UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

(Amendment
No. 2)



|[X] | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------
|    |                                                                                         
|    | For
    the Fiscal Year Ended December 31, 2018                                         



OR



|[  ] | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | --------------------------------------------------------------------------------------------
|     |                                                                                             
|     | For
    the transition period from _________ to ___________                                 



Commission
File Number: 000-55898



SSB
Bancorp, Inc.

(Exact
Name of Registrant as Specified in its Charter)



|Maryland                                                                                                                                   |  | 82-2776224                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------
|(State or other jurisdiction of
                                                                             incorporation or organization |  | (I.R.S. Employer
                                                                             Identification Number)



|8700
    Perry Highway, Pittsburgh, Pennsylvania |  | 15237         
|------------------------------------------------ |  | --------------
|(Address
    of principal executive offices)     |  | (Zip
    code)



(412)
837-6955

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act:



|(Title
    of each class) |  | (Trading
    symbol(s)) |  | (Name
    of each exchange on which registered)
|------------------------- |  | ----------------------- |  | -----------------------------------------------
|                          |  |                         |  |                                                



Securities
registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.01 per share



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]
No [X]



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [  ]
No [X]



Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the
registrant was required to submit such files). Yes [X] No [  ]



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large
    accelerated filer [  ] |  | Accelerated
    filer [  ] |  | Non-accelerated
    filer [X] |  | Smaller
    reporting company [X]
|-------------------------------- |  | -------------------------- |  | ----------------------------- |  | ---------------------------------
|Emerging
    growth company [X]  |  |                            |  |                               |  |                                  



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No
[X]



As
of June 30, 2018, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant
was $7,465,872.



As
of June 25, 2019, there were 2,248,250 outstanding shares of the registrant’s common stock, of which 1,236,538 shares
are owned by SSB Bancorp, MHC.




















EXPLANATORY
NOTE



SSB
Bancorp, Inc. (the “Company”) is the stock holding company for SSB Bank. On March 29, 2019, the Company filed its
Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “Original Filing”). On May 21, 2019, the
Company filed a Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2018 (the “First Amendment”).
The tabular information contained in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of
Operations) under the section captioned “Revision of Prior Period Financial Statements” in both the Original Filing
and the First Amendment reflected financial information for SSB Bank only. The sole purpose of this Form 10-K/A (Amendment No.
2) is revise such tabular information to present consolidated financial information for the Company.



1







PART
II



ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations



This
discussion and analysis reflects our consolidated financial statements and other relevant statistical data and is intended to
enhance your understanding of our financial condition and results of operations. The information in this section has been derived
from the consolidated financial statements, which appear elsewhere in this annual report. You should read the information in this
section in conjunction with the other business and financial information provided in this annual report.



Overview



Our
business consists primarily of making loans to real estate investors, businesses and consumers. We also invest in securities,
which consist of Federal Home Loan Bank of Pittsburgh stock, mortgage-backed securities issued by U.S. government-sponsored entities,
corporate bonds, tax-exempt municipal bonds, and U.S. Treasury notes. We also have a mortgage banking operation that generates
one- to four-family residential mortgage loans through three mortgage loan originators and three correspondent mortgage banks.
Such residential mortgage loans are originated both for sale in the secondary market and for retention in our portfolio. However,
the origination of loans for sale became a larger focus for us at the beginning of 2017. We continue to rely less on correspondent
banks for loan originations, focusing instead on self-generated originations.



We
offer a variety of deposit accounts, including checking accounts, savings and money market accounts, and time deposits. We also
utilize advances from the Federal Home Loan Bank of Pittsburgh for liquidity and for asset/liability management purposes.



We
also offer various merchant services to businesses, consisting of multiple credit card processing solutions and other ancillary
services such as Internet banking. These services are offered through a third-party partner.



Our
results of operations rely heavily on net interest income, which is the difference between interest earned on interest-earning
assets and interest expense on interest-bearing liabilities. The results of operations are also affected by non-interest income,
non-interest expenses, and the provision for loan losses. Primary sources of non-interest income are gains on the sale of loans,
earnings on bank-owned life insurance, and loan servicing fees. Primary non-interest expenses are personnel costs, occupancy,
professional fees, federal deposit insurance premiums, and data processing.



Our
financial condition and results of operations may also be affected by general and local economic and competitive conditions, changes
in market interest rates, governmental policies, and actions of financial regulatory authorities.



Business
Strategy



Our
business strategy is to use our capital to both serve our community and maintain a profitable community savings bank. Our goals
have been to grow our core deposit base, effectively manage our cost of funds, and develop strong business relationships with
our customers. Our mortgage banking operations continue to generate gains on loan sales and servicing fee income. We continue
to expand our base for non-interest income and have begun marketing our commercial loans as well.



2







Our
current business strategy consists of the following:



| | ● | Continue
    to grow our core deposit base.Deposits have been and continue to be our primary source of funds for lending. Historically,
    we relied on time deposits as a source of funds, we remain focused on increasing core deposits. We consider savings, checking,
    money market, and commercial deposits to be core deposits. Core deposits are the funding source that is least costly and least
    sensitive to interest rate fluctuations. Core deposits also help us maintain loan-to-deposit ratios at levels consistent with
    regulatory expectations. Continuing to focus on relationship growth will increase our deposit portfolio with new and existing
    customers. We also continue to improve and invest in technologies, such as remote check capture and mobile & on-line banking
    that will help to attract core deposits.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Increase
    income streams by developing and offering innovative products to help our customers’ meet their financial goals.We
    continue to strive to make the financial independence of our customers and our communities one of the pillars of our core
    values. In 2018 we initiated a credit card program, which will be fully operational in the first quarter of 2019, we continue
    to market special CD & money market rates, and continue to offer ATM fee reimbursement along with all checking account
    products. While some of these offerings create a tangible cost, the intangible value to the bank and appreciation from our
    customers is incalculable. Relationship banking is our goal and the more products we are able to offer our customers will
    broaden the available avenues for income growth.                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Manage
    credit risk to maintain a low level of non-performing assets.Strong asset quality is a key to the long-term financial
    success of any bank. Our credit risk management strategy focuses on well-defined credit and investment policies and procedures
    that we believe promote conservative lending and investment practices, conservative loan underwriting criteria and active
    credit monitoring. In 2018 we made changes to our commercial lending department, which will ensure adequate oversight and
    consistent credit underwriting. We continue to look for areas to improve the balance in portfolio management and lending growth.                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Manage
    interest rate risk. Interest rate risk management is central to our budgeting, liquidity, and asset management. Our
    focus has shifted to managing our commercial and consumer credit portfolios, with conservative lending growth, competitive
    interest rates, and reasonable closing costs. The commercial lending department has started marketing saleable loans to the
    market in an effort to free up space for more competitive opportunities in terms of interest rate and credit quality. The
    consumer lending department continues to sell fixed rate residential mortgage loans into the secondary market, which helps
    mitigate and manage interest rate risk.                                                                                                                                                         



Summary
of Critical Accounting Policies and Estimates



A
summary of our accounting policies is described in Note 1 to the financial statements. Critical accounting estimates are necessary
in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical
accounting policies are defined as those involving significant judgments and assumptions by management that could have a material
impact on the carrying value of certain assets or on income under different assumptions or conditions.



The
JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.
As an emerging growth company, we may elect to delay adoption of new or revised financial
accounting standards until such date that the standards are required to be adopted by non-issuer (private) companies. If such
standards would not apply to non-issuer companies, no deferral would be applicable.Such an election is irrevocable during
the period that a company is an emerging growth company. We have elected to take advantage
of the benefits of extended transition periods. Accordingly, our financial statements may not be comparable to those of public
companies that adopt new or revised financial accounting standards as of an earlier date.



Management
believes the accounting policies discussed below to be the most critical accounting policies, which involve the most complex or
subjective decisions or assessments.



