( Updated with Frontier Financial news.)
Frontier Financial Retraces Gains As Vote Looms
EVERETT, Wash. ( TheStreet) -- One day after surging on heavy volume, Frontier Financial (FTBK) shares retraced some of those gains Wednesday on fears the deal with SP Acquisition Holdings (DSP) will not close.
Frontier shares were lately down 19 cents, or 12.3%, to $1.35. Share volume Wednesday topped 3.8 million, well above the 50-day average daily volume of 515,000 shares, according to the Nasdaq's Web site.
SP Acquisition, a New York-based asset-acquisition company sponsored in part by Steel Partners, said in July it would buy Frontier for about $24 million in stock and warrants.In a regulatory filing Wednesday, SP Acquisition said that Frontier shareholders would receive an implied consideration of roughly 52 cents a share "resulting in an implied discount of approximately $1.02 per share of Frontier common stock." SP Acquisition warrants, which had traded near 40 cents last week, had fallen to 13 cents Wednesday, an indication traders believe there is a low probability of a deal being completed. The filing also said Frontier expects that its Tier 1 leverage capital ratio will drop below 4% as of Sept. 30, which would mean the bank would be considered "undercapitalized" by federal regulatory guidelines. In March, Frontier said it signed a Cease and Desist Order with the Federal Deposit Insurance Corp. and State of Washington Department of Financial Institutions. Under the agreement, Frontier agreed to achieve and maintain a Tier 1 capital level of 10% of its total assets. The bank's Tier 1 capital ratio at year end 2008 was 8.53%.