Jefferies Says Texas Capital Bancshares A 'Top Pick'

In a report published Thursday, Oppenheimer analysts maintained a Buy rating on

, while raising the price target to $62. In the report Oppenheimer noted, "We recently met with mgmt. of several Texas banks. To be sure, local loan growth rates are slowing with the oil price decline and a few credit issues are likely to appear. That said, both the banks and the energy complex have acted swiftly to shore up financials…We prefer TCBI as a local grower with less oil exposure." The analysts expect expense growth at Texas Capital to exceed revenue generation from new businesses over the forthcoming couple of quarters. The expense growth would be driven by an increase in the company's final hiring for a business line that it intends to name in 2Q and 3Q. Earnings would be protected by revenue growth in other businesses. The analysts believe that there would be "a steep ramp to profitability" in 4Q15, since the new business is expected to be "profitable on a full-year basis in 2015." "The quarterly provision is difficult to predict given the dynamic oil environment and growth characteristics of the bank, but a level somewhere between 4Q14 and 1Q15 is likely, barring meaningful swings from either of these effects," the analysts wrote.