The end of the quantitative easing is right around the corner, the federal funds rate, which has been perched near 0% for years, will be raised next year. Many on Wall Street have been telling clients both retail and institutional to prepare for the coming increase. The higher rates argument is relevant, but not a market or stock killer. The Federal Reserve is well aware of what raising rates will do to our national debt service.

In a new, in-depth research piece on banks, the team at Baird make the case that many may be overstating the amount of bank earnings leverage attributed to rising rates. They see banks with higher quality deposits and less exposure to small interest bearing deposits better set for the coming interest rate increase. Financials having seriously underperformed tech and health care, and some of the top banks make tremendous sense now.

Here are the banks rated Outperform at Baird.

Capital One Financial Corp. (NYSE: COF) is a popular stock with many of the Wall Street firms we cover, and it is rated Outperform at Baird. The company had $205.9 billion in deposits and $298.3 billion in total assets as of June 30, 2014. Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. It also offers terrific commercials that have driven brand recognition.

Capital One investors are paid a 1.45% dividend. The Baird price target for the stock is $90. The Thomson/First Call consensus target is $92.45. The stock closed Wednesday at $82.42.

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Fifth Third Bancorp (NASDAQ: FITB) is a top regional banking stock that makes the grade at Baird. The company announced this summer an 8.3% hike in its quarterly dividend, and it has repurchased 8 million shares of stock this year. The bank also recently announced the formation of the Payments and Commerce Solutions division, which combines existing businesses such as Treasury Management, Commercial and Consumer Card and Currency Processing Solutions with resources specialized in developing innovative commerce-enabled solutions.

Investors in Fifth Third are paid a 2.53% dividend. The Baird price target is $23, and the consensus figure is slightly higher at $23.78. The stock closed Wednesday at t$20.59 a share.

JPMorgan Chase & Co. (NYSE: JPM), like most of the top money center banks, is expected to benefit from commercial loan growth and an upturn in capital spending. The Baird team does caution that litigation charges may prove to be more of a recurring expense, and financial regulatory reforms, legal costs and Basel II could temper capital standards and permanently depress returns and the bank’s profitability. Trading at a discount to the other large cap banks on 2015 earnings estimates does help upside potential.

J.P. Morgan investors are paid a respectable 2.6% dividend. The Baird price objective is $67, and the consensus target is $67.25. The stock closed Wednesday at $61.63.

PNC Financial Services Group Inc. (NYSE: PNC) is one of the largest diversified financial services organizations in the United States, providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; and wealth management and asset management. The company recently released solid Tier 1 stress test results and remains a top super-regional for investors.

Shareholders are paid a 2.2% dividend. The Baird price target is $90, and the consensus is $93.68. The stock ended trading on Wednesday at $86.67.

Wells Fargo & Co. (NYSE: WFC) is another solid financial name on the Baird list that really may see a benefit if yields start moving higher. The yield curve typically steepens in an improving economy, which many on Wall Street currently anticipate. Wells Fargo has slowly, but surely become one of the biggest mortgage lending companies in the United States, in addition to its normal banking and brokerage businesses. An increase in commercial real estate lending could really boost the bank’s bottom line. It also remains a top Warren Buffett holding.

Investors are paid a 2.6% dividend. The Baird price target is $55, and the consensus target is $54.94. Wells Fargo shares closed Wednesday at $52.13.

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The market is tempting everyone to sell. The best idea now may be to rotate to under-performing sectors that have top stocks with upside. These solid financials that provide growth and income may make very good sense for the rest of the year and 2015.

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