Leadership Corner: Al Landon

Interviewed by Catherine E. Toth
Advertiser Staff Writer

Age: 56

Title: Chairman, chief executive officer and president

Organization: Bank of Hawaii

High school: West Marshall High School, State Center, Iowa

College: Bachelor of science in accounting, Iowa State University

Breakthrough job: "Coming to paradise." Landon said he came to Hawai'i in April 2000 to be the director of risk management at Bank of Hawaii.

Little-known fact: He loves to eat apple pie and ice cream, preferably together.

Major challenge: Consistency. "As we say, perform well and repeat regularly. We've gone through where we've had some challenges as a company to where we're actually performing pretty well. And now to continue that on a regular basis, quarter after quarter, will take a little different skill set. I would say growing our business along with it will be our challenge. But it's a good challenge to have."

Q. Before 2002, earnings per share for Bank of Hawaii hovered around $11 to $15. Now shares are nearly $50. Has a lot of that growth come from the reorganization of the company?

A. Yes. Mike (O'Neill, former chairman and CEO, who resigned Sept. 1) used to tell me it was just a stroke of brilliance. (Laughs.) I think we, as a company, have done a number of good things. We've focused on Hawai'i. We're focusing on taking care of our customers first. We've become a more efficient operation. We've done a good job with managing our risk. And we've been thoughtful about our investors and making sure we do a good job for them.

Q. Part of that reorganization included a technology conversion, which resulted in the layoff of about 250 employees. Has the outsourcing of the main computer system to a Mainland company been worth it?

A. I'd like to say it's gone better than (we) probably expected it would. We had a vision of good communication, efficient operations, improvement of our products and reduction in our costs. And we accomplished all of that. And we were able to do that without any interruption of service or any difficulties for our operating people.

It also built a platform that now has allowed us to upgrade lots of our other technology. Within the last year, nearly 100 percent of us have new computers. We've rewired the entire company in terms of network activity. And we're continuing to improve our operational efficiency, with new systems for opening new accounts, making new team changes and trying to shorten the lines for our customers. ...

(The layoff) is an inevitable consequence of becoming more efficient. We were fortunate in that there were very few people who actually left the company, and we did it at one of the best times in the Hawai'i economy for a long time — people had opportunities for other jobs. We paid our people for a transition period, and to my knowledge we have not had any ill will as a result of that activity.

Q. What are your plans for the bank's continued growth, and will that involve more hiring or more layoffs?

A. We're certainly on the horns of a dilemma. You want your assets to grow ... and to become a bigger bank. That's one of the ways you increase your profits. But you also want to be more efficient and provide better use of technology. ...

Our idea is to get bigger, but stay about the same size. You can achieve that with good service. If we could get that, things would flow rather nicely.

Q. O'Neill succeeded in encouraging profitable growth of the bank. Thoughts were the bank would be sold to enhance shareholder value. Is that a possibility?

A. It's not in our plan, but it's always a possibility. The strange thing about it is the more you do to protect yourself — which, in our view, is perform well as a company — the more interesting you are to somebody looking for expansion. So I've learned never to say never, but it's just not our plan.

Q. How will the merger of Central Pacific Bank and City Bank change the landscape of banking in Hawai'i? Will they pose any competitive threat to Bank of Hawaii?

A. We take all our competitors seriously. Both Central Pacific Bank and City Bank are good competitors .... Merging two banks is a challenging undertaking; all of us who have worked in banking elsewhere know that. But they've got good people and should come out of this with a good-performing bank.

Q. Bank of Hawaii and First Hawaiian Bank are publicly held companies. The difference, however, is that Bank of Hawaii is locally based. Do you think that's important for the community?

A. We think it's important to us, and we hope the state will support us being headquartered here. They run a great bank at First Hawaiian, too, so I think you could do it both ways.

Q. What kinds of improvements are you planning?

A. We're going to continue to work on our branches — make them more attractive, more accessible, easier to interact with. We're going to improve our ATMs, first of all making sure our technology is up to date, that they're very secure, and improve their functionality. We're going to continue to improve our Internet banking and investing in our people to help them better understand customer needs and how to meet those needs.

Q. What is your take on the state's economy, and do you expect its growth to be sustainable?

A. I think the economy here is very good. All of our research tells us that almost every sector of the economy is performing well — certainly led by tourism, where we're setting records. The real-estate sector is bringing in a lot of cash ... ; construction seems to be doing very well with a number of large projects on the way; the military is spending at high levels. ... I'm sure there are other sectors that probably would argue with this. Some of our friends in agriculture would say it's hard to be competitive here. But I think the economy is doing well overall, and I think it's fairly sustainable. ... They say we sell sunshine and smiles, and we seem to have an endless supply of those.

Q. What are the most important services you can provide to your customers?

A. We think convenience is important in today's economy. ... We think we're pretty good at that. We know places where we could do better, and that's in our plan in the next three years.