NSTS Bancorp, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls & Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that, as of December 31, 2025 , our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by NSTS Bancorp, Inc. in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and is accumulated and communicated to NSTS Bancorp, Inc.'s management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management's Annual Report on Internal Control Over Financial Reporting Management of NSTS Bancorp, Inc. is responsible for establishing and maintaining effective internal control over financial reporting. Internal control is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of published financial statements. Internal control over financial reporting includes self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified. Management assessed the effectiveness of NSTS Bancorp, Inc.’s internal control over financial reporting as of December 31, 2025. This assessment was based on criteria for effective internal control over financial reporting established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) . Based on this assessment, our Chief Executive Officer and our Chief Financial Officer have determined that NSTS Bancorp, Inc. maintained effective internal control over financial reporting as of December 31, 2025, based on the specified criteria. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control Over Financial Reporting There were no changes made in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, NSTS Bancorp, Inc.’s internal control over financial reporting. 42 Table of Contents Item 9B. Other Information Not. Applicable. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III Item 10. Directors, Executive Officers and Corporate Governance NSTS Bancorp, Inc. has adopted a Code of Ethics that applies to its principal executive officer and principal financial officer, as well as all of its senior officers. A copy of the Code of Ethics is available on our website at https://ir.northshoretrust.com, or upon written request to Ms. Christine Stickler at 700 S. Lewis Ave., Waukegan, Illinois 60085 without charge. If we amend or grant any waiver from a provision of our Code of Ethics that applies to our executive officers, we will publicly disclose such amendment or waiver on our website and as required by applicable law, including by filing a Current Report on Form 8 -K. The information required by this Item is incorporated herein by reference to the sections captioned “Proposal I – Election of Directors” and "Stockholder Proposals and Nominations" in NSTS Bancorp, Inc.'s definitive Proxy Statement for its 2026 Annual Meeting of Stockholders, a copy of which will be filed with the SEC no later than 120 days after the end of our fiscal year (the “Proxy Statement”). Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to the sections captioned “Executive and Director Compensation” in the Proxy Statement. 43 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) Securities Authorized for issuance under Stock-Based Compensation Plans Set forth below is information as of December 31, 2025 regarding the Company’s equity compensation plans that have been approved by shareholders. The Company has no equity-based benefit plans, other than its employee stock ownership plan, that were not approved by shareholders. Plan Number of Securities to be Issued Upon Exercise of Outstanding Options and rights (1) Weighted Average Exercise Price (2) Number of Securities Remaining Available for Issuance Under Plan (3) 2023 Equity Incentive Plan 467,500 $ 9.61 26,296 Total 467,500 $ 9.61 26,296 (1) Consists of outstanding stock options to purchase 467,500 shares of common stock granted under the Company’s stock-based compensation plans. (2) Represents the weighted average exercise price of stock options granted in 2023 and 2024. There were no stock options granted during 2025. (3) Represents the number of available shares that may be granted as stock options and other stock awards under the 2023 Equity Incentive Plan. (b) Security Ownership of Certain Beneficial Owners The information required by this Item is incorporated herein by reference to the section captioned "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement. (c) Security Ownership of Management The information required by this Item is incorporated herein by reference to the section captioned "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement. (d) Changes in Control Management knows of no arrangements, including any pledge by any person of securities of NSTS Bancorp, Inc., the operation of which may at a subsequent date result in a change in control of NSTS Bancorp, Inc. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to the sections captioned “Transactions with Certain Related Persons,” “Board Independence” and “Meetings and Committees of the Board of Directors” in the Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to the section captioned “Proposal II—Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement. 44 Table of Contents PART IV Item 15. Exhibit and Financial Statement Schedules Exhibit Number 2.1 Plan of Conversion of North Shore MHC, as amended (1) 3.1 Certificate of Incorporation of NSTS Bancorp, Inc. (1) 3.2 Bylaws of NSTS Bancorp, Inc. (1) 3.3 Amendment to Article III, Section 12 of the Bylaws of NSTS Bancorp, Inc. (3) 4.1 Description of NSTS Bancorp, Inc.'s securities registered under the Securities Exchange Act of 1934, as amended 10.1 Amended and Restated Employment Agreement by and among NSTS Bancorp, Inc., North Shore Trust and Savings and Stephen G. Lear dated March 27, 2024* (6) 10.2 Employment Agreement by and among NSTS Bancorp, Inc., North Shore Trust and Savings and Nathan E. Walker dated March 27, 2024* (6) 10.3 Change in Control Severance Agreement by and between North Shore Trust and Savings and Carissa H. Schoolcraft dated January 18, 2022* (2) 10.4 Change in Control Severance Agreement by and between North Shore Trust and Savings and Amy L. Avakian dated January 18, 2022* (2) 10.5 Change in Control Severance Agreement by and between North Shore Trust and Savings and Christine E. Stickler dated January 18, 2022* (2) 10.6 NSTS Bancorp, Inc. 2023 Equity Incentive Plan* (4) 10.7 Form of Restricted Stock Award Grant Notice under the NSTS Bancorp, Inc. 2023 Equity Incentive Plan* (5) 10.8 Form of Stock Option Grant Notice under the NSTS Bancorp, Inc. 2023 Equity Incentive Plan* (5) 19.1 Insider Trading Policy (6) 21.1 Subsidiaries of NSTS Bancorp, Inc. 23.1 Consent of Independent Registered Public Accounting Firm, Plante & Moran, PLLC 24.1 Power of Attorney (set forth on signature page) 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certifications pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Policy Concerning Recovery of Erroneously Awarded Compensation (7) 101.INS Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101) 45 Table of Contents * Indicates a management contract or compensatory plan. (1) Filed as an exhibit to NSTS Bancorp, Inc.'s Registration Statement on Form S-1 (File No. 333-259483) and incorporated herein by reference. (2) Filed as an exhibit to NSTS Bancorp, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (File No. 001-41232) and incorporated herein by reference. (3) Filed as an exhibit to NSTS Bancorp, Inc.'s Current Report on Form 8-K (File No. 001-41232) filed on March 31, 2023, and incorporated herein by reference. (4) Filed as Appendix A to the Proxy Statement for the NSTS Bancorp, Inc. annual meeting of stockholders (File No. 001-41232) filed on April 14, 2023 and incorporated herein by reference. (5) Filed as an exhibit to NSTS Bancorp, Inc.'s Current Report on Form 8-K (File No. 001-41232) filed on June 16, 2023, and incorporated herein by reference. (6) Filed as an exhibit to NSTS Bancorp, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (File No. 001-41232) and incorporated herein by reference. (7) Filed as an exhibit to NSTS Bancorp, Inc's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No. 001-41232) and incorporated herein by reference. 46 Table of Contents Item 16. Form 10-K Summary None. 47 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENT OF NSTS BANCORP, INC. 2025 and 2024 Consolidated Annual Financial Statements Report of Independent Registered Public Accounting Firm 49 Consolidated Balance Sheets at December 31, 2025 and 2024 50 Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 51 Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 52 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2025 and 2024 53 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 54 Notes to Consolidated Financial Statements 55 48 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of NSTS Bancorp, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of NSTS Bancorp, Inc. and its Subsidiary (the “Company”) as of December 31, 2025 and 2024, the related statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Plante & Moran, PLLC We have served as the Company’s auditor since 2019. Chicago, Illinois March 27, 2026 49 Table of Contents NSTS BANCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets Year ended December 31, 2025 2024 (Dollars in thousands) Assets: Cash and due from banks $ 1,242 $ 1,223 Interest-bearing bank deposits 32,800 52,258 Cash and cash equivalents 34,042 53,481 Time deposits with other financial institutions 1,245 1,494 Securities available for sale 78,719 71,249 Federal Home Loan Bank stock (FHLB) 605 585 Loans held for sale 4,459 1,218 Loans, net of unearned income 129,763 131,557 Allowance for credit losses on loans ( 1,128 ) ( 1,201 ) Loans, net 128,635 130,356 Premises and equipment, net 5,113 5,311 Accrued interest receivable 925 870 Bank-owned life insurance (BOLI) 9,894 9,661 Other assets 3,011 4,463 Total assets $ 266,648 $ 278,688 Liabilities: Deposits: Noninterest bearing $ 13,306 $ 11,896 Interest-bearing Demand and NOW checking 14,289 14,930 Money market 25,735 28,967 Savings 38,660 41,544 Time deposits over $250,000 23,370 21,990 Other time deposits 66,112 70,829 Total deposits 181,472 190,156 Escrow deposits 1,599 1,739 Other borrowings — 5,000 Accrued expenses and other liabilities 3,603 5,303 Total liabilities 186,674 202,198 Stockholders' equity: Common stock 56 56 Treasury stock, at cost ( 3,087 ) ( 3,240 ) Additional paid-in capital 52,348 51,684 Retained earnings 39,880 40,266 Unallocated common shares held by ESOP ( 3,462 ) ( 3,670 ) Accumulated other comprehensive loss, net ( 5,761 ) ( 8,606 ) Total stockholders' equity 79,974 76,490 Total liabilities and stockholders' equity $ 266,648 $ 278,688 December 31, 2025 December 31, 2024 Common Stock Common Stock Par value $ 0.01 $ 0.01 Shares authorized 10,000,000 10,000,000 Shares issued 5,599,859 5,601,859 Shares outstanding 5,261,533 5,249,826 Treasury shares 338,326 352,033 See accompanying notes to consolidated financial statements 50 Table of Contents NSTS BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Operations Year ended December 31, 2025 2024 (Dollars in thousands) Interest income: Loans, including fees $ 7,453 $ 6,785 Securities Taxable 1,463 1,539 Tax-exempt 241 244 Federal funds sold and other 1,737 1,613 Time deposits with other financial institutions 65 85 FHLB stock 34 38 Total interest income 10,993 10,304 Interest expense: Deposits 3,417 3,000 Other borrowings 113 243 Total interest expense 3,530 3,243 Net interest income 7,463 7,061 (Reversal of) provision for credit losses ( 192 ) 71 Net interest income after provision for credit losses 7,655 6,990 Noninterest income: Gain on sale of mortgage loans 1,565 1,245 Rental income on office building 65 64 Service charges on deposits 252 256 Increase in cash surrender value of BOLI 233 220 Other 157 156 Total noninterest income 2,272 1,941 Noninterest expense: Salaries and employee benefits 6,266 5,939 Equipment and occupancy 875 782 Data processing 951 884 Professional services 570 513 Advertising 141 286 Supervisory fees and assessments 150 142 Loan expenses 301 212 Deposit expenses 292 239 Director fees 210 215 Other 557 508 Total noninterest expense 10,313 9,720 Loss before income taxes ( 386 ) ( 789 ) Income tax expense — — Net loss $ ( 386 ) $ ( 789 ) Basic and diluted loss per share ( 0.08 ) ( 0.16 ) Weighted average shares outstanding 4,887,508 4,911,461 See accompanying notes to consolidated financial statements 51 Table of Contents NSTS BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Year ended December 31, 2025 2024 (Dollars in thousands) Net loss $ ( 386 ) $ ( 789 ) Unrealized net holding gain (loss) on securities Unrealized net holding gain (loss) on securities arising during period 3,979 ( 535 ) Tax effect ( 1,134 ) 152 Other comprehensive income (loss), net of taxes 2,845 ( 383 ) Comprehensive income (loss) $ 2,459 $ ( 1,172 ) See accompanying notes to consolidated financial statements 52 Table of Contents NSTS BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity Accumulated other Unallocated Common Common Treasury Additional Retained comprehensive Common Shares Shares Stock Stock Paid-In Capital earnings loss Held by ESOP Total (Dollars in thousands) Balance at January 1, 2024 5,315,261 $ 56 $ ( 2,381 ) $ 50,920 $ 41,055 $ ( 8,223 ) $ ( 3,882 ) $ 77,545 Net loss — — — — ( 789 ) — — ( 789 ) ESOP shares committed to be released — — — 2 — — 212 214 Purchase of treasury stock from stock repurchase program ( 93,732 ) — ( 970 ) — — — — ( 970 ) Purchase of treasury stock from taxes withheld on net share settlement of restricted stock awards ( 11,403 ) — ( 109 ) — — — — ( 109 ) Reissuance of treasury stock for options exercised 23,000 — 220 ( 5 ) — — — 215 Compensation cost for stock options and restricted stock — — — 767 — — — 767 Issuance of common shares for the restricted stock plan 16,700 — — — — — — — Change in net unrealized loss on securities available for sale, net — — — — — ( 383 ) — ( 383 ) Balance at December 31, 2024 5,249,826 $ 56 $ ( 3,240 ) $ 51,684 $ 40,266 $ ( 8,606 ) $ ( 3,670 ) $ 76,490 Net loss — — — — ( 386 ) — — ( 386 ) ESOP shares committed to be released — — — 38 — — 208 246 Forfeiture of stock options and restricted stock ( 2,000 ) — — ( 8 ) — — — ( 8 ) Purchase of treasury stock from taxes withheld on net share settlement of restricted stock awards ( 9,293 ) — ( 114 ) — — — — ( 114 ) Compensation cost for stock options and restricted stock — — — 686 — — — 686 Reissuance of treasury stock for stock options exercised 23,000 — 267 ( 52 ) — — — 215 Change in net unrealized loss on securities available for sale, net — — — — — 2,845 — 2,845 Balance at December 31, 2025 5,261,533 $ 56 $ ( 3,087 ) $ 52,348 $ 39,880 $ ( 5,761 ) $ ( 3,462 ) $ 79,974 See accompanying notes to consolidated financial statements 53 Table of Contents NSTS BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Year ended December 31, 2025 2024 (Dollars in thousands) Cash flows from operating activities: Net loss $ ( 386 ) $ ( 789 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 302 293 Securities amortization and accretion, net 461 515 Loans originated for sale ( 70,902 ) ( 45,583 ) Proceeds from sales of loans held for sale 77,060 54,374 Gain on sale of mortgage loans ( 1,565 ) ( 1,245 ) (Reversal of) provision for credit losses ( 192 ) 71 Earnings on bank owned life insurance ( 233 ) ( 220 ) ESOP expense 246 214 Stock based compensation expense, net of forfeitures 678 767 Change in deferred income taxes 1,134 ( 152 ) Net change in accrued interest receivable and other assets ( 871 ) ( 46 ) Net change in accrued expenses and other liabilities ( 1,680 ) 1,234 Net cash provided by operating activities 4,052 9,433 Cash flows from investing activities: Net change in portfolio loans ( 5,941 ) ( 18,142 ) Principal repayments on mortgage-backed securities 5,817 5,536 Purchases of securities available for sale ( 10,849 ) — Maturities and calls of securities available for sale 1,080 4,300 Purchase of Federal Home Loan Bank stock ( 20 ) ( 35 ) Net change in time deposits with other financial institutions 249 497 Purchases of premises and equipment, net ( 104 ) ( 319 ) Net cash used in investing activities ( 9,768 ) ( 8,163 ) Cash flows from financing activities: Net change in deposits ( 8,684 ) 21,330 Net change in escrow deposits ( 140 ) 357 Repayment of FHLB advance ( 5,000 ) — Purchase of treasury stock — ( 970 ) Purchase of treasury stock from taxes withheld on net share settlement of restricted stock awards ( 114 ) ( 109 ) Proceeds from exercise of stock options 215 215 Net cash (used in) provided by financing activities ( 13,723 ) 20,823 Net change in cash and cash equivalents ( 19,439 ) 22,093 Cash and cash equivalents at beginning of period 53,481 31,388 Cash and cash equivalents at end of period $ 34,042 $ 53,481 Supplemental disclosures of cash flow information: Loans transferred to held for sale from portfolio, net $ 7,834 $ 8,384 Cash paid during the period for: Interest 3,556 3,255 See accompanying notes to consolidated financial statements 54 Table of Contents Note 1: Summary of Significant Accounting Policies The accompanying consolidated financial statements (“the financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America and conform to practices within the banking industry. Nature of Operations NSTS Bancorp, Inc. was formed to serve as the stock holding company for North Shore Trust and Savings (the “Bank”) in connection with the conversion of North Shore Trust and Savings, NSTS Financial Corporation and North Shore MHC, from the mutual to the stock form of organization, which was completed on January 18, 2022. Shares of NSTS Bancorp, Inc. common stock began trading on January 19, 2022 on the Nasdaq Capital Market under the trading symbol "NSTS." The Bank operates primarily in the northern suburbs of Chicago, Illinois. The Bank offers a variety of financial services to customers in the surrounding communities. Financial services consist primarily of one to four -family mortgage loans, savings accounts, and certificate of deposit accounts. There are no significant concentrations of loans to any one industry or customer. The Bank’s exposure to credit risk is significantly affected by changes in the economy in the Bank’s market area. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year financial statements have been reclassified to conform to the 2025 presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may vary from those estimates. The determination of the adequacy of the allowance for credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral. The Bank’s loans are generally secured by specific items of collateral including real property, consumer assets, and 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. 55 Table of Contents 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 available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will sell, the security before recovery of its amortized cost basis. If either of the aforementioned criteria exists, the Company will record an ACL related to securities available-for-sale with an offsetting entry to the provision for credit losses on securities on the statement of operations. Losses are charged against the allowance when management believes the available-for-sale security is uncollectible or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale securities, totaling $ 326,000 and $ 278,000 as of December 31, 2025 and 2024, respectively, is excluded from the estimate of credit losses. If either of these criteria does not exist, the Company will evaluate the securities individually to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors, such as market interest rate fluctuations. In evaluating securities available-for sale for potential impairment, the Company considers many factors, including the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; and its ability and intent to hold the security for a period of time sufficient for a recovery in value. The Company also considers the extent to which the securities are issued by the federal government or its agencies, and any guarantee of issued amounts by those agencies. The amount of the impairment related to other factors is recognized in other comprehensive loss. Federal Home Loan Bank Stock The Bank, as a member of the Federal Home Loan Bank (FHLB) system, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market price and is carried at cost of $ 605,000 and $ 585,000 at December 31, 2025 and 2024, respectively, and is evaluated for impairment at each reporting date. Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or market value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Mortgage loans held for sale are generally sold with servicing rights released. Gains or losses are recognized through earnings. Loans The Bank’s loan portfolio includes segments for mortgage loans and consumer loans. Mortgage loans include classes for one to four -family, construction, multi-family, and commercial. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge offs, the allowance for credit losses on loans, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment to the related loan yield using the interest method, adjusted for prepayments. The accrual of interest on all loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until the loans qualify for return to accrual. Loans are returned to accrual status when payment of all the principal and interest amounts contractually due is reasonably assured. 56 Table of Contents Allowance for Credit Losses The allowance for credit losses (“ACL”) is an estimate of the expected credit losses on the loans held for investment, unfunded loan commitments, and available-for-sale debt securities portfolios. Allowance for Credit Losses on Loans The ACL is calculated according to GAAP standards and is maintained by management at a level believed adequate to absorb estimated credit losses that are expected to occur within the existing loan portfolio through their contractual terms. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on loans. Determination of the ACL is inherently subjective in nature since it requires significant estimates and management judgment, and includes a level of imprecision given the difficulty of identifying and assessing the factors impacting loan repayment and estimating the timing and amount of losses. While management utilizes its best judgment and information available, the ultimate adequacy of the ACL is dependent upon a variety of factors beyond the Company’s direct control, including, but not limited to, the performance of the loan portfolio, consideration of current economic trends, changes in interest rates and property values, estimated losses on pools of homogeneous loans based on an analysis that uses historical loss experience for prior periods, portfolio growth and concentration risk, management and staffing changes, the interpretation of loan risk classifications by regulatory authorities and other credit market factors. While each component of the ACL is determined separately, the entire balance is available for the entire loan portfolio. The ACL methodology consists of measuring loans on a collective (pool) basis when similar risk characteristics exist. The Company has identified five loan portfolios and measures the ACL using the Scaled CECL Allowance for Losses Estimator (“SCALE”) method. The loan portfolios are one - to four -family residential real estate, commercial real estate, multi-family real estate, construction and consumer. The SCALE method uses publicly available data from Schedule RI-C of the Call Report to derive the initial proxy expected lifetime loss rates. These proxy expected lifetime loss rates are then adjusted for bank-specific facts and circumstances to arrive at the final ACL estimate that adequately reflects the Company’s loss history and credit risk within our portfolio. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Mortgage Loans One- to four -family mortgage loans in this segment are made to individuals. The loans are secured by real estate with the Bank typically in a first lien position. The Bank generally does not grant loans that would be classified as subprime upon origination. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Although terms for commercial real estate and multi-family residential loans vary, our underwriting standards generally allow for terms not exceeding 30 years and loan-to-value ratios of not more than 75 %. Interest rates are typically adjustable, based upon designated market indices such as The Wall Street Journal prime rate, or fixed-rate, and fees are charged to the borrower at the origination of the loan. The actual lives of such loans generally are less than their contractual terms to maturity due to prepayments and re-financings. Generally, we obtain personal guarantees of the principals as additional collateral for commercial real estate and multi-family residential loans. Commercial real estate and multi-family residential lending involve a greater degree of risk than one - to four -family residential lending. These risks include larger loans to individual borrowers and loan payments that are dependent upon the successful operation of the project or the borrower’s business. These risks can be affected by supply and demand conditions of rental housing units, office and retail space and other commercial space in the project’s market area. We attempt to minimize these risks for loans we originate by soliciting loans from businesses with existing operating performance. We also use conservative debt coverage ratios in our underwriting, and periodically monitor the operation of the business or project and the physical condition of the property. Construction lending is generally originated with a loan-to-value ratio, based on the estimated cost to construct, less than or equal to 80 %. Additionally, the construction loan terms generally include interest only payments for the first 18 months. The overall costs of construction, building material supply chain and health of the economy, including housing prices, will have an effect on the credit quality in this segment. 57 Table of Contents Consumer Loans Loans in this segment are generally to individuals and are supported by non-real estate collateral, such as deposit accounts and personal property. Unsecured loans are also included in this segment. Repayment is dependent on the credit quality of the individual borrower or borrowers. The qualitative factors applied to each loan portfolio consist of the impact of other internal and external qualitative and credit market factors as assessed by management through a detailed loan review, ACL analysis and credit discussions. These internal and external qualitative and credit market factors include: ● changes in lending policies and procedures, including changes in underwriting standards and collections, charge-offs and recovery practices; ● changes in international, national, regional and local conditions; ● changes in the experience, depth and ability of lending management; ● changes in the volume and severity of past due loans and other similar loan conditions; ● changes in the nature and volume of the loan portfolio and terms of loans; ● the existence and effect of any concentrations of credit and changes in the levels of such concentrations; ● effects of other external factors, such as competition, legal or regulatory factors, on the level of estimated credit losses; ● changes in the quality of our loan review functions; and ● changes in the value of underlying collateral for collateral dependent loans. The impact of the above listed internal and external qualitative and credit market risk factors is assessed within predetermined ranges to adjust the ACL totals calculated. In addition to the pooled analysis performed for the majority of our loan and commitment balances, we also review those loans that have collateral dependency or nonperforming status which requires a specific review of that loan, per our individually analyzed CECL calculations. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed, while recoveries of amounts previously charged-off are credited to the ACL. Approved releases from previously established ACL reserves authorized under our ACL methodology also reduce the ACL. Additions to the ACL are established through the provision for credit losses on loans, which is charged to expense. The Company’s ACL methodology is intended to reflect all loan portfolio risk, but management recognizes the inability to accurately depict all future credit losses in a current ACL estimate, as the impact of various factors cannot be fully known. Accrued interest receivable on loans, totaling $ 577,000 and $ 560,000 as of December 31, 2025 and 2024, respectively, is excluded from the amortized cost basis of financing receivables for the purpose of determining the allowance for credit losses. 58 Table of Contents Allowance for Credit Losses on Unfunded Loan Commitments The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk by a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL related to off-balance sheet credit exposures, which is within other liabilities on the Company’s Consolidated Balance Sheets, is estimated at each balance sheet date under the CECL model, and is adjusted as determined necessary through the provision for credit losses on the statement of operations. The estimate for ACL on unfunded loan commitments includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Premises and Equipment Land is stated at cost. Property, improvements, and equipment are stated at cost less accumulated depreciation. Depreciation is determined under the straight-line method over the following estimated useful lives of assets: Years Land improvements 3 - 10 Office building and improvements 10 - 40 Furniture and equipment 3 - 10 Income Taxes Deferred taxes are recognized using the asset/liability method. Deferred tax assets are recognized for deductible temporary differences, operating loss and tax credit carryforwards; deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the financial statement amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than- not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceed the amount measured as described above, if any, is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as additional income taxes in the statement of operations. Bank management believes that the Bank maintains no uncertain tax positions for tax reporting purposes and accordingly, no liability is required to be recorded. The Bank is subject to U.S. federal income tax as well as income tax of the States of Illinois and Wisconsin. 