Sterne Agee Lowers TCBI Rating To Neutral

Sterne Agee is lowering its rating on shares of Texas Capital Bancshares, Inc.

to Neutral. “In addition to a valuation more in-line with Texas peers on both earnings prospects and tangible book value, we note our estimates are no longer significantly above consensus expectations,” Sterne Agee writes. “The shares have been the top-performing Texas institution on a 52-week performance basis (+56% versus 13%for the Texas peer group). We believe longer-term investors should maintain positions but our view is near-term upside prospects are more limited. Our modeling assumes the ROA improves 30bp from last quarter to ~0.95% during FY12.” Texas Capital Bancshares closed Thursday at $22.04.