Butterfield Bank’s chief executive sold all of the vested ordinary shares he held in the company last month, according to a regulatory filing.

A “Form 4” filing submitted to the US Securities and Exchange Commission, shows Michael Collins, who is also Butterfield’s chairman, sold a total of 207,037 shares over three days from August 17 to 19.

Mr Collins sold the shares at a weighted average price of $61.59 per share — a total transaction value of $12.75 million.

The filing includes the comment: “The sales were made in connection with the reporting person’s long-term strategy for investment diversification and estate planning purposes.”

The share sales came about one month before Butterfield’s annual meeting last Friday, when shareholders approved plans to issue approximately 11.58 million new shares — a decision that brings the proposed acquisition of CIBC Caribbean one step closer.

The $1.8 billion purchase will be paid approximately 61 per cent in cash and 39 per cent in newly issued Butterfield shares.

In response to our questions on Mr Collins’s share sales, a Butterfield spokesman said: “The sales were pre-cleared under the bank’s dealing policy and took place during an open trading window. They were made for personal financial planning reasons and were properly disclosed in filings at the time.

“Mr Collins retains a substantial economic interest in Butterfield through unvested share awards. The value of those awards depends directly on how the bank performs over the years ahead, so his interests remain closely tied to those of shareholders.

“Mr Collins and the board remain confident in the bank’s strategy, including the acquisition of CIBC Caribbean, which shareholders supported at the recent annual general meeting.”

Jake Lerch, an analyst with investment website The Motley Fool, picked up on Mr Collins’s sale of shares.

“Some insider transactions are more significant than others,” Mr Lerch wrote. “Take this one, for instance. While some insider sales are triggered by tax withholding or prearranged, this one appears to be a one-off sale.

“What’s more, the CEO has liquidated his entire holdings in the stock, to the tune of $12.8 million. While that alone isn’t enough for investors to be bearish, it may raise a few eyebrows.”

While the Form 4 filing indicates that the amount of securities directly owned by Mr Collins after the transactions is zero, he still maintains a significant economic interest in the bank’s future.

The CEO holds 598,913 unvested restricted stock units, according to an August 27 regulatory filing. Each unit represents a contingent right to receive one ordinary share, with vesting dates as far out as February 2033, and various conditions attached, relating to continued service and performance.

Butterfield’s newly issued shares will be transferred to CIBC and a smaller number to CIBC Caribbean and CIBC Bahamas minority shareholders, depending on their elections. Minority shareholders will be offered the ability to elect to receive up to 100 per cent share consideration.

Mr Collins had spelled out the benefits of the takeover in a letter to shareholders sent out before the September 18 annual meeting.

“Together with CIBC Caribbean, we will hold the No 1 banking position in the Cayman Islands, Bermuda, Barbados, the Bahamas, and Turks & Caicos, with approximately $29 billion in total assets and more than $25 billion in deposits across 19 jurisdictions,” Mr Collins wrote.

“Scale matters in our industry, supporting investment in technology, talent, and client service.”

The share portion of the transaction was one of the strengths of the deal, Mr Collins argued.

“We believe that issuing shares, rather than using only cash, allows us to complete an acquisition of this scale while maintaining a strong, conservatively managed balance sheet and capital levels, and it results in CIBC retaining a meaningful investment in the combined company,” he wrote.

“The cash portion will be funded from existing resources and a subordinated debt offering for which we have already secured underwriting commitments. We expect to structure the subordinated debt in such a way that, if the transaction were not completed, the debt would be repaid.”

Existing Butterfield shareholders are expected to own approximately 72.3 per cent to 75.2 per cent of the enlarged group, depending on the mix of consideration elected by CIBC minority shareholders.

Also emerging from the annual meeting was that John Wright has left the board of Butterfield Bank, after serving as a director for 24 years.

Mr Wright, a former chief executive of Clydesdale & Yorkshire Banks, and past president of the Irish Institute of Bankers, did not stand for re-election at the annual meeting, Butterfield said in a statement filed with the Bermuda Stock Exchange.

At the meeting the following directors were elected until the close of the 2027 annual meeting: Mr Collins, Alastair Barbour, Stephen Cummings, Andrew Henton, Mark Lynch, Meroe Park, Ingrid Pierce, Jana Schreuder and Michael Schrum, the bank’s president and group chief financial officer.