EVERETT — Frontier Financial, which has struggled for more than a year to free itself from soured real estate loans, has until April 15 to raise more capital or sell itself to the highest bidder.
The Everett-based parent of Frontier Bank becomes the latest Western Washington banking company to get such an ultimatum from the Federal Deposit Insurance Corp. The order, known as a supervisory prompt corrective action directive, often represents a bank’s last chance to fix itself before regulators step in and take it over, The Seattle Times reported.
The directive, dated March 16 but not made public until today, also restates several restrictions Frontier has operated under for the past year, relating to such things as accepting or renewing brokered deposits, paying dividends and limiting the rates it pays on deposits.
Last week, Frontier restated its 2009 financial results, increasing its loss to $295.1 million from the $258.8 million it initially reported. The higher loss occurred mainly because the FDIC ordered Frontier Bank to put aside an additional $30 million to cover the expected future cost of the bad loans.
Frontier Bank has three branches on the North Olympic Peninsula — Port Angeles, Port Townsend and Sequim — as well as 48 other locations in Western Washington.
