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Wall Street Transcript Interview with Brad Milsaps, Managing Director at Sandler O'Neill + Partners, L.P.: Commercial Loan Growth and M&A Pickup Reinforce Texas Banks

67 WALL STREET, New York - March 6, 2013 - The Wall Street Transcript has just published its Pacific and Southwest Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Regulatory Obstacles and Fee Income Replacement - Interest Rates and Loan-Growth Strategies - Pockets of Growth in Western Banking - Regulatory Outlook Gains Clarity

Companies include: Texas Capital BancShares Inc. (TCBI), Viewpoint Financial Group (VPFG) and many more.

In the following excerpt from the Pacific and Southwest Banks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What are your current recommendations or top picks?

Mr. Milsaps: I continue to feel good about the banks in the state. We continue to favor growth names like Texas Capital (TCBI) and Viewpoint Financial (VPFG). Both these stocks have had really nice runs over the last 12 months, great growth trajectory.

Certainly, a lot of it's being captured at current valuations, but we think from a growth perspective, if investors are looking to play the growth opportunities in Texas - looking for attractive franchises in a market where there aren't a lot of ways to play the market from that perspective - we think these continue to make sense over a longer term.

TWST: What stood out for you from the most recent round of quarterly earnings?

Mr. Milsaps: I think first and foremost, the strength in loan growth. It continues to be very impressive, not only for Texas banks but banks in general, particularly on the commercial side. Also, credit metrics continue to improve, or certainly stabilize. You're seeing appraisals stabilizing. All of those trends are encouraging for the sector.

I think, on the flip side, the discouraging thing is, with the interest rate environment we are in, net interest margins remain under pressure, which is going to make revenue growth tougher, unless you can grow your loan book even faster or cut costs by reducing overhead.

TWST: How are valuations for these stocks trending overall, and what's your expectation for the year in terms of total returns?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.