##### 



AGREEMENT AND PLAN OF MERGER
 Between
 FRONTIER FINANCIAL CORPORATION
and
FRONTIER BANK
 and
 WASHINGTON BANKING COMPANY
and
WHIDBEY ISLAND BANK
 
 Dated as of September 26, 2007




---



##### 



TABLE OF CONTENTS
 RECITALS
    
    
    
    
    1DEFINITIONS
    
    
    
    
    1ARTICLE I.
    
    THE MERGER
    
    
    71.1
    
    THE CORPORATE MERGER
    
    
    71.2
    
    THE BANK MERGER
    
    
    71.3
    
    CONVERSION OF WBC COMMON STOCK
    
    
    81.4
    
    ELECTION PROCEDURES
    
    
    91.5
    
    WBC OPTIONS
    
    
    111.6
    
    DISSENTING SHARES
    
    
    121.7
    
    TAX CONSEQUENCES
    
    
    13ARTICLE II.
    
    EXCHANGE OF SHARES
    
    
    132.1
    
    FRONTIER TO MAKE SHARES AND CASH AVAILABLE
    
    
    132.2
    
    EXCHANGE OF SHARES
    
    
    13ARTICLE III.
    
    ACTIONS PENDING CLOSING
    
    
    153.1
    
    ORDINARY COURSE
    
    
    153.2
    
    CAPITAL STOCK
    
    
    153.3
    
    DIVIDENDS
    
    
    153.4
    
    INDEBTEDNESS; LIABILITIES
    
    
    153.5
    
    OPERATING PROCEDURES; CAPITAL EXPENDITURES
    
    
    153.7
    
    CONTINUANCE OF BUSINESS
    
    
    153.7
    
    SUBSIDIARIES
    
    
    163.8
    
    COMPENSATION; EMPLOYMENT AGREEMENTS
    
    
    163.9
    
    HIRING
    
    
    163.10
    
    BENEFIT PLANS
    
    
    163.11
    
    CLAIMS
    
    
    163.12
    
    AMENDMENTS
    
    
    163.13
    
    CONTRACTS
    
    
    163.14
    
    LOANS
    
    
    163.15
    
    AGREEMENTS
    
    
    17ARTICLE IV.
    
    FRONTIER FORBEARANCES
    
    
    174.1
    
    AMENDMENTS
    
    
    174.2
    
    REORGANIZATION
    
    
    174.3
    
    CONDITIONS
    
    
    174.4
    
    AGREEMENTS
    
    
    174.5
    
    CERTAIN ACTIONS
    
    
    17ARTICLE V
    
    REPRESENTATIONS AND WARRANTIES
    
    
    175.1
    
    WBC AND WHIDBEY ISLAND BANK REPRESENTATIONS AND WARRANTIES
    
    
    175.2
    
    FRONTIER AND FRONTIER BANK REPRESENTATIONS AND WARRANTIES
    
    
    29ARTICLE VI.
    
    COVENANTS
    
    
    346.1
    
    BEST EFFORTS
    
    
    34
 i




---



##### 



6.2
    
    PROXY STATEMENT; MEETING
    
    
    346.3
    
    REGISTRATION STATEMENT COMPLIANCE WITH SECURITIES LAWS
    
    
    356.4
    
    PUBLICITY; PRESS RELEASES
    
    
    356.5
    
    ACCESS; INFORMATION
    
    
    356.6
    
    AFFILIATE AGREEMENTS
    
    
    366.7
    
    STATE TAKEOVER LAWS
    
    
    366.8
    
    NO RIGHTS TRIGGERED
    
    
    366.9
    
    SHARES LISTED
    
    
    366.10
    
    REGULATORY APPLICATIONS
    
    
    366.11
    
    INSURANCE
    
    
    366.12
    
    CERTAIN ACTIONS
    
    
    376.13
    
    ESTOPPEL LETTERS
    
    
    37ARTICLE VII.
    
    CONDITIONS PRECEDENT
    
    
    377.1
    
    CONDITIONS TO EACH PARTY'S OBLIGATIONS
    
    
    377.2
    
    CONDITIONS TO OBLIGATIONS OF FRONTIER
    
    
    387.3
    
    CONDITIONS TO OBLIGATIONS OF WBC
    
    
    40ARTICLE VIII.
    
    TERMINATION AND AMENDMENT
    
    
    418.1
    
    TERMINATION
    
    
    418.2
    
    EFFECT OF TERMINATION
    
    
    438.3
    
    AMENDMENT
    
    
    448.4
    
    EXTENSION; WAIVER
    
    
    44ARTICLE IX.
    
    ADDITIONAL AGREEMENTS
    
    
    449.1
    
    ADDITIONAL AGREEMENTS
    
    
    449.2
    
    BENEFIT PLANS
    
    
    449.3
    
    CERTAIN ACTIONS
    
    
    459.4
    
    EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
    
    
    469.5
    
    DIRECTORS OF WBC
    
    
    469.6
    
    WBC MANAGEMENT
    
    
    469.7
    
    AT-WILL EMPLOYEES
    
    
    47ARTICLE X.
    
