Frontier Financial Corporation (NASDAQ: FTBK) today announced
results for the three and six months ended June 30, 2009. For the
three months ended June 30, 2009, the Corporation reported a net
loss of $50.0 million, or ($1.06) per diluted share, compared to a
net loss of $33.8 million, or ($0.72) per diluted share, for the
three months ended March 31, 2009, and net income of $2.1 million,
or $0.04 per diluted share, for the three months ended June 30,
2008. For the six months ended June 30, 2009, the Corporation
reported a net loss of $83.8 million, or ($1.78) per diluted share,
compared to net income of $17.6 million, or $0.37 per diluted
share, for the same period a year ago.
The results for the three and six months ended June 30, 2009,
reflect continued pressure from an uncertain economy and the
negative impact on the local housing market. The ratio of
nonperforming assets has increased to 20.53% of total assets at
June 30, 2009, up from 16.25% at March 31, 2009, and 2.97% a year
ago. Because of this continued pressure, the provision for loan
losses was $77.0 million for the three months ended June 30, 2009,
compared to $58.0 million and $24.5 million for the three months
ended March 31, 2009 and June 30, 2008, respectively. For the six
months ended June 30, 2009, the provision for loan losses totaled
$135.0 million, compared to $33.5 million for the same period in
2008. Net charge-offs for the three and six months ended June 30,
2009, totaled $90.2 million and $149.8 million, respectively,
compared to $6.5 million and $9.5 million, respectively, for the
same periods a year ago.
Despite these challenging times, the Board of Directors and
management continue to take important steps to strengthen the
Corporation. Management has been diligently working to reduce the
concentration in real estate construction and land development
loans, and has successfully reduced these portfolios by $916.0
million, or 37.1%, from June 30, 2008 to June 30, 2009, including
undisbursed loan commitments, as defined by the FDIC.
As part of our ongoing strategy to reduce noninterest expense,
the Board of Directors voted to suspend the Corporation's matching
of employee 401(K) Plan contributions, effective May 1, 2009. This
cost saving measure is expected to reduce noninterest expense by
approximately $1.7 million annually. This is in addition to other
previously announced expense reduction measures; including
reductions to executive compensation, salary freezes and the
elimination of performance bonuses and discretionary profit sharing
contributions to the 401(K) Plan for the year ended December 31,
2008.
On June 11, 2009, we announced a workforce reduction of
approximately six percent of the workforce, effective immediately.
The action was taken as the result of an ongoing review of Bank
operations to identify ways to operate more efficiently and
continue to adjust the Bank's structure to reflect current economic
conditions. The reductions occurred at all levels and in all parts
of the Corporation. The departing employees received severance pay
based on their years of service. This reduction resulted in a $360
thousand pre-tax charge in the second quarter of 2009 and is
expected to provide an annual pre-tax cost savings of approximately
$2.5 million.
Subsequent to June 30, 2009, the decision was made to close our
downtown Poulsbo branch as a result of our continuing efforts to
reduce noninterest expense. We currently have another Poulsbo
branch that is within 0.8 miles of the branch being closed, and
therefore, we do not expect our customers to be adversely affected
by the closure. This branch closure had no material effect on our
consolidated financial statements for the period ended June 30,
2009.
Patrick M. Fahey, Chairman and CEO of Frontier Financial
Corporation, said, "While economic conditions remain difficult, we
have made progress in a number of areas as noted in this report. I
am pleased with the efforts of our staff to maintain and build
customer relationships, to control expenses and resolve problem
loans. While we have reduced the concentration in acquisition,
construction and development loans significantly from a year ago,
this continues to be our primary challenge, despite signs of
recovery in the housing markets."
As noted in our March 25, 2009, Form 8-K filing, Frontier Bank
("Bank") entered into a Stipulation and Consent to the Issuance of
an Order to Cease and Desist ("FDIC Order") on March 20, 2009 with
the Federal Deposit Insurance Corporation ("FDIC") and the
Washington Department of Financial Institutions, Division of Banks
("DFI") resulting from a June 30, 2008 examination. In addition, on
July 2, 2009, Frontier Financial Corporation entered into an
agreement with the Federal Reserve Bank of San Francisco ("FRB")
resulting from the same examination. The Corporation and the Bank
have been actively engaged in responding to the concerns raised in
the FDIC Order and FRB Agreement, and we believe we have already
addressed all of the regulators' requirements, with the exception
of increasing Tier 1 capital, in which efforts are currently
underway.
Liquidity
We continue to closely monitor and manage our liquidity
position, understanding that this is of critical importance in the
current economic environment. Attracting and retaining customer
deposits remains our primary source of liquidity. Noninterest
bearing deposits increased $9.4 million, or 2.4%, from December 31,
2008 to June 30, 2009, and $15.6 million, or 4.0%, from a year
ago.
