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Frontier Bank losses in 2009 reach $295 million, announces possible FDIC intervention
SNOHOMISH COUNTY — The parent corporation that operates Frontier Bank announced Tuesday that it is "critically undercapitalized," meaning that government regulators could take control of them if it can't fix the situation within 90 days.
Everett-based Frontier Financial reported $295.1 million in losses in 2009 — compared to $258.8 million as originally reported.
According to other a release, Frontier officials said that the higher loss was due to the FDIC ordering the bank to set aside an additional $30 million to cover the possible cost of bad loans in the future.
Because of the revisions, Frontier fell into the "critically undercapitalized" category by the federal entity's requirements, meaning that the institution must be placed into "conservatorship or receivership within 90 days" of being labeled as undercapitalized unless the FDIC determines another plan of action.
"If Frontier Bank is placed into conservatorship or receivership, the Corporation would suffer a complete loss of the value of its ownership interest in Frontier Bank," officials said in the financial statement.
Frontier Bank, which has locations in Arlington, Smokey Point and Marysville, was founded in 1978.