Central Pacific Bank parent buys back shares
By Frank Cho
The parent company of Central Pacific Bank paid about $6.8 million yesterday to buy back 250,000 of its shares from Sumitomo Bank Ltd., reducing the Japanese bank's stake to its lowest level in nearly 20 years.
Sumitomo had held 507,969 shares, or 5.5 percent, of CPB's stock.
But Sumitomo, which is planning to merge its operations with Sakura Bank Ltd. next month to create the world's second-biggest lender, has been reducing its holdings in CPB for nearly two years at the Hawai'i bank's request.
"We are buying back the shares to improve (CPB's) return for our shareholders," said Ann Takiguchi, spokeswoman for Central Pacific Bank.
Since 1998, Sumitomo has sold more than 1.2 million shares of CPB stock back to the Hawai'i bank to trim its stake from 14 percent to just 2.58 percent, or 211,750 shares, according to a filing yesterday with the Securities and Exchange Commission.
The stock repurchase program authorized by CPB's board of directors was part of a three-year strategic reorganization to cut costs and improve revenues.
While Sumitomo is no longer CPB's single-largest shareholder an employee stock plan holds more than 12 percent the Japanese bank will maintain a seat on CPB's board of directors.
Shares of CPB lost 63 cents yesterday to close at $25.27.
Meanwhile, CPB's board of directors announced a first-quarter dividend of 16 cents per share, up 6.7 percent from the same period a year ago. The dividend is payable April 27 to shareholders of record as of March 30.
CPB is a Honolulu-based holding company with $1.82 billion in assets. Central Pacific Bank is Hawai'i's third-largest commercial bank.
Frank Cho can be reached by phone at 525-8088, or by e-mail at firstname.lastname@example.org.