Opus Bank has made its first local acquisition as it seeks to become a regional bank on the West Coast.
Opus, which has its executive headquarters in Irvine, last week agreed to buy 84-year-old Fullerton Community Bank.
It is paying $50 million in cash to shareholders of RMG Capital Corp., the parent company of Fullerton Community.
The deal values RMG at 1.32 times its book value through March.
The acquisition, subject to customary closing conditions, is expected to close in the fourth quarter.
The boards of RMG, Fullerton and Opus banks have signed off on the deal.
Fullerton Community, the largest savings and loan based in the county, has $682 million in assets, $511 million in deposits and $530 million in loans.
The thrift’s strong community ties, reputable name, philanthropic work and longstanding presence in North Orange County were big selling points, according to Opus Chief Executive Stephen Gordon.
“We like to acquire financial institutions that have a long heritage, are highly regarded and reputable and those who have been known to give back to community,” Gordon said. “The two companies very much share that same culture and belief.”
Fullerton Community has eight branches in Anaheim, Brea, Fullerton, Garden Grove and Yorba Linda. Its shares are traded on the low-profile Pink Sheets exchange.
The thrift is seeking regulatory approval to sell its Garden Grove branch to Los Alamitos-based Southland Credit Union. The other seven branches are expected to be folded into Opus.
“A Little Melancholy”
The deal is bittersweet for Fullerton Community, which ends one of the longest runs in the banking industry here amid pressures to keep capital levels high to meet revived demand for loans and higher regulatory requirements placed on the industry in recent years.
“You can’t help but feel a little melancholy,” said RMG Chief Executive Tom Meyer, who’s set to become president of the OC market for Opus. “We probably needed more capital to grow with our customers as everyone is emerging with the recovery. Accessing and tapping into what Stephen has raised at Opus will be a tremendous opportunity for our clients.”
Opus made a splash last year when Gordon, a veteran local banker, led a $460 million recapitalization of what had been known as Bay Cities National Bank.
Gordon has laid out a plan to grow Opus to 75 branches in Calif-ornia, Washington and Oregon.
“Things are proving out—the company is clearly expanding and growing,” he said. “It’s becoming pretty clear the client base wants it and needs it.”
In March, Opus announced its first acquisition outside Southern California. Its pending $21.7 million buy of Washington’s Cascade Financial and Cascade Bank includes 22 branches in the Seattle area and $1.5 billion in assets. That deal is expected to close later this month.
Last month the Business Journal reported that Opus finalized leases for six branches in OC and the rest of Southern California.
The bank also said it has signed or is in the process of negotiating letters of intent for 11 other branches, including its first in the San Francisco area and other markets in Northern California.
Opus now has five branches in the South Bay area of Los Angeles County with a branch in Crystal Cove set to open this summer and one in Corona del Mar due later this year.
Opus has about $708 million in assets and nearly $300 million in deposits.
After the acquisitions of Cascade Bank and Fullerton Community close, Opus is projected to have nearly $3 billion in assets with 42 branches.