UPDATE: Morgan Stanley Initiates Signature Bank with Overweight on Positive Outlook

In a report published on Thursday, Morgan Stanley analyst Ken Zerbe initiated coverage on

with an Overweight rating and an $86.00 price target based on sustainable organic growth for the company. In the report, Zerbe stated, "Signature is not a mass market bank, nor does it have a typical branch franchise. Its approach is to hire experienced bankers with existing books of business and pay them very well to grow loans and deposits, while giving them flexibility and autonomy to run their own banking franchises. Its focus on customer service, with a single point of contact for the client, is also driving growth through word-of-mouth referrals. While we expect loan growth to slow over the next three years (declining from 42% in 2012 to 18% in 2015), we think it will remain well above peers, supporting a premium valuation for the stock." Signature Bank is trading at $76.39, up .70 percent from its Wednesday close of $75.86.