BF&M, through a stock dividend, announced yesterday it will increase its share number by 10 percent, or about 290,000.

For every 10 shares held, shareholders will receive one additional share.

The Bermuda insurance company's board of directors approved the 10 percent stock dividend at a meeting on Tuesday as well as approving their usual 10 cents per share quarterly stock dividend and a preferred stock dividend.

The company intends to continue its normal rate of dividend on the new common shares.

Shareholders of record January 3, with trades up to and including yesterday applicable because of the five trading day settlement period, will be eligible for the new shares in connection with the 10 percent stock dividend.

"Stock dividends have been done by several local companies, the board noted (Tuesday) that the company is making excellent progress with unaudited accounts at the half year to June 30, 1994 showing that net earnings had increased 21 percent to $4.68 million over the corresponding period in 1993, with earnings per share increased to $1.22...accounts to September 30, 1994 show this strong performance has continued,'' said Mr. Glenn Titterton, President and CEO of BF&M.

"1994 is expected to be a good year and the 10 percent common stock dividend is a result of that progress, the time was now appropriate to improve shareholder returns.'' Though the dividend could drive the price of the stock down, Mr. Titterton said he believed the share value would be maintained.

"BF&M Ltd.'s principal operating subsidiaries, BF&M General Insurance Company Ltd., and BF&M Life Insurance Company Ltd., have maintained their market shares in all major classes of business in difficult market, the companies are experiencing growth in several important areas and underwriting results are generally good with the noticeable exception of our motor account, where high liability claims and the horrendous rate of motorcycle thefts has produced unacceptable results.''