SEC Filing Document

Company: Forbright, Inc.
Ticker: 
CIK: 1925062
Filing Type: S-1
Document Type: S-1
Date Filed: 2026-05-15
Accession Number: 0001628280-26-035713
Exchange: 
SIC Code: 6022
SIC Description: State Commercial Banks
URL: https://www.sec.gov/Archives/edgar/data/1925062/000162828026035713/forbright-sx1publicflip.htm

Chunk 45 of 124
Word Count: 1488
Character Count: 8896

Document Content:

28.6 % Commercial and Industrial 25,535 48.4 % 22,553 48.1 % 26,022 49.1 % 19,380 45.8 % Consumer 7,693 14.6 % 10,496 22.4 % 8,324 15.7 % 10,836 25.6 % Total ACL - Loans $ 52,794 100.0 % $ 46,868 100.0 % $ 52,986 100.0 % $ 42,294 100.0 % The total ACL - Loans disclosed in the table above is available to absorb losses from any loan category. We believe that the ACL - Loans as of March 31, 2026 and December 31, 2025, is adequate to cover estimated losses in the loan portfolio as of such date. There can be no assurance, however, that our loan portfolio will not sustain losses in future periods, which could be substantial in relation to the size of the allowance as of March 31, 2026 or December 31, 2025. Non-performing Assets Non-performing assets consist of non-performing loans, non-performing financing receivables, and OREO.

Assets acquired through, or in lieu of, loan foreclosure are held for sale as OREO and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to OREO is charged to the ACL - Loans. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less estimated costs to sell. Costs of improvements are capitalized, whereas costs related to holding OREO and subsequent write-downs to the value are expensed. Any gains and losses realized at the time of disposal are reflected in income.

Non-performing assets consisted of the following as of March 31, 2026, December 31, 2025, and December 31, 2024:

March 31, December 31,

(dollars in thousands) 2026 2025 2024
Non-accrual loans:

Commercial Real Estate $	66,804 $	60,360 $	44,694
Commercial and Industrial 15,984 11,798 16,439
Consumer 1,670 1,857 1,122
Total non-accrual loans 84,458 74,015 62,255
Non-performing financing receivables — — —
Other real estate owned 7,109 8,729 25,476
Total non-performing assets $	91,567 $	82,744 $	87,731
Total non-accrual loans as a percentage of total loans 1.46	% 1.32	% 1.45	%
Total non-performing financing receivables as a percentage of total financing receivables —	% —	% —	%
Total non-performing assets as a percentage of total assets 1.11	% 1.05	% 1.21	%

Total non-performing assets were $91.6 million as of March 31, 2026, an increase of 10.7% compared to $82.7 million as of December 31, 2025. The increase was primarily due to an increase in non-accrual loans. Non-accrual loans increased by $10.4 million, or 14.1%, for March 31, 2026, compared to December 31, 2025, primarily due to one real estate finance and six corporate finance loans placed on non-accrual, offset partially by a payoff of one loan and charge-off of one loan in our corporate finance loan portfolio. OREO assets decreased by $1.6 million, or 18.6%, for March 31, 2026, compared to December 31, 2025, due to write-downs of OREO property fair values.

Total non-performing assets were $82.7 million as of December 31, 2025, a decrease of 5.7% compared to $87.7 million as of December 31, 2024. The decrease was primarily due to sales of OREO, offset partially by an increase in non-accrual loans. Non-accrual loans increased by $11.8 million, or 18.9%, for December 31, 2025, compared to December 31, 2024, primarily due to two real estate finance and five corporate finance loans placed on non-accrual, offset partially by one loan in our healthcare finance loan portfolio being placed back on accrual status and a payoff of one loan in our real estate finance loan portfolio. OREO assets decreased by $16.7 million, or 65.7%, for December 31, 2025, compared to December 31, 2024, primarily due to sales of three existing OREO assets, offset slightly by the addition of one new OREO asset.

During the three months ended March 31, 2026, there were no transfers or sales of OREO. As of March 31, 2026, there remained three OREO properties, with an aggregate value of $7.1 million.

During the year ended December 31, 2025, we transferred one real estate finance loan to OREO, with a value at the time of transfer of $1.7 million. Also during 2025, we sold three OREO properties with a carrying value of $18.7 million for proceeds of $19.1 million, resulting in a gain of $0.4 million, which was recognized in other non-interest income. As of December 31, 2025, there remained three OREO properties, with an aggregate value of $8.7 million.

During 2024, we transferred five real estate finance loans held for investment at amortized cost to OREO assets. There were no sales of OREO during 2024. As of December 31, 2024, there were five OREO properties with an aggregate value of $25.5 million.

OREO is recognized in Other assets on the Consolidated Balance Sheets.

Non-performing Loans

A loan for which the accrual of interest has been discontinued is designated as a non-accrual loan. When loans are placed on non-accrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on non-accrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans are once again current with regards to payment status, become well-secured, and management believes full collectability of future principal and interest is probable.

A loan is evaluated for individual impairment when we determine that it no longer exhibits similar risk characteristics inline with the rest of the related loan category. Individually evaluated loans include loans on non-accrual status. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral-dependent loan is charged-off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral-dependent is set up as a specific reserve.

The following tables present non-performing loans held for investment at amortized cost, by loan category, as of the dates indicated:

As of March 31, 2026

(dollars in thousands) Commercial Real Estate Commercial and Industrial Consumer Total
Non-accruing $	66,804 $	4,112 $	1,670 $	72,586
Accruing loans 90 days or more past due — 1,762 — 1,762

Total non-performing loans held for investment at amortized cost $	66,804 $	5,874 $	1,670 $	74,348

Total loans held for investment at amortized cost $	2,679,872 $	2,485,418 $	211,247 $	5,376,537

Non-accrual loans to total loans held for investment at amortized cost ratio 2.49	% 0.17	% 0.79	% 1.35	%
ACL - Loans to non-accrual loans held for investment at amortized cost ratio 29.29	% 620.99	% 460.66	% 72.73	%

Non-performing loans to total loans held for investment at amortized cost ratio 2.49	% 0.24	% 0.79	% 1.38	%

As of December 31, 2025

(dollars in thousands) Commercial Real Estate Commercial and Industrial Consumer Total
Non-accruing $	60,361 $	5,484 $	1,857 $	67,702
Accruing loans 90 days or more past due — — — —

Total non-performing loans held for investment at amortized cost $	60,361 $	5,484 $	1,857 $	67,702

Total loans held for investment at amortized cost $	2,528,996 $	2,475,549 $	217,689 $	5,222,234

Non-accrual loans to total loans held for investment at amortized cost ratio 2.39	% 0.22	% 0.85	% 1.30	%
ACL - Loans to non-accrual loans held for investment at amortized cost ratio 30.88	% 474.51	% 448.25	% 78.26	%

Non-performing loans to total loans held for investment at amortized cost ratio 2.39	% 0.22	% 0.85	% 1.30	%

As of December 31, 2024

(dollars in thousands) Commercial Real Estate Commercial and Industrial Consumer Total
Non-accruing $	44,694 $	12,789 $	1,122 $	58,605
Accruing loans 90 days or more past due — — — —

Total non-performing loans held for investment at amortized cost $	44,694 $	12,789 $	1,122 $	58,605

Total loans held for investment at amortized cost $	1,730,883 $	1,986,457 $	246,633 $	3,963,973

Non-accrual loans to total loans held for investment at amortized cost ratio 2.58	% 0.64	% 0.45	% 1.48	%
ACL - Loans to non-accrual loans ratio 27.02	% 151.54	% 965.78	% 72.17	%