Magazine article American Banker

Boston Private Plans Calif. Expansion -- Solo

Magazine article American Banker

Boston Private Plans Calif. Expansion -- Solo

Article excerpt

As far larger private banks and asset management firms grappled with declining profits in the wake of the first quarter's market tumble, Boston Private Financial Holdings posted gains of 82% and prepared to branch out with a new banking operation in California.

Last week the $1 billion-asset private bank applied to California regulators for a bank charter after failing to find a suitable acquisition in the Silicon Valley area to merge with its existing asset management firm there, Sand Hill Advisors.

Many of the largest U.S. banking companies, including J.P. Morgan Chase & Co. and Northern Trust Corp., have scrambled to build a private banking presence in the Silicon Valley in the last year, to attract business from young millionaire entrepreneurs. In the last two years the region has become saturated with out-of-state financial firms hoping to grab a piece of the affluent market.

The mood of the market has also changed with the steep yearlong decline in the technology sector. However, Timothy L. Vaill, chairman and chief executive officer of Boston Private Financial, seems undaunted. Though relatively late to the game in California, Boston Private -- with its blend of traditional private banking, money management, and financial planning services -- is positioned to find a niche, he said.

"The good news is that the economy is shaky, so we're going in with our eyes wide open," he said in an interview last week. "We're ready for a fight."

Private bankers and asset managers faced some rough weather recently. Boston Private reported assets under management at the end of the first quarter of $5.6 billion, 21% more than a year earlier but 10% less than at yearend.

Torrid deposit growth has offset declines in asset values, Mr. Vaill said. Over the last year the company's deposits have increased 50%, to $725 million at the end of the first quarter. …

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