Filed by CB Bancshares, Inc. pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: CB Bancshares, Inc. Subject Company's Exchange Act File No.: 000-12396 The following is a joint investor presentation by Central Pacific Financial Corp. and CB Bancshares, Inc., and posted on CB Bancshares, Inc.'s website at www.citybankhawaii.com and Central Pacific Financial Corp's website, at www.cpbi.com, on May 3, 2004.
Creating
A Stronger
Hawaii Bank
May 2004
Merger of
&
This
document contains forward-looking statements. Such statements
include, but are not limited to, (i) statements about the benefits of a merger
between
Central Pacific Financial Corp. (“CPF”) and CB
Bancshares, Inc. (“CBBI”), including future financial and operating
results, costs savings and accretion to
reported and cash earnings that may
be realized from such merger; (ii) statements with respect to CPF’s plans,
objectives, expectations and intentions and
other statements that are not
historical facts; and (iii) other statements identified by words such as
“believes”, “expects”, “anticipates”,
“estimates”,
“intends”, “plans”,
“targets”, “projects” and other similar
expressions. These statements are based upon the current beliefs and
expectations of management
and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements.
The
following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the business of CPF and CBBI may
not be integrated successfully or such integration may be more difficult,
time-
consuming or costly than expected; (2) expected revenue synergies and
cost savings from the merger may not be fully realized or realized within the
expected time frame; (3) revenues following the merger may be lower than
expected; (4) deposit attrition, operating costs, customer loss and business
disruption, including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers, may be greater
than
expected following the merger; (5) any necessary approvals for the
merger may not be obtained on the proposed terms; (6) the failure of CPF’s
and CBBI’s
shareholders to approve the merger; (7) competitive
pressures among depository and other financial institutions may increase
significantly and may have an
effect on pricing, spending, third-party
relationships and revenues; (8) the strength of the United States economy in
general and the strength of the Hawaii
economy may be different than
expected, resulting in, among other things, a deterioration in credit quality
or a reduced demand for credit, including the
resultant effect on the
combined company’s loan portfolio and allowance for loan losses; (9)
changes in the U.S. legal and regulatory framework; and (10)
adverse
conditions in the stock market, the public debt market and other capital
markets (including changes in interest rate conditions) and the impact of
such conditions on the combined company’s activities.
Additional
factors that could cause actual results to differ materially from those
described in the forward-looking statements can be found in CPF’s and
CBBI’s reports (such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and
Exchange Commission (“SEC”) and available at the SEC’s
Internet web site (www.sec.gov). All subsequent written and oral
forward-looking statements
concerning the proposed transaction or other
matters attributable to CPF or CBBI or any person acting on their behalf are
expressly qualified in their
entirety by the cautionary statements
above. CPF and CBBI do not undertake any obligation to update any
forward-looking statement to reflect
circumstances or events that occur
after the date the forward-looking statement is made.
FORWARD LOOKING INFORMATION
CPF
will amend its registration statement on Form S-4 to register shares of CPF
common stock to be issued in this transaction. The registration
statement is not
final and will be further amended. The
registration statement will include a joint proxy statement/prospectus for
solicitation of proxies from CPF and CBBI
shareholders, in connection with
meetings of such shareholders at a date or dates subsequent
hereto. Investors and security holders are urged to read the
registration statement and joint proxy statement and any other relevant
documents (when available) filed with the SEC, as well as any amendments or
supplements
to those documents, because they will contain important
information. Investors and security holders may obtain a free copy
of documents filed with the SEC at the
SEC’s Internet web site at
(www.sec.gov). Such documents may also be obtained free of charge
from CPF by directing such request to: Central Pacific Financial
Corp., 220
South King Street, Honolulu, Hawaii 96813, Attention: David Morimoto, (808)
544-0627; or from CBBI by directing such request to: CB Bancshares,
Inc.,
201 Merchant Street, Honolulu, Hawaii 96813, Attention: Investor Relations,
(808) 535-2518.
CPF
and CBBI, and their respective directors and executive officers and certain
other persons may be deemed to be participants in the solicitation of proxies
from
the shareholders of CBBI and CPF in connection with the
merger. Information about the directors and executive officers of
CPF and their ownership of and
interests in CPF stock is set forth in the
proxy statement for CPF’s 2004 Annual Meeting of
Shareholders. Information about the directors and executive officers
of
CBBI and their ownership of and interests in CBBI stock is set forth in
the proxy statement for CBBI’s 2004 Annual Meeting of
Shareholders. Additional
information regarding the interests of
those participants may be obtained by reading the joint proxy
statement/prospectus regarding the proposed transaction when
it becomes
available.
Transaction Overview
Transaction Summary
(1)
Based on CPF stock price of $26.85 on 04/22/04.
(2)
Based on CBBI stock price of $73.13 on 04/22/04.
