DA Davidson Starts Texas Capital Bancshares (TCBI) at Buy; Organic Growth Model With Solid Long-Term Prospects

DA Davidson initiates coverage on Texas Capital Bancshares (NASDAQ: TCBI) with a Buy. PT $40.00.

DA analyst says, "TCBI’s model is dependent on the company’s ability to hire experienced relationship managers from other institutions who bring their books of business over to Texas Capital. The company has been successful in doing this, resulting in strong growth over multiple years without the operational or cultural risk of completing whole bank M&A transactions."

"Our initial EPS estimates are $1.88, $2.29, and $2.61 for 2011, 2012, and 2013, respectively. We expect net interest revenue growth to drive EPS growth, as balance sheet expansion should result from organic loan growth and growth in the mortgage warehouse business. Our $40 price target represents 2.25x estimated year end 2012 TBV of $18.07 and 17.5x 2012E EPS."

For an analyst ratings summary and ratings history on Texas Capital Bancshares click here. For more ratings news on Texas Capital Bancshares click here.

Shares of Texas Capital Bancshares closed at $31.94 yesterday.

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