Despite a slowing local economy, First Hawaiian Bank said it is on pace to report record earnings for 2008.

The state's largest financial institution said today that its third-quarter earnings increased by 6 percent to $55.4 million. For the first nine months this year, First Hawaiian has earned a record $166.6 million, which was a 7.1 percent increase from the year-earlier period.

"Despite the challenges facing our economy and the financial services industry, First Hawaiian's consistent credit policies have continued to serve us well," said Don Horner, First Hawaiian's CEO.

"Last year was the most profitable in our 150-year history and for the first nine months we are on pace to exceed 2007's earnings performance."

Unlike Mainland lenders who have been hard-hit by the turmoil in the nation's credit markets, Hawai'i banks generally have shunned the risky subprime market. Local banks also have benefited from strong real estate prices.

Those policies boosted First Hawaiian's recent performance.

The bank's assets were up 2.4 percent to $12.8 billion during the first nine months of 2008 while loans and leases grew by 23.9 percent to $7.7 billion.

First Hawaiian's nonperforming assets remained one of the lowest in the nation. Nonperforming assets were about .09 percent of its overall assets, the bank said.

Founded in 1858, First Hawaiian operates 58 branches in Hawai'i, three on Guam and two on Saipan.

"Our solid balance sheet, earnings, credit quality and ample liquidity allowed us to support our local communities by posting strong loan growth for the quarter while maintaining a prudent loan to deposit ratio," Horner said.

"Overall, the bank continues to perform well."