When it comes to profits, the Bay Area’s non-technology companies outdid their technology counterparts in the SV150.

The Bay Area 25 powered to a 7.3 percent gain in profits over the 12 months that ended in March. In contrast, profits for the SV150 slumped 12.4 percent during the same period, this newspaper’s analysis of the financial performance of hundreds of Bay Area companies shows.

Companies that are household names in Corporate America and the consciousness of consumers dominate the non-tech Bay Area 25.

Among them: San Ramon-based Chevron, Pleasanton-based Safeway, Oakland-based Clorox, Pleasanton-based Ross Stores, along with Wells Fargo, PGE, Gap and Visa, all based in San Francisco.

“These are some big companies that directly affect people’s lives,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Yet the rising profits don’t necessarily mean sales were robust for the non-tech Bay Area 25.

While the SV150 as a group generated a sturdy 9.1 percent increase in sales over the one-year stretch, the Bay Area 25 eked out a puny 0.3 percent gain in sales.

“The non-technology companies were able to capture revenue without having internal higher labor costs and other overhead,” said Michael Yoshikami, chief executive and founder of Walnut Creek-based Destination Wealth Management. “That means increased profitability.”

The profitability of the companies in

the Bay Area 25 also appears to reflect what is happening in Corporate America in general.

“In the non-tech economy, hiring has been very tight,” Yoshikami said. “Non-tech companies have steadily increased their efficiency.”

The non-tech Bay Area 25 also includes numerous banks. And for a growing number of banks, the financial crisis and sour loans that accompanied the downturn have become specks in the respective rearview mirrors of the financial companies.

“With the rebound in the housing sector, banks have been working through some of their financial problems and bad loans,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at the University of the Pacific.

Numerous banks have shifted money out of the reserves they had maintained to cover bad loans and allowed the money to flow onto their bottom lines. That has helped to bolster profits.

An analysis of the results shows that financial companies in the Bay Area 25 performed particularly well in the non-tech group.

Of the 11 companies that powered to double-digit increases, eight were in the financial, investment or real estate business. Chevron, Clorox and Pleasanton-based contact lens producer Cooper Cos. were the other three.

Two companies in the Bay Area 25 suffered an erosion in earnings. Profits tumbled 9 percent for San Francisco-based Diamond Foods, a supplier of nuts and snack foods; and by 2 percent for San Francisco-based Prologis, a real estate investment firm that owns numerous industrial properties.

The company in the group with the strongest results for sales was Walnut Creek-based Central Garden Pet, which provides pet, lawn and garden products. Central Garden produced a 73 percent increase in sales.

Santa Clara-based SVB Financial Group, Pleasanton-based Simpson Manufacturing, Chevron and San Francisco-based Digital Realty Trust rounded out the top five for gains in revenue.

“The performance of the non-tech companies shows there is a lot of stuff going on outside of Silicon Valley,” Levy said. “They employ a lot of people. They serve a lot of customers.”

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.

Article source: http://www.contracostatimes.com/breaking-news/ci_23064540/bay-area-non-tech-companies-were-more-profitable

When it comes to profits, the Bay Area’s non-technology companies outdid their technology counterparts in the SV150.

The Bay Area 25 powered to a 7.3 percent gain in profits over the 12 months that ended in March. In contrast, profits for the SV150 slumped 12.4 percent during the same period, this newspaper’s analysis of the financial performance of hundreds of Bay Area companies shows.

Companies that are household names in Corporate America and the consciousness of consumers dominate the non-tech Bay Area 25.

Among them: San Ramon-based Chevron, Pleasanton-based Safeway, Oakland-based Clorox, Pleasanton-based Ross Stores, along with Wells Fargo, PGE, Gap and Visa, all based in San Francisco.

“These

are some big companies that directly affect people’s lives,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Yet the rising profits don’t necessarily mean sales were robust for the non-tech Bay Area 25.

While the SV150 as a group generated a sturdy 9.1 percent increase in sales over the one-year stretch, the Bay Area 25 eked out a puny 0.3 percent gain in sales.

