City Bank customers
rue news of closings

Some say they will consider
switching to another bank

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City Bank's slogan says "It's worth it to switch."

Two customers of the bank said yesterday they may do exactly that -- but to another bank -- in light of Central Pacific Financial Corp.'s announcement Thursday night that it is closing nine branches as a result of its acquisition of City Bank's parent. Eight of those branches being closed were owned by CB Bancshares Inc. and include the Merchant Street and Bishop Street locations in downtown Honolulu.

Payout results Central Pacific Financial Corp. said yesterday that all CB Bancshares Inc. shareholders would receive the cash or stock distributions that they elected in connection with the merger of the two banks. The acquiring bank said it had $88,861,760 available to be paid out in cash to CB Bancshares shareholders and 11,888,824 shares of Central Pacific stock to be distributed. In both cases, the amounts were undersubscribed since shareholders elected to receive $58,066,412 in cash and 10,332,215 shares of stock. The remaining cash of $30,815,347 and 1,556,609 shares of Central Pacific stock will be issued to CB Bancshares shareholders who didn't elect a preference or did not submit a properly completed election form. The distribution equates to $39.3402 in cash and 1.9872 shares of Central Pacific stock for each CB Bancshares share. Shareholders who have not yet delivered their CB Bancshares shares will be receiving another letter next week from American Stock Transfer. Shareholders also can contact American Stock Transfer at (877) 248-6417, or Central Pacific Treasurer David Morimoto at 544-0627.

One City Bank customer, who identified herself only as Esther, said she might transfer to another bank and pointed down Bishop Street in the direction of Central Pacific competitors Bank of Hawaii, First Hawaiian Bank, American Savings Bank and Territorial Savings Bank.

"It's sad. I like the people in there," she said, pointing inside the Bishop Street branch. "I was kind of scared. I didn't want this branch to close because I like this branch."

A City Bank customer at the main branch on Merchant Street said the closing of the branches, which will occur sometime in the first quarter, will be inconvenient since she works in the branch's City Financial Tower.

"My husband is thinking of closing our account in here because he doesn't like CPB," she said, declining to give her name.

They were among a half-dozen City Bank customers who spoke yesterday against the branch closures.

Central Pacific spokeswoman Ann Takiguchi said employees of both banks are working to combine the best products and services to enhance value and convenience for customers.

"We understand that change can be difficult, especially when you consider what the two companies have gone through, and we ask that customers give us a chance, as employees are trying their utmost to do more for all customers," she said.

Takiguchi said customers of both banks can use the more than 100 combined automated teller machines of either bank for free. She also said City Bank customers can continue using their checks and account numbers until the banks merge. The merger on Wednesday involved the banks' holding companies.

In order to attract customers, Central Pacific said it will offer several special CD rates, including a 10-month CD at 2.25 percent that is available until Sept. 30. It requires a minimum of $10,000 to open and has a cap of $99,000.

The merged bank also began running a new television advertisement earlier this week that shows Alex, the bank's "fiercely loyal" dog, sitting on a teal City Bank bench that has been part of City Bank's marketing campaign.

CB Bancshares spokesman Wayne Miyao said there has been heavy demand from customers and employees seeking the bank's approximately 75 benches as memorabilia. He said the bank is giving away the benches. The benches are in retail and recreational locations, as well as in some professional sites such as dentists' offices.

Despite the efforts of the banks to paint a positive face on the future, not all City Bank customers are convinced.

Rory Soares Toomey, who was banking at the Merchant Street branch, was upset that the acquisition was allowed to proceed.

"It's simply ridiculous," he said. "It's going to hurt the consumers of Hawaii. The state of Hawaii should have been in the forefront of bringing an action to enjoin it. It's going to take away the number of banks I have to bank with by one and it's going to force eventually these two banks to go after the smaller banks because they grow or they die. They're not going to be able to compete against First Hawaiian or Bank of Hawaii even when they're merged."

For other City Bank customers, the branch closures means they'll take their business to other banks where they have accounts.

"It won't really affect me because I have accounts at other banks," said Terry Yung, who was conducting business at the Bishop Street site. "But I'm kind of sad about it because people are always losing their jobs and downsizing."

Central Pacific, which has promised no layoffs, has offered voluntary severance packages to reduce the work force. Some employees who are being reassigned are receiving less pay and getting reductions in job title.

City Bank customer Stan Nakashima, who was banking at the Bishop Street branch, said he planned to remain with the merged bank but said the closure of his branch was going to be inconvenient.

A woman banking at the Merchant Street branch said she wouldn't be fazed by the closing because although she worked in City Financial Tower, she also had an account at nearby American Savings.

Central Pacific customer Tom Kelley, who was conducting business at Central Pacific's main branch on S. King Street, said he wasn't affected at all because his branch wasn't closing.

But, he added, "If I were losing my branch where the people knew me, I'd be a little upset too."