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Buckley bank changes hands
At 6 p.m. April 30, state regulators shut down Frontier Bank, citing inadequate capital and severe loan losses. All bank branches – including the Buckley branch on South River Avenue – reopened the next day under new management by Union Bank of San Francisco.
The Federal Deposit and Insurance Corporation acquired Frontier’s assets and liabilities, rendering the Everett-based owning corporation insolvent. The FDIC then transferred Frontier’s assets to Union.
Union acquired all Frontier Bank branches in Washington and Oregon, the deposits held therein, and all commercial and consumer loans.
Though the closure and transfer of the bank assets and liabilities was arranged before April 30, FDIC does not announce bank closures in advance in order to avoid a destabilizing exodus of depositors that could sour the deal. A news leak of the FDIC seizure posted online just 40 minutes before the official announcement prompted a frantic phone call to the state regulatory agency by Frontier Chief Executive Patrick Fahey.
Frontier Bank’s loss was Union Bank’s gain.
“Frontier Bank represents an important strategic base for Union Bank,” said Tim Wennes, vice chairman and chief retail banking officer for Union. “We were already actively seeking to expand into the Pacific Northwest, and this deal has given us the opportunity to do so.”
Investors in Frontier Bank have filed a class action civil lawsuit against former bank holding company Frontier Financial Corporation, alleging the company inflated its financial records.
But customers with loans or deposits with Frontier Bank will not be affected by the lawsuit against the former owner, or any other aspect of the transfer, Wennes said.
Union Bank also acquired the Frontier Bank branch in Sumner.