The parent of Central Pacific Bank, reinvigorated with a cash infusion and an improved loan portfolio, said Wednesday it had a profit for the second straight quarter and that its turnaround is beginning to gain momentum.

The state’s fourth-largest bank in terms of assets swung to a profit of $8.2 million, or 20 cents a share, in the second quarter from a year-earlier loss of $16.1 million, or $12.01 a share. Central Pacific Financial Corp., which has been weeding out bad loans from its portfolio, benefited from the release of $8.8 million from a reserve it had set aside for future loan losses. Of that amount, $6.4 million was returned to the bank’s income, and the remainder was applied to other credit costs.

In the first quarter of this year, Central Pacific earned $4.6 million after seven straight losing quarters.

"We feel good, but we’re not relaxed," Central Pacific President and CEO John Dean said. "We’ve still got a lot of work to do, but I think putting together two quarters of profitable earnings — and increased earnings — over the prior quarter are all good trends."

Central Pacific, which lost $703 million from 2008 through 2010 largely due to a California loan meltdown, recapitalized itself earlier this year with a $325 million stock sale to private investors and an additional $20 million generated from a shareholder rights offering. The cash infusion was among the final pieces that prompted federal and state regulators to lift an order they placed upon the bank 17 months earlier to improve its capital ratio and other operations.

"We’re back in Hawaii and that’s our focus," Dean said. "We still have assets on the mainland, but our focus is, ‘Let’s get back to our roots, back to the community of Hawaii.’ All the banks are very, very liquid so it’s a very competitive market in Hawaii today for good loan growth."

All banks keep a loan-loss reserve and Central Pacific still has $167 million set aside for future losses. But Central Pacific Chief Credit Officer Bill Wilson said the release of $8.8 million from its reserve last quarter signifies a stabilization of the bank’s credit portfolio "and is indicative of the improving trend relative to our recent history."

Analyst Joe Gladue of Haverford, Pa.-based B. Riley & Co., said the speed of the bank’s turnaround continues to surprise him.

"They continue to make very rapid progress in reducing their problem assets," he said. "They took a negative provision (taking money out of the reserve) that you don’t see very often. They were very proactive in building up a very large loan-loss reserve."

Nonperforming assets, or loans delinquent for 90 days or more, fell to $249.3 million last quarter from $284.9 million at the end of the first quarter and $467.2 million as of June 30, 2010.

"We’re cautiously optimistic," Dean said. "The overall improving trends we’re seeing in asset quality is a key driver in terms of nonperforming assets."

The bank’s nonperforming assets at the end of last quarter represented 6 percent of total assets.

"They’ve still got a pretty high level of nonperforming assets," Gladue said. "The 6 percent is still above the industry average of 2.8 percent for small-cap banks for nonperforming assets to total assets."

The bank also reduced its net loan charge-offs to $2.3 million last quarter from $13.3 million in the first quarter and $30.1 million in the year-ago quarter.

Central Pacific ended the quarter with $2 billion in loans and leases, down from $2.1 billion in the first quarter and $2.6 billion a year ago. Its loan portfolio in California represents $300 million of the total loan portfolio. Of that amount, the bank considers about $200 million good quality credits with the remainder being loans that the bank is trying to reduce.

"We were out of the market for almost three years," Dean said. "While we were servicing our clients, we weren’t aggressively pursuing new business relationships. We’re very active today in building a pipeline looking for opportunities, but we recognize it takes time."

He said the bank is seeking to grow its commercial loan portfolio and that on the consumer front it has rolled out a credit line based on homeowner equity.

"That product has done very well, and we’re pleased to see some growth on the retail side in terms of residential mortgage originations," Dean said.

Central Pacific had $4.1 billion in total assets as of June 30, up from $4 billion in the first quarter but down from $4.3 billion in the year-earlier period.

Total deposits rose to $3.2 billion from $3.1 billion in the first quarter and was virtually unchanged from a year ago.

Central Pacific’s stock slipped 11 cents to $13.60 on Tuesday. The earnings were released before the stock market opened.