Central Pacific Financial Corp. returned to profitability for the first time in two years as continued improvements to its credit portfolio last quarter helped the state’s fourth-largest bank earn $4.6 million.

The parent of Central Pacific Bank said today it ended a string of seven straight losing quarters by reducing nonperforming assets by $18 million from the October-December period through loan pay-downs and charge-offs and taking a $1.6 million credit on money it previously had set aside to potentially cover bad loans.

Central Pacific also made an $85.1 million accounting adjustment stemming from the exchange of the company’s preferred stock issued to the U.S. Department of Treasury for common stock as part of the bank’s recapitalization program. While the adjustment boosted the earnings per share to $4.58 from 18 cents, it did not affect the net income.

The normalized earnings per share of 18 cents easily beat analysts’ consensus of minus 18 cents. 

In the year-earlier quarter, Central Pacific lost $160.2 million, or $107.23 a share.

“It’s a great way to start out the new year,” said John Dean, president and CEO of Central Pacific. “A lot of progress has been made in the quarter, which was driven by asset quality improvements. That’s driving our turnaround right now. I think we’ve accomplished a lot, but there’s much more work to be done.”

Central Pacific’s stock closed up 23 cents, or 1.5 percent, to $15.54. The results were announced before the market opened.