Pacific Century Financial Corp. Unveils Comprehensive Restructuring Plan

Pacific Century Financial Corp., a regional financial services holding company, has unveiled a comprehensive two-year reorganization and restructuring program aimed at improving efficiency and reducing costs. The plan involves the merger of First Federal Savings & Loan with Bank of Hawaii, the closure of approximately 25 branches in the state, and a customer-focused redesign process. The company aims to lower its efficiency ratio to 55% by the end of 2000, which is consistent with its financial objectives.

The restructuring program will see Pacific Century merge its mainland operations into one nationally chartered entity, headquartered in California. The company will also implement a hiring freeze in Hawaii for 1998 and 1999 and reincorporate in the State of Delaware. Pacific Century is committed to maintaining and enhancing its current levels of customer service, continuing its commitments to the communities it serves, and providing innovative solutions to customers.

The company has set a goal to lower its efficiency ratio to 55% by the end of 2000 through actions to reduce redundancy, enhance revenues, streamline operations, and cut costs. Pacific Century expects to realize annualized expense reductions of approximately $25 million and a reduction of about 550 in its statewide workforce of approximately 3,600 over the next two years.

Key Takeaways:

• Pacific Century Financial Corp. has unveiled a comprehensive two-year reorganization and restructuring program to improve efficiency and reduce costs.
• The plan involves the merger of First Federal Savings & Loan with Bank of Hawaii and the closure of approximately 25 branches in the state.
• The company aims to lower its efficiency ratio to 55% by the end of 2000 through actions to reduce redundancy, enhance revenues, streamline operations, and cut costs.
• Pacific Century expects to realize annualized expense reductions of approximately $25 million and a reduction of about 550 in its statewide workforce of approximately 3,600.
• The company will merge its mainland operations into one nationally chartered entity, headquartered in California.
• Pacific Century will implement a hiring freeze in Hawaii for 1998 and 1999 and reincorporate in the State of Delaware.
• The company remains committed to maintaining and enhancing its current levels of customer service and supporting economic revitalization in the areas it serves.

Statistics:

• Efficiency ratio target: 55% by the end of 2000.
• Annualized expense reductions: approximately $25 million.
• Workforce reduction: about 550 in the statewide workforce of approximately 3,600.
• Branch closures: approximately 25 branches in the state.
• Hiring freeze: 1998 and 1999.

Sources:

• "Pacific Century Financial Corp. Unveils Plan to Accelerate Expense Reduction and Improve Efficiency." Business Wire, February 18, 1998.
• Pacific Century Financial Corp. Press Release, February 18, 1998.