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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entered into an Advances and Security Agreement with the FHLB of Atlanta (the “Advances and Security Agreement”) , of which we are a member. Under the Advances and Security Agreement, borrowings from the FHLB must be secured with eligible collateral approved by the FHLB. As of December 31, 2025 and 2024, there was $ million and $920.4 million, respectively, of stated potential borrowing capacity available under the Advances and Security Agreement, of which approximately $ million and $700.0 million were outstanding as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had $ million and $960.0 million, respectively, of securities available for collateral under the Advances and Security Agreement. As of December 31, 2025 and 2024, we had an outstanding balance of $ million and $700.0 million, respectively, at a floating interest rate of % and 4.44%, respectively, under the Advances and Security Agreement.

We may also borrow funds through the Federal Reserve Bank’s discount window. These borrowings are secured by qualifying loans and investment securities with a balance of $ million and $2.5 billion as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had approximately $ million and $1.8 billion, respectively, in borrowing capacity available under these arrangement with no outstanding balance as of December 31, 2025 or 2024.

We maintain Fed Funds facilities with three other financial institutions in the aggregate amount of $90.0 million. As of December 31, 2025 and 2024, there were no borrowings outstanding under these facilities. We are required to periodically borrow on the Fed Funds facilities in order to test the borrowing capabilities and keep the funds available.

Liquidity and Capital Resources

Liquidity

Liquidity involves our ability to raise funds to support asset growth or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate the business on an ongoing basis and manage unexpected events. Our largest sources of liquidity include deposits, payments and maturities of outstanding loans, sales of loans, and maturities or sales of available-for-sale securities. We believe these sources will be sufficient to meet our liquidity needs over the next twelve months; however, our long-term liquidity position is dependent on our ability to sustain deposit growth and our ability to continue to source digital deposits as our balance sheet continues to grow. While scheduled loan payments and maturing available-for-sale securities are relatively predictable sources of liquidity, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. We generally hold excess funds as reserve deposits with the Federal Reserve. We use cash generated through online deposits, our largest funding source, to offset the cash utilized in lending and investing activities. Our short-term interest-earning available-for-sale securities are used to provide liquidity for lending and other operational requirements. During the years ended December 31, 2025 and 2024, our liquidity needs have primarily been met through strong deposit growth, and from loan principal paydowns and interest payments received. Management expects deposits to remain a primary source of liquidity, however, future deposit growth may be affected by changes in interest rates, competitive pressures, or shifts in customer preferences, which could increase our reliance on wholesale funding sources in the future.

The following table illustrates, during the years presented, the mix of our funding sources and the average assets in which those funds are invested. Average assets totaled $ billion for 2025 compared to $6.6 billion for 2024.

December 31,
(dollars in thousands) 2025 2024
Sources of funds:
Deposits:
Non-interest-bearing $ 271,796
Interest-bearing 5,392,106

Subordinated debt, net 174,319

Other borrowings 51,656
Other liabilities 68,587
Stockholders’ equity 690,283
Total sources of funds $ $	6,648,747
Uses of funds:

Total loans $ $	4,023,418

ACL (54,975)

Total investment securities 1,405,086

Interest-bearing deposits with banks 1,020,070

Other earning assets 54,861

Other assets 200,287
Total uses of funds $ $	6,648,747
Average non-interest-bearing deposits to average deposits % 4.80	%
Average loans to average deposits % 71.04	%

Our largest source of funds is deposits, and our largest use of funds is loans. We do not expect a change in the source or use of funds in the foreseeable future, other than increasing purchases of investment securities. Our average deposits were $ billion or a      % for the year ended December 31, 2025 compared with the year ended December 31, 2024. Our average loans were $ billion, or a      % for the year ended December 31, 2025 compared with the year ended December 31, 2024. We hold excess funds in cash with the Federal Reserve Bank until the funds are needed to fund loan growth. Our securities portfolio has a weighted average life of years and a modified duration of years as of December 31, 2025.

We have a maximum borrowing capacity of $     million through the Advances and Securities Agreement, with $    million of borrowings outstanding, and a remaining borrowing capacity of $     million. To borrow through the Advances and Securities Agreement, we are required to pledge sufficient qualifying collateral to the FHLB. As of December 31, 2025, we pledged eligible U.S. Treasury and government agency investment securities with a book value of $     million, eligible 1-4 family first mortgages with a book value of $     million, and eligible home equity loans with a book value of $     million to secure borrowings from the FHLB. The total collateral value assigned by the FHLB for these pledged investments and loans was $     million.

We also have a maximum borrowing capacity of $     billion through the Federal Reserve Bank’s discount window, and no borrowings outstanding as of December 31, 2025. To borrow under the Federal Reserve Bank’s discount window, we are required to pledge sufficient collateral consisting of qualifying loans and investment securities to the Federal Reserve Bank. As of December 31, 2025, we pledged commercial real estate loans with a book value of $    million, commercial loans with a book value of $    million, construction loans with a book value of $    million, and multi-family loans with a book value of $    million to facilitate future transactions. The total collateral value assigned by the Federal Reserve Bank for these pledged loans was $    million.

Our Fed Funds facilities with three other financial institutions have $90.0 million borrowing capacity as of December 31, 2025, and there were no borrowings outstanding under these facilities. Borrowing under these facilities are not secured by collateral.

Additionally, we may sell investment securities available-for-sale from our portfolio as a source of liquidity, if necessary. As of December 31, 2025, we had investment securities available-for-sale with a fair value of $    million, and a carrying value of $    million. Of these balances there are investment securities maturing within the next twelve months with a fair value of $    million, and a carrying value of $    million. We purchase investments to provide liquidity when it is needed. As of December 31, 2025 and 2024, a large portion of our portfolio was invested in U.S. Treasury securities.

As of December 31, 2025, we had outstanding $    million in commitments to extend credit and $    million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements. A significant portion of our outstanding commitments could be drawn upon in periods of economic stress, which could require us to obtain additional funding from deposits or wholesale sources.

As of December 31, 2025, we had no identified capital expenditure commitments that we currently expect to have a material impact on liquidity; however, future loan growth, changes in funding costs, or adverse economic conditions could increase our cash requirements.

Off-balance Sheet Arrangements

In the normal course of business, we will enter into various transactions, which, in accordance with GAAP, are not included in our Consolidated Balance Sheet. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.

Commitments associated with letters of credit and commitments to extend credit may expire unused, therefore, the amounts shown do not necessarily reflect the actual future cash funding requirements. A summary of financial instruments with off-balance sheet credit risk as of December 31, 2025 and 2024 are as follows:

(in thousands) December 31, 2025 December 31, 2024
Commercial real estate development and construction $ $	155,701
Residential real estate development and construction 2,380
Lines of credit, primarily business lines 569,143
Standby letters of credit 29,956
Total commitments to extend credit and available lines of credit $ $	757,180