This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Bank Stock Picks for Bottom-Fishing Investors

7. Virginia Commerce Bancorp

Shares of Virginia Commerce Bancorp (VCBI) of Arlington closed at $5.79 Wednesday, down 11% from a week earlier -- for the best one-week performance among this group of 10 bank stocks -- and down 6% year-to-date.

The shares traded for 0.9 times tangible book value as of Wednesday's market close, according to SNL Financial.

The company owes $71 million in TARP money.

Virginia Commerce reported second-quarter net income to common stockholders of $7.5 million, or 24 cents a share, increasing from $3.7 million, or 12 cents a share, in the first quarter, and $4.3 million, or 15 cents a share, in the second quarter of 2010. The operating improvement reflected a decline in credit costs, with a second-quarter provision for loan losses of $1.4 million, declining from $5.8 million the previous quarter and $4.2 million a year earlier.

A $3.2 million release of loan loss reserves provided a direct boost to the company's second-quarter results, however, the company's ratio of reserves to total loans was a strong 2.47% of total loans, when compared to an annualized second-quarter ratio of net charge-offs (loan losses less recoveries) to average loans of 0.75%.

CEO Peter Converse said on July 20 when the company announced its second-quarter results that provisions for loan losses would likely "range between the first and second quarter levels through the remainder of this year."

Virginia Commerce's second-quarter net interest margin was 3.99%, which was the same as the previous quarter but up from 3.89% a year earlier. Maintaining a margin of close to 4% in such a low-rate environment is an impressive achievement for the bank.

Total loans were $2.1 billion as of June 30, declining 4% from a year earlier. Converse said that the bank's loan "pipeline is building, our loan officers are heavily involved in prospecting, and our focus on [commercial and industrial] lending is yielding positive growth. As a result, we expect a reversal of negative loan growth to emerge in the second half."

While Virginia Commerce said its tangible common equity ratio was 7.18% as of June 30, and Converse didn't discuss the company's plans for repaying TARP.

The shares trade for 8.4 times the consensus 2012 earnings estimate of 74 cents a share, among analysts polled by FactSet.

Two of the six analysts covering Virginia Commerce Bancorp rate the shares a buy, while the remaining analysts all have neutral ratings.

While the TARP overhang is placing a drag on the shares, Virginia Commerce appears to be a relatively low-risk play at its reduced valuation.
5 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BPOP $29.75 -1.30%
BAC $14.80 -1.50%
CATY $30.64 -1.50%
C $46.74 -1.10%
FITB $18.49 -1.30%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs