Southern States Bancshares, Inc. Announces Renewal of $10.0 Million Stock Repurchase Program
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Insights
The renewal of Southern States Bancshares, Inc.'s stock repurchase program is a strategic financial decision that warrants attention from investors and market analysts. The authorization to repurchase up to $10.0 million of its common stock signals a potential increase in shareholder value, as buybacks can lead to a reduction in the number of outstanding shares and, typically, an elevation in earnings per share (EPS). The repurchase program's execution will be contingent on several market factors, including the company's stock price, trading volume and general market conditions.
It is important to note that while stock repurchase programs are often perceived positively, as they can indicate management's confidence in the company's financial health and future prospects, they also imply that the company may not have identified more compelling investment opportunities or acquisitions to drive growth. Additionally, repurchases may impact the company's cash reserves, potentially affecting its ability to respond to unforeseen financial needs or investment opportunities.
In assessing the implications of the repurchase program within the banking industry, it is crucial to consider the regulatory environment, particularly for a state-chartered commercial bank like Southern States Bank. Banking institutions are subject to stringent capital requirements and the decision to allocate funds for stock repurchases must be balanced against the need to maintain adequate capital ratios. Furthermore, the Program's compliance with securities laws, including the safe harbor provisions of Rule 10b-18, is essential to mitigate legal risks and ensure transparency in the repurchase process.
From an industry perspective, stock repurchase programs are not uncommon among financial institutions, especially when seeking to optimize capital structure and return excess capital to shareholders. However, the actual impact on the company's stock performance will depend on the execution of the Program and the broader economic context, including interest rate trends and economic growth, which can significantly affect the banking sector.
The broader economic implications of a stock repurchase program must be considered in tandem with the company-specific factors. In a scenario where the economy is expanding, a repurchase program may be well-received as it could reflect underlying corporate strength and a favorable outlook. Conversely, in a contracting economy, the same action might be scrutinized if it is perceived as a short-term measure to prop up stock prices amidst declining fundamentals.
The timing and scale of the repurchases can also have a nuanced impact on the market. For example, if the company executes buybacks at a time when the stock is undervalued, it can be seen as a savvy move. However, if repurchases are made when the stock is perceived to be overvalued, it could raise concerns about management's allocation of capital and its impact on long-term shareholder value.
ANNISTON, Ala., Dec. 20, 2023 (GLOBE NEWSWIRE) -- Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States” or the “Company”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today announced that its Board of Directors has approved the renewal of the Company’s
Stock repurchases under the Program may be made from time to time on the open market, in privately negotiated transactions, or in any other manner that complies with applicable securities laws (including pursuant to the safe harbor provided under Rule 10b-18 of the Securities Act of 1934, as amended), at the discretion of the management of the Company. The Program will be in effect from January 1, 2024 through December 31, 2024 with the timing of purchases and number of shares repurchased under the Program dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements, and market conditions. The Company is not obligated to purchase any shares under the Program and the Program may be suspended or discontinued at any time without notice.
About Southern States Bancshares, Inc.
Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 13 branches in Alabama and Georgia and two loan production offices in Atlanta.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company's reports filed with the Securities and Exchange Commission under the section entitled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors". Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.
These statements are often, but not always, made through the use of words or phrases such as "may," "can," "should," "could," "to be," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "likely," "anticipate," "seek," "estimate," "intend," "plan," "target," "project," "would" and "outlook," or the negative version of those words or other similar words or phrases of a future or forward-looking nature. Forward-looking statements appear in a number of places in this press release and may include statements about the Program, including the timing, amount and manner of purchases, if any, and the duration of the Program.
Contact Information:
Lynn Joyce
(205) 820-8065
ljoyce@ssbank.bank
Kevin Dobbs
(310) 622-8245
ssbankir@finprofiles.com
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