<PAGE> 1
[KELLER ROHRBACK L.L.P. LETTERHEAD]
EXHIBIT 8
__________, 2000
Frontier Financial Corporation Interbancorp, Inc.
332 SW Everett Mall Way 15305 Main Street N.E.
Everett, WA 98204 P. O. Box 700
Duvall, WA 98019
Re: HOLDING COMPANY MERGER/TAX CONSEQUENCES
Ladies and Gentlemen:
This letter responds to your request for our opinion as to certain of the
federal income tax consequences of the proposed merger (the "Merger") of
Interbancorp, Inc. ("Interbancorp") into Frontier Financial Corporation
("Frontier").
We have acted as legal counsel to Frontier in connection with the Merger.
For the purpose of rendering this opinion, we have examined and relied upon
originals, certified copies, or copies otherwise identified to our satisfaction
as being true copies of the originals of the following documents, including all
exhibits and schedules attached to them:
(a) The Agreement and Plan of Mergers, dated as of October 23, 2000,
between Frontier, Frontier Bank, Interbancorp and Inter Bank (the
"Merger Agreement").
(b) Form S-4 Registration Statement of Frontier declared effective
__________, 2000 by the Securities and Exchange Commission.
(c) The Proxy Statement of Interbancorp (included as part of the
Registration Statement); and
(d) Such other documents, instruments, records and information pertaining
to the Merger as we have deemed necessary for rendering our opinion.
We have assumed, without independent investigation or review, the accuracy
and completeness of the facts and representations and warranties contained in
those documents or otherwise made known to us, and that the Merger will be
effected in accordance with the terms of the Merger Agreement.
In connection with the Merger and pursuant to the Merger Agreement, each
share of Interbancorp voting common stock will be exchanged for three-quarters
(0.75) of a share of Frontier voting common stock based on the exchange rate
established in the Merger Agreement. Cash will be paid in exchange for
fractional shares as described in the Merger Agreement. Interbancorp
shareholders who perfect their dissenter's rights under state law will be paid
the cash value for their Interbancorp shares by Frontier. Upon the consummation
of the Merger, Frontier will continue the historic business of Interbancorp.
Based upon our review of the facts described above and our analysis of the
law, and subject to the qualifications and limitations set forth herein, and the
completion of the transactions described in the matter contemplated, it is our
opinion that:
<PAGE> 2
Page 2
1. The merger of Interbancorp into Frontier solely for Frontier voting
common stock, as described above, will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code"). Interbancorp and Frontier will
each be a "party to a reorganization" within the meaning of Section
368(b) of the Code.
2. No gain or loss will be recognized by Interbancorp shareholders upon
the receipt of Frontier voting common stock solely in exchange for
their shares of Interbancorp stock, pursuant to Section 354(a)(1) of
the Code.
3. The basis of the shares of Frontier voting common stock received by
Interbancorp shareholders will be the same as the basis of the
Interbancorp stock surrendered in exchange therefor, pursuant to
Section 358(a)(1) of the Code.
4. The holding period of the shares of Frontier voting common stock
received by Interbancorp shareholders will include the holding period
during which the Interbancorp stock surrendered in exchange therefor
was held, provided that the shares of Interbancorp stock were held as
a capital asset in the hands of the exchanging shareholders on the
date of the exchange, pursuant to Section 1223(1) of the Code.
5. Where cash is received by any dissenting shareholder of Interbancorp
in exchange for the surrender of all of such shareholder's
Interbancorp stock, the cash will be treated as received by the
shareholder as a distribution in redemption of his or her Interbancorp
stock, subject to the provisions and limitations of Section 302 of the
Code.
6. An Interbancorp shareholder who receives cash in lieu of a fractional
share of Frontier voting common stock and who holds such fractional
share as a capital asset will recognize gain or loss equal to the
difference between the cash received and the shareholder's basis in
that fractional share.
7. No gain or loss will be recognized by Interbancorp upon the transfer
of its assets to Frontier, pursuant to Sections 361 and 357(a) of the
Code.
8. The basis of the assets of Interbancorp acquired by Frontier will be
the same as the basis of Interbancorp in the assets immediately before
the Merger, pursuant to Section 362(b) of the Code.
9. The holding period of the assets acquired by Frontier will include the
period such assets were held by Interbancorp, pursuant to Section
1223(2) of the Code.
10. No gain or loss will be recognized by Frontier upon the receipt by
Frontier of the assets of Interbancorp, as described above.
We have assumed, with your consent, that the Merger will be completed in
the manner set forth in the Merger Agreement and Registration Statement without
waiver or breach of any material provision thereof, and all of the
representations, warranties, statements and assumptions upon which we relied are
true and accurate at all relevant times. In the event any one of the statements,
representations, warranties or assumptions upon which we have relied to issue
this opinion is incorrect, our opinion might be adversely affected and may not
be relied upon.
<PAGE> 3
Page 3
Our opinion represents only our best legal judgment as to the probable
federal income tax consequences of the transaction described, based upon
existing law. Our opinion is not intended to be a conclusive statement as to all
of the tax consequences of the transaction and is expressly limited to the
matters addressed. Further, our opinion is not binding upon the Internal Revenue
Service (the "IRS") or any court and has no official status of any kind, and no
private ruling regarding the matters discussed has been or will be requested
from the IRS. The IRS has ruled in a number of private rulings that transactions
substantially identical to the Merger result in tax consequences consistent with
those described in this opinion. Although such rulings do not constitute
authority on which we can rely in expressing our opinion, such rulings generally
do reflect the position of the IRS. Each shareholder, however, is urged to
consult with his or her own tax advisor with respect to their individual tax
situation. Our opinion is intended solely for the benefit of Frontier, the
shareholders of Frontier and the shareholders of Interbancorp, and may not be
relied upon for any other purpose or by any other person or entity or made
available to any other person or entity without our prior written consent.
Very truly yours,
KELLER ROHRBACK, LLP