Allowance
for Loan Losses.The allowance for loan losses is established as losses are estimated to have occurred through a provision
for loan losses charged to income. Loan losses are charged against the allowance when management believes that specific loans,
or portions of loans, are uncollectible. The allowance for loan losses is evaluated on a regular basis, and at least quarterly,
by management. Management reviews the nature and volume of the loan portfolio, local and national conditions that may adversely
affect the borrower’s ability to repay, loss experience, the estimated value of any underlying collateral, and other relevant
factors. The evaluation of the allowance for loan losses is characteristically subjective as estimates are required that are subject
to continual change as more information becomes available.



3







The
allowance consists of general and specific reserve components. The specific reserves are related to loans that are considered
impaired. Loans that are classified as impaired are measured in accordance with applicable accounting guidance. The general reserve
is allocated for non-impaired loans and includes evaluation of changes in the trend and volume of delinquency, our internal risk
rating process and external conditions that may affect credit quality.



A
loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the
scheduled principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management
in determining impairment include payment status and the financial condition of the borrower. Loans that experience payment shortfalls
and insignificant payment delays are typically not considered impaired. Management looks at each loan individually and considers
all the circumstances around the shortfall or delay including the borrower’s prior payment history, borrower contact regarding
the reason for the delay or shortfall and the amount of the shortfall. Collateral dependent loans are measured against the fair
value of the collateral, while other loans are measured by the present value of expected future cash flows discounted at the loan’s
effective interest rate.



From
time to time, we may choose to restructure the contractual terms of certain loans at the borrower’s request. We review all
scenarios to determine the best payment structure with the borrower to improve the likelihood of repayment. Management reviews
modified loans to determine if the loan should be classified as a trouble debt restructuring. A trouble debt restructuring is
when a creditor, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the
borrower that it would not otherwise consider. Management considers the borrower’s ability to repay when a request to modify
existing loan terms is presented. A transfer of assets to repay the loan balance, a modification of loan terms or a combination
of these may occur. If an appropriate arrangement cannot be made, the loan is referred to legal counsel, at which time foreclosure
will begin. If a loan is accruing at the time of restructuring, we review the loan to determine if it should be placed on non-accrual.
It is our policy to keep a troubled debt restructured loan on non-accrual status for at least six months to ensure the borrower
can repay, at that time management may consider its return to accrual status.



Troubled
debt restructured loans are considered to be impaired loans.



Income
Taxes. We account for income taxes in accordance with accounting guidance (ASC 740, Income Taxes). The income tax accounting
guidance results in two components of income tax expense: current and deferred. Current income tax reflects taxes to be paid or
refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions
over revenues. U.S. GAAP requires that we use the Balance Sheet Method to determine the deferred income, which affects the differences
between the book and tax bases of assets and liabilities, and any changes in tax rates and laws are recognized in the period of
enactment. Deferred taxes are based on a valuation model and the determination on a quarterly basis whether all or a portion of
the deferred tax asset will be recognized.



Fair
Value Measurements. The fair value of a financial instrument is defined as the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. We estimate the fair value
of a financial instrument and any related asset impairment using a variety of valuation methods. Where financial instruments are
actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are
not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be
used, if available, to determine fair value. When observable market prices do not exist, we estimate fair value. These estimates
are subjective in nature and imprecision in estimating these factors can impact the amount of revenue or loss recorded. A more
detailed description of the fair values measured at each level of the fair value hierarchy and the methodology we utilize can
be found in Note 16 of the financial statements.



4







Investment
Securities. Available for sale and held to maturity securities are reviewed quarterly for possible other-than-temporary
impairment. The review includes an analysis of the facts and circumstances of each individual investment such as the severity
of loss, the length of time the fair value has been below cost, the expectation for that security’s performance, the creditworthiness
of the issuer and our intent and ability to hold the security to recovery. A decline in value that is considered to be other-than-temporary
is recorded as a loss within non-interest income in the statements of net income. At December 31, 2018, we believe the unrealized
losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the
fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally
views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified
as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive
scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities
and does not believe it will be required to sell these securities before they recover in value.



Loan
Portfolio



General.Loans are our primary interest-earning asset. At December 31, 2018, net loans represented 84.0% of our total assets.



Loan
Portfolio Analysis.The following table sets forth the composition of our loan portfolio by type of loan at the dates
indicated.



|                                                             |  | At December 31,        |        
|------------------------------------------------------------ |  | ---------------------- | -------
|                                                             |  | 2018                   |        
|                                                             |  | Amount                 |        
|                                                             |  | (Dollars in thousands) |        
|Mortgage Loans:                                              |  |                        |        
|One-to-four family                                           |  | $                      | 75,521 
|Commercial                                                   |  |                        | 59,494 
|                                                             |  |                        | 135,015
|                                                             |  |                        |        
|Commercial and industrial                                    |  |                        | 19,167 
|Consumer                                                     |  |                        | 5,404  
|                                                             |  |                        | 159,586
|                                                             |  |                        |        
|Third-party loan acquisition and other net origination costs |  |                        | 268    
|Discount on loans previously held for sale                   |  |                        | (199   
|Allowance for loan losses                                    |  |                        | (1,125 
|Total                                                        |  | $                      | 158,530



Loan
Maturity.The following tables set forth certain information at December 31, 2018 and December 31, 2017 regarding the
dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of
prepayments that may significantly shorten the average loan life and may cause actual repayment experience to differ from that
shown below. Demand loans, which are loans having no stated repayment schedule or no stated maturity, are reported as due in one
year or less.



5







|                                    |  | December 31, 2018                 |       
|----------------------------------- |  | --------------------------------- | ------
|                                    |  | One-to-Four Family Mortgage Loans |       
|                                    |  | (In thousands)                    |       
|Amounts due in:                     |  |                                   |       
|1 year or less                      |  | $                                 | 6,252 
|More than 1 year through 2 years    |  |                                   | 7     
|More than 2 years through 3 years   |  |                                   | 777   
|More than 3 years through 5 years   |  |                                   | 2,292 
|More than 5 years through 10 years  |  |                                   | 4,526 
|More than 10 years through 15 years |  |                                   | 7,594 
|More than 15 years                  |  |                                   | 54,073
|Total                               |  | $                                 | 75,521



|                                    |  | December 31, 2017                 |       
|----------------------------------- |  | --------------------------------- | ------
|                                    |  | One-to-Four Family Mortgage Loans |       
|                                    |  | (In thousands)                    |       
|Amounts due in:                     |  |                                   |       
|1 year or less                      |  | $                                 | 6,746 
|More than 1 year through 2 years    |  |                                   | 7     
|More than 2 years through 3 years   |  |                                   | 19    
|More than 3 years through 5 years   |  |                                   | 1,276 
|More than 5 years through 10 years  |  |                                   | 5,456 
|More than 10 years through 15 years |  |                                   | 7,365 
|More than 15 years                  |  |                                   | 54,989
|Total                               |  | $                                 | 75,858



The
following tables sets forth the dollar amount of all loans at December 31, 2018 that are due after December 31, 2019 and have
either fixed interest rates or floating or adjustable interest rates. The amounts shown below exclude third-party loan and other
net origination costs and the discount on loans previously held for sale.





|                                  |  | December 31, 2018 |        
|--------------------------------- |  | ----------------- | -------
|                                  |  | Fixed Rates       |        
|                                  |  | (In thousands)    |        
|One-to-four family mortgage loans |  | $                 | 63,494 
|Commercial mortgage loans         |  |                   | 53,886 
|Commercial and industrial loans   |  |                   | 9,705  
|Consumer loans and HELOC          |  |                   | 1,764  
|Total                             |  | $                 | 128,849



6







Loan
Originations, Purchases and Sales. The following table sets forth our loan origination, purchase and sale activity for
the years indicated.



