Tuesday, January 8, 2002

Outgoing Central Pacific Bank CEO Joichi Saito, left, yesterday welcomed his replacement, Clinton L. Arnoldus.

Taking over

Mainland exec to lead
state's 3rd-largest bank

By Russ Lynch

Central Pacific Bank, Hawaii's third-biggest commercial bank, has hired a veteran mainland financial executive to lead it.

Central Pacific Bank In addition to immediately becoming president and chief operating officer of the bank, Clinton L. Arnoldus will also become chairman, president and chief executive officer of parent company CPB Inc., at the company's annual shareholders meeting in April.

Arnoldus said he will take a very visible, hands-on approach to running the bank, founded in 1954 by residents of Japanese ancestry, and will base his decisions on what he learns from people in the community rather than from an "ivory tower."

"I plan to take Central Pacific to where it is not only the best community bank in Hawaii, but the best bank in Hawaii," Arnoldus said.

Arnoldus, 54, takes over the reins from top executives of Sumitomo Bank, which formerly was a major investor in CPB, but now has no stake. Chairman and CEO Joichi Saito will step down at the April shareholders meeting. Naoaki Shibuya, vice chairman of the bank, will officially step down then as well, but told a news conference yesterday he expects to leave in February to retire in Japan and spend some "quality time" with his family.

Arnoldus' salary was not disclosed. Company reports show that in 2000 Saito was paid $405,000 in salary plus a $120,000 bonus. Shibuya was paid $262,000 and an $83,000 bonus.

All of the executives and directors who spoke at a news conference yesterday morning at the Central Club on the 22nd floor of the CPB building said no major changes are expected because CPB is doing well and is ahead of its three-year plan to reduce staff, increase efficiency and improve the quality of its loans and other assets. By attrition and agreements with individual workers, the bank has reduced its staff to less than 500 from more than 600 and has reported nine consecutive quarters in which profits bettered the previous year.

CPB for decades has had no controlling shareholder and now the biggest owner is an employee stock ownership plan that owns less than 12 percent of the company's shares, according to the company's latest Securities and Exchange Commission filing in April 2001. The company's stock closed at $31.31 today, up 56 cents.

"We went through a major reorganization which began in the middle of 1999 and today we are a much leaner and stronger financial institution," Saito said. The company has met "all the key financial benchmarks" ahead of schedule.

The plan for the future, Saito and Arnoldus said, is to keep Central Pacific a local bank with its entire focus on Hawaii consumer and business accounts.

The bank, with $1.8 billion in assets and 24 branches statewide, including six in supermarkets, has no pressing need for change, because its major efficiency plans have already been implemented, the executives said.

Arnoldus, who said he could not answer some questions because he has only been in town since the weekend, said there were bound to be some "preordained" questions and he would answer a couple.

Is there a pre-determined plan to make sweeping changes? "The answer to that is no," he said.

Will the bank reduce staff and make other cost-cutting changes? Again, no, Arnoldus said, because that has already been done.

He said he intends to be very visible in the community and will be outside his office much of the time talking to businesspeople and others in the community.

Arnoldus was chairman and CEO of First Interstate Bank of Nevada from 1993 to 1996, when he left because the bank was acquired by Wells Fargo. He then became chairman, president and CEO of the Bank of New Mexico in Albuquerque.

Arnoldus and his wife have been to Hawaii some 15 times and he has a daughter who went to Hawaii Pacific University.

He and his wife, Lesley, have six children and six grandchildren. He got his undergraduate degree from Brigham Young University in Provo, Utah, and a master's from the American Graduate School of International Management-Thunderbird in Glendale, Ariz.

Central Pacific Bank

Branches: 24
Assets: $1.8 billion
Deposits: $1.4 billion
Net loans: $1.3 billion
Employees: 475
Founded: 1954
Outgoing CEO: Joichi Saito
Incoming CEO: Clinton L. Arnoldus
Headquarters: 220 S. King St., Honolulu
Ticker: CPBI
Stock price: $31.31

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