    GENERAL PROVISIONS
    
    
    4710.1
    
    CLOSING; EFFECTIVE TIME
    
    
    4710.2
    
    SURVIVAL
    
    
    4710.3
    
    COUNTERPARTS
    
    
    4710.4
    
    GOVERNING LAW; VENUE
    
    
    4710.5
    
    EXPENSES
    
    
    4710.6
    
    NOTICES
    
    
    4710.7
    
    ENTIRE UNDERSTANDING
    
    
    4810.8
    
    ENFORCEMENT PROCEEDINGS
    
    
    4810.9
    
    HEADINGS
    
    
    4810.10
    
    ENFORCEMENT OF CONFIDENTIALITY AGREEMENT
    
    
    4810.11
    
    SEVERABILITY
    
    
    4810.12
    
    ASSIGNMENT; NO THIRD PARTY BENEFICIARIES
    
    
    49
 ii




---



##### 



AGREEMENT AND PLAN OF MERGER
  RECITALS
 FRONTIER
 FRONTIER BANK
 WASHINGTON BANKING COMPANY
 WHIDBEY ISLAND BANK
 VOTING, DIRECTORS AND NONCOMPETITION AGREEMENTS Exhibit A Exhibit B Exhibits C-1 through C-4
  DEFINITIONS
 DEFINITIONS
 Acquisition Agreement
 Acquisition Proposal
 Aggregate Consideration
 AGREEMENT AND PLAN OF MERGER
    
    1




---



##### 



Agreement
 Appraisal Laws
 Business Day
 Certificate
 Closing
 Code
 Compensation and Benefit Plans
 Confidentiality Agreement
 Control
 Daily Sales Price
 Department
 Derivatives Contract
 Determination Date
 Dissenting Shares
 Effective Time
 Employment Agreements
 Environmental Law
 AGREEMENT AND PLAN OF MERGER
    
    2




---



##### 



ERISA
 ERISA Affiliate
 ERISA Plans
 Exchange Act
 Exchange Agent
 Exchange Fund
 Exchange Ratio
 Execution Date
 Executive Officer
 FDIC
 Federal Reserve Board
 Frontier
 Frontier Average Share Price
 Frontier Bank
 Frontier Common Stock
 Frontier Financial Statements
 Frontier Securities Documents
 Frontier Transaction
 AGREEMENT AND PLAN OF MERGER
    
    3




---



##### 



GAAP
 Governmental Authority
 Hazardous Material
 Intellectual Property
 Knowledge or words of similar meaning
 Loan/Fiduciary Property
 Material Adverse Effect
 Measurement Period
 Meeting
 Merger
 Merger Consideration
 Multiemployer Plans
 AGREEMENT AND PLAN OF MERGER
    
    4




---



##### 



Nasdaq
 Noncompetition Agreements
 Participation Facility
 Pension Plan
 Per Share Cash Consideration
 Per Share Consideration
 Per Share Stock Consideration
 Person
 Previously Disclosed
 Prospectus/Proxy Statement
 RCW
 Registration Statement
 Regulatory Agreement
 Regulatory Authorities
 Resulting Bank
 Rights
 Securities Act
 SEC
 Subsidiary
 AGREEMENT AND PLAN OF MERGER
    
    5




---



##### 



Superior Proposal
 Surviving Corporation
 Taxes
 Termination Fee Amount
 Third Party
 Total Cash Amount
 Total Stock Consideration
 Trading Day
 WBC
 WBC Common Stock
 WBC Contract
 WBC Financial Statements
 WBC Office
 WBC Option
 WBC Stock Option Plans
 WBC Securities Documents
 WBC Tax Returns
 Whidbey Island Bank
 Whidbey Island Bank Common Stock
 GENERAL INTERPRETATION
 AGREEMENT AND PLAN OF MERGER
    
    6




---



##### 



ARTICLE I. THE MERGER
 1.1 THE CORPORATE MERGER .
 SURVIVING CORPORATION
 ARTICLES, BYLAWS, DIRECTORS, OFFICERS
 RIGHTS OF SURVIVING CORPORATION
 ASSUMPTION OF LIABILITIES
 1.2 THE BANK MERGER .
 RESULTING BANK
 ARTICLES, BYLAWS, DIRECTORS, OFFICERS
 AGREEMENT AND PLAN OF MERGER
    
    7




---



##### 



RIGHTS OF RESULTING BANK
 ASSUMPTION OF LIABILITIES
 1.3 CONVERSION OF WBC COMMON STOCK .
 OUTSTANDING WBC COMMON STOCK
      AGREEMENT AND PLAN OF MERGER
    
    8




---



##### 



1.4 ELECTION PROCEDURES.
  AGREEMENT AND PLAN OF MERGER
    
    9




---



##### 



Cash Election Shares Plus Mixed Cash Shares More Than Total Cash Amount
 AGREEMENT AND PLAN OF MERGER
    
    10




---



##### 



Cash Election Shares Plus Mixed Cash Shares Less Than Total Cash Amount
    Cash Election Shares Plus Mixed Cash Shares Equal to Total Cash Amount
  1.5 WBC OPTIONS
 Unexercised Options
 AGREEMENT AND PLAN OF MERGER
    
    11




---



##### 



Schedule 1.5(B)
 1.6 DISSENTING SHARES
 AGREEMENT AND PLAN OF MERGER
    
    12




---



##### 



1.7 TAX CONSEQUENCES
 ARTICLE II. EXCHANGE OF SHARES
 2.1 FRONTIER TO MAKE SHARES AND CASH AVAILABLE .
 2.2 EXCHANGE OF SHARES.
   AGREEMENT AND PLAN OF MERGER
    
    13




---



##### 



AGREEMENT AND PLAN OF MERGER
    
    14




---



##### 



ARTICLE III. ACTIONS PENDING CLOSING
  3.1 ORDINARY COURSE .
 3.2 CAPITAL STOCK . Schedule 5.1(B)
 3.3 DIVIDENDS .
 3.4 INDEBTEDNESS; LIABILITIES .
 3.5 OPERATING PROCEDURES; CAPITAL EXPENDITURES . Schedule 3.5
 3.6 CONTINUANCE OF BUSINESS . Schedule 3.5
 AGREEMENT AND PLAN OF MERGER
    
