Butterfield Bank's common shares yesterday dropped to their lowest level on the Bermuda Stock Exchange (BSX) since June 1997, taking into consideration stock splits.

The bank's shares fell by almost 30 percent, or 85 cents, to close on $2, having plunged even lower to $1.50 earlier in the day, driving The Royal Gazette / BSX Index down nearly 10 percent.

Butterfield shares were trading at $7.26 just a year ago, while the shares have plunged almost 49 percent this year to date.

A total of 607,359 common shares changed hands during yesterday's trading as investors reacted to Tuesday's announcement of a $550 million capital injection in the bank from mainly foreign investors and its declaration of a $213.4 million net loss for 2009.

The downward move was expected after new equity for the investors was priced at $1.21 per share — $1.64 below Monday's closing price.

Trading in the shares was suspended on the BSX on Tuesday as investors came to terms with the news and resumed again yesterday.

"Any time any stock falls it does negatively impact the Index," said Greg Wojciechowski, president and CEO of the BSX.

"The Butterfield shares move the Index more so than if a smaller company were to move. The market is reacting the way it should in an orderly fashion and it is reflecting the sentiments of the investors.

"Trading was suspended to ensure that information that is solid and based on fact gets delivered to the market so that investors can make an informed decision, and that is the reason for the halts — to be able to pause the markets so that information is able to get into the hands of those investors so they can look at it properly."

The bank is the most heavily weighted issuer in the BSX Index, with a market capitalisation of $195.6 million for its common shares — accounting for almost one quarter of the whole Index.

The Index's market cap stands at $815.2 million with Argus Group Holdings making up $179.1 million and the Ascendant Group $152.4 million of that total.

For the day, the BSX Index slid 173.16 points, or 9.06 percent, to 1,737.25, with 626,509 shares worth BD$1,233,547.30 and 104 shares worth US$128,718.22 traded.

The BSX Index has declined 7.8 percent this year to date.