Butterfield Bank’s initial public offering of shares on the New York Stock Exchange is scheduled to take place this morning.

Last night the bank announced that the 10.6 million shares to go on sale will have an asking price of $23.50 per share — representing a more than 20 per cent premium over last night’s closing price of $19.30 on the Bermuda Stock Exhange.

Butterfield is selling 5.95 million common shares, with expected net proceeds of approximately $127 million to be used for general corporate purposes.

In addition, some of the bank’s major shareholders, including private-equity firm the Carlyle Group, will sell a combined total of 4.68 million shares in the offering for approximately $110 million.

The $23.50 price is at the mid-point of the range of $22 to $25 that the bank previously announced in a registration filing with the US Securities and Exchange Commission.

As a result of the IPO, trading of Butterfield shares on the BSX will be delayed from 9am today.

“The temporary suspension of trading in Butterfield’s shares on the BSX has been implemented to facilitate an orderly opening of the shares on the BSX concurrently with the commencement of trading of Butterfield’s shares on the NYSE,” the BSX said in a statement last night.

A lifting of the suspension is expected to be announced after the shares start trading on the NYSE. The New York-listed shares will have the ticker symbol “NTB”.

The offering is expected to close on or about September 21.

Butterfield suffered huges losses arising from the US subprime mortgage crisis after investments tied to American residential mortgages soured, forcing the bank to make hundreds of millions of dollars of writedowns.

After the Bermuda Government backed a $200 million preferred share issuance by the bank in 2009, a group of investors injected a further $550 million into the bank a year later.

One of those rescuers is the Carlyle Group, the bank’s largest shareholder, which holds 22.7 per cent of the bank’s common shares. Today it will offer to sell 1.4 million shares as part of the IPO, which would reduce its stake to 17.5 per cent.

Another of the 2010 rescuers, The Wellcome Trust, will offer to sell about half of its 3.7 million shares, reducing its stake to 3.5 per cent.

Realising the $23.50 target price would make these investors a near 100 per cent, six-year return, since they bought into the bank at a stock split-adjusted price of $12.10.

And the sellers may end up cashing in even more of their shares during the IPO.

Butterfield said last night: “Certain of the selling shareholders have granted the underwriters a 30-day option to purchase an additional 1,595,744 shares at the initial public offering price, less underwriting discounts and commissions.”

Butterfield shares were trading at a split-adjusted price of $16.50 just two months ago.

Goldman Sachs & Co, Citigroup and Sandler O’Neill & Partners are acting as the joint book-running managers, and Keefe, Bruyette & Woods, Raymond James and Wells Fargo Securities are acting as co-managers for the offering.