First Hawaiian Bank reached $10 billion in loans for the first time and posted its second-highest quarterly net income ever as growing consumer confidence and a resurgence in the construction sector helped boost net income 19.7 percent in the final three months of the year.

The state’s largest bank has been benefiting from an improving Hawaii economy that has seen the unemployment rate fall to a six-year low of 4 percent and nonagricultural job growth rise nearly 10,000 from the previous year.

First Hawaiian’s earnings jumped to $61.4 million in the fourth quarter from $51.5 million in the year-earlier period. Its most profitable quarter ever was in the January-March period of 2009 when it made $74.5 million.

For the year, First Hawaiian’s net income rose 9.4 percent to $226.3 million from $206.9 million.

"We’re seeing good growth in the lending portfolio, which leads to growth in net interest income," Bob Harrison, chairman, president and CEO of First Hawaiian, said ahead of Friday’s earnings release. "We also saw good expense control — as we have had throughout the year — and we had gains from securities sales (in the bank’s investment portfolio)."

Loans rose 5.2 percent in the fourth quarter while deposits gained 8.4 percent in propelling the bank to a record 18.1 billion in assets. The gains on the sales of securities such as U.S. Treasuries increased by $4 million over the year-earlier quarter.

The bank also showed strong growth in deposits last quarter as they rose by more than $1 billion over the last 12 months to $14.7 billion from $13.6 billion.

"Deposits are really a reflection of the bank’s relationship strategy as we continue to grow and the economy continues to improve here," Harrison said. "That’s how deposits grow. It’s been unusually high — even we’re a little surprised at how high the deposit growth has been going."

Loans have been on the upswing for all Hawaii banks due to historically low interest rates, the improving economy and the influx of condominium towers that are being built primarily around Kaka­ako.

"It really has been strong on the consumer side — car lending and equity lines — and that speaks to consumer confidence in the economy," Harrison said. "We’re seeing that on the consumer side in terms of borrowing and deposit growth. It also has been strong in the construction portfolio. Clearly, we’re seeing growth in our construction loans and, secondly, with those people in the construction industry that are working, you’re seeing growth and confidence in their own personal lives. Those are generally well-paying jobs."

The bank’s net interest income — the spread between loan and deposit rates — rose 3.4 percent to $111.9 million last quarter from $108.2 million in the year-earlier period due to strong loan growth even as First Hawaiian’s net interest margin decreased to 2.79 percent from 2.87 percent.

Noninterest income, which includes service charges and fees, rose 6.4 percent to $53.1 million from $49.9 million.

Nonperforming assets — loans overdue by 90 days or more — declined 14.8 percent to $28.3 million from $33.2 million and as a percentage of total assets improved to 0.16 percent from 0.19 percent.

The bank’s control over expenses, as reflected in the efficiency ratio that measures how much it costs First Hawaiian to make a dollar of revenue, improved to 44.48 cents from 46.78 cents in the year-earlier quarter.

First Hawaiian, a wholly owned subsidiary of French banking giant BNP Pari­bas, is not required to separately report its earnings, but does so voluntarily each quarter.