CommerceBancorp Reports ’93 Loss of $12.7 Million

Struggling CommerceBancorp, working its way through bad loans and real estate it owns through foreclosure, reported an annual loss of $12.7 million, equal to $5.36 a share.

The loss--nearly quadruple the $3.6-million loss, or $1.53 a share, for the previous year--has brought the company’s CommerceBank subsidiary precipitously close to being critically undercapitalized--a category that could lead to a federal takeover.

Regulators, however, have approved the company’s plan to raise $12 million to $15 million in a stock offering to current shareholders and to the public. Dale E. Walter, company president, said he hopes to obtain regulatory approval soon and to start selling stock by mid-April.

The bank, he pointed out, has improved greatly since the third quarter, reducing its bad loans and foreclosed real estate from about $21 million to $11 million. It also has socked so much away in reserves for possible loan losses, he said, that the cash available covers 95% of the bank’s bad loans.

As part of its strategy, the bank has been reducing its loans and other assets. At the end of December, its total assets stood at $187.9 million, a 28% drop from $259.3 million a year earlier.

Annual revenue dropped 30% to $11.8 million last year from $16.9 million the previous year.

For the fourth quarter, the company lost $3.2 million, a slight improvement over the $3.7 million lost for the last three months of 1992. Quarterly revenue fell 40% to $2.4 million from $4 million.