WEDNESDAY, JUNE 6: The Bank of Butterfield has told the Bermuda Stock Exchange that it repurchased 2,500 of its common shares during May. The average price per share was $1.276.
The bank had announced on May 2 it was introducing a share buyback programme, in which it would repurchase up to six million common shares and 2,000 preference shares.
At that time, new board chairman Brendan McDonagh told the Bermuda Sun that Butterfield had built up capital and this was a way to return value to the shareholders.
He said: “We looked at taking some of the accumulated capital and returning it back to the shareholders. We didn’t want to pay out the common dividend.
“We decided to explore the option of a share buyback programme. The specific reason why that was an attractive option over other options was that there is very little liquidity in our shares in the BSX at the moment. In part that’s due to the fact that 70 to 80 per cent of the shares are held by a limited number of institutions and those shares are not going to be traded — they are long-term holds.
“We prefer to try to put some liquidity into the market for the Butterfield shares.
“We’ll have to see what the interest there is over the next few months. We’re assuming there are some shareholders out there who would like to reduce their holding but they are not able to under the current level of turnover in the market.
“Hopefully the share buyback programme will help them. We hope this will give a bit more consistency to the share price in the market.”
This year the share price has varied from 99 cents to $1.33.
Editor’s note: In the interest of full disclosure, Don Burgess is a shareholder in Butterfield Bank.