Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

Banker To The Silicon Swells


Inside Wall Street

BANKER TO THE SILICON SWELLS

No doubt about it, says money manager William Astrop, the bull market in technology stocks "will be long-running." But he isn't loading up on tech issues. An "offbeat way to play the tech upswing," he says, is through SJNB Financial (SJNB), a community bank in San Jose, Calif. Astrop thinks that "as technology goes, so will SJNB." A booming Silicon Valley will enhance SJNB's allure as a takeover target, argues Astrop, who runs Astrop Advisory in Atlanta.

From its single headquarters location, the bank serves prosperous San Jose and nearby Santa Clara. San Jose, now California's third-largest city, has seen its land prices more than double in the past year.

"In a takeover deal, SJNB would fetch a price in the mid-40s," says Astrop. Some banks have sold at three times their book value. He estimates SJNB's book at $13. SJNB competes with three independent banks: Silicon Valley Bank, Heritage Bank of Commerce, and Cupertino National Bank. Any of them, or one of the big banks, figures Astrop, could be a potential buyer.

Even without a deal, Astrop thinks "the stock will double in two to three years." The total assets of SJNB--$321 million--should grow at 20% for a number of years, he says. Also, the bank has a minuscule share of nonperforming assets (0.2% vs. the typical 2.5% to 3%), adds Astrop.

Also upbeat on SJNB is Van Kasper, a San Francisco investment firm. The bank's lean structure, its management experience, and a strong lending environment should boost earnings growth, says a Van Kasper analyst.BY GENE G. MARCIALReturn to top

Return to top


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus