First Hawaiian Bank, the state’s largest bank in terms of assets, posted flat second-quarter earnings compared with a year ago but saw deposits jump 11.6 percent to a record $11.7 billion.

The bank, which released its earnings today, said net income slipped 0.4 percent to $54.5 million from $54.7 million in the year-earlier quarter. Deposits, though, increased from $10.8 billion in the first quarter and $10.5 billion in the second quarter of 2010.

"The deposit growth is reflective of both an increase in market share and also a wait-and-see attitude by our customers," First Hawaiian Chairman and CEO Don Horner said. "The economy is improving, but our businesses are choosing to pay down debt and build cash reserves."

Still, Horner said that despite weakness in the construction sector and sluggishness in employer hiring, the tourism and retail sectors are "producing positive trends which reflect improvement in consumer confidence."

Last week, First Hawaiian, the state’s largest local credit and debit card processor of merchant services, said card sales at businesses open at least a year rose 8 percent over the same period a year ago and followed first-quarter growth of 10.7 percent.

"First Hawaiian remains committed and well positioned to supporting our customers, especially during these challenged economic times."

The bank said total assets rose 0.3 percent to $14.8 billion last quarter from $14.7 billion a year ago but fell from $15.2 billion at the end of the first quarter. Loans and leases increased 2.2 percent to $8.2 billion from $8.1 billion a year ago but remained even with the first quarter of this year.

Nonperforming assets remained one of the strongest in the U.S. at 0.2 percent of total assets, the same level as a year ago.

"The bank’s strong credit quality has been consistent through the economic cycle," Horner said. "In many ways the bank is old-fashioned because we look to our customers’ strength and character rather than the strength of their credit score. That credit philosophy has served us well."

Horner said a challenge for the bank going forward is the lack of growth in its loan portfolio because of a decrease in demand.

"Given our strong deposit growth, the bank has substantial liquidity to lend," he said.

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.

The Honolulu-based bank, founded in 1858, has 58 branches in Hawaii, three on Guam and two on Saipan.