City Bank poll
finds merger dissentNearly 82 percent of Central
Pacific Bank customers said
state should oppose merger
City Bank's parent, hoping to convince a state regulatory agency that the public is against a hostile merger with rival Central Pacific Financial Corp., released a poll yesterday that showed nearly 79 percent of Hawaii residents surveyed said the state should oppose the takeover attempt.
CB Bancshares Inc., which hired Honolulu-based Pacific Fielding Center Inc. to conduct the survey, said the study also found that nearly 82 percent of Central Pacific Bank's own customers said the state should oppose the takeover.
The results of the survey, which randomly selected 400 heads of household statewide and 125 Central Pacific small-business loan customers, were released today in City Bank advertisements taken out in both of Honolulu's daily newspapers and in neighbor island publications.
Pacific Fielding Center said the margin of error on the surveys were plus or minus 4.7 percent on the general population sample and plus or minus 8.4 percent on Central Pacific's small-business loan customers. Those customers were randomly selected from a Dunn and Bradstreet list of business loans as of April 2003 -- just before the merger announcement.
City Bank, which has been waging a public campaign against the merger, released the survey on the same day it is scheduled to release its fourth-quarter and full-year earnings, and four weeks ahead of a decision by the state's Division of Financial Institutions. The DFI, which last month listened to testimony from more than 200 people during two days of public hearings, is due to release its ruling on Feb. 18. The merger already has received approval from the Federal Reserve Board.
"We just wanted to know what the public is thinking because at the public hearings we had our employees, customers and shareholders at both banks testifying," City Bank spokesman Wayne Miyao said. "But there was no quantifiable view of the general public ... We felt we needed to get a better handle what the general public was thinking about."
While the survey results indicated that more than three-quarters of those polled were against the merger, it also revealed that most of those questioned had no idea what the impact of a merger would be.
For example, 67.2 percent of CPB customers and 64.5 percent of the general population did not know or refused to answer whether there would be higher or lower loan rates; 57.6 percent of CPB customers and 57.8 percent of the general population did not know or refused to answer whether there would be higher or lower fees; and 44.8 percent of CPB customers and 53.3 percent of the general population did not know if there would be better service or a reduction in service.
The survey found that 81 percent of CPB customers opposed the merger and that the top two reasons for being against the merger were that it's not the way to do business in Hawaii (36.6 percent) and small businesses will have fewer choices (32.7 percent).
Central Pacific spokeswoman Ann Takiguchi said the City Bank survey was self-serving.
"After reviewing the survey questions, it's quite obvious that City Bank management is still trying to lobby the DFI even after a public hearing was held," Takiguchi said. "The validity of any survey depends on whether questions were presented in a fair and unbiased manner. A true survey is not to find answers that support your position."
One of the questions included a theme that City Bank has been stressing for the last several months. The question, in part, said, "Do you believe that a hostile takeover is not the way business should be conducted in Hawaii and goes against the Aloha Spirit?"
That question resulted in 75.2 percent of CPB customers and 72.5 percent of the general population responding that the hostile takeover was "no way to do business in Hawaii."
"What would the results have been," Takiguchi asked, "if you asked how one felt about a merger if there were no layoffs and the combined bank had a commitment to expand into new areas where neither bank currently serves -- all toward the creation of a strong, more viable local bank for our future?"
Miyao said the survey was conducted independently of the bank but that City Bank gave Pacific Fielding Center "a general idea" of what questions to ask.
"Public opinion, we believe, is very important in gauging the impact that a merger will have on the current and potential customer base because strong public opinion against the merger would make it very difficult for the merged bank to retain and attract customers," Miyao said.