FFB Bancorp's Deep Discount Persists, But So Do Its Challenges

2025-07-31 15:46:46 ET

Since I first wrote about FFB Bancorp (OTCQX: FFBB ) , the parent company of FFB Bank, the stock is down around 2% on a share price and total returns basis, while the SPDR S&P 500 ( SPY ) is up nearly 14%, and up over 14% on a total returns basis. My initial thesis was that the company was a well-capitalised, deeply undervalued bank with sustainably robust net interest margin ((NIM)), a healthy fee income, and strategic expansion and tech investment, that made me believe that it would overcome regulatory headwinds. The impact of the Consent Order has been very great, leading to a rise in expense growth, a decline in the deposit base, higher funding costs, and an overall decline in profitability. These factors are, by management’s estimation, likely to continue for a few quarters. So while the overall business remains strong, the rest of the year is going to be a challenging one for the bank. So, I am revising my rating to a “Hold”....

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