Bermuda Commercial Bank yesterday reported its half-year profit more than doubled to $3.23 million as fixed customer deposits rose 45 percent.Total customer deposit balances decreased by 1.9 percent, however, to $434.84 million compared with September 2011.“Despite this headline reduction, our customer deposit position improved as measured by all our key customer performance metrics,” the bank said. “Customer numbers were up, customer deposit duration lengthened and customer concentration improved. The improvement in concentration and customer numbers and the skewing towards longer maturing fixed deposits has resulted in a deeper, more stable deposit base.”The bank said it also increased hiring, with the number of employees growing from 43 to 58 over the past year, bringing payroll costs to almost $4 million from $2.26 million.Along with increased payroll costs, the bank said property and equipment costs rose to $3.55 million from $0.41 million following its purchase of the Trinity Hall building on Cedar Avenue.BCB said its fully diluted earnings per share of 44 cents for the six months ended March 31 compared with a profit of $1.35 million, or 20 cents a share, for the six months ended March 31, 2011.BCB, which focuses on corporate and private wealth clients, said total revenue for the period was $10.17 million compared to $5.74 million in the same period in 2011.“Our improved earnings reflect solid customer deposits and strong interest earnings on our investments and to a lesser extent our loan portfolios,” BCB chairman Michael Collier said in a statement.“The bank’s profit together with the unrealised growth of our investment portfolio boosted shareholders’ equity to $93.56 million at March 31, 2012 compared with $82.92 million at September 30, 2011. Our tier one capital ratio, which is a measure of strength and stability, was 25.52 percent at period end, significantly higher than general industry standards and a clear indication of the strength of BCB’s balance sheet. Our total capital ratio was 21.66 percent.”Mr Collier added: “The bank seeks to build value for our shareholders by generating consistent and sustainable earnings while adhering to our conservative risk profile. We are therefore pleased with the steady growth in profit levels and the strengthening of the deposit base since the completion of the sale of the bank two years ago.“BCB has become Bermuda’s bank of choice for clients that demand traditional service excellence along with a conservative approach to business.”Interest income increased strongly to $9.48 million from $4.84 million one year ago.The bank said: “In response to the lengthening of our customer deposit duration, the Bank has continued to reallocate funds previously held in low yielding money market funds into a diversified investment portfolio. As a result, interest income on money market funds decreased to negligible levels. BCB also recorded $0.73 million in interest income on the bank’s small loan portfolio.”Over the course of 12 months the bank said it has succeeded in increasing key term deposits by 45 percent.“While a more expensive form of funding, the stability provided by this maturity growth allows for vastly improved investment opportunities and lower deposit volatility,” BCB said.Net non-interest income was $2.46 million, up from $1.57 million in 2011. The figures include a number of changes from the prior year period as the Bank said it diversified into new areas of business.Fees and commissions revenue increased to $2.07 million from $1.38 million primarily following the completion of the amalgamation of Paragon Trust Ltd and Charter Corporate Services Ltd in October 2011.The bank continued: “The hedging costs of our securities portfolio were $2.64 million compared with $1.16 million in the prior year. This increase should be measured in the context of our increased investment interest income, the gains on sale of investments and the improvement in our unrealised investment position.“In line with our new acquisitions and the continued roll out of our growth strategies, our year over year cost base has increased by 58.1 percent from $4.39 million in 2011 to $6.94 million for the six months ended March 31, 2012.”Mr. Collier stated that “By investing in our employees and infrastructure we are looking to strengthen our business and to create long-term value for our shareholders.”Total assets increased marginally to $534.85 million at March 31, 2012 from $531.98 million at September 30, 2011.Cash, money market funds and term deposits decreased to $213.97 million from $273.29 million at September 30, 2011 due to the reallocation of funds into longer term assets in line with the lengthening of customer deposit maturity.Investment securities increased to $240.69 million from $191.99 million at September 30, 2011. This increase resulted from the reallocation of funds from short-term positions as the maturity profile of our customer deposits lengthened.“Following the quarter-on-quarter balance sheet transition over the last two years, our securities and cash positions are now broadly aligned with management’s intentions for the future. The primary driver of future change will be the deposit activities of our customer base. Despite the relative expansion of our securities portfolio, BCB maintains an extremely conservative ‘risk asset’ leverage ratio of less than 4:1. This compares very favourably to industry averages of more than 12:1.”The board of directors resolved that an interim dividend of ten cents per share will be paid to shareholders of record as of May 23, 2012.BCB also noted the launch in March of the BCB Bond Fund, which is an actively managed diversified portfolio of predominantly investment grade global bonds with a targeted yield of at least five percent. In addition, the bank rolled out BCB Visa Platinum and BCB Visa Gold Business credit cards in January.Mr Collier said: “The last six months have been a positive period for the bank as achieved real goals and continued to build strong sustainable earnings. We will continue to drive our strategy and focus on building a strong diversified bank with increasing market share. Our achievements to date and clear view of the way forward allow us to look to the remainder of the year with a high degree of confidence.”