Silicon Valley Bancshares Opens Arizona Office to Serve Southwest

Silicon Valley Bancshares is taking yet another step outside of the region for which it is named.

The Santa Clara, Calif.-based bank, best known for financing high-tech companies, is opening an office in Scottsdale, Ariz. From there, it plans to serve capital-hungry clients in Arizona, New Mexico, and Nevada.

"Phoenix, Tucson, Albuquerque are rapidly developing markets for emerging technology companies," said Stephen D. Todd, the Silicon Valley senior vice president running the new office.

Mr. Todd is the former president of First National Bank of Arizona-now known as Pacific Century Bank, a subsidiary of Pacific Century Financial Corp., Honolulu.

Silicon Valley, a $2.1 billion-asset banking company, has been on an expansion tear in recent months. It opened offices in Bellevue, Wash., and Atlanta this year and in Austin, Tex., and Boulder, Colo., last year.

The Southwest outpost is located in a Scottsdale office building called the Arizona Technology Incubator. Most of the bank's neighbors there are fledgling companies eager for seed money from venture capitalists, to which Silicon lends.

Venture capitalists have been key referral sources of emerging technology companies for Silicon Valley in other regions of the country. Silicon Valley provides small businesses with lines of credit, term loans, and lease financing for equipment, as well as cash management and asset- based lending products.

Mr. Todd, who has worked in commercial lending, finance, and credit for more than 20 years, said Silicon Valley has a good plan in the Southwest because of the surge of start-up businesses.

"A lot of banks are focused on consumer banking," he said, but "the fundamental underpinning of banking is the creation of capital and jobs."

The move into the Southwest is "classic" for Silicon Valley Bank, said Joseph K. Morford, an analyst with Alex. Brown & Co. The bank's strategy of opening offices in areas densely populated with technology companies is fueling loan growth and giving the portfolio a healthy diversification.

"They have credits across the country. That helps insulate them from a downturn in any particular market," Mr. Morford said.

Silicon Valley's core clientele are companies in the life sciences businesses, including bioengineering, medical devices, and pharmaceuticals; and high-tech companies, including producers of software, hardware, equipment, computer networks, and semiconductors.

The bank's first foray outside of California was in 1990 when it opened an office in Wellesley, Mass. It also has offices in Beaverton, Ore.; Rockville, Md.; Irvine, Calif.; and San Diego.

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