Butterfield Bank?s net income for the third quarter jumped 34 percent as the bank?s local business and overseas expansion strategies appeared to be paying off.

Butterfield said in a statement yesterday that net income rose to $30.6 million for the three months ending September 30 while its nine-month net income rose 23.4 percent to $85 million. Diluted earnings per share were $1.18, up 29 cents year on year.

Butterfield Bank president and CEO Alan Thompson said: ?It is pleasing to note that the Group?s core businesses, both in Bermuda and overseas, continue to perform in line with expectations. Our Bermuda businesses continue to do well.

?In particular the Community Banking division has demonstrated significant growth in a highly competitive environment.?

Net income from Community Banking was $9.8 million, a 13.5 percent increase year on year when excluding the impact of a $3.3 million loan recovery in the same quarter in 2004, the bank said.

?In the United Kingdom we recorded positive earnings in line with expectations and strong performances were also seen from our Guernsey and Bahamas businesses.?

Butterfield has expanded heavily in the Caribbean and in the UK in the last two years, purchasing the private banking operations of Leopold Joseph in the Bahamas and London, Deerfield Fund Services in the Bahamas and a bank in Barbados.

In Barbados total revenues increased by 38.7 percent to $3.1 million, whilst net income, at $0.5 million, was down slightly from $0.6 million achieved a year ago. Total assets now stand at $187 million, up 21.3 percent.

In the Bahamas, the Bank achieved net income of $400,000 on total revenues of $1.7 million, up from $300,000 and $1.4 million respectively a year earlier. Client assets under administration were up 22.1 percent year on year to $3.9 billion.

In Cayman, traditionally one of the Bank?s strongest subsidiaries, net income jumped by $6.9 million to $11.4 million, partly due to provisions taken last year in the wake of Hurricane Ivan. Total income, at $20.4 million, was up 68.2 percent.Total assets increased year on year by 5.3 percent to $2.2 billion and client assets under administration rose by 55.5 percent to $31.2 billion.

Butterfield Bank Chief Financial Officer Richard Ferrett said: ?Most pleasing was the improvement in the Group?s efficiency ratio, at 64.1 percent for the quarter compared to 73.3 percent for the same period a year ago.

?Our return on equity continues to remain solid at 25.7 percent for the quarter, compared to 22 percent for the same quarter a year ago.?

?Significant increases were seen year on year in the Group?s revenue generation with net interest income increasing by 10.7 percent and non-interest income increasing by 11.1 percent.?

Other financial highlights of the quarter compared to the last quarter include: return of equity of 25.7 percent, return on assets of 1.3 percent, net interest income of $47.6 million, total assets of $8.9 billion and assets under administration of $9.8 billion.

Total assets increased by 13 percent to $3.5 billion. The wealth management, fiduciary services and investment and pension fund administration businesses achieved an 8.4 percent year on year growth in net income to $8.1 million.

This reflects the increase in client assets under administration, which now stand at $43.7 billion compared to $31.9 billion a year ago.

The Bank also announced a third quarter dividend of 41 cents per share.

After taking into account the one-for-ten bonus share issue made in August, 2005, this equates to a ten percent increase in the quarterly dividend and will be payable on November 21 to shareholders of record on November 9.