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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cash balances, and a decrease in yields on interest-earning assets. Interest Expense Interest expense for the year ended December 31, 2025, was $253.6 million compared to $271.6 million for the year ended December 31, 2024, a decrease of $18.0 million, or 6.6%, primarily related to a decrease in rates charged on deposit balances and a decrease in time deposit balances, offset by an increase in growth savings balances. Provision for (recovery of) Credit Losses The ACL represents an amount which we believe is adequate to absorb the lifetime expected credit losses that may be sustained on assets carried at amortized cost as of the balance sheet date. The provision for credit losses represents the amount of expense charged to current earnings from an increase in the ACL. Conversely, a recovery of credit loss is recorded to earnings when the ACL is reduced. Our provisions for, or recoveries of, credit losses

arising from within the loan, unfunded loan commitments, investment securities, and financing receivables portfolios were as follows:

For the Years Ended December 31,
(dollars in thousands) 2025 2024 $ Change % Change
Provision for/(recovery of) credit losses:
Provision for credit losses on loans $	23,493 $	1,348 $	22,145 1642.8	%
Recovery of credit losses on investment securities (51) (565) 514 (91.0)	%
Provision for/(recovery of) credit losses on financing receivables 34 (1) 35 N/M
Provision for/(recovery of) credit losses on unfunded commitments 535 (2,470) 3,005 N/M
Total provision for/(recovery of) credit losses $	24,011 $	(1,688) $	25,699 N/M

N/M - not meaningful

The provision for credit losses was $24.0 million for the year ended December 31, 2025, compared to a recovery of credit losses of $1.7 million for the year ended December 31, 2024. The provision for credit losses in 2025 reflects an increase of $10.7 million in the ACL – Loans, primarily due to loan growth and $12.8 million in net charge-offs; $11.2 million from forward flow loans within consumer and commercial and industrial and $1.6 million from corporate finance loans within commercial and industrial. The provision for credit losses in 2024 reflects a decrease of $32.5 million in the ACL – Loans and net charge-offs of $33.8 million; $16.4 million from forward flow loans within consumer and commercial and industrial, $9.7 million from legacy in-market loans primarily within commercial real estate, and $7.7 million from healthcare finance and corporate finance loans within commercial real estate and commercial & industrial. The decrease in the allowance for credit losses in 2024 includes a $9.3 million recovery of credit losses associated with the reclassification of forward flow loan portfolios to held-for-sale as well as other factors, including a reduction in the composition of consumer loans in the loan portfolio, improvement in portfolio credit quality, lower individually-assessed reserves, and an improved economic outlook. The provision for credit losses in 2024 includes $2.5 million of recovery of credit losses on unfunded commitments which was driven by lower loss expectations on unfunded commitments.

See below in “—Financial Condition—ACL—Loans” and “—Financial Condition—ACL—Investment Securities” for additional discussion regarding our ACL.

Non-interest Income

The following table presents non-interest income for the years ended December 31, 2025 and 2024 and the change between periods, by major component:

For the Years Ended December 31,
(dollars in thousands) 2025 2024 $ Change % Change
Investment advisory fees $	16,190 $	19,385 $	(3,195) (16.5)	%
Fee income on loans 8,367 9,031 (664) (7.4)	%
Gains/(losses) on sales of loans and investment securities, net 12,579 (11,563) 24,142 N/M
Unrealized gains on loans and financing receivables, net 6,574 3,012 3,562 118.3	%
Charge-offs on loans carried at fair value — (3,330) 3,330 (100.0)	%
Other non-interest income 27,066 6,578 20,488 311.5	%
Total non-interest income $	70,776 $	23,113 $	47,663 206.2	%

N/M - not meaningful

Total non-interest income was $70.8 million for the year ended December 31, 2025, an increase of $47.7 million, or 206.2%, compared with the year ended December 31, 2024, primarily due to the recognition of net gains on loan sales during 2025, compared to net losses during 2024, as well as an increase in net fees on FHA/HUD originations and solar loan servicing and administration fees related to the solar servicing business acquired during the third quarter of 2025.

