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APRIL | MAY

Money Matters Some of the region's top banking professionals discuss the current

state of business and the economy in San Francisco, on the Peninsula, and in Silicon Valley.

For the past four years, we've held a roundtable for real estate professionals to assess the state of Bay Area real estate. Recently, we met with three financial professionals-Clay Jones, Executive Vice President and Mid-Peninsula Market President, Presidio Bank; Mark D. Mordell, Chairman & Chief Executive Officer, Avidbank; and Jeffrey Schnitz, Managing Director, Silicon Valley Bank Asset Management­who have a different perspective on the economy in our special part ofN orthern California. Spoiler alert: "Optimism" is the word of the day.

Where do you see the business of banking today?

Jeffrey Schnitz: We are seeing great things in technology, particu­larly in the areas of hardware and software. Silicon Valley Bank (SVB) had a tremendous 2012, and the start of2013 has been very positive. There are a lot of clean-tech companies doing a lot of great work SVB is hiring and growing right now. Mark Mordell: The bulk of Avidbank's business takes place between San Jose and San Francisco. The real estate market is booming here. Avid had the best year ever in 2012 from an earnings standpoint. We also increased our company from 16 to 40 employ­ees.The economy here, in general, is gaining more and more trac­tion because of the market that we are in. Take a look at the velocity in home sales and the enormous growth of condominium high­rises in San Francisco. Clay Jones: From Marin to Contra Costa County, we've seen a tremendous amount of growth, especially in the last quarter of2012 and continuing into the first quarter of 2013. The Bay Area econ­omy has been very resilient, especially around the Palo Alto area.

What about another bubble? Will history repeat itself shortly?

JS: You have to remember that the Bay Area goes through its own cycles, too. There seems to be no solid limit to recent activity. MM: There's a lot of opportunity still ahead. Remember where we started. The velocity will probably slow, but the growth is still there. Many companies are increasing their respective footprints in the Bay Area. In the past three years, Coogle, Apple, and Facebook,

I Clay Jones\

among others, have all made investments in long-term growth. CJ: We see much of the growth here as very sustainable.

What's needed to sustain growth?

JS: For long-term competitive stability in the area, we need education and we need support from Washington, D.C., to wel-

come people in from around the world. The creativity and funding-the think tank-is in the Bay Area, despite tax rates. The core is here. The innovation is here and the dynamic has changed. Years ago, it was expensive and

more difficult to start up a company. Now, two Stanford students can come up with an idea and take money from their parents' bank accounts. We're seeing this in New York City as well.

What are the hot industries right now?

ALL THREE: Tech, clean tech, and real estate.

How do you choose which companies to invest in?

JS: It's hard to find the next Facebook or the next Coogle. CJ: It's all about partnerships and structure-proof of concept. We work closely with venture capital firms.

What exciting projects are you working on?

MM: The real estate market in San Francisco is proving to be fasci­nating. Younger consumers want real estate in San Francisco, but are willing to forego parking and large spaces. We're working on a project of studio apartments with very modest square footage, and the forecast for sales is incredible. CJ: San Francisco is experiencing its largest population growth in decades, and that population is working. It's exciting to see what's going into infrastructure and financial services. JS: At Silicon Valley Bank, we have a segment of our business that's focused on vineyards and wineries. As technology and business boom, so, too, does the wine industry. +

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