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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of business from related parties held as of March 31, 2026 and December 31, 2025, were $6.7 million and $5.2 million, respectively. See Note 18 – Related Party Transactions for more information. NOTE 10 – BORROWED FUNDS Subordinated Debt The following table provides information on subordinated debt as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 2019 Notes, due in 2029 (1) 25,000 25,000 2021 Notes, due in 2032, 4.00% 125,000 125,000 Other subordinated debt, due in 2033 (2) 3,000 3,000 Less: debt issuance costs and discounts (1,908) (1,997) Total subordinated debt $ 151,092 $ 151,003 (1)Borrowings bore interest at an effective rate of 8.06% and 8.18% as of March 31, 2026 and December 31, 2025, respectively. (2)Borrowings bore interest at an effective rate of 7.23% and 7.47% as of March 31, 2026 and December 31, 2025, respectively. Other Borrowed Funds

As of March 31, 2026, the Company had a credit line with the FHLB (“FHLB Credit Line”) with a maximum borrowing capacity of $5.8 million, with no of borrowings outstanding and a remaining borrowing capacity of $5.8 million. In order to borrow under the FHLB Credit Line, the Company must secure the borrowings with qualifying assets. Under the terms of the FHLB Credit Line, the Company is required to maintain sufficient collateral to secure these borrowings. As of March 31, 2026, the Company pledged eligible 1-4 family first mortgages with a book value of $5.8 million, and eligible home equity loans with a book value of $3.0 million to secure borrowings under the FHLB Credit Line. The total collateral value assigned by the FHLB for these pledged investments and loans was $5.8 million.

As of March 31, 2026, the Company had a credit line with the Federal Reserve Bank (“FRB Credit Line”) with a maximum borrowing capacity of $3.5 billion. As of March 31, 2026, there were no borrowings outstanding under the FRB Credit Line. In order to borrow under the FRB Credit Line, the Company must maintain sufficient loan collateral. As of March 31, 2026, the Company pledged commercial real estate loans with a book value of $1.7 billion, commercial and industrial loans with a book value of $1.9 billion, construction loans with a book value of $182.9 million and multi-family loans with a book value of $88.5 million to facilitate future transactions. The total collateral value assigned by the Federal Reserve Bank for these pledged loans was $3.5 billion.

The Company maintains unsecured Fed Funds facilities with three other financial institutions in the aggregate amount of $90.0 million. As of March 31, 2026 and December 31, 2025, there were no borrowings outstanding under these facilities. The Company periodically borrows on its Fed Funds facilities to test its borrowing capabilities and keep the funds available.

NOTE 11 – STOCKHOLDERS' EQUITY

The Company’s Articles of Incorporation authorizes 108,200,000 shares of stock, consisting of 51,600,000 shares of Voting Common Stock, par value $0.001 per share (“Voting Common Stock”) and 51,600,000 shares of Non-Voting Common Stock, par value $0.001 per share (“Non-Voting Common Stock” and, together with the Voting Common Stock, “common stock”) 5,000,000 shares of preferred stock, par value $0.001 (“Preferred Stock”).

As of March 31, 2026, the Company had 19,605,006 shares of Voting Common Stock, 21,242,551 shares of Non-Voting Common Stock, and no shares of Preferred Stock issued and outstanding.

Certain shares of common stock issued and outstanding include unvested restricted stock awards granted to employees and directors. These restricted shares are legally issued and carry voting rights equivalent to vested shares of common stock, notwithstanding that such shares are subject to forfeiture until vesting conditions are satisfied. While these shares are considered legally outstanding and included within common stock outstanding, these shares are excluded from basic earnings per share and will be included within the diluted earnings per share

calculation. See Note 14 – Stock-based Compensation and Note 17 – Earnings Per Common Share for more information.

NOTE 12 – ACCUMULATED OTHER COMPREHENSIVE (LOSS)/INCOME

The Company’s Accumulated other comprehensive (loss)/income is comprised of unrealized gains and losses associated with investment securities available for-sale. Gains and losses on investment securities available-for-sale are reclassified to earnings as the gains or losses are realized.

