SSB Bancorp's Buyback Gamble: A Value Play or a Risky Roll of the Dice?

The financial markets are rife with companies attempting to prop up their stock prices through buybacks, but few operate under as much uncertainty as SSB Bancorp (OTC: SSBP). With just 5% of its authorized buyback program remaining, the regional bank faces a critical question: Is this a strategic move to capitalize on undervalued shares, or a desperate bid to mask underlying vulnerabilities? Let’s dissect the data.

The Buyback Basics: A Small Window, Big Implications

SSB Bancorp’s repurchase program, initially set to buy ~5% of its shares (49,489 total), has only 11,750 shares left as of May 2025. This means over 76% of the authorized buyback has already been executed. While the use of SEC Rule 10b5-1 plans ensures compliance and avoids accusations of market manipulation, the remaining capacity is now minuscule. For shareholders, this raises two key concerns:
1. Why hasn’t the buyback been completed sooner?
2. Is the remaining 5% enough to move the needle on a $19 million market cap?

The answer hinges on the bank’s financial health and the rationale behind the program.

Financial Health: Fragile Foundations?

The data paints a mixed picture. SSB Bancorp’s trailing twelve-month (TTM) revenue of $8 million and net income of $1.22 million (as of 2022) suggest a micro-cap institution with limited scale. Its P/E and P/B ratios are listed as 0.0x, which likely reflects outdated or incomplete financial reporting. The last full financial update is over a year old, and the stock’s 12-month decline of 12.95% underscores investor skepticism.

The bank’s loan-to-deposit ratio of 80% (as of Q1 2024) is prudent, but its liquidity coverage ratio—critical for a bank—is unknown due to missing data. Without transparency on capital reserves or non-performing loans, investors are left guessing. This opacity is a red flag, especially for a bank whose fate hinges on local economic conditions.

Regional Focus: Allegheny County’s Double-Edged Sword

SSB Bank operates almost exclusively in Allegheny County, Pennsylvania, a region with a stagnant economy. While its community-focused model builds loyalty, it also limits growth potential. The bank ranks 1,040th out of 6,088 competitors, underscoring its niche status.

A Rule 10b5-1 buyback here could signal confidence in the bank’s undervaluation—after all, shares trade at just $8.62, near their 52-week low of $8.06. But it could also be a defensive move to avoid further dilution in a low-liquidity stock. With average daily trading volume under 1,000 shares, even small buybacks could artificially inflate the price—a tactic that might backfire if the broader market ignores the stock.

The Regulatory Tightrope

SSB Bancorp’s buyback is subject to regulatory scrutiny, particularly given its small size. The Fed’s recent crackdown on risky lending practices could pressure the bank to bolster reserves, limiting capital flexibility. Meanwhile, the remaining 5% repurchase capacity—worth roughly $100,000 at current prices—seems more symbolic than impactful. For a bank with a $19 million market cap, this is akin to rearranging deck chairs on the Titanic unless paired with transformative growth.

Investment Verdict: A Gamble with High Odds

The buyback’s strategic value is questionable. Key issues remain unresolved:
- Outdated financials cloud the bank’s true health.
- Overreliance on Allegheny County exposes it to local downturns.
- Tiny buyback capacity offers little upside in such a small market cap.

While the buyback might signal confidence in undervaluation, the lack of recent data and paltry liquidity make this a high-risk bet. Investors seeking stability in regional banks are better off with larger, more transparent players like SouthState Corp (SSB) or Customers Bancorp (CUBI).

Final Take: SSB Bancorp’s buyback is a tactical move, not a strategic one. Unless the bank delivers updated financials and shows growth beyond Pittsburgh, this remains a gamble for all but the most speculative investors. Proceed with extreme caution—or avoid altogether.