 Aloha, and welcome to Business in Hawaii with Reg Baker, where a weekly show that broadcast live every Thursday at 2 o'clock for 30 minutes from 2 to 2.30. We focus on successful stories in Hawaii for businesses and their owners. There's also successful individuals that we highlight occasionally, and maybe some organizations that help those reach success. So today we're going to have Central Pacific Bank here today. We've got Susan Utsugi, who is the Senior Vice President and Director of Business Banking for the bank. And as we all know, and we've all been watching, Central Pacific Bank has done a miraculous turnaround in the last few years and has done very well, and Susan was a big part of the reason why. So Susan, welcome to the show. Thank you. Thanks for having me. So glad that you can join us today. Hi, you born and raised in Hawaii? Yes, born and raised in Hawaii, from IAEA. IAEA. So you went to IAEA High School? No, I actually went to Hawaii Baptist Academy. Aha, very good. All right, and then so you went there, and then you stayed in Hawaii, went to college, you went to the mainland? Went to the mainland. I graduated from Seattle University, where I got a degree in finance. A lot of people go to Washington, don't they? Yes, it's a beautiful place. Yes, and from what I understand, I don't know about Seattle, but I heard that Washington U has got a very large Hawaiian club. Yes, there's a lot of people from Hawaii that live there. Yeah, it's a popular place. So you majored in finance? Finance. All right, and then did you work on the mainland before you came home? No, actually right after I graduated, I came home. I had a position with one of the largest banks here in Hawaii, their matching training program. Very good. As a matter of fact, I think we probably worked at the same bank at one time. Right, you were at the higher level though. No, well, that's only because my floor was higher. No, but it was a great training program. As a matter of fact, my son is actually working in the bank of Hawaii as well. It's a great bank. A lot of people who started there, and then they kind of expanded and grew and went in other directions, so great training ground. But you were there for a while, and then eventually you transferred over or was recruited by Central Pacific Bank. Yeah, I was there for about 13 and a half years and actually made a boss. And I got a lot of good training there, and then my boss moved to Central Pacific Bank, which was sort of a shocker for us, and brought some of us over. So that's how I got over to Central Pacific Bank. Very good. Well, that's happened in other banks too. So, and then did you go over there in the lending area or in what role did you play when you first went to the CPV? So when I moved over, I was a business banking officer in their business banking department. And I've been there now for 16 years. Wow. It's impressive. And so you've been there through the challenging times, and now you're into the good times. Right. Things have worked really well. So it's a great experience to have gone through that. You learn a lot in that process. But you have risen through the ranks, and now you're heading up the department. And you're also on TV too once in a while. That was really hard. It wasn't. Well, you become well-recognized. I mean, a lot of people know who you are. Those advertisements are still running, right? Occasionally, I believe so. And it's funny because people who seem to watch Korean soap operas seem to recognize me the most. Oh. Well, I tell you what, I think we should probably talk to Catherine and say they need to renew those advertisements. Keep them going for a while, because I know a lot of people really enjoy those. So, but now you're there. You become a recognized face of CPV. You've gone through some challenges. I mean, what were some of your experiences while you were there? I mean, during the hard times, I mean, it must have been tough to get through that. Yeah. It was tough. You know, I was at Central Pacific Bank since 2000, and so the bank had gone through a lot of changes, especially in executive management. And prior to going to Central Pacific Bank, I always thought it was a Japanese bank. I really didn't know the history. A lot of people thought that. Right. The executive management came from Sumitomo Bank. And so, but there were a lot of changes where, you know, a publicly traded company, and as executive management changed, the bank went through changes, and then we got into our financial crisis. So it was tough. It was a very interesting time, and I learned a lot. And I'm glad I stuck it out because I learned so much. And I think now that we're over it, thankfully, and we're very successful, we don't want to forget what we went through. You want to learn from our lessons. You don't want to repeat history. No. Yeah. But the bank really, we had to, you know, bind together. Teamwork became a big deal, and that's one of our core values, that we had to live every day to make sure that we could get through that period. And thankfully, we have wonderful customers who stood by us and believed us. Well, I was just going to mention that, you know, that it's really important to get that team together and get that cohesiveness. Right. We need to have those loyal customers supporting that activity, too, and you had some of that. Yes. We did. I think if we had not been in Hawaii and had the kind