Central Pacific Bank's parent company will miss a regulator-imposed March 31 deadline to raise capital, and instead announced yesterday the appointment of a new chairman and the rollout of a recovery plan to downsize operations.

While the moves come too late to raise the $150 million to $175 million in capital that federal and state regulators require, bank executives and an analyst say the changes are positive steps for the 56-year-old local institution, which lost $293 million in 2009, its worst year ever.

John C. Dean, a bank turnaround expert, has replaced Ronald Migita, who is stepping down as chairman and retiring as bank president and chief executive. Migita, who was Central Pacific's first Hawaii-born CEO, will continue serving as director of the struggling company.

The company also reported an ominous opinion issued by KPMG, its independent registered public accounting firm, that said the company's failure to improve its capital ratios raised “;substantial doubt about the company's ability to continue.”;

The appointment of Dean is part of a recovery plan foreshadowed in the bank's year-end earnings report, which came on the heels of a $183 million third-quarter loss and a consent order from federal and state regulators requiring it to improve its capital position, asset quality, liquidity and management oversight. Central Pacific executives have talked about positioning the company for recovery through cost-savings initiatives, reducing the bank's credit risks, raising capital and improving liquidity.

“;Our customers' money is safe,”; Paul Kosasa, chairman of the bank's recovery committee, said yesterday. “;We've always been on a mission to turn around the bank; the recovery plan is just a more formalized document that documents our steps.”;

Still, Central Pacific has been unable to raise the money needed to satisfy regulators and Dean said it could be months before it meets that goal.

“;We're not going to be able to meet that order, but we aren't the first bank that hasn't been able to do that,”; Dean said, adding that there are more than a dozen banks that haven't meet regulator deadlines .

Consent deadlines are taken seriously by the Federal Deposit Insurance Corp. and the Hawaii Department of Financial Institutions, but a missed deadline may not “;trigger an immediate response,”; said Nick Griffin, HDFI commissioner.

“;We find it more productive to work together to achieve our goals than to use more Draconian measures,”; Griffin said, adding that generally, missed deadlines prompt meetings between banks and regulators.

Downsizing Central Pacific will stabilize it and make it more attractive to investors, Dean said.

“;We have to show more progress before we are going to attract capital,”; he said. “;If everything else is held constant, reducing the bank will get you there.”;

Under the recovery plan, Central Pacific will be a smaller bank focused on its core business and traditional Hawaii markets, said Dean, who has turned around three other banks during his 29 years as a financial services executive.

Reducing the bank's assets will contribute to improving its capital ratios, he said, adding that no decisions have been made on layoffs or branch closures.

Dean's presence is good for customers and investors, said Brett Rabatin, a Nashville, Tenn.-based bank analyst with Sterne Agee.

“;They've realized that the strategy that they were using wasn't working,”; Rabatin said. “;Just the presence of Dean being in charge is meaningful. They have a better chance of making it.”;

Dean's ties to private equity investors and venture capitalists could open new avenues to capital, he said.

Central Pacific bank executives, including Migita, have said they are confident that Dean can turn this bank around, too.

“;I know that John is the right person to lead our company through the recovery and to re-establish a business model that has been highly successful in the past, as his stellar track record of turning banks around speaks for itself,”; Migita said.