Frontier Bank is On the Watch List

From the flood of recent articles, it looks like the recent changes at Everett Washington based Frontier Bank were set in motion by federal regulators.  Apparently they were concerned that Frontier Bank could go the way of Washington Mutual.

There was even a cease and desist letter filed by the FDIC to halt the decline of the bank.  The major points of the C&D letter were to stop:

• Operating the bank with management practices that were harming the bank.
• Operating without proper board of directors oversight into the management of the bank.
• Operating with too little capital in relation to the quality of the assets held.
• Operating with inadequate loan valuation reserve.
• Operating with a large volume of poor quality loans.
• Engaging in unsatisfactory lending and collection practices.
• Operating in a manner that produces low earnings.
• Operating with insufficient liquidity.

Sounds like they were messing up across the board!  In a press release issued Tuesday, Frontier Bank addressed some of the concerns in an effort to reassure investors and customers alike.  Newly appointed Frontier CEO Patrick Fahey points out that many changes have been made to bring the institution back around.  These include cutting executive pay and diversifying their loan portfolio.