Company: NSTS
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001437749-25-009831
Chunk: 231

Company: NSTS Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 14
Chunk 231
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 business assets. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions.
    
   While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans  may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies  may require the Bank to recognize additional losses based on their judgments of information available to them at the time of their examination. Due to these factors, it is reasonably possible that the estimated losses on loans  may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
    
   Additional material estimates that are particularly susceptible to significant change in the near term include the determination of the valuation allowance on deferred tax assets and the valuation of investment securities.

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   Comprehensive Income 
    
   Comprehensive income includes net loss and other changes in net worth which bypass the statement of operations. For all periods presented, other comprehensive income includes only one additional component, the change in unrealized gains and losses on available-for-sale investment securities.
    
   Cash and Cash Equivalents 
    
   For purposes of reporting cash flows, cash and cash equivalents includes cash on hand and amounts due from banks, including cash items in process of clearing.
    
   Time Deposits with Other Financial Institutions 
    
   Time deposits with other financial institutions are carried at cost and generally mature within the next two years.
    
   Investment Securities
    
   Securities are classified as available-for-sale and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive loss. Discounts are accreted into interest income over the estimated life of the related security and premiums are amortized against income over the earlier of the call date or weighted average life of the related security using the level yield method. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
    
   Securities available-for-sale are securities that are intended to be held for indefinite periods of time, but which  may not be held to maturity. These securities  may be used as a part of the Bank’s asset/liability management strategy and  may be sold in response to changes in interest rates, deterioration of issuer’s creditworthiness, or due to a desire to increase liquidity.
    
   For