After less than a month on the job, the chief executive of Hawaii's second-largest community bank is seeking to slash costs and revive profitability.
Ronald K. Migita said he and other officials of $1.4 billion-asset CB Bancshares are examining operations to root out redundant expenses. Mr. Migita said he wants to review "every single line item on our income statement."
"We're feverishly working hard to get this company back to the levels it formerly enjoyed," said Mr. Migita, who nearly lost a lower-ranking job at CB in a consolidation last fall before being named chief executive officer. "That's my No. 1 mission."
In the past three years the Honolulu company's returns have declined as expenses have grown. Returns on assets and equity sank as low as 0.16% and 1.98%, respectively, in last year's first quarter. A year later they were up a bit-0.54% and 6.30%-but still sluggish.
Management problems prompted the Federal Reserve Bank of San Francisco to place CB under a memorandum of understanding last fall, restricting its activities.
Under a plan submitted to the Federal Reserve, CB officials have set a target of 0.75% ROA and 10% ROE for 1997. But Mr. Migita said he and the presidents of CB's two subsidiaries are reviewing those goals "to make sure they're still valid."
"I'm optimistic," he said. "I'd like to see these numbers be improved upon."
Mr. Migita's new role at CB is a radical change from last fall when he was nearly fired as part of a planned consolidation.
The 55-year-old banker, a former executive vice president at Bank of Hawaii, had joined CB in June 1995 as president of the holding company with a five-year contract. But his post was terminated last fall after CB officials announced plans to cut costs by consolidating its thrift unit, International Savings and Loan, into City Bank, the company's lead subsidiary.
Mr. Migita threatened to sue, and the situation was resolved in late March with his appointment as CEO, just over a month after chairman and CEO James M. Morita announced his planned retirement. Mr. Migita took over at the end of April.
Richard B. Dole, research director at Fry & Co. in Honolulu, speculated that the initial firing of Mr. Migita stemmed from disagreements with Mr. Morita. He noted that both Mr. Migita and an important shareholder had supported merging the subsidiaries.
M.A. Schapiro & Co., a New York investment banking firm and CB shareholder, had criticized the banking company's high expenses and unsuccessfully sought last year to unseat two directors.