Hawaii’s largest bank is preparing for a possible wave of loan defaults as the COVID-19 pandemic keeps residents unemployed and businesses shut down.

The holding company of First Hawaiian Bank reported today that its net income fell 44.4% in the first quarter after it set aside $41.2 million for future potential loan losses. That loan-loss provision far exceeds the $4.3 million provision that the bank took in the fourth quarter of 2019 and the $5.7 million provision it took in the first quarter a year ago.

“Our primary concern is for our customers’ health and welfare, along with our employees and the overall community,” First Hawaiian Inc. Chairman, President and CEO Bob Harrison said in an email. “By proactively working with our customers, we are taking a long-term approach as we enter a potentially long period of economic stress. Along with civic leadership, we see ourselves as a part of the solution and we will continue to support our customers during this especially fragile time.

First Hawaiian said it approved 2,396 Paycheck Protection Program loan applications totaling about $775 million for small businesses during the quarter and also provided loan modifications to 18,981 consumers and 597 businesses.

The bank also received and processed in excess of 41,000 electronic stimulus payments totaling a little over $73 million. It also waived fees for noncustomers cashing their stimulus checks.

First Hawaiian, which temporarily closed 26, or nearly 45%, of its 58 branches during the quarter, redeployed the affected employees to augment areas experiencing higher volumes. More than 50% of the bank’s employees are now working from home.

The bank’s massive loan-loss provision reduced its net income to $38.9 million, or 30 cents a share. That is compared to $69.9 million, or 52 cents a share, in the year-ago period. Revenue slipped 2.2% to $187.9 million.

Loans rose 1.4% to $13.38 billion from a year ago while deposits edged up 1.3% to $17.02 billion.

Like most banks in the nation, First Hawaiian suspended its stock buyback program to preserve capital. But it did declare a quarterly dividend for shareholders of 26 cents a share. It will be payable June 5 to stockholders of record at the close of business on May 26.

The bank also launched last week the Aloha for Hawaii Fund to support Hawaii’s restaurant industry, which has seen dramatic decreases in business under the stay-at-home mandate. The bank said it is donating $1 million to support nonprofits with food supply, and health and human service programs, to help those impacted by COVID-19.