CommerceBank

CommerceBank of Newport Beach said Monday that it posted $1.02 million in profits for 1984, a sixfold increase from the $156,000 in earnings reported for 1983.

For the fourth quarter of 1984, CommerceBank reported a profit of $354,000, up 139% from earnings of $148,000 in the same period in 1983.

CommerceBank President Clyde Gossert credited the boost in annual earnings to the Newport Beach-based lender’s decision to return to “basic banking” by controlling overhead costs and making sound loans to financially responsible borrowers.

“It is a goal we’ve been pursuing for the past two years and it is finally paying dividends,” Gossert said.

Revenue from loans increased 43% in 1984, to $10.7 million from $7.4 million in 1983. At the same time, the bank had to write off only about $100,000 in loan losses for 1984, and offset that, Gossert said, by recovering more than $100,000 from loans written off in previous years.

A secondary reason for CommerceBank’s profitability, Gossert said, is that the bank’s second office, located in the business district near South Coast Plaza in Costa Mesa, “had a very profitable year.” The office was opened in 1983 and the opening costs weren’t paid off until early this year.

CommerceBank emphasizes commercial lending, with almost 70% of its loan portfolio devoted to business loans.

The bank’s loan portfolio totaled $82.5 million on Dec. 31, up 23% from the $66.8 million reported a year earlier. Commercial loans, Gossert said, accounted for about $58 million, with real estate construction loans at $17 million and consumer loans and leases at about $7. million.

Assets on Dec. 31 totaled $126.8 million, up 3.5% from $122.5 million in assets a year earlier, according to the bank’s unaudited financial report.

At the same time, shareholder equity of $8.3 million represented a 16% increase from the $7.2 million reported for Dec. 31, 1983. The shareholder equity, combined with a loan-loss reserve of $1.05 million, boosted the bank’s ratio of capital to assets to 7.36%. The Federal Deposit Insurance Corp. considers a 6% capital-to-assets ratio to be the minimum acceptable level for an independent bank.