Investment advisory fees were $16.2 million for the year ended December 31, 2025, a decrease of $3.2 million, or 16.5%, compared to the year ended December 31, 2024. This decrease is primarily due to advisory loan pay-offs exceeding new distributions to advisory clients during 2024 and 2025, which resulted in a net reduction in total fee-generating assets held by advisory clients. In addition, the advisory fee rates charged on loans distributed in 2025 and 2026 were generally lower than the advisory fee rates charged on loans distributed in earlier years, as the advisory fee amounts scale based on the interest rates of the loans being distributed and there were generally lower interest rates on the loans being distributed in 2025 and 2026.

Fee income on loans was $8.4 million for the year ended December 31, 2025, a decrease of $0.7 million, or 7.4%, compared to the year ended December 31, 2024, primarily due to a reduction in non-recurring income related to the management of portfolio loans.

Gains/(losses) on sales of loans and investment securities, net increased $24.1 million compared to the year ended December 31, 2024, primarily due to $11.7 million related to the recognition of unamortized deferred fees upon the full satisfaction of a loan, that was previously on non-accrual status, in exchange for certain of the borrower’s assets during 2025, and a $9.2 million loss on the sale of forward flow loan portfolios and a $2.4 million loss related to a loan extinguishment in exchange for equity during 2024.

Unrealized gains on loans and financing receivables, net increased $3.6 million, or 118.3%, compared to the year ended December 31, 2024, primarily due to the reversal of unrealized losses associated with loan sales and restructurings.

There were no charge-offs on loans carried at fair value for the year ended December 31, 2025, compared to $3.3 million of charge-offs for the year ended December 31, 2024. The portfolio that incurred the charge-offs during 2024 was subsequently sold.

Other non-interest income was $27.1 million for the year ended December 31, 2025, an increase of $20.5 million, or 311.5%, compared to the year ended December 31, 2024, primarily due to solar loan servicing and administration fees related to the solar servicing business acquired during the third quarter of 2025, net fees earned on FHA/HUD originations, and a loss on OREO during 2024.

Non-interest Expense

The following table presents non-interest expense for years ended December 31, 2025 and 2024 and the change between periods, by major component:

For the Years Ended December 31,
(dollars in thousands) 2025 2024 $ Change % Change
Compensation and benefits $	127,112 $	110,356 $	16,756 15.2	%
Information technology 26,918 22,267 4,651 20.9	%
Professional fees 15,891 20,809 (4,918) (23.6)	%
Loan administration and servicing 8,495 6,153 2,342 38.1	%
Advertising and marketing 6,244 9,913 (3,669) (37.0)	%
FDIC insurance 5,032 9,967 (4,935) (49.5)	%
Other non-interest expense 18,932 20,525 (1,593) (7.8)	%
Total non-interest expense $	208,624 $	199,990 $	8,634 4.3	%

Total non-interest expense was $208.6 million for the year ended December 31, 2025, an increase of $8.6 million, or 4.3%, compared with the year ended December 31, 2024, primarily due to an increase in compensation and benefits and information technology expenses, partially offset by a decrease in professional fees.

Compensation and benefits expenses were $127.1 million for the year ended December 31, 2025, an increase of $16.8 million, or 15.2%, compared to $110.4 million for 2024, primarily due to an increase in the annual incentive bonus and an increase in full-time equivalent employees from 519 to 556.

Information technology expenses were $26.9 million and $22.3 million for the years ended December 31, 2025 and 2024, respectively. The increase of $4.7 million, or 20.9%, was primarily due to software costs associated with banking platforms and an increase in amortization of internally developed software, primarily related to our digital deposit platform, and the addition of software costs related to the solar servicing acquisition.

Professional fees were $15.9 million and $20.8 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million, or 23.6%, was primarily due to higher consulting costs incurred during 2024 related to implementation of the digital deposit platform. The decrease in consulting expense was partially offset by an increase in legal fees during 2025 related to the solar servicing acquisition and subsequent legal fees associated with its related administration, which are largely reimbursed by counterparties to the loans and recognized in other non-interest income.

Loan administration and servicing expenses were $8.5 million and $6.2 million for the years ended December 31, 2025 and 2024, respectively. The increase of $2.3 million, or 38.1%, was due to sub-servicer fees following the solar servicing acquisition.