    15




---



##### 



3.7 SUBSIDIARIES .
 3.8 COMPENSATION; EMPLOYMENT AGREEMENTS . Schedule 3.8
 3.9 HIRING . Schedule 3.8
 3.10 BENEFIT PLANS . Schedule 3.10,
 3.11 CLAIMS .
 3.12 AMENDMENTS .
 3.13 CONTRACTS . Schedule 3.13
 3.14 LOANS .
 AGREEMENT AND PLAN OF MERGER
    
    16




---



##### 



3.15 AGREEMENTS .
 ARTICLE IV. FRONTIER FORBEARANCES
  4.1 AMENDMENTS
 4.2 REORGANIZATION
 4.3 CONDITIONS
 4.4 AGREEMENTS
 4.5 CERTAIN ACTIONS.
 ARTICLE V. REPRESENTATIONS AND WARRANTIES
 5.1 WBC AND WHIDBEY ISLAND BANK REPRESENTATIONS AND WARRANTIES .
 ORGANIZATION, QUALIFICATION AND AUTHORITY
 AGREEMENT AND PLAN OF MERGER
    
    17




---



##### 



SHARES; OPTIONS
 Schedule 5.1(B)
   Schedule 5.1(B)
 WBC AND WHIDBEY ISLAND BANK SUBSIDIARIES Schedule 5.1(C)
 CORPORATE AUTHORITY
 CORPORATE MINUTES
 AGREEMENT AND PLAN OF MERGER
    
    18




---



##### 



NO DEFAULTS Schedule 5.1(F)
 FINANCIAL REPORTS AND SECURITIES DOCUMENTS
 Schedule 5.1(G)
  AGREEMENT AND PLAN OF MERGER
    
    19




---



##### 



ABSENCE OF UNDISCLOSED LIABILITIES Schedule
5.1(H) Schedule 5.1(H)
 ABSENCE OF CERTAIN CHANGES OR EVENTS Schedule
5.1(I)
 PROPERTIES
 AGREEMENT AND PLAN OF MERGER
    
    20




---



##### 



LITIGATION; REGULATORY ACTION Schedule 5.1(K)
 COMPLIANCE WITH LAWS Schedule 5.1(L)
    AGREEMENT AND PLAN OF MERGER
    
    21




---



##### 



MATERIAL CONTRACTS
 Schedule 5.1(M)
 AGREEMENT AND PLAN OF MERGER
    
    22




---



##### 



Schedule 5.1(M)
 Schedule 5.1(M)
 REGULATORY REPORTS
 BROKERS AND FINDERS
 EMPLOYEE BENEFIT PLANS
 Schedule 5.1(P)(1)
 AGREEMENT AND PLAN OF MERGER
    
    23




---



##### 



Schedule 5.1(P)(2)
    Schedule 5.1(P)(6)
 AGREEMENT AND PLAN OF MERGER
    
    24




---



##### 



LABOR AGREEMENTS
 LOAN PORTFOLIO
 Schedule 5.1(R) Schedule 5.1(R)
   AGREEMENT AND PLAN OF MERGER
    
    25




---



##### 



Schedule 5.1(R)(4)
  Schedule 5.1(R)(6)
 INSURANCE Schedule 5.1(S)
 STATE TAKEOVER LAWS; ARTICLES OF INCORPORATION; BYLAWS
 ENVIRONMENTAL MATTERS
   AGREEMENT AND PLAN OF MERGER
    
    26




---



##### 



Schedule 5.1(U)(2)
 Schedule 5.1(U)(3)
 Schedule 5.1(U)(4)
 Schedule 5.1(U)(5)
 Schedule 5.1(U)(6)
 TAX REPORTS Schedule
5.1(V)
 AGREEMENT AND PLAN OF MERGER
    
    27




---



##### 



ACCURACY OF INFORMATION
 DERIVATIVES CONTRACTS Schedule 5.1(X) Schedule 5.1(X)
 INVESTMENT SECURITIES
 Schedule 5.1(Y) Schedule 5.1(Y)
  INTELLECTUAL PROPERTY Schedule 5.1(Z)
 AGREEMENT AND PLAN OF MERGER
    
    28




---



##### 



5.2 FRONTIER AND FRONTIER BANK REPRESENTATIONS AND WARRANTIES .
 ORGANIZATION, QUALIFICATION AND AUTHORITY
 SHARES
 Schedule 5.2(B)
   AGREEMENT AND PLAN OF MERGER
    
    29




---



##### 



FRONTIER SUBSIDIARIES Schedule 5.2(C) Schedule 5.2(C)
 CORPORATE AUTHORITY
 CORPORATE MINUTES
 NO DEFAULTS Schedule 5.2(F)
 AGREEMENT AND PLAN OF MERGER
    
    30




---



##### 



FINANCIAL REPORTS AND SECURITIES DOCUMENTS
 Schedule 5.2(G)
   ABSENCE OF UNDISCLOSED LIABILITIES Schedule
5.2(H)
 AGREEMENT AND PLAN OF MERGER
    
    31




---



##### 



Schedule 5.2(H)
 LITIGATION; REGULATORY ACTION Schedule 5.2(I)
 COMPLIANCE WITH LAWS Schedule 5.2(J)
    AGREEMENT AND PLAN OF MERGER
    
