Frontier Financial Corp., the Washington state lender facing an April 15 deadline to find new capital or a buyer, ousted the son of its founder as president of the bank unit in a dispute over a spring break vacation.
John J. Dickson resigned “immediately” as a director of Frontier March 30 after being fired from the president’s job the previous day, saying he couldn’t continue “in the face of this dismissal,” according to a copy of his resignation filed today with the U.S. Securities and Exchange Commission.
“It’s a very critical time for the bank and we have a lot of efforts under way with a last ditch here to try and raise some capital,” Chief Executive Officer Patrick Fahey said in an interview today. “We have staff in great anxiety, as you might imagine. I felt, and feel, very strongly it was not an appropriate time for either he or I to abandon the ship.”
Frontier said last month that the Federal Deposit Insurance Corp. had ordered the Everett, Washington-based lender to bolster its balance sheet or sell itself by the middle of April “due to the bank’s critically undercapitalized status,” the lender said in a statement. A takeover bid last July led by Warren Lichtenstein, the New York hedge-fund manager, broke down in October after failing to get regulatory approval.
Fahey said he regretted needing to fire Dickson because of the dispute, which was over Dickson’s planned Hawaiian vacation. He said the resignation letter was publicized both because “rumors were running rampant” and because of SEC rules.
“My termination followed your improper demand that I refrain from exercising my employment right to earned vacation time for a family vacation during my children’s Spring Break starting on March 31, 2010,” Dickson wrote in his letter. “I had earlier given you timely notification of my vacation schedule.”
Dickson said his family and marriage come before work, and that he offered to be available via phone and Internet as well as to fly back if an investor emerged, the Puget Sound Business Journal said. A message left by Bloomberg News at a number listed for John J. Dickson in Everett wasn’t returned.
Dickson’s father, Robert, founded the bank in 1978. Robert Dickson stepped down in December 2008, when the bank said that John Dickson would “transition” from president and CEO of the corporation to president of the Frontier Bank unit, according to a bank statement. Dickson’s age was listed as 48 in Frontier’s March 2009 proxy statement.
The vacation would “conjure up a picture of John basking poolside with a Mai Thai while the troops are on the field,” Fahey said. “It also isn’t just the staff, we have shareholders and customers who want to talk and make conversation.”
Fahey said he hasn’t given up on efforts to raise capital, and that he was “in conversation with prospective capital prospects. We’re pursing that with everything we have in us.” He said Dickson won’t be replaced, and that other executives within Frontier have been asked to help with the president’s duties.
“I’m not forgoing any opportunity nor am I determined that it isn’t going to happen,” he said in the interview. “I’m more determined it’s going to happen.”
Frontier has about 50 offices in Washington and Oregon that reported deposits of about $3.12 billion as of Dec. 31. The bank hasn’t made money since 2007, with combined losses of almost $350 million in the past two years. The stock dropped 84 percent in the past 12 months through yesterday.
The bank’s shares rose 15 cents, or 7.7 percent, to $2.10 at 4 p.m. New York time in Nasdaq Stock Market trading.