Frontier Group Shows Profit Rise in Second Year

The Frontier Group Inc., holding company for Frontier Bank of Buena Park, reported record earnings of $543,000 for fiscal 1984, more than 15 times the $36,000 posted for the same period last year. The bank, in business only since May, 1983, already has had an earnings history which runs counter to the industry standard for new banks, which usually experience losses during its first few years.

For the fourth quarter, which ended Dec. 31, Frontier Group’s consolidated profit totaled $212,000, up 272% from the $57,000 reported for the final three months of 1983.

Charles Matter, Frontier Group president, said last week that the strong earnings can be attributed to increased fee income generated by the bank’s small business administration loan department and loans that the bank has originated and then sold on the secondary market. In addition, Matters said, “We have held down operating expenses because we have one facility--no branches--and our salaries are substantially below” other bank employees.

The bank’s total loan portfolio stood at $15.9 million on Dec. 31, more than double the $7 million reported a year earlier. Deposits of $29 million were up 93% from $15 million last year. The primary capital-to-assets ratio was 14%, double the 7% minimum required for independent community banks.

Matter cited the bank’s “prudent loan policy” and the absence of brokered deposits as significant factors in the Frontier Group’s strong performance during its second year.

Frontier’s assets were $34.2 million on Dec. 31, compared with $19.6 million at year end 1983.