SEC Filing Document

Company: Forbright, Inc.
Ticker: 
CIK: 1925062
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2026-04-08
Accession Number: 0001628279-26-000459
Exchange: 
SIC Code: 6022
SIC Description: State Commercial Banks
URL: https://www.sec.gov/Archives/edgar/data/1925062/000162827926000459/filename1.htm

Chunk 39 of 102
Word Count: 1459
Character Count: 8770

Document Content:

may be inadequate to cover future losses given the uncertainty in the quantitative and qualitative components. The following table provides detail activity in the ACL - loans held for investment carried at amortized cost for the years ended December 31, 2025 and 2024. Allocation of a portion of the ACL - loans to one category of loans does not preclude its availability to absorb losses in other categories: As of and for the years ended December 31, (dollars in thousands) 2025 2024 Average loans held for investment outstanding, at amortized cost $ 4,569,708 $ 3,665,462 Total loans held for investment outstanding, at amortized cost at end of period $ 5,222,234 $ 3,963,973 ACL - loans: Beginning of period $ 42,294 $ 74,745 Provision for credit losses on loans 23,344 10,896 Provision for/(recovery of) credit losses on loan transfers from/to loans held-for-sale 148 (9,548) Loan charge-offs: Commercial Real Estate — (16,495)

Commercial and Industrial (7,374) (7,359)
Consumer (8,040) (12,378)
Total charge-offs (15,414) (36,232)
Loan recoveries:

Commercial Real Estate — 200

Commercial and Industrial 1,205 359
Consumer 1,409 1,874
Total recoveries 2,614 2,433
Net charge-offs (12,800) (33,799)
End of period $	52,986 $	42,294
Ratio of ACL - loans to total loans at amortized cost at period end 1.01	% 1.07	%
Ratio of net charge-offs to average total loans at amortized cost (0.28)	% (0.92)	%

We maintain an ACL - loans that represents management’s best estimate of the loan losses in our loan portfolio.

As of December 31, 2025, the ACL - Loans totaled $53.0 million, or 1.01% of total loans held for investment at amortized cost. As of December 31, 2024, the allowance totaled $42.3 million or 1.07% of total loans held for investment at amortized cost. The increase in the allowance was primarily due to an increase in loans held for investment at amortized cost, and an increase in collectively and individually assessed reserves.

The ACL - loans as a percentage of total loans held for investment at amortized cost decreased by 6 basis points as of December 31, 2025, compared to December 31, 2024. The ACL - Loans to total loans held for investment at amortized cost declined slightly to 1.01% as of December 31, 2025, compared to 1.07% as of December 31, 2024, primarily due to continued run-off in loan balances of high loss forward flow loans offset by an overall increase in loan balances. Economic forecast assumptions reflected in the ACL – Loans estimate as of December 31, 2025 were largely consistent with assumptions reflected in the ACL – Loans estimate as of December 31, 2024.

The following tables present activity in the ACL - loans by loan category, for the years ended December 31, 2025 and 2024. Allocation of a portion of the ACL - loans to one category of loans does not preclude its availability to absorb losses in other categories.

For the Year Ended December 31, 2025

(dollars in thousands) Commercial Real Estate Commercial and Industrial Consumer Total
Total loans outstanding at end of period, at amortized cost $	2,528,996 $	2,475,549 $	217,689 $	5,222,234
ACL - loans:
Beginning of period $	12,078 $	19,380 $	10,836 $	42,294
Provision for credit losses - loans 6,418 12,807 4,119 23,344
Provision for credit losses - transfers of loans 144 4 — 148
Loan charge-offs — (7,374) (8,040) (15,414)
Loan recoveries — 1,205 1,409 2,614
Net charge-offs — (6,169) (6,631) (12,800)
End of period $	18,640 $	26,022 $	8,324 $	52,986
ACL - loans to loan type ratio 0.74	% 1.05	% 3.82	% 1.01	%

