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

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assets were $8.2 billion and for the first quarter 2026 net income was $11.6 million. During the periods presented, our business strategy focused on balance sheet growth, managing credit risk, expansion of lending activities on a national basis, diversifying our funding sources, and maintaining capital and liquidity levels that support these objectives. Our discussion and analysis of results of operations and financial condition is intended to provide the reader with information that will assist in the understanding of our business, results of operations, financial condition, changes in key items in our financial statements from period to period, and the primary factors that we use to evaluate our business. Primary Factors Used to Evaluate Results of Operations The most significant performance indicators we use to evaluate our results of operations are return on average assets, return on average equity, net interest margin and efficiency ratio. These performance indicators rely on net

income, net interest income, non-interest income, and non-interest expense, average assets, and average equity as primary inputs. We analyze these indicators against our historical performance, our budget targets and banking industry financial condition and performance levels.

Return on Average Assets

Return on average assets measures our efficiency in profiting from the assets on our balance sheet over a period of time. It is calculated by dividing the net income for the period by the average assets over the same period. We monitor return on average assets to assess the degree to which our assets produce meaningful earnings.

Return on Average Equity

Return on average equity measures our efficiency in profiting from the equity on our balance sheet over a period of time. It is calculated by dividing the net income for the period by average equity over the same period. Similar to return on average assets, we monitor return on average equity to assess the degree to which our equity produces meaningful earnings.

Return on Average Tangible Common Equity

Return on average tangible common equity measures our efficiency in profiting from the tangible equity on our balance sheet over a period of time. It is calculated by dividing (a) the net income for the period less intangible asset amortization on an after-tax basis, by (b) average tangible common equity over the same period. Similar to return on average assets and average equity, we monitor return on average equity to assess the degree to which our tangible equity produces meaningful earnings.

Net Interest Margin

Net interest margin measures the comparison of interest earned on assets to interest paid on liabilities. Using lower cost deposits and borrowings to generate interest income will improve our interest margin and our net income. The metric is measured by dividing net interest income for a period by average earning assets for the same period. We monitor net interest margin to assess the degree to which yield on our interest-earning assets exceeds the cost of the funding sources we utilize.

Efficiency Ratio

The efficiency ratio measures how efficiently we are using our resources to generate revenue. It is calculated by dividing non-interest expense into the sum of net interest income and non-interest income. As we generate more revenue by incurring the same amount of expense, our efficiency ratio will go down. We monitor the efficiency ratio to assess the level of expenses relative to our income.

Net Interest Income

Net interest income represents our primary source of income and equals the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. We own interest-earning assets including cash, loans, financing receivables, and investment securities. We own interest-bearing liabilities, including interest-bearing deposits, FHLB advances, and our subordinated debt issuances. Our net interest income is monitored and evaluated by comparing yields on interest-earning assets (primarily loans), the costs of interest-bearing liabilities (primarily deposits), the net interest spread, and net interest margin.

Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, and both the amount and mix of interest-earning assets and interest-bearing liabilities we own will have the largest impact on our net interest income.

Similar to net interest margin, tracking net interest income provides insight into our ability to generate more income from our assets than our funding costs.

Non-interest Income

Non-interest income represents other income we earn in the course of business or ancillary to our business. Non-interest income primarily consists of servicing income, investment advisory fees, fee income on loans, gains or losses resulting from loan sales, and other miscellaneous income. Non-interest income is a meaningful metric because it provides us with an indication of our ability to generate revenue through revenue streams outside of interest income, which can provide steady revenue during volatile interest markets.

Servicing income is impacted by the balance of solar and small home improvement loans serviced. Investment advisory fee income is impacted by the balance of loans under management. Fee income on loans is related to fees charged to borrowers associated with managing our loan portfolio. Gains or losses on the sale of loans and fair value marks on loans carried under the fair value option, and loans held-for-sale are driven by both the volume of loan sales during the period, as well as market interest rates and the credit quality of loans sold. Loan program fee income is impacted by the volume of loans brokered by the business. Other miscellaneous income can represent trust administration, net fees on FHA/HUD originations, loan program fees, fees on deposit accounts, gains or losses on sales of other assets, income on the changes in value of bank owned insurance policies, and other non-recurring income.

Non-interest Expense

Non-interest expense primarily consists of compensation and benefits, information technology expense, professional fees, loan administration and servicing, advertising and marketing expense, FDIC premiums for deposit insurance coverage, and other expenses. Monitoring non-interest expense helps management identify the most meaningful costs associated with revenue generation and provides insight into areas where expense management efforts may be focused, if necessary.

Compensation and benefits is our largest component of non-interest expense and includes compensation, bonuses, employee benefits, and employer tax expenses related to our personnel. Information technology expense includes computer and software expenses and depreciation, and other related information technology expense. Professional fees include costs associated with legal, audit, tax, consulting and similar services. Advertising and marketing expense includes expenses for advertisements and marketing the business’s products and services. FDIC premium represents the cost of insuring customer deposits with the FDIC. Other expenses include costs associated with our occupancy expense, referral fees, deposit services, insurance, board compensation, intangible amortization, and other miscellaneous expenses.

Primary Factors Used to Evaluate Our Financial Condition

The most significant factors used to evaluate our financial condition are asset quality metrics, capital ratios, and liquidity measures.

Asset Quality

We monitor the quality of our assets using factors including the level and severity of deterioration in borrower cash flows and other items impacting ability to make loan payments. Assets are assessed and reported as delinquent, classified, criticized, non-performing, non-accrual, or a modified loan with a borrower experiencing financial difficulty. We also monitor credit concentrations by loan type and we may also monitor credit concentrations by industry and/or geography based on the characteristics of the individual loan portfolios. We use metrics such as non-accrual loans to total loans, non-performing assets to total assets, allowance for loan losses to total loans, net charge-offs to total average loans, and allowance for loan loss to non-performing loans to monitor trends in the quality of the loan portfolio. Management monitors asset quality to ensure that risk of loss, primarily in the loan portfolio, is mitigated as much as possible, or to the extent necessary management is aware of any near-term risk.

Capital

We use regulatory capital ratios to monitor the strength of our capital position. As of March 31, 2026 and December 31, 2025, each of the Company and the Bank was a “qualifying community banking organization” as

defined by applicable regulations of the federal banking agencies and elected to measure its regulatory capital adequacy under the CBLR framework. Although under the CBLR framework, neither the Company nor the Bank are required to report regulatory capital ratios other than their respective leverage ratios (defined as the ratio of the organization’s Tier 1 capital to its average total consolidated assets) in applicable regulatory financial filings, we also monitor risk-based capital ratios such as the common equity Tier 1 ratio, Tier 1 capital ratio, and total capital ratio for the Company and the Bank to ensure we are continuing to maintain adequate capital levels to support our business operations. Additionally, we monitor the trends and volumes of problem assets and ACL, the level and quality of earnings, as well as our anticipated growth, for their potential impact on our capital position.

Liquidity