Company: NSTS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034806
Chunk: 36

Company: NSTS Bancorp, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 36
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7 basis points for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024. The net increase in our funding costs was primarily due to an increase in the percentage of interest-bearing liabilities held in higher cost accounts, such as time deposit accounts. For the quarter ended September 30, 2025, 53.5% of interest-bearing deposits were time deposits compared to 48.1% for the quarter ended September 30, 2024. This shift is primarily attributable to higher rates offered on time deposits that ran through 2024 and into 2025. Additionally, the bank saw a reduction in average money market and demand accounts during the third quarter 2025 compared to the third quarter of 2024.

Net interest income increased $262,000, to $5.6 million for the nine months ended September 30, 2025 compared to $5.3 million for the nine months ended September 30, 2024. Our interest rate spread decreased to 2.29% for the nine months ended September 30, 2025 from 2.35% for the nine months ended September 30, 2024. Our net interest margin decreased to 2.89% for the nine months ended September 30, 2025 compared to 2.90% for the nine months ended September 30, 2024. The decrease in interest rate spread and margin 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 $257.8 million for the nine months ended September 30, 2025 increased $13.2 million compared to $244.6 million for the nine months ended September 30, 2024. The increase in average earning assets was driven by an increase in loans, net and interest-bearing deposits at other banks, funded by an increase in average deposit balances during the period and a reduction in investment securities. The average outstanding balance of loans, net increased to $135.9 million for the nine months ended September 30, 2025, an increase of $4.1 million from $131.8 million for the nine months ended September 30, 2024. Additionally, the average yield earned on those loans outstanding increased 41 basis points to 5.46% for the nine months ended September 30, 2025. This increase is a result