of customers that we have, we might have had a different outcome. But our customers in Hawaii are very loyal, very supportive, and the bank is so thankful for that. And the people that stayed and worked with the turnaround, you know, were very loyal to, I think, we all really believed in the bank. Well, it obviously worked. I think I don't know it as well as I should, but I know that the CPB is hitting some good targets, some good numbers, and it's been miraculous the turnaround. You've been there both before and after. We're kind of in an evolving industry, you know, and so there's constant change going on. But what are some of the big differences have you seen between banking, you know, 10, 15, 20 years ago as opposed to today? Well, definitely technology plays a big part in that. And so, you know, we've always had a model of relationship banking. That's one thing that we don't want to change. I think although we may not see our customers as often because they don't come in as often because they don't have to, it's still important to have that personal touch and that they know somebody that they can call and they know they can count on, but certainly technology has played a big, has made a big difference. And it's changed both the front as well as the back of the bank. I mean, there's a lot of technology changes and a lot of cybersecurity issues too that comes with that, but it allows a lot faster processing of transactions, more immediate information is available. Right. You know, and so from a banking perspective, from a marketing perspective, customer service level, I think the technology has played a significant role in transforming the banking industry. So we've seen a lot of change in the way that banks have run from technology, but also, hasn't there been some regulatory changes too? I mean, you know, from the banking days I was involved and the banking days that I see today, there seems to be a lot more rules and regulations and maybe the parameters are a little bit more narrow in getting things done. Definitely. You know, regulation, compliance is a big issue for the bank. That's been a major initiative for Central Pacific Bank. So it's a very regulated industry that we work within. Well, and as it should be, I mean, the bottom line is that the money that the bank gets for the most part is the community's money. Exactly. It's the money that comes from the community and individuals in that community. Right. And it needs to be protected. Right. So after the financial crisis, you know, the public needed to feel like regulation was at a higher level. Right. Bring that confidence back. Correct. Right. And so have you, I mean, I know regulation is always tough to deal with, but it seems like you guys are making it work. Well, yeah, I think because, you know, we work within the parameters that we have to, but I think the customer relationship is really what drives us. And while we have certain constraints, you know, it's a matter of knowing your customer. When you know your customer and you have a relationship, you can identify the needs and the opportunities and they trust that you are looking out for their best interest. And that's what makes it work. Right. So even with all the technology and with the rules and regulations, it's still a relationship type business. Right. Right. And how does CPV establish those relationships? I mean, you've got branches and I guess you're out in the community a lot. Right. Well, so we have our branch network and our branch folks really make a point to get to know our customers, know them by name. And one of our core values is exceptional service. And so we try and deliver that every day. In business banking, we have 15 business bankers across the state and they have a portfolio of customers. And their job is to be the quarterback of that relationship. And you can only do that if you know that relationship. Well, you know the business, the business owner, you even know their family members and their employees. Well, because sometimes they become bank customers too. Exactly. That's what we, that's what we aspire. Yeah, no, that's a per, I mean, that's the best way that the customer itself becomes a testimonial to bring a new business. Yes. Yeah, that's the most perfect and, you know, situation you can ask for. Right. And so having those relationships and working with them, I also have found, and correct me if you've had a different experience, but sometimes the customers don't always know what it is that they really need to maybe make things work a little bit better. And that's where the relationship comes in. You can go in and kind of educate and create that awareness of what the options are. Right. And that's our job. You know, we shouldn't expect them to tell us what they want. It's our job to have good conversations and identify needs that they have, the need behind the need, and so that we can then provide solutions that are effective. That's, you know, in banking, it's really a people business and it's helping people. Right. You know, and helping them to achieve their goals, and they can be personal as well as business. Yes. And so, and I know you're in charge of the business banking side of things, but do you also help your customers on their personal needs too? Or is that something that you pass off to somebody else at some point? Well, so the business banking officer, as I mentioned, is the quarterback to the relationship. And within the bank, we offer all kinds of products and services. So that's what I like about Central Pacific Bank. You know, we're small enough where we can provide that personal attention, but we're also large enough where we can provide all of the products and services that our customers need. And so as the quarterback of the relationship, you know, you know your customer and then you're pulling in the subject matter experts to surround your customer and so become very customer centric. But you're providing them with the expertise that they need all around the customer. So they have a team really supporting that relationship. Right. And so that, you know, so if they decide that one of their goals is to go out and buy a house, you're there to help them with that or make an acquisition for the business, you can help them with that. That's right. Hi, I'm Chris Lietzo. If they have financial planning needs or investment needs, we'll bring in the experts there. And so it's the business banking officer isn't out there alone. They have their expertise primarily in lending, but they'll bring in all the other experts that we have within the bank. And of course lending is a big part of what the bank does and there are rules and regulations that are in place. You know, a lot of people being a CPA and working with clients, they all come and they go, oh, I've got this great idea and I need, you know, $100,000 and I can double my money and all this. And then they get confused as to why the banks aren't so receptive to their idea. It's important for people to know, and you could probably say this better than I can, that it's not always the bank's rules and regulations that are being enforced. I mean, the Federal Reserve comes out and the OCC comes in and does their audits. And there's very specific guidelines in what you are allowed to do before you can lend money to people. That's right. We are highly regulated and we have to buy by those regulations and we do get audited by the FDAC every year. But yeah, we have to help our customers understand, you know, we don't say, well, we can't do it because it's a regulation. It's important for us to explain so that they can then understand, maybe it's not in their best interest to do something like this. Well, at least not right now. And maybe there's some ways of tweaking things going forward that would maybe change that scenario or outcome a little bit. Right. And that's part of that relationship you develop. Now, I know that this segment went really quick and we're going to go on break real fast. But this is business in Hawaii with Reg Baker. I'm here today with Central Pacific Bank and we're chatting not only about the success of Central Pacific Bank and the turnaround that they've gone through, which is truly amazing, but we're also going to be talking a little bit about, you know, the products and services and how CPB can do good things for you. So we'll be right back in about a minute. Hi, I'm Donna Blanchard. I'm the host of Center Stage, which is on Wednesdays at 2 o'clock here on ThinkTech. On Center Stage, I talk with artists about not only what they do and how they do it, but the meat of the conversation for me is why they do it, why we go through this. A lot of us are not making our livings doing this, and a lot of us would do this with our last dying breath if we had that choice. And that's what I love to talk to people about. I hope you enjoy watching it and I hope you get inspired because there's an artist inside you too. Join us on Center Stage at 2 o'clock on Wednesdays. Bye. Hey, everybody, my name is David Chang, and I'm the new host of a new show, The Art of Thinking Smart. I'm really excited to be able to share with you secrets on giving yourself a smart edge in life. We're going to have awesome guests and great mentors of mine from the political, military, business, nonprofit, you name it. So it's something for everybody. Welcome back. This is Business in Hawaii with Reg Baker. And I forgot to mention at the beginning of this show, we're broadcasting live in the Think Tech Studios in downtown Hololulu out of the Pioneer Plaza. So if you want to come visit us, we're right there. All right, today we're talking with Central Pacific Bank, the head of the business banking operations. And she was very involved in the turnaround and getting things back on track. And she's got a very dynamic group that she works with. And we were just getting into a little bit of some of the lending and some of the relationships and partnering, if you will, and helping customers define exactly what their needs are and how to get there. Now, in the process of maybe going through the application process to get a loan and working with the bank to grow and expand, sometimes it gets a little in that gray area. And then there's an organization out there that might be able to help with that a little bit called the Small Business Administration. You work very closely with them. Yes, Small Business Administration is a wonderful partner for us. We do SBA guaranteed loans for small business. And basically what that means is that the bank will lend the money to the borrower and the SBA will guarantee 50 percent or more, depending on the type of program. But we're very active in the SBA express loan program, which is at 50 percent guarantee. And the SBA actually waived their SBA loan fees for our loans 150,000 and under through the next fiscal year. And that's significant because I know they can tend to be a little bit high, but they waived it in order to stimulate a little bit of business there. Right, right. And that's actually worked because I think the loan volume actually in Hawaii has been setting some records. Yes, yes. In fact, Central Pacific Bank has always been involved with small business. If you look at our roots, I don't know if you're familiar with it. But when the bank first started, we were founded by World War II heroes, veterans who came back. The 4.2. Yes. And, you know, they tried to get business loans to start their small business or home loans to buy home. And they were having difficulties. So they actually started their own bank. And so today the bank continues that legacy. So we're very proud. We have been the small business administration lender of the year in our category two for 10 out of the last 12 years. You know, that's amazing. Yeah, that's a real track record. Yeah, we're very, you know, happy that we can do that for our community because, as you know, we're a small business is the engine, a small engine, but small but mighty engine in our community. It is. And if you use the definition at the federal level for small business, I mean, that's 97% of all businesses in Hawaii, representing well over half of the domestic product in Hawaii. So it's truly a powerful and it needs to be protected. Yes. It's a powerful engine of the economy. It needs to be protected and groomed. And I think that the same number is a little over 50% of the employment in Hawaii is with small business. So it's not something to be ignored. Right. And you know, you mentioned or I mentioned 442 and that's the roots of the CPV. But the SBA also has a veterans type of program as well, and they've got different programs to help minorities and women and veterans to get into business. In fact, the SBA just ended its fiscal year end on September 30th, and they announced their awards. And Central Pacific Bank was also a veteran lender of the year. So that was a nice recognition for us. It was. So we do try and, you know, with our business bankers, try and be a resource for their customers out there. And there are so many great services and resources for a small business at free or very low cost. So SBA is one of them and scores another. Score ACE is still out there. Yeah. And I'm involved in another organization called the Patsy Teemings Center for Business and Leadership, which is funded by the SBA. And their goal is to help women in business. And they're very active. They've got a, I see them in different programs and events all over town. Yes. So they offer a wonderful menu of classes and training and even counseling for small business owners. Women who wanna maybe start or have started and need help, wanna get to the next level. And we also launched this year our leadership program. So it's called the Patsy Teemings Leadership Alliance. And, you know, when we asked Patsy Teemings' daughter, Wendy, if we could use her name when the business center started, it was important to her that the center not just be a center for business, but also a center for leadership. So earlier this year, we launched the first cohort and we have 14 women who are up-and-comers, emerging leaders from their respective organizations. How long is the program for? It's a six month program. Wow. And so we're right about in the middle of the program and we spent a lot of time creating a curriculum that we found women leaders need as they're coming up through the ranks. So we're very happy about that and we're right in the middle of our program now and looking forward to the next cohort next year. Well, maybe when you get close to graduation, do they have awards as to top graduate or anything like that out of the program? I don't know if we have awards, but we'll definitely have a wonderful ceremony to celebrate. Well, we should maybe get somebody on the show to talk about some of the experiences that they had during the program and maybe get somebody from the Patsy. You're on the board? I'm on the advisory board and it's actually a program under the YWCA of Oahu. Terry Funakoshi is the executive director and it'll be great to bring some of the participants. You can come back, Terry can come back. We can bring one of the graduates and we can talk about what kind of program it was and how beneficial it is. Yeah, that'd be great. So there's a lot of organizations out there and it sounds like you or CPB are both involved with all of these, promoting the business activities and success of businesses in Hawaii. So I think CPB needs to be congratulated on that. That's a... Thank you. And so not only have you turned things around, got back on track, you're a strong organization again, but you're also giving back to the community and engaging with them. Yes. When you're dealing with some of your customers in the banking, business banking world, they come to you and they're at various degrees of success or in the business cycle of their company. Right. From your experience of all this, what do you think are some of the specific challenges that you might be experiencing that you've seen that you can give some advice on? Yeah, you know, business owners are so busy. They have to wear a lot of hats and sometimes it's hard to take time out and work on your business. Is it in your business? And