March 25, 2009

Frontier Financial Corporation (NASDAQ: FTBK: 1.35, 0, 0%), on behalf of its subsidiary Frontier Bank, announced today it has signed an agreement with the Federal Deposit Insurance Corporation (FDIC: undefined, undefined, undefined%) and State of Washington Department of Financial Institutions (DFI: undefined, undefined, undefined%). Under the agreement, called a Cease and Desist Order, Frontier agreed to changes in lending policies, administration and management.

The order was the result of an examination conducted by the FDIC and DFI as of June 30, 2008.Patrick M. Fahey, who was appointed Frontier's chairman and CEO in December 2008, said the bank had already begun working to address items cited in the examination and intends to fully comply with the terms of the agreement.Frontier, like many banks that concentrated on residential construction and development lending, has been heavily impacted by the sharp downturn in the economy and the Northwest housing market. As a result, the bank increased its reserves for future loan losses significantly to a total of over $112 million at the end of 2008.