|                                                             |  | Year Ended December 31, |        
|------------------------------------------------------------ |  | ----------------------- | -------
|                                                             |  | 2018                    |        
|                                                             |  | (In thousands)          |        
|Total loans at beginning of period                           |  | $                       | 141,450
|Loans originated:                                            |  |                         |        
|One-to-four family mortgage loans                            |  |                         | 18,565 
|Commercial mortgage loans                                    |  |                         | 1,738  
|Construction loans                                           |  |                         | 8,971  
|Multi-family loans                                           |  |                         | 10,270 
|Commercial and industrial loans                              |  |                         | 9,899  
|Consumer loans                                               |  |                         | 3,714  
|Total loans originated                                       |  |                         | 53,157 
|Loans purchased:                                             |  |                         |        
|One-to-four family mortgage loans                            |  |                         | 3,939  
|Commercial mortgage loans                                    |  |                         | -      
|Construction loans                                           |  |                         | 1,902  
|Consumer loans                                               |  |                         | -      
|Total loans purchased                                        |  |                         | 5,841  
|Additions:                                                   |  |                         |        
|Loans held for sale transferred to loans held for investment |  |                         | -      
|Less:                                                        |  |                         |        
|Loan principal repayments                                    |  |                         | 31,179 
|Loan sales                                                   |  |                         | 9,683  
|Loans transferred to held for sale                           |  |                         | -      
|Net loan activity                                            |  |                         | 18,136 
|Total loans at end of period                                 |  | $                       | 159,586



Asset
Quality



Credit
Risk Management.Management of asset quality is accomplished by internal controls, monitoring and reporting of key risk
indicators, and both internal and independent third-party loan reviews. The primary objective of our loan review process is to
measure borrower performance and assess risk for the purpose of identifying loan weakness in order to minimize loan loss exposure.
From the time of loan origination through final repayment, commercial real estate and commercial business loans are assigned a
risk rating based on pre-determined criteria and levels of risk. The risk rating is monitored annually for most loans; however,
it may change during the life of the loan as appropriate.



Delinquency
Procedures. When a borrower fails to make a required loan payment, we take a number of steps to have the borrower
cure the delinquency and restore the loan to current status, including contacting the borrower by letter and phone at regular
intervals. When the borrower is in default, we may commence collection proceedings. If a foreclosure action is instituted and
the loan is not brought current, paid in full, or refinanced before the foreclosure sale, the real property securing the loan
may be sold at foreclosure.



7









Delinquent
Loans.The following tables set forth our loan delinquencies, including non-accrual loans, by type and amount at the dates
indicated.







|                          |  | At December 31, 2018                                                                  |    
|------------------------- |  | ------------------------------------------------------------------------------------- | ---
|                          |  | 30-59 Days
                                                                  Past Due |    
|                          |  | (In thousands)                                                                        |    
|Mortgage loans:           |  |                                                                                       |    
|One-to-four family        |  | $                                                                                     | 305
|Commercial                |  |                                                                                       | -  
|Commercial and Industrial |  |                                                                                       | -  
|Consumer                  |  |                                                                                       | -  
|Total                     |  | $                                                                                     | 305



|                          |  | At December 31, 2017 |      
|------------------------- |  | -------------------- | -----
|                          |  | 30-59 Days Past Due  |      
|                          |  | (In thousands)       |      
|Mortgage loans:           |  |                      |      
|One-to-four family        |  | $                    | 982  
|Commercial                |  |                      | 656  
|Commercial and Industrial |  |                      | 302  
|Consumer                  |  |                      | 1    
|Total                     |  | $                    | 1,941



Non-performing
Assets.Non-performing assets include loans that are 90 or more days past due or on non-accrual status, including troubled
debt restructurings on non-accrual status, and real estate and other loan collateral acquired through foreclosure and repossession.
Troubled debt restructurings include loans where management has granted a concession from the original terms to a borrower that
is experiencing financial difficulties. Loans 90 days or greater past due may remain on an accrual basis if adequately collateralized
and in the process of collection. For non-accrual loans, interest previously accrued but not collected is reversed and charged
against income at the time a loan is placed on non-accrual status. Loans generally are returned to accrual status when the borrower
has become current and has demonstrated continued ability to service the loan.



Real
estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as foreclosed real estate until
it is sold. When property is acquired, it is initially recorded at the fair value less costs to sell at the date of foreclosure,
establishing a new cost basis. Holding costs and declines in fair value after acquisition of the property result in charges against
income.



8







The
following table sets forth information regarding our non-performing assets at the dates indicated.



|                                                                                        |  | At December 31,        |      
|--------------------------------------------------------------------------------------- |  | ---------------------- | -----
|                                                                                        |  | 2018                   |      
|                                                                                        |  | (Dollars in thousands) |      
|Non-accrual loans:                                                                      |  |                        |      
|One-to-four family mortgage loans                                                       |  | $                      | 2,302
|Commercial mortgage loans                                                               |  |                        | 1,094
|Commercial and industrial loans                                                         |  |                        | 156  
|Consumer loans                                                                          |  |                        | 1    
|Total                                                                                   |  |                        | 3,553
|Accruing loans past due 90 days or more:                                                |  |                        |      
|One-to-four family mortgage loans                                                       |  |                        | -    
|Commercial and industrial loans                                                         |  |                        | -    
|Consumer loans                                                                          |  |                        | -    
|Total                                                                                   |  |                        | -    
|                                                                                        |  |                        |      
|Total non-performing loans                                                              |  |                        | 3,553
|                                                                                        |  |                        |      
|Other real estate owned                                                                 |  |                        | 138  
|Total non-performing assets                                                             |  | $                      | 3,691
|                                                                                        |  |                        |      
|Troubled debt restructurings (accruing):                                                |  |                        |      
|One-to-four family mortgage loans                                                       |  | $                      | 51   
|Commercial mortgage loans                                                               |  |                        | 674  
|Total troubled debt restructurings (accruing)                                           |  | $                      | 725  
|                                                                                        |  |                        |      
|Total troubled debt restructurings (accruing) and total non-performing assets           |  | $                      | 4,416
|                                                                                        |  |                        |      
|Total non-performing loans to gross loans                                               |  |                        | 2.23 
|Total non-performing loans to total assets                                              |  |                        | 1.88 
|Total non-performing assets to total assets                                             |  |                        | 1.96 
|Total non-performing assets and troubled debt restructurings (accruing) to total assets |  |                        | 2.34 



The
cumulative amount of interest income not recognized on non-accrual loans for the years ended December 31, 2018 and December 31,
2017 was $357,000 and $278,000 respectively. For the years ended December 31, 2018 and 2017, interest income was negatively impacted
by $79,000 and $55,000, respectively, as a result of nonaccrual loans not performing in accordance with their original terms.
Interest income was minimally impacted by accruing troubled debt restructurings for the years ended December 31, 2018 and 2017
with the exception of the recognition of $95,000, related to recoveries of interest from prior periods in 2017.



Potential
Problem Loans.Certain loans are identified during our loan review process that are currently performing according to
their contractual terms and we expect to receive payment in full of principal and interest, but it is deemed probable that we
will be unable to collect all the scheduled payments of principal or interest when due according to the contractual terms of the
loan agreement. This may result from deteriorating conditions such as cash flows, collateral values or creditworthiness of the
borrower. These loans are classified as impaired but are not accounted for on a non-accrual basis.



Other
potential problem loans are those loans that are currently performing, but where known information about possible credit problems
of the borrowers causes us to have concerns as to the ability of such borrowers to comply with contractual loan repayment terms.
At December 31, 2018, there were no other potential problem loans.



9







Classified
Assets.The following table sets forth information regarding our classified assets, as defined under applicable regulatory
standards, and our special mention assets at the dates indicated.



|                |  | At December 31, |      
|--------------- |  | --------------- | -----
|                |  | 2018            |      
|                |  | (In thousands)  |      
|Special mention |  | $               | 3,982
|Substandard (1) |  |                 | 4,180
|Ending Balance  |  | $               | 8,162





| | (1) | Includes
    one- to four-family residential real estate loans on nonaccrual status of $2.3 million and $2.1 million at December 31, 2018
    and 2017, respectively, as well as consumer loans on nonaccrual status of $1,000 and $29,000 at December 31, 2018 and 2017,
    respectively.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Allowance
for Loan Losses.The allowance for loan losses is maintained at levels considered adequate by management to provide for
probable incurred loan losses inherent in the loan portfolio at the balance sheet reporting dates. The allowance for loan losses
is based on management’s assessment of various factors affecting the loan portfolio, including portfolio composition, delinquent
and non-accrual loans, national and local business conditions and loss experience and an overall evaluation of the quality of
the underlying collateral.



