Turnaround specialist John Dean, who guided Central Pacific Bank from the brink of collapse to 13 straight profitable quarters, has committed to staying on as chief executive officer for up to two more years.
But in a major step forward in Central Pacific’s successor planning, the bank is elevating two of the company’s executives, Lance Mizumoto and Catherine Ngo, to be co-presidents, effective June 1, according to an announcement due out early Tuesday.
Mizumoto, 55, will be appointed president and chief banking officer of both the bank and holding company Central Pacific Financial Corp. He is currently executive vice president and chief banking officer.
Ngo, 53, will be appointed president and chief operating officer of both the bank and holding company. She is currently executive vice president and chief administrative officer.
The 66-year-old Dean, who also holds the president’s title, will relinquish that post but remain as CEO and take on the added position of chairman. He also has committed to serve as nonexecutive chairman beyond the two years, subject to board approval.
Crystal Rose, who has been chairwoman, will become the lead independent director for both the bank and holding company.
"This is just the continued evolution of hopefully a succession plan rather than an abrupt change," said Dean, adding that he expects one of the two co-presidents to eventually become CEO. "What we’re doing is a very deliberate succession plan as I become less involved in the bank but continuing my role as CEO."
In 2012 Dean promoted Mizumoto, who has been with Central Pacific since 2005, to chief banking officer to oversee all sales and service functions (customer-facing areas) of the bank. Ngo joined the bank in 2010 as chief administrative officer and now will be in charge of all operations and support areas.
"I will be taking on a number of additional support areas," Ngo said. "That will give me an opportunity to better coordinate the activities of all the support groups in supporting Lance and his line officers (relationship bankers) to meet the needs of our customers."
Dean said he’ll know when it’s time to step down as CEO after he looks at the results of how the three of them work as a team.
"It’s already a big step looking to Lance and Catherine to head up the day-to-day operations of the bank," Dean said.
Central Pacific, which has 875 employees and 36 branches, is the fourth-largest bank in the state with $4.8 billion in assets.
Mizumoto, who has more than 30 years’ experience in the financial services industry, said he is excited about the opportunity to be president.
"I’m also excited about the fact that John is staying on with us, and I’m excited about working together with Catherine," he said. "We’ve worked together the last three years and established a level of trust and teamwork."
Ngo, who has more than 20 years of executive experience in the banking and private equity industries, said she doesn’t foresee any difficulties having co-presidents.
"We have a great working relationship, and I would think that on most occasions we’d be able to work issues out between ourselves," she said. "And if there are some circumstances in which we’re not able to come to an agreement, we’ll be able to go to John for guidance."
Rose, who was named chairwoman in April 2011, said the bank has a strong executive management team, "and this realignment should further strengthen our organization over the longer term."
When Dean came onboard at Central Pacific as executive chairman in March 2010, Central Pacific already had received a $135 million bailout from the U.S. Treasury through the Troubled Asset Relief Program, more commonly known as TARP. But the bank was still operating on life support until he put together a management team and recapitalized the bank with $345 million. The majority of that amount, $325 million, came from private-equity investors. An additional $20 million came from a rights offering with existing shareholders.
The bank now has excess capital and recently bought back $125 million in stock through a tender offer with shareholders and separate agreements with its two largest shareholders.
"It’s certainly nothing short of a miracle the way the bank has turned around, and we have to thank John for his leadership during the capital raise," Mizumoto said.
Until the bank began its streak of profitable quarters, it lost $703.1 million from 2008 to 2010. And in Dean’s first quarter of the bank, he inherited $496 million in nonperforming assets, or loans delinquent for 90 days or more. At the end of last quarter, the bank had whittled down its nonperforming assets to $54 million.
Dean, who relinquished the chairman title when he became president and CEO in April 2011, said it’s important to promote people from within the company and the state, and said naming Mizumoto and Ngo as presidents rather than vice chairmen sends a stronger message.
"Most vice chairmen in banks are not members of the board," Dean said. "Oftentimes the use of vice chair can be overused, and I think it sends a stronger message to the market and employees to announce Lance and Catherine as presidents versus vice chairs."
