Company: NSTS
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026943
Chunk: 91

Company: NSTS Bancorp, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 91
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 June 30, 2025 compared to 2.87% for the six months ended June 30, 2024. The decrease in interest rate spread and margin is driven by an increased average balance of higher earning interest-bearing liabilities, specifically interest-bearing deposits, as a percentage of total assets.

Average interest-earning assets of $260.3 million for the six months ended June 30, 2025 increased $16.9 million compared to $243.4 million for the six months ended June 30, 2024. The increase in average earning assets was driven by an increase in loans, net and interest-bearing deposits at other banks, funded by an increase in average deposit balances during the period and reduction in investment securities. The average outstanding balance of loans, net increased slightly to $134.4 million for the six months ended June 30, 2025, an increase of $4.4 million from $130.0 million for the six months ended June 30, 2024. Additionally, the average yield earned on those loans outstanding increased 43 basis points to 5.35% for the six months ended June 30, 2025. This increase is a result of an overall increase in market rates on mortgage loans originated during 2024 and the first half of 2025 and still in our portfolio, as well as an increased loan demand for specialty portfolio products which are originated at higher interest rates and with additional origination fees.

The cost of interest-bearing liabilities increased 26 basis points for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The net increase in our funding costs was primarily due to an increase in rates earned on time deposit accounts to remain competitive with the local market. The average yield on time deposits for the six months ended June 30, 2025 was 3.49%.

Provision for Credit Losses. During the quarter ended June 30, 2025, we recorded a provision for credit losses of $57,000, comprised of $44,000 provision for credit losses on loans and $13,000 provision for credit losses related to unfunded commitments. During the three months ended June 30, 2024, we recorded a provision for credit losses of $123,000, comprised of $90,000 in provision for credit losses to loans and $33,000 in provision for credit losses related to unfunded commitments, including loans committed for origination. During