ORIGINALLY PUBLISHED HERE FRIDAY, APRIL 30TH AT 9:05PM
KING-5 News in Seattle reported this evening that the primary lending bank of Yelm’s defaulted 5,000-home Thurston Highlands development was seized by the FDIC and sold today:
“State regulators shut down struggling Everett-based Frontier Bank Friday [April 30], which was then sold to Union Bank.
The Washington Department of Financial Institutions closed the bank, citing inadequate capital and severe loan losses associated with its construction loan portfolio.
[CLICK HERE for the Washington Department of Financial Institutions report on this seizure.]
‘Frontier’s management team has worked hard to recapitalize the bank throughout the past year,’ said DFI bank division director Brad Williamson. ‘However, the economic climate has made this task very difficult and the continuing loan losses finally brought the bank’s capital to an unsustainable level.'”
Another sad tale in the saga known as Yelm’s Thurston Highlands & Tahoma Terra.
And, just more evidence that developers’ wide-eyed dreams, married with a total disregard of state regulations put in-place to protect the public’s interests by local Yelm officials, coupled with unscrupulous bankers and a financing system that ignored accepted banking standards have all contributed to these two bankrupt developments & huge legal expenditures in Yelm’s budget!
This bank’s failure follows on the heels of another Yelm-entrenched recent bank failure – Venture Bank.
No doubt when historians & towns folk look back on these times from a more educated view, the 2000-2010 decade of Yelm’s leaders’ decisions will be seen as some of the more detrimental to the public in the city’s history!
The issues facing Frontier had been covered here several times previously, including the most recent entry on April 2, 2010:
“Stock in Frontier Bank, which has a branch at 130 Marvin Road S.E. in Lacey, fell to a 52-week low Wednesday [March 31] on news this week that President John Dickson has abruptly resigned…
Neither Dickson nor Frontier Chairman and CEO Patrick Fahey commented on the change in leadership…
Frontier announced last week that its holding company, Frontier Financial Corp., had received a Supervisory Prompt Corrective Action Directive on March 16 from its regulator, the Federal Deposit Insurance Corp.
With a deadline of 30 days or by April 15 the order demanded that the bank must either recapitalize by the sale of shares or obligations so that the bank will be adequately recapitalized, or accept an offer to be acquired by another institution. The order also repeated other restrictions previously imposed,” quoting The Olympian.
As reported last Fall,
“Thurston Highlands, one of the largest proposed mixed-use developments in the state, has emerged as the biggest example of how the economic crisis has had a corrosive effect on development.
Through its trustee, the projects primary lender, Frontier Bank, has started foreclosure proceedings on the 1,250-acre property after saying a loan was in default. The trustee is scheduled to auction the property to the highest bidder on the Thurston County Courthouse steps June 5, ” quoting The Olympian on May 15, 2009.