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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16,546 $ (3,424) The Company collectively evaluates its investment securities held-to-maturity for credit losses. As of December 31, 2024, the Company recorded an allowance for credit losses on its investment securities held-to-maturity. See Note 1 – Significant Accounting Policies for more information on the Company’s accounting policy for the allowance for credit losses. The following table summarizes the activity in the allowance for credit losses for investment securities held-to-maturity for the year ended December 31, 2024: December 31, 2024 (in thousands) Municipal bonds CPACE Total Balance at beginning of period $ 155 $ 55 $ 210 Recovery of credit losses (46) (3) (49) Balance at end of period $ 109 $ 52 $ 161 Equity Investments The Company holds equity investments for various business purposes. As of December 31, 2024, the Company had $44.8 million of equity investments, which are included with Other assets in the Consolidated Balance Sheet. As

of December 31, 2024, the majority of equity investments was comprised of FHLB common stock purchased in connection with securing FHLB advances. See Note 10 – Borrowed Funds for more information on the outstanding FHLB advances.

NOTE 4 – LOANS

The Company holds loans in three separate categories: loans held-for-sale (including loans at fair value and lower of cost or fair value), loans held for investment at fair value, and loans held for investment at amortized cost. In the ordinary course of business to manage overall portfolio management strategies, when the intentions of the Company’s ability and interest with respect to loans change, the Company will transfer loans between loans held-for-sale and loans held for investment.

The Company manages its exposure to credit losses by evaluating credit risk in the following specific portfolio categories, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for credit losses. Descriptions of the loan categories are:

•Commercial Real Estate - Commercial real estate loans are primarily secured by various types of commercial real estate including healthcare facilities, office, retail, warehouse, industrial, multi-family properties, and other commercial real estate properties and are made to owners of such properties. The category also includes loans for the construction of those property types. Within this category, loans are further bifurcated between loans secured by owner-occupied properties and investment (non owner-occupied) properties. The repayment of loans secured by owner-occupied properties is dependent on cash flow from the successful operation of the business which owns the property. The repayment of loans secured by investment properties is dependent upon the operation (net operating income) or sale of the property. Both property types may be subject to adverse conditions in the commercial real estate market or in the general economy.

•Commercial - Within this category, there is further distinction among structured finance loans, health care asset based-loans, and corporate loans (which are typically cash flow loans, including leveraged loans). The market area for these loans is national with geographic diversification. The loan category also includes the Company’s sustainable finance related lending products, which also represent nationally originated loans, and small business loans purchased through technology enabled lender platforms with forward flow purchase agreements. Of primary concern in commercial lending is the borrower’s creditworthiness and ability to successfully generate cash flow from their business to service the debt. The Company no longer purchases small business loans through forward flow programs, but continues to originate new commercial loans.

•Residential Real Estate - These loans are secured by residential real estate and are further bifurcated to isolate first lien mortgages, second lien mortgages, and home equity lines of credit. Residential first lien mortgages are evaluated for adequacy of repayment sources at time of approval based upon measures including credit scores, debt-to-income and collateral values. Home equity lines and loans are typically secured by second mortgages on the borrower’s primary residence and carry a higher level of risk, which is mitigated by prudent loan-to-value requirements. The Company no longer originates residential real estate loans.

•Consumer - These loans consist primarily of loans made to individuals for personal, family, and household purposes, with the majority of the portfolio comprised of loans purchased through technology enabled lender platforms with forward flow purchase agreements. These loans are unsecured and, therefore, may entail greater risk than certain other types of loans. The Company sold substantially all of its exposure in this loan category during the year ended December 31, 2024, and did not purchase additional consumer loans through forward flow programs or originate new consumer loans during 2024. The remaining consumer portfolio represents a de minimis percentage of the total loan portfolio.

•Solar - The loans in this portfolio category are principally comprised of consumer solar loans that were purchased through technology enabled lender platforms with forward flow purchase agreements and commercial solar loans that were purchased on an individual loan basis. The Company no longer purchases

consumer solar loans through forward flow programs, however, continues to purchase commercial solar loans. The Company continues to hold previously purchased consumer and commercial solar loans on its balance sheet.

Loans Held-for-Sale

As of December 31, 2024, the Company had $316.5 million of loans held-for-sale. The table below presents the proceeds received from the sales of loans held-for-sale, realized losses and gains, and unrealized gains related to loans-held-for sale for the year ended December 31, 2024. Unrealized gains related to loans held-for-sale are included with Unrealized gains on loans and financing receivables, net in the Consolidated Statement of Income. Realized losses and gains are recognized in Losses on sales of loans and financing receivables, net in the Consolidated Statement of Income.

(in thousands) December 31, 2024
Proceeds from sales $	340,526
Realized losses, net $	(11,563)
Unrealized gains, net $	3,151

The following table presents, by loan category, the carrying amount and unpaid contractual balance of the Company’s loans held-for-sale as of December 31, 2024:

December 31, 2024

Loans Held-for-Sale at Fair Value Loans Held-for-Sale at Lower of Cost or Fair Value Total Loans Held-for-Sale
(in thousands) Carrying Amount Unpaid Contractual Balance Carrying Amount Unpaid Contractual Balance Carrying Amount Unpaid Contractual Balance
Commercial $	108,575 $	116,376 $	207,909 $	212,082 $	316,484 $	328,458
Total loans held-for-sale $	108,575 $	116,376 $	207,909 $	212,082 $	316,484 $	328,458

Loans Held for Investment at Fair Value

Loans held for investment at fair value, by loan category, as of December 31, 2024, are presented in the following table:

(in thousands) December 31, 2024
Commercial $	7,081
Total loans held for investment at fair value $	7,081

The table above includes total unrealized fair value loss adjustments recognized as of December 31, 2024, of $383 thousand. See Note 21 – Fair Value of Financial Instruments for more information on fair value adjustments.

Loans Held for Investment at Amortized Cost

Loans held for investment at amortized cost, by loan category, as of December 31, 2024, are presented in the following table:

(in thousands) December 31, 2024
Commercial real estate $	1,694,575
Commercial 1,978,130
Residential real estate 71,037
Consumer 126
Solar 220,105
Total loans held for investment at amortized cost $	3,963,973

Total outstanding loans held for investment, at amortized cost, are net of deferred fees and costs of $57.9 million as of December 31, 2024.

Total outstanding loans held for investment, at amortized cost, excludes accrued interest receivable of $26.7 million as of December 31, 2024.

Loans to Related Parties

From time to time, the Company has loan transactions with some of its officers, directors, and material investors, and their immediate family members and affiliated entities. As of December 31, 2024, all such loans were made in accordance with applicable bank regulations. There were no loans in the ordinary course of business due from related parties as of December 31, 2024. See Note 19 – Related Party Transactions for more information.

NOTE 5 – CREDIT QUALITY ASSESSMENT

Allowance for Credit Losses - Loans Held for Investment at Amortized Cost

See Note 1 – Significant Accounting Policies for more information on the Company’s accounting policy for the allowance for credit losses.

The following table summarizes 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: