First Hawaiian Bank, overcoming a sluggish Hawaii economy, posted record earnings in 2009 and saw its loans top $8 billion for the first time in company history.

Its net income in the fourth quarter, though, declined 13.6 percent due to a year-earlier, one-time tax benefit in excess of $5 million.

The state's largest bank in terms of assets finished the year with $230.5 million in net income, up 3.6 percent from $222.5 million in 2008. In the fourth quarter, the bank posted a profit of $48.3 million, down from $55.9 million a year earlier when the bank benefited from a leverage lease tax gain. Excluding the extraordinary item, the bank's net income would have been up 2.2 percent.

Revenue for the year rose less than 1 percent to $681.4 million from $680 million while revenue for the quarter increased 2.1 percent to $167.1 million from $163.7 million.

“;Despite our challenging economy, the bank experienced solid performance with growth in net income, deposits, loans and assets,”; said First Hawaiian Chairman and Chief Executive Officer Don Horner. “;Additionally, we significantly invested in the state's economy by making in excess of $2 billion in loans during the year and remained Hawaii's largest lender.”;

Horner said the bank had its largest volume of residential loans ever in 2009 at $1.1 billion and that the bank increased its state-leading market share in that area.

“;We saw double-digit growth in home-equity lending because folks are reinvesting in their homes rather than investing in other things,”; Horner said. He also said they're consolidating debt and paying off items such as car loans.

“;We maintained our No. 1 lending position in the state in 2009 and it actually expanded, mostly as a result of the fact that we remained consistent in our underwriting,”; he said. “;We did not tighten or change our credit underwriting standards. We firmly believe as a bank that your underwriting standards should not change in economic cycles.”;

Deposits rose 9.1 percent to $10 billion from $9.4 billion. Assets increased 6.7 percent to $13.7 billion from $12.8 billion. And loans and leases rose 1.2 percent to $8 billion, up from $7.9 billion a year earlier, as First Hawaiian was named Small Business Administration Lender of the Year.

First Hawaiian's nonperforming assets, as a percentage of total assets, remained among the lowest in the nation at 0.27 percent compared with 0.10 percent a year ago.

“;The bank's credit quality remains strong and we actually were able to strengthen our reserves in 2009,”; Horner said.

In the fourth quarter, First Hawaiian set aside $11.2 million for potential loan losses, 28 percent less than a year earlier when its loan-loss provision was $15.6 million.

He said the bank anticipates 2010 to be “;a very solid year, but with clearly slower growth.”;

“;It will be a challenging year, but I don't think it will necessarily be any more challenging than in 2009,”; Horner said. “;I think it will be a year of opportunities for a lot of our customers. We'll probably see a recovery in 2011 and 2012, so 2010 is a time to look for opportunities to strategically place investments or to position yourself. The bank is well-positioned to support that growth and we're looking forward to assisting our customers in finding those opportunities. The bank remains optimistic in the intermediate and long term.”;