Industry Veteran Working on His Magnum Opus

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Raising a half-billion dollars? That was the easy part.

Now Stephen Gordon has his sights set on a new challenge: building one of the largest bank franchises on the West Coast.

The financial services veteran made headlines in September when he put $460 million of fresh capital in beleaguered Bay Cities National Bank in Redondo Beach, which he has used as a platform to launch his nascent banking empire, Opus Bank.

To build the institution, Gordon said he plans to use that extra cash to take advantage of a distressed industry in which even healthy banks can be bought on the cheap.

“We are going to be a significant acquirer of banks up and down the West Coast,” said Gordon, who announced a major acquisition this month with the purchase of Cascade Bank in Everett, Wash.

Indeed, he might just be the most ambitious and well financed of the new wave of bank investors. Gordon founded Irvine’s Commercial Capital Bancorp in 1998 and sold it eight years later for close to $1 billion. He said he saw an opportunity emerge around the time the market was bottoming out in 2009 when most banks were either struggling to avoid failure or barely holding their own, turning off conservative investors.

“The void that existed in the western region was so significant that I decided to move forward,” he said.

Since taking control of Bay Cities, a small institution with just five branches and $273 million in assets, Gordon has signed letters of intent to open as many as a half-dozen branches across Southern California. On March 4, the bank agreed to acquire Cascade Financial Corp., the parent of Cascade Bank, which has $1.5 billion in assets and nearly two dozen locations in the Seattle area, giving the bank an instant presence in Washington state.

Cascade had been struggling with loan losses, leading to a heavy discount on the sale. Opus paid just under $22 million for the bank, including $5.5 million for outstanding stock and the rest to retire obligations under the government’s Troubled Asset Relief Program.

With branches in California and Washington, Gordon is well on his way to his ultimate goal of a presence in all West Coast states, as well as Arizona and Nevada. As for final asset size, though, he remains coy. $5 billion? $10 billion?

“A lot more than that,” he said.

Opus Bank

Redondo Beach

FOUNDED: 2010

BUSINESS: Bank holding company

LATEST ACQUISITION: Bought Cascade Bank on March 4.

AMOUNT: $22 million

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