NSTS Bancorp, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
NSTS$14.26+0.5%Stored close · as of Sep 30, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001437749-25-034806
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001437749-26-017061
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 67 current paragraphs.
39 unchanged; 25 reworded; 3 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 37 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
***Loans held for sale.***Our loans held for sale decreased $2.7 million to $1.8 million at March 31, 2026 compared to $4.5 million at December 31, 2025. The change in loans held for sale is the result of timing of originations and sales of loans. On average, the Bank holds loans held for sale less than 30 days.
Current report
Escrow deposits. Escrow deposits increased $1.1 million to $2.7 million at March 31, 2026 compared to $1.6 million at December 31, 2025. The increase in escrow deposits is due to timing of escrow receipts and disbursements. Cook County, Illinois, one of the Bank's primary lending areas, had property taxes due in December 2025, resulting in a large escrow disbursement at the end of 2025.
Current report
Total Equity. Total equity remained flat. The increase in the unrealized loss position of the securities available for sale portfolio was offset by an increase in additional paid in capital and a decrease in the unallocated common shares held by the ESOP. The changes in the additional paid in capital and unallocated common shares held by the ESOP were related to benefit plan expenses and commitments of allocations within the ESOP.
Removed paragraphs (7)
Previous report
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.
Previous report
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 of an overall increase in market rates on mortgage loans originated during 2024 and the first half of 2025 and still in our portfolio, the interest paid on a previously charged-off loan, as well as an increased loan demand for specialty portfolio products which are originated at higher interest rates and with additional origination fees.
Previous report
The cost of interest-bearing liabilities increased 19 basis points for the nine months ended September 30, 2025 compared to the nine months ended September 30, 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 nine months ended September 30, 2025 was 3.48%.
Previous report
Noninterest expenses increased $609,000 for the nine months ended September 30, 2025, compared to the same period ended September 30, 2024. The increase in noninterest expenses was primarily driven by increases in salaries and employee benefits, data processing related expenses, loan expenses and deposit expenses. The average number of employees increased to 52 for the nine months ended September 30, 2025 compared to 49 for the nine months ended September 30, 2024. The increase in headcount is based on additional loan officers brought in during 2024 and 2025. The increase in data processing costs was driven by system upgrades. Loan expenses increased as a result of an increase in loan originations during the period as well as 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. Deposit expenses increased as a result of ATM losses totaling $40,000 due to an ATM robbery.
Previous report
***Loans held for sale.***Our loans held for sale increased $882,000 to $2.1 million at September 30, 2025 compared to $1.2 million at December 31, 2024. The increase was primarily due an overall increase in the level of loans originated for sale during the third quarter of 2025. During the nine months ended September 30, 2025, the Bank originated $55.4 million in loans held for sale.
Previous report
Total Equity. Total equity increased $2.4 million to $78.9 million at September 30, 2025. The increase is primarily due to a decrease in the unrealized loss position on the securities available-for-sale portfolio during the nine months ended September 30, 2025, partially offset by net losses of $521,000.
Previous report
On December 14, 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: (1) The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, and (2) The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information: (1) Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (2) Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The ASU is effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company will adopt this ASU, and does not expect the amendments to have a material impact to the annual financial statements of the Company.
Reworded paragraphs (25)
Previous wording
This section is intended to assist in the understanding of our financial performance through a discussion of our financial condition as of September 30, 2025 and as compared to our financial condition as of December 31, 2024, and our results of operations for the three and nine months ended September 30, 2025 and 2024. This section should be read in conjunction with the unaudited interim consolidated financial statements and notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
This section is intended to assist in the understanding of our financial performance through a discussion of our financial condition as of March 31, 2026 and as compared to our financial condition as of December 31, 2025, and our results of operations for the three months ended March 31, 2026 and 2025. This section should be read in conjunction with the unaudited interim consolidated financial statements and notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated unaudited interim financial statements for the three and nine months ended September 30, 2025 and 2024, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results could differ from these estimates.
Current wording
Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated unaudited interim financial statements for the three months ended March 31, 2026 and 2025, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results could differ from these estimates.
Previous wording
COMPARISON OF OPERATING RESULTS FOR THE three and nine months ended September 30, 2025 and 2024
Current wording
COMPARISON OF OPERATING RESULTS FOR THE three months ended March 31, 2026 and 2025
Previous wording
General. For the quarter ended September 30, 2025, we had net income of $65,000, compared to a net loss of $171,000 for the quarter ended September 30, 2024. The change is due to an increase in interest and noninterest income, and a reversal of provision for credit losses during the current quarter. These benefits were partially offset by an increase in interest expense and noninterest expenses. For the nine months ended September 30, 2025, we had a net loss of $521,000, compared to a net loss of $743,000 for the nine months ended September 30, 2024. Similarly, the change is due to an increase in interest and noninterest income, and a reversal of provision for credit losses. These benefits were partially offset by an increase in interest expense and noninterest expenses.