“The non-technology companies were able to capture revenue without having internal higher labor costs and other overhead,” said Michael Yoshikami, chief executive and founder of Walnut Creek-based Destination Wealth Management. “That means increased profitability.”

The profitability of the companies in

the Bay Area 25 also appears to reflect what is happening in Corporate America in general.

“In the non-tech economy, hiring has been very tight,” Yoshikami said. “Non-tech companies have steadily increased their efficiency.”

The non-tech Bay Area 25 also includes numerous banks. And for a growing number of banks, the financial crisis and sour loans that accompanied the downturn have become specks in the respective rearview mirrors of the financial companies.

“With the rebound in the housing sector, banks have been working through some of their financial problems and bad loans,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at the University of the Pacific.

Numerous banks have shifted money out of the reserves they had maintained to cover bad loans and allowed the money to flow onto their bottom lines. That has helped to bolster profits.

An analysis of the results shows that financial companies in the Bay Area 25 performed particularly well in the non-tech group.

Of the 11 companies that powered to double-digit increases, eight were in the financial, investment or real estate business. Chevron, Clorox and Pleasanton-based contact lens producer Cooper Cos. were

the other three.

Two companies in the Bay Area 25 suffered an erosion in earnings. Profits tumbled 9 percent for San Francisco-based Diamond Foods, a supplier of nuts and snack foods; and by 2 percent for San Francisco-based Prologis, a real estate investment firm that owns numerous industrial properties.

The company in the group with the strongest results for sales was Walnut Creek-based Central Garden Pet, which provides pet, lawn and garden products. Central Garden produced a 73 percent increase in sales.

Santa Clara-based SVB Financial Group, Pleasanton-based Simpson Manufacturing, Chevron and San Francisco-based Digital Realty Trust rounded out the top five for gains in revenue.

“The performance of the non-tech companies shows there is a lot of stuff going on outside of Silicon Valley,” Levy said. “They employ a lot of people. They serve a lot of customers.”

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.

Article source: http://www.mercurynews.com/business/ci_23064539/bay-area-non-tech-companies-were-more-profitable

The new rules would apply to all mortgage servicers, not just the nation’s five largest banks that earlier this year agreed to a $25 billion settlement in the wake of the “robo-signing” paperwork scandal.

The new guidelines present new challenges to mortgage servicers — especially big banks already overwhelmed with delinquent loans.

“There’s a finite amount of capacity in the servicing enterprise today, and the system by design was never set up to withstand these rates of delinquency, these high rates of foreclosure for an extended and protracted period of time which is where we’re at right now,” said Edward Delgado, COO of Wingspan Portfolio Advisors, a Texas-based specialty servicer.

That is why many institutions are increasingly farming out servicing, or directly selling the loans to so-called specialty servicers. These entities, which number about two dozen, often have more experience and resources to deal with troubled loans. 

Despite improvements in the overall mortgage markets, 5.8 million loans — or 11.9 percent of all residential U.S. mortgages — were either delinquent or in the foreclosure process at the end of June, according to Mortgage Bankers Association data. Mortgage delinquencies increased in the second quarter of this year, reversing a trend of fairly steady drops in the rate.  

The bureau’s new policy “amplifies our role as a strategic partner in the prevention of foreclosures for the most part, by enhancing our outreach to homeowners and working closely with the banks to make contact,” said Delgado. He said his company works with smaller pools of troubled loans and can therefore conduct consumer outreach more effectively, even go door-to-door.

Just last week CitiMortgage
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] announced it is selling $158 million worth of mortgages to special servicer Carrington Capital, which will conduct a deed-for-lease program. That’s where troubled borrowers turn over ownership of the home to Carrington and then can rent the home back if they choose, sidestepping a more costly and credit-crushing foreclosure. 

“As a financial institution, managing a program of this nature is not within our area of expertise, so we joined with Carrington, one of the best property management companies in the country, to help make this program work,” said Sanjiv Das, CEO of CitiMortgage in a release.