Capital G Bank Ltd made a $3.2 million profit last year - an increase of 38 percent over the $2.3 million recorded for the 11 months ended December 31, 2009.In a statement released yesterday, the privately held bank revealed that customer deposits grew 15 percent to a record $1.1 billion and total assets increased 13 percent to $1.2 billion.Capital G’s president and chief executive officer Ian Truran said: “We are particularly pleased with this performance in the face of the recessionary pressures that continue to dominate the Bermuda economic landscape.“In fact our operating earnings for 2010 were $6 million, an increase of $3.7 million, or 157 percent, over December 2009 results, after excluding accelerated depreciation on certain computer software related assets.”Some recessionary impact was apparent in that impaired loans grew from $1.5 million to $3.1 million, but still represent only 0.39 percent of the loan book. The total value of foreclosed properties held by the Bank at the end of the year was $7.7 million, compared to $2.6 million at the end of 2009.“Because last year we substantially increased our provisions for loan losses, recognising weakness in the resale market for consumer loan collateral, we have in fact been able to reduce our provision expense this year by $0.5 million,” Mr Truran said.“Unfortunately, while our policy has always been one of ‘the customer comes first’ and we continue to work one-on-one with customers to assist with resolving any difficult situations, we did have to foreclose on more properties this year than in 2009 as some of our borrowers struggled to cope with the effects of the recession.”Mr Truran said the bank’s addition of Kast Investment Management had contributed positively to earnings and added that Capital G’s merger with the First Bermuda Group, completed in January, would further accelerate the bank’s growth.Direct period-over-period comparisons are impacted because the bank changed its reporting date in 2009 to December from January, with 2009 results covering only 11 months.Despite the low interest rate environment, the bank’s net interest income grew by 21 percent to $34.1 million, while fees and other income grew by $1.5 million to $11 million, largely due to the addition of Kast.Total revenues reached $45.1 million for the year, compared to $37.6 million a year earlier. Total operating expenses grew to $41.1 million from $34 million while provisions for loan losses dropped to $0.8 million from the $1.3 million recorded in 2009.The tier one capital ratio a key indicator of core financial strength watched by regulators was 16.88 percent at the end of 2010, far in excess of regulatory minumums.Talking about the addition of FBG, Mr Truran said: “Our combined operations will have over $1.4 billion in assets and we anticipate First Bermuda’s business will be a strong contributor to our bottom line in 2011 and beyond.”He added: “The bank is well aware of the pressures that the community as a whole continues to face in the current economic environment. Capital G will continue to assist a wide range of local charitable organisations whose work supports a broad cross-section of the community, with particular emphasis in the areas of human services, youth development and education.“The bank has increased its annual ‘Giving Back’ donations fund by 60 percent since 2001. We are a Bermuda-focused financial institution, and we are committed to growing our ‘Giving Back’ programme in step with our evolution as a full-service bank for the Bermuda community.”