    32




---



##### 



REGULATORY REPORTS
 BROKERS AND FINDERS
 STATE TAKEOVER LAWS; ARTICLES OF INCORPORATION; BYLAWS
 ACCURACY OF INFORMATION
 AGREEMENT AND PLAN OF MERGER
    
    33




---



##### 



ARTICLE VI. COVENANTS
  6.1 BEST EFFORTS .
 6.2 PROXY STATEMENT; MEETING .
    AGREEMENT AND PLAN OF MERGER
    
    
    34




---



##### 



6.3 REGISTRATION STATEMENT COMPLIANCE WITH SECURITIES LAWS . provided, however,
 6.4 PUBLICITY; PRESS RELEASES .
 6.5 ACCESS; INFORMATION .
   AGREEMENT AND PLAN OF MERGER
    
    
    35




---



##### 



6.6 AFFILIATE AGREEMENTS . Exhibit D
 6.7 STATE TAKEOVER LAWS .
 6.8 NO RIGHTS TRIGGERED . Schedule 5.1(F) Schedules 3.8 and 9.4
 6.9 SHARES LISTED .
 6.10 REGULATORY APPLICATIONS .
 6.11 INSURANCE .
 AGREEMENT AND PLAN OF MERGER
    
    
    36




---



##### 



6.12 CERTAIN ACTIONS
 6.13 ESTOPPEL LETTERS .
 ARTICLE VII. CONDITIONS PRECEDENT
 7.1 CONDITIONS TO EACH PARTYS OBLIGATIONS .
 SHAREHOLDER VOTE
 REGULATORY APPROVALS provided, however,
 NO PENDING OR THREATENED CLAIMS
 NO INJUNCTION
 EFFECTIVE REGISTRATION STATEMENT
 TAX OPINION Exhibit E-3
 AGREEMENT AND PLAN OF MERGER
    
    
    37




---



##### 



NASDAQ LISTING
 7.2 CONDITIONS TO OBLIGATIONS OF FRONTIER .
 PERFORMANCE
 REPRESENTATIONS AND WARRANTIES
 OFFICERS CERTIFICATE
   LEGAL OPINION Exhibit E-2
 AGREEMENT AND PLAN OF MERGER
    
    
    38




---



##### 



NO MATERIAL ADVERSE CHANGE
 OTHER BUSINESS COMBINATIONS, ETC
 RECEIPT OF AFFILIATE AGREEMENTS
 DISSENTERS RIGHTS
 VOTING AGREEMENT Exhibit A
 DIRECTORS AGREEMENT Exhibit B
 NONCOMPETITION AGREEMENTS Exhibits C-1 through C-4
 TRANSACTION EXPENSES
 AGREEMENT AND PLAN OF MERGER
    
    
    39




---



##### 



7.3 CONDITIONS TO OBLIGATIONS OF WBC .
 PERFORMANCE
 REPRESENTATIONS AND WARRANTIES
 OFFICERS CERTIFICATE
   LEGAL OPINION Exhibit E-1
 NO MATERIAL ADVERSE CHANGE
 AGREEMENT AND PLAN OF MERGER
    
    
    40




---



##### 



REORGANIZATION
 FAIRNESS OPINION
 ARTICLE VIII. TERMINATION AND AMENDMENT
 8.1 TERMINATION .
 MUTUAL CONSENT
 DELAY provided, however provided,
further,
 NO REGULATORY APPROVALS provided however
 BREACH OF WARRANTY provided, however,
 AGREEMENT AND PLAN OF MERGER
    
    
    41




---



##### 



BREACH OF COVENANT
 SUPERIOR PROPOSAL provided, however,
 WALK-AWAY provided, however
 SHAREHOLDER APPROVAL
 FRONTIER CONDITIONS PRECEDENT
 AGREEMENT AND PLAN OF MERGER
    
    
    42




---



##### 



WBC CONDITIONS PRECEDENT
 NO FAIRNESS OPINION
 8.2 EFFECT OF TERMINATION .
        AGREEMENT AND PLAN OF MERGER
    
    
    43




---



##### 



8.3 AMENDMENT . provided, however,
 8.4 EXTENSION; WAIVER .
 ARTICLE IX. ADDITIONAL AGREEMENTS
 9.1 ADDITIONAL AGREEMENTS .
 9.2 BENEFIT PLANS .
   AGREEMENT AND PLAN OF MERGER
    
    
    44




---



##### 



9.3 CERTAIN ACTIONS .
      AGREEMENT AND PLAN OF MERGER
    
    
    45




---



##### 



9.4 EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS . Schedule 9.4 Employment Agreements
 9.5 DIRECTORS OF WBC .
 9.6 WBC MANAGEMENT .
 AGREEMENT AND PLAN OF MERGER
    
    
    46




---



##### 



9.7 AT-WILL EMPLOYEES .
 ARTICLE X. GENERAL PROVISIONS
 10.1 CLOSING; EFFECTIVE TIME .
 10.2 SURVIVAL .
 10.3 COUNTERPARTS .
 10.4 GOVERNING LAW; VENUE .
 10.5 EXPENSES .
 10.6 NOTICES .
 If to Frontier or Frontier Bank to:FRONTIER FINANCIAL CORPORATION332 S.W. Everett Mall WayP.O. Box 2215Everett, WA 98203Telephone: (425) 514-0700Fax: (425) 514-0718Attn: John J. Dickson, President and CEO
 AGREEMENT AND PLAN OF MERGER
    
    47




---



##### 



With a copy to:
    
    Keller Rohrback L.L.P.1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone: (206) 623-1900Fax: (206) 623-3384Attn: Thomas A. Sterken
 If to WBC or Whidbey Island Bank, to:
    
    WASHINGTON BANKING COMPANY450 S.W. Bayshore DriveOak Harbor, WA 98277Telephone: (360) 679-3121Fax: (360) 675-7282Attn: Michal D. Cann, President and CEO
 With a copy to:
    
    Davis Wright Tremaine1201 Third Avenue, Suite 2200Seattle, WA 98101Telephone: (206) 622-3150Fax: (206) 757-7700Attn: Marcus J. Williams
 10.7 ENTIRE UNDERSTANDING .
 10.8 ENFORCEMENT PROCEEDINGS .
 10.9 HEADINGS .
 10.10 ENFORCEMENT OF CONFIDENTIALITY AGREEMENT .
 10.11 SEVERABILITY .
 AGREEMENT AND PLAN OF MERGER
    
    48




---



##### 



10.12 ASSIGNMENT; NO THIRD PARTY BENEFICIARIES .
  FRONTIER FINANCIAL CORPORATIONBy:
    /s/ John J. DicksonJohn J. DicksonPresident and Chief Executive Officer FRONTIER BANKBy:
    /s/ John J. DicksonJohn J. DicksonChief Executive Officer WASHINGTON BANKING COMPANYBy:
    /s/ Michal D. CannMichal D. CannPresident and Chief Executive Officer WHIDBEY ISLAND BANKBy:
    /s/ Jack WagnerJack WagnerPresident and Chief Executive Officer AGREEMENT AND PLAN OF MERGER
    
    49




---



##### 



EXHIBITS
 Exhibit A
    
    Voting AgreementExhibit B
    
    Directors AgreementExhibit C
    
    Noncompetition/Nonsolicitation AgreementExhibit D
    
    Affiliate AgreementExhibit E
    
    (1) Legal Opinion of Keller Rohrback L.L.P.(2) Legal Opinion of Davis Wright Tremaine L.L.P.(3) Tax Opinion of Keller Rohrback L.L.P.Exhibit F
    
    Illustrative Calculations of Merger Consideration
 SCHEDULES
 WBC and Whidbey Island Bank Disclosures
 Schedule 1.5(D)
    
    WBC OptionsSchedule 3.5
    
    Changes to Line of Business, Operating Procedures, etc.Schedule 3.8
    
    Changes in Compensation; Employment AgreementsSchedule 3.13
    
    New or Changes to Material ContractsSchedule 5.1(B)
    
    Shares OutstandingSchedule 5.1(C)
    
    WBC SubsidiariesSchedule 5.1(F)
    
    No Defaults  Agreements Requiring Third Party ConsentSchedule 5.1(G)
    
    WBC Financial StatementsSchedule 5.1(H)
    
    Undisclosed LiabilitiesSchedule 5.1(I)
    
    No Events Causing Material Adverse EffectSchedule 5.1(K)
    
    Litigation, Regulatory ActionSchedule 5.1(L)
    
    Compliance with LawsSchedule 5.1(M)
    
    Material ContractsSchedule 5.1(P)(1)
    
    List of Employee Benefit PlansSchedule 5.1(P)(2)
    
    Employee Benefit Plans Not Qualified Under ERISASchedule 5.1(P)(6)
    
    Obligations for Retiree Health and Life Benefits
 50




---



##### 



Schedule 5.1(R)
    
    Loan PortfolioSchedule 5.1(R)(4)
    
    Loan Repurchase ObligationsSchedule 5.1(R)(6)
    
    Loans to Officers and DirectorsSchedule 5.1(S)
    
    InsuranceSchedule 5.1(U)(2)
    
    Pending Proceedings with Respect to Environmental MattersSchedule 5.1(U)(3)
    
    Pending Proceedings with Respect to Environmental Matters Involving Loan/Fiduciary PropertySchedule 5.1(U)(4)
    
    Pending Proceedings with Respect to Environmental Matters Listed in Sections 5.1(U)(2) or (3)Schedule 5.1(U)(5)
    
    Actions During Ownership Which Could Have Material Adverse Effect with Respect to Environmental MattersSchedule 5.1(U)(6)
    
    Actions Prior to Ownership Which could Have Material Adverse Effect with Respect to Environmental MattersSchedule 5.1(V)
    
    Tax Report MattersSchedule 5.1(X)
    
    Derivative Contracts, including a list of any assets pledged as security for such Derivative ContractsSchedule 5.1(Y)
    
    Investment SecuritiesSchedule 5.1(Z)
    
    Intellectual Property
 Frontier and Frontier Bank Disclosures
 Schedule 5.2(B)
    
    SharesSchedule 5.2(C)
    
    Frontier SubsidiariesSchedule 5.2(F)
    
    No DefaultsSchedule 5.2(G)
    
    Frontier Financial StatementsSchedule 5.2(H)
    
    Absence of Undisclosed LiabilitiesSchedule 5.2(I)
    
    Litigations, Regulatory ActionSchedule 5.2(J)
    
    Compliance with LawsSchedule 9.4
    
    Employment and Change of Control Agreements
 51




---



##### 



EXHIBIT A
 VOTING AGREEMENT
 
   *
    Very truly yours,Print Name:NUMBER OF SHARES:
    
    Dated:  , 2007
 
 * Beneficial ownership is defined by SEC
rules, to include WBC shares held by the undersigned, his spouse and dependents
and their controlled trusts and other entities over which the undersigned has
voting or investment power with respect to the WBC Common Stock.




