FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Current Report Pursuant to Section 13
of the Securities Exchange Act of 1934
Date of Report (Date Earliest Event reported)- October 18, 1996
Commission File Number 2-67419
CB BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Hawaii 99-0197163
(State of Incorporation) (IRS Employer Identification No.)
201 Merchant Street, Honolulu, Hawaii 96813
(Address of principal executive offices)
(808) 546-2411
(Registrant's Telephone Number)
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ITEM 5. Other events
Refer to attachment I.
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Attachment I.
FOR IMMEDIATE RELEASE
Contact: Wayne T. Miyao Daniel Motohiro
Senior Vice President Senior Vice President & CFO
City Bank CB Bancshares, Inc.
Ph. (808) 546-8484 Ph. (808) 546-2424
CB BANCSHARES TO MERGE SUBSIDIARIES
SIGNS MEMORANDUM OF UNDERSTANDING WITH FEDERAL RESERVE BANK
(Honolulu, Hawaii) October 18, 1996 -- CB Bancshares, Inc. (NASDAQ: CBBI),
today announced plans to merge its two subsidiaries: City Bank and
International Savings and Loan Association (ISL) to improve operating
efficiency. The merger is expected to be completed in the first half of 1997,
subject to the approval of the bank's regulators. After the merger, the
combined banks will operate under the City Bank name.
Based on June 30, 1996 figures, the merged bank would have $1.4 billion in
assets, $1.1 billion in loans and $1.0 billion in deposits. Both City Bank
and ISL currently exceed all minimum capital requirements.
In making the announcement James M. Morita, Chairman of the Board and Chief
Executive Officer of CB Bancshares, commented: "We are merging our two
principal subsidiaries because it is apparent in the increasingly competitive
Hawaiian market that combining our resources is essential to driving down
costs. These steps are part of our continuing effort to improve operating
efficiency while maintaining effective customer service in our local market.
The planned merger continues the implementation of the goals established in
our long range plan. We plan to streamline the operation of the holding
company as well. We will also work hard to keep and enhance the strong
tradition of mortgage lending which ISL has established in Hawaii." The
merger of the two subsidiaries is expected to result in the closing of several
overlapping branches and the elimination of an unspecified number of positions.
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The announcement of the merger plan follows a review and analysis of the
company's operations and a strategic assessment of future growth opportunities.
As part of this process, the company has had a series of discussions with
regulatory authorities on the management, operations and structure of the
company. As a result, CB Bancshares has entered into an informal agreement,
or a Memorandum of Understanding, with The Federal Reserve Bank of San
Francisco with respect to issues raised in an inspection of the company as of
June 30, 1996 by The Federal Reserve Bank, the Office of Thrift Supervision
and the State of Hawaii Division of Financial Institutions. The memorandum is
designed to further improve the financial condition and operation of CB
Bancshares.
Under the memorandum, CB Bancshares is restricted from the payment of cash
dividends, incurring debt, or redeeming its stock without prior approval of
the Federal Reserve Bank. There is no impact on the company's previously
announced third quarter dividend, which is payable October 31, 1996. As
always, any future dividends are based on the Board of Directors' review of
financial performance. The memorandum also addresses a number of other issues
that require Federal Reserve Bank approval including: increases in director
and executive compensation; entering into agreements to acquire or divest
businesses; management and organizational structure; liquidity and capital
needs; interest rate risk; and audit, record keeping and compliance control
systems.
With the announcement of the City Bank-ISL merger plan and streamlining of
the holding company, Mr. Morita indicated that the company had already
commenced actions to address several of the issues addressed by the memorandum
of understanding. "We intend to continue our efforts to address any
regulatory concerns while implementing our long-term strategic plan," he said.
City Bank is a state-chartered bank organized under the laws of the State of
Hawaii in 1959. Insured by the Federal Deposit Insurance Corporation (FDIC),
the bank provides full commercial banking services to customers through
thirteen branches on the islands of Oahu, Maui and Hawaii. ISL, with 11
branches, was chartered by the then Territory of Hawaii in 1925 and is also
insured by the FDIC. Customers with deposit and checking accounts at ISL will
automatically become City Bank customers and will receive new account materials
in connection with the merger. The terms of existing ISL certificates of
deposit and loans will not change and customers with ISL credit cards will be
offered similar City Bank cards. As with ISL, deposits at City Bank are
insured by the FDIC up to the maximum amount available, $100,000.
CB Bancshares provides a full range of banking products and services for small
to medium size business and retail customers through its branch network on the
islands of Oahu, Maui and Hawaii. The company is the third largest bank
holding company in Hawaii.
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CB Bancshares, Inc.
Date: October 23, 1996 Daniel Motohiro
Senior Vice President and
Chief Financial Officer
