High-Touch

Clinton Arnoldus breaks tradition as the first non-Japanese chief of Central Pacific Bank.

Three decades later, Clinton Arnoldus — the new president, chairman and chief executive officer of Central Pacific Bank — still shakes his head as he recalls his first job performance review. The review was positive. But his former supervisors had one negative remark: Arnoldus rarely wined and dined clients.

“I was able to sell the products effectively, but they said that if I wanted to progress any further in the company, I had to smoke and drink,” Arnoldus says, about the former Fortune 500 construction company that hired him as a sales and marketing representative. While in college, Arnoldus had served on a two-year mission for the Church of Jesus Christ of Latter-Day Saints in Germany.

Mind you, this was in the early 1970s, when three-martini lunches and cigars were part of American corporate culture. “My first thought was ‘How about finance?’” he says.

New Guy on the Block: Clinton Arnoldus has taken over Hawaii's third-largest commercial bank in assets.

Transferring to the company’s finance department turned out to be the best career move. From 1972 to 1974, he worked in the company’s Amsterdam location. Over the next 30 years, he held executive positions at Scandinavian Bank Group in Los Angeles, Bank of America in Chicago, and Security Pacific National Bank in Los Angeles, Chicago and San Francisco.

Arnoldus most recently served as chairman, president and chief executive officer of Community Bank, a $1.3 billion commercial bank in Pasadena, Calif., before moving to Hawaii in January of this year to assume his new role. The bank plans to announce Arnoldus’ role as chairman, president and chief executive officer of the bank and holding company CPB Inc. (NASDAQ: CPBI), at the annual shareholders meeting in April. He will replace Joichi Saito, former chairman and chief executive officer.

It’s a watershed move for CPB Inc., which traditionally taps Japanese executives as bank chiefs. Arnoldus calls his appointment to the $1.84 billion bank, “a delicate transition,” not only for the Japanese management team but also for the bank’s Japanese-American clients. “This is a careful maneuver because we really value the Japanese,” he says. “There is a lot more we can do in the market because we have a very proud history of focusing on the Japanese market. We want to take this outstanding reputation we have for service, and make it available for everyone to enjoy.”

Otherwise, Arnoldus’ goals for the bank are straightforward, thanks to CPB’s stellar track record. The company reported record earnings for the fourth quarter of 2001, marking the tenth consecutive quarter of upward earnings. Here is Arnoldus’ agenda: Return on equity and cost efficiency. CPB Inc.’s cost-efficiency ratio for 2001 was 55 percent, down from 58 percent in 2000. Return on equity was 19 percent. Market reputation and employment. “We want to be the preferred name in people’s minds whenthey think of banking transactions. Employment? We want to be Hawaii’s preferred employer.”

Arnoldus has first-hand experience in transforming a troubled financial institution into the preferred employer in town. He became chief executive of First Interstate Bank of Nevada in 1993, fully aware that the bank had a troubled loan portfolio and regulatory problems. By the time he left in 1996, it was the No. 1 performing bank within the 13-state First Interstate organization. Wells Fargo acquired the bank, and Arnoldus left the following year to take over The Bank of New Mexico.

His secret? Says Arnoldus: “People respond a lot better to a leader who is involved in what they do, who will make the hard decisions but will still have the compassion in the process – the more heart you have in your job, the more effect you’ll have.”

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