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Hawaii Business 2012 CEO of the Year: John Dean of Central Pacific Bank

The complicated deal to save CPB

(page 3 of 3)

More than needed

Morimoto, while careful not to criticize prior CPB leadership, highlights the contrast between his road trips before Dean and with him. “It went a lot better with John,” Morimoto says. “We generated a lot of interest. Whereas previously I think we were only able to get two firms to even take a look at the company, with John, I think we had eight or 10 companies take a deeper look. And ultimately we got four term sheets to be our lead investors. In the structure that we needed to get CPB recapitalized, we only needed two lead investors. It’s our understanding from Sandler O’Neill, our investment banker, we were the first troubled recap to have more term sheets than we needed.”

That meant John Dean and the bank had some leverage, which would be critical as they negotiated the terms of the deal. “It allowed us to pick who we wanted to partner with,” Morimoto says. “Some of the people who wanted to invest in us may have had different game plans than we did. For example, they may have wanted to use this as a jumping pad to something more on the West Coast, more of a multistate organization. But John has always wanted to bring things more Hawaii-centric, something along the lines of what Bank of Hawaii did.”

Morimoto also points out that Dean was honest with investors, even when it complicated the transaction. For example, with private equity, the exit strategy for an investment is often through mergers and acquisitions. “The attraction,” Morimoto says, “is that with M&As, you generally get a premium to the market price. But John was very clear he didn’t think this was an M&A exit. He told them, ‘You will probably have to sell your shares back into the open market.’ ”

Of course, it wasn’t just reputation and leverage that made the deal. Faith helped. “We worked hard,” Dean says. “It was sell, sell, sell. But I would also tell you we believed in the story. Everyone there believed that, with the capital, we could make this bank profitable again. These equity capital people look at pitches all day long. If you’re not passionate, if you don’t believe what you’re saying, forget it.” 

 

John Dean timeline

Dean was born in Lawrence, Mass., on August 14, 1947. He graduated from Holy Cross College in Worcester, Mass., and received his MBA from the Wharton School at the University of Pennsylvania.

Photos courtesy of the Dean family

Dean at 9 months old.
Graduation picture from St. Mary’s of Redford High School in Detroit in 1965.
Dean and his wife, Sue, return from their Peace Corps duty in Westerm Samoa, via Rio de Janeiro, in 1972.
The Deans with their daughters, Monica and Sally, when they lived in Texas.
The Dean family on an Alaskan cruise in 2005. Left to right, Sue, Monica, Sally and John.
Interviewed in September by Susan Yamada at the Shidler College of Business’ Kipapa i ke Ala lecture series, which John founded and sponsored.
“Cupcake Wars,” a fundraiser for Aloha United Way.
Dean with his mother, Monica Dean, at her 90th birthday celebration in October.

 

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