At a marble table in a largely empty Irvine office, Stephen Gordon is crafting a plan to build a regional bank from a small, newly renamed lender now based in Redondo Beach.
In the next few years, Gordon hopes to grow Opus Bank to 75 branches across California, up from five now, all in the South Bay area of Los Angeles County.
Beyond that, he hopes to expand to Arizona, Nevada, Oregon and Washington.
Gordon said he hopes to take the community business bank’s assets from $710 million to more than $20 billion.
Sounds lofty, but the former New York investment banker has done it here before.
Gordon, who lives in Laguna Beach’s Irvine Cove, started Commercial Capital Bancorp Inc. in 1998. He moved the bank and real estate lender to Irvine in 2000 and took it public in 2002, raising $43 million.
From there, Commercial Capital grew to nearly $6 billion in assets before it was sold to Washington Mutual Inc. in 2006 for $1 billion.
The remnants of Commercial Capital now are part of New York-based JP Morgan Chase & Co., which took over struggling WaMu in late 2008.
New Opportunity
Gordon, who is chairman and chief executive of Opus, said he sees opportunity in the wake of the financial crisis. The ongoing credit crunch has led many banks to effectively shut down lending or tighten standards for loans, he said, leaving businesses and consumers unable to get financing.
“There’s a massive void that needs to be filled,” Gordon said.
He started his latest plan by leading a $460 million investor financing of Opus, which had been known as Bay Cities National Bank. He led a group of 25 institutional and accredited investors.
Among them are New York hedge fund manager Elliott Management Corp., New York investment manager Fortress Investment Group LLC and Greenwich, Conn.-based investment firm Starwood Capital Group.
Gordon plans to keep the bank’s Redondo Beach headquarters and oversee administrative and management from his Irvine office, making it the bank’s de facto base.
He’s hired some 30 executives to lead the bank’s business divisions, including Richard Sanchez, who served as interim chief executive of Brea subprime lender Fremont General Corp., which Gordon unsuccessfully tried to revive a couple of years ago.
Sanchez, who also worked with Gordon at Commercial Capital, has been tapped as executive vice president and serves as chief risk officer and chief administrative officer for Opus.
The bank counts a number of high-profile business names as board members, including Jonathan Jaffe, vice president and chief operating officer of Miami-based homebuilder Lennar Corp.; Michael Meyer, managing principal of TwinRock Partners LLC, a Newport Beach real estate investor; and former KPMG LLP partner Robert Shackleton.
Irvine Office
New hires are starting to move into the 46,500 square feet of Irvine space Opus has subleased from San Francisco-based law firm Morrison Foerster LLP, which closed its OC office in 2008.
Opus is looking to open branches and make acquisitions to expand, according to Gordon.
The bank is set to open a branch in Newport Beach’s Crystal Cove, where Gordon opened a Commercial Capital branch catering to wealthy customers years ago.
He plans a similar approach now, with the Opus branch zeroing in on small and midsize businesses, real estate investors and the wealthy.
“It’s a very centralized location and there are no banks there,” Gordon said.
Opus is expected to make loans in the $500,000 to $10 million range, with an average of $1.5 million, according to Gordon.
As part of the bank’s makeover, Opus in September converted its charter from a national bank to a state commercial bank. Gordon said he sought the change because he and his management team have longstanding ties with state banking regulators.
Gordon, a tough-talking New Yorker, is critical of his banker peers, who he says have sat on the sidelines as they watched the economy spiral. The region needs leadership and access to credit, he said.
“We can do our part in turning this around,” Gordon said. “We will be putting money back into the community—this company will have a voice.”
Last week, the bank started the Opus Community Foundation with a $4.3 million endowment funding by the bank’s recent refinancing.
The foundation is set to support California nonprofits and focus on charitable giving, financial literacy, affordable housing, community development, education, health and science issues, the arts, and infrastructure and neighborhood reinvestment.
Gordon earned his spurs in East Coast banking circles, rising to become partner in the early 1990s with investment bank Sandler O’Neill & Partners LP.
Nearly 15 years ago, Gordon traded his 104th floor office in the World Trade Center for Newport Beach, where he launched Financial Institutional Partners Mortgage Corp., a lender to apartment investors.
Commercial Capital grew out of that company.
In 2007, Fremont General, then based in Santa Monica and parent of Brea’s Fremont Investment & Loan, hired Gordon to turnaround a company buried under a mess of subprime mortgages.
Gordon and a team of executives he brought with him spent most of their time selling off Fremont’s bank branches after federal regulators threatened to shut the company down.
He stepped down in 2008. Fremont filed for bankruptcy that same year and re-emerged earlier this year.
