Dividends: Silicon Savings

A time-honored way to start a successful bank is to identify it with a booming local industry, a tactic that has worked for the likes of both the giant Manufacturers Hanover Trust of New York City (deposits: $41 billion) and the little Farmers & Merchants National Bank in Rensselaer, Ind. (deposits: $50 million). Now two California banks that plan to open later this year are using the strategy: Silicon Valley Bank and High Tech National Bank.

"We want to be the banker for the electronics industry," says Roger Smith, Silicon Valley's president. His bank, with headquarters in a San Jose industrial building,...

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