Central Pacific to issue
$74.8 million in new stock

Central Pacific Financial Corp., which will consolidate the operations of Central Pacific Bank and City Bank during President's Day weekend, filed a registration statement with the Securities and Exchange Commission today for a public stock offering that could gross the company nearly $74.8 million.

The bank, which noted in its registration that it wants to continue growing its California and Washington lending operations, said the money will be used for general corporate purposes. However, the bank could use the additional capital to pursue additional loan production.

Central Pacific's proposed public offering, which typically would be purchased mostly by institutions, is for 1.75 million shares of common stock with 262,500 additional shares available to cover overallotments. The gross amount of $74.8 million is based on yesterday's closing price of $37.15 and doesn't include money that the bank would have to pay for investment banking and legal fees. The actual offering price has not been set yet.

The offering initially will dilute the stock because it will increase the number of outstanding shares. But the greater capital base will give the bank more money with which to increase its loan business and perhaps eventually offset the number of shares in the market.

Bear, Stearns & Co. Inc., which was Central Pacific's investment adviser during its merger last year with City Bank parent CB Bancshares Inc., will serve as the lead manager. Sandler O'Neill & Partners LP, which was CB Bancshares' investment adviser, will serve with RBC Capital Markets as the co-managers in the offering.

Although the holding companies of the two banks merged Sept. 15, the consolidation of branches won't be effective until Feb. 22.