Wednesday, April 28, 1999

Hawaii National
going private
to reduce costs

Star-Bulletin staff


Hawaii National Bancshares Inc. plans to go private to cut costs and gain more flexibility in its planning.

The company, parent of Hawaii National Bank, said its shares are thinly traded and not listed on any stock exchange, so "the benefits of public ownership are minimal."

More than 1,000 of the company's 1,200 shareholders hold 100 shares or fewer and going private makes sense, said Warren K.K. Luke, president and chief executive officer.

The buy-back plan will start with a reverse split, in which one new share will be issued in exchange for each 200 shares outstanding. Those holding fewer than 200 will be paid $45 a share and their shares will cease to exist. The company will then have so few shareholders that it no longer will have to report to the Securities & Exchange Commission, Luke said.

Those with 200 or more shares also will be able to cash their stock in at $45 a pre-split share, he said. The stock last traded at $40.

More than 60 percent of the company's 711,000 common shares are owned by the Luke family. Luke said they will not cash in their stock. That leaves the cost of the buyback at about $13 million if all the others turn in their shares.

Luke said stockholders will get written details of the proposal once the SEC has approved it. Banking operations will not be affected and deposits will continue to be insured by the Federal Deposit Insurance Corp., he said.

Hawaii National, one of the state's smallest banks, has assets of about $312 million.

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