In an effort to increase on-balance sheet liquidity, we have
been focused on restructuring our balance sheet, and in particular,
reducing the loan portfolio. For the first six months of 2009,
total loans decreased $362.5 million, or 9.6%, compared to December
31, 2008. Year-over-year, total loans decreased $391.1 million, or
10.3%. Additionally, we have increased our federal funds sold
balances to $289.9 million at June 30, 2009, an increase of $172.1
million from December 31, 2008, and $271.6 million from a year
ago.
Capital
We are currently taking steps to strengthen our capital
position. We continue to look at adding capital through a private
equity investment and have engaged an investment banking firm to
help facilitate this process. Emphasis has also been placed on
shifting higher risk weighted assets into lower risk weighted
categories for the purpose of calculating capital ratios. At June
30, 2009, our total risk-based capital and Tier 1 leverage capital
ratios were 9.42% and 6.74%, respectively, and continue to be above
the established minimum regulatory capital levels. Our tangible
common equity ratio was 6.74% at June 30, 2009.
Review of Financial Condition
Loans
At June 30, 2009, total loans, including loans held for resale,
were $3.42 billion, compared to $3.78 billion at December 31, 2008,
and $3.81 billion at June 30, 2008.
The decreases in total loans at June 30, 2009, compared to the
year ended 2008 and a year ago, is attributable to decreases in new
loan originations, loan pay downs and increased loan charge-offs.
With few exceptions, we have suspended the origination of new real
estate construction, land development and completed lot loans. New
loan originations for the first six months of 2009 totaled $77.7
million, compared to $583.7 million for the same period in
2008.
Management continues to recognize loan quality deterioration on
a timely basis and aggressively address work out strategies. Net
charge-offs for the three and six months ended June 30, 2009,
totaled $90.2 million and $149.8 million, respectively, compared to
$6.5 million and $9.5 million, respectively, for the same periods a
year ago. Due to the increased net charge-offs, the Corporation has
adjusted its income tax provision to claim these losses as current
tax deductions.
Allowance for Loan Losses
The total allowance for loan losses was $98.6 million, or 2.89%,
of total loans outstanding at June 30, 2009, compared to $112.6
million, or 2.98%, at December 31, 2008, and $78.7 million, or
2.07%, at June 30, 2008. The allowance for loan losses, including
the reclassified allocation for undisbursed loans of $1.3 million,
would amount to a total allowance of $99.9 million, or 2.92%, of
total loans outstanding at June 30, 2009.
Asset Quality
Nonperforming assets are summarized as follows (in
thousands):
June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Commercial and
industrial $ 27,092 $ 12,745 $ 12,908 $ 1,256 $ 394
Real estate:
Commercial 73,130 14,527 10,937 2,986 -
Construction 267,102 286,342 181,905 135,419 96,526
Land
development 267,907 217,082 177,139 40,602 13,450
Completed lots 88,072 94,438 34,005 17,949 7,872
Residential
1-4 family 40,433 30,521 17,686 6,985 1,010
Installment and
other 822 718 645 - 684
---------- ---------- ---------- ---------- ----------
Total nonaccruing
loans 764,558 656,373 435,225 205,197 119,936
Other real
estate owned 54,222 18,874 10,803 3,693 3,681
---------- ---------- ---------- ---------- ----------
Total
nonperforming
assets $ 818,780 $ 675,247 $ 446,028 $ 208,890 $ 123,617
========== ========== ========== ========== ==========
Restructured
loans - - - - -
Total loans at
end of period
(1) $3,416,219 $3,659,510 $3,778,733 $3,832,052 $3,807,278
Total assets at
end of period $3,987,403 $4,154,267 $4,104,445 $4,244,963 $4,156,721
Total nonaccruing
loans to total
loans 22.38% 17.94% 11.52% 5.35% 3.15%
Total nonperforming
assets to
total assets 20.53% 16.25% 10.87% 4.92% 2.97%
(1) Includes loans held for resale.
The ratio of loans past due over 90 days was 20.3% of total
loans at June 30, 2009, compared to 8.9% at December 31, 2008, and
3.2% at June 30, 2008. There were no loans 90 days or more past due
and still accruing interest at June 30, 2009.
Results of Operations
Net interest income
Net interest income for the three months ended June 30, 2009,
was $21.4 million, compared to $23.8 million for the three months
ended March 31, 2009, and $44.9 million for the three months ended
June 30, 2008. Net interest income for the six months ended June
30, 2009, totaled $45.2 million, compared to $92.3 million for the
same period a year ago.
Net interest income decreased $2.3 million, or 9.7%, for the
three months ended June 30, 2009, compared to the linked quarter.
