Wednesday, FBR Capital Markets upgraded Virginia Commerce Bancorp Inc. (VCBI) shares to Market Perform from Underperform and increased its price target to $6 from $3. The brokerage raised its 2010 per share estimate to profit $0.16 from loss $0.67, and its 2011 EPS estimate to $0.39 from $0.01.
In addition, the brokerage upgraded Sandy Spring Bancorp Inc. (SASR) shares to Market Perform from Underperform and increased its price target to $11 from $7.50. The brokerage narrowed its 2010 loss per share estimate to $0.56 from $0.80, while lowering its 2011 EPS estimate to $0.82 from $1.13.
Analyst Brett Scheiner said that while difficult to quantify, management commentary at banks he has spoken with in this market, and VCBI's fourth quarter results announced on January 26, give him enough conviction in improving trends to expect materially lower downside risk in both stocks.
The analyst believes the weakness outside the beltway was as much a result of declining demand as of overbuilding, setting the stage for the more rapid recovery that he is seeing and that he expects to continue in the area. While absorption of the excess supply resulting from a building boom often takes years, weak demand is more often remedied by lower clearing prices requiring a shorter correction period.
The analyst noted that in short, real estate borrowers and, by extension, their lenders outside the D.C. beltway overbuilt less so than they simply over-paid. While the analyst believes the downside risk in VCBI and SASR has abated materially, he still finds healthier growth prospects, credit metrics, and somewhat comparable valuations at his two Outperform-rated metropolitan D.C. names: Eagle Bancorp (EGBN) and Cardinal Financial (CFNL).
Currently, SASR is up $0.84 or 8.28% and trading at $10.99. VCBI is currently trading at $5.56, down $0.34 or 5.81%.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.