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<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Business tip from Shannon Affholter with Moss Adams LLP 12/9/09 • Retailers turn shopping into an event 12/9/09 • Business book recommendation from Louise Stanton-Masten, president of the Everett Area Chamber of Commerce 12/9/09 • United Airlines orders 25 Boeing 787s 12/9/09 • Second Thursday Connect networking in Mill Creek 12/9/09 • Young professionals networking mixer in Everett 12/9/09 » More BIZINSIDER stories >   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, October 30, 2009 Frontier Bank parent company posts huge loss By Amy Rolph, Herald Writer EVERETT — Frontier Financial Corp. announced a $141.1 million third-quarter loss Thursday, up from a net loss of $50 million in the second quarter. That's the largest quarterly loss this year for the parent company of Everett-based Frontier Bank, and the latest in a string of ominous mileposts marking the bank's decline. Frontier's stock dropped 7.89 percent in trading Thursday, closing at 52 cents a share. Two years before, a share of the bank's stock was worth $21.88. The bank is aggressively seeking an investor to ease the impact of loan losses, Frontier executive Pat Fahey said Thursday. A merger with SP Acquisition Holdings, a New York-based acquisition company worth $427 million, was announced earlier this year. But bank officials called the deal off this month when it became clear federal regulators wouldn't approve the merger soon enough to meet the closing deadline. Fahey said Thursday that bank executives were “disappointed but not dissuaded” by the failed merger. “We're back in the hunt,” he said. Frontier has struggled under the weight of bad real estate loans for more than a year, facing censure from state and federal agencies and staff layoffs as it tried to free itself from a loan portfolio weighted heavily with construction projects. Fahey said he's hopeful about Frontier's chance of landing new investors, partly because of the thorough vetting the bank's finances were put through as part of the SP Acquisition Holdings deal and also because the economic outlook for the Northwest isn't as dismal as it was one year ago. “It's a totally different environment from when we first started our quest for capital,” Fahey said. He said he met with a number of potential investors during the last few weeks. “Based on the numerous discussions with investors we have had since the termination of the merger, we are optimistic we will be successful in raising additional capital,” Fahey said. The provision for loan losses increased $63 million for the three months ended Sept. 30, according to Frontier's quarterly report. That's compared to $97.9 million in the same period last year. The report also stated that the rate of growth in the amount of nonperforming assets decreased for the third consecutive quarter. “We're made some great progress in reducing our exposure to construction loans,” Frontier President John Dickson told analysts and investors in a conference call Thursday. Chief Credit Officer Rob Robinson said: “We continue to be aggressive at classifying problem loans into nonaccrual status and believe, based on current market conditions, we are at or near the bottom of this challenging housing market.” Frontier launched a direct-mail campaign in the third quarter, aiming to increase depositors. The mailings, which are still going out in the fourth quarter, show the outline of a rock climber and tell potential customers to “reach for a peak banking experience.” Inside, it reveals that opening a free checking account before Nov. 21 makes a depositor eligible for one of three gifts, including a personal GPS or a set of binoculars. Executives said the bank has had some success in gleaning depositors away from larger banks. Read Amy Rolph's small-business blog at www.heraldnet.com/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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