For the period, changes in average earning assets and interest
bearing liabilities increased net interest income by $347 thousand
whereas changes in interest rates decreased net interest income by
$2.6 million. For the second quarter of 2009, average earning
assets decreased $213.7 million, or 5.1%, and average interest
bearing liabilities decreased $175.0 million, or 5.0%. The average
quarterly yield on earning assets decreased 29 basis points to
4.66% for the second quarter 2009, compared to 4.95% for the first
quarter 2009. The average cost of funds decreased 18 basis points
for the same period.
For the three months ended June 30, 2009, net interest income
decreased $23.5 million, or 52.2%, compared to the same period a
year ago. For the period, changes in average earning assets and
interest bearing liabilities decreased net interest income by $5.8
million and changes in interest rates decreased net interest income
by $17.7 million. For the quarter ended June 30, 2009, average net
earning assets (earning assets less interest bearing liabilities)
totaled $631.4 million, compared to $698.4 million a year ago, a
decrease of $67.0 million, or 9.6%. The average yield on earning
assets was 4.66% for the second quarter 2009, down 282 points from
7.48% for the second quarter 2008. The average cost on interest
bearing liabilities was down 52 basis points for the period.
For the six months ended June 30, 2009, net interest income
decreased $47.1 million, or 51.0%, compared to the six months ended
June 30, 2008. For the period, average earning assets increased
$190.9 million, resulting in an additional $1.7 million of interest
income. Average interest bearing liabilities increased $234.5
million for the six months ended June 30, 2009, compared to the
same period a year ago, resulting in $10.1 million of additional
interest expense. Therefore, changes in average earning assets and
interest bearing liabilities for the six months ended June 30,
2009, compared to the same period a year, negatively impacted net
interest income by $8.4 million. Changes in interest rates reduced
net interest income by $38.7 million for the same period.
Year-over-year, the average yield on earning assets and average
cost of funds decreased 303 basis points and 64 basis points,
respectively.
The annualized tax equivalent net interest margin was 2.21% for
the three months ended June 30, 2009, compared to 4.63% for the
three months ended June 30, 2008, a decrease of 242 basis points.
For the three months ended June 30, 2009, the reversal of $5.4
million of interest accruals lowered the tax equivalent net
interest margin by approximately 55 basis points. The remainder of
the decrease in net interest margin can be attributed to the
increase in total nonaccruing loans, lower loan fees as a result of
reduced loan originations and a reduction of average outstanding
loan balances.
The annualized tax equivalent net interest margin was 2.26% for
the six months ended June 30, 2009, compared to 4.82% for the six
months ended June 30, 2008, a decrease of 256 basis points. For the
six months ended June 30, 2009, the reversal of $11.7 million of
interest income on nonaccrual loans lowered the tax equivalent net
interest margin by approximately 58 basis points. The
year-over-year decrease in the tax equivalent net interest margin
can also be attributed to the increase in total nonaccruing loans,
as well as, decreases in interest rates by the Federal Reserve, and
the resulting repricing of variable rate loans at lower rates. At
June 30, 2009, the Federal Funds rate was 0.25%, down 175 basis
points from 2.00% at June 30, 2008. In addition, loan originations
for the six months ended June 30, 2009 decreased 86.7%, compared to
the same period a year ago, resulting in lower loan fees.
Also contributing to the decrease in the annualized tax
equivalent net interest margin for the three and six months ended
June 30, 2009, compared to the same periods in 2008, was the change
in mix of earning assets. As previously mentioned, in an effort to
increase on-balance sheet liquidity, we have increased federal
funds sold balances. For the second quarter of 2009, average
federal funds sold accounted for approximately 6.1% of total
earning assets, compared to 0.05% for the second quarter of 2008.
For the six months ended June 30, 2009 and 2008, average federal
funds sold accounted for approximately 6.8% and 0.2% of total
earning assets, respectively. Typically, federal funds sold are a
lower earning asset and currently yield a rate of 0.25%.
Noninterest income
For the three months ended June 30, 2009, noninterest income
totaled $3.6 million, compared to $4.3 million for the three months
ended March 31, 2009, and $4.2 million for the three months ended
June 30, 2008. For the six months ended June 30, 2009, noninterest
income totaled $7.9 million, compared to $10.5 million for the same
period a year ago.
Noninterest income decreased $732 thousand, or 16.9%, for the
three months ended June 30, 2009, compared to the linked quarter,
and $608 thousand, or 14.5%, compared to the same period a year
ago. For both periods, the decrease in noninterest income is
primarily attributable to the net loss on other real estate owned
and the decrease in other noninterest income. During the second
quarter 2009, we recognized a net loss of $451 thousand related to
other real estate owned, as the result of a $3.8 million valuation
adjustment, partially offset by a $3.3 million gain on sale of
other real estate owned. The valuation adjustment was the result of
declines in the market value of these properties subsequent to
foreclosure. The linked quarter and year-over-year decreases in
other noninterest income are primarily attributable to decreases in
insurance and financial service fees and annuity commissions
generated by our Trust department.
