Frontier Financial stock slumps on going concern doubts

March 17 Wed Mar 17, 2010 10:22am EDT

March 17 (Reuters) - Shares of Frontier Financial Corp FTBK.O fell as much as 35 percent, a day after the lender revised its results to reflect higher losses and said its weak capital position raises substantial doubt about its ability to continue as a going concern.

The Everett, Washington-based company said the additional losses reduced its banking unit's Tier 1 Leverage Capital ratio to 1.65 percent, designating it as "critically undercapitalized" for purposes of prompt corrective action as of Dec. 31.

The weak capital position could lead to Frontier Bank being placed into conservatorship, or receivership, the company said.

The company said the revised results reflect an additional $30 million in loan loss provisions, among other things.

Fourth-quarter net loss was $70.2 million, or $14.89 a share, compared with its previously reported loss of $33.9 million, or $7.19 a share.

Shares of the company were down 27 percent at $3.09 Wednesday morning on Nasdaq. They touched a low of $2.75 earlier in the session. (Reporting by Abhinav Sharma in Bangalore; Editing by Anil D'Silva)