Silicon Valley Bank, which has made its name lending to technology entrepreneurs, is mapping national expansion plans.
The $1.9 billion-asset bank, which currently has seven private banking offices in six California cities and in Wellesley, Mass., is eyeing sites in other high-tech centers. These include Rockville, Md.; Boulder, Colo.; and Beaverton, Ore., a top executive said.
It is also considering opening another California branch, in St. Helena.
The plans are still in an early stage, cautioned Jean Whitney Blomberg, senior vice president and manager of the executive banking group at the Santa Clara, Calif.-based bank.
The expansion would take about two years, she explained, and the bank has not yet begun assembling regulatory applications.
But she left no doubt about Silicon Valley's ambitions. "Wherever technology thrives, you'll find Silicon Valley Bank," Ms. Blomberg said.
The bank, founded in 1983, specializes in lending to nascent software or semiconductor companies, biotechnology and health-care firms, and young venture capitalists.
Its executive banking division is based in Palo Alto, Calif., and it has other offices in Menlo Park, Santa Clara, Irvine, San Diego, and Beverly Hills.
The Wellesley, Mass., office opened seven years ago to serve high-tech companies popping up along Route 128.
To quench the liquidity thirst of the executives of those companies, many of whom get sizable lumps of stock when their firms go public, Silicon Valley started private banking in 1994.
The bank started offering a line of credit this spring that allows clients to apply restricted stock as loan collateral.
"There is nothing terribly new about the strategy, but applying it to one of the best growth markets in the country is sharp," said David Ross Palmer, a private banking consultant based in East Falmouth, Mass. "That market is growing like a weed. It's an example of a disciplined niche marketing campaign carried out extremely well."
Other niches for Silicon Valley include serving executives from the entertainment industry out of its Beverly Hills office; cash management for religious organizations from its Irvine office; and lending to wineries in California's Napa Valley.
Ms. Blomberg says her clients do not have established wealth, yet.
"We really have a different philosophy as far as extending executive banking services," she said. "What most people do is put parameters on the clients. They say you have to have a minimum net worth or whatever to qualify for services."
Different philosophy, indeed. Not having proprietary investment products available would be unthinkable these days at most banking companies, big or small.
But Silicon Valley isn't looking to manage the assets of private banking clients; it just wants to reap the rewards of lending to them."Our goal isn't to maximize profitability on every private banking client," Ms. Blomberg said. "Everybody else is more interested in the deposit and trust sides of serving private banking clients."
When they do need trust and investment management services, Silicon Valley refers them to specialists.
"There are plenty of banks to go after people in the top echelons," Ms. Blomberg said. "We can't be all things to all people."
