Citigroup Is Your Best Bank Stock Play Through 2015: Deutsche Bank

NEW YORK (TheStreet) -- To the business media, "long-term investment" often seems to mean an investment that is held for more than five minutes.

Most sell-side analysts provide long-term price targets for their stock recommendations with a 12-month outlook, which makes sense because this is what their customers demand. But one year is actually a short period to invest in a profitable, growing company that you believe in, and strong earnings and earnings growth will win out over the long hall, despite the short-term volatility of the stock market, which is driven by so many headline events. The recent Fiscal Cliff farce in Washington is a prime example.

Deutsche Bank analysts Matt O'Connor and Dave Rochester on Friday named their four top bank stock picks with a three-year outlook through 2015, saying that the most important of the many themes for the industry is loan growth: "We think a ramp up of loan growth in 2H13 or in 2014 is likely (to mid single digits or more). This reflects a potential end of private sector de-leveraging, strong capital/funding at banks and the impact of likely GSE/mortgage finance reform." The GSEs are the government-sponsored mortgage entities, the largest of which are Fannie Mae (FNMA) and Freddie Mac (FMCC) , which were taken under government conservatorship in 2008. Considering the inability of Congress to make decisions, GSE reform by 2015 may be wishful thinking, but the U.S. economy is growing and economic reports continue to provide evidence of a sustained housing recovery.

O'Connor and Rochester said that "loan growth could reach double digits in 2015." The analysts' "base case" scenario is for the U.S. economy to grow at an annual pace of 2.5% through 2015.