Company: NSTS
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001437749-25-009831
Chunk: 752

Company: NSTS Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 3
Chunk 752
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 Bank has various commitments and contingent liabilities that are not reflected in the accompanying financial statements. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the financial position of the Bank.
    
   Financial Instruments
   The Bank does not engage in the use of interest rate swaps or futures, forwards or option contracts.
    
   At  December 31, 2024 and 2023, unused lines of credit and outstanding commitments to originate loans were as follows:

       2024    2023  
   (Dollars in thousands)
 Unused line of credit  $8,950  $4,050 
 Commitments to originate loans   1,109   3,770 
 Total commitments  $10,059  $7,820 

   Concentrations of Credit Risk 
   The Bank generally originates single-family residential loans within its primary lending area which is Waukegan, Illinois and the surrounding area. These loans are secured by the underlying properties.
    
   The Bank maintains its cash in deposit accounts at the Federal Reserve Bank or other institutions, the balances of which  may exceed federally insured limits. The Bank has not experienced any losses in such accounts. The Bank believes it is not exposed to any significant credit risk on cash and cash equivalents.
    
   Interest Rate Risk 
   The Bank assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, fair values of its financial instruments will change when interest rate levels change, and that change  may be either favorable or unfavorable to the Bank. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the overall interest rate risk.
    
   Litigation 
   Due to the nature of its business activities, the Bank is at times subject to legal action which arises in the normal course of business. In the opinion of management, the ultimate resolution