Company: NSTS
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001437749-25-016849
Chunk: 35

Company: NSTS Bancorp, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 35
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 by increases in salaries and employee benefits and loan expenses.  The average number of employees increased to 52 for the quarter ended March 31, 2025 compared to 46 for the quarter ended March 31, 2024. The increase in headcount is based on additional hires during 2024 to supplement the lending team as operations continue to expand. Loan expenses increased as a result of an increase in loan originations during the periods. 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 (Benefit). There was no provision for income tax expense recorded during the three months ended March 31, 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 March 31, 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 March 31, 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 March 31, 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.

       31

COMPARISON OF FINANCIAL CONDITION AT March 31, 2025 and December 31, 2024

      At March 31, 

      At December 31, 

      2025 

      2024 

      (Dollars in thousands) 

      Selected Consolidated Financial Condition Data: 

      Cash and cash equivalents 
      
     $
     57,454

     $
     53,481

      Securities available for sale 

     70,319

     71,249

      FHLB stock 

     585

     585

      Loans held for sale 

     2,595

     1,218

      Loans, net 

     130