Most of the region’s community banks closed out last year with increased profits, as they continued to clear troubled loans off of their books and lend to small businesses.

Among the 13 locally based banks reporting year-end earnings, there was a median increase of 40.8 percent in profits from a year ago. While much of that growth can be attributed to gains from a decline in money set aside to cover problem loans — known as loan loss provisions — there was a noticeable pickup in lending.

Sandy Spring Bank, for example, more than doubled new commercial loan originations to $269 million in 2011, with much of that activity taking place in the last two quarters of the year. The Olney-based bank, which recorded a 45 percent rise to $34.1 million in net income, also logged a 7 percent increase in revenue from its wealth management services, a nod to the growing popularity of that product line.

Sandy Spring stands to gain a healthy portfolio of loans from its $25.4 million acquisition of CommerceFirst Bank of Annapolis, announced last month. CommerceFirst is one of the top five Small Business Administration lenders in the Baltimore region, according to the federal agency.

Meanwhile, loans held for investment at Cardinal Bank in Tysons Corner grew 15.8 percent year over year to $1.6 billion. The bank maintained a healthy loan portfolio, with its nonperforming loans falling below 1 percent of its total assets.

Asset quality continued to improve at Virginia Commerce Bank, as the Arlington institution reduced problem assets by 56.1 percent for the year. The bank reported a 1.4 percent decline in net loans for the full year 2011, though there was marginal 1.1 percent growth in the three months ending December.

EagleBank said its loan pipeline remains strong, though it reported a mere 1 percent in loan growth for the fourth quarter as a result of higher levels of loan payoffs. The Bethesda-based institution, which posted a 47 percent jump to $24.6 million in profits, led its peers in new originations for much of last year.

The bank benefited from participation in the Small Business Lending Fund, which lowered dividends on the preferred stock issued under the Troubled Asset Relief Program from 5 percent to 1 percent. As a result, net income available to shareholders soared 50 percent to $23 million for the full year.