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

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margin. Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, and both the amount and mix of interest-earning assets and interest-bearing liabilities we own will have the largest impact on our net interest income. Similar to net interest margin, tracking net interest income provides insight into our ability to generate more income from our assets than our funding costs. Non-interest Income Non-interest income represents other income we earn in the course of business or ancillary to our business. Non-interest income primarily consists of investment advisory fees, loan fee income, servicing fees, gains or losses resulting from loan sales, loan program fees, and other miscellaneous income. Non-interest income is a meaningful metric because it provides us with an indication of our ability to generate revenue through revenue streams outside of interest income, which can provide steady revenue during volatile interest markets.

Investment advisory fee income is impacted by the balance of loans under management. Loan fee income related to fees charged to borrowers associated with managing our loan portfolio. Servicing fee income is impacted by the balance of solar and small home improvement loans serviced. Gains or losses on the sale of loans and fair value marks on loans carried under the fair value option, or loans held-for-sale are driven by both the volume of loan sales during the period, as well as market interest rates and the credit quality of loans sold. Loan program fee income is impacted by the volume of loans brokered by the business. Other miscellaneous income can represent fees on deposit accounts, gains or losses on sales of other assets, income on the changes in value of bank owned insurance policies, and other non-recurring income.

Non-interest Expense

Non-interest expense primarily consists of compensation and benefits, professional fees, information technology expense, occupancy expense, marketing and advertising expense, FDIC premiums for deposit insurance coverage, and other expenses. Monitoring non-interest expense helps management identify the most meaningful costs associated with revenue generation and provides insight into areas where expense management efforts may be focused, if necessary.

Compensation and benefits is our largest component of non-interest expense and includes compensation, bonuses, employee benefits, and employer tax expenses related to our personnel. Professional fees include costs associated with legal, audit, tax, consulting and similar services. Information technology expense includes computer and software expenses and depreciation, and other related information technology expense. Occupancy expense includes lease expense, furniture and equipment expense and depreciation, and other occupancy related expenses. Advertising and marketing expense includes expenses for advertisements and marketing the business’s products and services. FDIC premium represents the cost of insuring customer deposits with the FDIC. Other expenses include costs associated with our lending and deposit services, insurance, board compensation, intangible amortization, and other miscellaneous expenses.

Primary Factors Used to Evaluate Our Financial Condition

The most significant factors used to evaluate our financial condition are asset quality metrics, capital ratios, and liquidity measures.

Asset Quality

We monitor the quality of our assets using factors including the level and severity of deterioration in borrower cash flows and other items impacting ability to make loan payments. Assets are assessed and reported as delinquent, classified, criticized, non-performing, non-accrual, or a modified loan with a borrower experiencing financial difficulty. We also monitor credit concentrations by loan type and we may also monitor credit concentrations by industry and/or geography based on the characteristics of the individual loan portfolios. We use metrics such as non-accrual loans to total loans, non-performing assets to total assets, allowance for loan losses to total loans, net charge-offs to total average loans, and allowance for loan loss to non-performing loans to monitor trends in the quality of the loan portfolio. Management monitors asset quality to ensure that risk of loss, primarily in the loan portfolio, is mitigated as much as possible, or to the extent necessary management is aware of any near-term risk.

Capital

We use regulatory capital ratios to monitor the strength of our capital position. As of December 31, 2025, each of the Company and the Bank was a “qualifying community banking organization” as defined by applicable

regulations of the federal banking agencies and elected to measure its regulatory capital adequacy under the CBLR framework. Although under the CBLR framework, neither the Company nor the Bank are required to report regulatory capital ratios other than their respective leverage ratios (defined as the ratio of the organization’s Tier 1 capital to its average total consolidated assets) in applicable regulatory financial filings, we also monitor risk-based capital ratios such as the common equity Tier 1 ratio, Tier 1 capital ratio, and total capital ratio for the Company and the Bank to ensure we are continuing to maintain adequate capital levels to support our business operations. Additionally, we monitor the trends and volumes of problem assets and ACL, the level and quality of earnings, as well as our anticipated growth, for their potential impact on our capital position.

Liquidity

We manage and evaluate our liquidity using factors that include balance sheet growth, the level of cash and highly rated securities in our investment portfolio, the composition and maturity structure of our funding sources, and the availability of unused lines of credit. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. Deposits primarily consist of individual balances through our national consumer digital deposit platform, and business account balances in our primary market. Other deposit funding sources include certificates of deposit issued through brokerage firms, sweep deposits, and reciprocal deposits placed through a third-party network. We maintain available lines of credit through the FHLB and the Federal Reserve Bank as well as federal funds borrowings with other banks. Additionally, our cash balances, investment securities, and loan principal and interest payments are available to fund liquidity needs.

General Factors Used to Evaluate Our Business

In addition to the primary factors we use to evaluate our results of operations and financial condition noted above, we also evaluate various broad economic conditions as general factors to evaluate our business.

Interest Rates

We monitor changes and expected changes in market interest rates because as they change they have an almost immediate impact on our net income, which is heavily impacted by changing interest rates due to our largely variable rate loan portfolio. Additionally, we need to monitor interest rates to make decisions on the rates we provide on our digital savings product to ensure it remains competitive so that we are able to maintain our deposit balances.

Economic Growth/Recession

The current and expected condition of the economy is a major factor in how we manage our business. While a healthy economy provides a favorable environment for businesses to borrow additional money to fund growth, as well as improves borrowers ability to repay existing loans, reducing risk in our portfolio, a weak or weakening economic environment could cause an abrupt tightening in businesses ability to open new credit making it more difficult to originate new loans and maintain a high credit quality in our loan portfolio. Depositors are also more capable of maintaining larger deposit balances in a healthier economic environment.

Regulatory Environment

The regulatory environment and changes in regulations could have a material impact on how we manage our business. Changes to the capital requirements could have an impact on the amount and type of loans that we can originate or the levels of capital that we are required to maintain.

Critical Accounting Estimates

We prepare our consolidated financial statements according to GAAP. Preparing these statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities on the balance sheet and the reported amounts of revenues and expenses during the reporting period in the statement of income. Our most significant critical accounting estimate relates to the ACL, which represents management’s estimate of expected lifetime credit losses on loans, held-to-maturity securities, and financing receivables, and is determined using historical loss experience, current conditions, and reasonable and supportable forecasts, with accrued interest

receivable excluded from the measurement. We also apply significant judgment in assessing the realizability of the net operating loss portion of our deferred tax assets, which depends primarily on our ability to generate sufficient future taxable income and may be affected by changes in operating results, tax laws, or other assumptions.

See below in “—Results of Operations for the Years Ended December 31, 2025 and 2024—Income Taxes” for additional discussion regarding our critical accounting estimates as they relate to our deferred tax assets and in “—Financial Condition —ACL—Loans” and “Financial Condition—ACL—Investment Securities” for additional discussion regarding our critical accounting estimates as they relate to our ACL.

Our significant accounting policies and the effects of new accounting pronouncements are detailed in Note 1, “Significant Accounting Policies,” to our consolidated financial statements and the notes thereto included elsewhere in this prospectus.

Financial and Business Highlights:

2025 Highlights