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Making money a renewable resource

How Peter Liu, a former oil industry engineer, stopped designing petrochemical plants and started the first green bank in U.S. David Bank.

San Francisco based investment banker Peter Liu's new resource bank has already garnered $166 million in deposits, which it's using to fund green technology and sustainable businesses.

Photo: Jennifer Hale

Several years ago, when the drips through our ceiling could no longer be ignored, we decided to install solar panels along with a new roof on our Berkeley, California, home. Then, when we needed a new car after our son arrived, we opted for a Toyota Prius.

We paid a premium for our little bit of green chic. That is, the money saved on our monthly electricity bill and at the gas pump didnt immediately justify the price of the not-yet-mainstream products. We figured the photovoltaic system wouldnt save us money for at least a dozen years, and it may be at least half that long for the gas-electric hybrid to pay for itself with better gas mileage. Were counting on global instability and corporate malfeasance to make our investments pay off, we joked to friends. And we havent been wrong yet!

At about the same time, across the San Francisco Bay, Peter Liu was making a much bigger bet on the same trends, literally banking on the green economy. Liu, a chemical engineer by training, assembled a Whos Who of Silicon Valley investors and others to put up just less than $25 million to open the first explicitly green bank in the U.S.

Since then, with a single branch and nearly no marketing, the New Resource Bank has attracted $166 million in deposits, including $10 million from the state of California. For individuals and institutions that have to bank somewhere, having ordinary savings and checking accounts in a bank that puts the money to work with loans to organic food producers, green developers and sustainable businesses has powerful appeal. As of June 30, deposits had more than doubled from a year earlier, while loans had nearly tripled, to $98 million.

Green may be the best kind of bank to be in these economic conditions, says Julius Genachowski, co-founder of the investment firm Rock Creek Ventures. He was one of New Resource Banks original organizers and came up with its name. I think we were early in recognizing that a bank that focused on this market could also be a successful business.

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