First Hawaiian Bank said yesterday that it had its best-ever second quarter, but the bank's president warned that Hawai'i's robust economy could be cooling.

First Hawaiian said its net profit rose 25.3 percent during the three months ending June 30.

"The bank experienced an exceptional quarter thanks to a continued positive economy and a highly customer-focused group of employees," said Don Horner, First Hawaiian's president and chief executive officer. "We expect 2006 to be a strong year for First Hawaiian Bank, but the economy is clearly showing signs of slower growth."

Horner said he expects growth levels to be more modest over the next few years.

Limited inventory of hotel rooms, a tight labor market and the high real estate values will make it difficult to sustain the level of growth seen in the past 10 years, he said.

"In general, we've had several years of unprecedented growth," he said. "I think there are signs of slower growth."

The bank earned $51.9 million in the second quarter, compared to $41.4 million in the year-earlier period. Year to date, First Hawaiian said it has earned $100.6 million, a 25.9 percent increase from the first half of 2005.

First Hawaiian, which was founded in 1858 and is the state's oldest financial institution, said its assets increased 7.7 percent to $11.8 billion while deposits grew by 6.8 percent to $8.7 billion. The bank said its loans and leases were up 6 percent to $6.1 billion.

The bank's record earnings come as interest rates have crept up and local real estate sales are slowing after a decade-long run up.

First Hawaiian is a subsidiary of BancWest Corp. which is owned by Paris-based BNP Paribas.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.