Aggregate Consideration per CBBI Share
2.6752 shares of CPF Stock + $20.00
in cash – shareholders can elect
cash or stock (subject to proration)
Offer Price(1)
$91.83 per CBBI share
Premium Over Closing Price (04/22/04)(2)
26%
Implied Transaction Value
$420 million
Pro Forma Ownership
58% CPF; 42% CBBI
Anticipated Closing
Q3-2004
Shareholder Votes Required
CPF and CBBI
Due Diligence
Completed
Transaction Rationale
Expected
to be
accretive to CPF
Shareholders
Premium
to CBBI
Shareholders
Opportunities
for
synergies
Investor visibility
Stronger
competitive position
Increased
lending
capacity
Leverage
combined
track record of
outstanding
performance and efficiency
Combining
complementary
strengths in retail
banking and commercial
lending
Expand
product
offering to customer
base
In-market
transaction
Similar
culture and
heritage
Both
use Fiserv
platform
Financial
Strategic
Integration
Experienced Management Team
Position
in
New Company
Officer
Years
of
Banking
Experience
Age
Prior
Position
Ron Migita
62
35
Chairman
CEO & President
(CBBI)
Clint Arnoldus
57
29
CEO
Chairman, CEO &
President (CPF)
Neal Kanda
55
30
President & COO
VP, Treasurer (CPF)
Dean Hirata
46
14
EVP, CFO
SVP, CFO (CBBI)
Blenn Fujimoto
45
24
EVP, Hawaii Market
CFSO (CPB)
Alwyn Chikamoto
50
27
EVP, National Market
CCO (CPB)
Doug Weld
55
30
EVP, CCO
CCO (CityBank)
CPF-CBBI: Superior Performance
Overview of CPF and CBBI
CBBI
CPF
39% CRE
21% 1–4 family
20% Commercial
29% CRE
35% 1–4 family
16% Commercial
Source: Company filings and press releases. Data as of 03/31/04.
Headquarters
Honolulu
Honolulu
Branch Offices
24 branches on 4 islands
22 branches on 4 islands
Common Heritage
Founded to serve the Japanese-American community in Hawaii
Total Assets
$2.28 billion
$1.87 billion
Total Deposits
$1.81 billion
$1.31 billion
Total Loans
$1.46 billion
$1.35 billion
Loan Composition
Performance
Review of
CPF and CBBI
Net Interest Margin
Return on Average Equity
Efficiency Ratio
Return on Average Assets
CBBI
CPF
Source: Company press releases. Data for first quarter ended March 31, 2004
(1) Excludes after-tax unsolicited takeover proposal expenses and gain on early pay-off of asset-backed security in 2004.
(2) Defined
as noninterest expense excluding unsolicited takeover proposal expenses and
amortization of intangibles as a percentage of
total operating revenue
excluding gain on early pay-off of asset-backed security.
4.52%
1.43%
15.76%
54.59%
4.87%
2.11%
1.86(1)
22.71%
19.95(1)
50.67%
53.18(1)(2)
CPF: A Proven Track Record
Source: Company filings.
Profitability Ratios
Efficiency Ratio
65.36
%
58.43
%
55.59
%
53.02
%
52.97
%
ROAA
1.03
1.16
1.60
1.74
1.64
ROAE
10.93
13.55
19.34
20.55
18.33
Asset Quality Ratios
NPAs/Loans & OREO
0.94
%
0.80
%
0.25
%
0.18
%
0.25
%
Reserves/Loans
1.77
1.75
1.94
1.88
1.72
Capital Ratios
Total Equity/Total Assets
8.75
%
7.89
%
8.01
%
8.55
%
8.97
%
Total Risk-Based Capital Ratio
12.50
10.89
11.37
12.82
17.16
Asset Growth
5.48
%
10.35
%
1.03
%
10.49
%
7.01
%
Deposit Growth
2.88
4.40
6.45
13.11
6.84
1999
2000
2001
2002
2003
0.97%
1.01%
1.09%
1.19%
2.11%
0.97%
1.34%
1.41%
1.45%
1.86%
0.0
0.5
1.0
1.5
2.0%
2.5%
1Q03
2Q03
3Q03
4Q03
1Q04
CBBI—GAAP
CBBI—Adjusted
(1)
(1)
ROAA
ROAE
Source: Company filings and press releases.
(1) Excludes after-tax unsolicited takeover proposal expenses and gain on early pay-off of asset-backed security in 2004.
CBBI: Strong Profitability Growth
22.71%
13.00%
11.80%
10.83%
10.54%
19.95%
15.77%
15.29%
14.45%
10.54%
0
5
10
15
20
25%
1Q03
2Q03
3Q03
4Q03
1Q04
CBBI—GAAP
CBBI—Adjusted
CPF-CBBI:
A Powerful
Combination
Shareholders of Both Banks Win
Significant value creation
Expected to be accretive to EPS in first full year
Consolidation,
scale and efficiency result in fully phased-
in anticipated annual cost
saves of $19.5 million by 2006
Large, well capitalized balance sheet of over $4 billion
Substantial capital generation over time
CBBI shareholders receive 26% (1) premium
Increased investor visibility & trading liquidity
Over $700 million pro forma market cap(2)
NYSE listing
(1) Based on CBBI stock price of $73.13 as of 04/22/04.
(2) Based on CPF share price of $26.85 as of 04/22/04.
It’s
a Logical Fit—and
Easy to Integrate
Similar roots and culture
Common roots, post-WWII founding
Founded
to serve the Japanese-American community in
Hawaii
Local values
Focused on personalized service
Same market
Small and mid-sized businesses, retail customers
Overlapping geography
Common Fiserv-based technology platform
Good
For Hawaii, Local
Community & Customers
Creates a stronger bank for Hawaii
$2.8B in loans(1) ; $3.1B in deposits(1) ; $4.2B in assets(1)
14% deposit market share in Hawaii(2)
Customers in the local community benefit
Continue tradition of personalized “high touch” service
Added convenience: Larger branch & ATM network
Broader menu of products and services
Larger lending capacity
$1 million community investment fund
(1) Source: Company press releases. Data as of 03/31/04.
(2) Source: SNL Securities.
CPF-CBBI: Significantly
Builds
Deposit Market Share in Hawaii
Source: SNL Securities data as of 06/30/03.
