Firm to Purchase CommerceBank, Parent Company : Acquisition: Michigan National, owner of Beverly Hills Business Bank in Mission Viejo, to give $5.1 million in cash and $20.4 million in stock.

Michigan National Corp., which owns Beverly Hills Business Bank in Mission Viejo, has agreed to acquire CommerceBancorp for $5.1 million in cash and $20.4 million in stock.

Under the tentative pact, the purchase price for CommerceBancorp in Newport Beach and its subsidiary, CommerceBank, could be less if the bank does not shed about $10 million in bad loans and foreclosed real estate by the time the deal closes. A closing date will be set when the two sides reach a definitive agreement.

CommerceBank, despite having adequate capital under federal law, is operating under restrictions imposed by regulators because it has been hit hard in the past two years by write-downs on its real estate loans to developers and losses on its commercial loans to businesses.

For CommerceBank, long one of Orange County’s biggest independent banks, the merger would increase its financial strength, help to remove regulatory restrictions and reduce the financial risk of the major shareholders, most of whom are developers.

For Michigan National, the deal would give it the California bank charter it has long been seeking. Executives have stated previously that they want to convert Beverly Hills Business Bank, which is actually a savings and loan, to a commercial bank.

In addition, CommerceBank is “very business oriented,” said Edward H. Sondker, president and chief executive of Beverly Hills Business Bank. “They do exactly what we’re doing, so we’re just adding to market share” with the acquisition.

The bank’s four branches do not overlap geographically with any of the thrift’s six branches, Sondker said.

Raymond E. Dellerba, CommerceBancorp’s president, said in a letter Monday to employees and shareholders: “This potential strategic alliance helps position the bank very well for the highly competitive future.”

Both Dellerba and Sondker said CommerceBank expects to reduce its $19.7 million in bad loans and foreclosed real estate to about $9 million, or 3% of its $304 million in assets, before any deal is completed. Sondker said the bank already has trimmed those bad assets and will release specific figures after the end of the third quarter.

Michigan National, which owns Michigan National Bank in Farmington Hills, Mich., acquired the failed Beverly Hills Savings & Loan at the end of December, 1988, with government assistance. It had been seized by federal regulators in 1985, making it the first big California thrift to fail.

The federal government still owes the revived institution $625 million, and Michigan National, Michigan’s third-largest banking company, cannot convert it to a bank or merge it into a bank until that debt is paid, Sondker said.

Times correspondent Carol Smith contributed to this report.