EVERETT — The stock price of Everett-based Frontier Financial Corp., which dropped dramatically during the last two days, was on the rise this morning on news that the company had applied for federal funds to have more money available for loans.
In announcing that Frontier, the parent company of Frontier Bank, had yet to hear about its application, CEO John Dickson acknowledged that his company had been the subject of a rumor that its application had been denied.
“The steep drop in our stock price that last two days is partially due to persistent rumors that our Capital Purchase Program application had been denied by our regulators,” he said in a news release. “Our application is being processed and they have neither approved nor denied it.”
Frontier stock, which lost 39 percent Tuesday to hit a 52-week low of $2.36 a share, had risen slightly to $2.69 a share in early trading.
The denial rumors had hit chat lines for Yahoo and other areas for stock traders on Tuesday.
Both Frontier and Everett-based Cascade Bank have been the subject of persistent short sellers, people who make money when the stock goes down.
Cascade recently announced that it had been approved for the government program in which it will receive $39 million in exchange for company stock. Cascade stock had dropped slightly today to $6.74 a share, but was trading well above its 52-week low of $3.24 a share.
Dickson said he doesn’t know when he will receive an answer on the company’s application.
Friday is the deadline for banks to apply for the program.
The company will continue to participate in a temporary program with the government that allows for unlimited FDIC insurance coverage for all noninterest-bearing checking accounts through Dec. 31, 2009.
Dickson said the program is intended to enhance confidence in the banking system.