Pro
Forma
0.2%
0.6%
1.8%
1.9%
3.7%
5.6%
8.1%
13.7%
18.4%
29.8%
30.0%
0
5
10
15
20
25
30
35%
Bank of
Hawaii
First
Hawaiian
American
Savings
CPF
CBBI
Territorial
Savings
Finance
Factors
Hawaii
National
Home
Street
Orient
Bancorp
Jumbo CDs
18.4%
Non-Jumbo CDs
15.0%
Demand Deposits
7.1%
NOW
&
Other
Transaction
Accounts
2.9%
MMDA
&
Savings
56.6%
Jumbo CDs
17.4%
Non-Jumbo CDs
18.8%
Demand Deposits
2.5%
NOW
&
Other
Transaction
Accounts
3.0%
MMDA
& Savings
58.3%
Total: $2,959.9M
Cost of Funding: 0.72%
Total: $1,206.7M
Cost of Funding: 0.73%
Total: $1,753.3M
Cost of Funding: 0.70%
Jumbo CDs
19.1%
Non-Jumbo CDs
12.3%
Demand Deposits
10.4%
NOW
&
Other
Transaction
Accounts
2.8%
Source: CPF and CBBI financials.
Note: As of 12/31/03.
MMDA & Savings
55.4%
CPF
Pro Forma
CBBI
CPF-CBBI: Strong
Core Deposit
Base
CRE
38.5%
CRE
34.1%
1–4
Family
27.3%
Other
0.3%
Consumer
7.5%
MultiFamily
4.2%
Construction
& Dev
9.0%
Commercial
17.7%
Total: $2,773.5M
Total Yield: 6.36%
CRE
29.2%
1–4
Family
34.5%
Other
0.5%
Consumer
10.5%
MultiFamily
1.6%
Construction
& Dev
8.0%
Commercial
15.8%
Other
0.1%
Total: $1,318.0M
Total Yield: 6.79%
Consumer
4.7%
MultiFamily
6.6%
Source: CPF and CBBI financials.
Note: As of 12/31/03.
Construction
&
Dev
9.8%
Commercial
19.5%
1–4
Family
20.9%
CPF
Total: $1,455.6M
Total Yield: 5.97%
Pro Forma
CBBI
CPF-CBBI: Diversified
Loan
Portfolio
Transaction Assumptions
Earnings for CPF
$2.19 per share in 2004, $2.35 per share in 2005, $2.51 per share in 2006
Earnings for CBBI(1)
$6.40 per share in 2004, $6.78 per share in 2005, $7.19 per share in 2006
$19.5 million of cost saves
17% of combined operating expenses
67% realized in 2005, 100% in 2006
Core-deposit
intangible estimated at $24 million, amortized over
10 years
Approximately $50 million net after-tax restructuring charge
Source: CPF Management.
Note: There is no assurance that these projections will be realized and actual results may differ significantly from such projections.
Synergies
Combined
Non-Interest
Expense
2004E
2006
2005
Cost Savings
Fully phased-in savings of $19.5 million by 2006
Hiring freeze
Attrition rate
Voluntary resignation program
Implementation Plan
Source: CPF Management.
Note: There is no assurance that these projections will be realized and actual results may differ significantly from such projections.
($ in thousands)
Compensation and Benefits
$62,300
$6,490
$9,735
Net Occupancy
11,100
1,858
2,787
Other Expenses
42,000
4,604
6,906
Total Non-Interest Expense
115,400
12,952
19,428
% of Total Non-Interest Expense
11
%
17%
Pro
Forma EPS Impact of
Proposed Transaction
Earnings Projections
2005
Projected for Fiscal Year
Note: Neither
CBBI nor any analyst has published any estimates for 2004, 2005 and
2006. There is no assurance that these projections will be
realized and actual results may differ significantly from such projections.
Note: Assumes cost saves of $13 million in 2005 and $19.5 million in 2006.
(1) Source: CPF guidance.
(2) Assumed EPS estimates for CBBI of $6.40 in 2004, $6.78 in 2005 and $7.19 in 2006 provided by CPF management.
2006
CPF Stand-Alone GAAP EPS(1)
$2.35
$2.51
Pro Forma GAAP EPS(2)
$2.57
$2.87
Accretion to CPF ($)
$0.22
$0.36
Accretion to CPF (%)
9
%
14
%
Pro Forma Cash EPS(2)
$2.62
$2.92
Accretion to CPF ($)
$0.27
$0.41
Accretion to CPF (%)
11
%
16%
CPF-CBBI: Strong Balance Sheet
CPF
CBBI
Pro Forma
Source: Company press releases. Data as of 03/31/04. Based on CPF stock price of $26.85 on 04/22/04.
($ in millions)
3/31/04
Loans
$1,461
$1,350
$2,811
Assets
2,284
1,874
4,348
Deposits
1,805
1,309
3,114
Shareholders’ Equity
204
178
533
CPF-CBBI: Solid Capital Ratios
CPF
CBBI
Source: CPF and CBBI Management.
(1) Defined as Tier 1 Capital divided by Average Tangible Assets.
3/31/04
Pro Forma
High internal cash generation with over 20% Return on Tangible Equity.
($ in millions)
Tangible Equity
$203.5
$178.0
$216.9
Tangible Equity/Tangible Assets
8.91
%
9.50
%
5.38%
Leverage Ratio(1)
11.93
9.33
7.46
Tier 1 Risk-Based Ratio
15.52
11.30
9.20
Total Risk-Based Capital Ratio
16.85
12.56
10.46
CPF-CBBI: Strong Asset Quality
CPF
CBBI
Pro Forma
Source: Company press releases.
