American Savings declined to disclose the terms of the deal and an attorney for former security director Bert Corniel had no comment.

The settlement comes after American Savings agreed to pay more than $1 million in September to settle allegations by 92-year-old Hawai'i Kai customer Ada Lim that a bank employee defrauded her of hundreds of thousands of dollars.

"We believe that this resolution of the matter is in the best interests of American Savings Bank," said bank spokeswoman Dawn Dunbar.

"We are pleased to put this matter behind us and continue our efforts to best serve our customers and communities."

Corniel sued the bank in Aug. 2, 2006, saying the bank tried to cover up the Lim case in filings with federal regulators. Corniel also alleged that the bank retaliated against him and passed him over for promotions because of various disclosure reports that he had filed.

Shortly after Corniel's suit was filed American Savings Chief Executive Officer Constance Lau called Corniel a "disgruntled former employee" and said his allegations of a cover up were "unfounded." Lau said at the time that she expected the bank to be "fully exonerated" at the end of the day.