Company: NSTS
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001437749-25-016849
Chunk: 83

Company: NSTS Bancorp, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 83
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 rate spread 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 $259.9 million for the quarter ended March 31, 2025 increased $18.2 million compared to $241.7 million for the quarter ended March 31, 2024. The increase in average earning assets was driven by an increase in loans 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 to $133.9 million for the quarter ended March 31, 2025, an increase of $8.6 million from $125.3 million for the quarter ended March 31, 2024. Additionally, the average yield earned on those loans outstanding increased 67 basis points to 5.38% for the quarter ended March 31, 2025. This increase is a result of an overall increase in market rates on mortgage loans originated during 2024 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 33 basis points for the quarter ended March 31, 2025 compared to the quarter ended March 31, 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 quarter ended March 31, 2025 was 3.48%. Over the next 12 months $52.2 million of time deposits with rates greater than 3.0% are scheduled to mature.

Provision for Credit Losses. During the quarter ended March 31, 2025, we recorded a reversal of provision for credit losses of $37,000, comprised of $45,000 reversal of provision for credit losses on loans and $8,000 provision for credit losses related to unfunded commitments.

We will continue to assess and evaluate the estimated future credit loss impact of current market conditions in subsequent reporting periods, which will be highly dependent on credit quality, macroeconomic forecasts and conditions, as well as the composition of our loan and available-for-sale securities portfolios.

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Noninterest Income. The following table shows the components of noninterest income for the periods presented.

      Three months ended March 31,