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

Chunk 117 of 124
Word Count: 1369
Character Count: 8733

Document Content:

recorded investment in the Company’s other real estate owned assets at fair value for the three months ended March 31, 2026 and 2025: (in thousands) March 31, 2026 March 31, 2025 Balance at beginning of period $ 8,729 $ 25,476 Improvements — 600 Sales (876) — Valuation adjustments (744) — Balance at end of period $ 7,109 $ 26,076 During the three months ended March 31, 2026, the Company sold a portion of one of its other real estate owned assets with a carrying value of $876 thousand for proceeds of $810 thousand resulting in a loss of $66 thousand, which is included in Other non-interest income in the Consolidated Statements of Income. There were no sales of other real estate owned assets during three months ended March 31, 2025. There were no transfers into other real estate owned assets during the three months ended March 31, 2026 or 2025.

During the three months ended March 31, 2026 and 2025, the Company incurred a non-material amount of expense related to holding other real estate owned assets, which is included in Other non-interest expense in the Consolidated Statements of Income. Subsequent to foreclosure, the Company determined the fair values of certain of its other real estate owned assets had declined during the three months ended March 31, 2026, at which time the Company recorded a valuation adjustment, which is included in Other non-interest income in the Consolidated Statements of Income. Other real estate owned assets were $7.1 million and $8.7 million as of March 31, 2026 and December 31, 2025, respectively, and are included with Other assets in the Consolidated Balance Sheets.

NOTE 6 – OTHER EARNING ASSETS

Financing Receivables Held for Investment at Amortized Cost

As of March 31, 2026 and December 31, 2025, the Company had $37.1 million and $42.8 million, respectively, of financing receivables held for investment, at amortized cost, and net of allowance for credit losses, which are included with Other earning assets in the Consolidated Balance Sheets. Total outstanding financing receivables held for investment, at amortized cost, are net of direct funding related income, net of costs, of $182 thousand and $180 thousand as of March 31, 2026 and December 31, 2025, respectively.

The following table summarizes the activity in the allowance for credit losses for financing receivables held for investment, at amortized cost, for the three months ended March 31, 2026 and 2025:

(in thousands) March 31, 2026 March 31, 2025
Balance at beginning of period $	108 $	74
Recovery of credit losses (15) —
Balance at end of period $	93 $	74

Equity Investments

The Company holds equity investments for various business purposes. As of March 31, 2026 and December 31, 2025, the Company had $13.6 million and $13.1 million, respectively, of equity investments, which are included with Other earning assets in the Consolidated Balance Sheets.

NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS

The following tables summarize the gross carrying amount and accumulated amortization, by type of amortizing other intangible asset, and the carrying amount of non-amortizing other intangible assets and goodwill, which are included in Goodwill and other intangible assets, net in the Consolidated Balance Sheets, as of March 31, 2026 and December 31, 2025:

March 31, 2026
(dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Amortizing intangible assets:
Core deposit intangible $	1,491 $	(1,491) $	—
Customer relationship intangibles 18,742 (7,973) 10,769
Other 399 (399) —
Total amortizing intangible assets $	20,632 $	(9,863) $	10,769
Indefinite life intangible asset 2,114
Total intangible assets 12,883
Goodwill 18,519
Total goodwill and intangible assets, net $	31,402

December 31, 2025
(dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Amortizing intangible assets:
Core deposit intangible $	1,491 $	(1,491) $	—
Customer relationship intangibles 18,742 (7,690) 11,052
Other 399 (399) —
Total amortizing intangible assets $	20,632 $	(9,580) $	11,052
Indefinite life intangible asset 2,114
Total intangible assets 13,166
Goodwill 18,519
Total goodwill and intangible assets, net $	31,685

The following table presents the estimated future amortization expense for amortizing intangible assets, which is included in Other non-interest expense in the Consolidated Statements of Income, as of March 31, 2026:

(in thousands) Amount
Remaining 2026 $	849
Thereafter 5,717
Total amortizing intangible assets $	10,769

NOTE 8 – LEASES

The Company has nine leases, all of which are currently classified as operating. The Company’s locations are deposit production offices, branches, and corporate office space, mostly located in the Washington, DC metro area. The headquarters lease, located in Chevy Chase, Maryland is considered to be critical to the Company’s operations. Some lease agreements include one or more options to renew, with renewal terms that can extend the original lease term from three to ten years. The Company currently does not believe it is reasonably certain it will exercise the renewal options for its leases, and therefore, the lease terms do not reflect any optional periods.

The following table provides information regarding the Company’s leases for the three months ended March 31, 2026 and 2025:

(in thousands) March 31, 2026 March 31, 2025
Components of operating lease expense:
Long-term lease expense $	747 $	941
Short-term lease expense $	40 $	19
Supplemental cash flow information related to leases:
Operating cash flows from operating leases $	882 $	939

The following table provides information regarding the Company’s leases as of March 31, 2026 and December 31, 2025:

(dollars in thousands) March 31, 2026 December 31, 2025
Supplemental balance sheet information related to leases:
Operating lease right-of-use assets $	15,067 $	15,691
Operating lease liabilities $	19,318 $	20,077
Other information related to leases:
Weighted-average remaining lease term of operating leases 6.0 years 6.2 years
Weighted-average discount rate of operating leases 2.56	% 2.60	%

The following table presents the maturities of the Company’s operating lease liabilities as of March 31, 2026, for the years indicated:

(in thousands) Amount
Remaining 2026 $	2,559
Thereafter 4,122
Total minimum lease payments 20,873
Less: present value discount (1,555)
Operating lease liability $	19,318

NOTE 9 – DEPOSITS

Deposit balances as of March 31, 2026 and December 31, 2025, are presented in the following table:

(in thousands) March 31, 2026 December 31, 2025

Non-interest-bearing deposits $	473,153 $	372,444
Interest-bearing deposits:
Demand 287,356 275,259
Money market 1,424,548 1,206,544
Savings 3,607,617 3,500,532
Time deposits less than $250 thousand 1,194,639 1,242,892
Time deposits greater than $250 thousand 150,895 180,244
Total interest-bearing deposits 6,665,055 6,405,471
Total deposits $	7,138,208 $	6,777,915

As of March 31, 2026 and December 31, 2025, $9 thousand and $14 thousand, respectively, of demand deposit overdrafts were reclassified to loans. The related charge-offs and recoveries, if any, are reflected in the allowance for credit losses - loans.

The following table presents the maturities of time deposits as of March 31, 2026, for the years indicated:

(in thousands) Amount
Remaining 2026 $	752,555
Thereafter 15
Total time deposits $	1,345,534

The Company’s time deposits of $250 thousand or greater represented 11.2% of total time deposits as of March 31, 2026, and are presented by maturity in the following table:

Months to Maturity
(in thousands) 3 or Less Over 3 to 6 Over 6 to 12 Over 12 Total
Time deposits greater than $250 thousand $	62,908 $	21,622 $	63,056 $	3,309 $	150,895

Deposits received in the ordinary course 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