KEN IGE / KIGE@STARBULLETIN.COM
Clint Arnoldus, chairman, president and chief executive officer of Central Pacific Bank, said yesterday the bank is on the lookout for acquisitions. Arnoldus, and "Loyalty Officer" Alex attended the Hawaii Society of Corporate Planners luncheon at the Hawaii Prince Hotel.
Central Pacific Bank He's only been on the job for eight months, but Central Pacific Bank leader Clint Arnoldus threw down the gauntlet yesterday.
in growth mode
It will add branches and may
look to buy a local competitorBy Dave Segal
dsegal@starbulletin.com"We're the best bank in Hawaii," the bank's chairman, president and chief executive officer told a lunchtime gathering of the Hawaii Society of Corporate Planners at the Hawaii Prince Hotel. "A lot of people think that's pretty brash to say because people equate size with quality. They think bigness is good, but that's not true at all."
With bank mascot Alex the dog sitting loyally to his side, Arnoldus ticked off the reasons behind his bold statement.
He mentioned the bank's return on equity and its efficiency ratio, two indicators used to measure performance in the banking industry, as well as his belief that Central Pacific Bank is becoming the preferred bank for both employees and customers.
Arnoldus, who has been implementing his growth strategy since arriving in January from Pasadena, Calif.-based Community Bank, has been trying to overcome the public perception that the bank is geared toward Japanese clients.
In fact, as the first non-Japanese CEO of the bank, he said he's trying to get employees and fellow executives to break from tradition and the Japanese culture of showing tremendous respect for authority as it relates to addressing him.
"Those of you that know me, know I don't like to be called Mr. Arnoldus," he said. "I feel old enough (at age 55) as it is. I want to be called Clint. And that's a real change in culture in our organization. The CEO has been called Mr. Whoever since the founding of the bank in 1954. So I'm working on it and I'm almost there. But some people just really struggle with it, and some have found a way to compromise and call me Mr. Clint. But I don't like that either because I don't know how many of you are old enough to remember Mr. Ed ... but we're getting there."
Arnoldus said the bank will be opening its 25th branch in November in Kihei, Maui, and has targeted Kapolei for a branch next year to take advantage of the booming business market near Campbell Industrial Park.
He also said the bank, the state's third-largest commercial bank in terms of assets, is evaluating additional markets and studying locations to determine if site changes should be made when leases come up for renewal.
"We're going through internal growth," he said. "But if there are acquisition opportunities, we'd certainly be interested in those as well. But it has to be something very compatible with this thing. There also could be opportunities out of the banking industry that could open up."
Arnoldus later said, though, that the bank isn't looking at any specific targets.
"Legislative changes have given us more acquisition options, such as in insurance or investment firms," he said. "We just need to explore every option we have and see if it fits into our plan."
He also said Central Pacific Bank could pursue other smaller Hawaii banks "if there is an opportunity that makes sense strategically for both parties."
Arnoldus, who said the bank is looking to beef up its corporate investment services, earlier this month introduced a courier service in which the bank will pick up deposits from business customers.
Then, in the next two months, he said, Central Pacific Bank will begin a lock box cash management service in which business customers can have receivables that are coming in from various points dropped off at a central area for processing.
As for Central Pacific Bank's financial performance, which has produced 12 straight record quarters of earnings, Arnoldus said "there isn't a bank in the state that comes close" to the bank's consistent 20 percent return on equity, which is a measure of how well a company used reinvested earnings to generate additional earnings.
The bank's efficiency ratio, which measures how much it costs the bank to make a dollar of revenue, is at 52 cents now.
"If you're under 55 cents, you're really an outstanding bank," Arnoldus said. "Our goal is to get to 45 cents."
Meanwhile, Arnoldus also said that the 8-year-old Shetland sheepdog Alex, whose name was changed from Arnold because of the similarity to Arnoldus' name, will resume his television career next year after gaining popularity in two earlier Central Pacific Bank commercials.
"Alex will continue to star in future commercials," Arnoldus said. "We're going to go silent during the political time. Then, in January, you'll see some more. We'll do at least three or four more commercials with Alex, and it will continue to evolve. I think Alex will just become part of our culture going forward."
