The Bank of N. T. Butterfield & Son, Bermuda's second largest bank, has reported record net quarterly earnings, up over 50 percent over the same period last year.

The bank, which is listed on both the Bermuda and Cayman Stock Exchanges, saw its stock rise 5.4 percent to $19.50 yesterday after the news was released.

The bank reported net income of $14.28 million for its first quarter ending 30 September 2000.

This represents an increase in net income for the period of 51.7 percent over that achieved at the same stage last year and a 30.4 percent increase on the fourth quarter of last fiscal year.

The bank said the results reflected the group's continuing strong earnings performances, and the continuing focus on enhancing shareholder value.

The Board has also decided to increase the quarterly dividend by 3 cents, a rise of 13 percent, to 26 cents per share.

Calum Johnston, President and Chief Executive Officer, said: "All businesses continue to produce significantly increased contributions. We are particularly pleased that our strategy of structuring the bank in order to achieve a superior return on shareholders' equity is having the desired effect, both in Bermuda and overseas.'' Richard Ferrett, Executive Vice President & Chief Financial Officer, said: "First quarter 2000/01 net income, at $14.28 million, was a record for the bank and represents an increase of 51.7 percent on the corresponding quarter in 1999 and 30.4 percent on the preceding quarter.'' He added that earnings per share for the quarter increased by 58.8 percent to 81 cents, 30 cents higher than for the same period the previous year and return on equity was the equivalent of 22.2 percent a year, up from 15.4 percent a year ago, and is the highest the bank has achieved since 1982. He added: "Net interest income, at $23.67 million, was up year on year by $3.37 million, or 16.6 percent.

"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 have now reduced from $51.23 million a year ago to $14.86 million as at 30 September 2000, including $8.44 million of loans now remaining in respect of discontinued operations,'' said Mr. Ferrett.

He added that non-interest income grew by 7.8 percent, to $21.33 million, with notable increases seen in the group's investment services revenues, up 46.9 percent, and corporate services fees, up 18.8 percent.

Bank posts record quarterly earnings Mr. Ferrett said: "Also particularly pleasing was that total expenses increased by only $0.05 million, or 0.2 percent, to $30.72 million. As a direct result, the group's efficiency ratio improved from 76.5 percent a year ago to 68.3 percent, the best level achieved by the bank since 1986.

"The first quarter of the fiscal year saw strong performances from all the group's businesses. In Bermuda quarterly earnings increased year on year by 67.2 percent, reflecting record performances by both the Community Banking and Asset Management businesses.'' He said overseas, Cayman and Guernsey also achieved record earnings with year on year increases in net income of 50.3 percent and 61.3 percent achieved respectively.

"In addition, Hong Kong has continued its solid improvement and recorded its sixth successive positive quarterly earnings performance, with net income up 145 percent on the preceding quarter,'' he said.

Other financial highlights included the return on assets up by 0.4 percent to 1.2 percent compared to a year ago and the net interest margin widened to 2.1 percent from 1.9 percent last year.

Total assets as at 30 September 2000 were $4.88 billion compared to $4.43 billion a year ago; reflecting the acquisition of the ANZ Bank (Guernsey) Limited in January this year, the bank said.

Over the past twelve months customer deposits have increased by 12.8 percent, with significant growth achieved in Bermuda and Cayman, as well as Guernsey.

Total loans increased year on year by $36 million, in spite of a $55 million reduction in loans due to the sale of Davenham Group plc last fiscal year. The underlying increase of $91 million in the bank's current businesses reflects the successful generation of new lending demand, particularly in Community Banking business in Bermuda, and increased loan portfolios in both Cayman and Guernsey, the bank said.

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