Cascade Financial Corp.'s capital prayers may have been answered by a small but ambitious California bank.
On Friday, Opus Bank in Irvine, which raised $460 million of equity late last year, announced it would acquire the $1.5 billion-asset Cascade in Everett, Wash., for $21.75 million in cash. Of the consideration, $16.25 million would be used to exchange Cascade's $39 million of preferred stock it issued to the Troubled Asset Relief Program. The remaining $5.5 million would go to the company's common shareholders, representing 45 cents per share, a 15% discount to the company's closing price on Friday.
The $700 million-asset Opus agreed to assume the company's trust-preferred securities.
Last summer, regulators called for Cascade to maintain a leverage ratio of 10% as part of consent order. Based on Dec. 31 figures, the company said it would have needed to raise $68 million to do so. Cascade, however, had been working with Sandler O'Neill & Partners LP since 2009 to consider alternatives.
Opus can relate. Previously known as Bay Cities Bank, that bank was undercapitalized for two years before Stephen Gordon, former chief executive of Commercial Capital Bancorp Inc., led an overcapitalization with the intention of building a regional bank on the West Coast. The deal for Cascade is Opus' first acquisition under Gordon's leadership.