Sonoma County-based Summit State Bank cuts second-quarter dividend

As an example of the difficult environment for many financial institutions, the board of directors of Summit State Bank (Nasdaq: SSBI) announced a cash dividend of 4 cents per share following the announcement of its second-quarter results.

The Santa Rosa-based bank announced on Sept. 12 that it plans to pay a dividend to shareholders on Oct. 10.

Results for the second quarter ended June 30 and released in August showed a sharp drop in net income to $928,000, about a third of the prior-year profit.

The results came on the heels of a 65% year-over-year drop in first-quarter net income from a year earlier, falling to $1.39 million, the company said in May. Management declared a dividend of 12 cents per share after the first quarter.

“The current interest rate environment and its impact on earnings have led to our decision to reduce our quarterly cash dividend,” CEO Brian Reed said in a statement. “We recognize the significance and impact of the dividend cut on all of our shareholders and this was not a decision taken lightly.”

Summit State Bank, founded in 1982, had $1 billion in assets at midyear.