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JPMorgan initiates coverage of Texas Capital Bancshares at 'neutral'

Initiation

JPMorgan analyst Steven Alexopoulos is now covering Dallas-based Texas Capital Bancshares Inc.'s stock. He gave it a "neutral" rating and set a price target of $62.

The analyst wrote that the company "has created an impressive growth track record, including loans growing at an 18% CAGR on an organic basis since 2007."

The analyst also wrote that the company has increasingly relied on deposits consisting of brokered as well as market index deposits, which resulted in the company reporting one of the highest cycle-to-date total deposit betas, at 46% for Texas Capital as compared to 21% for peers.

The company's net interest margin has come under pressure, as the company saw a migration of deposits from noninterest-bearing to interest-bearing accounts, and because the index and brokered deposits continue to reset.