retooling itself to end five years of sluggish earnings growth.

Chairman and chief executive Joichi Saito said his goal for the $1.5 billion-asset company is to increase return on equity to 15%, from 10%, and improve the 66.36% efficiency ratio to less than 60%.

The strategy combines initiatives to boost revenues and cut costs, Mr. Saito said, and is meant to take advantage of what is shaping up as a recovery in the Hawaiian economy.

CPB aims to increase loans and deposits by 20%; a special focus will be loans to small and midsize businesses. It will also seek partnerships to sell investment products and develop an Internet banking program for its business customers. And a team of consultants has been hired to give its employees sales training.

To reduce expenses, CPB plans to slash its 575-person workforce by 10%. It also expects $2.5 million a year of savings from centralizing back-room and administrative functions, which are spread over 26 branches in the state.

"We want to be the best-performing community bank in Hawaii," Mr. Saito said. With the state's economy showing signs of improvement, he said, "it is time to take action."

Hawaii's banks, which have $31 billion of assets, have taken it on the chin in the 1990s. The state economy has suffered an eight-year drought that is partly a consequence of the Asian financial crisis. The slump has hampered the tourism industry and depressed land values.

But Hawaii may be poised to turn the corner. The economic reports show gains in civilian jobs and construction activity. The unemployment rate was 5.8% at the end of the second quarter, down from 6.5% a year earlier, and second-quarter issuance of single-family home permits was up more than 15%.

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