Central Pacific Financial Corp.’s massive losses of the past turned into a big benefit in the first quarter for the state’s fourth-largest bank.

The parent of Central Pacific Bank continued its turnaround with a ninth straight profitable quarter that was inflated by a $119.8 million noncash income tax benefit stemming from losses recognized in 2008 to 2010.

Central Pacific said Thursday that it had net income of $137.3 million in the first quarter largely due to a so-called "deferred tax asset."

Even without it, the bank said it had a profit of $17.5 million, a 29.9 percent increase over $13.5 million in the year-earlier period. Its net income included $6.6 million that it previously had set aside for potential loan losses. The earnings per share without the tax benefit were 41 cents compared with 32 cents a share a year ago.

Central Pacific, which lost $703.1 million from 2008 to 2010, would have paid approximately $5.5 million in income taxes in the first quarter without the tax benefit.

"The substantial losses that we took a few years ago resulted in a significant tax benefit to the bank," said Reid Gushiken, Central Pacific senior vice president and controller. "Now that we are three years later and our financial condition is much improved and we’ve shown the ability to have consistent profits, we are now able to use those losses to offset future taxable income."

Tax benefit aside, Central Pacific’s quarter included further improvement in its nonperforming assets — loans overdue by 90 days or more — which decreased to $75.3 million, or 1.64 percent of total assets, from $90 million, or 2.06 percent of total assets, as of Dec. 31.

"It’s been a successful nine quarters after our nonperforming assets peaked at just under half a billion dollars (in 2010)," said Central Pacific President and CEO John Dean. "We still have some work to do, but if you look at where we were three years ago, there’s been significant improvement."

Central Pacific, which said in late 2009 that it would stop pursuing new loans in California after getting burned by that state’s real estate meltdown, still has $218 million in outstanding loans on the mainland, predominantly in California, with about $33 million nonperforming. In Hawaii the bank has just more than $2 billion in outstanding loans, with about $42 million nonperforming. Of the nonperforming Hawaii loans, $25 million of that is in residential mortgages.

As the bank cuts down its problem loans, it has been growing its overall loan and leases portfolio. It rose 9.2 percent to $2.27 billion from $2.08 billion in the year-earlier quarter.

"You can take out that nonincome tax benefit and we still had an excellent quarter," Dean said. "We have good momentum. Part of that is due to continued improvement in loan quality and, importantly, in the reduction in nonperforming assets. I’m very pleased with the loan growth across the board in terms of residential, commercial and industrial, and consumer loans (such as personal and auto loans). The loan growth we’re experiencing is not just in the first quarter, but started to pick up in the fourth quarter of last year."

Total assets increased 10.2 percent to $4.58 billion from $4.16 billion, and total deposits were up 7.3 percent to $3.76 billion from $3.51 billion.

Net interest income, the spread between what the bank pays depositors and what it brings in from loans, edged up 0.5 percent to $30.7 million from $30.5 million. Central Pacific’s net interest margin fell to 3.06 percent from 3.23 percent in the year-earlier quarter.

Noninterest income, which includes service charges and fees, fell to $12.5 million from $13.2 million primarily due to lower rental income and lower service charges on deposits.

Central Pacific’s stock closed Thursday up 3 cents at $15.96 on the New York Stock Exchange. The earnings were scheduled to be released today.