59 Table of Contents Other Real Estate Owned Property acquired in satisfaction of debt or through foreclosure is carried at the lower of cost or market value less estimated costs to sell. At foreclosure, if the fair value of the property acquired is less than the recorded investment in the related loan, a reduction in the carrying amount of the loan is recognized with a charge to the allowance for credit losses. The cost of carrying the assets subsequent to foreclosure and any decrease in the market value occurring after that date are charged to operating expenses as incurred. Bank-owned Life Insurance The Bank purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount estimated to be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due which are probable at settlement. Service Charges on Deposits Service charges on deposits represent general service fees for monthly account maintenance and activity or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue, or some other individual attribute-based revenue. Revenue is recognized when the Bank’s performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time performance obligations are satisfied. Operating Segments The Company's revenue is primarily derived from the business of banking. The Company's financial performance is monitored on consolidated basis by Mr. Stephen Lear, CEO and Chairman of the Board, who is considered to be the Company's Chief Operating Decision Maker ("CODM"). Financial performance is reported to the CODM monthly, and the primary measure of performance is consolidated net income. The allocation of resources throughout the Company is determined annually based upon consolidated net income performance. The presentation of financial performance to the CODM is consistent with amounts and financial statement line items shown in the Company's consolidated balance sheets and consolidated statements of operations. Additionally, the Company's significant expenses are adequately segmented by category and amount in the consolidated statements of operations to include all significant items when considering both qualitative and quantitative factors. Significant expenses of the Company include salaries and employee benefits, equipment and occupancy expense, data processing, professional services and advertising. All of the Company’s financial results are similar and considered by management to be aggregated into one reportable operating segment. While the Company has assigned certain management responsibilities by business-line, the Company’s CODM evaluates financial performance on a Company-wide basis. The Company's assigned business lines have similar economic characteristics, products, services and customers. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment. Dividend Restrictions Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to its stockholders. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Bank, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity. 60 Table of Contents Stock Based Compensation The Company maintains an equity incentive plan under which restricted stock and stock options may be granted to employees and directors, see Note 11. The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards in accordance with ASC 718, “Compensation-Stock Compensation”. The Company estimates the per share fair value of option grants on the date of grant using the Black-Scholes option pricing model using assumptions for the expected dividend yield, expected stock price volatility, risk-free interest rate and expected option term. These assumptions are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision. The Black-Scholes option pricing model also contains certain inherent limitations when applied to options that are not traded on public markets. The per share fair value of options is highly sensitive to changes in assumptions. In general, the per share fair value of options will move in the same direction as changes in the expected stock price volatility, risk-free interest rate and expected option term, and in the opposite direction as changes in the expected dividend yield. For example, the per share fair value of options will generally increase as expected stock price volatility increases, risk-free interest rate increases, expected option term increases and expected dividend yield decreases. The use of different assumptions or different option pricing models could result in materially different per share fair values of options. The Company recognizes compensation expense for the fair values of these awards, which have graded vesting, on a straight-line basis over the requisite service period of the awards. The Company’s accounting policy is to recognize forfeitures as they occur. Forfeited shares are added back to the pool of shares available for future grants. Employee Stock Ownership Plan The ESOP shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Balance Sheets. As shares are committed to be released from collateral, the Bank reports compensation expense equal to the average market price of the shares during the year, and the shares become outstanding for basic net income per common share computations. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce the ESOP’s debt and accrued interest. Treasury Stock Treasury stock acquired is recorded at cost and is carried as a reduction of stockholders’ equity in the Consolidated Balance Sheets. Treasury stock issued is valued based on the “last in, first out” inventory method. The difference between the consideration received upon issuance and the carrying value is charged or credited to additional paid-in capital. Earnings per Share Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. ESOP shares committed to be released are considered to be outstanding for purposes of the earnings per share computation. ESOP shares that have not been legally released, but that relate to employee services rendered during an accounting period (interim or annual) ending before the related debt service payment is made, are considered committed to be released. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. 61 Table of Contents Note 2: Securities The amortized cost and estimated fair value of debt securities at December 31, 2025 and 2024 , by contractual maturity, are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties, therefore, these securities have been included in 1 to 5 years based on average remaining life. December 31, 2025 U.S. Treasuries U.S. government agency obligations Municipal obligations Mortgage-backed residential obligations Collateralized mortgage obligations Total available-for-sale (Dollars in thousands) 1 year or less $ — $ — $ 198 $ — $ 1,412 $ 1,610 1 to 5 years 7,085 7,208 1,202 8,860 17,757 42,112 5 to 10 years — 1,326 3,642 14,336 5,918 25,222 After 10 years — — 7,104 573 2,098 9,775 Fair value $ 7,085 $ 8,534 $ 12,146 $ 23,769 $ 27,185 $ 78,719 Gross unrealized gains 4 — — — 1 5 Gross unrealized losses ( 7 ) ( 685 ) ( 1,829 ) ( 2,990 ) ( 2,552 ) ( 8,063 ) Amortized cost $ 7,088 $ 9,219 $ 13,975 $ 26,759 $ 29,736 $ 86,777 December 31, 2024 U.S. Treasuries U.S. government agency obligations Municipal obligations Mortgage-backed residential obligations Collateralized mortgage obligations Total available-for-sale (Dollars in thousands) 1 year or less $ — $ 1,000 $ — $ — $ — $ 1,000 1 to 5 years — 3,047 1,452 8,971 15,086 28,556 5 to 10 years — 4,610 2,401 15,794 7,786 30,591 After 10 years — — 7,883 1,150 2,069 11,102 Fair value $ — $ 8,657 $ 11,736 $ 25,915 $ 24,941 $ 71,249 Gross unrealized gains — — — — — — Gross unrealized losses — ( 1,062 ) ( 2,367 ) ( 4,766 ) ( 3,842 ) ( 12,037 ) Amortized cost $ — $ 9,719 $ 14,103 $ 30,681 $ 28,783 $ 83,286 As of December 31, 2025 and 2024 , no securities were pledged to secure public deposits or for other purposes as required or permitted by law. At December 31, 2025 and 2024 , there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of equity. Information pertaining to securities with gross unrealized losses at December 31, 2025 and 2024 , aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows: Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2025 Value Losses Value Losses Value Losses (Dollars in thousands) U.S. Treasuries $ 2,990 $ 7 $ — $ — $ 2,990 $ 7 U.S. government agency obligations 1,000 1 7,534 684 8,534 685 Municipal obligations — — 12,146 1,829 12,146 1,829 Mortgage-backed residential obligations — — 23,769 2,990 23,769 2,990 Collateralized mortgage obligations 1,530 24 24,654 2,528 26,184 2,552 Total $ 5,520 $ 32 $ 68,103 $ 8,031 $ 73,623 $ 8,063 December 31, 2024 U.S. government agency obligations $ — $ — $ 8,657 $ 1,062 $ 8,657 $ 1,062 Municipal obligations 467 28 11,269 2,339 11,736 2,367 Mortgage-backed residential obligations — — 25,915 4,766 25,915 4,766 Collateralized mortgage obligations — — 24,941 3,842 24,941 3,842 Total $ 467 $ 28 $ 70,782 $ 12,009 $ 71,249 $ 12,037 62 Table of Contents At December 31, 2025 and 2024, certain investment securities were in unrealized loss positions. There were no securities with identified credit losses at December 31, 2025 and 2024. Unrealized losses have not been recognized into income because, based on management's evaluation, the decline in fair value is largely due to increased market rates, temporary market conditions and trading spreads, and, as such, are considered to be temporary by the Bank. In addition, management has the intent and ability to hold the securities until they mature or they recover their carrying values. All U.S. government agency obligations, mortgage-based residential obligations and collateralized mortgage obligations are agency-issued or government-sponsored enterprise issued. Agency-issued securities are generally guaranteed by a U.S. government agency, such as the Government National Mortgage Association. Government-sponsored enterprises, such as the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Small Business Administration, have either a direct or implied guarantee by the U.S. government. The Bank holds two classifications of municipal bonds, general obligation bonds and revenue bonds. General obligation bonds are backed by the general revenue of the issuing municipality, while revenue bonds