For the six months ended June 30, 2009, noninterest income
decreased $2.6 million, or 24.7%, compared to the six months ended
June 30, 2008. The decrease in noninterest income for the period is
primarily attributable to the $2.6 million decrease in gain (loss)
on sale of securities. For the six months ended June 30, 2009, we
recognized a $102 thousand loss on sale of securities, compared to
a $2.5 million gain on sale of securities for the six months ended
June 30, 2008. For the six months ended June 30, 2008, we sold our
stock in Skagit State Bank for a gain of $2.0 million and recorded
a one-time gain of $274 thousand related to the required
liquidation of a portion of our stake of VISA, Inc., which went
public in March 2008.
Noninterest expense
For the three months ended June 30, 2009, total noninterest
expense was $25.4 million, compared to $23.3 million for the three
months ended March 31, 2009, and $21.5 million for the three months
ended June 30, 2008. For the six months ended June 30, 2009, total
noninterest expense was $48.7 million, compared to $43.1 million
for the six months ended June 30, 2008.
For the three months ended June 30, 2009, noninterest expense
increased $2.1 million, or 9.0%, compared to the linked quarter.
Other noninterest expense totaled $10.3 million for the three
months ended June 30, 2009, compared to $7.7 million for the three
months ended March 31, 2009, an increase of $2.6 million, or 33.1%.
The most significant increase related to the $1.9 million special
FDIC insurance assessment to be paid in the third quarter of 2009.
In addition, foreclosure expense increased $387 thousand,
collection expense increased $337 thousand and legal fees increased
$159 thousand. The increases in these expenses are directly related
to the increase in nonperforming assets during the period.
For the three months ended June 30, 2009, noninterest expense
increased $3.9 million, or 17.9%, compared to the same period a
year ago. For the same period, other noninterest expense increased
$4.9 million, or 91.5%. The increase in other noninterest expense
for the period was primarily attributable to the $4.8 million
increase in FDIC insurance assessments and the one-time 5 basis
point special assessment to be paid in the third quarter of
2009.
For the six months ended June 30, 2009, noninterest expense
increased $5.6 million, or 13.0%. For the period, salaries and
employee benefits decreased $1.9 million, or 7.3%, primarily as the
result of the elimination of bonus and incentive pay, a reduction
in executive compensation, a moratorium on hiring and a reduction
in force. At June 30, 2009, full time equivalents ("FTE") employees
totaled 714, down from 813 at June 30, 2008. In addition, the Board
of Directors voted to suspend the Corporation's matching of
employee 401(K) Plan contributions, effective May 1, 2009.
The increase in other noninterest expense for the six months
ended June 30, 2009, over the same period in 2008, is primarily
attributable to an increase in FDIC insurance assessments and the
one-time special assessment of 5 basis points to be paid in the
third quarter of 2009.
Certain amounts in prior years' financial statements have been
reclassified to conform to the 2009 presentation. These
classifications have not had an effect on previously reported
income or total equity.
Frontier Financial Corporation is a Washington-based financial
holding company providing financial services through its commercial
bank subsidiary, Frontier Bank. Frontier Bank offers a wide range
of financial services to businesses and individuals in its market
area, including investment and insurance products.
CERTAIN FORWARD-LOOKING INFORMATION -- This press release
contains certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 ("PSLRA").
This statement is included for the express purpose of availing
Frontier of the protections of the safe harbor provisions of the
PSLRA. The forward-looking statements contained herein are subject
to factors, risks and uncertainties that may cause actual results
to differ materially from those projected. The following items are
among the factors that could cause actual results to differ
materially from the forward-looking statements: general economic
conditions, including their impact on capital expenditures;
business conditions in the banking industry; recent world events
and their impact on interest rates, businesses and customers; the
regulatory environment; new legislation; vendor quality and
efficiency; employee retention factors; rapidly changing technology
and evolving banking industry standards; competitive standards;
including increased competition with community, regional and
national financial institutions; fluctuating interest rate
environments; higher than expected loan delinquencies; and similar
matters. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis
only at the date of this release.
Frontier undertakes no obligation to publicly revise or update
these forward-looking statements to reflect events or circumstances
that arise after the date of this release. Readers should carefully
review the risk factors described in this and other documents
Frontier files from time to time with the Securities and Exchange
Commission, including Frontier's 2008 Form 10-K.