For the Year Ended December 31, 2024

(dollars in thousands) Commercial Real Estate Commercial and Industrial Consumer Total
Total loans outstanding at end of period, at amortized cost $	1,730,883 $	1,986,457 $	246,633 $	3,963,973
ACL - loans:
Beginning of period $	23,203 $	26,460 $	25,082 $	74,745
Provision for credit losses - loans 5,228 78 5,590 10,896
Recovery of credit losses - transfers of loans (58) (158) (9,332) (9,548)
Loan charge-offs (16,495) (7,359) (12,378) (36,232)
Loan recoveries 200 359 1,874 2,433
Net charge-offs (16,295) (7,000) (10,504) (33,799)
End of period $	12,078 $	19,380 $	10,836 $	42,294
ACL - loans to loan type ratio 0.70	% 0.98	% 4.39	% 1.07	%

The following table shows the allocation of the ACL - loans by loan type for the years ended December 31, 2025 and 2024.

December 31,

(dollars in thousands) Amount % of Total ACL - Loans Amount % of Total ACL - Loans
Balance of ACL - loans:

Commercial Real Estate $	18,640 35.2	% $	12,078 28.6	%
Commercial and Industrial 26,022 49.1	% 19,380 45.8	%
Consumer 8,324 15.7	% 10,836 25.6	%
Total ACL - loans $	52,986 100.0	% $	42,294 100.0	%

The total ACL - loans disclosed in the table above is available to absorb losses from any loan category. We believe that the ACL - loans as of December 31, 2025, is adequate to cover estimated losses in the loan portfolio as of such date. There can be no assurance, however, that our loan portfolio will not sustain losses in future periods, which could be substantial in relation to the size of the allowance as of December 31, 2025.

Non-performing Assets

Non-performing assets consist of non-performing loans, non-performing financing receivables, and OREO.

Assets acquired through, or in lieu of, loan foreclosure are held for sale as OREO and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to OREO is charged to the ACL - loans. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less estimated costs to sell. Costs of improvements are capitalized, whereas costs related to holding OREO and subsequent write-downs to the value are expensed. Any gains and losses realized at the time of disposal are reflected in income.

Non-performing assets consisted of the following as of December 31, 2025 and 2024:

December 31,

(dollars in thousands) 2025 2024
Non-accrual loans:

Commercial Real Estate 60,360 44,694
Commercial and Industrial 11,798 16,439
Consumer 1,857 1,122
Total non-accrual loans 74,015 62,255
Non-performing financing receivables — —
Other real estate owned 8,729 25,476
Total non-performing assets $	82,744 $	87,731
Total non-accrual loans as a percentage of total loans 1.32	% 1.45	%
Total non-performing financing receivables as a percentage of total financing receivables —	% —	%
Total non-performing assets as a percentage of total assets 1.05	% 1.21	%

Total non-performing assets were $82.7 million as of December 31, 2025, a decrease of 5.7% compared to $87.7 million as of December 31, 2024. The decrease was primarily due to sales of OREO, offset partially by an increase in non-accrual loans. Non-accrual loans increased by $11.8 million, or 18.9%, for December 31, 2025, compared to December 31, 2024, primarily due to two real estate finance and five cash flow lending loans placed on non-accrual, offset partially by one loan in our healthcare finance loan portfolio being placed back on accrual status

and a payoff of one loan in our real estate finance loan portfolio. OREO assets decreased by $16.7 million, or 65.7%, for December 31, 2025, compared to December 31, 2024, primarily due to sales of three existing OREO assets, offset slightly by the addition of one new OREO asset.

During the year ended December 31, 2025, we transferred one real estate finance loan to OREO, with a value at the time of transfer of $1.7 million. Also during 2025, we sold three OREO properties with a carrying value of $18.7 million for proceeds of $19.1 million, resulting in a gain of $0.4 million, which was recognized in other non-interest income. As of December 31, 2025, there remained three OREO properties, with an aggregate value of $8.7 million.

During 2024, we transferred five real estate finance loans held for investment at amortized cost to OREO assets. There were no sales of OREO during 2024. As of December 31, 2024, there were five OREO properties with an aggregate value of $25.5 million.

OREO is recognized in Other Assets on the Consolidated Balance Sheets.

Non-performing Loans

A loan for which the accrual of interest has been discontinued is designated as a non-accrual loan. When loans are placed on non-accrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on non-accrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans are once again current with regards to payment status, become well-secured, and management believes full collectability of future principal and interest is probable.