The Bank of Bermuda yesterday reported record net income of $17.2 million for first quarter ended September 30, an increase of 21 percent over the same period last year.

First quarter diluted earnings per share was 80 percent, a 19 percent increase over the 67 cents earned in first fiscal quarter 1997.

Bank of Bermuda chief financial officer Edward Gomez said pre-tax net operating income of $18.9 million was also a record.

"The 19 percent increase in earnings per share was achieved despite fee pressures caused by recent stock market conditions,'' he said. "The first quarter results also reflect improvements in banking and foreign exchange revenues.'' President and chief executive officer Henry Smith said new private client business had increased in the Far East and Europe during the quarter.

Total revenue for the quarter was $83.5 million, a gain of 12 percent. The bank reported that interest income increases more than compensated for declines in other revenues, including corporate trust fees.

Non-interest income was down six percent to $49.9 million. Corporate trust fees, the largest component of fee revenue, fell $3.5 million to $20.5 million. Fees from Hong Kong alone ware down $4.2 million alone.

Meanwhile foreign exchange services earned $8.4 million, a gain of 12 percent.

Interest income rose $12.2 million to $33.6 million, reflecting higher margins in pricing deposits.

The bank had operating expenses of $64.6 million, a gain of 13 percent.

"Nearly 70 percent of this increase relates to salaries and staff benefits, the largest component of operating costs,'' the bank stated. "The increase in salaries and staff benefits is due primarily to staff growth required to support the expanding European offices, as well as annual pay rises and higher profit share accruals.'' The bank's return on equity for first quarter was 15.4 percent, up from 14.2 percent in first quarter 1997.

"The bank continues to pursue a conservative balance sheet management policy to ensure strong liquidity in difficult financial markets and is now well positioned to take advantage of widening spreads once markets become more stable,'' a press release stated.

Back on track after write downs from profits over the past two years, The Bank of N.T. Butterfield and Son Ltd. yesterday announced earnings of $8.81 million for first quarter ended September 30.

In the last financial year ended June 30, the bank had earnings of $2.48 million.

"Solid performances were seen in all our core business areas, both in Bermuda and overseas, which is particularly pleasing,'' bank president and chief executive officer Calum Johnston stated in a press release. "Our strategy of building on the core strengths of the group is now being proven, as was our decision to take firm and decisive action last financial year.'' Earnings per share for the quarter was 46 cents. Return on equity was 15.1 percent. Annualised return on assets was 0.8 percent.

Ince was made up of $18.01 million in net interest income and $19.7 million in fees and other income. The bank had total expenses of $28.90 million, an increase of $1.7 million over the same period last year.

In the last financial year the bank had net income of $35 million before exceptional charges for discontinued operations and other adjustments of $32.5 million. The charges were on top of write-offs of $16.8 million taken the previous year.