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except for shares and per share amounts)
(Unaudited)
Three Months Ended
----------------------------------
June 30, March 31, June 30,
2009 2009 2008
---------- ---------- ----------
INTEREST INCOME
Interest and fees on loans $ 44,732 $ 49,400 $ 70,970
Interest on investments 849 1,091 1,372
---------- ---------- ----------
Total interest income 45,581 50,491 72,342
---------- ---------- ----------
INTEREST EXPENSE
Interest on deposits 20,148 22,635 23,261
Interest on borrowed funds 3,984 4,102 4,190
---------- ---------- ----------
Total interest expense 24,132 26,737 27,451
---------- ---------- ----------
Net interest income 21,449 23,754 44,891
PROVISION FOR LOAN LOSSES 77,000 58,000 24,500
---------- ---------- ----------
Net interest income (loss) after
provison for loan losses (55,551) (34,246) 20,391
---------- ---------- ----------
NONINTEREST INCOME
Gain (loss) on sale of securities (149) 47 144
Gain on sale of secondary
mortgage loans 630 584 377
Net loss on sale of other real
estate owned (451) - -
Service charges on deposit accounts 1,539 1,446 1,421
Other noninterest income 2,021 2,245 2,256
---------- ---------- ----------
Total noninterest income 3,590 4,322 4,198
---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits 12,217 12,420 12,592
Occupancy expense 2,732 2,838 2,991
State business taxes 179 326 594
Other noninterest expense 10,259 7,708 5,356
---------- ---------- ----------
Total noninterest expense 25,387 23,292 21,533
---------- ---------- ----------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES (77,348) (53,216) 3,056
PROVISION (BENEFIT) FOR INCOME TAXES (27,354) (19,405) 982
---------- ---------- ----------
NET INCOME (LOSS) $ (49,994) $ (33,811) $ 2,074
========== ========== ==========
Weighted average number of shares
outstanding for the period 47,131,853 47,126,801 47,006,729
Basic earnings (losses) per share $ (1.06) $ (0.72) $ 0.04
========== ========== ==========
Weighted average number of diluted
shares outstanding for period 47,131,853 47,126,801 47,069,136
Diluted earnings (losses) per share $ (1.06) $ (0.72) $ 0.04
========== ========== ==========
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Continued)
(In thousands, except for shares and per share amounts)
(Unaudited)
Six Months Ended
----------------------
June 30, June 30,
2009 2008
---------- ----------
INTEREST INCOME
Interest and fees on loans $ 94,132 $ 146,888
Interest on investments 1,940 2,954
---------- ----------
Total interest income 96,072 149,842
---------- ----------
INTEREST EXPENSE
Interest on deposits 42,783 48,986
Interest on borrowed funds 8,086 8,567
---------- ----------
Total interest expense 50,869 57,553
---------- ----------
Net interest income 45,203 92,289
PROVISION FOR LOAN LOSSES 135,000 33,500
---------- ----------
Net interest income (loss) after
provison for loan losses (89,797) 58,789
---------- ----------
NONINTEREST INCOME
Gain (loss) on sale of securities (102) 2,468
Gain on sale of secondary mortgage loans 1,214 766
Net gain (loss) on sale of other real estate owned (451) 12
Service charges on deposit accounts 2,985 2,746
Other noninterest income 4,266 4,509
---------- ----------
Total noninterest income 7,912 10,501
---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits 24,637 26,585
Occupancy expense 5,570 5,581
State business taxes 505 1,145
Other noninterest expense 17,967 9,767
---------- ----------
Total noninterest expense 48,679 43,078
---------- ----------
INCOME (LOSS) BEFORE PROVISION (BENEFIT)
FOR INCOME TAXES (130,564) 26,212
PROVISION (BENEFIT) FOR INCOME TAXES (46,759) 8,637
---------- ----------
NET INCOME (LOSS) $ (83,805) $ 17,575
========== ==========
Weighted average number of
shares outstanding for the period 47,126,801 47,296,849
Basic earnings (losses) per share $ (1.78) $ 0.37
========== ==========
Weighted average number of diluted shares
outstanding for period 47,126,801 47,385,620
Diluted earnings (losses) per share $ (1.78) $ 0.37
========== ==========
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except for shares and per share amounts)
(Unaudited)
June 30, December 31, June 30,
2009 2008 2008
----------- ----------- -----------
ASSETS
Cash and due from banks $ 42,697 $ 52,022 $ 68,161
