By M.L. Dehm and John Wolcott SCBJ Freelance Writers
Everett-based Frontier Bank, one of the largest banks headquartered in the Puget Sound region, closed April 30 by order of the Federal Deposit Insurance Corp. All branches reopened under the Union Bank banner three days later
According to Tim Wennes, Union Bank vice chairman and head of retail banking, the organization hopes to complete the full transition in six to nine months.
“Our near-term goal is to provide as seamless a transition as possible for Frontier Bank employees and customers, and the long-term goal is to provide a safe and stable banking environment so that we can help our customers realize their financial goals, support career development and growth for employees, and be a strong partner in the community,” Wennes said.
He also said that the transition so far has been smooth with virtually no complaints from former Frontier Bank customers. This he attributed in large part to efforts of front-line employees who are helping guide customers through the transition process.
Also, Wennes said Union Bank’s culture of customer service, relationship banking and community involvement is similar to that of Frontier, which would allow for a smooth customer transition.
“Union Bank has been operating in Washington for more than 100 years, so there was some familiarity with our institution from Frontier Bank customers,” Wennes said. “Still, we had a small presence, which is why this acquisition made so much sense for us by helping to meet our goal of expanding in the Pacific Northwest.”
Union Bank is a San Francisco-based subsidiary of Tokyo-based Mitsubishi UFJ Financial Group and is currently one of the nation’s largest banks, with estimated assets of $86 billion.
“For local businesses here, our immediate plan is to deepen the existing customer relationships and provide businesses with a broad array of financial products and services to help small businesses, middle-market companies and major corporations meet their financial goals,” Wennes said.
The company will also have to work at rebuilding consumer trust that was shaken by Frontier Bank’s denial of troubles related to the recession and the collapse of the housing market. It was well known that the company had invested heavily in real estate loans and was undercapitalized. The FDIC had given Frontier an April 15 deadline to raise capital or face a forced sale or closure.
Former Frontier Financial Corp. CEO Patrick M. Fahey was recently named Union Bank’s regional chairman for the Pacific Northwest. Fahey, who worked fervently for months to rid Frontier Bank of soured real estate loans and to find a qualified buyer, said May 18, “It was very close, we almost made it, but then we got word that the FDIC had arranged a sale to Union Bank of California.” Impressed by Fahey’s efforts, and his decades of successful banking leadership before he was hired by Frontier Bank, Union Bank hired Fahey May 14. He will be based in Everett and report to Wennes in California.
“I accepted their offer to stay on because I was very impressed with these people and the approach they’ve taken,” Fahey said. “They put on a very nice town hall meeting in Bellevue the Sunday after they acquired Frontier. Most of the 700 Frontier employees were there. The bank is very sensitive to the communities they serve.”
Fahey said the transition is going smoothly and that former Frontier employees have found Union Bank to be “very good to work with.” He said it’s unfortunate that Frontier stockholders’ shares, including his own, were lost in the transaction.
“It’s not like a regular buyout (between banks), which often includes an exchange of stock,” he said, noting that the FDIC’s primary concern was to find a financially strong buyer.