The
following table sets forth activity in our allowance for loan losses for the years indicated.



|                                                                      |  | 2018                   |       |   | 2017 |  
|--------------------------------------------------------------------- |  | ---------------------- | ----- | - | ---- | -
|                                                                      |  | (Dollars in thousands) |      
|Allowance for loan losses at beginning of period                      |  | $                      | 1,041 |   |      | $
|Provision for loan losses                                             |  |                        | 150   |   |      |  
|Charge-offs:                                                          |  |                        |       |   |      |  
|One-to-four family mortgage loans                                     |  |                        | (16   | ) |      |  
|Commercial mortgage loans                                             |  |                        | -     |   |      |  
|Commercial and industrial loans                                       |  |                        | (9    | ) |      |  
|Consumer loans                                                        |  |                        | (41   | ) |      |  
|Total charge-offs                                                     |  |                        | (66   | ) |      |  
|Recoveries:                                                           |  |                        |       |   |      |  
|One-to-four family mortgage loans                                     |  |                        | -     |   |      |  
|Commercial mortgage loans                                             |  |                        | -     |   |      |  
|Commercial and industrial loans                                       |  |                        | -     |   |      |  
|Consumer loans                                                        |  |                        | -     |   |      |  
|Total recoveries                                                      |  |                        | -     |   |      |  
|                                                                      |  |                        |       |   |      |  
|Net (charge-offs) recoveries                                          |  |                        | (66   | ) |      |  
|                                                                      |  |                        |       |   |      |  
|Allowance for loan losses at end of period                            |  | $                      | 1,125 |   |      | $
|                                                                      |  |                        |       |   |      |  
|Allowance for loan losses to non-performing loans at end of period    |  |                        | 31.66 | % |      |  
|Allowance for loan losses to total loans outstanding at end of period |  |                        | 0.70  | % |      |  
|Net charge-offs to average loans outstanding during the period        |  |                        | 0.04  | % |      |  



10







Allocation
of Allowance for Loan Losses.The following tables set forth the allowance for loan losses allocated by loan category.
The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category
and does not restrict the use of the allowance to absorb losses in other categories.



|                                  |  | December 31,           |      
|--------------------------------- |  | ---------------------- | -----
|                                  |  | 2018                   |      
|                                  |  | Amount                 |      
|                                  |  | (Dollars in thousands) |      
|One-to-four family mortgage loans |  | $                      | 422  
|Commercial mortgage loans         |  |                        | 394  
|Commercial and industrial loans   |  |                        | 264  
|Consumer loans                    |  |                        | 45   
|Total                             |  | $                      | 1,125



See
Notes 2 and 7 to the financial statements for a complete discussion of the allowance for loan losses. Although we believe that
we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan
losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the
assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses
in conformity with U.S. GAAP, there can be no assurance that regulators, in reviewing our loan portfolio, will not require us
to increase our allowance for loan losses. In addition, because future events affecting borrowers and collateral cannot be predicted
with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be
necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the
allowance for loan losses may adversely affect our financial condition and results of operations.



11







Securities
Portfolio



The
following table sets forth the amortized cost and estimated fair value of our securities portfolio at the dates indicated.



|                                                            |  | December 31,   |      
|----------------------------------------------------------- |  | -------------- | -----
|                                                            |  | 2018           |      
|                                                            |  | Amortized Cost |      
|                                                            |  | (In thousands) |      
|Securities held-to-maturity:                                |  |                |      
|Mortgage-backed securities in government-sponsored entities |  | $              | 6    
|Total                                                       |  | $              | 6    
|Securities available-for-sale:                              |  |                |      
|Mortgage-backed securities in government-sponsored entities |  | $              | 3,883
|Obligations of state and political subdivisions             |  |                | 1,540
|Corporate bonds                                             |  |                | 3,547
|U.S. treasury securities                                    |  |                | 193  
|Total                                                       |  | $              | 9,163



At
December 31, 2018 and 2017, we had no investments in a single issuer (other than securities issued by the U.S. government and
government agency), which had an aggregate book value in excess of 10% of our stockholders’ equity.



Securities
Portfolio Maturities and Yields. The following table sets forth the stated maturities and weighted average yields of investment
securities at December 31, 2018 and 2017. Weighted-average yields on tax-exempt securities are not presented on a tax equivalent
basis. Certain mortgage-backed securities have adjustable interest rates and will reprice annually within the various maturity
ranges. These repricing schedules are not reflected in the table below. Weighted average yield calculations on investment securities
available for sale do not give effect to changes in fair value that are reflected as a component of equity.



12









|                                                            |                                                           | December 31, 2018      |    
|----------------------------------------------------------- | --------------------------------------------------------- | ---------------------- | ---
|                                                            | One
                                         Year or Less |                        |    
|                                                            |                                                           | Amortized Cost         |    
|                                                            |                                                           | (Dollars in thousands) |    
|Securities held-to-maturity:                                |                                                           |                        |    
|Mortgage-backed securities in government-sponsored entities |                                                           | $                      | -  
|Total                                                       |                                                           | $                      | -  
|Securities available-for-sale:                              |                                                           |                        |    
|U.S. treasury securities                                    |                                                           | $                      | 193
|Mortgage-backed securities in government-sponsored entities |                                                           | $                      | -  
|Obligations of state and political subdivisions             |                                                           | $                      | 30 
|Corporate bonds                                             |                                                           | $                      | 200
|Total                                                       |                                                           | $                      | 423



|                                                            |  | December 31, 2017      |   
|----------------------------------------------------------- |  | ---------------------- | --
|                                                            |  | One Year or Less       |   
|                                                            |  | Amortized Cost         |   
|                                                            |  | (Dollars in thousands) |   
|Securities held-to-maturity:                                |  |                        |   
|Mortgage-backed securities in government-sponsored entities |  | $                      | - 
|Total                                                       |  | $                      | - 
|Securities available-for-sale:                              |  |                        |   
|U.S. treasury securities                                    |  | $                      | - 
|Mortgage-backed securities in government-sponsored entities |  |                        | - 
|Obligations of state and political subdivisions             |  | $                      | 85
|Corporate bonds                                             |  |                        | - 
|Total                                                       |  | $                      | 85





Each
reporting period, we evaluate all securities with a decline in fair value below the amortized cost of the investment to determine
whether or not the impairment is deemed to be other-than-temporary. Other-than-temporary impairment (“OTTI”) is required
to be recognized if (1) we intend to sell the security; (2) it is more likely than not that we will be required to sell the security
before recovery of its amortized cost basis; or (3) for debt securities, the present value of expected cash flows is not sufficient
to recover the entire amortized cost basis. For impaired debt securities that we intend to sell, or more likely than not will
be required to sell, the full amount of the depreciation is recognized as OTTI, resulting in a realized loss that is a charged
to earnings through a reduction in our non-interest income. For all other impaired debt securities, credit-related OTTI is recognized
through earnings and non-credit related OTTI is recognized in other comprehensive income/loss, net of applicable taxes. We did
not recognize any OTTI during the years ended December 31, 2018 and 2017.



