Company: NSTS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034806
Chunk: 23

Company: NSTS Bancorp, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 23
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ations of Credit Risk
    
   The Bank generally originates single-family residential loans within its primary lending area. These loans are secured by the underlying properties.
    
   The Bank maintains its cash in deposit accounts at the Federal Reserve Bank or other institutions, the balances of which  may exceed federally insured limits. The Bank has not experienced any losses in such accounts. The Bank believes it is not exposed to any significant credit risk on cash and cash equivalents.
    
   Interest Rate Risk
    
   The Bank assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, fair values of its financial instruments will change when interest rate levels change, and that change  may be either favorable or unfavorable to the Bank. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the overall interest rate risk.
    
   Litigation
    
   Due to the nature of its business activities, the Bank is at times subject to legal action which arises in the normal course of business. In the opinion of management, the ultimate resolution of these matters is not expected to have a material effect on the financial position or results of operations of the Bank.

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   Note 10: Earnings Per Share
    
   Basic EPS represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares (such as stock options) were exercised or converted into additional common shares that should then share in the earnings of the entity. Diluted EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period, plus the effect of potential dilutive common share equivalents. 
    
   There were no securities or other contracts that had a dilutive effect for the nine months ended  September 30, 2025 and 2024, and