By Frank Cho
Advertiser Staff Writer
Pacific Century Financial Corp., under pressure to improve management and clean up asset quality problems that have hurt financial performance, yesterday named two banking veterans to key positions at the bank.
The Honolulu holding company and parent of Bank of Hawaii appointed William Nelson as chief risk officer and Scott Miller as director of asset recovery.
Nelson will be responsible for all of Pacific Century’s financial risk activities, except for interest rates and liquidity issues. Nelson was also named vice chairman and appointed to the company’s managing committee. Miller will oversee the bank’s asset recovery operations.
"Resolving our credit quality issues is my top priority for this coming year and having professionals of this caliber join our ranks is a huge step forward for us," said Pacific Century chairman and chief executive Michael O’Neill.
The decision to name two former Bank of America executives to fill key credit officer positions marks the latest move by the $13.9 billion financial services giant to improve the company’s bottom line and regain investor confidence.
Since being named CEO, O’Neill has moved quickly to cut ties to underperforming assets. He approved the sale of Pacific Century’s Arizona branch operation, the divestiture of subsidiary Bank of Hawaii’s $226 million credit card portfolio, and the sale of the company’s stake in banks in Tonga and American Samoa.
The company’s stock price has recovered some lost ground, closing yesterday at $17.75, up about 30 percent from $13.56 on Nov. 3, when O’Neill was hired.
Pacific Century, parent of Bank of Hawaii and Pacific Century Bank on the Mainland, had a tumultuous 2000. For the nine months ended Sept. 30, the holding company’s net income fell 15 percent to $81.1 million compared to the previous year, primarily because of bad loans. Net interest income after loan-loss provisioning fell 23 percent during that period, according to filings with the Securities and Exchange Commission. The company’s stock price hit a six-year low as investors fled to safer stocks.
The bank also entered a memorandum of understanding last year with federal banking regulators that require it to supply reports, plans and analyses about its operation and management and obtain regulatory permission to pay dividends or incur debt.
When O’Neill, also a former Bank of America executive, was brought on to replace retiring CEO Lawrence Johnson, he promised to deal with the company’s asset quality problems in a "timely and forceful manner" and improve the stock price for shareholders.
Nelson, who has spent the past 24 years with Bank of America, was most recently managing director of the Bank of America’s headquarters in Charlotte, N.C., where he was in charge of the credit products group handling the U.S. health care industry. Prior to that, Nelson worked in Hong Kong for six years as executive vice president for credit risk management.
Miller was president of Heller Commercial Services, a unit of Heller Financial Inc. in Chicago.
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