Merging banks
to face shareholders
The banks' headquarters are separated by just two blocks in downtown Honolulu. But until last Friday's merger announcement, Central Pacific Financial Corp. and CB Bancshares Inc. seemed more like miles apart following 13 months of strained relations.
With a handshake before the television cameras, Clint Arnoldus and Ronald Migita, the chief executive officers of the two banks, respectively, began the healing process Friday that is necessary for the banks to create a lasting marriage.
This week, Arnoldus and Migita will get another chance to work toward that goal when they conduct their company's shareholder meetings.
Central Pacific Bank's parent will meet with shareholders at 6 tonight in the Iao Needle and Akaka Falls conference rooms of the Sheraton Waikiki Hotel. City Bank's parent will do its part at 9 a.m. Thursday on the second floor of City Financial Tower, 201 Merchant St.
With the merger announcement just four days old, there's still plenty of unanswered questions. Branch closures and employees' job assignments are still being worked out.
Other financial details, such as executive compensation, won't be revealed until the banks file their proxies to seek shareholder approval. One person familiar with the situation said some members of Central Pacific's executive team received "substantial bonuses" for orchestrating the merger.
Central Pacific spokeswoman Ann Takiguchi said the bank didn't have any immediate response to any financial questions.
Central Pacific shareholders will have their last chance to vote tonight for three board nominees -- Arnoldus, chairman, president and CEO of Central Pacific; Dennis Hirota, president and CEO of Sam O. Hirota Inc. Engineering and Surveying; and newcomer Christine Camp Friedman, managing director of Avalon Development Co. Their terms will expire in 2007.
Missing from this year's slate is Joseph Blanco, a real estate development and governmental affairs consultant who was an executive assistant to former Gov. Ben Cayetano. Blanco, who was first elected to the Central Pacific board in 2002, said in an e-mail response that it wasn't appropriate for him to comment on such matters.
Takiguchi didn't provide a specific reason for his exclusion.
"From time to time, new directors are added to a board and existing directors leave a board," she said.
At CB Bancshares' shareholders meeting, board members Tomio Fuchu, director of Dart Coffee Inc.; Duane Kurisu, partner of Kurisu & Fergus; and Mike Sayama, a vice president of Hawaii Medical Service Association, are up for re-election to three-year terms.
Central Pacific, however, said Friday it will only add six of CB Bancshares' 10 board members to what will become a 15-member board of the combined bank.
Other than Migita, who will become the nonexecutive chairman of the new company, the banks haven't announced the composition of the board.
Separately, analyst Brett Rabatin, who covers Central Pacific for Nashville, Tenn.-based FTN Midwest Research, raised his rating on Central Pacific's stock before trading began yesterday to "buy" from "neutral."
"Anytime you have a relatively large acquisition, the market typically responds negatively to the acquirer," Rabatin said after Central Pacific's stock fell 6.3 percent Friday to $25.15. "I think the stock is probably a little too cheap relative to its core earnings power."
Central Pacific's stock rose 17 cents, or 0.7 percent, to $25.32 yesterday. CB Bancshares' shares gained 62 cents, or 0.7 percent, to $86.02