First Hawaiian Bank is seeing signs in its loan portfolio that individual consumers and businesses are getting more confident about the state economy.

The state’s largest bank saw its loans reach a company record $9.1 billion in the first quarter even as its net income fell 7.4 percent to $52.6 million from $56.8 million in the year-earlier period, primarily due to lower interest margins and reduced gains from securities sales.

"For a couple of years now, we’ve been waiting for a recovery, and now it seems to be finally getting going," First Hawaiian President and CEO Bob Harrison said. "Consumers are getting the confidence it takes to buy a new car. And in construction you see the confidence it takes for people to invest in a new building or a new project. So having all that happen now is very positive."

Harrison said residential loan volume has been strong and remains steady, and that the bank is starting to see commercial loan growth.

"Some of the (planned) construction projects have started, and our branches are seeing new loan activity," Harrison said. "We’re helping consumers finance the purchase of new cars. The only negative pulling us back is the low interest rate environment from the earnings perspective. But we’re still over $50 million in net income, and that makes us one of the most profitable, if not the most profitable, companies (in the state)."

First Hawaiian’s $9.1 billion in loans was up 7.6 percent from $8.4 billion in the year-earlier quarter, while the amount the bank set aside for potential loan losses was just $2.9 million last quarter compared with $13.4 million in the first quarter of 2012. The bank’s nonperforming assets — loans overdue by 90 days or more — to total assets remained one of the best in the U.S. at 0.27 percent, up slightly from 0.22 percent in the year-ago quarter.

The bank, whose earnings are due out today, boosted its assets 1.6 percent to $16.4 billion from $16.1 billion.

Its net interest income — the difference between lending rates and deposit rates — slipped 2 percent to $119.7 million from $122.1 million.

"Rates have dropped over the last year significantly, and that’s something none of the banks can control," Harrison said. "At this point it’s being driven by the Federal Reserve. Deposit rates can’t go much lower, so as interest rates continue to drop, that puts pressure on our net interest margin."

Deposits continued to grow and were up 3.4 percent to $12.9 billion from $12.4 billion a year ago.

But the bank’s noninterest income, which includes service charges, fees and securities sales, fell nearly 22 percent to $40.5 million from $51.6 million. First Hawaiian’s securities sales were primarily a mix of government securities and agencies.

"We had a lower amount of gains on securities sales in the first quarter this year from last year," Harrison said.

The bank’s efficiency ratio, which measures how much it costs the bank to make a dollar of revenue, remained strong at 45.6 cents compared with 42.8 cents a year ago.

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 57 branches in Hawaii, three on Guam and two on Saipan.