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

Chunk 37 of 87
Word Count: 1454
Character Count: 9128

Document Content:

% 0.65 % 0.50 % 6.35 % 0.35 % 1.48 % Total non-performing loans were $ million as of December 31, 2025, a of % compared to $58.6 million as of December 31, 2024. The was primarily driven by . Non-accruing loans by % for December 31, 2025, compared to December 31, 2024, primarily due to . Modifications to Borrowers Experiencing Financial Difficulty The following tables present by class and by type of modification, the recorded investment and financial effect of modification as of December 31, 2025 and 2024, in our loans that were both modified and experiencing financial difficulty during the years ended December 31, 2025 and 2024: December 31, 2025 (dollars in thousands) Term Extension Total Modification to Loan Class Ratio Weighted-Average Term Extension Commercial Real Estate $ $ % months Commercial % months Residential Real Estate % months Consumer % months Solar % months Total $ $

December 31, 2024
(dollars in thousands) Term Extension Total Modification to Loan Class Ratio Weighted-Average Term Extension
Commercial $	1,971 $	1,971 0.1	% 19.2 months
Total $	1,971 $	1,971

As of December 31, 2025 and 2024, there were no unfunded loan commitments on modifications for borrowers experiencing financial difficulty.

Asset Quality Trends

Management monitors trends in delinquencies, nonperforming assets, and criticized loans to identify areas of potential credit deterioration or improvement. While overall credit quality remains consistent with management’s expectations, certain loan segments may be more sensitive to changes in interest rates, borrower cash flows, or economic conditions. Management continues to closely monitor these segments and adjust credit oversight and risk management practices as appropriate.

Asset quality metrics during the period reflect the performance of our loan portfolio and broader economic conditions. We experienced a change in asset quality metrics during 2025 driven by      .

Credit Quality

We use several credit quality indicators to manage credit risk in an ongoing manner. The risk rating system is central to the overall credit risk management discipline and the important first step in effectively monitoring the credit quality of the portfolio. Credit risk ratings are applied individually to those classes of assets that have significant or unique credit characteristics that benefit from a case-by-case evaluation. Groups of assets that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically assets to individuals in the classes which comprise the consumer and solar portfolio categories.

During 2025 credit metric trends       primarily due to changes in           .

The following are the definitions of our credit quality indicators:

•Acceptable Risk (or better) - Assets in all classes that comprise the commercial and consumer portfolio categories that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the asset agreement. Management believes that there is a low likelihood of loss related to those assets that are considered Acceptable Risk or better.

•Higher Risk - Assets in this category may demonstrate weaker credit fundamentals with an above-average chance of resulting in a default combined with a lower risk of loss to create an overall risk, profile which requires appropriate monitoring but do not present potential weaknesses or a warrant a lower rating.

•Special Mention - Assets in this category exhibit potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may, at some future date, result in deterioration of the repayment prospects for the asset. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. While potentially weak, the asset is currently marginally acceptable, and no loss of principal or interest is envisioned.

•Substandard - A substandard asset is inadequately protected by the current sound worth and paying capacity of the borrower or the collateral pledged, if any. Assets classified in this category must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Loss potential, which exists in the aggregate amount of Substandard assets, does not have to exist in individual assets classified substandard.

•Doubtful - Assets in this category have all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

We periodically review and, if necessary, update the credit quality indicator assigned to each of the loans on a case-by-case basis.

The following tables summarize our held for investment loan portfolio by credit quality indicator as of December 31, 2025 and 2024:

As of December 31, 2025
(in thousands) Acceptable Risk Higher Risk Special Mention Substandard Doubtful Total
Commercial real estate $ $ $ $ $ $
Commercial
Residential real estate
Consumer
Solar
Total loans $ $ $ $ $ $

As of December 31, 2024
(in thousands) Acceptable Risk Higher Risk Special Mention Substandard Doubtful Total
Commercial real estate $	1,128,017 $	411,542 $	103,162 $	51,854 $	— $	1,694,575
Commercial 1,801,279 109,226 2,326 63,147 2,152 1,978,130
Residential real estate 63,208 7,477 — 352 — 71,037
Consumer 89 29 — 8 — 126
Solar 219,343 — — 762 — 220,105
Total loans $	3,211,936 $	528,274 $	105,488 $	116,123 $	2,152 $	3,963,973

The change in allocation between credit quality indicators in our loan portfolio as of December 31, 2025, compared to December 31, 2024, was primarily driven by           .

A loan is considered delinquent when principal or interest payments are 30 days or more past due. Delinquent loans may remain on accrual status between 30 days and 90 days past due. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. See Note 5, “Credit Quality,” to our consolidated financial statements and the notes thereto included elsewhere in this prospectus for more information on our past due loan aging schedule.

Investment Securities

We use our investment securities portfolio to manage interest rate risk and as a source of income and liquidity for cash requirements. As of December 31, 2025, the carrying amount of investment securities totaled $ billion, a of $  million or      % compared with $1.5 billion as of December 31, 2024. As of December 31, 2025, securities represented      % of total assets compared to 21.0% of total assets as of December 31, 2024.

At the date of purchase, we are required to classify investment securities into one of two categories: held-to-maturity or available-for-sale. We primarily acquire investment securities as available-for-sale, however, we may elect certain investment securities that are acquired as held-to-maturity based on our strategy given the particular investment security acquired and current market conditions and expectation.

The following table summarizes the amortized cost and their weighted average yields as of December 31, 2025 by contractual maturities. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.

December 31, 2025
Available-for-sale Held-to-maturity

(dollars in thousands) Amortized Cost Yield Amortized Cost Yield
U.S. government agencies:
One year or less $ % $ %
One to five years % %
Five to ten years % %
After ten years % %
Mortgage-backed and asset-backed:
One year or less $ % $	— %
One to five years % %
Five to ten years % %
After ten years % %
Municipal bonds:
One year or less $ % $	— %
One to five years % %
Five to ten years % %
After ten years % %
Corporate Bonds:
One year or less $ % $	— %
One to five years % %
Five to ten years % %
After ten years % %
CPACE:
One year or less $ % $	— %
One to five years % %
Five to ten years % %
After ten years % %
Total investment securities $ % $	— %

The average yield was      % and      % on our available-for-sale and held-to-maturity investment securities as of December 31, 2025. The majority of our portfolio will mature within      .

The following table summarizes the carrying value by classification of securities as of the dates shown:

As of December 31,
2025 2024 Change