Current wording
General. For the quarter ended March 31, 2026, we had a net loss of $39,000, compared to a net loss of $328,000 for the quarter ended March 31, 2025. The change is due to an increase in noninterest income primarily stemming from an increase in the gain on loans held for sale.
Previous wording
***Net Interest Income.***Net interest income increased $116,000, to $1.9 million for quarter ended September 30, 2025. Our interest rate spread increased to 2.48% for the quarter ended September 30, 2025 from 2.39% for the quarter ended September 30, 2024. Our net interest margin increased to 3.08% for the quarter ended September 30, 2025 compared to 2.96% for the quarter ended September 30, 2024. The increase in interest rate spread and margin is driven by a reduction of higher cost other borrowings. Additionally, the Bank received a loan payoff from a previously charged-off loan, which included $30,000 in interest income.
Current wording
***Net Interest Income.***Net interest income increased $26,000, to $1.9 million for quarter ended March 31, 2026. Our interest rate spread increased to 2.42% for the quarter ended March 31, 2026 from 2.23% for the quarter ended March 31, 2025. Our net interest margin increased to 2.98% for the quarter ended March 31, 2026 compared to 2.82% for the quarter ended March 31, 2025. The increase in interest rate spread and margin is driven by a reduction of higher cost other borrowings.
Previous wording
Average interest-earning assets of $252.8 million for the quarter ended September 30, 2025 increased $5.7 million compared to $247.1 million for the quarter ended September 30, 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 a reduction in investment securities. The average outstanding balance of loans, net increased to $138.7 million for the quarter ended September 30, 2025, an increase of $3.4 million from $135.3 million for the quarter ended September 30, 2024. Additionally, the average yield earned on those loans outstanding increased 37 basis points to 5.68% for the quarter ended September 30, 2025. This increase is a result of an overall increase in market rates on mortgage loans originated during 2024 and the first half of 2025, and still in our portfolio, the interest paid on a previously charged-off loan, as well as an increased loan demand for specialty portfolio products which are originated at higher interest rates and with additional origination fees.
Current wording
Average interest-earning assets of $248.9 million for the quarter ended March 31, 2026 decreased $11.0 million compared to $259.9 million for the quarter ended March 31, 2025. The decrease in average earning assets was driven by a decrease in interest-bearing deposits at other banks, resulting from a decrease in average deposit balances during the period. The average outstanding balance of loans, net remained relatively flat, going from $133.9 million for the quarter ended March 31, 2025 to $133.2 million for the quarter ended March 31, 2026. The average yield earned on those loans outstanding increased 8 basis points to 5.46% for the quarter ended March 31, 2026. This increase is a result of an increased loan demand for specialty portfolio products which are originated at higher interest rates and with additional origination fees.
Previous wording
The cost of interest-bearing liabilities increased 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.
Current wording
The cost of interest-bearing liabilities decreased 26 basis points for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. This shift is primarily attributable to higher rates offered on time deposits that ran through 2024 and into 2025. Many of the matured time deposits originated during this period were renewed at lower offering rates.
Previous wording
Provision for Credit Losses. During the quarter ended September 30, 2025, we recorded a reversal of provision for credit losses of $(50,000) comprised of a $(39,000) reversal of provision for credit losses on loans and $(11,000) reversal of provision for credit losses related to unfunded commitments. During the three months ended September 30, 2024, we recorded a provision for credit losses of $20,000, comprised of $4,000 in provision for credit losses to loans and $16,000 in provision for credit losses related to unfunded commitments, including loans committed for origination. During the three months ended September 30, 2025, the Bank received a payoff on a loan previously charged-off totaling $99,000, resulting in a recovery to the allowance for credit losses. During the nine months ended September 30, 2025, we recorded a reversal of provision for credit losses of $(30,000), comprised of a $(40,000) reversal of provision for credit losses on loans and $10,000 provision for credit losses related to unfunded commitments. During the nine months ended September 30, 2024, we recorded a provision for credit losses of $142,000, comprised of $95,000 provision for credit losses on loans and $47,000 provision for credit losses related to unfunded commitments.