13







Deposits



Deposits
continue to be our primary source of funds for our lending and investment activities. The majority of our deposits are from depositors
who reside in our primary market area. Deposits are attracted through the offering of a broad selection of deposit instruments
for both individuals and businesses. The following table sets forth the distribution of total deposits by account type at the
dates indicated.







|                                     |  | December 31,           |        
|------------------------------------ |  | ---------------------- | -------
|                                     |  | 2018                   |        
|                                     |  | Amount                 |        
|                                     |  | (Dollars in thousands) |        
|Non-interest bearing demand accounts |  | $                      | 5,699  
|Interest-bearing demand accounts     |  |                        | 8,386  
|Money market accounts                |  |                        | 16,021 
|Savings accounts                     |  |                        | 12,884 
|Time deposit accounts                |  |                        | 93,119 
|Total                                |  | $                      | 136,109



The
following tables indicate the amount of jumbo certificates of deposit by time remaining until maturity at December 31, 2018 and
2017. Jumbo certificates of deposit require minimum deposits of $100,000.



|Maturity Period                |  | Amount |               
|------------------------------ |  | ------ | --------------
|                               |  |        | (In thousands)
|December 31, 2018:             |  |        |               
|Three months or less           |  | $      | 4,766         
|Over three through six months  |  |        | 7,767         
|Over six through twelve months |  |        | 15,865        
|Over twelve months             |  |        | 52,383        
|Total                          |  | $      | 80,781        
|                               |  |        |               
|December 31, 2017:             |  |        |               
|Three months or less           |  | $      | 2,249         
|Over three through six months  |  |        | 2,137         
|Over six through twelve months |  |        | 7,662         
|Over twelve months             |  |        | 56,364        
|Total                          |  | $      | 68,412        





14







The
following tables set forth time deposit accounts classified by rate and maturity at December 31, 2018 and December 31, 2017.



|                 |  | December
    31, 2018      |       
|---------------- |  | -------------------------- | ------
|                 |  | Amount
    Due             |       
|                 |  | Less
    Than  One Year    |       
|                 |  | (Dollars
    in thousands) |       
|0.00
    - 1.00% |  | $                          | 583   
|1.01
    - 2.00% |  |                            | 18,345
|2.01
    - 3.00% |  |                            | 12,334
|3.01
    - 4.00% |  |                            | -     
|Total            |  | $                          | 31,262



|             |  | December 31, 2017     |       
|------------ |  | --------------------- | ------
|             |  | Amount Due            |       
|             |  | Less Than  One Year   |       
|             |  | Dollars in thousands) |       
|0.00 - 1.00% |  | $                     | 1,392 
|1.01 - 2.00% |  |                       | 14,011
|2.01 - 3.00% |  |                       | 8     
|Total        |  | $                     | 15,411



Borrowings



We
use advances from the Federal Home Loan Bank of Pittsburgh to supplement our investable funds. At December 31, 2018, we had $91.9
million of available borrowing capacity with the Federal Home Loan Bank of Pittsburgh and $31.4 million in advances outstanding.
The following table sets forth information concerning our borrowings at the dates and for the years indicated.



|                                                            |  | Year Ended December 31, |       
|----------------------------------------------------------- |  | ----------------------- | ------
|                                                            |  | 2018                    |       
|                                                            |  | (Dollars in thousands)  |       
|Maximum balance outstanding at any month-end during period: |  |                         |       
|Federal Home Loan Bank advances                             |  |                         | 31,375
|Average balance outstanding during period:                  |  |                         |       
|Federal Home Loan Bank advances                             |  |                         | 28,355
|Weighted average interest rate during period:               |  |                         |       
|Federal Home Loan Bank advances                             |  |                         | 2.47  
|Balance outstanding at end of period:                       |  |                         |       
|Federal Home Loan Bank advances                             |  |                         | 31,375
|Weighted average interest rate at end of period:            |  |                         |       
|Federal Home Loan Bank advances                             |  |                         | 2.70  



15







Comparison
of Financial Condition at December 31, 2018 and December 31, 2017



Total
Assets.Total assets were $188.8 million as of December 31, 2018, an increase of $16.9 million, or 9.8% when compared
to total assets of $172.0 million at December 31, 2017. The increase was due primarily to a $6.5 million increase in securities
available for sale and an $18.0 million increase in loans - primarily commercial mortgages and commercial and industrial loans.
The Bank borrowed an additional $5.0 million and added $3.7 million in deposits to fund the increase in assets.



Cash
and Cash Equivalents.Cash and cash equivalents decreased $7.4 million, or 45.2%, to $9.0 million at December 31, 2018
from $16.5 million at December 31, 2017. The reduction in cash was due to the withdrawal of stock subscription funds held on account
at SSB Bank for the purpose of purchasing SSB Bancorp, Inc. common stock in the Reorganization.



Net
Loans.Net loans increased $18.0 million, or 12.8%, to $158.5 million at December 31, 2018 from $140.6 million at December
31, 2017. The change is primarily due to an increase in commercial real estate of $9.4 million, or 18.7%, to $59.5 million at
December 31, 2018 from $50.1 million at December 31, 2017. Commercial and industrial loans increased $7.7 million, or 67.3%, to
$19.2 million at December 31, 2018 from $11.5 million at December 31, 2017. One-to-four family mortgages remained relatively flat
year over year. Consumer loans increased $1.4 million, or 34.6%, to $5.4 million at December 31, 2018 from $4.0 million at December
31, 2017.



During
the year, the volumes in originations were as follows: $18.6 million in one- to four-family mortgages, an increase of $1.3 million
over the $17.3 million originated in 2017; $12.0 million in commercial mortgages, a decrease of $12.8 million from the $24.8 originated
in 2017; $9.0 million in construction loans, an increase of $2.6 million over the $6.4 million originated in 2017. Originations
of commercial and industrial, and consumer loans increased $7.9 million as compared to the prior year.



Loans
purchased during 2018 were $3.9 million in one-to-four family, a decrease of $2.8 million or 41.5% as compared to 2017; there
were no commercial mortgages purchased in 2018 or 2017. Construction loans purchased were $1.9 million, a decrease of $3.6 million
or 65.3% as compared to 2017. This decrease is due to our strategy to originate more loans as opposed to purchasing loans.



$12.6
million in loans that were reported as held for sale at December 31, 2016 were transferred to loans held for investment in 2017.
SSB sold loans in the amount of $9.7 million, a decrease of $11.8 million or 55.0% as compared to $21.5 million in 2017. Most
of the difference is due to a $6.9 million pool of seasoned loans sold in 2017.



The
largest increase in our loan portfolio commercial and industrial loan portfolio. This growth reflects our strategy to invest in
higher yielding adjustable rate loans to improve net margins and manage interest rate risk. We continue to sell selected, conforming
15-year and 30-year fixed rate mortgage loans to the Federal Home Loan Bank of Pittsburgh on a servicing retained basis through
its mortgage purchase program.



Loans
Held for Sale. There were no loans held for sale at December 31, 2018 or 2017. The loans that were held-for-sale at year
end 2016 totaled $19.9 million. In June 2017, $6.9 million of one – to – four family mortgages were sold and the remaining
held for sale portfolio was reclassified to held for investment. The decision to reclassify the loans as being held for investment
was made as there was less demand for one-to-four family and commercial mortgage loans on the secondary market.



Available
for Sale Securities.Available for sale securities decreased by approximately $6.5 million, or 246.6%, to $9.1 million
at December 31, 2018 from $2.6 million at December 31, 2017. The increase is due to management efforts to increase liquidity through
the purchase of available for sale securities. The increases were mostly due to a $3.3 million increase in mortgage-backed securities
in government-sponsored entities and a $3.2 million increase in corporate bonds. There were slight decreases in obligations of
state and political subdivisions and U.S. treasuries.



Deposits.Deposits increased $3.7 million, or 2.8%, to $136.1 million at December 31, 2018 from $132.4 million at December 31, 2017.
Core deposits decreased $7.7 million, or 15.3%, to $43.0 million at December 31, 2018 from $50.7 million at December 31, 2017.
The primary reason for the decrease was loss $10.1 million in Business Demand Deposits for the purpose of buying stock of SSB
Bancorp in the offering completed in January 2018. Time deposits increased $11.4 million, or 14.0%, to $93.1 million at December
31, 2018 from $81.7 million at December 31, 2017. The increase in time deposits was primarily due to an increase in deposits obtained
through brokers and listing services in order to fund the increase in loans and investments.



16







Stockholders’
Equity.Stockholders’ equity increased $8.2 or 67.8% to $20.3 million at December 31, 2018 from $12.1 million at
December 31, 2017. The majority is due to $8.7 million in paid-in capital that was received as a result of the Reorganization
completed in January 2018. Consolidated net Income was $380,000 for the year 2018, increasing retained earnings by 3.1%. This
was partially offset by other comprehensive loss of $51,000 related to net changes in unrealized gains/losses in the available-for-sale
securities portfolio as well as $837,000 in unearned employee stock ownership plan that did not exist at December 31, 2017.



Comparison
of Results of Operations for the Years Ended December 31, 2018 and 2017



Net
Income. Net income decreased $209,000, or 35.4%, to $380,000 for the year ended December 31, 2018 from $589,000 for the
year ended December 31, 2017. This increase was due to a $971,000 increase, or 32.2%, in noninterest expense to $4.0 million for
the year ended December 31, 2018 from $3.0 million for the year ended December 31, 2017. Noninterest income dropped by $67,000,
or 12.7%, to $460,000 for the year ended December 31, 2018, from $527,000 for the year ended December 31, 2017. Offsetting these
effects was an increase in net interest income of $211,000, or 5.4%, to $4.1 million for the year ended December 31, 2018, from
$3.9 million for the year ended December 31, 2017.



Interest
and Dividend Income. Interest and dividend income increased $795,000, or 12.8%, to $7.0 million for the year ended December
31, 2018 from $6.2 million for the year ended December 31, 2017. This increase was due to an increase of $624,000, or 10.4%, in
interest on loans to $6.6 million for the year ended December 31, 2018, from $6.0 million for the year ended December 31, 2017.
The increased interest is due to a $15.6 million increase in average total loans for the year ended December 31, 2018. Also, the
weighted average yield on the loan portfolio was 4.41% for the year ended December 31, 2018 compared to 4.39% for the year ended
December 31, 2017. Aside from loan growth, there was a $37,000 increase in income from interest-bearing deposits to $83,000 for
the year ended December 31, 2018 from $46,000 for the year ended December 31, 2017. There was also a $143,000 increase in income
from investment securities to $286,000 for the year ended December 31, 2018 from $144,000 for the year ended December 31, 2017.
The increase in income from investment securities is due to the increase in the average investment securities of $1.9 million
to $4.9 million for the year ended December 31, 2018, from $3.0 million for the year ended December 31, 2017. The average yield
of the portfolio also increased to 2.82% for the year ended December 31, 2018, from 2.14% for the year ended December 31, 2017.
These increases were slightly offset by a decrease in income from certificates of deposit of $8,000 to $15,000 for the year ended
December 31, 2018 from $23,000 for the year ended December 31, 2017.



Average
interest-earning assets increased $19.4 million, from $146.0 million for the year ended December 31, 2017 to $165.3 million for
the year ended December 31, 2018, while the yield on the interest earning-assets increased 5 basis points, from 4.20% to 4.25%
when comparing the two periods.



Interest
Expense.Total interest expense increased $583,000, or 25.2%, to $2.9 million for the year ended December 31, 2018 from
$2.3 million for the year ended December 31, 2017. Interest expense on deposit accounts increased $427,000, or 24.1%, to $2.2
million for the year ended December 31, 2018 from $1.8 million for the year ended December 31, 2017. The increase was primarily
due to an increase in the average balance of interest-bearing deposits from $115.4 million for the year ended December 31, 2017
to $119.8 million for the year ended December 31, 2018; an increase of $4.4 million or 3.8%. This was accompanied by a 30 basis
point increase in the weighted average cost from 1.54% to 1.84%. There was a reclassification of a business checking account type
from interest-bearing demand accounts to noninterest-bearing demand accounts. At year end, the amount reclassed from interest-bearing
demand to noninterest-bearing demand totaled $8.7 million.



Interest
expense on Federal Home Loan Bank advances increased $156,000, or 28.7%, to $700,000 for the year ended December 31, 2018 from
$544,000 for the year ended December 31, 2017. The average balance increased from $25.5 million to $28.4 million when comparing
the two periods. The increase in the average balance of advances is due to management utilizing advances as a funding source for
loan originations and investment purchases. The cost of the advances also increased by 34 basis points from 2.13% for the year
ended December 31, 2017, to 2.47% for the year ended December 31, 2018.



17







Net
Interest Income. Net interest income increased $211,000, or 5.4%, to $4.1 million for the year ended December 31, 2018
from $3.9 million for the year ended December 31, 2017. This increase was due to an increase in our average net loans of $15.6
million to $150.4 million for the year ended December 31, 2018, from $134.8 million for year ended December 31, 2017. Average
interest earning assets increased by $19.4 million when comparing the two periods, while average interest-bearing liabilities
increased by only $7.2 million ($12.4 million without the reclassification noted above) over the same two periods. Offsetting
this increase, the yield of interest earning assets increased by 5 basis points when comparing the two periods, while the cost
of interest-bearing liabilities increased by 32 basis points over the two periods.



Provision
for Loan Losses.Based on management’s analysis of the allowance for loan losses, we recorded a provision for loan
losses of $150,000 for the year ended December 31, 2018 compared to a provision of $247,000 for the year ended December 31, 2017.
The decrease in the provision for the year ended December 31, 2018 was primarily due to changes in FAS 5 qualitative factors used
when calculating the allowance for loan losses.



Non-Interest
Income. Non-interest income decreased $67,000 to $460,000 for the year ended December 31, 2018 compared to $527,000 for
the year ended December 31, 2017. Gains on the sale of loans decreased by $165,000 to $182,000 for the year ended December 31,
2018 from $348,000 for the year ended December 31, 2017. Offsetting this decrease was an increase in loan servicing fees of $47,000,
or 48.4%, to $143,000 for the year ended December 31, 2018 from $97,000 for the year ended December 31, 2017, reflecting sales
of loans with servicing rights retained. Earnings on bank-owned life insurance increased by $19,000 and other noninterest income
increased by $34,000 further offsetting the decrease in gain on sale of loans.



Non-Interest
Expense.Non-interest expense increased $970,000, or 32.2%, to $4.0 million for the year ended December 31, 2018 from
$3.0 for the year ended December 31, 2017. The increase was due primarily to a $341,000 or 94.9% increase in professional fees,
a $281,000 or 19.3% increase in salary and employee benefits, a 114,000 or 43.6% increase in occupancy, a $53,000 or 60.1% increase
in director fees, a $51,000 or 18.0% increase in data processing a $31,000 or 24.5% increase in federal deposit insurance, a $15,000
or 27.5% increase contributions and donations, and an $85,000 increase in other noninterest expenses. Noninterest expense has
been driven up by additional costs associated with the growth of the institution.



Income
Taxes. The income tax provision decreased by $521,000, or 89.2%, to $63,000 for the year ended December 31, 2018 from
$584,000 for the year ended December 31, 2017. The effective tax rate was 14.2% for the year ended December 31, 2018 and 49.8%
for the year ended December 31, 2017. The decrease in tax expense was primarily due to the Tax Cuts and Jobs Act which caused
us to write down our net deferred tax asset by $203,000 as of the enactment date of December 22, 2017, as well as lowered the
federal corporate tax rate in 2018. Additionally, the decrease in net income for the year ended December 31, 2018, when compared
to the year ended December 31, 2017, contributed to the decrease in income taxes.



Revision
of Prior Period Financial Statements



During
the 4th quarter of 2018, the Company identified and corrected an error related to its accounting treatment of accrued interest
on investor sold loans and loan participations affecting 2nd and 3rd quarters of 2018. Prior period accrued
interest receivable accounts were overstated at June 30, 2018, and September 30, 2018, by $140,000 and $335,000, respectively.
The Company was able to identify the sources of the issues and it resulted in the Company correcting interest income and provision
for income taxes for the 2nd and 3rd quarters of 2018. On the corresponding balance sheet, the Company’s
accrued interest receivable and income taxes receivable was understated. The net effect was an overstatement of total assets and
total liabilities and stockholders’ equity at June 30, 2018 and September 30, 2018.



The
Company has evaluated the effects of this error and concluded that they are immaterial to the two quarters affected. Since the
errors happened in the 2nd and 3rd quarters of 2018, the Company has revised its financial statements as of and for the six months
and three months ended June 30, 2018 and as of and for the nine months and three months ended September 30, 2018. The tables below
show the originally reported and revised income and balance sheet information.



18







|                                                    |  | At or For the Three Months Ended |        
|--------------------------------------------------- |  | -------------------------------- | -------
|                                                    |  | June 30, 2018                    |        
|                                                    |  | As Reported                      |        
|                                                    |  | (In thousands)                  
|Statement of income information:                    |  |                                  |        
|                                                    |  |                                  |        
|Interest income from loans, including fees          |  | $                                | 1,719  
|Total interest income                               |  | $                                | 1,799  
|Net interest income                                 |  | $                                | 1,138  
|Net interest income after provision for loan losses |  | $                                | 1,113  
|Income before income taxes                          |  | $                                | 248    
|Provision (benefit) for income taxes                |  | $                                | 34     
|Net income                                          |  | $                                | 214    
|                                                    |  |                                  |        
|Balance sheet information:                          |  |                                  |        
|Accrued interest receivable                         |  | $                                | 612    
|Other assets                                        |  | $                                | 844    
|Total assets                                        |  | $                                | 172,583
|Retained earnings                                   |  | $                                | 12,396 
|Total net worth                                     |  | $                                | 20,271 
|Total liabilities and stockholders’ equity          |  | $                                | 172,583
|                                                    |  |                                  |        
|Book value per share (2,248,250 shares issued)      |  | $                                | 9.02   



|                                                    |  | At or For the Six Months Ended |        
|--------------------------------------------------- |  | ------------------------------ | -------
|                                                    |  | June 30, 2018                  |        
|                                                    |  | As Reported                    |        
|                                                    |  | (In thousands)                 |        
|Statement of income information:                    |  |                                |        
|Interest income from loans, including fees          |  | $                              | 3,288  
|Total interest income                               |  | $                              | 3,434  
|Net interest income                                 |  | $                              | 2,150  
|Net interest income after provision for loan losses |  | $                              | 2,085  
|Income before income taxes                          |  | $                              | 305    
|Provision (benefit) for income taxes                |  | $                              | 44     
|Net income                                          |  | $                              | 261    
|                                                    |  |                                |        
|Balance sheet information:                          |  |                                |        
|Accrued interest receivable                         |  | $                              | 612    
|Other assets                                        |  | $                              | 844    
|Total assets                                        |  | $                              | 172,583
|Retained earnings                                   |  | $                              | 12,396 
|Total net worth                                     |  | $                              | 20,271 
|Total liabilities and stockholders’ equity          |  | $                              | 172,583
|                                                    |  |                                |        
|Book value per share (2,248,250 shares issued)      |  | $                              | 9.02   



19







|                                                    |  | At or For the Three Months Ended |        
|--------------------------------------------------- |  | -------------------------------- | -------
|                                                    |  | September 30, 2018               |        
|                                                    |  | As Reported                      |        
|                                                    |  | (In thousands)                   |        
|Statement of income information:                    |  |                                  |        
|Interest income from loans, including fees          |  | $                                | 1,818  
|Total interest income                               |  | $                                | 1,923  
|Net interest income                                 |  | $                                | 1,167  
|Net interest income after provision for loan losses |  | $                                | 1,117  
|Income before income taxes                          |  | $                                | 247    
|Provision for income taxes                          |  | $                                | 58     
|Net income                                          |  | $                                | 189    
|                                                    |  |                                  |        
|Balance sheet information:                          |  |                                  |        
|Accrued interest receivable                         |  | $                                | 892    
|Other assets                                        |  | $                                | 894    
|Total assets                                        |  | $                                | 183,770
|Retained earnings                                   |  | $                                | 12,586 
|Total net worth                                     |  | $                                | 20,351 
|Total liabilities and stockholders’ equity          |  | $                                | 183,770
|                                                    |  |                                  |        
|Book value per share (2,248,250 shares issued)      |  | $                                | 9.05   



|                                                    |  | At or For the Nine Months Ended |        
|--------------------------------------------------- |  | ------------------------------- | -------
|                                                    |  | September 30, 2018              |        
|                                                    |  | As Reported                     |        
|                                                    |  | (In thousands)                  |        
|Statement of income information:                    |  |                                 |        
|Interest income from loans, including fees          |  | $                               | 5,106  
|Total interest income                               |  | $                               | 5,356  
|Net interest income                                 |  | $                               | 3,318  
|Net interest income after provision for loan losses |  | $                               | 3,203  
|Income before income taxes                          |  | $                               | 552    
|Provision for income taxes                          |  | $                               | 102    
|Net income                                          |  | $                               | 450    
|                                                    |  |                                 |        
|Balance sheet information:                          |  |                                 |        
|Accrued interest receivable                         |  | $                               | 892    
|Other assets                                        |  | $                               | 894    
|Total assets                                        |  | $                               | 183,770
|Retained earnings                                   |  | $                               | 12,586 
|Total net worth                                     |  | $                               | 20,351 
|Total liabilities and stockholders’ equity          |  | $                               | 183,770
|                                                    |  |                                 |        
|Book value per share (2,248,250 shares issued)      |  | $                               | 9.05   



20







Average
Balance Sheet



The
following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest
income from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities,
and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing
income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances
have been calculated using daily balances. Nonaccrual loans are included in average balances only. Loan fees are included in interest
income on loans and are not material. Yields on tax exempt investment securities are not presented on a tax equivalent basis.
Any adjustments necessary to present such yields on a tax equivalent basis are insignificant.



|                                                                            |  | Year Ended December 31, |        
|--------------------------------------------------------------------------- |  | ----------------------- | -------
|                                                                            |  | 2018                    |        
|                                                                            |  | Average Balance         |        
|                                                                            |  | (Dollars in thousands)  |        
|Assets:                                                                     |  |                         |        
|Interest-bearing deposits                                                   |  | $                       | 6,770  
|Net Loans and Loans Held for Sale (1)(5)(6)                                 |  |                         | 150,377
|Investment securities                                                       |  |                         | 4,866  
|Other interest-earning assets (2)                                           |  |                         | 3,306  
|Total interest-earning assets                                               |  |                         | 165,319
|                                                                            |  |                         |        
|Non-interest-earning assets                                                 |  |                         | 10,588 
|Total assets                                                                |  | $                       | 175,907
|                                                                            |  |                         |        
|Liabilities and equity:                                                     |  |                         |        
|Interest-bearing demand accounts                                            |  | $                       | 7,211  
|Money market accounts                                                       |  |                         | 14,581 
|Savings accounts                                                            |  |                         | 13,128 
|Certificate of deposit                                                      |  |                         | 84,852 
|Total interest-bearing deposits                                             |  |                         | 119,772
|                                                                            |  |                         |        
|Federal Home Loan Bank advances                                             |  |                         | 28,355 
|Other interest-bearing liabilities                                          |  |                         |        
|Total interest-bearing liabilities                                          |  |                         | 148,127
|                                                                            |  |                         |        
|Non-interest-bearing deposits                                               |  |                         | 7,161  
|Other non-interest-bearing liabilities                                      |  |                         | 917    
|Total Liabilities                                                           |  |                         | 156,205
|                                                                            |  |                         |        
|Total net worth                                                             |  |                         | 19,702 
|Total liabilitites and net worth                                            |  | $                       | 175,907
|Net interest income                                                         |  |                         |        
|Add: Out-of-period recoveries of loan interest (1)                          |  |                         |        
|Net interest income per Statements of Net Income                            |  |                         |        
|Net Interest Earning Assets (3)                                             |  | $                       | 17,192 
|Interest rate spread (4)                                                    |  |                         |        
|Net interest margin (5)                                                     |  |                         |        
|Average interest-earning assets to average
    interest-bearing liabilities |  |                         |        



|(1) | Included
    in interest on loans and loans held for sale for the years ended December 31, 2018 and 2017 are loan fees of $67,000 and $62,000,
    respectively. Excluded from interest on loans and loans held for sale for the years ended December 31, 2017 are recoveries
    of interest on an impaired loan that relate to prior periods of $95,000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Dividends
    on FHLB stock are included in dividends on other interest-earning assets.                                                                                                                                                                                                                                                                   
|(3) | Represents
    total average interest-earnings assets less total average interest-bearing liabilities.                                                                                                                                                                                                                                                    
|(4) | Represents
    the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of average
    interest-bearing liabilities.                                                                                                                                                                            
|(5) | Represents
    net interest income, excluding out of period recoveries of loan interest, as a percent of average interest-earning assets.                                                                                                                                                                                                                 
|(6) | Loans
    do not include the allowance for loan losses.                                                                                                                                                                                                                                                                                                   