Federal funds sold 289,871 117,740 18,265
Securities
Available for sale, at fair value 80,318 90,606 108,796
Held to maturity, at amortized cost 3,081 3,085 3,740
----------- ----------- -----------
Total securities 83,399 93,691 112,536
Loans held for resale 5,271 6,678 3,793
Loans 3,410,948 3,772,055 3,803,485
Allowance for loan losses (98,583) (112,556) (78,722)
----------- ----------- -----------
Net loans 3,317,636 3,666,177 3,728,556
Premises and equipment, net 49,649 51,502 52,212
Intangible assets 687 794 78,009
Federal Home Loan Bank (FHLB) stock 19,885 19,885 21,698
Bank owned life insurance 24,824 24,321 24,236
Other real estate owned 54,222 10,803 3,681
Other assets 104,533 67,510 49,367
----------- ----------- -----------
Total assets $ 3,987,403 $ 4,104,445 $ 4,156,721
=========== =========== ===========
LIABILITIES
Deposits
Noninterest bearing $ 404,832 $ 395,451 $ 389,275
Interest bearing 2,844,301 2,879,714 2,907,051
----------- ----------- -----------
Total deposits 3,249,133 3,275,165 3,296,326
Federal funds purchased and
securities sold under repurchase
agreements 17,564 21,616 38,005
Federal Home Loan Bank advances 421,130 429,417 330,249
Junior subordinated debentures 5,156 5,156 5,156
Other liabilities 24,934 21,048 24,773
----------- ----------- -----------
Total liabilities 3,717,917 3,752,402 3,694,509
----------- ----------- -----------
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
10,000,000 shares authorized - - -
Common stock, no par value;
100,000,000 shares authorized 257,694 256,137 254,703
Retained earnings 14,215 98,020 208,221
Accumulated other comprehensive
loss, net of tax (2,423) (2,114) (712)
----------- ----------- -----------
Total shareholders' equity 269,486 352,043 462,212
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 3,987,403 $ 4,104,445 $ 4,156,721
=========== =========== ===========
Shares outstanding at end of period 47,131,853 47,095,103 47,010,131
Book value $ 5.72 $ 7.48 $ 9.83
Tangible book value $ 5.70 $ 7.46 $ 8.17
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED OTHER FINANCIAL INFORMATION AND RATIOS
(In thousands)
(Unaudited)
For the Period Ended (Year-to-Date)
----------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Loans by Type
(including
loans held for
resale)
Commercial and
industrial $ 425,221 $ 444,681 $ 457,215 $ 452,286 $ 448,360
Real Estate:
Commercial 1,017,204 1,020,530 1,044,833 1,049,939 1,048,321
Construction 713,571 870,201 949,909 1,030,591 1,048,552
Land
development 476,562 512,804 580,453 607,501 598,931
Completed lots 272,824 297,702 249,685 242,234 236,004
Residential
1-4 family 433,884 443,361 431,170 379,485 357,650
Installment and
other loans 76,953 70,231 65,468 70,016 69,460
---------- ---------- ---------- ---------- ----------
Total loans $3,416,219 $3,659,510 $3,778,733 $3,832,052 $3,807,278
========== ========== ========== ========== ==========
Allowance for
Loan Losses
Balance at
beginning of
period $ 114,638 $ 114,638 $ 57,658 $ 57,658 $ 57,658
---------- ---------- ---------- ---------- ----------
Provision for
loan losses 135,000 58,000 120,000 75,600 33,500
---------- ---------- ---------- ---------- ----------
Loans charged-off
Commercial and
industrial (18,891) (5,355) (3,101) (1,167) (381)
Real Estate:
Commercial (1,176) (149) (1,264) - -
Construction (62,036) (29,448) (31,968) (17,316) (9,275)
Land
development (38,015) (19,057) (12,165) (1,050) -
Completed
lots (19,286) (3,504) (13,839) (4,031) -
Residential
1-4 family (10,771) (2,127) (846) (250) -
Installment and
other loans (1,089) (205) (343) (246) (106)
---------- ---------- ---------- ---------- ----------
Total charged-off
loans (151,264) (59,845) (63,526) (24,060) (9,762)
---------- ---------- ---------- ---------- ----------
Recoveries
Commercial and
industrial 496 211 308 237 226
Real Estate:
Commercial - - - - -
Construction 863 51 161 9 10
Land
development 57 57 - - -
Completed
lots 66 16 9 5 -
Residential
1-4 family 27 - - - -
Installment and
other loans 4 2 28 23 11
---------- ---------- ---------- ---------- ----------
Total recoveries 1,513 337 506 274 247
---------- ---------- ---------- ---------- ----------
Net (charge-offs)
recoveries (149,751) (59,508) (63,020) (23,786) (9,515)
---------- ---------- ---------- ---------- ----------