Current wording
Provision for Credit Losses. During the quarter ended March 31, 2026, we recorded a reversal of provision for credit losses of $26,000 comprised of a $33,000 reversal of provision for credit losses on loans and $7,000 of provision for credit losses related to unfunded commitments. During the quarter ended March 31, 2025, we recorded a reversal of provision for credit losses of $37,000, comprised of a $45,000 reversal of provision for credit losses on loans and $8,000 in provision for credit losses related to unfunded commitments, including loans committed for origination.
Previous wording
For the quarter ended September 30, 2025 compared to the same period ended September 30, 2024, noninterest income increased $141,000 to $564,000. Noninterest income increased $397,000 for the nine months ended September 30, 2025 to $1.6 million compared to $1.2 million for the nine months ended September 30, 2024. The increases were driven by an increase in the gain on sale of mortgage loans during the quarter and nine months ended September 30, 2025. The increase in gain on sale of mortgages was primarily the result of an overall increase in total mortgage loans originated for sale during the periods. During the quarter ended September 30, 2025, we sold 66 loans totaling $19.4 million for a gain on sale of $393,000. During the quarter ended September 30, 2024, we sold 53 loans totaling $13.8 million for a gain on sale of $268,000. During the nine months ended September 30, 2025, we sold 176 loans totaling $57.3 million for a gain on sale of $1.1 million. During the nine months ended September 30, 2024, we sold 125 loans totaling $33.3 million for a gain on sale of $695,000. Management continues to look for opportunities and markets to sell loans as we continue to see increased loan production compared to prior years.
Current wording
For the quarter ended March 31, 2026 compared to the same period ended March 31, 2025, noninterest income increased $321,000 to $655,000. The increase was driven by an increase in the gain on sale of mortgage loans during the quarter ended March 31, 2026. The increase in gain on sale of mortgages was primarily the result of an overall increase in total mortgage loans originated for sale during the period. During the quarter ended March 31, 2026, we sold 63 loans totaling $23.2 million for a gain on sale of $475,000. During the quarter ended March 31, 2025, we sold 31 loans totaling $9.9 million for a gain on sale of $189,000. The increase in other noninterest income is driven by the increase in subserviced loans. During the fourth quarter of 2025, the Bank began subservicing approximately 200 additional loans, resulting in subservicing fees totaling $36,000 during the first quarter of 2026.
Previous wording
Noninterest expenses increased $91,000 for the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. The increase in noninterest expenses was primarily driven by increases in salaries and employee benefits and data processing related expenses. The increase in noninterest expenses was partially offset by a reduction in advertising expenses. The average number of employees increased to 50 for the quarter ended September 30, 2025 compared to 49 for the quarter ended September 30, 2024. The increase in data processing costs was driven by system upgrades. Advertising expenses were higher during the previous year as the Bank was building the brand awareness surrounding Oak Leaf Community Mortgage, powered by North Shore Trust and Savings.
Current wording
Noninterest expenses increased $47,000 for the quarter ended March 31, 2026, compared to the quarter ended March 31, 2025. The increase in noninterest expenses was primarily driven by increases in salaries and employee benefits and data processing related expenses, partially offset by a decrease in professional services. Salaries and employee benefits increased approximately 5.1%, driven by general cost of living and merit increases for our employees and increases in employee health and wellness costs. The increase in data processing costs was driven by system upgrades. The reduction in professional services expenses was driven by a $40,000 reduction in legal costs during the first quarter of 2026 compared to 2025. Additional legal billings were incurred during the first quarter of 2025 associated with the passing of Director Bond.
Previous wording
***Provision for Income Tax Expense.***There was no provision for income tax expense recorded during the three and nine months ended September 30, 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.
Current wording
***Provision for Income Tax Expense.***There was no provision for income tax expense recorded during the three months ended March 31, 2026 and 2025. Management estimates a taxable net loss for the year ended December 31, 2026 due to non-taxable income, such as income on tax exempt municipal securities and BOLI.
Previous wording
Total Assets*.* Total assets decreased $8.9 million to $269.8 as of September 30, 2025 compared to $278.7 million at December 31, 2024. The decrease was driven by a reduction in cash and cash equivalents due to the paydown of the FHLB Advance during June 2025 and a reduction in deposits.
Current wording
Total Assets*.* Total assets increased $3.7 million to $270.3 as of March 31, 2026 compared to $266.6 million at December 31, 2025. The increase was driven by an increase in cash and cash equivalents as a result of an increase in deposits and escrow deposits.
Previous wording
Cash and cash equivalents. Cash and cash equivalents decreased $19.4 million to $34.1 million as of September 30, 2025, from $53.5 million at December 31, 2024. The decrease was driven by the paydown of the FHLB Advance in June 2025 of $5.0 million. Additionally, deposits decreased $4.1 million, reducing interest-earning bank deposits. Further, the Bank purchased securities available for sale, totaling $10.9 million during the nine months ended September 30, 2025. Currently, the Bank holds a majority of the cash on hand at the Federal Reserve Bank of Chicago, earning 4.15%, to keep the funds available for increasing loan demand. Management continues to actively monitor our liquidity position on a daily basis and maintain levels of liquid assets deemed adequate.