---



##### 



EXHIBIT B
 DIRECTORS AGREEMENT
  Recitals
    Agreement
   1




---



##### 



2




---



##### 



FRONTIER FINANCIAL CORPORATION
    
    DIRECTORBy:John J. Dickson, President/CEO

   

Print Name:
 FRONTIER BANKBy:, President/CEO
 3




---



##### 



EXHIBIT C-1
 NONCOMPETITION/NONSOLICITATION AGREEMENT
  WHEREAS
 WHEREAS
 NOW, THEREFORE
 Effective Time
 Noncompetition, Nonsolicitation and Nondisparagement .
  1




---



##### 



Nondisparagement .
 Intellectual Property/Confidential Information
 No Employee Contract Rights
 Enforcement of Covenants
   2




---



##### 



Adequate Consideration
 Employment Agreement Superseded
 Definitions
    3




---



##### 



Payment Obligations
 provided however
 provided however
 4




---



##### 



Miscellaneous Provisions
 Independent Legal Counsel
 Binding Effect
 Costs of Legal Actions and Proceedings
 Governing Law
 Entire Agreement
 Waiver
 5




---



##### 



Notice
 Counterparts
  FRONTIER
FINANCIAL CORPORATION

EXECUTIVEBy:John J. Dickson, President and CEO
    
    Name: Michal D. Cann
 FRONTIER BANKBy:Name:Title:
 6




---



##### 



EXHIBIT C-2
 NONCOMPETITION/NONSOLICITATION AGREEMENT
  WHEREAS
 WHEREAS
 NOW, THEREFORE
 Effective Time
 Noncompetition, Nonsolicitation and Nondisparagement .
  1




---



##### 



Nondisparagement .
 Intellectual Property/Confidential Information
 No Employee Contract Rights
 Enforcement of Covenants
   2




---



##### 



Adequate Consideration
 Employment Agreement Superseded
 Definitions
    3




---



##### 



Payment Obligations
 provided however
 provided however
 4




---



##### 



Miscellaneous Provisions
 Independent Legal Counsel
 Binding Effect
 Costs of Legal Actions and Proceedings
 Governing Law
 Entire Agreement
 Waiver
 5




---



##### 



Notice
 Counterparts
  FRONTIER FINANCIAL CORPORATION
    
    EXECUTIVEBy:John J. Dickson, President and CEO
    
    Name: John L. WagnerFRONTIER BANKBy:Name:Title:
 6




---



##### 



EXHIBIT C-3
 NONCOMPETITION/NONSOLICITATION AGREEMENT
  WHEREAS
 WHEREAS
 NOW, THEREFORE
 Effective Time
 Noncompetition, Nonsolicitation and Nondisparagement .
  1




---



##### 



Nondisparagement .
 Intellectual Property/Confidential Information
 No Employee Contract Rights
 Enforcement of Covenants
   2




---



##### 



Adequate Consideration
 Employment Agreement Superseded
 Definitions
    3




---



##### 



Payment Obligations
 provided however
 provided however
 4




---



##### 



Miscellaneous Provisions
 Independent Legal Counsel
 Binding Effect
 Costs of Legal Actions and Proceedings
 Governing Law
 Entire Agreement
 Waiver
 5




---



##### 



Severability
 Notice
 Counterparts
  FRONTIER FINANCIAL CORPORATION
    
    EXECUTIVEBy:John J. Dickson, President and CEO
    
    Name: Richard A. ShieldsFRONTIER BANKBy:Name:Title:
 6




---



##### 



EXHIBIT C-4
 NONCOMPETITION/NONSOLICITATION AGREEMENT
  WHEREAS
 WHEREAS
 NOW, THEREFORE
 Effective Time
 Noncompetition, Nonsolicitation and Nondisparagement .
  1




---



##### 



Nondisparagement .
 Intellectual Property/Confidential Information
 No Employee Contract Rights
 Enforcement of Covenants
   2




---



##### 



Adequate Consideration
 Employment Agreement Superseded
 Definitions
    3




---



##### 



Payment Obligations
 provided however
 provided however
 4




---



##### 



Miscellaneous Provisions
 Independent Legal Counsel
 Binding Effect
 Costs of Legal Actions and Proceedings
 Governing Law
 Entire Agreement
 Waiver
 5




---



##### 



Severability
 Notice
 Counterparts
  FRONTIER FINANCIAL CORPORATION
    
    EXECUTIVEBy:John J. Dickson, President and CEO
    
    Name: Joseph W. NiemerFRONTIER BANKBy:Name:Title:
 6




---



##### 



EXHIBIT D
 
 
         1




---



##### 



Very truly yours,Print Name:
 
 FRONTIER FINANCIAL CORPORATIONBy:John J. Dickson, President/CEO
 2




---



##### 



EXHIBIT E-1
 
 
         E.
    
    Certificate of existence or authorization dated ___, 2007, issued
by the Washington Secretary of State with respect to Frontier, and certificate of




---



##### 



Washington Banking CompanyWhidbey Island Bank
    
    Keller Rohrback L.L.P., 2007Page 2




---



##### 



Washington Banking CompanyWhidbey Island Bank
    
    Keller Rohrback L.L.P., 2007Page 3




---



##### 



Washington Banking CompanyWhidbey Island Bank
    
    Keller Rohrback L.L.P., 2007Page 4




---



##### 



Washington Banking CompanyWhidbey Island Bank
    
    Keller Rohrback L.L.P., 2007Page 5
   Very truly yours,KELLER ROHRBACK L.L.P.




