Thank you, Bob.
Turning to Slide 4. Period-end loans and leases were $13.3 billion, unchanged versus the prior quarter. PPP loan balances grew by $358 million, as we originated over 3,600 loans for $459 million. In Q1, we shifted resources from processing forgiveness applications to originating new PPP loans.
As a result, the number of loans forgiven in the first quarter was less than expected. Mortgage loan balances were up slightly. Originations were strong in the quarter, but repayments were also high. C&I balances, excluding PPP loans, declined by $256 million, driven by $181 million decline in dealer flooring balances and a $41 million decline in shared national credits. Strong demand for new cars, both locally and on the mainland, depleted dealer inventories and drove down flooring balances.
Looking forward, we reiterate our view that full year loan growth, excluding PPP, will be in the low single-digit range.
Turning to Slide 5. Total deposit balances ended the quarter at $20.1 billion, a $906 million increase versus the prior quarter. This increase was driven by growth of $1.2 billion in consumer and commercial deposit balances, partially offset by a $269 million decrease in public deposits. Consumer and commercial deposit balances in the first quarter benefited from both stimulus payments and PPP loan disbursements.
Our cost of deposits fell 3 basis points to 8 basis points in the quarter.
Turning to Slide 6. Net interest income was $129.2 million, a $6 million decrease versus the prior quarter. The decrease was primarily due to average yields, lower average yields and balances on loans. Net interest margin was 2.55%, a 16 basis point decrease from the previous quarter.
As expected, asset and liability repricing contributed about 7 basis points to NIM compression. Excess liquidity, driven by the significant increase in deposits, added another 6 basis points of NIM compression. And lower fee income, because of the lower amount of PPP loans forgiven versus the prior quarter contributed another 3 basis points of NIM compression. The number of PPP loans forgiven in the first quarter declined from the prior quarter due to reallocating resources from processing forgiveness applications to originating new PPP loans.
We have shifted those resources back to processing forgiveness applications.
Over the next few quarters, we expect PPP loan forgiveness along with stimulus money to cause liquidity levels to persist. In Q2, we expect the net interest margin to decline 5 to 7 basis points, excluding the impact of PPP and excess liquidity.
Turning to Slide 7. Noninterest income in Q1 was $43.9 million, down $9.7 million from the previous quarter. Q4 noninterest income was elevated. Due to onetime items, including a $7.1 million gain on sale loans, a $1.2 million gain from an unsettled tax liability and a $0.9 million reduction in network associated dues, which was booked as contra income. These onetime impacts in Q4 were offset by a $4.8 million charge associated with the vis-à-vis swap. In Q1, our income related to customer swap agreements was down $0.9 million due to low customer activity and BOLI income was down $1.8 million.
Looking forward, activity based items such as credit and debit fees and merchant services have started to recover. And we expect further recovery as tourism increases. Swap fee income impacted by low loan growth and a stable low rate environment will most likely increase during the second half of the year, as loan growth starts to pick up.
We also expect a recovery in BOLI income in the second quarter.
Given these factors, we anticipate that noninterest income will bounce back to this $47 million to $48 million range in the second quarter.
Turning to Slide 8. Noninterest expenses were $96.3 million, $8.2 million higher than the previous quarter, and the efficiency ratio was 55.5%. Salaries and benefits increased approximately $1.2 million over the prior quarter. This was mainly driven by a small increase in salaries, annual bonuses and inflationary increases in our health care costs. In Q1, the bank launched its new website, fhb.com. The expenses associated with the implementation of the new website and other technology initiatives added approximately $2.2 million to contracted services.
In addition, to support the origination of the second round of PPP loans, in the first quarter, we added temporary support to help process over 3,600 loans. This led to onetime expenses of around $1 million in the quarter. Other operating expenses increased $3.3 million versus the prior quarter, of which approximately $1.2 million was nonrecurring.
For the full year 2021, we continue to expect expenses to be about 7% higher than 2020 expenses. And now I'll turn it over to Ralph to go over asset quality.