Marking a yearlong turnaround, Ocean Bank reported its fourth consecutive quarter of earnings on Thursday, amid loan growth, a decline in non-performing assets and lower cost of funds.

Miami-based Ocean Bank reported $12.5 million in second-quarter net income, compared to a net loss of $26.4 million during the same period of last year.

“The biggest change is the cost of credit,” said A. Alfonso Macedo, president and chief executive of Ocean Bank. “We had a lot more nonperforming assets at the first half of last year, and we reduced our nonperforming assets dramatically.”

Meanwhile, loan growth, particularly in commercial loans, has led to more low-cost demand deposits, reducing the bank’s cost of funds, he said.

“We’re making more loans: commercial, industrial, commercial real estate, stabilized properties, apartment buildings — we’re even doing some construction loans,” Macedo said. “We have a campaign out there for lending, and it is showing results.”

Ocean Bank has 21 branches in Miami-Dade and Broward counties and 661 employees. It had $3.27 billion in assets at the end of the second quarter.

Benefiting in part from stabilizing real estate values, the bank’s non-performing assets dropped to $234.5 million at the end of the second quarter, down from $324.6 million at June 30, 2011. Non-performing assets had peaked at $771.6 million at year-end 2008 and have declined for 14 straight quarters, the bank said.

Costs associated with bad loans, including appraisals, legal and consulting fees have also declined, bolstering the bottom line.

Ocean Bank, which is privately owned by a group of Venezuelan families that are originally from Portugal, has been steadily boosting its capital through four quarters of retained earnings. The bank is “on the way” to complying with the capital requirements regulators required, among other issues, in an April 2011 consent order, Macedo said. (Last year, the bank also paid nearly $11 million to the federal government in a deferred prosecution agreement to resolve charges that it failed to establish an anti-money laundering program from 2001 through June 2008.)

“We still have conversations with current ownership to increase capital, and we also looked at options outside the ownership, but the best way, the cleanest way to grow capital is through earnings,” he said. “And that is what we are focusing on: turning the bank around and making money.”