Frontier Bank customers on the North Olympic Peninsula will find their branches in Port Angeles, Port Townsend and Sequim closed today after government regulators seized the embattled banking corporation Friday.
When those branches and Frontier’s 48 other branches reopen Monday, they’ll be under the auspices of Union Bank, a San Francisco banking corporation with roots in Japan.
Frontier Financial Corp., the parent company of the longtime Everett-based institution, was closed by state regulators Friday. In nearly seamless succession, the Federal Deposit Insurance Commission immediately assumed receivership of the bank and sold it to Union Bank, which is owned by The Bank of Tokyo-Mitsubishi UFJ Ltd.
Peninsula customers’ deposits in Frontier are insured up to $250,000 and are at no risk, federal regulators said. Their accounts will fall under the auspices of Union Bank starting today, but branches are closed for reconfiguration and will open at regular business hours Monday.
Customers can still use their accounts by writing checks, using ATMs and debit cards and doing other banking through Frontier’s Web site.
The sale marks the end of a long fight by Frontier. Under increased scrutiny from regulators for more than a year, the bank has long struggled to break free from bad real estate loans and find investors to stop large losses.
Regulators started pounding the final nails in Frontier’s coffin earlier this year when it labeled the bank “critically undercapitalized” and told officials to turn things around by April 15 or risk being sold to the highest bidder.
Brad Williamson, director of the state Department of Financial Institution’s banking division, told The Herald of Everett that Frontier executives put up an admirable fight to recapitalize the bank.
But large loan losses related to construction projects coupled with the state’s economic climate was too high of a mountain to climb.
“I think in all cases, management tries desperately to bring the bank back to a safe condition,” Williamson said. “But [Frontier CEO] Pat Fahey and the management at Frontier — they really made a tremendous effort to recapitalize the institution.”
