$23.1 million, a 43 percent increase over the same period ended March 31 last year.

The company had diluted earnings per share for the quarter of $1.06, an increase of 39 percent over the 76 cents per share earned in the same period a year ago. Return on average shareholders equity was 19.7 percent.

For the nine months net income to March 31 was $55.4 million a 27 percent increase over the same period ended last year. Bank of Bermuda chief financial officer Edward Gomez said the nine month earnings were a record.

"These results reflect continued strong interest earnings, as well as improvements in important fee based revenues and some non-recurring investment income,'' he said. "Indicators of an improving corporate trust market were reported throughout the bank's network of offices. We are seeing a recovery of client asset values in Europe and the Americas, together with a more stable business environment in the Far East and excellent results from the bank's other operating units.'' In the third quarter revenues grew 20 percent to $94.9 million. Total non-interest income was unchanged at $49.9 million. Mr. Gomez reported that higher banking services fees and foreign exchange earnings offset a decline in corporate trust fees.

While the bank's revenue from corporate trust fees have increased from the first of the current fiscal year, the $21.1 million in fees collected in the third quarter were still six percent less than the same period last year.

"This decline is largely due to lower client asset values in the Far East,'' the bank reported in a press release. "Although we have recently seen a more stable business environment and upturn in stock markets in the Far East, client asset values have yet to return to their record levels in the early part of fiscal year 1997/98.'' Private trust fees in the Americas and Far East fell slightly, the bank reported. As a result total private trust fees fell to $7 million from $7.3 million. The bank plans on boosting revenues through new product offerings.

Record Q3 net income for bank Investment services fees of $7.6 million remained the same as third quarter in the previous fiscal year. Banking services fees increased 25 percent to $5.23 million. The increase was attributed to revenues from Bermuda Home Ltd.

Banking service revenues also increased in the Bermuda and Luxembourg operations.

Meanwhile foreign exchange fees increased six percent to $8.7 million.

Net interest income for the quarter increased $12.2 million to $39.5 million.

"We have changed the composition of our asset portfolio over the past year by increasing holdings of floating rate securities and relying less on inter-bank deposits,'' the bank stated. "These changes have generated improved interest earnings. Our results this quarter also benefited from a tightening of credit spreads and the inclusion of Bermuda Home's interest earnings for the first time.'' Investment and other income was $4.9 million in the third quarter compared to $1.6 million for the same quarter last year. The increase was attributed to significant non-recurring investment gains in the quarter.

Operating expenses increased 15 percent to $69.9 million for the third quarter. Bermuda Home contributed $1.9 million of the year over year increase.

"The remaining increase largely relates to higher salaries and staff benefits resulting from necessary staff growth in Europe and annual pay rises at the start of the fiscal year,'' Mr. Gomez stated. "Systems upgrade expenses also contributed to higher costs in the current quarter.'' Total balance sheet assets at March 31 were $9.6 billion compared to $9.5 billion a year earlier. Total cash and bank deposits were $4.6 billion, down from $5.8 billion a year earlier. The securities portfolio increased $800 million to $3.3 billion from $2.5 billion.

Loans, less allowance for loan losses, were $617 million higher than a year earlier, rising to $1.4 billion mostly due to the inclusion of Bermuda Home loans in the current year figures.

Customer deposits at March 31 were $8.9 billion about the same as at the end of the same period last year. Total shareholders' equity increased 11 percent to $475 million at March 31.

Record Q3 net income for bank Investment services fees of $7.6 million remained the same as third quarter in the previous fiscal year. Banking services fees increased 25 percent to $5.23 million. The increase was attributed to revenues from Bermuda Home Ltd.

Banking service revenues also increased in the Bermuda and Luxembourg operations.

Meanwhile foreign exchange fees increased six percent to $8.7 million.

Net interest income for the quarter increased $12.2 million to $39.5 million.

"We have changed the composition of our asset portfolio over the past year by increasing holdings of floating rate securities and relying less on inter-bank deposits,'' the bank stated. "These changes have generated improved interest earnings. Our results this quarter also benefited from a tightening of credit spreads and the inclusion of Bermuda Home's interest earnings for the first time.'' Investment and other income was $4.9 million in the third quarter compared to $1.6 million for the same quarter last year. The increase was attributed to significant non-recurring investment gains in the quarter.

Operating expenses increased 15 percent to $69.9 million for the third quarter. Bermuda Home contributed $1.9 million of the year over year increase.

"The remaining increase largely relates to higher salaries and staff benefits resulting from necessary staff growth in Europe and annual pay rises at the start of the fiscal year,'' Mr. Gomez stated. "Systems upgrade expenses also contributed to higher costs in the current quarter.'' Total balance sheet assets at March 31 were $9.6 billion compared to $9.5 billion a year earlier. Total cash and bank deposits were $4.6 billion, down from $5.8 billion a year earlier. The securities portfolio increased $800 million to $3.3 billion from $2.5 billion.

Loans, less allowance for loan losses, were $617 million higher than a year earlier, rising to $1.4 billion mostly due to the inclusion of Bermuda Home loans in the current year figures.

Customer deposits at March 31 were $8.9 billion about the same as at the end of the same period last year. Total shareholders' equity increased 11 percent to $475 million at March 31.