UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities Exchange Act of 1934
Date of
Report:
March
24, 2009
Frontier
Financial Corporation
(Exact
name of registrant as specified in its charter)
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Washington
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000-15540
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91-1223535
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(State
of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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332
S.W. Everett Mall Way
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P.O.
Box 2215
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Everett,
Washington
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98204
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(425) 514-0700
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
£
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£
Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement
FDIC
Order
On March
20, 2009, Frontier Bank (“Bank”), a wholly-owned subsidiary of Frontier
Financial Corporation, entered into a Stipulation and Consent to the Issuance of
an Order to Cease and Desist (“Consent Agreement”) with the Federal Deposit
Insurance Corporation (FDIC) and the Washington Department of Financial
Institutions (DFI).
Under the
terms of the Consent Agreement, the Bank has agreed to:
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Have
and retain a qualified management
team.
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Strengthen
the Board of Director’s oversight including having the Board develop and
implement a capital plan and a comprehensive policy for determining the
adequacy of the allowance for loan and lease
losses.
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·
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Increase
and maintain its capital levels.
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·
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Reduce
its risk exposure to assets classified as “substandard” or
“doubtful.”
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·
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Refrain
from extending any additional credit to borrower’s whose loans have been
charged-off or are classified as “loss” and are
uncollected.
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·
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Refrain
from extending any additional credit to, or for the benefit of, any
borrower who has a loan, or other extension of credit, classified in
whole, or in part, as “doubtful” or “substandard” without collecting all
past due interest.
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·
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Revise
and implement lending and collection
policies.
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Revise
its Concentration Policy which must limit and systematically reduce the
number of commercial real estate and acquisition, development and
construction loans.
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·
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Develop
and adopt an overhead and profitability
plan.
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·
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Revise
and adopt a written liquidity and funds management policy and a liquidity
and funds management policy to reduce the Bank’s reliance on non-core
funding sources.
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Refrain
from paying dividends without prior written consent of the FDIC and
DFI.
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Notify
shareholders of the Consent
Agreement.
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Provide
quarterly progress reports to the FDIC and
DFI.
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All
customer deposits remain fully insured to the fullest extent permissible by the
FDIC. The Bank expects to continue to serve its customers in all
areas making loans, establishing lines of credit, accepting deposits and
processing banking transactions. The Bank has not admitted any
wrongdoing in entering into the Consent Agreement. The FDIC and DFI
did not impose or recommend any monetary penalties.
The above
description of the Order issued by the FDIC and DFI as well as the Consent
Agreement is qualified in their entirety by these documents which are attached
as
Exhibits 10.1
and
10.2.
FRB
Notice
The
Federal Reserve Bank of San Francisco has also notified Frontier Financial
Corporation (FFC) that it will be subject to an enforcement order from the
Federal Reserve. FFC is currently required to comply with notice and
approval requirements established by the Federal Reserve Bank relating to the
appointment of directors and senior executive officers as well as any change in
the responsibilities of any current senior executive officer, and is prohibited
from paying or agreeing to pay indemnification and severance payments except
under certain circumstances, and with the prior approval of the Federal
Reserve. In addition, FFC is restricted from declaring
any dividends, or making any distributions of interest or principal on trust
preferred securities without the prior written approval of the Federal
Reserve.
On March
24, 2009, FFC issued a press release regarding the Bank, a copy of which is
attached hereto as
Exhibit 99.1
.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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FRONTIER
FINANCIAL CORPORATION
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(Registrant)
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March
24, 2009
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/s/
Patrick M. Fahey
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(Date)
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Patrick
M. Fahey
Chairman
and CEO
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