Frontier Financial stock up 97 percent
Published 2:24 pm Monday, April 26, 2010
EVERETT — Frontier Financial Corp.’s stock price continued to show volatility today, nearly doubling in value during market hours.
The stock ended the day at $5.88, up 97.32 percent from Friday’s closing price.
Speculation about whether the troubled bank will be seized by regulators could be the reason behind the jump, which started late last week. Frontier officials haven’t release any news that would explain the increased buying activity.
The bank’s stock traded at a volume of 23.26 million shares today. Average daily volume for the stock is about 204,000 shares.
Sara Hasan, an analyst with McAdam Wright Ragan of Seattle, said the bank’s extreme movement is a mystery.
“Frontier? I have no idea,” she said. “I can’t figure out any reason that it has moved like this. I’ve noticed it in other community banks that are in trouble, but this one is the largest and the most dramatic.”
Sterling Financial of Spokane was another troubled community bank that saw increased trading during the last few days, Hasan said. But its price hasn’t moved as much as Frontier’s.
Frontier CEO Pat Fahey said he wasn’t planning any announcements later in the day, and was at a loss to explain the jump.
“We have really no way of knowing,” Fahey said. “Anything I would say would be pure speculation.”
The bank’s stock first showed signs of volatility Friday, climbing 26 percent.
Federal and state regulators usually seize troubled banks at the end of the week. The stock’s increase could have started with short sellers speculating that Frontier would be seized and sold by regulators last week — but Friday passed without any news regarding the bank’s fate.
Hasan said there’s a chance the increase is due to program trading, electronic transactions involving groups of stock.
“It may be a program trade just taking a position in a lot of community banks,” she said. “We’ve seen funny moves like this in other bank stocks. I really can’t figure out who’s making money. People get excited, and it’s just kind of weird.”
Frontier’s executives are working to recapitalize the bank following censure from the federal government. Earlier this month, Fahey said he felt there was enough time to find an investor to save Frontier from a forced-sale.
Frontier’s stock price continued to move in after-hours trading. Over the course of the day, shares soared as high as $7.90.
Read Amy Rolph’s small-business blog at cmg-northwest2.go-vip.net/heraldnet/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com.
