Forbright Reports $20.6 Million in Third-Quarter Profit as Loans Grow
Key Facts
Forbright reported net income attributable to the company of $20.6 million for the quarter ended September 30, 2026, with diluted earnings of $0.41 per share, according to a company filing reported by Nasdaq on October 29. The results show a quarter in which lending expanded and credit-quality metrics improved. Loans totaled $6.6 billion at the end of September, up $577.8 million from the end of June. Total assets also rose to $9.6 billion from $8.5 billion at the end of the previous quarter. The company's shares, FRBT, closed at $17.24 on October 28, according to EL7 data.
The company said loans grew 9.5% quarter over quarter, driven by loan originations exceeding $1 billion during the quarter. The expansion included higher balances across multiple lending activities, including healthcare financing, where the company said its strategy had delivered strong growth. Total loans increased from $6.1 billion on June 30 to $6.6 billion on September 30, a rise of $577.8 million. The comparison reflects the addition of new loans as well as growth in existing balances. The company said loan originations exceeded $1 billion, while average loans increased 9.5% from the previous quarter.
Forbright attributed the growth in interest income mainly to a 9.5% increase in average loans from the previous quarter, alongside a 14-basis-point rise in loan yields. It also cited the recovery of previously accrued interest on loans that had not been accruing interest as an additional factor in the increase in income. In contrast, net interest margin was 3.18% in the three months ended September 30, compared with 3.19% in the three months ended June 30. The company said excess liquidity related to the branch sale affected the asset mix, partly offset by higher loan yields. Lending and its returns therefore grew alongside a slight quarter-over-quarter decline in net interest margin.
Credit metrics improved during the quarter, with the core net charge-off ratio falling to 3 basis points from 8 basis points in the second quarter. The company said nonaccrual loans declined and the average risk rating of loans improved. This places growth in the lending portfolio in the context of the improved quality metrics reported by management. On the funding side, the company said digital deposits increased by $1 billion quarter over quarter, driven by promotional offers. The filing points to quarterly growth in digital deposits, not to the platform's total collections since inception.
The company's assets increased by $1.1 billion during the quarter to $9.6 billion on September 30, compared with $8.5 billion on June 30. The company attributed the increase mainly to cash accumulation ahead of the branch sale and to loan growth. According to the company's explanation, the excess liquidity from cash accumulation affected the asset mix and weighed on net interest margin. These developments combined lending expansion with the retention of liquidity related to the branch transaction. Management had also linked the quarterly increase in loans to new originations and higher balances in lending activities, including healthcare financing.
Management said about 85% of loans had repriced between the September rate hike and mid-October. It added that the liquidity position allowed the company to hold deposit rates steady after the rate hike. The repricing came after the end of the reported quarter and extended into mid-October, making it a development after the financial period ended in September. The reported facts did not specify the financial impact of these changes on future quarters. This provides a view of the timing of repricing across a large share of the portfolio and of deposit-rate management in the period following the rate hike.
Looking ahead, management expects operating expenses in 2027 to remain largely stable, excluding reimbursable expenses in the solar energy services business. The company tied this outlook to excluding those expenses from its estimate, despite expecting strong loan growth. The outlook is limited to 2027 and the operating expense categories described by management. The available facts did not provide a figure for expected loan growth or for the excluded expenses. This frames next year's cost outlook alongside credit growth the company expects, without specifying the scale of that growth in the reported filing.