Company: NSTS
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001437749-25-009831
Chunk: 953

Company: NSTS Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7A
Chunk 953
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 prompt corrective action. There are no conditions or events since that notification which management believes have changed the Bank’s category.
    
   On  November 13, 2019, the federal regulators finalized and adopted a regulatory capital rule establishing a new community bank leverage ratio (“CBLR”), which became effective on  January 1, 2020. The intent of CBLR is to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions and depository institution holding companies, as directed under the Economic Growth, Relief, and Consumer Protection Act. Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total assets (i.e., leverage ratio) exceeds 9% subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios. The Bank elected to begin using CBLR for the first quarter of 2020. Management believes, as of  December 31, 2024, that the Bank met all capital adequacy requirements to which it was subject.
    
   The Bank’s actual capital amounts and ratios as of  December 31, 2024 and 2023, are presented below:

       Actual    Minimum Required to be Well-Capitalized (1)  
   Amount    Ratio    Amount    Ratio  
   (Dollars in thousands)  
 As of December 31, 2024                 
 Tier 1 capital (to Average Assets)  $64,634   23.53% $24,722   >9% 
                 
 As of December 31, 2023                 
 Tier 1 capital (to Average Assets)  $63,258   24.72% $23,031   >9% 

   (1) As defined by regulatory agencies. Failure to exceed the leverage ratio thresholds required under CBLR in the future, subject to any applicable grace period, would require the Company to return to the risk-based capital ratio thresholds previously utilized under the fully phased-in Basel III Capital Rules to determine capital adequacy.
    
   The Company's principal source of funds for dividend payments is dividends received from the Bank. Banking regulations