Balance before
portion
identified for
undisbursed
loans 99,887 113,130 114,638 109,472 81,643
Reserve
acquired in
merger - - - - -
Portion of
reserve
identified for
undisbursed
loans (1,304) (1,646) (2,082) (2,837) (2,921)
---------- ---------- ---------- ---------- ----------
Balance at end
of period $ 98,583 $ 111,484 $ 112,556 $ 106,635 $ 78,722
========== ========== ========== ========== ==========
Allowance for
loan losses as
a percentage of
total loans,
including loans
held for resale 2.89% 3.05% 2.98% 2.78% 2.07%
---------- ---------- ---------- ---------- ----------
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED OTHER FINANCIAL INFORMATION AND RATIOS (Continued)
(In thousands)
(Unaudited)
For the Period Ended (Year-to-Date)
----------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Nonperforming
Assets (NPA)
Nonaccruing
loans $ 764,558 $ 656,373 $ 435,225 $ 205,197 $ 119,936
Other real
estate owned 54,222 18,874 10,803 3,693 3,681
---------- ---------- ---------- ---------- ----------
Total
nonperforming
assets 818,780 675,247 446,028 208,890 123,617
---------- ---------- ---------- ---------- ----------
Restructured
loans - - - - -
---------- ---------- ---------- ---------- ----------
Total impaired
assets $ 818,780 $ 675,247 $ 446,028 $ 208,890 $ 123,617
========== ========== ========== ========== ==========
Total
nonaccruing
loans to total
loans 22.38% 17.94% 11.52% 5.35% 3.15%
Total NPA to
total assets 20.53% 16.25% 10.87% 4.92% 2.97%
Interest Bearing
Deposits
Money market,
sweep and NOW $ 409,606 $ 365,807 $ 325,554 $ 557,323 $ 600,023
Savings 285,725 334,076 365,114 418,535 367,731
Time deposits 2,148,970 2,243,362 2,189,046 2,050,857 1,939,297
---------- ---------- ---------- ---------- ----------
Total interest
bearing
deposits $2,844,301 $2,943,245 $2,879,714 $3,026,715 $2,907,051
========== ========== ========== ========== ==========
Capital Ratios
Tier 1 leverage
ratio 6.74% 7.60% 8.62% 8.88% 9.69%
Tier 1
risk-based
capital ratio 8.15% 9.13% 9.64% 9.48% 9.96%
Total
risk-based
capital ratio 9.42% 10.40% 10.91% 10.75% 11.22%
For the Three Months Ended
----------------------------------------------------------
Performance June 30, March 31, December 31, September 30, June 30,
Ratios 2009 2009 2008 2008 2008
---------- ---------- ---------- ---------- ----------
ROA (annualized) -4.92% -3.18% -8.68% -1.69% 0.20%
ROE (annualized) -63.92% -38.70% -81.58% -15.32% 1.75%
Average assets $4,061,874 $4,248,979 $4,125,319 $4,221,730 $4,087,538
Average
shareholders'
equity $ 312,851 $ 349,465 $ 438,908 $ 464,500 $ 473,750
For the Period Ended (Year-to-Date)
----------------------------------------------------------
Performance June 30, March 31, December 31, September 30, June 30,
Ratios 2009 2009 2008 2008 2008
---------- ---------- ---------- ---------- ----------
ROA (annualized) -4.03% -3.18% -2.18% -0.01% 0.87%
ROE (annualized) -50.63% -38.70% -19.42% -0.06% 7.44%
Average assets $4,154,923 $4,248,979 $4,107,571 $4,102,034 $4,041,808
Average
shareholders'
equity $ 331,056 $ 349,465 $ 461,981 $ 469,727 $ 472,369
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED OTHER FINANCIAL INFORMATION AND RATIOS (Continued)
(In thousands)
(Unaudited)
Quarterly Average Balances
June 30, June 30,
2009 2008 $ Change % Change
----------- ----------- ----------- -----------
Assets
Cash and due from banks $ 43,367 $ 50,205 $ (6,838) -13.6%
Federal funds sold 239,315 1,994 237,321 11901.8%
Securities available
for sale 84,176 121,195 (37,019) -30.5%
Securities held to
maturity 3,083 2,216 867 39.1%
----------- ----------- ----------- -----------
Total securities 87,259 123,411 (36,152) -29.3%
Loans held for resale 8,151 3,543 4,608 130.1%
Loans
Commercial and
industrial 444,572 437,414 7,158 1.6%
RE commercial 1,020,838 1,024,190 (3,352) -0.3%
RE construction 827,641 1,080,338 (252,697) -23.4%
RE land development 501,469 578,954 (77,485) -13.4%
RE completed lots 292,891 241,750 51,141 21.2%
RE residential 1-4
family 435,596 330,612 104,984 31.8%
Installment and
other 71,186 67,936 3,250 4.8%
----------- ----------- ----------- -----------
Total 3,602,344 3,764,737 (162,393) -4.3%
Allowance for loan
losses (116,225) (63,565) (52,660) 82.8%
----------- ----------- ----------- -----------
Net loans 3,486,119 3,701,172 (215,053) -5.8%
Premises and equipment,
net 50,450 51,751 (1,301) -2.5%
Intangible assets 714 78,036 (77,322) -99.1%
FHLB Stock 19,885 20,339 (454) -2.2%
Bank owned life
insurance 24,693 24,112 581 2.4%
Other real estate owned 28,447 1,870 26,577 1421.2%
Other assets 81,625 34,648 46,977 135.6%
----------- ----------- ----------- -----------
Total assets $ 4,061,874 $ 4,087,538 $ (25,664) -0.6%
=========== =========== =========== ===========
Liabilities
Deposits:
Noninterest bearing $ 406,910 $ 377,131 $ 29,779 7.9%
Interest bearing
MMA, Sweep and NOW 388,049 645,409 (257,360) -39.9%
Savings 300,522 345,192 (44,670) -12.9%
Time deposits 2,178,557 1,765,116 413,441 23.4%
----------- ----------- ----------- -----------
Total interest
bearing 2,867,128 2,755,717 111,411 4.0%
Total deposits 3,274,038 3,132,848 141,190 4.5%
Fed funds purchased and
repurchase agreements 18,784 118,866 (100,082) -84.2%
FHLB Advances 426,288 332,297 93,991 28.3%
Junior subordinated debt 5,156 5,156 - 0.0%
Other liabilities 24,757 24,621 136 0.6%
----------- ----------- ----------- -----------
Total liabilities 3,749,023 3,613,788 135,235 3.7%
Total shareholders'
equity 312,851 473,750 (160,899) -34.0%
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 4,061,874 $ 4,087,538 $ (25,664) -0.6%
----------- ----------- ----------- -----------
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED OTHER FINANCIAL INFORMATION AND RATIOS (Continued)
(In thousands)
(Unaudited)
Year-to-Date Average Balances
June 30, June 30,
2009 2008 $ Change % Change
----------- ----------- ----------- -----------
Assets
Cash and due from banks $ 45,925 $ 49,778 $ (3,853) -7.7%
Federal funds sold 275,805 6,946 268,859 3870.7%
Securities available
for sale 82,477 127,518 (45,041) -35.3%
Securities held to
maturity 3,083 3,742 (659) -17.6%
----------- ----------- ----------- -----------
Total securities 85,560 131,260 (45,700) -34.8%
Loans held for resale 7,259 4,174 3,085 73.9%
Loans
Commercial and
industrial 445,482 417,279 28,203 6.8%
RE commercial 1,024,583 1,020,161 4,422 0.4%
RE construction 882,109 1,074,283 (192,174) -17.9%
RE land development 529,754 567,163 (37,409) -6.6%
RE completed lots 282,629 243,603 39,026 16.0%
RE residential 1-4
family 432,973 312,065 120,908 38.7%
Installment and
other 69,004 67,705 1,299 1.9%
----------- ----------- ----------- -----------
Total 3,673,793 3,706,433 (32,640) -0.9%
Allowance for loan
losses (118,566) (59,573) (58,993) 99.0%
----------- ----------- ----------- -----------
Net loans 3,555,227 3,646,860 (91,633) -2.5%
Premises and equipment,
net 50,858 50,216 642 1.3%
Intangible assets 741 78,085 (77,344) -99.1%
FHLB Stock 19,885 19,539 346 1.8%
Bank owned life
insurance 24,564 23,983 581 2.4%
Other real estate owned 21,640 1,268 20,372 1606.6%
Other assets 74,718 33,873 40,845 120.6%
----------- ----------- ----------- -----------
Total assets $ 4,154,923 $ 4,041,808 $ 113,115 2.8%
=========== =========== =========== ===========
Liabilities
Deposits:
Noninterest bearing $ 395,358 $ 371,430 $ 23,928 6.4%
Interest bearing
MMA, Sweep and NOW 359,622 677,837 (318,215) -46.9%
Savings 329,381 305,460 23,921 7.8%
Time deposits 2,263,587 1,749,984 513,603 29.3%
----------- ----------- ----------- -----------
Total interest
bearing 2,952,590 2,733,281 219,309 8.0%
Total deposits 3,347,948 3,104,711 243,237 7.8%
Fed funds purchased and
repurchase agreements 18,850 99,645 (80,795) -81.1%
FHLB Advances 427,797 331,824 95,973 28.9%
Junior subordinated debt 5,156 5,156 - 0.0%
Other liabilities 24,116 28,103 (3,987) -14.2%
----------- ----------- ----------- -----------
Total liabilities 3,823,867 3,569,439 254,428 7.1%
Total shareholders'
equity 331,056 472,369 (141,313) -29.9%
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 4,154,923 $ 4,041,808 $ 113,115 2.8%
----------- ----------- ----------- -----------
Contact: Patrick M. Fahey Frontier Financial Corporation
Chairman and CEO 425-423-7250 Michael Clementz Frontier Financial
Corporation President 425-514-0717 John J. Dickson Frontier Bank
President 425-514-0700
Frontier Finl Corp Wash (MM) (NASDAQ:FTBK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Frontier Finl Corp Wash (MM) (NASDAQ:FTBK)
Historical Stock Chart
From Jul 2023 to Jul 2024
