The reported profit of $11.7 million was down 18% on the previous period's profit of $14.25 million.
Last year, SBS had a gain of more than $5 million from financial instruments designated at fair gain.
Chief executive Ross Smith said that although the global financial crisis had left many of the world's markets in turmoil, SBS Bank's prudent and conservative management approach had shielded it from severe effects on profitability.
"Because we are a customer-owned bank, it is important for us to ensure we manage our exposure to risk in the market and protect our customers' investments."
The bank had taken the opportunity to improve both its capital ratio and its liquidity and was now among the leading banks in New Zealand in those categories, he said.
Total liquidity was $594 million and members' equity stood at $208 million.
The increase in operating surplus, growth in total assets, strengthening of members' equity and opening an HBS Bank branch in Havelock North had been highlights of the past year, Mr Smith said.
"Our growth over the past 12 months has been a modest $28 million, on the back of a slow housing market and aggressive competitor activity.
"Our priority, as always, is to look after both new and existing customers and to offer the same competitive rates and superior service to all."
That was unlike the strategy the larger banks seemed to have adopted, whereby new customers got discounted rates and incentives at the expense of existing customers, he said.
Asked for a particular highlight in a difficult trading year, Mr Smith said the year was not one in which to grow the business.
Instead, SBS used it to consolidate its business and balance sheet, strengthening its capital position to meet all regulatory requirements. That had been his personal highlight.
During the period, SBS Bank's cash flows from operating activities increased significantly, to more than $189 million from $25 million in the previous period.
Bank general manager finance Tim Loan said the change in net advances had caused a large cash inflow.
Repayments in the Canterbury region accounted for about half, and there was the natural outflow that occurred with a mortgage book.
"Normally, that's well and truly offset by new mortgage lending, but this year has been difficult for new mortgage lending, particularly as the key growth here has tended to be in Auckland, where we are not represented."
Cash had also been positively affected by an increase in depositors' funds, which was pleasing, Mr Loan said.
Mr Smith said no staff had been put off during the year, despite a branch having to be closed in Christchurch because of earthquake damage.
As staff left, some were not replaced, but he estimated the bank was only two or three staff down from the same time last year.
Christchurch was still difficult for many of the bank's clients.
"The rebuild: it's going to happen, is the catch-cry. We are not sure when.
"Our job is to manage the relationship with our customers and staff. A lot of people are in a very difficult situation.
"The payments for red-zone residents have allowed some people to move on, but those poor people who haven't received their insurance payments - it's an absolute mess."
It was almost impossible to understand what it was like to live in broken-down homes in desperate circumstances, Mr Smith said.
There were signs of movement in the commercial areas of Christchurch, but not a lot of activity in the residential markets.
It appeared that restoring operations in the central business district had become a priority, he said.
SBS chairman Acton Smith will retire from the board at the annual meeting in Invercargill on July 18. Mr Smith had been with the bank for 21 years and had been chairman for 18.
Mr Smith was a key player in defeating the sale of the former Southland Building Society to Westpac in 1991.
He pushed for bank registration as a mutual in 2008 and was described as an "inspirational leader" throughout the merger process with Hastings Building Society.
Ross Smith said there was no doubt Acton Smith would be remembered fondly as one of the most important directors in the history of SBS Bank.
