FDIC tightens deadline for Frontier Bank

Published 10:36 pm Tuesday, March 23, 2010

EVERETT — Federal regulators have tightened the screws on Everett’s Frontier Bank, giving it only until April 15 to raise more capital or face a forced sale.

Bank officials announced the new deadline Tuesday, saying the Federal Deposit Insurance Corp. had issued it an order dated March 16.

The bank had earlier announced that the FDIC had declared it “critically undercapitalized” and given it 90 days to find investors or its own buyer.

The new order gives it a tighter deadline and also a specific amount of money to raise, said Frontier Chief Executive Patrick Fahey, who said he couldn’t disclose the amount.

“I haven’t given up,” Fahey said. “It’s not in my nature, and we continue our efforts on raising capital. There are interested parties and we continue to talk with them.”

The bank has appealed the FDIC’s review of its finances, saying its in better shape than the regulators believe. “We’re much better off than we were a year ago,” he said.

Fahey said the bank’s nonperforming assets are valued accurately now and should make Frontier interesting to investors or a buyer. He noted that many banks seeking investors haven’t had much success in the recent past.

“Things are different now that the economy has shown some signs (of life),” he said. “Where there’s life, there’s hope, and I’ll be redoubling our efforts again.”

The FDIC has issued a similar order to Lynnwood’s City Bank, giving it a deadline of April 10 to improve the bank’s financial position or face a forced sale.

Martin Heimbigner, president and chief executive of City Bank, said his team has been trying to sell the bank’s developable land to a national homebuilder.

“Our whole team is focused on raising capital, and we will continue to sell our houses,” he said.