 million in 2009.
Total assets increased to $348 million as of Dec. 31, up from $340 million the previous year.