Peninsula Daily News News Sources
EVERETT — Frontier Bank, which has three North Olympic Peninsula branches, has announced a new team of executives, part of an ongoing restructuring attempt aimed at fortifying the bank’s shaky footing.
The executives will oversee the four lending segments outlined in Frontier’s new business plan, which includes a scaled-back real-estate loan sector.
Frontier has been plagued by plummeting stock prices, defaulting loans and regulatory censure since the first signs of recession paralyzed the construction industry.
A federal cease-and-desist order earlier this year first called attention to the gravity of the bank’s situation.
Real-estate lending has been the Achilles’ heel of Frontier for about a year, when the bank’s loan portfolio was slammed by the crumbling real estate market.
The federal-issued cease and desist order explicitly requires that the bank de-emphasize commercial real-estate loans — and take a hard look at management structure.
In July, the parent company of Frontier Bank, Everett-based Frontier Financial, sold itself to a New York hedge fund, SP Acquisition Holdings, that planned to pay $24.4 million in stock and warrants and pump more than $400 million into the bank’s operations.
But that sale unraveled earlier this month, leaving Frontier to search for a new way forward.
In addition to Frontier, Spokane-based Sterling Savings Bank, which has branches in Port Angeles and Forks, is also operating under a federal cease-and-desist order.
Four consecutive quarters of losses totaling $879 million prompted the order Oct. 9.
It has resulted in a management shakup and an agreement with the Federal Deposit Insurance Corp. and state Department of Financial Institutions that requires Sterling to improve its lending procedures, increase board oversight and raise $300 million by Dec. 15 to buffer against a pileup of bad commercial real estate loans.
Frontier operates branches in Port Angeles, Port Townsend and Sequim as well as 48 other locations in Western Washington.
“The bank has successfully reduced its construction and development loans and commitments by over $1 billion in the past 12 months,” according to a statement last week from Frontier.
“Real-estate lending will be a continuing part of the revised business model, but at a reduced level.”
The bank’s strategy includes an added emphasis on commercial and retail banking along with private client services.
Dave Dorsey, 60, will be the executive vice president of Frontier’s real estate division, according to the statement. He has been with the bank since 2001, and formerly managed the mortgage department and commercial real estate for Everett.
Jim Liming, 58, will lead commercial banking for Frontier. He started Frontier’s Seattle office in 2003 and was more recently the regional manager of the bank’s metropolitan division.
Jeff Lewis, 42, will be executive vice president of retail banking, in which he’ll orchestrate the bank’s new emphasis on small-business banking. Lewis has been with the bank for two years as a senior vice president and senior branch operations manager.
Lyle Ryan, 57, will lead private client services, focusing on expanding Frontier’s wealth- management offerings. He’s been with the bank 30 years.
