NSTS Bancorp, Inc. Liquidation Value

NSTS Bancorp, Inc. (NSTS) is a federally chartered savings institution holding company with total assets of $270.3 million at March 31, 2026, up $3.7 million from $266.6 million at December 31, 2025. Under a liquidation lens, the recovery posture is positive but thin relative to book equity, driven by the asset composition and the subsequent announcement of a definitive merger agreement.

Asset composition as of March 31, 2026: cash and equivalents $43.4 million (100% recovery), securities available for sale $76.7 million carrying value with an embedded unrealized loss of $8.3 million (9.8% of book value), net loans $127.6 million predominantly single-family residential collateral, loans held for sale $1.8 million, FHLB stock $0.6 million, and BOLI plus other assets comprising the remainder. Applying standard liquidation haircuts — cash at par, AFS securities at $68.4 million (market less unrealized loss, ~89% of book), net loans at approximately 85-90% of carrying given residential collateral quality (ACL ratio 0.85%, nonperforming loans only $283K or 0.22% of portfolio, zero net charge-offs) — produces estimated gross liquidation asset value in the range of $245-$255 million. Total deposits of $183.9 million and escrow deposits of $2.7 million stay at face value as liabilities, leaving net recovery to equity of roughly $59-$69 million against book equity of $80.0 million. The $8.3 million AFS unrealized loss position is the primary drag on liquidation value relative to book, as it is already reflected in AOCI but would crystallize on wind-up.

Material subsequent event: On May 12, 2026, the Company entered into an Agreement and Plan of Merger with Brookfield Bancshares, Inc. at $14.28 per share in cash, implying total merger consideration of $73.7 million. This figure exceeds the estimated liquidation value range and reflects a going-concern premium. The merger is expected to close Q4 2026, subject to stockholder and regulatory approval.

Change from prior filing (10-K as of December 31, 2025): $5.0 million FHLB advance outstanding at December 31, 2024 had already been retired by December 31, 2025, eliminating that senior obligation. The AFS unrealized loss widened $279K during Q1 2026, incrementally reducing liquidation recovery. Cash increased $9.4 million, improving the highest-quality recovery asset. No XBRL tags were emitted by this filer in the current filing period per TAG_CONTEXT.