21







Rate/Volume
Analysis



The
following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects
attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable
to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes
attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes
due to rate and the changes due to volume. Changes exclude recoveries of loan interest amounts that relate to prior periods.



|                                               |  | Year Ended December 31, 2018
 Compared to Year Ended
 December 31, 2017 |    
|---------------------------------------------- |  | ----------------------------------------------------------------------- | ---
|                                               |  | Increase (Decrease) Due To                                              |    
|                                               |  | Volume                                                                  |    
|                                               |  | (In thousands)                                                          |    
|Interest income:                               |  |                                                                         |    
|Interest-bearing deposits                      |  | $                                                                       | 14 
|Loans receivable                               |  |                                                                         | 687
|Investment securities                          |  |                                                                         | 40 
|Other interest-earning assets                  |  |                                                                         | 11 
|Total interest-earning assets                  |  | $                                                                       | 752
|                                               |  |                                                                         |    
|Interest expense:                              |  |                                                                         |    
|Deposits                                       |  | $                                                                       | 147
|Federal Home Loan Bank advances                |  |                                                                         | 60 
|Total interest-bearing liabilities             |  | $                                                                       | 207
|                                               |  |                                                                         |    
|Net increase (decrease) in net interest income |  | $                                                                       | 545



Management
of Market Risk



General.Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets
and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest
rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. Our
Asset/Liability Management Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities,
for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity
and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors.
We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest
rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this
risk consistent with the guidelines approved by the board of directors.





22







Our
interest rate risk profile is considered liability-sensitive, which means that if interest rates rise our deposits and other interest-bearing
liabilities would be expected to reprice to higher interest rates faster than would our loans and other interest-earning assets.
We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest
rates. In recent years, we have implemented the following strategies to manage our interest rate risk:



| | ● | increasing
    lower cost core deposits and limiting our reliance on higher cost funding sources, such as time deposits; and                                                                                                                                   
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                
| | ● | diversifying
    our loan portfolio by adding more commercial-related loans, which typically have shorter maturities and/or balloon payments,
    and selling one- to four-family residential mortgage loans, which have fixed interest rates and longer terms.





By
following these strategies, we believe that we are better positioned to react to increases in market interest rates.



We
do not engage in hedging activities, such as engaging in futures, options or swap transactions, or investing in high-risk mortgage
derivatives, such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests
or stripped mortgage backed securities.



Economic
Value of Equity.We analyze our sensitivity to changes in interest rates through an economic value of equity (“EVE”)
model. EVE represents the difference between the present value of assets and the present value of liabilities. The EVE ratio represents
the dollar amount of our EVE divided by the present value of our total assets for a given interest rate scenario. EVE attempts
to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital
ratio. We estimate what our EVE would be at a specific date. We then calculate what the EVE would be at the same date throughout
a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate
EVE under the assumptions that interest rates increase 100, 200, 300 and 400 basis points from current market rates and that interest
rates decrease 100 basis points from current market rates.



The
following table presents the estimated changes in our EVE that would result from changes in market interest rates at December
31, 2018. All estimated changes presented in the table are within the policy limits approved by our board of trustees.



|                                      |  |                        |        |  | Estimated Increase
 (Decrease) in EVE |   |        | EVE as Percent of Economic
 Value of Assets | 
|------------------------------------- |  | ---------------------- | ------ |  | ------------------------------------- | - | ------ | ------------------------------------------- | 
|Basis Point (“bp”) Change in Interest |  |                        |        |  |                                       |   |        |                                             | 
|Rates (1)                             |  | Estimated EVE          |        |  | Dollar Change                         |   |        | Percent Change                              | 
|                                      |  | (Dollars in thousands) |        |  |                                       |   |        |                                             | 
|+400bp                                |  | $                      | 13,278 |  |                                       | $ | (8,147 | )                                           | 
|+300bp                                |  |                        | 14,907 |  |                                       |   | (6,518 | )                                           | 
|+200bp                                |  |                        | 17,067 |  |                                       |   | (4,358 | )                                           | 
|+100bp                                |  |                        | 19,378 |  |                                       |   | (2,047 | )                                           | 
|0                                     |  |                        | 21,425 |  |                                       |   | -      |                                             | 
|-100bp                                |  |                        | 21,930 |  |                                       |   | 505    |                                             | 



|(1) | Assumes
    instantaneous parallel changes in interest rates.            
|--- | -------------------------------------------------------------------------
|(2) | EVE
    ratio represents the EVE divided by the economic value of assets.



Certain
shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes requires making
certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest
rates. The above table assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated
remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities.
Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, such
measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our
EVE and will differ from actual results.



23







Liquidity
and Capital Resources



Liquidity.Liquidity is the ability to meet current and future financial obligations of a short-term nature that arise in the ordinary
course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and
to fund investing activities and current and planned expenditures. Our primary sources of funds are deposits, principal and interest
payments on loans and securities, proceeds from the sale of loans, and advances from the Federal Home Loan Bank of Pittsburgh.
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments
are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term
investments including interest-bearing deposits in other financial institutions. The levels of these assets are dependent on our
operating, financing, lending, and investing activities during any given period. At December 31, 2018, we had $9.0 million of
cash and cash equivalents and we had $31.4 million in outstanding borrowings from the Federal Home Loan Bank of Pittsburgh with
$91.9 million of available borrowing capacity.



At
December 31, 2018, we had $12.6 million of loan commitments outstanding, which includes $3.7 million of undisbursed construction
funds, and $6.0 million of unused lines of credit. We have no other material commitments or demands that are likely to affect
our liquidity. If loan demand was to increase faster than expected, or any unforeseen demand or commitment was to occur, we could
access our borrowing capacity with the Federal Home Loan Bank of Pittsburgh.



Time
deposits due within one year of December 31, 2018 totaled $31.3 million. If these deposits do not remain with us, we will be required
to seek other sources of funds, including other time deposits and Federal Home Loan Bank of Pittsburgh advances. Depending on
market conditions, we may be required to pay higher rates on such deposits or other borrowings than we paid on time deposits at
December 31, 2018. We believe, however, based on past experience that a significant portion of our time deposits will remain with
us. We have the ability to attract and retain deposits by adjusting the interest rates offered.



SSB
Bancorp, Inc. is a separate legal entity from SSB Bank and must provide for its own liquidity to pay any dividends to its stockholders
and for other corporate purposes. SSB Bancorp, Inc.’s primary source of liquidity is dividend payments it may receive from
SSB Bank. SSB Bank’s ability to pay dividends to SSB Bancorp, Inc. is governed by applicable laws and regulations. At December
31, 2018, SSB Bancorp, Inc. (on an unconsolidated basis) had liquid assets of $3.5 million.



Capital
Resources. At December 31, 2018, SSB Bank exceeded all regulatory capital requirements and it was categorized as “well
capitalized.” We are not aware of any conditions or events since the most recent notification that would change our category.
See Note 13 of the financial statements for additional information.



Off-Balance
Sheet Arrangements



We
are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs
of our customers. These financial instruments include commitments to extend credit and unused lines of credit, which involve elements
of credit and interest rate risk in excess of the amount recognized in the balance sheets. Our exposure to credit loss is represented
by the contractual amount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet
instruments. See Note 15 to the financial statements for additional information.



Recent
Accounting Pronouncements



Refer
to Note 2 of the Notes to Financial Statements for a description of recent accounting pronouncements that may affect our financial
condition and results of operations.



Impact
of Inflation and Changing Price



The
financial statements and related data presented herein have been prepared in accordance with U.S. GAAP, which requires the measurement
of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing
power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating
costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in
nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance
than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods
and services.



PART
IV



ITEM 15. Exhibits and Financial Statement Schedules



|31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           
|32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           



24







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amended
report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        | SSB BANCORP, INC.
|----------------------- | -----------------
|                        |                  
|Date:
    June 25, 2019 | By:              
|                        |                  
|                        |                  
|                        |                  



25