---



##### 



Subject to Review and Approval by the DWT Opinion Committee
 EXHIBIT E-2
 
 
     A. Documents and Matters Examined
  A-1
    
    The Articles of Incorporation and Bylaws of WBC and WBC Bank, as amended
through the date of this opinion letter;A-2
    
    Minutes of meetings of the Boards of Directors and shareholders of WBC and WBC
Bank;




---



##### 



A-3
    
    The Agreement, including the representations, warranties and covenants of WBC
and WBC Bank contained in the Agreement, and including all exhibits and schedules
thereto;A-4
    
    The Proxy Statement;A-5
    
    Certificate of existence or authorization dated ___, 2007, issued by
the Washington Secretary of State with respect to WBC, certificate of existence or
authorization dated ___, 2007, issued by the Washington Department of
Financial Institutions with respect to WBC Bank, and certification of WBC Bank as an
insured depository institution under the Federal Deposit Insurance Act, from the
Federal Deposit Insurance Corporation dated ___, 2007; andA-6
    
    Certificates of Officers of WBC and WBC Bank dated ___, 2007, as to
certain factual matters contained in the opinion.
 B. Assumptions
  B-1
    
    All conditions precedent to the Closing have been satisfied or waived and all
the representations and warranties contained in the Agreement are accurate.B-2
    
    Our opinions in C-1 and C-2 as to the valid existence and good standing of WBC
and WBC Bank are based exclusively on certificates of public officials.B-3
    
    Our opinion in C-7 are based upon, and assume the accuracy of, WBCs and WBC
Banks representations contained in the Agreement and of the books and records of WBC
and WBC Bank supplied to us, including, without limitation, the stock ledger, options
ledger, and minutes of meetings (or consents in lieu of minutes) of the directors and
shareholders of WBC and WBC Bank. We acknowledge, with your concurrence, that we have
not been requested to conduct an independent investigation of the books and records of
WBC and WBC Bank with respect to our opinions.B-4
    
    Our opinions in C-7 relating to the fully paid status of the issued and
outstanding shares of capital stock of WBC and WBC Bank and of the common stock are
based, without independent verification by us, on the certificate of the Chief
Executive Officer of WBC and WBC Bank (the Opinion Certificate), to the effect that
WBC and WBC Bank has received the consideration approved by its Board of Directors for
all of the issued shares of capital stock of WBC and WBC Bank.




---



##### 



C. Opinions
  C-1
    
    WBC is a corporation validly existing under the laws of the State of Washington
and has the corporate power to own or lease its properties and assets and to carry on
its business as such properties, assets and business are described in the Proxy
Statement.C-2
    
    WBC Bank is a banking corporation validly existing under the laws of the State
of Washington and has the corporate power to own or lease its properties and assets and
to carry on its business as such properties, assets and business are described in the
Proxy Statement.C-3
    
    The execution and delivery of the Agreement and the consummation of the Merger
have been duly and validly authorized by the Boards of Directors and the shareholders
of WBC and WBC Bank.




---



##### 



C-4
    
    The Agreement constitutes a valid and binding obligation of WBC and WBC Bank,
enforceable against WBC and WBC Bank in accordance with the terms of the Agreement.C-5
    
    No consent or approval from any federal regulatory authority that has not
already been obtained is required for the execution and delivery by WBC or WBC Bank of
any of the documents to be executed and delivered by WBC or WBC Bank in connection with
the Agreement or for the consummation of the Merger.C-6
    
    Neither the execution, delivery or performance of the Agreement by WBC and WBC
Bank nor the consummation of the Merger will (a) violate any provision of the Articles
of Incorporation or Bylaws of WBC or WBC Bank, or (b) to our knowledge, violate any
order, judgment or decree to which WBC or WBC Bank are parties or by which they or any
of their properties or assets are bound.C-7
    
    The issued and outstanding shares of common stock of WBC and WBC Bank have been
duly authorized and validly issued and are fully paid and nonassessable.C-8
    
    To our knowledge there is no suit, action, investigation or proceeding, legal,
quasi-judicial, administrative or otherwise, pending or threatened against, or
affecting WBC or WBC Bank, that is seeking equitable relief or damages against WBC or
WBC Bank that would materially affect the ability of WBC or WBC Bank to consummate the
transactions contemplated by the Agreement or that seeks to enjoin consummation of the
transactions contemplated by the Agreement.
 D. Qualifications
  D-1
    
    Our opinion as to the legal, valid and binding nature and the enforceability of
the Agreement in paragraphs 3, 4 and 5 above is subject to the following: (i) the
effect of applicable bankruptcy, insolvency, reorganization, receivership, fraudulent
conveyance, moratorium or other similar laws affecting the rights of creditors
generally, including without limitation such laws and/or regulations specifically
applicable to institutions the deposits of which are insured by the Federal Deposit
Insurance Corporation (Insured Institutions), now or subsequently in effect; (ii)
limitations imposed by laws and judicial decisions relating to or affecting creditors
of Insured Institutions, or by general principles of equity (regardless of whether
enforcement is considered in proceedings at law or in equity), upon the provisions of
the Agreement and/or the other related documents or upon the availability of injunctive
relief or other equitable remedies; and (iii) our assumption that Frontier, Frontier
Bank and any of their successors in interest will




---



##### 



seek to enforce any of its rights in connection with the Agreement only in
circumstances and in a manner in which it is commercially reasonable to do so.D-2
    
    We express no opinion as to: (i) the enforceability of any provision or
accumulation of provisions that may be deemed to be unconscionable; (ii) any antitrust,
securities or tax laws; (iii) provisions that purport to establish evidentiary
standards; (iv) provisions relating to venue, jurisdiction, governing law, waiver of
remedies (or the delay or omission of enforcement of such provisions), or disclaimers
or liability limitations with respect to third parties; (v) the enforceability of any
requirement in the Agreement or related documents specifying that provisions of such
documents may only be waived in writing, to the extent that an oral agreement or an
implied agreement by trade practice or course of conduct has been created modifying any
provision of the Agreement; (vi) provisions for payment or reimbursement of costs and
expenses (including, without limitation, attorneys fees) in excess of statutory limits
or amounts determined to be reasonable by any court or other tribunal, and any
provision for payment of attorneys fees other than to the prevailing party; (vii)
severability and indemnification provisions; (viii) availability of equitable remedies;
and (ix) any reservation of the right to pursue inconsistent or cumulative remedies.D-3
    
    Our opinions below are limited to the matters expressly set forth in this
opinion letter, and no opinion is to be implied or may be inferred beyond the matters
expressly so stated.D-4
    
    We disclaim any obligation to update this opinion letter for events occurring
after the date of this opinion letter.D-5
    
    A Washington court, or federal court applying Washington law, may consider
extrinsic evidence of the circumstances surrounding the making of the Agreement to
ascertain the intent of the parties using the language employed in the Agreement,
regardless of whether or not the language used is plain and unambiguous on its face,
and may incorporate additional or supplementary terms into the Agreement.
 E. Certain Factual Matters




---



##### 



material
   Very truly yours,DAVIS WRIGHT TREMAINE LLP




---



##### 



EXHIBIT E-3
 [To be included in Proxy Statement]
  Frontier Financial Corporation
    
    Washington Banking CompanyFrontier Bank
    
    Whidbey Island Bank332 S.W. Everett Mall Way
    
    450 SW Bayshore DriveP.O. Box 2215
    
    Oak Harbor, WA 98277Everett, WA 98203
 Corporate Merger/Tax Consequences
    1.
    
    The Agreement and Plan of Merger dated as of September ___, 2007, between Frontier,
Frontier Bank, WBC and Whidbey Island Bank (the Merger Agreement).2.
    
    Form S-4 Registration Statement and Prospectus of Frontier filed with the Securities
and Exchange Commission on or about ___, 2007.3.
    
    The Proxy Statement of WBC (included as part of the Registration Statement).




---



##### 



Frontier Financial Corporation and Frontier Bank
    
    Keller Rohrback L.L.P.Washington Banking Company and Whidbey Island Bank, 2007Page 2
 4.
    
    Such other documents, instruments, records and information pertaining to the Merger as
we have deemed necessary for rendering our opinion.
      Parties
 Shareholders of WBC




---



##### 



Frontier Financial Corporation and Frontier Bank
    
    Keller Rohrback L.L.P.Washington Banking Company and Whidbey Island Bank, 2007Page 3
   Sincerely,KELLER ROHRBACK L.L.P.




---



##### 



EXHIBIT F
 Frontier
    
    
    
    
    
    
    
    
    
    Per Share
    
    Per Share
    
    Total
    
    Frontier
    
    TotalAverage
    
    Aggregate
    
    Per Share
    
    Cash
    
    Stock
    
    Cash
    
    Merger
    
    StockShare
    
    Consideration
    
    Consideration
    
    Consideration
    
    Consideration
    
    Amount
    
    Shares
    
    ConsiderationPrice
    
    ($)
    
    ($)
    
    ($)
    
    (x)
    
    ($)
    
    (shares)
    
    ($)$21.00
    
    $
    167,109,037
    
    
    $
    19.41
    
    
    $
    19.41
    
    
    
    0.9244x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    124,245,034
    
    
    
    
    
    
    
    
    INCL. OPTIONS$22.00
    
    $
    173,025,467
    
    
    $
    20.10
    
    
    $
    20.10
    
    
    
    0.9136x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    130,161,464$23.00
    
    $
    178,941,897
    
    
    $
    20.79
    
    
    $
    20.79
    
    
    
    0.9038x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    136,077,894$24.00
    
    $
    184,858,327
    
    
    $
    21.47
    
    
    $
    21.47
    
    
    
    0.8947x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    141,994,324$25.00
    
    $
    190,774,758
    
    
    $
    22.16
    
    
    $
    22.16
    
    
    
    0.8864x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    147,910,754
    
    
    Shares Oustanding
    
    
    9,391,159$26.00
    
    $
    196,691,188
    
    
    $
    22.85
    
    
    $
    22.85
    
    
    
    0.8788x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    153,827,184
    
    
    Less: Frontier Owned
    
    
    (782,506
    )$27.00
    
    $
    202,607,618
    
    
    $
    23.54
    
    
    $
    23.54
    
    
    
    0.8717x
    
    
    $
    42,864,003
    
    
    
    5,916,430
    
    
    $
    159,743,615
    
    
    Excl. Frontier Owned
    
    
    8,608,653$28.00
    
    $
    202,607,618
    
    
    $
    23.54
    
    
    $
    23.54
    
    
    
    0.8405x
    
    
    $
    42,864,003
    
    
    
    5,705,129
    
    
    $
    159,743,615$29.00
    
    $
    202,607,618
    
    
    $
    23.54
    
    
    $
    23.54
    
    
    
    0.8116x
    
    
    $
    42,864,003
    
    
    
    5,508,401
    
    
    $
    159,743,615