Frontier Financial on Thursday became the latest local bank to slash its dividend, slicing the quarterly payout to 6 cents from 18 cents.
Frontier Financial on Thursday became the latest local bank to slash its dividend in response to the housing slump.
Everett-based Frontier, parent of Fronter Bank, cut its quarterly payout to 6 cents a share, from 18 cents a share last quarter. The dividend is payable July 22 to shareholders of record as of July 8.
Frontier has regularly increased its dividend for years. But the deflated housing market has caused mortgage defaults to jump, forcing banks large and small to set aside more money to cover bad home loans; as a result, many banks have cut their dividend payments to preserve capital.
“Unfortunately, the economic cycle we are working through poses challenges for everyone in our industry,” Frontier Chief Executive John Dickson said in a statement. “We expect to significantly increase our loan-loss provision in the second quarter as a precaution for potential loan losses in the future.”