DA Davidson reiterates its Buy rating on Texas Capital Bancshares TCBI and raises its price target from $41.50 to $45.
DA Davidson comments, "TCBI's mortgage warehouse business has continued to grow as the company benefits from strong refinance volumes and reduced capacity in the industry as large players have backed away. We expect the company to continue to grow the warehouse business, although 4Q/1Q likely marked a near term peak vis-à-vis balance sheet exposure. TCBI's loan participation program should take on additional importance in 2Q and beyond as management targets on-balance sheet mortgage exposure closer to $1.5 billion, below the 1Q12 average balance of $2.0 billion.
TCBI closed at $37.88 on Wednesday.
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