Company: NSTS
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001437749-25-016849
Chunk: 8

Company: NSTS Bancorp, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 8
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 (Release of) Provision for credit losses   (3)  (4)  —   7   1   1 
 Ending balance  $1,091  $36  $37  $11  $2  $1,177 

   The ACL on loans excludes $67,000 and $11,000 of allowance for off-balance sheet exposures as of  March 31, 2025 and 2024, respectively, recorded within Other Liabilities on the Consolidated Balance Sheets. The net release of provision for credit losses for the three months ended  March 31, 2025 in the table above excludes a provision for credit losses of $8,000 related to off balance sheet exposures. The net provision for credit losses for the three months ended  March 31, 2024 in the table above excludes a release of provision for credit losses of $2,000 related to off balance sheet exposures.

       10

   As of  March 31, 2025, there was one collateral dependent loan totaling $263,000 in the one to four-family residential loan segment. This loan is collateralized by residential real estate and has no ACL as of  March 31, 2025. There were no other collateral dependent loans as of  March 31, 2025. There were no collateral dependent loans as of  December 31, 2024. 
    
   The Bank evaluates collectability based on payment activity and other factors. The Bank uses a graded loan rating system as a means of identifying potential problem loans, as follows:
    
   Pass
   Loans in these categories are performing as expected with low to average risk.
    
   Special Mention
   Loans in this category are internally designated by management as “watch loans.” These loans are starting to show signs of potential weakness and are closely monitored by management.
    
   Substandard
   Loans in this category are internally designated by management as “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the paying capacity of the obligors or the current net worth of the collateral pledged. Substandard loans present a distinct possibility that the Bank will sustain losses if such weaknesses are not corrected.
    
   Doubtful
   Loans classified as doubtful have all the weaknesses inherent in those designated as “substandard” with the added characteristic that the weaknesses  may make collection or liquidation in full