Next steps in bank merger revealed
Central Pacific Financial Corp. today disclosed early details of its business strategy following the merger between Central Pacific Bank and City Bank, which includes closing nine branches statewide, moving one branch, and opening a new location on Maui. Details also emerged about the company’s “voluntary separation program” for employees, although bank officials have repeatedly stressed their commitment to no involuntary layoffs.
“The merger provides us with an opportunity and the resources to expand our banking services into communities not being served by either bank through the consolidation of overlapping branches,” said Central Pacific head Clint Arnoldus.
Implementation of the strategy will begin early next year, as the two banks are consolidated to operate under the Central Pacific Bank name. The Central Pacific Bank branch in Kailua will close, as will eight City Bank branches: two in downtown Honolulu (on Merchant and Bishop streets), Waipahu, Hilo, Kona, Kahului, Kihei, and Lihue. The Kapolei branch of City Bank will be moved to 680 Kamokila Blvd., and a new Central Pacific Bank branch will open at 2061 Wells St. in Wailuku.
The company did not disclose plans or potential locations for additional new branches, but noted that it is studying the feasibility of new branches in nine neighborhoods statewide. The overall branch plan is expected to be fully implemented within five years.
Currently, Central Pacific and City Bank operate 23 and 22 branches, respectively, in Hawaii. The combined bank will intially operate 37 branches statewide: 31 branches on Oahu, 2 on the island of Hawaii, 3 on Maui, and 1 on Kauai.
Central Pacific reiterated its commitment to no involuntary layoffs as a result of the merger, asserting that all current branch employees will have the opportunity to remain in the combined branch network. But certain positions will be eligible for a “voluntary separation program.”
Under the program, eligible employees who choose to leave the company will receive a lump sum payment of 6 months salary, plus additional pay based on length of service, up to a maximum of two years’ salary. In addition, individual medical and dental benefits will remain in force for the employee at the company’s expense for varying periods, also based on the employee’s length of service, up to a maximum of 18 months from the effective date of the separation. The program will also offer professional outplacement services through HR Pacific, an employee assistance counseling service.
Employees eligible for the separation program have until November 1 to accept its benefits.
The Central Pacific announcement concluded: “Employees electing to decline these benefits will remain employed by the company and be subject to the company’s commitment to no involuntary layoffs as a result of this merger.” Whether there will be reassignments, relocations, salary changes or even layoffs for other reasons, however, remains an open question.