03/31/04
NPAs/Loans & OREO
0.51
%
0.34
%
0.43
%
Reserves/Loans
1.70
2.13
1.91
Reserves/NPLs
322.8
620.4
442.8
NCOs/Average Loans
0.06
0.09
0.08
Appendix
Pro Forma Earnings Impact
Earnings Projections
2005
2006
Projected for Fiscal Year
Note: All
estimates for both CPF and CBBI provided by CPF Management. There is
no assurance that these projections will be realized and actual
results may
differ significantly from such projections.
(1) Includes opportunity cost of cash component of consideration and restructuring charges.
($ in millions)
CPF’s Earnings
$38.5
$41.2
CBBI’s Earnings
30.8
32.7
After-Tax Cost Savings
7.8
11.7
CDI Amortization
(1.5)
(1.5
)
Other Adjustments(1)
(3.3)
(3.3)
Pro Forma Net Income
$72.4
$80.8
Pricing Mechanics
(1)
Equal to 2.6752 multiplied by the Common Shares Outstanding.
(2)
Equal to $20 multiplied by the Common Shares Outstanding.
(3)
CPF Measuring Price is defined as the average price of CPF’s Common Stock over the 10-trading day period prior to closing.
(4)
Equal to $20 + (2.6752 multiplied by the CPF Measuring Price).
(5)
Equal to Aggregate Cash to be Paid (Based on Common Shares Outstanding) divided by the Consideration Per Share.
(6)
Equal to Common Shares Outstanding less Shares to Receive Cash.
(7)
Equal to the Per Share Consideration divided by the CPF Measuring Price.
Total CBBI Common Shares Outstanding as of April 22, 2004:
4,395,096
Number of CPF Shares to be Exchanged Based on Common Shares Outstanding (1):
11,757,761
Cash to be Paid Based on Common Shares Outstanding (2):
87,901,920
$
CPF
Shares of CBBI
Percentage
Shares of CBBI
Percentage
Stock
Measuring
Consideration
to Receive
to Receive
to Receive
to Receive
Exchange
Price (3)
Per Share (4)
Cash (5)
Cash
Stock (6)
Stock
Ratio (7)
22.00
$
78.85
$
1,114,737
25.4%
3,280,359
74.6%
3.5843
24.00
$
84.20
$
1,043,906
23.8%
3,351,190
76.2%
3.5085
26.00
$
89.56
$
981,539
22.3%
3,413,557
77.7%
3.4444
26.85
$
91.83
$
957,234
21.8%
3,437,862
78.2%
3.4201
28.00
$
94.91
$
926,204
21.1%
3,468,892
78.9%
3.3895
30.00
$
100.26
$
876,775
19.9%
3,518,321
80.1%
3.3419
32.00
$
105.61
$
832,354
18.9%
3,562,742
81.1%
3.3002
Creating
A Stronger
Hawaii Bank
May 2004
Merger of
&
MERGER OF [LOGO OMITTED]Central Pacific Bank [LOGO OMITTED]CITY BANK FIERCELY LOYAL BANKING & CREATING A STRONGER HAWAII BANK MAY 2004 [LOGO OMITTED] Slide 2 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP FORWARD LOOKING INFORMATION This document contains forward-looking statements. Such statements include, but are not limited to, (i) statements about the benefits of a merger between Central Pacific Financial Corp. ("CPF") and CB Bancshares, Inc. ("CBBI"), including future financial and operating results, costs savings and accretion to reported and cash earnings that may be realized from such merger; (ii) statements with respect to CPF's plans, objectives, expectations and intentions and other statements that are not historical facts; and (iii) other statements identified by words such as "believes", "expects", "anticipates", "estimates", "intends", "plans", "targets", "projects" and other similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the business of CPF and CBBI may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; (3) revenues following the merger may be lower than expected; (4) deposit attrition, operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the merger; (5) any necessary approvals for the merger may not be obtained on the proposed terms; (6) the failure of CPF's and CBBI's shareholders to approve the merger; (7) competitive pressures among depository and other financial institutions may increase significantly and may have an effect on pricing, spending, third-party relationships and revenues; (8) the strength of the United States economy in general and the strength of the Hawaii economy may be different than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on the combined company's loan portfolio and allowance for loan losses; (9) changes in the U.S. legal and regulatory framework; and (10) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on the combined company's activities. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in CPF's and CBBI's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet web site (www.sec.gov). All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters attributable to CPF or CBBI or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. CPF and CBBI do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made. [LOGO OMITTED] Slide 3 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF will amend its registration statement on Form S-4 to register shares of CPF common stock to be issued in this transaction. The registration statement is not final and will be further amended. The registration statement will include a joint proxy statement/prospectus for solicitation of proxies from CPF and CBBI shareholders, in connection with meetings of such shareholders at a date or dates subsequent hereto. Investors and security holders are urged to read the registration statement and joint proxy statement and any other relevant documents (when available) filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain a free copy of documents filed with the SEC at the SEC's Internet web site at (www.sec.gov). Such documents may also be obtained free of charge from CPF by directing such request to: Central Pacific Financial Corp., 220 South King Street, Honolulu, Hawaii 96813, Attention: David Morimoto, (808) 544-0627; or from CBBI by directing such request to: CB Bancshares, Inc., 201 Merchant Street, Honolulu, Hawaii 96813, Attention: Investor Relations, (808) 535-2518. CPF and CBBI, and their respective directors and executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from the shareholders of CBBI and CPF in connection with the merger. Information about the directors and executive officers of CPF and their ownership of and interests in CPF stock is set forth in the proxy statement for CPF's 2004 Annual Meeting of Shareholders. Information about the directors and executive officers of CBBI and their ownership of and interests in CBBI stock is set forth in the proxy statement for CBBI's 2004 Annual Meeting of Shareholders. Additional information regarding the interests of those participants may be obtained by reading the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. [LOGO OMITTED] Slide 4 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP TRANSACTION OVERVIEW [LOGO OMITTED] Slide 5 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP TRANSACTION SUMMARY AGGREGATE CONSIDERATION PER CBBI SHARE 2.6752 SHARES OF CPF STOCK + $20.00 IN CASH - SHAREHOLDERS CAN ELECT CASH OR STOCK (SUBJECT TO PRORATION) OFFER PRICE(1) $91.83 PER CBBI SHARE PREMIUM OVER CLOSING PRICE (04/22/04)(2) 26% IMPLIED TRANSACTION VALUE $420 MILLION PRO FORMA OWNERSHIP 58% CPF; 42% CBBI ANTICIPATED CLOSING Q3-2004 SHAREHOLDER VOTES REQUIRED CPF AND CBBI DUE DILIGENCE COMPLETED (1) BASED ON CPF STOCK PRICE OF $26.85 ON 04/22/04. (2) BASED ON CBBI STOCK PRICE OF $73.13 ON 04/22/04. [LOGO OMITTED] Slide 6 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP TRANSACTION RATIONALE FINANCIAL STRATEGIC INTEGRATION --------- --------- ----------- o EXPECTED TO BE o STRONGER o IN-MARKET ACCRETIVE TO CPF COMPETITIVE POSITION TRANSACTION SHAREHOLDERS o INCREASED LENDING o SIMILAR CULTURE AND o PREMIUM TO CBBI CAPACITY HERITAGE SHAREHOLDERS o LEVERAGE COMBINED o BOTH USE FISERV o OPPORTUNITIES FOR TRACK RECORD OF PLATFORM SYNERGIES OUTSTANDING PERFORMANCE AND EFFICIENCY o INVESTOR VISIBILITY o COMBINING COMPLEMENTARY STRENGTHS IN RETAIL BANKING AND COMMERCIAL LENDING o EXPAND PRODUCT OFFERING TO CUSTOMER BASE [LOGO OMITTED] Slide 7 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP EXPERIENCED MANAGEMENT TEAM YEARS OF BANKING POSITION IN PRIOR OFFICER AGE EXPERIENCE NEW COMPANY POSITION ----------------------------------- -------- ------------ -------------------------------- -------------------------- RON MIGITA 62 35 CHAIRMAN CEO & PRESIDENT (CBBI) CLINT ARNOLDUS 57 29 CEO CHAIRMAN, CEO & PRESIDENT (CPF) NEAL KANDA 55 30 PRESIDENT & COO VP, TREASURER (CPF) DEAN HIRATA 46 30 EVP, CFO SVP, CFO (CBBI) BLENN FUJIMOTO 45 24 EVP, HAWAII MARKET CFSO (CPB) ALWYN CHIKAMOTO 50 27 EVP, NATIONAL MARKET CCO (CPB) DOUG WELD 55 14 EVP, CCO CCO (CITY BANK) [LOGO OMITTED] Slide 8 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: SUPERIOR PERFORMANCE [LOGO OMITTED] Slide 9 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP OVERVIEW OF CPF AND CBBI CPF CBBI ------------------------------------ --------------------------------------- HEADQUARTERS HONOLULU HONOLULU BRANCH OFFICES 24 BRANCHES ON 4 ISLANDS 22 BRANCHES ON 4 ISLANDS COMMON HERITAGE FOUNDED TO SERVE THE JAPANESE-AMERICAN COMMUNITY IN HAWAII TOTAL ASSETS $2.28 BILLION $1.87 BILLION TOTAL DEPOSITS $1.81 BILLION $1.31 BILLION TOTAL LOANS $1.46 BILLION $1.35 BILLION 39% CRE 29% CRE LOAN COMPOSITION 21% 1-4 FAMILY 35% 1-4 FAMILY 20% COMMERCIAL 16% COMMERCIAL SOURCE: COMPANY FILINGS AND PRESS RELEASES. DATA AS OF 03/31/04. [LOGO OMITTED] Slide 10 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP PERFORMANCE REVIEW OF CPF AND CBBI CPF CBBI ------------------- ----------------------- NET INTEREST MARGIN 4.52% 4.87% RETURN ON AVERAGE ASSETS 1.43% 2.11% 1.86(1) RETURN ON AVERAGE EQUITY 15.76% 22.71% 19.95(1) EFFICIENCY RATIO 54.59% 50.67% 53.18(1)(2) SOURCE: COMPANY PRESS RELEASES. DATA FOR FIRST QUARTER ENDED MARCH 31, 2004 (1) EXCLUDES AFTER-TAX UNSOLICITED TAKEOVER PROPOSAL EXPENSES AND GAIN ON EARLY PAY-OFF OF ASSET-BACKED SECURITY IN 2004. (2) DEFINED AS NONINTEREST EXPENSE EXCLUDING UNSOLICITED TAKEOVER PROPOSAL EXPENSES AND AMORTIZATION OF INTANGIBLES AS A PERCENTAGE OF TOTAL OPERATING REVENUE EXCLUDING GAIN ON EARLY PAY-OFF OF ASSET-BACKED SECURITY. [LOGO OMITTED] Slide 11 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF: A PROVEN TRACK RECORD 1999 2000 2001 2002 2003 -------- -------- -------- -------- -------- PROFITABILITY RATIOS EFFICIENCY RATIO 65.36% 58.43% 55.59% 53.02% 52.97% ROAA 1.03 1.16 1.60 1.74 1.64 ROAE 10.93 13.55 19.34 20.55 18.33 ASSET QUALITY RATIOS NPAS/LOANS & OREO 0.94% 0.80% 0.25% 0.18% 0.25% RESERVES/LOANS 1.77 1.75 1.94 1.88 1.72 CAPITAL RATIOS TOTAL EQUITY/TOTAL ASSETS 8.75% 7.89% 8.01% 8.55% 8.97% TOTAL RISK-BASED CAPITAL RATIO 12.50 10.89 11.37 12.82 17.16 ASSET GROWTH 5.48% 10.35% 1.03% 10.49% 7.01% DEPOSIT GROWTH 2.88 4.40 6.45 13.11 6.84 SOURCE: COMPANY FILINGS. [LOGO OMITTED] Slide 12 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CBBI: STRONG PROFITABILITY GROWTH [GRAPH OMITTED] ROAA -------------------------------------------------------------------------------- 1Q03 2Q03 3Q03 4Q03 1Q04 CCBI-GAAP 0.97% 1.01% 1.09% 1.19% 2.11% CCBI-Adjusted(1) 0.97% 1.34% 1.41% 1.45% 1.86% [GRAPH OMITTED] ROAE -------------------------------------------------------------------------------- 1Q03 2Q03 3Q03 4Q03 1Q04 CCBI-GAAP 10.54% 10.83% 11.80% 13.00% 22.71% CCBI-Adjusted(1) 10.54% 14.45% 15.29% 15.77% 19.95% SOURCE: COMPANY FILINGS AND PRESS RELEASES. (1) EXCLUDES AFTER-TAX UNSOLICITED TAKEOVER PROPOSAL EXPENSES. [LOGO OMITTED] Slide 13 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: A POWERFUL COMBINATION [LOGO OMITTED] Slide 14 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP SHAREHOLDERS OF BOTH BANKS WIN o SIGNIFICANT VALUE CREATION o EXPECTED TO BE ACCRETIVE TO EPS IN FIRST FULL YEAR o CONSOLIDATION, SCALE AND EFFICIENCY RESULT IN FULLY PHASED-IN ANTICIPATED ANNUAL COST SAVES OF $19.5 MILLION BY 2006 o LARGE, WELL CAPITALIZED BALANCE SHEET OF OVER $4 BILLION o SUBSTANTIAL CAPITAL GENERATION OVER TIME o CBBI SHAREHOLDERS RECEIVE 26%(1)PREMIUM o INCREASED INVESTOR VISIBILITY & TRADING LIQUIDITY o OVER $700 MILLION PRO FORMA MARKET CAP(2) o NYSE LISTING (1) BASED ON CBBI STOCK PRICE OF $73.13 AS OF 04/22/04. (2) BASED ON CPF SHARE PRICE OF $26.85 AS OF 04/22/04. [LOGO OMITTED] Slide 15 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP IT'S A LOGICAL FIT--AND EASY TO INTEGRATE o SIMILAR ROOTS AND CULTURE o COMMON ROOTS, POST-WWII FOUNDING o FOUNDED TO SERVE THE JAPANESE-AMERICAN COMMUNITY IN HAWAII o LOCAL VALUES o FOCUSED ON PERSONALIZED SERVICE o SAME MARKET o SMALL AND MID-SIZED BUSINESSES, RETAIL CUSTOMERS o OVERLAPPING GEOGRAPHY o COMMON FISERV-BASED TECHNOLOGY PLATFORM [LOGO OMITTED] Slide 16 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP GOOD FOR HAWAII, LOCAL COMMUNITY & CUSTOMERS o CREATES A STRONGER BANK FOR HAWAII o $2.8B IN LOANS(1); $3.1B IN DEPOSITS(1); $4.2B IN ASSETS(1) o 14% DEPOSIT MARKET SHARE IN HAWAII(2) o CUSTOMERS IN THE LOCAL COMMUNITY BENEFIT o CONTINUE TRADITION OF PERSONALIZED "HIGH TOUCH" SERVICE o ADDED CONVENIENCE: LARGER BRANCH & ATM NETWORK o BROADER MENU OF PRODUCTS AND SERVICES o LARGER LENDING CAPACITY o $1 MILLION COMMUNITY INVESTMENT FUND (1) SOURCE: COMPANY PRESS RELEASES. DATA AS OF 03/31/04. (2) SOURCE: SNL SECURITIES. [LOGO OMITTED] Slide 17 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: SIGNIFICANTLY BUILDS DEPOSIT MARKET SHARE IN HAWAII [GRAPH OMITTED] Bank of Hawaii 30.0% First Hawaiian 29.8% American Savings 18.4% PRO FORMA 13.7% CPF 8.1% CBBI 5.6% Territorial Savings 3.7% Finance Factors 1.9% Hawaii National 1.8% Home Street 0.6% Orient Bancor 0.2% SOURCE: SNL SECURITIES DATA AS OF 06/30/03. [LOGO OMITTED] Slide 18 