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MONDAY OCTOBER 23, 8:20 PM EASTERN TIME
PRESS RELEASE
FRONTIER FINANCIAL CORPORATION AND INTERBANCORP TO MERGE
EVERETT, Wash--(BUSINESS WIRE)--Oct. 23, 2000--Frontier Financial Corporation
(NASDAQ:FTBK - news), headquartered in Everett, Washington and Interbancorp,
Inc. of Duvall, Washington today announced a definitive agreement to merge.
Interbancorp, Inc., through its wholly owned subsidiary, Inter Bank, operate two
offices, Valley Community Bank, in Duvall, and Kirkland Bank of Commerce located
in Kirkland. Founded in 1990, Inter Bank is a commercial bank with approximately
$75 million in assets, $55 million in loans, $69 million in deposits, and $5.3
in shareowners' equity. The bank has recently received regulatory approval to
open a third office, to be located at Totem Lake.
According to the terms of the definitive agreement, Frontier will exchange .75
shares of its common stock for each Interbancorp Inc. share. The merger, which
has been approved by the Boards of Directors of each company, is subject to,
among other contingencies, approval by regulators and Interbancorp, Inc.
shareowners. The transaction is expected to close early in 2001.
Based on the current price of Frontier common stock of $17.25 per share, the
transaction is valued at approximately $11 million, not including the value of
outstanding stock options. The transaction has a value of approximately 2.1
times Interbancorp, Inc. book value and approximately 16.5 times 1999 net
income. It is expected that the transaction will be accretive to Frontier during
the first year.
Upon completion, Interbancorp, Inc. will be merged into Frontier Financial
Corporation and Inter Bank will be merged into Frontier Bank. Mr. Herb Mueller,
CEO of Interbancorp, Inc. plans to retire on October 31, 2000, and Mr. Russ
Anderson, President, will be named a Senior Vice President of Frontier. All
other officers and employees of Interbancorp, Inc. will be retained by Frontier.
The transaction will be handled as a tax free exchange of stock using the
purchase method of accounting.
Russ Anderson, President of Interbancorp, Inc. stated, "The merger will allow us
to offer enhanced products and services to Inter Bank customers. Our owners will
become shareowners of a well regarded, publicly traded bank holding company with
a 22 year history of quality banking and excellent earnings. We look forward to
completing the transaction and continuing the community banking traditions of
both our fine institutions".
Frontier President & CEO, Bob Dickson, responded by saying, "The merger of two
community banks will enable us to better serve the Duvall/Kirkland area
customers through a larger loan capacity and an expanded menu of products.
Career opportunities are enhanced for Inter Bank employees. We plan to continue
to offer the same high quality service by the same staff members that customers
of both banks now expect".
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This will be the seventh merger for Frontier which opened in 1978, and its third
in the last two years. At completion, Frontier will have total assets in excess
of $1.7 billion, approximately 525 employees in 36 offices located in eight
counties of Western Washington.
Information herein contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which can be identified by
words such as "may", "expected", "anticipate", "estimate", "continue" or
comparable words. In addition, all statements other than statements of
historical facts that address activities that Frontier expects or anticipates
will or may occur in the future are forward-looking statements. Readers are
encouraged to read the SEC reports of Frontier particularly its Form 10-K for
the Fiscal Year Ended December 31, 1999, for meaningful cautionary language
discussing why actual results may vary materially from those anticipated by
management.
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Contact:
Frontier Financial Corporation
Robert J. Dickson, President & CEO, 425/514-0700
or
Interbancorp, Inc.
Russ Anderson, President, 425/788-1177
