Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- First PacTrust Bancorp (Nasdaq: BANC) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 8.1%. 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.
- Net operating cash flow has significantly increased by 330.34% to $2.57 million when compared to the same quarter last year. In addition, FIRST PACTRUST BANCORP has also vastly surpassed the industry average cash flow growth rate of -115.46%.
- The gross profit margin for FIRST PACTRUST BANCORP is currently very high, coming in at 79.80%. Regardless of BANC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BANC's net profit margin of -6.70% significantly underperformed when compared to the industry average.
- 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 147.7% when compared to the same quarter one year ago, falling from $1.55 million to -$0.74 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, FIRST PACTRUST BANCORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff