Butterfield Bank yesterday reported net income of $33.9 million for the second quarter ended June 30, 2006 up 12.7 percent year on year.

This brings the year to date net income to $66.9 million, up 23.1 percent and diluted earnings per share were $1.28, up 11 cents on last year and up 2 cents on the previous quarter.

Total revenue increased year on year by $14.3 million to $104.7million, compared to an increase in non-interest expense of $9.9 million to $69.8 million.

Butterfield Bank CEO Alan Thompson said: ?These results again demonstrate the continuing effectiveness of our business model in a highly competitive environment.?

?Our strategic focus on developing core businesses has resulted in continued growth across the jurisdictions in which we operate.?

?Our Bermuda businesses are continuing to do well, with both our Corporate Banking and Retail Banking businesses demonstrating how quality customer service can attract and retain business.?

Butterfield Bank has approved a one-for-ten bonus share issue, which equates to a 10 percent stock dividend, effective August 7, in addition to maintaining the quarterly dividend at 44 cents per share. The cash dividend is payable on August 18 to shareholders of record on August 7. The bonus shares will be eligible for dividends commencing November.

?Our Guernsey businesses achieved strong growth in net income, up 59.6 percent, whilst continued solid growth was also seen in Barbados, Cayman and the Bahamas,? Mr. Thompson said.

?In London our UK business recorded a 12.6 percent year on year increase in total income, reflecting continuing progress since the acquisition of Leopold Joseph two years ago, and made a positive contribution to the Group?s net income.?

?Overall, our results reflect the commitment and professionalism of our employees and I am proud to see their continuing dedication to excellent customer service, which is a key driver in our success.?

Total assets of the Group as at 30 June 2006 was a record at 30 June 2006 was a record $10.2 billion, a 12.1 percent increase from $9.1 billion a year ago.

The increase reflects solid growth in customer deposits, which have increased by $1.1 billion, or 14.8 percent, to $8.8 billion. The return on assets for the quarter was 1.3 percent, in line with the same quarter in 2005.

The Group?s balance sheet remains highly liquid with a loan-to-customer-deposits ratio of 38.0 percent. Deposits with banks and investments were $6.4 billion at 30 June 2006 and represent 63.1 percent of total assets.

The loan portfolio increased year on year by 18.5 percent, or $525 million, to $3.4 billion reflecting increased loan demand, particularly in our Bermuda and Guernsey based businesses and represents 33.0 percent of total assets, compared to 31.2 percent a year ago.

Bank of Butterfield Chief Financial Officer Richard Ferrett said: ?The Group remains committed to the prudent management of its expense base and we are also pleased to see an improvement in the efficiency ratio, at 64.8 percent for the quarter.?

Client assets under administration across the Group increased year on year by $14.3 billion, or 15.2 percent, to $108.6 billion, reflecting the growth in administration services to mutual and hedge funds. Client assets under investment management in Butterfield funds stood at $5.6 billion at 30 June 2006, up $0.1 billion on the previous quarter.