EVERETT — The acquisition of Frontier Financial Corp. by a take-over company will pave the way for expansion into Southwest Washington and Oregon, bank officials said in a conference call to investors Monday.
The parent company of Frontier Bank announced late last week it would be acquired by SP Acquisition Holdings, a blank-check company with more than $400 million to invest in the recession-battered bank.
Frontier CEO Pat Fahey told investors Monday that the injection of capital will help cut ties with a string of non-performing real estate loans and give the bank of shot of energy that could aid plans to expand southward into Oregon.
“Frontier’s position in Oregon is not well developed.” Fahey said.
Ultimately, the goal is to make Frontier a “more progressive and growth-oriented bank,” he said.
Frontier’s 51 branches are mostly consolidated along the Interstate-5 corridor between Bellingham and Tacoma. The bank wants to push south into Clark County, and add to its three branches open near Portland.
The Oregon branches have been with Frontier since the acquisition of the Bank of Salem in late 2007. Oregon’s deposit market is half comprised of four national banks, creating “significant opportunity” for smaller, community banks, Frontier officials said.
The merger is subject to shareholder approval, and is expected to be finalized in the fourth quarter of this year.
SP Acquisition Holdings is a so-called “blank-check” company organized for the purpose of acquiring other companies. It is headed by Warren Lichtenstein, the New York-based manager of activist hedge fund Steel Partners.
Lichtenstein, who will serve as chairman of the board at Frontier after the merger is finalized, told shareholders Monday that Frontier is in a positioned to be a “growth platform.”
“Frontier will be distinguished as a survivor in today’s marketplace,” he said.
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