Silicon Valley Bancshares Inc. will continue to build its fledgling private banking business aimed at technology entrepreneurs, despite the unexpected resignation of the unit's president, the company's vice chairman said last week.
On Wednesday it announced that Jim Wall, who joined the firm only a year ago, had left "to pursue other opportunities." It did not provide any other details about his departure.
"Jim's leaving us has certainly had a negative impact, because he was the person running our private bank," said vice chairman Harry Kellogg in an interview Thursday.
Mr. Kellogg, who is also head of merchant banking at Silicon Valley, will assume Mr. Wall's duties while it searches for a successor. "I can pick up the reins in the interim, but we are clearly 100% behind doing private banking."
"Given the bank's brand, our platform, our network, our relationships, and the fact that we really want to build a private bank, I think we should be able to attract some very good people" to run the unit, he said.
But Silicon Valley has its work cut out in securing the type of private banking customer it craves in the wake of the dot-com bust.
The company, which operates Silicon Valley Bank of Santa Clara, Calif., built its business on lending and banking for technology and life sciences start-ups. It has opened offices in other tech centers, such as Boston; Atlanta; Durham, N.C.; Seattle; and northern Virginia.
"Their sweet spot is emerging growth companies that are freshly minted … and frankly there is a depression in that area," said Gary Townsend, an analyst at Friedman Billings Ramsey & Co. Inc. of Arlington, Va.
The tech slump, along with competition from Wells Fargo & Co., Bank of America Corp., and other large private banks, may be making it difficult for Silicon Valley to develop its private banking business, Mr. Townsend said.
"I don't know why he [Mr. Wall] left other than what has been said, but I suspect that they haven't gotten a lot of traction … given the weakness" in the segment, he added.
Mr. Kellogg acknowledged that Silicon Valley does not have the product line to compete with larger players but said it is committed to developing its capabilities, including areas such as financial advisory and asset management, probably through acquisitions.
Silicon Valley Bank has about 9,500 corporate customers, and it sees those companies as fertile ground for marketing its private banking services.
"We're really the incubator" of the future rich, Mr. Kellogg said. "We want to bring these people into the private bank early in the process," and when they acquire assets, "we need the product set to support them," he added.
Mr. Wall joined Silicon Valley in June 2001 from another private banking upstart in Silicon Valley, Sand Hill Private Bank, a unit of Boston Private Financial Holdings. He had joined Sand Hill in late 2000, after leaving his job as chief executive of Bank of Los Altos, a California community bank.
In hiring Mr. Wall, Silicon Valley had hoped to add private banking services for chiefs and other executives of its start-up customers, as well as lawyers, investors, and others who work with them.
Mr. Kellogg said that Silicon Valley Bank has about 1,500 private banking customers and that it remains committed to its strategy for the business.
