SEC Filing Document

Company: Forbright, Inc.
Ticker: 
CIK: 1925062
Filing Type: DRS
Document Type: DRS
Date Filed: 2026-02-13
Accession Number: 0001628279-26-000183
Exchange: 
SIC Code: 6022
SIC Description: State Commercial Banks
URL: https://www.sec.gov/Archives/edgar/data/1925062/000162827926000183/filename1.htm

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there was $8.3 million of unrecognized compensation cost related to stock options granted under the Plan, and is expected to be recognized over a weighted-average period of 1.1 years. Restricted Stock Awards The Company granted 9,000 restricted stock awards during the year ended December 31, 2024. The vesting terms for restricted stock awards granted range from zero to three years. The following table summarizes the unvested restricted stock awards activity for the year ended December 31, 2024: Shares Weighted-Average Grant-Date Fair Value Balance as of December 31, 2023 31,570 $ 15.61 Granted 9,000 $ 17.74 Vested (14,570) $ 15.84 Balance as of December 31, 2024 26,000 $ 16.22 As of December 31, 2024, there was $175 thousand of unrecognized compensation cost related to unvested restricted stock awards granted under the Plan, which is expected to be recognized over a weighted-average period of 1.2 years. NOTE 15 – EMPLOYEE BENEFIT PLANS

As of December 31, 2024, the Company had The 401(k) Plan, Adopted by Forbright Bank (“401(k) Plan”), a multiple employer plan covering all full-time and part-time employees. Employees become eligible to participate in the 401(k) Plan on the first day of the month that is 30 days after their hire date. Under the 401(k) Plan, a participant may elect to contribute up to 80% of their compensation to the extent the total dollar amount is permitted by law. Under the terms of the 401(k) Plan, the Company will make a matching contribution of 100% up to 4% of employee compensation contributed. Both employee contributions and employer matching contributions vest immediately. During the year ended December 31, 2024, the Company made matching contributions of $2.5 million. The Company may also make discretionary contributions for each participant. The amount of discretionary contribution, if any, is determined on an annual basis by the Company’s Board of Directors. No discretionary contributions were made by the Company during the year ended December 31, 2024.

NOTE 16 – OTHER NON-INTEREST INCOME AND NON-INTEREST EXPENSE

The following table presents selected components of other non-interest income and other non-interest expense for the year ended December 31, 2024:

(in thousands) December 31, 2024
Fee income on loans $	9,031
Program fees 5,968
Other non-interest income 610
Total other non-interest income $	15,609
(in thousands) December 31, 2024
Advertising and marketing $	9,913
Loan administration and servicing 6,153
Referral fees 2,944
Other non-interest expense 12,547
Total other non-interest expense $	31,557

During the year ended December 31, 2024, the Company incurred $2.1 million of audit-related fees, and $542 thousand of other fees for services provided by its principal auditors, Ernst & Young LLP. Fees for services provided by Ernst & Young LLP, are included in Professional fees in the Consolidated Statement of Income.

NOTE 17 – INCOME TAXES

The components of income tax expense for the year ended December 31, 2024, are presented in the following table:

(in thousands) December 31, 2024
Current income tax:
Federal $	4,121
State 2,765
Total current income tax expense 6,886
Deferred income tax:
Federal 3,916
State 199
Total deferred income tax expense/(benefit) 4,115
Total income tax expense $	11,001

The reconciliations of the income tax expense computed using the federal statutory rates and income tax expense recognized for the year ended December 31, 2024, are presented in the following table:

December 31, 2024

(dollars in thousands) Amount Percentage of Pre-Tax Income
Income tax at the federal statutory rate $	11,417 21.0	%
State income tax, net of federal benefit 2,341 4.3	%
Adjustment of provision to tax return (2,090) (3.8)	%
Change in valuation allowance 519 0.9	%
Permanent items 150 0.3	%
Other (1,336) (2.5)	%
Total income tax expense and rate $	11,001 20.2	%

The Company has uncertain income tax positions totaling $1.4 million recorded as of December 31, 2024, recognized in Other liabilities in the Consolidated Balance Sheet.

