City Bank says
it’s business as usual
For the second year in a row, CB Bancshares Inc. went into defense mode at its annual shareholders meeting regarding the prospective merger with its downtown rival.
The lunchroom crowd of about 60 yesterday was less than half of last year's shareholders turnout, and there was a definitive merger agreement with Central Pacific Financial Corp. this time rather than just a proposal.
But officials of City Bank's parent said they had been told by their legal counsel not to answer any questions about the merger to avoid violating Securities and Exchange Commission regulations.
"You can ask (questions)," Chairman Lionel Tokioka told the shareholders, "but we won't answer them."
That's not to say there was a complete blackout about the merger.
Ronald Migita, president and chief executive officer of City Bank parent CB Bancshares, briefly explained the terms of the offer and said regulatory filings and a joint proxy statement would be forthcoming. The board's reason for accepting the deal would be explained in the proxy, he said.
"Rather than dwell on past events that transpired since the unsolicited proposal was made over a year ago, I'd like to share with you the promising future of this merger," Migita said. "Speaking on behalf of your board of directors, we believe that Central Pacific's revised offer is a fair price that better reflects the underlying value of your company.
"You can be assured that the management and the board of CB Bancshares will do all what we can to make sure the merger is successful."
Migita, who will become nonexecutive chairman of the new company, wouldn't take any media questions after the 25-minute meeting and ducked out of a back door to attend a board of directors session.
Clint Arnoldus, chairman, president and CEO of Central Pacific, was more accommodating at his bank's shareholders meeting Tuesday night in answering questions first from the shareholders and then from the media. Arnoldus even invited Migita to speak to Central Pacific's shareholders, which Migita did briefly before leaving to attend another engagement.
However, Central Pacific spokeswoman Ann Takiguchi said yesterday that Arnoldus, who will be CEO of the combined company, wasn't asked to speak at CB Bancshares' shareholders meeting.
Migita said an integration team composed of City Bank employees and Central Pacific employees has been formed to smooth the transition. In the meantime, CB Bancshares Chief Financial Officer Dean Hirata, who will keep his title with the combined bank, said it has been business as usual.
At the meeting, CB Bancshares re-elected incumbent directors Tomio Fuchu, Duane Kurisu and Mike Sayama to new three-year terms.
Central Pacific, also showing that it was business as usual, declared a second-quarter cash dividend of 16 cents a share payable on June 18 to shareholders of record as of May 21.
CB Bancshares spokesman Wayne Miyao said reaction of the bank's employees to the merger has run the gamut from surprise to anger to concern for their jobs.
"Those are normal human reactions to situations like this," he said. "We will be coming out with a game plan for our employees very shortly announcing how the transition will be made.
"It only happened last Friday so people have been working around the clock to put things together," he said.
Michael Trefero, a shareholder and employee who attended the meeting, said he thinks the merger is a good decision and that he didn't know how his job would be affected.
"It's too early to tell what will take place," said Trefero, who works for City Bank's check-processing Datatronix subsidiary.
Meanwhile, calls already are starting to come in to City Bank from people interested in acquiring the bank's teal benches and promotional items as mementos.
"We've told people to send in a request and we'll take a look and make a decision," said Miyao, adding the bank may decide to donate any money it receives to charity. "Employees also are making requests for their customers, who have been asking for the teal benches so they can place them at their place of business."
The teal bench concept was launched in March 2001 and has won national advertising and marketing awards. There are more than 75 benches in retail and recreational locations, as well as in some professional sites such as dentists' offices.
"It's how we aim to do business," Miyao said. "We want to establish relationships with our customers as partners, friends or neighbors. And instead of seeing our customers across a desk or counter, we want to sit down and work together with them, like on a bench.
"The bench is supposedly the extension of the bank, and we want our customers and prospects to know that we'll bring the bank to them. So the tag line is: "It's worth it to switch."
Given the merger agreement, that slogan seems prophetic now.