so I think it's important for them to do that and I think you would appreciate and know that understanding their financial position is very important. Business owners are not accountants necessarily and that's okay, but they should include somebody on their team, their CPA or their accountant, who can help them understand. I think it's important for them to know the basics so that they can really use their financial statement, hopefully they're doing it on a monthly basis to help them make decisions and help them maneuver and there are resources out there that we've talked about that can help them do that. So I think that's important. Management is really the key I think to a business success. And it's hard to manage something if you can't measure it. So having a measurement type of function within an organization, it doesn't necessarily have to be measuring the PNLs and the balance sheet, but you measure customer activities and number of accounts. There's a sales focus, a market's focus of finance, but you have to be able to have that measurement capability in order to properly manage your organization. And you know, time management, business owners like I said are busy and so we try and provide services that help them save time or save money. So we've introduced Bob. Oh, Bob, is that a new hire? For those who know Central Pacific Bank, it's not Bob, he's actually the only Bob in the bank, but Bob is our business online banking service and it's a free service. It allows business owners to have multiple users and you can actually set access levels for security purposes. Very necessary these days. Right, and you can do free bill payment, free mobile deposits. I'm hearing free in there. Yes. Wow. And for a small fee, you can also do ACH transactions, which is something that small business will save time for small business, time and money. So we're excited about that. Now, I hope I don't step on my toes here, but can you do the picture, the check and deposit that here? I can, yes. Wow. That's our mobile deposit service. That is so neat. Free. I've tried to play with it, deposit the same check four or five times. It doesn't work, but it's kind of neat to be able to do that and go into the bank. Right. Yeah. And so you see Bob is something that's going to, I guess continue to transition the bank into that electronic digital world. Right. Yeah, I think there's going to be a lot more, technology will continue to play a part as the bank evolves and provides services to our customers that they really appreciate, especially business owners, because they don't have the kind of time that others may and they're wearing so many hats and whatever we can do to help them, like I mentioned, save time, save money and do their business better. Well, and that's always a challenge. And you've got the demographics today, you've got some of the older generation that likes more of a, go to the branch and see the person and talk to them in some ways, that's the way they socialize. And then you got other people that they just love to take the pictures of the checks or they can just automatically pause it into the account, they never have to go in there. And so you've got this opposing type of process that you've got to have these relationships, but yet you get these relationships in totally different ways. Right, right. And the millennials, my daughter's a millennial, I don't think she ever goes into the bank, but on the other hand, I tell her, you should know someone there, because when you have a problem, it's good to call someone who knows you and you know them. But my son's in San Francisco, one of my boys there in San Francisco, and occasionally I might send him a couple dollars here and there. And so the first time he asked, I broke out my checkbook and I was gonna write him a check and he went a little bonkers. He said, what in the world are you doing? Just go on your phone and send me the money. And I go, wow. So I learned real quick how to do that, which was probably a mistake. My daughter will take any form of payment. Yeah, that's good. Now there is, talk about the relationships. I mean, you're transitioning or focusing on any particular groups these days, trying to get a foothold into any industry or profession. Yeah, we've been really focusing on the healthcare industry, specifically dentists and physicians. And we found that, especially in, there's a shortage of medical professionals in Hawaii. And so we want to make sure as dentists, for example, as they're retiring that we can help young dentists acquire these practices so that they can maintain the practice. Facilitate that transition, succession. Very good. And my mistake, we just got into a really big conversation. I'd love to continue, but you know what? We've run out of time. Oh, shut up. So it just went quick. So, but yeah, I think the dentist in the healthcare industry needs a lot of help in a lot of different ways. And there's a direct benefit to the community when we're able to do that. So we need, I think I applaud you for NCPB for taking a look at that. But this is Reg Baker and I'm the host of Business in Hawaii. We broadcast live every Thursday from two to two 30. And we focus on success stories in Hawaii. And we just had a really great success story here with Susan and with CPB. We wish them all the well in the future. And hopefully we can have them come back again. Until next week, aloha.