Working weekend as
Central Pacific prepares
to rename branches

Starting Tuesday, the City Bank
name will be removed from
branches combined in merger

Is everybody happy?

Central Pacific Bank and City Bank, which publicly set aside their differences several months ago when they agreed to merge, will become one family on Tuesday when they consolidate branch operations. Preparation for the changeover will take place during this three-day Presidents' Day weekend.

Transition City Bank customers will see few changes when the branches officially become part of Central Pacific Bank on Tuesday. » City Bank checks can be used until the end of the year. » Account numbers will remain the same. » City Bank ATM and debit cards will be deactivated beginning Tuesday and must be replaced by Central Pacific cards that have been mailed out. » For more information, call 535-2500, 544-0500, or toll-free 1-888-798-4442.

Central Pacific closed one phase of its $423.1 million stock-and-cash purchase of CB Bancshares when the holding companies merged on Sept. 15. The next chapter will be Tuesday when the combined bank slims down to 37 branches, eliminating nine overlapping branches and opening a new site in Wailuku, Maui.

Central Pacific Chief Financial Officer Dean Hirata, who held the same position with City Bank, said the bank is ready.

"We feel very positive that the customers will find that with the combination of the two banks we'll have a broader community bank platform with a broad offering of products and services, and at the same time still be able to maintain the high level of customer service that both banks have offered," Hirata said.

City Bank customers, besides getting access to expanded services, should for the most part see a seamless transition. Their account numbers will remain the same and they'll be able to use their City Bank checks until the end of the year. By now, they should have received new ATM and debit cards from Central Pacific that they'll be able to use beginning Tuesday. City Bank and Central Pacific Bank branches and online banking services normally open on weekends and holidays will be closed during Presidents' Day weekend to accommodate the switch. ATMs, however, still will be accessible.

Central Pacific is planning a Tuesday ceremony with a Hawaiian priest's blessing at the South Beretania branch to mark the occasion.

Chief Executive Clint Arnoldus, who declined to be interviewed ahead of Tuesday's event, repeatedly has said that the merger will help make Central Pacific "the best community bank" serving Hawaii.

Analyst Brett Rabatin said Arnoldus has been able to convince the skeptics that the merger will be successful.

"I think it will be a very good thing for the bank and a very good thing for shareholders," said Rabatin, who covers Central Pacific for Nashville, Tenn.-based FTN Midwest Research. "And from a cost savings perspective, a lot of people were skeptical at first about the level of merger savings that management talked about. But as things progressed, most people who knew what was going on felt more confident they'd be able to extract a reasonable amount of expenses from the combination."

Central Pacific has said that the combined bank will be able to realize just under $13 million in savings in 2005 and about $19 million annually beginning next year. The two banks, which originally had about 1,000 combined employees, have narrowed that number to about 900 after 102 employees accepted voluntary separation programs and some members of City Bank's management were not retained.

Central Pacific, which has strengthened its position as the fourth-largest bank in the state, had $4.7 billion in assets, $3.1 billion in loans and $3.3 billion in deposits at the end of last year.

Rabatin said he expects the merger to go smoothly.

"The banking industry is a very homogenous industry, so it's not like you're combining two companies with vastly different product groups," he said. "The biggest thing is the first few weeks of a transition to make sure all the accounts are transferred correctly and making sure everybody's debit card works. The back office is typically intense for a few days, but it's much less painful than other industries trying to mesh completely different operations."