Business

Last local bank sold to Frontier Bank

Everett-based Frontier Bank will buy Whidbey Island Bank, the only local bank still headquartered on the island, for about $191 million in a stock and cash transaction.

The merger should be wrapped up by February or March of next year.

There are three Whidbey Island Bank branches on South Whidbey in Clinton, Langley and Freeland, and additional offices are located in Coupeville and Oak Harbor.

While employees in the branch offices don’t have to worry about their jobs, the ownership change will possibly lead to downsizing or the closure of the Oak Harbor headquarters, Frontier officials said Wednesday.

John Dickson, CEO of Frontier Bank, said the company will analyze these issues over the next few weeks to find out what administrative tasks are duplicated in the administrative offices of Frontier and Whidbey Island banks.

However, on-island branch locations appear to be safe for now.

“It’ll likely affect the administrative offices in Oak Harbor and some branches on the mainland,” Dickson said.

Because there aren’t any Frontier branches on the island yet, Whidbey Island Bank branches under the new name will likely remain open for South End customers.

“It may be a new name, but the same friendly faces,” Dickson said.

Since the two companies have branches in similar locations on the mainland, some may close after the deal is completed around the first quarter of 2008, Dickson said.

Whidbey Island Bank has 20 branches and more than 300 employees and does business in Island, San Juan, Skagit, Whatcom and Snohomish counties. Frontier Bank has more than 40 offices in Clallam, Jefferson, King, Kitsap, Pierce, Skagit, Snohomish and Whatcom counties.

The name on local branch offices is expected to change to Frontier by mid-2008.

Enhanced services for customers — such as ATM service at the 46 Frontier branches throughout Oregon and Washington and better online banking products — will probably be available in May, Dickson said.

Business customers especially may benefit from the additional banking products, he added.

Whidbey Island Bank was founded in 1960 by a group of Whidbey Island business people who saw a need for a locally owned, independent bank that would serve the community.

The bank has been a major sponsor of many local organizations and events including the Island County Fair, as well as arts and entertainment events over the years.

Frontier Financial Corporation announced the signing of a definitive agreement for the merger on Sept. 26. Frontier will pay about $21.40 per share of Washington Banking.

Frontier Financial Corporation, the holding company for Frontier Bank, has $3.6 billion in assets. Washington Banking Company, the holding company for Whidbey Island Bank, has $850 million in assets.

The combined company enhances Frontier Bank’s leadership position as the largest community bank headquartered in Western Washington, company officials said.

“We are absolutely thrilled to have Washington Banking join our organization,” Dickson said. “Whidbey Island Bank is a high quality organization that operates with a philosophy very similar to our own. We believe this will be an outstanding combination of highly talented employees that bring with them a solid customer base, and we look forward to welcoming the Washington Banking team into the Frontier family,” he said.

Michaela Marx Wheatley can be reached at 221-5300 or mmarxwheatley@southwhidbey

record.com.

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