The following table presents the activity in Accumulated other comprehensive (loss)/income for the three months ended March 31, 2026 and 2025:

(in thousands) Total Tax Effect Net
Investment securities available-for-sale:

Balance as of December 31, 2025 $	4,075 $	(1,051) $	3,024
Unrealized losses, net (7,289) 1,885 (5,404)

Balance as of March 31, 2026 $	(3,214) $	834 $	(2,380)

Balance as of December 31, 2024 $	(596) $	153 $	(443)
Unrealized gains, net 2,959 (747) 2,212
Reclassification of net gains on investments available-for-sale to earnings (1,194) 301 (893)

Balance as of March 31, 2025 $	1,169 $	(293) $	876

NOTE 13 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company enters into commitments to extend credit and standby letters of credit to meet the financing needs of its customers. For a description of the Company's accounting policy for off-balance sheet instruments, refer to the annual Consolidated Financial Statements included in the Company's Registration Statement on Form S-1.

A summary of the net commitment available to fund financial instruments with off-balance sheet credit risk as of March 31, 2026 and December 31, 2025 is as follows:

(in thousands) March 31, 2026 December 31, 2025
Commercial real estate development and construction $	221,707 $	179,439
Residential real estate development and construction — 682
Lines of credit, primarily business lines 863,360 606,921
Standby letters of credit 7,179 20,195
Total commitments to extend credit and available lines of credit $	1,092,246 $	807,237

As of March 31, 2026 and December 31, 2025, the total reserve for unfunded commitments was $2.3 million and $2.7 million, respectively, which is included in Other liabilities in the Consolidated Balance Sheets. The Company recognized a recovery of credit losses of $396 thousand and $22 thousand for the three months ended March 31, 2026 and 2025, respectively. The recovery of credit losses is included in Provision for credit losses in the Consolidated Statements of Income.

The Company is involved in various legal actions arising in the ordinary course of business. The Company’s evaluation has resulted in none being expected to result in a loss contingency.

NOTE 14 – STOCK-BASED COMPENSATION

As of March 31, 2026, the Company had a stock-based compensation plan, the 2014 Plan, which was adopted on June 25, 2014. In February 2026, the 2014 Plan was amended to make available an additional 1,000,000 shares of Voting Common Stock in stock-based awards, including restricted stock awards and stock options, to its employees and directors. The Company believes that such awards better align the interests of its employees with those of its stockholders. As of March 31, 2026, total shares of Voting Common Stock authorized under the 2014 Plan were 12,500,000. For a description of the 2014 Plan's terms, refer to the annual Consolidated Financial Statements included in the Company's Registration Statement on Form S-1.

As of March 31, 2026, there were 1,355,329 shares remaining to be issued under the 2014 Plan. Compensation expense is recognized using the graded method over the vesting period of the stock option or restricted stock award granted. During the three months ended March 31, 2026 and 2025, expense of $2.8 million and $2.1 million, respectively, was recognized associated with stock options and restricted stock awards.

Stock Options

Stock option awards are granted with an exercise price equal to the fair value of the Company’s Voting Common Stock at the date of grant; those option awards vest based on five years of continuous service and have 10-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control. Stock options issued can require meeting certain performance criteria prior to exercise.

The fair values of the options granted during the three months ended March 31, 2026, were determined based on Black-Scholes option-pricing model using the following assumptions:

March 31, 2026
Black-Scholes

Volatility 45%

Expected dividend yield —%

Expected term 6.5 years

Risk-free rate 3.89%

The fair values of options granted during the three months ended March 31, 2025, were determined using the Black-Scholes option-pricing model. For option series that are subject to exercise conditions in addition to the grant date exercise price, the Black-Scholes option pricing model was used in conjunction with (i) a Monte Carlo Simulation model for determining stock price values and (ii) probability weights for scenarios where the Company either remains independent or is acquired. The description of the exercise conditions that apply to certain series of options is more fully described in the 2014 Plan. The following table presents the assumptions used to determine the fair value of the options granted during the three months ended March 31, 2025:

March 31, 2025
Black-Scholes Monte Carlo

Volatility 40% 40%

Expected dividend yield —% —%