Company: NSTS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034806
Chunk: 18

Company: NSTS Bancorp, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 18
---
 an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that  may be used to measure fair value:
    
    Level 1  Quoted prices in active markets for identical assets or liabilities 

    Level 2  Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities 

    Level 3  Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities 

   An asset’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
    
   Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at  September 30, 2025 or  December 31, 2024.
    
   Securities available for sale (Recurring)
   Where quoted market prices are available in an active market, securities such as U.S. Treasuries, would be classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities would be classified within Level 3 of the hierarchy.
    
   Individually Evaluated (Nonrecurring) Individually evaluated loans are recorded at fair value on a nonrecurring basis. The fair value of loans is generally based on recent real estate appraisals. These appraisals  may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3