Ohana Pacific Bank’s loans soared 23 percent in the third quarter, but net income declined sharply due to a tax reversal from the year-earlier period.

The state’s smallest bank by assets said Thursday that loans rose to $105.3 million from $85.6 million, primarily fueled by commercial and residential real estate.

Ohana said its earnings, though, fell to $158,000 from $299,000 in the year-earlier quarter when it had a $100,000 tax credit. Last quarter the bank had a $105,000 tax expense.

Deposits last quarter rose 4 percent to $107.2 million from $102.9 million while assets increased 4 percent to $123.7 million from $118.9 million.

The bank’s loan quality continued to improve, and as of Sept. 30 it had no nonperforming assets, which represent delinquent loans not accruing interest and foreclosed real estate.

Ohana Pacific’s thinly traded stock last exchanged hands Aug. 10 when it closed at $5.90.