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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or % compared with the year ended December 31, 2024, primarily due to . Losses on sales of loans, financing receivables, and investment securities, net $ million, or % compared to the year ended December 31, 2024, primarily due to . Investment advisory fees were $ million for the year ended December 31, 2025, a of $ million, or % compared to the year ended December 31, 2024, driven primarily by . Unrealized gains on loans and financing receivables, net $ million, or % compared to the year ended December 31, 2024, primarily due to . Charge-offs on loans carried at fair value $ million, or % compared to the year ended December 31, 2024, primarily due to . Other non-interest income was $ million for the year ended December 31, 2025, a of $ million, or % compared to the year ended December 31, 2024, driven primarily by .

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 $ $	110,356 $ %
Professional fees 20,809 %
Information technology 22,267 %
FDIC insurance 9,967 %
Occupancy expense 5,034 %
Other non-interest expense 31,557 %
Total non-interest expense $ $	199,990 $ %

For the year ended December 31, 2025, non-interest expense was $ million, a       of $ million or      % compared with the year ended December 31, 2024, primarily due to       .

Compensation and benefits were $ million for the year ended December 31, 2025, a       of $ million compared to $110.4 million for 2024, primarily due to      .

Professional fees were $ million and $20.8 million for the years ended December 31, 2025 and 2024, respectively. The       of $ million or      %, primarily due to      .

Information technology expenses were $ million and $22.3 million for the years ended December 31, 2025 and 2024, respectively. The       of $ million or      %, primarily due to      .

FDIC insurance expenses were $ million and $10.0 million for the years ended December 31, 2025 and 2024, respectively. The       of $ million or      %, primarily due to      .

Occupancy expenses       by $ million or      % for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to      .

Other non-interest expenses, which consist of marketing and advertising expense, loan administration and servicing expenses, referral fees, travel and meals, dues and subscriptions, directors fees, and other miscellaneous expenses, were $ million and $31.6 million for the years ended December 31, 2025 and 2024, respectively. The       of $ million or      %, primarily due to      .

Efficiency Ratio

The efficiency ratio for the year ended December 31, 2025 was      % compared to 79.15% for the year ended December 31, 2024, primarily due to      .

Income Taxes

For the year ended December 31, 2025, income tax expense was $ million, a of $ million compared to $11.0 million for the year ended December 31, 2024, primarily due to      . The effective tax rate for the years ended December 31, 2025 and 2024 was      % and 20.2%, respectively, primarily due to      .

We have recorded gross deferred tax assets primarily related to federal and state net operating loss carryforwards. In accordance with ASC 740 - Income Taxes, we assess the realizability of these deferred tax assets each reporting period by evaluating all available positive and negative evidence to determine whether it is more likely than not that some or all of the deferred tax assets will be realized. We consider our strong earnings history, three-year cumulative income position as of December 31, 2025, and established loan portfolio, expected to generate sufficient taxable income over the next five years, to be positive evidence. We consider our limited net operating loss carry-forward period in some states to be negative evidence.

Our realizability analysis relies on several critical assumptions and management judgments:

•Future Taxable Income Projections: Realizability is based on using a weighted forecast based on our historical results and near-term outlook.

•Federal Utilization Limits: We assume that federal net operating losses generated after 2017 are subject to an 80% limitation against annual taxable income, as required by current tax law.

•No Ownership Change: Our projections assume no "ownership change" as defined by Section 382 of the Code occurs with respect to the Company, which would significantly limit the annual utilization of our net operating loss carryforwards.

Based on this weighted evidence, management concluded that it is more likely than not that the net operating loss carryforwards, net of valuation allowances, recorded as of December 31, 2025 will be realized. As of December 31, 2025, we maintain a valuation allowance only for the portion of state net operating loss carryforwards likely to expire unused due to shorter carryforward periods. We will continue to monitor these assumptions going forward; any significant decline in actual results versus our projections may require an increase to the valuation allowance.

The amount of net operating loss carryforwards recognized as of December 31, 2025 related to our most recent acquisition remains subject to change upon completion of acquisition accounting, which is expected to occur during the second quarter of 2026 when the final tax return of the acquired entity is completed.

Financial Condition

Loan Portfolio

We manage our exposure to credit losses by evaluating credit risk in the following specific portfolio categories, which are levels at which we develop and document a systematic methodology to determine the ACL. We do not have a significant concentration of loan balances to any one borrower. Descriptions of the loan categories are:

•Commercial Real Estate - Commercial real estate loans are primarily secured by various types of commercial real estate including healthcare facilities, office, retail, warehouse, industrial, multi-family properties, and other commercial real estate properties and are made to owners of such properties. The category also includes loans for the construction of those property types. Within this category, loans are further bifurcated between loans secured by owner-occupied properties and investment (non-owner-occupied) properties. The repayment of loans secured by owner-occupied properties is dependent on cash flow from the successful operation of the business which owns the property. The repayment of loans secured by investment properties is dependent upon the operation (net operating income) or sale of the property. Both property types may be subject to adverse conditions in the commercial real estate market or in the general economy.

•Commercial - Within this category, there is further distinction among structured finance loans, health care asset based-loans, and corporate loans (which are typically cash flow loans, including leveraged loans). The market area for these loans is national with geographic diversification. The loan category also includes small business loans purchased through technology enabled lender platforms with forward flow purchase agreements. Of primary concern in commercial lending is the borrower’s creditworthiness and ability to successfully generate cash flow from their business to service the debt. We no longer purchase small business loans through forward flow programs, but we continue to originate other commercial loans.

•Residential Real Estate - These loans are secured by residential real estate and are further bifurcated to isolate first lien mortgages, second lien mortgages, and home equity lines of credit. Residential first lien mortgages are evaluated for adequacy of repayment sources at time of approval based upon measures including credit scores, debt-to-income and collateral values. Home equity lines of credit and loans are typically secured by second mortgages on the borrower’s primary residence and carry a higher level of risk, which is mitigated by prudent loan-to-value requirements. We no longer originate residential real estate loans.

•Consumer - These loans consist primarily of loans made to individuals for personal, family, and household purposes, with the majority of the portfolio comprised of loans purchased through technology enabled lender platforms with forward flow purchase agreements. These loans are unsecured and, therefore, may entail greater risk than certain other types of loans. We sold substantially all of our exposure in this loan category during the year ended December 31, 2024, and did not purchase additional consumer loans through forward flow programs or originate new consumer loans during 2024. Our remaining consumer portfolio represents a de minimis percentage of our total loan portfolio.

•Solar - The loans in this portfolio category are principally comprised of consumer solar loans that were purchased through technology enabled lender platforms with forward flow purchase agreements and commercial solar loans that were purchased on an individual loan basis. We no longer purchase consumer solar loans through forward flow programs, however, we continue to purchase commercial solar loans. We continue to hold previously purchased consumer and commercial solar loans on our balance sheet.

Total loans were $ billion as of December 31, 2025, a       of $ billion or      % compared with $4.3 billion as of December 31, 2024. Loans as of December 31, 2025 and December 31, 2024, included $ million and $316.5 million of loans held for sale, respectively.