Frontier Bank lays off 45 employees

Everett-based Frontier Bank, which has been hit hard by the slump in the local housing market, said today it has laid off about 45 workers, or 6 percent of its 760-person workforce.

Pat Fahey, CEO of the bank's parent company, Frontier Financial, called the move "a difficult decision in difficult times."

The layoffs were spread throughout the company, which has 47 branch offices in Western Washington and three in Oregon, Frontier said in a statement.

Besides severance pay based on how long they worked for Fronter, the bank said the laid-off workers would be eligible for continued health insurance under COBRA for up to 24 months, rather than the usual 18 months.

Frontier said the layoffs will save it $2.5 million annually before taxes. The company will take a $360,000 pre-tax charge in the current second quarter to cover the severance costs.

Frontier Bank has been one of the local banks most affected by the collapse of the housing bubble, which has led many of the builders and developers to whom Frontier lent money to default on their loans.

In the first quarter, which ended March 31, Frontier Financial lost $33.8 million, or 72 cents per share. The bank is operating under closer supervision from federal and state regulators, who have required it to tighten lending standards, get problem loans off its books and strengthen its capital base.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com