Posted on: Monday, September 13, 2004

City Bank merger vote today

By Deborah Adamson
Advertiser Staff Writer

Shareholders of Central Pacific Financial Corp. and CB Bancshares, the parent of City Bank, are scheduled to vote on their nearly $430 million merger today.

The banks need 75 percent of shares to vote in favor of the merger for it to go through. They hope to reach their goal at a final tally on votes during back-to-back shareholder meetings at the Dole Cannery this morning.

The merger of the holding companies has received regulatory approvals from the state and federal authorities, but regulators still need to approve the merger of the subsidiary banks, according to the state Division of Financial Institutions.

Shareholder approval of the marriage would cap 17 months of a mostly contentious pursuit by Central Pacific, which launched what was only the state's second hostile takeover attempt in its history. But the merger turned friendly a year later.

David Yamamoto, a City Bank customer in Wahiawa, said he was upset about the takeover when the effort first began.

"It was very, very unlocal. The other bank was being hostile and kind of abusive," he said. "The truly local way was to continue to have discussions, or find some people to (mediate)" instead of initiating a hostile takeover.

But what softened his view toward Central Pacific was its pledge not to lay off employees as a result of the merger, with the exception of top executives.

"Even though the fight was vicious, they are doing the sensible thing by keeping the personnel," Yamamoto said.

He plans to stay as a customer after the merger because he wants to continue dealing with the same folks at his branch.

"I like the way our people operate over here," he said.

In April, CB Bancshares accepted Central Pacific's offer to pay $20 in cash and 2.6753 Central Pacific shares for each share of CB Bancshares. As of Friday, the deal amounted to $96.24 a share. CB Bancshares closed at $95.75 a share on Friday.

After the merger, City Bank will cease to exist — after nearly half a century of operation. It was founded by Japanese-Americans to serve their community.

City Bank executives had rebuffed Central Pacific for a year, arguing that the buyout would limit competition and harm employees, customers and borrowers. City Bank organized sign-waving campaigns and ran advertisements opposing the deal.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.