No state has fewer community banks than Hawaii, and one group of bank organizers says the time has come to help fill that void.
The group, led by Hawaii banker and consultant Austin Imamura, recently filed an application with the state’s Division of Financial Institutions to open Pacific Rim Bank this fall. If the application is approved and the group raises the $10 million to $12 million it is seeking, Pacific Rim would be the first new bank to open in Hawaii in 18 years.
In its application the group said that consolidation has claimed more than two-thirds of the state’s banks since 1990, leaving it with just seven – and only two with assets below $1 billion.
The most recent merger, in September, combined the $2.2 billion-asset Central Pacific Financial Corp. of Honolulu with the $1.9 billion-asset City Bank, also of Honolulu.
“We feel there is a need for community banks here in Honolulu,” said Mark Southwick, who is to be Pacific Rim’s chief financial officer. Mr. Southwick was the president of the $52 million-asset Harbor Community bank of Raymond, Wash., which was sold to the $323 million-asset Security State Bank of Centralia, Wash., in December.
Central Pacific made a hostile bid for City Bank and its parent, CB Bancshares, in early 2003. CB’s board rejected it, saying a merger would harm Hawaii’s fragile economy by causing branch closings and numerous layoffs. Local business owners also spoke out against the deal, arguing that the state was already underbanked.
CB’s board came around a year later, though, after Central Pacific upped its offer by nearly half, to $421 million.
Mr. Imamura, who had been a consultant to City Bank and once worked for Central Pacific, would be Pacific Rim Bank’s chief executive officer. He was among the many Hawaiians who opposed the deal between Central Pacific and CB Bancshares, and he retired soon after it was completed.
Mr. Imamura said in a report in the June 16 Honolulu Advertiser that he decided to start Pacific Rim because business owners were telling him they wanted another banking alternative in the state. Like many start-ups, the bank would focus on small-business lending and commercial real estate lending.
Mr. Southwick told American Banker this week that organizers were raising money primarily through contacts of Mr. Imamura and other directors “and friends of those friends.” He said his group had verbal commitments for $10 million and expected state regulators to approve their application by the end of July.
Only Alaska has as few banks as Hawaii. Maine, which has roughly the same population as Hawaii, has 36 banks. Pacific Rim Bank would be the first new bank to open in Hawaii since January 1987, when American Savings Bank was founded. American, of Honolulu, now has assets of $6.7 billion.
Another group applied for a bank charter two years later, but it withdrew its application after failing to raise enough capital.
