The Bank of Butterfield yesterday reported net income had soared by 59.1 percent to $26.1 million for the first quarter of 2004, in what management said was a ?pleasing? set of results with large increases in business both at home and abroad.

In the same quarter a year ago Bermuda?s oldest bank made $16.4 million, which was up over five percent on a year earlier. The bank said at the time it had been a ?challenging? year.

?We remain pleased with the bank?s performance and the significant progress made across all areas of our core businesses over the past year as we continue to implement our business model,? said Alan Thompson, president and chief executive officer.

?Particularly pleasing are the significant increases in revenues achieved from banking, asset management and investment and pension fund administration businesses both in Bermuda and overseas.?

Despite a change in focus for the bank over the past year with an array of purchases of banks in the Caribbean and the bank of the stars in London, Leopold Joseph, local banking has also been doing well in Bermuda.

The company said that net income from community banking in Bermuda increased year on year by 95.6 percent to $12.9 million, the significant growth reflecting the gain on sale of the venture capital equity investment. Customer deposits across the group increased year on year by $852 million, or 16.3 percent, to $6.07 billion, in line with the growth in total assets and total loans increased year on year by $247 million (14.2 percent), primarily reflecting increased loan demand in the community banking business in Bermuda, up 12 percent, together with the addition of the community banking business in Barbados.

And total investments increased year on year by $360 million, or 16.7 percent to $2.52 billion, reflecting the employment of the increase in customer deposits and the asset/liability management strategy of investing in high quality investment grade securities as an alternative to the inter-bank deposit market.

Richard Ferrett, executive vice president and chief financial officer, said: ?Significantly, the bank continues to achieve a return on equity in excess of 20 percent, at 26.0 percent, and the year on year growth rate in total revenues, at 37.4 percent, was markedly higher than that for operating expenses, which increased by 27.1 percent.

?In addition, our asset/liability management strategies continue to perform well and in line with expectations.?

Net interest income after provision for credit losses of $1.8 million was $37.2 million, up year on year by $13.2 million, or 55.1 percent. A $5.8 million realised gain was recognised in the quarter from the sale of a venture capital equity investment in a Bermuda-based company.

Total fees and other income increased year on year by 23.2 percent, or $6.9 million, to $36.7 million. The acquisitions in Barbados and the Bahamas in the second half of 2003 accounted for $2.2 million of the increase.

The bank reported strong year on year revenue increases from investment and pension fund administration services (up 58.6 percent), asset management (up 21.3 percent ), banking services (13.4 percent) and customer related foreign exchange income (up 11.1 percent), reflecting the overall growth in the client base.

Overseas, Cayman recorded net income of $7.0 million, up 15.7 percent compared to a year ago due to increases seen in both customer deposits and loans.

In Guernsey, post tax net income at $0.9 million was in line with that a year ago and is up $0.3 million on last quarter, reflecting increased revenue generation and in the UK a post tax loss of $0.7 million was recorded in line with expectations as the bank continues to invest in the business.

In the Bahamas, total income was up $1 million to $1.4 million on the preceding quarter, reflecting the acquisition of Deerfield Fund Services Ltd., now renamed Butterfield Fund Services (Bahamas) Ltd. in February this year.

Net income from the Bahamian businesses was $0.3 million for the quarter. In its first full quarter since acquisition, the community bank in Barbados achieved post tax net income of $0.2 million.

The board has decided to maintain the quarterly dividend at 38 cents per share payable on May 14 to shareholders of record on May 4.