Ronald Migita, left, CEO of CB Bancshares, and Clint Arnoldus, CEO of Central Pacific Bank, shook hands Friday after a news conference on the merger of their two banks.
Bank investors give
merger mixed reviewsSome back the deal, while others
say it took too long to close
The Wall $treet Wahines, a Honolulu investment club of 13 women ages 33 to 90, whooped it up last night after its leader offered a bravo for the merger agreement between the parent companies of Central Pacific Bank and City Bank.
But for investor Mark Egan, who owns homes on the Big Island and in Chicago, there was little to cheer about, because he said the $420 million deal was too costly and a year late.
Those were among the sentiments at Central Pacific Financial Corp.'s annual shareholders meeting, an event that even included a short pep talk by Ronald Migita, president and chief executive officer of City Bank parent CB Bancshares Inc.
Clint Arnoldus, chairman, president and CEO of Central Pacific Bank, and Migita, who will become nonexecutive chairman of the new company, did their best to bury a year of acrimony in front of about 75 shareholders and employees at the Sheraton Waikiki Hotel last night.
"We want to look forward," said Arnoldus, who would retain only the CEO title when the banks merge sometime in the third quarter.
Pat Fugere, the presiding partner of the Wall $treet Wahines, said Central Pacific's stock was one of the 3-year-old group's first holdings and remains the only local stock in the club's $38,000 portfolio.
"The Wall $treet Wahines admire the persistence of Clint Arnoldus," said Fugere, whose club holds 100 shares of the company. "We asked Clint more than a year ago to come to our meeting and speak to us about CPF, and he was wonderful. So we're staunch supporters for CPF. We think he's a great leader. ... We're very pleased with the merger and we admire his persistence because it took a lot of resistance."
Egan, though, was clearly unhappy at the length of time and the cost that it took to get the deal done.
"This is something that should have been done a year ago," said Egan, who said he owns a "substantial amount" of shares in both banks. "The only people who win in the meantime are the investment bankers charging fees and the lawyers charging fees. In my guess, roughly 30 million bucks went down the drain in fees that didn't have to."
Although the final numbers aren't in yet, Arnoldus and Migita revealed at a press conference following last Friday's merger announcement that the two banks had up to that point spent about $16 million and $8 million, respectively, related to the merger.
"I asked the question at the (CB Bancshares special shareholders) meeting a year ago when the investment banker from Sandler O'Neill got up and said the offer wasn't a fair one," Egan recalled. "I said, 'You charged a big fee for this. Why don't you share with us what is a fair deal so we can get on with it?' And there was no comment from anybody, and I was told I couldn't ask any more questions."
Shareholders had plenty of time to ask questions last night, but they asked less than a handful.
"I think what you saw in there was a happy group of shareholders," Arnoldus said. "I think if they were unhappy, we would have had a lot of questions."
Arnoldus said the transition is still being worked on and, as promised, there will be "no involuntary layoffs."
But, he said, "there will be a severance plan, there will be attrition and there will be other ways eventually that the staff count will come down."
More details about the severance plan and executive golden parachutes, he said, will be forthcoming in a couple weeks when the bank makes its required regulatory filings.
In the meantime, though, Arnoldus, Migita and CB Bancshares Chief Financial Officer Dean Hirata, who will remain in that role with the merged bank, will take their message on the road. They will leave this weekend to visit with institutional investors of the two banks on Monday and Tuesday in New York and Boston, respectively.
In regularly scheduled business last night, Central Pacific's shareholders elected Arnoldus, Dennis Hirota and newcomer Christine Camp Friedman to three-year terms on the board.
City Bank's parent will have its last shareholders meeting at 9 a.m. tomorrow on the second floor of City Financial Tower, 201 Merchant St.
