Frontier Financial of Everett said it will reduce executives' total compensation by about 34 percent this year and will not pay them discretionary bonuses
Following a $17.8 million third-quarter loss, Frontier Financial of Everett said it will reduce executives’ total compensation by about 34 percent this year.
The bank also will stop paying directors’ meeting fees indefinitely.
Beginning Jan. 1, 2009, CEO John Dickson will take a 10 percent reduction in his base salary, and other officers will take a 5 percent cut. It also will not pay them discretionary bonuses. As a group, their compensation will be down 34 percent from 2007, the company said.
Those and other cost cuts are expected to shave more than $8.5 million in expenses.
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Frontier lost $17.8 million, or 38 cents a share, in the third quarter, comapred to a profit of $2.1 million in the third quarter last year.
It set aside $42.1 million for loan losses, up from a loan loss provision of $2.1 million a year ago.
The company charged off $24.1 million in bad loans during the quarter, up from $1.3 million a year ago. Construction loans made up the bulk of the charge-offs, at $17.3 million.
Frontier also expanded its “special assets group,” which focuses on reducing non-performing loans, from 5 people to 22. All of them were already at the company.
Frontier Financial shares fell 20.5 percent Thursday, dropping $1.91 to $7.41.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org