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: STRONG CORE DEPOSIT BASE CPF -------------------------------------------------------------------------------- [GRAPHIC OMITTED] MMDA & Savings 55.4% Jumbo CDs 19.1% Demand Deposits 10.4% NOW & Other Transaction Accounts 2.8% Non-Jumbo CDs 12.3% TOTAL: $1,753.3M COST OF FUNDING: 0.70% CBBI -------------------------------------------------------------------------------- [GRAPHIC OMITTED] MMDA & Savings 58.3% Jumbo CDs 17.4% Demand Deposits 2.5% NOW & Other Transaction Accounts 3.0% Non-Jumbo CDs 18.8% TOTAL: $1,206.7M COST OF FUNDING: 0.73% PRO FORMA -------------------------------------------------------------------------------- [GRAPHIC OMITTED] MMDA & Savings 56.6% Jumbo CDs 18.4% Demand Deposits 7.1% NOW & Other Transaction Accounts 2.9% Non-Jumbo CDs 15.0% TOTAL: $2,959.9M COST OF FUNDING: 0.72% SOURCE: CPF AND CBBI FINANCIALS. NOTE: AS OF 12/31/03. [LOGO OMITTED] Slide 19 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: DIVERSIFIED LOAN PORTFOLIO CPF -------------------------------------------------------------------------------- [GRAPHIC OMITTED] CRE 38.5% Commercial 19.5% Consumer 4.7% Other 0.1% 1-4 Family 20.9% MultiFamily 6.6% Construction & Dev 9.8% TOTAL: $1,455.6M COST OF FUNDING: 5.97% CBBI -------------------------------------------------------------------------------- [GRAPHIC OMITTED] CRE 29.2% Commercial 15.8% Consumer 10.5% Other 0.5% 1-4 Family 34.5% MultiFamily 1.6% Construction & Dev 8.0% TOTAL: $1,318.0M COST OF FUNDING: 6.79% PRO FORMA -------------------------------------------------------------------------------- [GRAPHIC OMITTED] CRE 34.1% Commercial 17.7% Consumer 7.5% Other 0.3% 1-4 Family 27.3% MultiFamily 4.2% Construction & Dev 9.0% TOTAL: $2,773.5M COST OF FUNDING: 6.36% SOURCE: CPF AND CBBI FINANCIALS. NOTE: AS OF 12/31/03. [LOGO OMITTED] Slide 20 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP TRANSACTION ASSUMPTIONS o EARNINGS FOR CPF o $2.19 PER SHARE IN 2004, $2.35 PER SHARE IN 2005, $2.51 PER SHARE IN 2006 o EARNINGS FOR CBBI(1) o $6.40 PER SHARE IN 2004, $6.78 PER SHARE IN 2005, $7.19 PER SHARE IN 2006 o $19.5 MILLION OF COST SAVES o 17% OF COMBINED OPERATING EXPENSES o 67% REALIZED IN 2005, 100% IN 2006 o CORE-DEPOSIT INTANGIBLE ESTIMATED AT $24 MILLION, AMORTIZED OVER 10 YEARS o APPROXIMATELY $50 MILLION NET AFTER-TAX RESTRUCTURING CHARGE SOURCE: CPF MANAGEMENT. NOTE: THERE IS NO ASSURANCE THAT THESE PROJECTIONS WILL BE REALIZED AND ACTUAL RESULTS ARE LIKELY TO DIFFER SIGNIFICANTLY FROM SUCH PROJECTIONS. [LOGO OMITTED] Slide 21 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP SYNERGIES COMBINED NON-INTEREST COST SAVINGS EXPENSE ------------ 2004E 2005 2006 ----- ---- ---- COMPENSATION AND BENEFITS $62,300 $6,490 $9,735 NET OCCUPANCY 11,100 1,858 2,787 OTHER EXPENSES 42,000 4,604 6,906 ------ ----- ----- TOTAL NON-INTEREST EXPENSE 115,400 12,952 19,428 % OF TOTAL NON-INTEREST EXPENSE 11% 17% IMPLEMENTATION PLAN -------------------------------------------------------------------------------- o FULLY PHASED-IN SAVINGS OF $19.5 MILLION BY 2006 o HIRING FREEZE o ATTRITION RATE o VOLUNTARY RESIGNATION PROGRAM SOURCE: CPF MANAGEMENT. NOTE: THERE IS NO ASSURANCE THAT THESE PROJECTIONS WILL BE REALIZED AND ACTUAL RESULTS ARE LIKELY TO DIFFER SIGNIFICANTLY FROM SUCH PROJECTIONS. [LOGO OMITTED] Slide 22 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP SYNERGIES PRO FORMA EPS IMPACT OF PROPOSED TRANSACTION PROJECTED FOR FISCAL YEAR ------------------------- EARNINGS PROJECTIONS 2005 2006 ----------------------------- ---- ---- CPF STAND-ALONE GAAP EPS(1) $2.35 $2.51 PRO FORMA GAAP EPS(2) $2.57 $2.87 -------------------------------------------------------------------- ACCRETION TO CPF ($) $0.22 $0.36 ACCRETION TO CPF (%) 9% 14% -------------------------------------------------------------------- PRO FORMA CASH EPS(2) $2.62 $2.92 -------------------------------------------------------------------- ACCRETION TO CPF ($) $0.27 $0.41 ACCRETION TO CPF (%) 11% 16% -------------------------------------------------------------------- NOTE: NEITHER CBBI NOR ANY ANALYST HAS PUBLISHED ANY ESTIMATES FOR 2004, 2005 AND 2006. THERE IS NO ASSURANCE THAT THESE PROJECTIONS WILL BE REALIZED AND ACTUAL RESULTS ARE LIKELY TO DIFFER SIGNIFICANTLY FROM SUCH PROJECTIONS. NOTE: ASSUMES COST SAVES OF $13 MILLION IN 2005 AND $19.5 MILLION IN 2006. (1) SOURCE: CPF GUIDANCE. (2) ASSUMED EPS ESTIMATES FOR CBBI OF $6.40 IN 2004, $6.78 IN 2005 AND $7.19 IN 2006 PROVIDED BY CPF MANAGEMENT. [LOGO OMITTED] Slide 23 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: STRONG BALANCE SHEET ($ IN MILLIONS) 3/31/04 ------------------------------------------ CPF CBBI PRO FORMA --------- ---------- ------------ LOANS $1,461 $1,350 $2,811 ASSETS 2,284 1,874 4,348 DEPOSITS 1,805 1,309 3,114 SHAREHOLDERS' EQUITY 204 178 533 SOURCE: COMPANY PRESS RELEASES. DATA AS OF 03/31/04. BASED ON CPF STOCK PRICE OF $26.85 ON 04/22/04. [LOGO OMITTED] Slide 24 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: SOLID CAPITAL RATIOS ($ IN MILLIONS) 3/31/04 -------------------------------------- CPF CBBI PRO FORMA ------------- ----------- ------------ TANGIBLE EQUITY $203.5 $178.0 $216.9 TANGIBLE EQUITY/TANGIBLE ASSETS 8.91% 9.50% 5.38% LEVERAGE RATIO(1) 11.93 9.33 7.46 TIER 1 RISK-BASED RATIO 15.52 11.30 9.20 TOTAL RISK-BASED CAPITAL RATIO 16.85 12.56 10.46 -------------------------------------------------------------------------------- HIGH INTERNAL CASH GENERATION WITH OVER 20% RETURN ON TANGIBLE EQUITY. -------------------------------------------------------------------------------- SOURCE: CPF MANAGEMENT. (1) DEFINED AS TIER 1 CAPITAL DIVIDED BY AVERAGE TANGIBLE ASSETS. [LOGO OMITTED] Slide 25 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP CPF-CBBI: STRONG ASSET QUALITY 03/31/04 -------------------------------------- CPF CBBI PRO FORMA ------------- ----------- ------------ NPAS/LOANS & OREO 0.51% 0.34% 0.43% RESERVES/LOANS 1.70 2.13 1.91 RESERVES/NPLS 322.8 620.4 442.8 NCOS/AVERAGE LOANS 0.06 0.09 0.08 SOURCE: COMPANY PRESS RELEASES. Slide 26 [LOGO OMITTED]Central Pacific Bank [LOGO OMITTED] CITY BANK FIERCELY LOYAL BANKING APPENDIX [LOGO OMITTED] Slide 27 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP PRO FORMA EARNINGS IMPACT ($ IN MILLIONS) ------------------------- PROJECTED FOR FISCAL YEAR ------------------------- EARNINGS PROJECTIONS 2005 2006 -------------------------------- -------- -------- CPF'S EARNINGS $38.5 $41.2 CBBI'S EARNINGS 30.8 32.7 AFTER-TAX COST SAVINGS 7.8 11.7 CDI AMORTIZATION (1.5) (1.5) OTHER ADJUSTMENTS(1) (3.3) (3.3) -------- -------- PRO FORMA NET INCOME $72.4 $80.8 ======== ======== NOTE: ALL ESTIMATES FOR BOTH CPF AND CBBI PROVIDED BY CPF MANAGEMENT. THERE IS NO ASSURANCE THAT THESE PROJECTIONS WILL BE REALIZED AND ACTUAL RESULTS ARE LIKELY TO DIFFER SIGNIFICANTLY FROM SUCH PROJECTIONS. (1) INCLUDES OPPORTUNITY COST OF CASH COMPONENT OF CONSIDERATION AND RESTRUCTURING CHARGE. [LOGO OMITTED] Slide 28 [LOGO OMITTED] CITY BANK CENTRAL PACIFIC FINANCIAL CORP PRICING MECHANICS Total CBBI Common Shares Outstanding as of April 22, 2004: 4,395,096 Number of CPF Shares to be Exchanged Based on Common Shares Outstanding (1): 11,757,761 Cash to be Paid Based on Common Shares Outstanding (2): $87,901,920 CPF Shares of CBBI Percentage Shares of CBBI Percentage Stock Measuring Consideration to Receive to Receive to Receive to Receive Exchange Price (3) Per Share (4) Cash (5) Cash Stock (6) Stock Ratio (7) --------- ------------- ---------- ---------- ---------- ---------- -------- $ 22.00 $ 78.85 1,114,737 25.4% 3,280,359 74.6% 3.5843 $ 24.00 $ 84.20 1,043,906 23.8% 3,351,190 76.2% 3.5085 $ 26.00 $ 89.56 981,539 22.3% 3,413,557 77.7% 3.4444 ==================================================================================================================== $ 26.85 $ 91.83 957,234 21.8% 3,437,862 78.2% 3.4201 ==================================================================================================================== $ 28.00 $ 94.91 926,204 21.1% 3,468,892 78.9% 3.3895 $ 30.00 $ 100.26 876,775 19.9% 3,518,321 80.1% 3.3419 $ 32.00 $ 105.61 832,354 18.9% 3,562,742 81.1% 3.3002 (1) EQUAL TO 2.6752 MULTIPLIED BY THE COMMON SHARES OUTSTANDING. (2) EQUAL TO $20 MULTIPLIED BY THE COMMON SHARES OUTSTANDING. (3) CPF MEASURING PRICE IS DEFINED AS THE AVERAGE PRICE OF CPF'S COMMON STOCK OVER THE 10-TRADING DAY PERIOD PRIOR TO CLOSING. (4) EQUAL TO $20 + (2.6752 MULTIPLIED BY THE CPF MEASURING PRICE). (5) EQUAL TO AGGREGATE CASH TO BE PAID (BASED ON COMMON SHARES OUTSTANDING) DIVIDED BY THE CONSIDERATION PER SHARE. (6) EQUAL TO COMMON SHARES OUTSTANDING LESS SHARES TO RECEIVE CASH. (7) EQUAL TO THE PER SHARE CONSIDERATION DIVIDED BY THE CPF MEASURING PRICE. MERGER OF [LOGO OMITTED]Central Pacific Bank [LOGO OMITTED] CITY BANK FIERCELY LOYAL BANKING & CREATING A STRONGER HAWAII BANK MAY 2004