First Hawaiian Bank reached record levels for assets, deposits and loans during the third quarter even as low interest rates ate into profits.

The state’s largest bank reported $50.9 million in net income that exceeded by just 0.6 percent the $50.6 million achieved in the year-earlier period.

Still, First Hawaiian President and CEO Bob Harrison said the state’s improving economy bodes well for future earnings.

"We continue to see strong loan growth in a recovering marketplace," Harrison said ahead of the financial results due out today. "The bank performed well this quarter with both deposits and assets achieving solid gains. We expect to see continued steady economic improvement as more projects begin construction."

Kakaako, in particular, is booming with nine condominium towers under construction or soon to be under construction. Those towers will have about 4,000 units. Kapolei is also a hotbed with 550 new homes being built this year.

"We mirror the economy," Harrison said. "What the start of construction means for the economy is that finally people are working. We keep talking about projects being announced, projects being in pre-sale. Now, finally, people in the industry are working and getting paid. And those dollars will recirculate into the economy."

First Hawaiian’s loans and leases, revved up by strong auto sales, increased 7.4 percent to $9.3 billion in the quarter from $8.7 billion in the year-earlier period.

Total assets rose 3.7 percent to $16.7 billion from $16.1 billion while total deposits increased 3.1 percent to $13.1 billion from $12.7 billion.

Interest rates, which the Federal Reserve is keeping low to support growth and job creation, pushed down First Hawaiian’s net interest margin — the spread between the bank’s lending rates and deposit rates — to 2.95 percent from 3.11 percent in the year-earlier quarter. Net interest income slipped 0.2 percent to $109.3 million from $109.5 million over the same period.

"The one thing we don’t control is interest rates," Harrison said. "That’s why the net interest income was flat, but that’s actually an improvement from where we thought it would be. The one thing we can control is working with our customers and being out in the community and supporting them with loans when they need to invest in whatever project there is to fulfill their needs. I think that will continue as we see some of these new projects come out of the ground."

First Hawaiian’s noninterest income, which includes service charges and fees, fell 4.5 percent to $49.2 million during the quarter from $51.5 million a year earlier.

With the improving economy, First Hawaiian’s nonperforming assets — loans overdue by 90 days or more — decreased 2.4 percent to $33.2 million from $34 million while the percent of nonperforming assets to total assets improved to 0.20 percent from 0.21 percent.

The bank’s efficiency ratio, which measures how much it costs the bank to make a dollar of revenue, rose to 46.2 cents from 44.0 cents.

Bank of Hawaii, which will report its earnings Oct. 28, is the state’s second-largest bank with assets of $13.7 billion at the end of the second 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.

The Honolulu-based bank, founded in 1858, has 57 branches in Hawaii, three on Guam and two on Saipan.