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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and are presented by maturity in the following table: Months to Maturity (in thousands) 3 or Less Over 3 to 6 Over 6 to 12 Over 12 Total Time deposits greater than $250 thousand $ 109,647 $ 131,318 $ 69,344 $ 4,657 $ 314,966 Deposits received in the ordinary course of business from related parties held as of December 31, 2024, were $7.1 million. See Note 19 – Related Party Transactions for more information. NOTE 10 – BORROWED FUNDS Subordinated Debt In 2016, the Company issued $17.0 million of Fixed Rate Subordinated Notes (“2016 Fixed Rate Notes”). The 2016 Fixed Rate Notes are unsecured, mature on December 30, 2026 and pay interest of 7.00% semi-annually, in arrears. The Company redeemed the 2016 Fixed Rate Notes at par in 2025, resulting in the recognition of a loss on repayment of debt in other non-interest income related to unamortized debt issuance costs.

In 2016, the Company issued $7.0 million of Fixed to Floating Rate Subordinated Notes (“2016 Fixed to Floating Notes”). The 2016 Fixed to Floating Notes are unsecured, mature on December 30, 2026, and paid an initial interest of 6.50% semi-annually, in arrears. Beginning on December 30, 2021, the 2016 Fixed to Floating Notes interest rate reset quarterly to an interest rate per annum equal to the three-month LIBOR plus 469.5 basis points, paid quarterly in arrears. If the three-month LIBOR was less than zero, the three-month LIBOR was deemed to be zero. Due to the cessation of LIBOR on June 30, 2023, the 2016 Fixed to Floating Notes interest rate resets quarterly to an interest rate per annum equal to the three-month Secured Overnight Financing Rate (“SOFR”) plus 495.7 basis points, paid quarterly in arrears. If the three-month SOFR is less than zero, the three-month SOFR shall be deemed to be zero. The SOFR-based interest rate became effective on October 1, 2023. The Company redeemed the 2016 Fixed to Floating Notes at par in 2025, resulting in the recognition of a loss on repayment of debt in other non-interest income related to unamortized debt issuance costs.

In 2019, the Company issued $25.0 million of Fixed to Floating Rate Subordinated Notes (“2019 Notes”). The 2019 Notes are unsecured, mature on December 1, 2029, and paid an initial interest of 5.75% semi-annually, in arrears. Beginning on December 1, 2024, the 2019 Notes interest rate resets quarterly to an interest rate per annum equal to the three-month SOFR plus 439 basis points, paid quarterly in arrears. If the three-month SOFR is less than zero, the three-month SOFR shall be deemed to be zero. The Company may redeem the 2019 Notes at par.

On December 22, 2021, the Company issued $125.0 million of Fixed to Floating Rate Subordinated Notes (“2021 Notes”). The 2021 Notes are unsecured, mature on January 1, 2032 and pay an initial interest of 4.00% semi-annually through January 1, 2027, in arrears. Beginning on January 1, 2027, through the earlier of maturity date or the early redemption date, the interest rate will adjust quarterly equal to the three-month term SOFR plus 289 basis points, paid quarterly in arrears. The 2021 Notes are non-callable for the first five years; the Company has the option to redeem the 2021 Notes at par value, after five years from the date of issuance. The 2021 Notes are classified as Green Bonds in alignment with the International Capital Markets Association’s Green Bond Principles (2021).

The Company also has $2.8 million of other subordinated debt that has a 30-year term (matures on April 7, 2033), has no principal amortization and is guaranteed by the Company. As of December 31, 2024, the other subordinated debt paid interest at the rate of SOFR plus 3.3%, which resets on a quarterly basis.

The Company’s subordinated debt requires it to comply with specific covenants related to capitalization adequacy, regulatory enforcement actions, nonperforming asset metrics, changes in key executive positions, and material changes in ownership. Additionally, in the event of default the Company’s subordinated debt contains certain restrictions and limitations on dividend payments and the Company’s ability to repurchase its common stock. The Company was in compliance with all relevant covenants as of December 31, 2024.

The following table provides information on subordinated debt as of December 31, 2024:

(dollars in thousands) December 31, 2024

2016 Fixed Rate Notes, due in 2026, 7.00% $	17,000

2016 Fixed to Floating Notes, due in 2026, 9.56% 7,000

2019 Notes, due in 2029, 8.89% 25,000

2021 Notes, due in 2032, 4.00% 125,000

Other subordinated debt, due in 2033, 8.22% 3,000

Less: debt issuance costs and discounts (2,474)
Total subordinated debt $	174,526

Other Borrowed Funds

As of December 31, 2024, the Company had a credit line with the FHLB (“FHLB Credit Line”) with a maximum borrowing capacity of $920.4 million, with $700.0 million of borrowings outstanding and a remaining borrowing capacity of $220.4 million. As of December 31, 2024, borrowings bore interest at a floating rate of 4.44%. In order to borrow under the FHLB Credit Line, the Company must secure the borrowings with qualifying assets. Under the terms of the FHLB Credit Line, the Company is required to maintain sufficient collateral to secure these borrowings. As of December 31, 2024, the Company pledged eligible U.S. Treasury and government agency investment securities with a par value of $950.0 million, eligible 1-4 family first mortgages with a book value of $6.4 million, and eligible home equity loans with a book value of $3.6 million to secure borrowings under the FHLB Credit Line. The total collateral value assigned by the FHLB for these pledged investments and loans was $920.4 million.

As of December 31, 2024, the Company had a credit line with the Federal Reserve Bank (“FRB Credit Line”) with a maximum borrowing capacity of $1.8 billion. As of December 31, 2024, there were no borrowings outstanding under the FRB Credit Line. In order to borrow under the FRB Credit Line, the Company must maintain sufficient loan collateral. As of December 31, 2024, the Company pledged commercial real estate loans with a book value of $837.1 million, commercial loans with a book value of $1.4 billion, construction loans with a book value of $222.4 million and multi-family loans with a book value of $44.3 million to facilitate future transactions. The total collateral value assigned by the Federal Reserve Bank for these pledged loans was $1.8 billion.

The Company maintains Fed Funds facilities with three other financial institutions in the aggregate amount of $90.0 million. As of December 31, 2024, there were no borrowings outstanding under these facilities. The Company is required to periodically borrow on its Fed Funds facilities in order to test its borrowing capabilities and keep the funds available.

The Company had a $20.0 million credit line (“Credit Line”), which matured May 23, 2024, and an interest rate equal to Prime Rate plus 1.00%. There were no borrowings outstanding under the Credit Line. The Credit Line was secured by all assets of the Parent, including the common stock of the Bank.

NOTE 11 – STOCKHOLDERS' EQUITY

The Company’s Articles of Incorporation authorizes 108,200,000 shares of stock, consisting of 51,600,000 shares of Voting Common Stock, par value $0.001 per share (“Voting Common Stock”) and 51,600,000 shares of Non-Voting Common Stock, par value $0.001 per share (“Non-Voting Common Stock” and, together with the Voting Common Stock, “common stock”) 5,000,000 shares of preferred stock, par value $0.001 (“Preferred Stock”).

As of December 31, 2024, the Company had 19,001,365 shares of Voting Common Stock, 21,242,551 shares of Non-Voting Common Stock, and no shares of Preferred Stock issued and outstanding.

Certain shares of common stock issued and outstanding include unvested restricted stock awards granted to employees and directors. These restricted shares are legally issued and carry voting rights equivalent to vested shares of common stock, notwithstanding that such shares are subject to forfeiture until vesting conditions are

satisfied. While these shares are considered legally outstanding and included within common stock outstanding, these shares are excluded from basic earnings per share and will be included within the diluted earnings per share calculation. See Note 14 – Stock-based Compensation and Note 18 – Earnings Per Common Share for more information.

NOTE 12 – ACCUMULATED OTHER COMPREHENSIVE LOSS

The Company’s accumulated other comprehensive loss is comprised of unrealized gains and losses associated with investment securities available for-sale. Gains and losses on investment securities available-for-sale are reclassified to earnings as the gains or losses are realized. Provisions for and recoveries of credit-related losses associated with investment securities available-for-sale are reclassified to and realized in income.

The following table presents the activity in accumulated other comprehensive loss for the year ended December 31, 2024:

(in thousands) Total Tax Effect Net
Investment securities available-for-sale:
Balance as of December 31, 2023 $	(2,463) $	622 $	(1,841)
Unrealized gains, net 2,103 (528) 1,575
Reclassification of net gains on investments available-for-sale to earnings (236) 59 (177)
Balance as of December 31, 2024 $	(596) $	153 $	(443)