NEW YORK ( TheStreet) -- Virginia Commerce Bancorp (Nasdaq: VCBI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • The gross profit margin for VIRGINIA COMM BANCORP INC is rather high; currently it is at 65.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.80% is above that of the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • VCBI, with its decline in revenue, underperformed when compared the industry average of 20.9%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 decreased by 5.6% when compared to the same quarter one year ago, dropping from $6.96 million to $6.57 million.

Virginia Commerce Bancorp, Inc. operates as the bank holding company for Virginia Commerce Bank that provides business and consumer banking services. The company accepts various deposit products comprising demand deposits, savings and money market accounts, and time deposits. The company has a P/E ratio of 9.2, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Virginia has a market cap of $182.6 million and is part of the financial sector and banking industry. Shares are down 1.8% year to date as of the close of trading on Thursday.

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