The Bank of Butterfield announced yesterday a 50.2 percent increase over the same period last year in its quarterly earnings for its second quarter ending 31 December 2000. The bank reported record quarterly earnings of $14.67 million, which is 2.8 percent up on the first quarter of the fiscal year.

This means earnings for the first half of the current financial year were a record $28.95 million, which is an increase of 50.9 percent or $9.77 million on the same period in 1999.

The bank's board has decided to increase its quarterly dividend by 2 cents to 28 cents per share, which is a 7.7 percent increase. This will be payable on Thursday 15th February to shareholders of record on Tuesday 30th January.

Bank of Butterfield reports 50.2 percent rise in earnings Calum Johnston, President and Chief Executive Officer said: "This is the tenth consecutive quarter of earnings growth and all our businesses, both in Bermuda and abroad, are performing in line with or better than the objectives we set ourselves. Our strategy of focusing on the bank's core strengths and improving efficiency is having the desired effect, particularly in terms of the return on shareholders' equity, which currently stands at 22.2 percent, the highest the bank has achieved since 1982.'' Richard Ferrett, Executive Vice President and Chief Financial Officer at the bank, stated that $1.64 earnings per share in the first half of 2000/01 were a record for the bank.

"This represents an increase of 60 cents, or 57.7 percent, on the corresponding period in 1999, and 46 cents, or 39.0 percent, on the second half of last fiscal year. Both net interest income and fee income are also at record levels. It is particularly pleasing that total expenses for the first half year decreased by $0.9 percent to $61.83 million compared to a year ago.

As a direct result the group's efficiency ratio improved from 76.5 percent to 68.1 percent.'' Mr. Ferrett continued:"First half net interest income of $46.39 million is up year on year by $5.89 million. This reflects significant growth in customer deposits, increases in loans, investments and deposits with banks, together with the continuing success in reducing the group's non-accrual loans. These were $46.67 million a year ago and are $14.15 million as at 31 December 2000, including $7.63 million of loans remaining in respect of discontinued operations.'' He went on to say that non-interest income grew by 8 percent to $44,38 million and represents some 49 percent of total income. Increases were also seen in the group's corporate services revenue of 24.4 percent and in investment services fees of 27.6 percent.

"The group's core businesses continue to perform at record levels. In Bermuda first half net income increased year on year by 91.4 percent. Overseas Guernsey's first half net income was up by 52.9 percent, Caymans by 34.1 percent and Hong Kong's by 202 percent.'' Return on assets improved by 0.4 percent to 1.3 percent over the past year and total assets as at 30 December 2000 were $4.58 billion compared to $4.38 billion the previous year. Loans now represent 28.8 percent of balance sheet footings and increased over the year 5.2 percent, or $65.80 million.

The group's total capital ratio remains strong at 13.1 percent and shareholders' equity increased in the year by 8.1 percent to $267.31 million.

The balance sheet remains liquid with 67.4 percent of assets employed in either deposits with banks or in investments.

The bank has purchased 1,887,603 shares for its stock option trust at a cost of $31.09 million to satisfy its obligations under an employees stock option plan. The bank also purchased 300,776 shares at a cost of $5.37 million under its share buyback programme.

CHART