Current wording
Cash and cash equivalents. Cash and cash equivalents increased $9.4 million to $43.4 million as of March 31, 2026, from $34.0 million at December 31, 2025. The increase was driven by an increase in total deposits and escrow deposits during the period and a reduction in loans held for sale and securities available for sale. Management continues to actively monitor our liquidity position on a daily basis and maintain levels of liquid assets deemed adequate.
Previous wording
Securities Available for Sale. Securities available-for-sale increased to $79.6 million as of September 30, 2025, compared to $71.2 million at December 31, 2024. The Bank purchased $10.9 million of securities available-for-sale during the nine months ended September 30, 2025. There were no sales of securities available for sale during the period. During the nine months ended September 30, 2025, the Bank received principal payments of $4.4 million, had maturities of $1.1 million, had net premium amortization and discount accretion of $359,000 and had a decrease in the unrealized loss on the portfolio of $3.3 million.
Current wording
Securities Available for Sale. Securities available-for-sale decreased to $76.7 million as of March 31, 2026, compared to $78.7 million at December 31, 2025. There were no purchases or sales of securities available for sale during the period. During the three months ended March 31, 2026, the Bank received principal payments of $1.6 million, had net premium amortization and discount accretion of $108,000 and had an increase in the unrealized loss on the portfolio of $279,000.
Previous wording
As of September 30, 2025, the securities available for sale portfolio included an unrealized loss position of $8.7 million, or 9.9% of the total book value of the portfolio. Management monitors the portfolio for credit losses and believes that the decline in value does not presently represent realized losses and is due to market volatility and increased market interest rates. While the Bank does not currently intend to sell securities in a loss position, management may consider the opportunity to reposition the investment securities portfolio in the future.
Current wording
As of March 31, 2026, the securities available for sale portfolio included an unrealized loss position of $8.3 million, or 9.8% of the total book value of the portfolio. Management monitors the portfolio for credit losses and believes that the decline in value does not presently represent realized losses and is due to market volatility and increased market interest rates. While the Bank does not currently intend to sell securities in a loss position, management may consider the opportunity to reposition the investment securities portfolio in the future.
Previous wording
Loans, net. Our loans, net, increased by $2.5 million to $132.9 million at September 30, 2025 compared to $130.4 million at December 31, 2024. The Bank originated $26.1 million in loans to be held in the portfolio during the nine months ended September 30, 2025 and had loan principal payments and payoffs of $23.6 million. In an effort to continue to grow loan originations, the Bank has hired additional mortgage loan originators during the nine months ended September 30, 2025 and continues to look to hire additional loan officers.
Current wording
Loans, net. Our loans, net, decreased by $988,000 to $127.6 million at March 31, 2026 compared to $128.6 million at December 31, 2025. The Bank originated $7.7 million in loans to be held in the portfolio during the three months ended March 31, 2026, transferred $2.5 million of loans to held for sale, and had loan principal payments and payoffs of $6.2 million.
Previous wording
As of September 30, 2025, the allowance for credit losses on loans (“ACL”) totaled $1.3 million, with a net change of approximately $59,000 during the nine months ended September 30, 2025. While the balance of the ACL remained steady, the ACL as a percentage of the loans, net of unearned income increased, driven by a shift in the portfolio mix, with an increase in construction loans which have a higher peer proxy rate. As of September 30, 2025, there were two loans individually assessed, of which neither had credit losses identified. The Bank actively monitors the loan portfolio for signs of weakening credit quality, noting as of September 30, 2025 the portfolio remains of high quality with limited credit concerns.
Current wording
As of March 31, 2026, the allowance for credit losses on loans (“ACL”) totaled $1.1 million, with a net change of approximately $33,000 during the three months ended March 31, 2026. There was minimal change in the ACL as a percentage of total loans. As of March 31, 2026, there were three loans individually assessed, of which none had credit losses identified. The Bank actively monitors the loan portfolio for signs of weakening credit quality, noting as of March 31, 2026 the portfolio remains of high quality with limited credit concerns.
Previous wording
Deposits. Total deposits decreased $4.1 million to $186.1 million at September 30, 2025 compared to $190.2 million at December 31, 2024. The decrease was primarily driven by a reduction in balances held in savings and money market accounts, some of which shifted into Time Deposits. The Bank had a large estate, totaling $1.7 million, pay out during the year. Management continues to actively monitor the deposit balances and interest rates offered to maintain an adequate level of liquidity.
Current wording
Deposits. Total deposits increased $2.4 million to $183.9 million at March 31, 2026 compared to $181.5 million at December 31, 2025. The increase was driven by an increase in time deposits. The Bank continues to run a 13 month time deposit special to assist in retaining the previous time deposit specials as those mature. Management continues to actively monitor the deposit balances and interest rates offered to maintain an adequate level of liquidity.
Previous wording
The following table sets forth certain information with respect to our nonperforming assets. The increase in non-accrual loans from December 31, 2024 to September 30, 2025 was the result of two loans moving to non-accrual during the period.
Current wording
The following table sets forth certain information with respect to our nonperforming assets.
Previous wording
The allowance for credit losses on loans as a percentage of total loans was 0.94% and 0.92% as of September 30, 2025 and December 31, 2024, respectively.
Current wording
The allowance for credit losses on loans as a percentage of total loans was 0.85% and 0.87% as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB of Chicago and a $10.0 million unsecured Fed Funds line of credit with BMO Harris Bank. At September 30, 2025, we had the capacity to borrow approximately $78.5 million from the FHLB of Chicago. At September 30, 2025, we had no outstanding borrowings.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB of Chicago and a $10.0 million uncommitted, unsecured line of credit with BMO Harris Bank. At March 31, 2026, we had the capacity to borrow approximately $74.5 million from the FHLB of Chicago. At March 31, 2026, we had no outstanding borrowings.
Previous wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $841,000 and $74,000 for the nine months ended September 30, 2025 and 2024, respectively. Net cash used in investing activities, which consists primarily of net change in loans receivable and net change in investment securities, was $10.5 million and $7.0 million for the nine months ended September 30, 2025 and 2024, respectively, with the increase in cash used in 2025 driven by investment security purchases. Net cash (used in) provided by financing activities, consisting primarily of the activity in deposit accounts was ($9.7) million and $10.2 million for the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, the Bank repaid the $5.0 million FHLB Advance, resulting in additional cash used in financing activities compared to the prior year.
Current wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by (used in) operating activities was $5.5 million and $(2.7) million for the three months ended March 31, 2026 and 2025, respectively. The change was driven by a transfer of loans to loans held for sale and subsequently sold in the first quarter of 2026, resulting in additional cash provided by operating activities. Net cash provided by investing activities, which consists primarily of net change in loans receivable and net change in investment securities, was $351,000 and $2.4 million for the three months ended March 31, 2026 and 2025, respectively, with the decrease in cash provided in 2026 driven by increased cash used for the loan portfolio. Net cash provided by financing activities, consisting primarily of the activity in deposit accounts was $3.5 million and $4.2 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Time deposits that are scheduled to mature in less than one year from September 30, 2025, totaled $70.4 million. Based on our deposit retention experience and current pricing strategy we anticipate that a significant portion of maturing time deposits will be retained. However, if a substantial portion of these deposits is not retained, we may utilize FHLB of Chicago advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Current wording
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Time deposits that are scheduled to mature in less than one year from March 31, 2026, totaled $69.2 million. Based on our deposit retention experience and current pricing strategy we anticipate that a significant portion of maturing time deposits will be retained. However, if a substantial portion of these deposits is not retained, we may utilize FHLB of Chicago advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Previous wording
As of September 30, 2025, the Bank was well capitalized under the regulatory framework for prompt corrective action. During the year ended December 31, 2020, the Bank elected to begin using the CBLR. Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds 9%, subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios. North Shore Trust and Savings’ Tier 1 capital to Average Assets was 24.11% and 23.53% at September 30, 2025 and December 31, 2024, respectively.
Current wording
As of March 31, 2026, the Bank was well capitalized under the regulatory framework for prompt corrective action. During the year ended December 31, 2020, the Bank elected to begin using the CBLR. Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds 9%, subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios. North Shore Trust and Savings’ Tier 1 capital to Average Assets was 24.93% and 24.32% at March 31, 2026 and December 31, 2025, respectively.
Previous wording
Commitments. At September 30, 2025, we had $1.9 million of outstanding commitments to originate loans. Our total letters and lines of credit and unused lines of credit totaled $10.1 million at September 30, 2025. The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and undisbursed construction loans at September 30, 2025.
Current wording
Commitments. At March 31, 2026, we had $2.6 million of outstanding commitments to originate loans. Our total letters and lines of credit and unused lines of credit totaled $6.5 million at March 31, 2026. The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and undisbursed construction loans at March 31, 2026.