Company: NSTS
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026943
Chunk: 39

Company: NSTS Bancorp, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 39
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, compared to the same period ended June 30, 2024. The increase in noninterest expenses was primarily driven by increases in salaries and employee benefits, loan expenses and deposit expenses.  The average number of employees increased to 52 for the six months ended June 30, 2025 compared to 48 for the six months ended June 30, 2024. The increase in headcount is based on additional loan officers brought in during 2024 and 2025. Loan expenses increased as a result of an increase in loan originations during the periods. Deposit expenses increased as a result of ATM losses totaling $40,000 due to an ATM robbery. Additionally, the Bank recorded a provision for recourse reserve related to the loans sold into the secondary market due to an increase in the volume of loans sold over the past 4 quarters.

Provision for Income Tax Expense. There was no provision for income tax expense recorded during the three and six months ended June 30, 2025 and 2024. Management estimates a taxable net loss for the year ended December 31, 2025 due to non-taxable income, such as income on tax exempt municipal securities and BOLI.

During the quarter ended June 30, 2025, management assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing net operating losses. A significant piece of objective negative evidence evaluated is the cumulative taxable loss incurred over the three-year period ended June 30, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of June 30, 2025, management maintained the full valuation allowance against the federal net operating losses and net deferred tax assets to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted.

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COMPARISON OF FINANCIAL CONDITION AT June 30, 2025 and December 31, 2024

      At June 30, 

      At December 31, 

      2025 

      2024 

      (Dollars in thousands) 

      Selected Consolidated Financial Condition Data: 

      Cash and cash equivalents 
      
     $
     47,488

     $
     53,481

      Securities available for sale 

     69,588