The components of net deferred tax assets and liabilities as of December 31, 2024, are presented in the following table:

(in thousands) December 31, 2024
Deferred tax assets:
Allowance for credit losses $	11,270
Unrealized losses on investment portfolio 153
Net operating losses and tax credit carryforwards 1,064
Stock compensation 7,534
Loan fair value adjustments 236
Accrued bonuses 6,296
Deferred loan costs and fees 4,746
Other 12,945
Total deferred tax assets 44,244
Valuation allowance (835)
Net deferred tax assets 43,409
Deferred tax liability:
Depreciation and amortization (3,228)
Total deferred tax liabilities (3,228)
Deferred tax asset, net $	40,181

NOTE 18 – EARNINGS PER COMMON SHARE

The following table presents the calculation of basic and diluted earnings per share for the year ended December 31, 2024:

December 31, 2024

(in thousands, except share and per share data) Voting Non-Voting

Basic Earnings Per Common Share:

Net income $	20,458 $	22,908

Weighted-average shares - basic 18,971,357 21,242,551

Basic earnings per common share $	1.08 $	1.08

Diluted Earnings Per Common Share:

Net income $	21,031 $	22,335

Weighted-average shares - basic 18,971,357 21,242,551
Effect of dilutive securities - stock options and restricted stock awards 1,030,448 —

Weighted-average shares - diluted 20,001,805 21,242,551

Diluted earnings per common share $	1.05 $	1.05

The Company has two classes of common stock, Voting and Non-voting, which are participating securities. Earnings are allocated to each class based on their respective participation rights, and basic and diluted earnings per share are presented under the two-class method in accordance with ASC 260. All potentially dilutive shares have voting rights, and net income has been reallocated to reflect the incremental dilutive voting shares. For the year ended December 31, 2024, diluted weighted-average shares outstanding includes 1,030,448 incremental common stock equivalents related to stock options and restricted stock awards as calculated under the treasury-stock method, as the stock options and restricted stock awards are not considered participating securities. For the year ended December 31, 2024, 8,967 shares of common stock equivalents were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. Additionally, 2,464,020 stock options with unresolved substantive contingencies that must be satisfied before shares can be exercised and issued, and therefore

do not represent potential shares of common stock for the period, have been excluded from the weighted-average shares outstanding to calculate basic and diluted earnings per common share. As of December 31, 2024, 26,000 unvested restricted stock award shares with voting rights are included in outstanding shares of common stock on the Consolidated Balance Sheet and Consolidated Statement of Changes in Stockholders’ Equity, but are excluded from the calculation of basic earnings per share.

NOTE 19 – RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has granted loans to and received deposits from related parties, which primarily includes principal officers and directors, and their affiliates. The Company had no loans outstanding to related parties as of December 31, 2024. The aggregate amounts of deposits from related parties as of December 31, 2024, was $7.1 million. For more information on the activity of loans and deposits with related parties see Note 4 – Loans and Note 9 – Deposits, respectively.

The Company has a related party relationship with BancAlliance because certain employees of the Company also hold officer roles with BancAlliance, and a subsidiary of the Company serves as the asset manager of BancAlliance members. The Company sources loans for its own balance sheet and makes those loans available for sale through the BancAlliance program. Loans sold to BancAlliance are immediately sold to members in the program with terms of loan sales, including pricing, dictated by a Master Participation Agreement for the program that applies the same to all members of BancAlliance. BancAlliance is a pass-through participant and does not incur an economic or accounting impact from the program.

Transactions with BancAlliance for the year ended December 31, 2024, and amounts due from BancAlliance as of December 31, 2024, are presented in the following table:

(in thousands) December 31, 2024
Loans sold to BancAlliance $	261,653
Net gains realized on loans sold to BancAlliance $	3,219
Amounts due from BancAlliance related to funding and expense advancements $	161

In the ordinary course of business, the Company incurs expenses from transactions with vendors who are considered related parties. These transactions resulted in a non-material amount of expense for the year ended December 31, 2024.

NOTE 20 – REGULATORY MATTERS

Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about qualifying capital components, risk weighting (where applicable) and other factors.