NSTS Bancorp files proxy for $14.28/share cash merger with Brookfield Bancshares

What happened

NSTS Bancorp, Inc. (Nasdaq: NSTS), the Waukegan, Illinois-based holding company for North Shore Trust and Savings, filed a definitive proxy statement (Form DEFM14A) on August 31, 2026, for a special stockholders' meeting scheduled for September 29, 2026. The meeting will be held at the bank's home office at 700 S. Lewis Avenue, Waukegan.

At the meeting, stockholders will vote on a proposal to approve an Agreement and Plan of Merger dated May 12, 2026, under which BRKD Merger Sub Inc., a wholly owned subsidiary of Brookfield Bancshares, Inc., will merge with and into NSTS Bancorp, and then the combined company will merge into Brookfield Bancshares. North Shore Trust and Savings will become a wholly owned subsidiary of Brookfield Bancshares.

Under the deal, each share of NSTS Bancorp common stock will be converted into the right to receive about $14.28 in cash, subject to a possible downward adjustment. The merger consideration is calculated based on $73.662 million minus option payments, divided by the number of shares outstanding, currently expected to yield $14.28 per share.

The NSTS Bancorp board unanimously recommends that stockholders vote 'FOR' the merger and the related adjournment proposal. Directors and executive officers, who collectively own about 5.2% of outstanding shares, have entered into voting agreements to vote in favor.

The company's stock closed at $14.05 on August 31, up $0.03 from the previous close of $14.02.

Completion of the merger requires the affirmative vote of holders of a majority of outstanding shares entitled to vote at the meeting, plus approval from bank regulatory authorities. A failure to vote, abstention, or broker non-vote counts as a vote against the merger.

The companies

NSTS Bancorp, Inc. is a savings and loan holding company and the parent of North Shore Trust and Savings, a federal savings association that has operated since 1921. The bank has three full-service offices in Waukegan and Lindenhurst, Illinois. As of June 30, 2026, the company reported total assets of $269.9 million, total loans of $126.5 million, total deposits of $184.1 million, and stockholders' equity of $80.1 million.

Brookfield Bancshares, Inc. is a bank holding company for First National Bank of Brookfield, a national banking association founded in 1962 and based in Brookfield, Illinois. As of June 30, 2026, Brookfield reported total assets of $420.2 million, total loans of $389.9 million, total deposits of $334.6 million, and stockholders' equity of $50.2 million. BRKD Merger Sub was formed solely to facilitate the merger.

What this means

A Form DEFM14A is a definitive proxy statement filed with the SEC when a company asks its shareholders to vote on a merger or acquisition. The '14A' refers to Section 14(a) of the Securities Exchange Act of 1934, which requires companies to provide shareholders with detailed information before a vote on such matters. This filing is the formal document that shareholders receive to decide how to vote.

The proposed transaction is a cash merger, not a stock-for-stock deal. Each share of NSTS Bancorp common stock will be converted into the right to receive a cash payment of approximately $14.28. That payment is the result of a formula: $73.662 million total merger consideration, minus payments to holders of stock options, divided by the number of shares outstanding at the closing date, rounded down.

The merger is structured as a two-step process: first, Merger Sub, a newly created subsidiary of Brookfield, merges into NSTS Bancorp, making NSTS a subsidiary of Brookfield; then NSTS merges into Brookfield, so Brookfield is the surviving corporation. The bank itself, North Shore Trust and Savings, will become a direct subsidiary of Brookfield.

Approval requires a majority of all outstanding shares entitled to vote — not just shares voted at the meeting. Because the record date is August 14, 2026, there are 5,253,131 shares outstanding. A stockholder who does not vote, abstains, or whose broker does not vote (a 'broker non-vote') effectively votes 'against' because the requirement is based on all outstanding shares.

The merger is also subject to approval from bank regulatory authorities. After stockholder approval and regulatory clearance, the merger is expected to close, at which point NSTS Bancorp's stock would be cashed out and delisted. The company's board has agreed to recommend the deal, and insiders who own about 5.2% of shares have committed to vote for it.

For tax purposes, receiving cash for shares in a merger is generally a taxable transaction for U.S. federal income tax purposes. Shareholders are urged to consult a tax advisor about their individual situation.