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Note 11 - Stock Based Compensation | 12 Months Ended
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Dec. 31, 2025
Notes to Financial Statements |
Equity [Text Block] | 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 |
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. 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.

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