The Bank of NT Butterfield has reported a record net income - for the thirteenth quarter in a row- of $17.2 million.

The Bank reported this income represents a 20.4 percent increase over that achieved last year - and a more than four percent increase of net income over the previous quarter.

The Bank also saw its income increase at a greater rate than its costs. The income results are for the first quarter of the Bank's 200002 fiscal year, which ended 30 September, 2001.

Earnings per share for the quarter was 89 cents; a 15 cent jump compared to the same period last year.

And the Bank's board has declared a quarterly dividend of 32 cents per share payable on 15 November, 2001 and on November 6, 2001 to shareholders of record.

Although last quarter's dividend payout was also 32 cents, the Bank's chief financial officer Richard Ferrett explained that with the Bank's "One for ten" bonus share issue in August, 2001, shareholders now own ten percent more of shares - and thereby receive a ten percent increase in dividend payment.

Speaking of total expenses, Mr. Ferrett said: "The growth in total expenses year on year was at a lower rate than that for total income; with the cost base increasing by 14.4 percent to $34.95 million...the size of the increase in costs reflects the acquisitions of Matheson Bank, London in February, 2001 and CIBC Guernsey in August, 2001, which together increased the Group's headcount by 130 employees."

Mr. Ferrett said that about 61 percent of the Bank's costs are employee-based, and with the increased headcount it was clear that the cost base would go up. But, he said the Bank is pleased that the costs have increased at a lower rate than income.

Mr. Ferrett spoke of the results against the current economic climate: "It is pleasing in the current economic environment - with declining interest rates and reducing stock market valuations - that the Bank is able to report record first quarter 200002 net income.

"Return on equity, at 23.7 percent, is the highest the Bank has achieved since 1982 and has increased from 22.2 percent at the same stage, a year ago," he said.

Mr. Ferrett also spoke of the Bank's record performance in Guernsey: "Particularly noteworthy is the performance of our Guernsey business, where net income is up year on year by 43.3 percent to $1.39 million, reflecting the Bank's successful acquisition strategy in that important jurisdiction."

The Bank has grown its Guernsey presence over the last 18 months with the acquisition of Guernsey ANZ Bank in February, 2000 and CIBC Guernsey in August, 2001.

The Bank's chief executive officer Calum Johnston attributed the year on year increase in net income to the Bank's structure: "We are pleased that our strategy of structuring the Bank in order to achieve a superior return on shareholders' equity continues to have a positive effect.

"Employees at all levels in the Bank in Bermuda and abroad have contributed to producing our thirteenth consecutive quarter of record earnings..." he said.

Mr. Johnston in announcing the Bank's record earning, also took the opportunity to address the tragic events of the September 11 attacks, and the toll on Bermuda's economy.

Mr. Johnston said: "Our pleasure, however, is tempered by the tragic events of 11 September. Many good friends of the Bank died as a result of the terrorist action and our thoughts and prayers are with the victims and their families.

"It is possible that the coming months will be difficult for Bermuda," he said. "The Bank of NT Butterfield is a community bank at heart; one that is highly liquid and strongly capitalised.

"We will deal responsibly to assist as best we can any customers in difficulty whilst continuing to recognise our duty to shareholders, the vast majority of whom are Bermudian."