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The Honolulu Advertiser
Posted on: Monday, December 8, 2003

Central Pacific pledges no layoffs in merger

By Peter Boylan
Advertiser Staff Writer

The parent company of Central Pacific Bank will not lay off any employees but will impose a hiring freeze if it prevails in its hostile takeover bid for City Bank, CPB officials said yesterday on the eve of a public hearing on the merger.

Paul Kosasa, board member of Central Pacific Bank, and Clint Arnoldus, the bank's president and CEO, were among the officials announcing a no-layoff proposal yesterday.

Gregory Yamamoto • The Honolulu Advertiser

Clint Arnoldus, president and CEO of Central Pacific Bank, said Central Pacific Financial Corp. also will open a new branch for every overlapping branch that may be consolidated as a result of the proposed merger. Many of the new branches would be in communities neither bank currently serves.

The no-layoff pledge would apply to employees of both banks, he said.

"It was never a part of our plan to have significant job losses, but we felt the concern seemed to have heightened in anticipation of these public hearings," Arnoldus said. "We're very pleased that we can come up with a solution to relieve this anxiety and to make everyone comfortable that we can avoid layoffs."

Of yesterday's announcement by Central Pacific, City Bank spokesman Wayne Miyao said he found it "very suspicious and calculating that they would release that the day before the public hearing."

Miyao pointed out that although Central Pacific does not intend layoffs, jobs still would be lost through attrition.

In October, Central Pacific Bank instituted a hiring freeze in anticipation of the merger and plans to impose it on City Bank as well, said Wayne Kirihara, CPB senior vice president.

Merger hearing

• WHAT: Public hearing on proposed Central Pacific-City Bank merger

• WHEN: 9:30 a.m. today

• WHERE: State Capitol auditorium

• INFORMATION: State Division of Financial Institutions, 586-2820.

Central Pacific Financial Corp. offered to buy City Bank's parent, CB Bancshares, in April for cash and stock now valued at about $245 million.

City Bank's managers oppose the takeover and have been encouraging customers to speak at today's hearing chaired by Nick Griffin, commissioner of the state Division of Financial Services.

Griffin's commission has until Feb. 18 to decide whether to let the merger go forward.

Griffin has said it is his intent to allow the public to comment and that he would extend the daylong hearing, if necessary. More than 250 people have signed up to testify at the hearing.

City Bank, which urged the state to hold the public hearings, was overwhelmed with letters of support, bank officials said.

In recent months, City Bank has employed tactics akin to those of a political campaign in order to oppose the merger, including distributing "Proud to be City Bank" bumper stickers and sending employees to the street to wave signs.

City Bank has said it plans to have employees line up today in front of the State Capitol waving signs, and will send its top executives to testify.

Combining Central Pacific, the state's fourth-largest bank, with City Bank, the fifth-largest, would create a stronger institution, Central Pacific says.

City Bank says the deal would lead to layoffs and fewer choices for consumers.

"The basic offer is still inadequate," Miyao said yesterday.

Reach Peter Boylan at 535-8110 or pboylan@honoluluadvertiser.com