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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the activity in the allowance for credit losses for loans held for investment at amortized cost for the year ended December 31, 2024: (in thousands) December 31, 2024 Balance at beginning of period $ 74,745 Provision for credit losses - loans 10,896 Recovery of credit losses - transfers of loans to held-for-sale (9,548) Loan charge-offs (36,232) Loan recoveries 2,433 Net charge-offs (33,799) Balance at end of period $ 42,294 Loans held-for-sale and loans held for investment at fair value do not require an allowance because they are carried at fair value and therefore any changes to the cost basis in the loan is recognized in earnings, as unrealized gains or losses in non-interest income, in the period of the change. The following table details activity in the allowance for credit losses for loans held for investment carried at amortized cost, by loan category, for the year ended December 31, 2024:

December 31, 2024
(dollars in thousands) Commercial Real Estate Commercial Residential Real Estate Consumer Solar Total
Allowance for credit losses:
Beginning of period $	22,102 $	26,460 $	1,739 $	11,743 $	12,701 $	74,745
Provision for/(recovery of) credit losses - loans 5,858 78 (1,027) 172 5,815 10,896
Recovery of credit losses - transfers of loans to held-for-sale (58) (158) — (9,332) — (9,548)
Loan charge-offs (16,495) (7,359) — (3,629) (8,749) (36,232)
Loan recoveries 200 359 47 1,079 748 2,433
Net (charge-offs)/recoveries (16,295) (7,000) 47 (2,550) (8,001) (33,799)
End of period $	11,607 $	19,380 $	759 $	33 $	10,515 $	42,294
Individually evaluated for credit loss $	— $	922 $	— $	— $	— $	922
Collectively evaluated for credit loss 11,607 18,458 759 33 10,515 41,372
Total allowance for credit losses $	11,607 $	19,380 $	759 $	33 $	10,515 $	42,294
Loans held for investment at amortized cost:
Individually evaluated for credit loss $	83,100 $	67,573 $	1,162 $	8 $	762 $	152,605
Collectively evaluated for credit loss 1,611,475 1,910,557 69,875 118 219,343 3,811,368
Total loans held for investment at amortized cost $	1,694,575 $	1,978,130 $	71,037 $	126 $	220,105 $	3,963,973
Allowance for loans to loan type ratio:
Individually evaluated for credit loss —	% 1.36	% —	% —	% —	% 0.60	%
Collectively evaluated for credit loss 0.72	% 0.97	% 1.09	% 27.97	% 4.79	% 1.09	%
Total loans held for investment at amortized cost 0.68	% 0.98	% 1.07	% 26.19	% 4.78	% 1.07	%

Credit Quality

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The risk rating system is central to the overall credit risk management discipline and the important first step in effectively monitoring the credit quality of the portfolio. Credit risk ratings are applied individually to those classes of assets that have significant or unique credit characteristics that benefit from a case-by-case evaluation. Groups of assets that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically assets to individuals in the classes which comprise the consumer portfolio category.

The following are the definitions of the Company’s credit quality indicators:

•Acceptable Risk (or better) - Assets in all classes that comprise the commercial and consumer portfolio categories that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the asset agreement. Management believes that there is a low likelihood of loss related to those assets that are considered Acceptable Risk or better.

•Higher Risk - Assets in this category may demonstrate weaker credit fundamentals with an above-average chance of resulting in a default combined with a lower risk of loss to create an overall risk profile which requires appropriate monitoring but do not present potential weaknesses or a warrant a lower rating.

•Special Mention - Assets in this category exhibit potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may, at some future date, result in deterioration of

the repayment prospects for the asset. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. While potentially weak, the asset is currently marginally acceptable, and no loss of principal or interest is envisioned.

•Substandard - A Substandard asset is inadequately protected by the current sound worth and paying capacity of the borrower or the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, which exists in the aggregate amount of Substandard assets, does not have to exist in individual assets classified Substandard.

•Doubtful - Assets in this category have all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

The Company periodically reviews and, if necessary, updates the credit quality indicator assigned to each of its loans on a case-by-case basis.

Loans Held for Investment at Amortized Cost

The following table presents by class, credit quality and year of origination, the recorded investment in the Company’s loans held for investment at amortized cost as of and for the year ended December 31, 2024: