NEW YORK ( TheStreet) -- Evans Bancorp (AMEX: EVBN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 40.4% when compared to the same quarter one year ago, falling from $1.63 million to $0.97 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, EVANS BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for EVANS BANCORP INC is currently very high, coming in at 75.00%. Regardless of EVBN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EVBN's net profit margin of 8.90% is significantly lower than the same period one year prior.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • EVBN's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Evans Bancorp, Inc. operates as the holding company for Evans Bank, N.A. that provides various banking products and services to consumers and commercial customers in western New York. The company has a P/E ratio of 10.7, above the average banking industry P/E ratio of 10.4 and below the S&P 500 P/E ratio of 17.7. Evans has a market cap of $56.5 million and is part of the financial sector and banking industry. Shares are down 3.4% year to date as of the close of trading on Monday.

You can view the full Evans Ratings Report or get investment ideas from our investment research center.
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