are supported by a specific revenue source. All general obligation and revenue bonds have a bond rating of investment grade by Standard and Poor's or Moody's Investor Services or are not rated. There have been no declines in investment grade ratings on bonds in a loss position and as of December 31, 2025, all municipal bonds are paying as agreed. There were no sales of securities for the years ended December 31, 2025 and 2024. Note 3: Loans A summary of loans by major category as of December 31, 2025 and 2024 is as follows: December 31, 2025 December 31, 2024 (Dollars in thousands) First mortgage loans 1-4 family residential $ 118,222 $ 119,409 Multi-family 3,240 3,368 Commercial 3,813 4,197 Construction 3,921 3,651 Total first mortgage loans 129,196 130,625 Consumer loans 268 282 Total loans 129,464 130,907 Net deferred loan costs 299 650 Allowance for credit losses on loans ( 1,128 ) ( 1,201 ) Total loans, net $ 128,635 $ 130,356 First mortgage loans serviced and subserviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid principal balance of these loans totaled $ 41.0 million and $ 13.9 million at December 31, 2025 and 2024 , respectively. Custodial escrow balances maintained in connection with the foregoing loan servicing were $ 480,000 and $ 236,000 at December 31, 2025 and 2024 , respectively. In the normal course of business, loans are made by the Bank to directors and officers of the Company and the Bank (related parties). The terms of these loans, including interest rate and collateral, are similar to those prevailing for comparable transactions with other customers and do not involve more than a normal risk of collectability. At December 31, 2025 and 2024 , such borrowers were indebted to the Bank in the aggregate amount of $ 564,000 and $ 587,000 , respectively. 63 Table of Contents Note 4: Allowance for Credit Losses The following tables present the activity in the allowance for credit losses for the years ended December 31, 2025 and 2024: December 31, 2025 1-4 family residential Multi-family Commercial Construction Consumer Total (Dollars in thousands) Year ended: Beginning balance $ 1,056 $ 37 $ 41 $ 65 $ 2 $ 1,201 Charge-offs — — — — — — Recoveries — — — — 99 99 Net recoveries (charge-offs) — — — — 99 99 (Release of) Provision for credit losses ( 67 ) 2 ( 4 ) ( 4 ) ( 99 ) ( 172 ) Ending balance $ 989 $ 39 $ 37 $ 61 $ 2 $ 1,128 December 31, 2024 1-4 family residential Multi-family Commercial Construction Consumer Total (Dollars in thousands) Year ended: Beginning balance $ 1,094 $ 40 $ 37 $ 4 $ 1 $ 1,176 Charge-offs — — — — — — Recoveries — — — — — — Net recoveries (charge-offs) — — — — — — Provision for (release of) credit losses ( 38 ) ( 3 ) 4 61 1 25 Ending balance $ 1,056 $ 37 $ 41 $ 65 $ 2 $ 1,201 The ACL on loans excludes $ 40,000 and $ 60,000 of allowance for off-balance sheet exposures as of December 31, 2025 and 2024, respectively, recorded within Other Liabilities on the Consolidated Balance Sheets. Off-balance sheet exposures consist of unused lines of credit, the unused portion of construction loans and commitments to originate loans. The net release of provision for credit losses for the year ended December 31, 2025 in the table above excludes a release of provision for credit losses of $ 20,000 related to off balance sheet exposures. The net provision for credit losses for the year ended December 31, 2024 in the table above excludes a provision for credit losses of $ 46,000 related to off balance sheet exposures. 64 Table of Contents There were two collateral dependent loans, totaling $ 284,000 , as of December 31, 2025 in the one to four -family residential loan segment. These loans are collateralized by residential real estate and have no ACL as of December 31, 2025. There were no other collateral dependent loans as of December 31, 2025. There were no collateral dependent loans as of December 31, 2024. The Bank evaluates collectability based on payment activity and other factors. The Bank uses a graded loan rating system as a means of identifying potential problem loans, as follows: Pass Loans in these categories are performing as expected with low to average risk. Special Mention Loans in this category are internally designated by management as “watch loans.” These loans are starting to show signs of potential weakness and are closely monitored by management. Substandard Loans in this category are internally designated by management as “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the paying capacity of the obligors or the current net worth of the collateral pledged. Substandard loans present a distinct possibility that the Bank will sustain losses if such weaknesses are not corrected. Doubtful Loans classified as doubtful have all the weaknesses inherent in those designated as “substandard” with the added characteristic that the weaknesses may make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. On an annual basis, or more often if needed, the Bank formally reviews the ratings on commercial loans. In addition, the Bank performs an independent review of a significant portion of the commercial loan portfolio. Management uses the results of the independent review as part of its annual review process. 65 Table of Contents The following tables present the credit risk profile of the Company's loan portfolio based on risk rating category and year of origination as of December 31, 2025 and 2024. As of December 31, 2025 Term loans amortized cost basis by origination year 2025 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis Total (Dollars in thousands) 1-4 family residential Pass $ 16,653 $ 13,335 $ 16,423 $ 10,870 $ 16,434 $ 37,769 $ 6,454 $ — 117,938 Special Mention — — — — — — — — — Substandard — 262 — — — 22 — — 284 Total 1-4 family residential 16,653 13,597 16,423 10,870 16,434 37,791 6,454 — 118,222 Current year-to-date gross write-offs — — — — — — — — — Multi-family Pass — 507 — — 221 2,512 — — 3,240 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total multi-family — 507 — — 221 2,512 — — 3,240 Current year-to-date gross write-offs — — — — — — — — — Commercial Pass — — 165 — 92 2,834 722 — 3,813 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total commercial — — 165 — 92 2,834 722 — 3,813 Current year-to-date gross write-offs — — — — — — — — — Construction Pass 2,156 1,676 89 — — — — — 3,921 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total construction 2,156 1,676 89 — — — — — 3,921 Current year-to-date gross write-offs — — — — — — — — — Consumer Pass 130 46 47 40 3 2 — — 268 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total consumer 130 46 47 40 3 2 — — 268 Current year-to-date gross write-offs — — — — — — — — — Total Pass 18,939 15,564 16,724 10,910 16,750 43,117 7,176 — 129,180 Special Mention — — — — — — — — — Substandard — 262 — — — 22 — — 284 Total 18,939 15,826 16,724 10,910 16,750 43,139 7,176 — 129,464 Current year-to-date gross write-offs — — — — — — — — — 66 Table of Contents As of December 31, 2024 Term loans amortized cost basis by origination year 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis Total (Dollars in thousands) 1-4 family residential Pass $ 20,577 $ 20,986 $ 12,421 $ 18,074 $ 43,245 $ 4,106 $ — $ 119,409 Special Mention — — — — — — — — Substandard — — — — — — — — Total 1-4 family residential 20,577 20,986 12,421 18,074 43,245 4,106 — 119,409 Current year-to-date gross write-offs — — — — — — — — Multi-family Pass 515 — — 230 2,623 — — 3,368 Special Mention — — — — — — — — Substandard — — — — — — — — Total multi-family 515 — — 230 2,623 — — 3,368 Current year-to-date gross write-offs — — — — — — — — Commercial Pass 148 301 — 96 3,158 494 — 4,197 Special Mention — — — — — — — — Substandard — — — — — — — — Total commercial 148 301 — 96 3,158 494 — 4,197 Current year-to-date gross write-offs — — — — — — — — Construction Pass 3,134 517 — — — — — 3,651 Special Mention — — — — — — — — Substandard — — — — — — — — Total construction 3,134 517 — — — — — 3,651 Current year-to-date gross write-offs — — — — — — — — Consumer Pass 127 77 58 18 2 — — 282 Special Mention — — — — — — — — Substandard — — — — — — — — Total consumer 127 77 58 18 2 — — 282 Current year-to-date gross write-offs — — — — — — — — Total Pass 24,501 21,881 12,479 18,418 49,028 4,600 — 130,907 Special Mention — — — — — — — — Substandard — — — — — — — — Total 24,501 21,881 12,479 18,418 49,028 4,600 — 130,907 Current year-to-date gross write-offs — — — — — — — — 67 Table of Contents The aging of the Bank’s loan portfolio as of December 31, 2025 and 2024, is as follows: 31-89 Days Past Due and Accruing Greater than 90 Days Past Due and Accruing Non-Accrual Total Past Due and Non-Accrual Current Total Loan Balance (Dollars in thousands) December 31, 2025 1-4 family residential $ 641 $ — $ 284 $ 925 $ 117,297 $ 118,222 Multi-family — — — — 3,240 3,240 Commercial — — — — 3,813 3,813 Construction — — — — 3,921 3,921 Consumer — — — — 268 268 Total $ 641 $ — $ 284 $ 925 $ 128,539 $ 129,464 December 31, 2024 1-4 family residential $ 371 $ — $ — $ 371 $ 119,038 $ 119,409 Multi-family — — — — 3,368 3,368 Commercial — — — — 4,197 4,197 Construction — — — — 3,651 3,651 Consumer — — — — 282 282 Total $ 371 $ — $ — $ 371 $ 130,536 $ 130,907 The following table presents the amortized cost basis of loans on nonaccrual status recorded at December 31, 2025 and 2024. As of January 1, 2024, the amortized cost basis of loans on nonaccrual status was $ 200,000 . December 31, 2025 December 31, 2024 Nonaccrual with no Allowance for Credit Losses Nonaccrual Nonaccrual with no Allowance for Credit Losses Nonaccrual (Dollars in thousands) First mortgage loans 1-4 family residential $ 284 $ 284 $ — $ — Multi-family — — — — Commercial — — — — Construction — — — — Consumer loans — — — — Total loans $ 284 $ 284 $ — $ — The Bank may modify loans to borrowers experiencing financial difficulty by providing modifications to repayment terms; more specifically, modifications to loan interest rates. Management performs an analysis at the time of loan modification. Any reserve required is recorded through a provision to the allowance for credit losses on loans. There were no modifications on loans to borrowers experiencing financial difficulty during the year ended December 31, 2025 and 2024. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process is $ 262,000 as of December 31, 2025. There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process as of December 31, 2024. 68 Table of Contents Note 5: Premises and Equipment The components of premises and equipment as of December 31, 2025 and 2024 , are as follows: 2025 2024 (Dollars in thousands) Land and improvements $ 2,951 $ 2,940 Building and improvements 7,313 7,274 Furniture and equipment 1,531 1,477 Total gross equipment 11,795 11,691 Less accumulated depreciation 6,682 6,380 Premises and equipment, net $ 5,113 $ 5,311 Depreciation expense was $ 302,000 and $ 293,000 for the years ended December 31, 2025 and 2024, respectively. 69 Table of Contents Note 6: Deposits As of December 31, 2025 , for the years below ended December 31, the scheduled maturities of time deposits are as follows: Years Ended Amount (Dollars in thousands) 2026 $ 64,305 2027 9,485 2028 8,437 2029 4,917 2030 and beyond 2,338 Total $ 89,482 In the normal course of business, deposit accounts are held by directors and officers of the Bank (related parties). The terms for these accounts, including interest rates, fees, and other attributes, are similar to those prevailing for comparable transactions with other customers and do not involve more than the normal level of risk associated with deposit accounts. At December 31, 2025 and 2024 , total deposits held by directors and officers of the Company and the Bank were $ 1.3 million and $ 1.1 million , respectively. The amount of our time deposits with accounts over the FDIC's insurance limit of $250,000 was $ 23.4 million and $ 22.0 million at December 31, 2025 and 2024, respectively. Note 7: Other Borrowings There were no additional borrowings made during the year ended December 31, 2025. In June 2023, the Company borrowed $ 5.0 million from the FHLB Chicago at a rate of 4.78 % for 24 months, payable on June 20, 2025. The advance was collateralized by loans pledged to the FHLB and was paid at maturity. The following table shows certain information regarding our borrowings at or for the dates indicated: At or For the Year Ended December 31, 2025 2024 (Dollars in thousands) FHLB of Chicago advances and other borrowings: Average balance outstanding $ 2,322 $ 5,000 Maximum amount outstanding at any month-end during the period 5,000 5,000 Balance outstanding at end of period — 5,000 Average interest rate during the period 4.8 % 4.8 % Weighted average interest rate at end of period — 4.8 % The following table shows the outstanding advances, additional borrowing capacity and total borrowing capacity from the FHLB Chicago at the dates presented. December 31, 2025 December 31, 2024 (Dollars in thousands) Outstanding advances $ — $ 5,000 Additional borrowing capacity 79,103 73,094 Total borrowing capacity $ 79,103 $ 78,094 The eligible borrowings are collateralized by $ 105.1 million and $ 103.8 million of first mortgage loans under a blanket lien arrangement at December 31, 2025 and 2024 , respectively. Additionally, at December 31, 2025 and 2024 we had a $ 10.0 million uncommitted, unsecured line of credit with the BMO Harris Bank, none of which was drawn at December 31, 2025 and 2024. 70 Table of Contents Note 8: Income Taxes Income tax expense for the years ended December 31, 2025 and 2024 , is summarized as follows: Year Ended December 31, 2025 2024 (Dollars in thousands) Loss from continuing operations before income tax expense (benefit) (1) $ ( 386 ) $ ( 789 ) Income tax expense (benefit) from continuing operations Current expense Federal $ — $ — State — — Total current expense — — Deferred (benefit) expense Federal $ ( 147 ) $ ( 406 ) State ( 49 ) 17 Change in valuation allowance 196 389 Total deferred expense — — Total income tax expense $ — $ — ( 1 ) No foreign activity. The difference between the income tax expense shown on the statements of operations and the amounts computed by applying the statutory federal income tax rate to income before income taxes is primarily due to tax-exempt income, the change in valuation allowance, and the adjustment of deferred taxes for enacted changes in tax laws. The provision for income taxes differs from that computed are as follows: Year Ended December 31, 2025 2024 (Dollars in thousands) Tax benefit at statutory federal rate of 21% applied to income before income tax benefit $ 81 21.0 % $ 166 21.0 % State income tax benefit, net of federal effect 29 7.5 % 59 7.5 % Tax-exempt security and loan income, net of TEFRA adjustments 45 11.6 % 45 5.7 % BOLI 49 12.7 % 46 5.9 % Change in valuation allowance ( 196 ) ( 50.8 )% ( 389 ) ( 49.3 )% Other ( 8 ) ( 2.0 )% 73 9.3 % Effective tax rate $ — 0.0 % $ — 0.0 % 71 Table of Contents Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax basis. Deferred tax assets and liabilities are measured using enacted tax rates to apply to taxable income in the period in which the temporary differences are expected to be recovered or settled. Net deferred tax assets are included in accrued interest receivable and other assets in the Consolidated Balance Sheets. The significant components of the Corporation’s deferred tax assets and liabilities were as follows: Year Ended December 31, 2025 2024 (Dollars in thousands) Deferred tax assets Allowance for credit losses $ 345 $ 364 Deferred compensation 572 635 Retirement plans 258 162 Premises held for sale impairment 101 101 Unrealized loss on securities available-for-sale 2,297 3,431 Federal net operating loss carryforwards 1,564 1,405 Other — 7 State net operating loss carryforwards 564 515 Gross deferred tax assets 5,701 6,620 Valuation allowance ( 3,246 ) ( 3,050 ) Net deferred tax assets 2,455 3,570 Deferred tax liabilities FHLB stock dividends ( 101 ) ( 101 ) Accumulated depreciation ( 57 ) ( 38 ) Deferred tax liabilities ( 158 ) ( 139 ) Net deferred tax asset $ 2,297 $ 3,431 The Bank does not expect the total amount of unrecognized tax benefits to change significantly in the next twelve months. Gross Federal net operating losses (NOL) as of December 31, 2025 and 2024 are $ 7.4 million, and $ 6.7 million, respectively. A portion of the Federal NOL, related to charitable contributions, totaling $ 1.3 million, as of December 31, 2025, will expire in 2027. The remainder of the Federal NOL does not expire. NOL carryforwards for state income tax purposes were approximately $ 6.1 million and $ 5.4 million at December 31, 2025 and 2024 , respectively, and will begin expiring in 2026. During 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 deferred tax assets. A significant piece of objective negative evidence evaluated is the cumulative taxable loss incurred over the five -year period ended December 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 December 31, 2025, a valuation allowance of $ 3.2 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The Bank did not pay any federal nor state income taxes during the years ending December 31, 2025 and 2024. There were no uncertain tax positions outstanding as of December 31, 2025 and 2024 . As of December 31, 2025 , tax years remaining open for State of Illinois and Wisconsin were 2021 through 2024. Federal tax years that remained open were 2022 through 2024. As of December 31, 2025 , there were also no unrecognized tax benefits that are expected to significantly increase or decrease within the next twelve months. 72 Table of Contents Note 9: Capital Ratios The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under accounting principles generally accepted in the United States of America, regulatory reporting requirements and regulatory capital standards. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, common equity Tier 1 capital to total risk-weighted assets and of Tier I capital to average assets, as such individual components and calculations are defined by related standards. As of December 31, 2025 , the most recent notification from the regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification which management believes have changed the Bank’s category. On November 13, 2019, the federal regulators finalized and adopted a regulatory capital rule establishing a new community bank leverage ratio (“CBLR”), which became effective on January 1, 2020. The intent of CBLR is to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions and depository institution holding companies, as directed under the Economic Growth, Relief, and Consumer Protection Act. The CBLR is the ratio of a bank's tangible Tier 1 equity capital to average total consolidated assets and has been set by the regulators at 9%. However, in November 2025, the OCC and the FDIC jointly issued a proposal to reduce the minimum leverage ratio for opting-in banks from 9% to 8%. Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements. A qualifying institution may opt in and out of the CBLR framework on its quarterly call report. The CBLR option became effective January 1, 2020 and is available to institutions with assets of less than $10.0 billion that meet other specified criteria. The rule also established a two -quarter grace period for a qualifying institution whose leverage ratio falls below the 8% requirement so long as the bank maintains a leverage ratio of 7% or greater. A qualifying community bank that exercises the election and has capital equal to or exceeding the applicable percentage is considered compliant with all applicable regulatory capital requirements. Qualifying institutions may elect to utilize the CBLR in lieu of the generally applicable risk-based capital requirements. The Bank elected to begin using CBLR for the first quarter of 2020. The Bank’s actual capital amounts and ratios as of December 31, 2025 and 2024 , are presented below: Actual Minimum Required to be Well-Capitalized (1) Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2025 Tier 1 capital (to Average Assets) $ 66,366 24.32 % $ 24,563 >9% As of December 31, 2024 Tier 1 capital (to Average Assets) $ 64,634 23.53 % $ 24,722 >9% ( 1 ) As defined by regulatory agencies. Failure to exceed the leverage ratio thresholds required under CBLR in the future, subject to any applicable grace period, would require the Company to return to the risk-based capital ratio thresholds previously utilized under the fully phased-in Basel III Capital Rules to determine capital adequacy. The Company's principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that the Bank may pay without prior approval of regulatory agencies. Under these regulations, the amount of dividends that the Bank may pay in any calendar year is limited to the current year's profits, combined with the retained profit of the previous two years, subject to the capital requirements described above which include a requirement that the Bank maintain a capital conservation buffer of 2.5 % on all risk-based capital requirements in order to avoid additional limitations on capital distributions. 73 Table of Contents Note 10: Benefit Plans Management implemented a 401 (k)-benefit plan during 2007. Employee contributions are matched up to the first 6 % of compensation contributed by the employee. Employer match contributions totaled $ 237,000 for 2025 and $ 206,000 for 2024 . As part of the conversion, North Shore Trust and Savings established the Employee Stock Ownership Plan ("ESOP") for its employees. Shares of the ESOP will be released and allocated to employees based on the ratio of each such participant's compensation. Refer to Note 11 for additional information surrounding the ESOP and related expenses. The Bank sponsors a noncontributory Profit-Sharing Plan covering all employees who have worked more than 1,000 hours during the plan year. There was no profit sharing expense for the years ended 2025 and 2024. Note 11: Stock Based Compensation ESOP In connection with the Bank’s mutual to stock conversion in January 2022, the Bank established the North Shore Trust and Savings Employee Stock Ownership Plan (“ESOP”) for all eligible employees. The ESOP purchased 431,836 shares of Company common stock in the Company’s initial public offering at $ 10.00 per share with the proceeds of a twenty-five ( 25 ) year loan from the Company in the amount of $ 4.3 million. The interest rate on the ESOP loan is fixed at 3.25 %. The Bank intends to make annual contributions to the ESOP that at a minimum will permit the ESOP to repay the principal and interest due on the ESOP debt. However, the Bank may prepay the principal of the note, partially or in full and without penalty or premium at any time and from time to time without prior notice to the holder. Any dividends declared on Company common stock held by the ESOP and not allocated to the account of a participant can be used to repay the loan. As the ESOP loan is repaid, shares of Company common stock pledged as collateral for the loan are released from the loan suspense account for allocation to Plan participants on the basis of each active participant’s proportional share of compensation. Participants vest 100 % in their ESOP allocations after five years of service. In connection with the implementation of the ESOP, participants were given credit for past service with the Bank for vesting purposes. Participants will become fully vested upon death, disability, retirement, a change in control, or termination of the ESOP. Generally, participants will receive distributions from the ESOP upon separation from service. The plan reallocates any unvested shares of common stock forfeited upon termination of employment among the remaining participants in the plan. ESOP compensation represents the average fair market value of the shares of Company common stock allocated or committed to be released as of that date. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends, if any, on allocated shares are recorded as a reduction of retained earnings and dividends, if any, on unallocated shares are recorded as a reduction of the debt service. The ESOP compensation expense for the year ended December 31, 2025 and 2024 was $ 246,000 and $ 214,000 . Shares held by the ESOP were as follows: As of December 31, 2025 2024 (Dollars in thousands) Shares allocated 85,669 64,844 Shares distributed to plan participants ( 2,028 ) ( 1,597 ) Unallocated 346,167 366,992 Total ESOP shares 429,808 430,239 Fair value of unearned shares as of December 31, 2025 and December 31, 2024 respectively $ 4,483 $ 4,331 74 Table of Contents Equity Incentive Plan At the Company's annual meeting of stockholders held on May 24, 2023, stockholders approved the NSTS Bancorp, Inc. 2023 Equity Incentive Plan ( “2023 Equity Plan”), which provides for the granting of up to 755,714 shares ( 215,918 shares of restricted stock and 539,796 shares available for future grants of stock options) of the Company’s common stock pursuant to equity awards made under the 2023 Equity Plan. Stock options granted under the 2023 Equity Plan generally vest in equal annual installments over a service period of five years beginning on the date of grant. The vesting of the options accelerates upon death, disability or following a change in control of the Company. Stock options are generally granted at an exercise price equal to the fair value of the Company’s common stock on the grant date based on the closing market price of the Company's common stock on the date of grant, and have an expiration period of ten years. In June 2023, the Company granted 465,500 stock options under the 2023 Equity Plan. In December 2024, the Company granted 58,000 stock options under the 2023 Equity Plan. There were no stock options granted in 2025. As of December 31, 2025, the Company has 26,296 shares available for future grants of stock options under the 2023 Equity Plan. The weighted average grant date fair value of stock options granted during the year ended December 31, 2024 was $ 4.38 . The following is a summary of the Company's stock option activity and related information for the periods presented. Stock Option Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Options, outstanding January 1, 2024 465,500 $ 9.36 $ 70 Granted 58,000 11.34 Exercised ( 23,000 ) 9.36 Forfeited — — Options, outstanding December 31, 2024 500,500 $ 9.59 $ 1,106 Exercisable - End of Period 106,900 $ 9.36 $ 261 Options, outstanding January 1, 2025 500,500 $ 9.59 $ 1,106 Granted — — Exercised ( 23,000 ) 9.36 Forfeited ( 10,000 ) 9.36 Options, outstanding December 31, 2025 467,500 $ 9.61 $ 1,561 Exercisable - End of Period 175,400 $ 9.49 $ 607 ( 1 ) Dollars in thousands. Expected future expense relating to the non-vested options outstanding as of December 31, 2025 is $ 900,000 over a weighted average period of 2.6 years. As of December 31, 2025, the Company had 292,100 in nonvested stock options with a weighted average remaining life of 7.6 years. 75 Table of Contents Restricted shares granted under the 2023 Equity Plan generally vest in equal annual installments over a service period of five years beginning on the date of grant. The vesting of the awards accelerates upon death, disability or following a change in control of the Company. The product of the number of shares granted and the grant date closing market price of the Company’s common stock determines the fair value of restricted shares under the 2023 Equity Plan. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period. There was no restricted stock granted during 2025. On December 19, 2024, the Company granted to employees, under the 2023 Equity Plan, 16,700 shares of restricted stock with a total grant-date fair value of $ 189,000 . These restricted stock awards vest in equal installments over a five -year period beginning one year from the date of grant. As of December 31, 2025, the Company has 14,018 shares of restricted stock available for future grants under the 2023 Equity Plan. The following is a summary of the status of the Company's restricted shares as of December 31, 2025 and changes thereto during the periods presented. Restricted Stock Shares Weighted Average Grant Date Fair Value Nonvested balance as of December 31, 2023 178,000 $ 9.36 Granted 16,700 11.30 Vested ( 42,960 ) 9.36 Forfeited — — Nonvested balance as of December 31, 2024 151,740 $ 9.57 Nonvested balance as of December 31, 2024 151,740 $ 9.57 Granted — — Vested ( 36,600 ) 9.54 Forfeited ( 2,000 ) 9.36 Nonvested balance as of December 31, 2025 113,140 $ 9.58 Expected future expense related to the non-vested restricted shares outstanding as of period end is $ 900,000 over a weighted average period of 2.7 years. The following table presents the stock based compensation expense for the periods presented. Year Ended December 31, 2025 2024 (Dollars in thousands) Stock option expense $ 332 $ 373 Restricted stock expense 346 394 Total stock based compensation expense $ 678 $ 767 For the year ended December 31, 2025, the total deferred tax benefit related to the $ 677,000 of stock based compensation expense was $ 138,000 . Due to the passing of Director Bond, Jr., 18,400 stock options and 7,360 restricted stock awards vested during the fourth quarter of the year ended December 31, 2024. The early vesting of the stock options and restricted stock awards resulted in an additional expense of $ 57,000 and $ 60,000 , respectively, during the year ended December 31, 2024. 76 Table of Contents Note 12: Commitments and Contingencies In the ordinary course of business, the Bank has various commitments and contingent liabilities that are not reflected in the accompanying financial statements. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the financial position of the Bank. Financial Instruments The Bank does not engage in the use of interest rate swaps or futures, forwards or option contracts. At December 31, 2025 and 2024 , unused lines of credit and outstanding commitments to originate loans were as follows: 2025 2024 (Dollars in thousands) Unused line of credit $ 7,220 $ 8,950 Commitments to originate loans 1,586 1,109 Total commitments $ 8,806 $ 10,059 Concentrations of Credit Risk The Bank generally originates single-family residential loans within its primary lending area which is Lake County, Illinois and the surrounding 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. 77 Table of Contents Note 13: Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities An asset’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2025 and 2024 . Available-for-Sale Securities (Recurring) Where quoted market prices are available in an active market, securities such as U.S. Treasuries, would be classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities would be classified within Level 3 of the hierarchy. Individually Evaluated (Nonrecurring) Individually evaluated loans are recorded at fair value on a nonrecurring basis. The fair value of loans is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional credit losses and adjusted accordingly. The following table presents the Bank’s assets that are measured at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December 31, 2025 and 2024 : Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 (Dollars in thousands) December 31, 2025 Securities Available-for-sale U.S. Treasuries $ 7,085 $ 7,085 $ — $ — U.S. government agency obligations 8,534 — 8,534 — Municipal obligations 12,146 — 12,146 — Mortgage-backed residential obligations 23,769 — 23,769 — Collateralized mortgage obligations 27,185 — 27,185 — Total $ 78,719 $ 7,085 $ 71,634 $ — December 31, 2024 Securities Available-for-sale U.S. government agency obligations $ 8,657 $ — $ 8,657 $ — Municipal obligations 11,736 — 11,736 — Mortgage-backed residential obligations 25,915 — 25,915 — Collateralized mortgage obligations 24,941 — 24,941 — Total $ 71,249 $ — $ 71,249 $ — 78 Table of Contents The Bank may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with accounting principles generally accepted in the United States of America. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. There were no assets measured at fair value on a nonrecurring basis as of December 31, 2025 and 2024. Note 14: Fair Value of Financial Instruments Financial instruments are classified within the fair value hierarchy using the methodologies described in Note 13 – Fair Value Measurements. Fair value estimates, methods and assumptions for the Company’s financial instruments that are not recorded at fair value on a recurring or non-recurring basis are set forth below. Loans, net: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories. Estimated fair value of loans is determined using a discounted cash flow model that employs an exit discount rate that reflects the current market pricing for loans with similar characteristics and remaining maturity, adjusted for estimated credit losses inherent in the portfolio at the balance sheet date. Interest-bearing deposits: The fair value of interest-bearing deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using rates for currently offered deposits of similar remaining maturities. Other borrowings: The fair value of borrowings is based on securities dealers’ estimated fair values, when available, or estimated using discounted cash flow analysis. The discount rates used approximate the rates offered for similar borrowings of similar remaining terms. Certain financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The carrying value of these financial instruments assumes to approximate the fair value of these instruments. These instruments include cash and cash equivalents, non-interest-bearing deposit accounts, time deposits with other financial institutions, FHLB stock, escrow deposits and accrued interest receivable and payable. The carrying amounts and estimated fair values by fair value hierarchy of certain financial instruments are as follows: Carrying Estimated Amount Level 1 Level 2 Level 3 Fair Value (Dollars in thousands) December 31, 2025 Financial assets: Loans, net $ 128,635 $ — $ — $ 122,290 $ 122,290 Loans held for sale 4,459 — 4,548 — 4,548 Financial liabilities: Interest-bearing deposits 168,166 — 168,431 — 168,431 December 31, 2024 Financial assets: Loans, net $ 130,356 $ — $ — $ 124,084 $ 124,084 Loans held for sale 1,218 — 1,242 — 1,242 Financial liabilities: Interest-bearing deposits 178,260 — 178,872 — 178,872 Other borrowings 5,000 — 4,999 — 4,999 79 Table of Contents Note 15: 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 during the twelve months ended December 31, 2025 and 2024, and therefore the weighted-average common shares outstanding used to calculate both basic and diluted EPS are the same. Shares held by the Employee Stock Ownership Plan ("ESOP") that have not been allocated to employees in accordance with the terms of the ESOP, referred to as "unallocated ESOP shares", are not deemed outstanding for purposes of the EPS calculation. Year Ended December 31, 2025 2024 Net loss applicable to common shares $ ( 386 ) $ ( 789 ) Average number of common shares outstanding 5,244,728 5,289,932 Less: Average unallocated ESOP shares 357,220 378,471 Average number of common shares outstanding used to calculate basic earnings per common share 4,887,508 4,911,461 Loss per common share basic and diluted $ ( 0.08 ) $ ( 0.16 ) All unallocated ESOP shares have been excluded from the calculation of basic and diluted EPS. Due to the net loss position, all outstanding share option awards are anti-dilutive and excluded from the computation of diluted earnings per share. 80 Table of Contents Note 16: Condensed Parent Only Financial Information The Parent Company’s condensed balance sheet and related condensed statements of operations and cash flows are as follows. NSTS BANCORP, INC. Condensed Balance Sheets Year ended December 31, 2025 2024 (Dollars in thousands) Assets: Cash $ 15,860 $ 16,855 Investment in subsidiary 60,606 56,028 Loan to ESOP 3,627 3,800 Other assets 15 15 Total assets $ 80,108 $ 76,698 Liabilities: Accrued expense and other liabilities $ 134 $ 208 Total liabilities 134 208 Stockholders' equity Common Stock 56 56 Treasury Stock ( 3,087 ) ( 3,240 ) Additional paid-in capital 52,348 51,684 Retained earnings 39,880 40,266 Unallocated common shares held by ESOP ( 3,462 ) ( 3,670 ) Accumulated other comprehensive loss, net ( 5,761 ) ( 8,606 ) Total stockholders' equity 79,974 76,490 Total liabilities and stockholders’ equity $ 80,108 $ 76,698 NSTS BANCORP, INC. Condensed Statements of Operations Year ended December 31, 2025 2024 (Dollars in thousands) Income: Interest income $ 124 $ 129 Total income 124 129 Expense: Noninterest expense $ 1,319 $ 1,313 Total expense 1,319 1,313 Losses before income tax expense and equity in undistributed earnings of subsidiary $ ( 1,195 ) $ ( 1,184 ) Income tax expense — — Losses before equity in undistributed earnings of subsidiary $ ( 1,195 ) $ ( 1,184 ) Equity in undistributed earnings of subsidiary 809 395 Net loss $ ( 386 ) $ ( 789 ) 81 Table of Contents NSTS BANCORP, INC. Condensed Statements of Cash Flows Year ended December 31, 2025 2024 (Dollars in thousands) Cash flows from operating activities: Net loss $ ( 386 ) $ ( 789 ) Adjustments to reconcile net loss to net cash used in operating activities: Net change in other assets — ( 8 ) Net change in accrued expenses and other liabilities ( 74 ) 104 Equity in undistributed earnings of subsidiary ( 809 ) ( 395 ) Net cash used in operating activities ( 1,269 ) ( 1,088 ) Cash flows from investing activities: Principal payments on loan to ESOP $ 173 $ 173 Net cash provided by investing activities 173 173 Cash flows from financing activities: Purchase of treasury shares — ( 970 ) Purchase of treasury stock from taxes withheld on stock awards ( 114 ) ( 109 ) Proceeds from exercise of stock options 215 215 Net cash provided by (used in) financing activities 101 ( 864 ) Net change in cash ( 995 ) ( 1,779 ) Cash at beginning of period 16,855 18,634 Cash at end of period $ 15,860 $ 16,855 82 Table of Contents Note 17: Changes in Accounting Principles 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. The Company adopted this standard effective for its fiscal year ended December 31, 2025, and did not have a material impact on the consolidated financial statements. In March 2024, the FASB issued ASU No. 2024 - 01, “Compensation—Stock Compensation (Topic 718 ): Scope Applications of Profits Interests and Similar Awards” (ASU 2024 - 01 ). ASU 2024 - 01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S. GAAP. ASU 2024 - 01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted. Upon adoption, ASU 2024 - 01 is not expected to have an impact on the Company’s consolidated balance sheets or consolidated statements of operations. In November 2024, the FASB issued ASU No. 2024 - 03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 - 40 ).”The pronouncement requires public entities to disclose additional information about specific expense categories in the notes to the financial statements. The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is assessing ASU 2024 - 03 and its impact on its Consolidated Financial Statements and disclosures, and does not expect the amendments to have a material impact to the annual financial statements of the Company. Note 18: Subsequent Events Management evaluated subsequent events through March 27, 2026 , the date the financial statements were issued. Management does not believe there were any material subsequent events during this period that would have required further recognition or disclosure in the consolidated financial statements included in this report. 83 Table of Contents SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NSTS BANCORP, INC. Dated: March 27, 2026 By: /s/ Stephen G. Lear Stephen G. Lear President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints each of Stephen G. Lear and Carissa H. Schoolcraft, with full power to act without the other, his or her trust and lawful attorney-in-fact and agency, with full and several powers of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully as to all intents and purposes as each of the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signatures Title Date /s/ Stephen G. Lear Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) March 27, 2026 Stephen G. Lear /s/ Carissa H. Schoolcraft Chief Financial Officer (Principal Financial and Accounting Officer) March 27, 2026 Carissa H. Schoolcraft /s/ Apolonio Arenas Director March 27, 2026 Apolonio Arenas /s/ Emily E. Ansani Director March 27, 2026 Emily E. Ansani /s/ Thomas M. Ivantic Director March 27, 2026 Thomas M. Ivantic /s/ Thomas J. Kneesel Director March 27, 2026 Thomas J. Kneesel /s/ Rodney J. True Director March 27, 2026 Rodney J. True /s/ John S. Pucin Director March 27, 2026 John S. Pucin 84