Central Pacific Bank spent about four years shedding problem loans as it struggled to regain profitability.

Now the state’s fourth-largest bank is riding a growth wave in that portfolio to help sustain its turnaround.

Parent company Central Pacific Financial Corp., buoyed by a 17.7 percent increase in loans, reported its 11th consecutive profitable quarter today even though net income fell from a year ago.

Central Pacific had earnings of $10.2 million, or 24 cents a share, compared with $10.7 million, or 26 cents a share, in the year-earlier quarter. The bank’s net income included a reversal of $3.2 million it had set aside for potential loan losses that was returned to the income statement. A year earlier, the bank reversed $5 million from its loan-loss reserve.

"We were out of the market for several years so we had an opportunity to leverage our existing client base," Central Pacific President and CEO John Dean said ahead of the earnings release. "So you might say we’re doing a little bit of catch-up. If you look at our performance the last three or four years, we were stagnant at best in 2008 through 2011. Actually there was a decline in loans. But our portfolio is benefiting because we’ve been active since being back in the market and we’re moving from the defensive to the offensive."

Residential mortgage loans jumped nearly 20 percent in the quarter from a year ago. Commercial loans increased about 75 percent, primarily because the bank redeployed loan officers to boost business calls, and also because the bank participated in national loan packages. Consumer loans (auto, personal and home equity) catapulted more than 85 percent from a small base.

"We haven’t focused as much in the past on consumer loans, and we think with a stronger focus on consumer loans and a more efficient way of originating those loans we’ve been able to grow that portfolio," Central Pacific Chief Banking Officer Lance Mizumoto said.

Overall total loans and leases rose to $2.48 billion from $2.11 billion in the year-earlier period.

Dean said the economy, as well as the performance of his executive team, have helped turn the bank around.

"There’s no question that the strong Hawaii economy is just not benefiting our bank, but the other banks (in the state) would say the same thing in terms of loan growth and, obviously, in terms of earnings improvement," he said. "If you look at CPB in terms of most ratios, you’ll see a steady progress in those ratios over the past 11 quarters."

That progress led Central Pacific to announce after the second quarter that it was reinstating its dividend after a more than four-year suspension. The bank began offering a dividend of 8 cents a share and today said it was maintaining it at that level for the current quarter. It will be payable on Dec. 16 to shareholders of record at the close of business on Nov. 29.

Central Pacific fell into a financial morass when it was burned by the mainland’s real estate meltdown. In late 2009, the bank said it would stop pursuing new loans on the mainland — primarily in California —and focus on Hawaii. At the end of last quarter, it had $167 million in outstanding loans on the mainland, with $22 million nonperforming. In Hawaii, the bank had about $2.3 billion in loans, with $37 million of those overdue by 90 days or more.

The total of $59 million in nonperforming loans is a significant decrease from the $496 million in nonperforming assets — loans delinquent for 90 days or more — the bank had when Dean took the reins during the first quarter of 2010. Since then, Dean and his team have aggressively been reducing those problem loans by selling them or restructuring the terms.

Low interest rates that have been pushing down the bank’s net interest margin — the spread between loan and deposit rates — subsided last quarter as Central Pacific improved its margin to 3.19 percent from 3.02 percent in the year-earlier period. The bank’s net interest income rose 14.2 percent last quarter to $33.8 million from $29.6 million.

Noninterest income fell 30 percent to $11.9 million from $17 million, primarily because the bank received $3.2 million less from gains on sales of residential loans to the secondary market such as Freddie Mac and Fannie Mae.

During the quarter, the bank increased its assets 10.1 percent to $4.7 billion and its deposits 7.9 percent to $3.9 billion.

Central Pacific also said the opening of its Kapaa, Kauai, branch — the bank’s 36th branch overall — has now been pushed back to January after previously being targeted for later this year.

The bank’s stock closed up 4 cents Tuesday at $18.54 on the New York Stock Exchange. Its shares are up 18.9 percent this year.