New Resource Bank, San Francisco, CA (NWBN)

A Case of One Green Branch about to Blossom


There's something I've always found appealing about successful one-branch banks. They're so easy to buy, so much easier to manage — they've got to make friendlier acquisition targets than more complex organizations.

With $186M in deposits in just one branch, for example, New Resource Bank has got to be one of the most attractive franchises for any competitor wanting to play bigger in Silicon Valley. An acquirer willing to pay a 10% deposit premium for NWBN would generate $8.40 per share in value, more than double today's share price.

Disclosure: As of this posting, I own shares of NWBN and may subsequently either dispose of them or purchase more.

Prospective Buyers
Each of the first three of these banks already has branches in San Francisco and should find appealing the $186M in deposits it could get by acquiring the one-branch NWBN. And SVB Financial would both fill a hole in its branch network with this San Francisco bank, and get a big Green business boost for its Cleantech Group. 
Bank of Marin, Novato, CA (BMRC)
City National Corp, Los Angeles, CA (CYN)
First Republic Bank, San Francisco, CA (FRC)
SVB Financial, Santa Clara, CA (SIVB) 
Financial Snapshot
(as of 12/31/2013)

Total assets:
$216M
Tangible book value per share:
$5.09
NPAs to assets:
0.1%
Price to book:
79%
Market cap:
$22.6M
Dividend yield:
0%
Trailing 12-month return on assets:
0.6%
Trailing 12-month return on equity:
4%
TARP:
$0M
The Crew
Mark Finser, Chairman
Vince Siciliano, President and CEO
Stephen Rossi, CFO
The Skinny
One green branch,

Not only is New Resource a healthy bank — with 13% equity to assets, no TARP, and six consecutive quarters of solid profits — but it has a fertile green niche in lending to environmentally sustainable businesses

No longer drooping,

Small losses reported from 2009 to 2012 due to bad assets — which peaked over 8% in 2008 — weighed down the book value of this one-branch bank

But about to blossom!

With NPAs now all but gone, profits are already budding— exceeding $1M in 2013. Factor in NWBN's yet unrecognized deferred tax asset (DTA) of $1.75 per share, and book value looks ready to burst open in full bloom 
Sources