{"id":986969,"date":"2026-07-30T06:03:59","date_gmt":"2026-07-30T10:03:59","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/forbright-inc-reports-second-quarter-2026-results\/"},"modified":"2026-07-30T06:03:59","modified_gmt":"2026-07-30T10:03:59","slug":"forbright-inc-reports-second-quarter-2026-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/forbright-inc-reports-second-quarter-2026-results\/","title":{"rendered":"Forbright, Inc. Reports Second Quarter 2026 Results"},"content":{"rendered":"

<\/p>\n

Forbright, Inc. Reports Second Quarter 2026 Results<\/b><\/p>\n

Net interest income increased to $63.1 million<\/i><\/p>\n

Net interest margin increased to 3.19%<\/i><\/p>\n

Total loans grew to $6.1 billion<\/i><\/p>\n

Total deposits rose to $7.3 billion<\/i><\/p>\n

Credit trends remained favorable<\/i><\/p>\n

CHEVY CHASE, Md.–(BUSINESS WIRE<\/a>)–
\nForbright, Inc. (Nasdaq FRBT):<\/p>\n

\nFellow Shareholders,<\/p>\n

\nForbright, Inc. (Nasdaq FRBT) (“Forbright,” the “Company,” “we,” “our,” or “us”) wants to begin by welcoming our new shareholders. Because this is our first letter, we will spend more time discussing our strategy, the market opportunity, and our plan to create long-term shareholder value. We think it is important to set the table clearly: how the market is evolving, why we are positioned to capitalize on those changes, and the decisions we are making to compound value over time.<\/p>\n

\nAlongside the numbers, we will tell you plainly how we see the business and the opportunity ahead. We will write to you the way we would want someone to write to us if our positions were reversed. Like us, you are owners, and owners deserve the same candor and clarity we would demand ourselves. We believe candid communication builds trust and strengthens companies.<\/p>\n

\nWe will begin, where we should, with the numbers:<\/p>\n

\nForbright, Inc. is the parent company of wholly-owned subsidiary Forbright Bank (the “Bank”), and we are reporting today financial results for the second quarter ended June 30, 2026. The Company reported net income of $4.1 million, or $0.10 of basic earnings per outstanding voting and non-voting common share and $0.09 of diluted earnings per outstanding voting and non-voting common share for the three months ended June 30, 2026, compared to net income of $11.6 million, or $0.29 of basic earnings per outstanding voting and non-voting common share and $0.27 of diluted earnings per outstanding voting and non-voting common share for the three months ended March 31, 2026.<\/p>\n

\nThese results are consistent with our expectations and include one-time costs for a $5.6 million write-down of compensation related deferred tax assets, due to tax rules that now apply since we are a public company, and other IPO expenses of $0.9 million and $3.1 million, respectively, for the three and six months ended June 30, 2026.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\u00a0<\/td>\n<\/tr>\n
\n

Quarter-over-Quarter<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Year-over-Year<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Net interest income<\/b> was $63.1 million for the three months ended June 30, 2026, an increase of $3.6 million from the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Net interest income<\/b> was $122.7 million for the six months ended June 30, 2026, a decrease of $0.1 million from the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Provision for credit losses<\/b> was $5.9 million for the three months ended June 30, 2026, compared to $3.5 million for the three months ended March 31, 2026. Ratio of net charge-offs to average total loans at amortized cost was 0.20% for the three months ended June 30, 2026, compared to 0.32% for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Provision for credit losses<\/b> was $9.4 million for the six months ended June 30, 2026, compared to $12.5 million for the six months ended June 30, 2025. Ratio of net charge-offs to average total loans at amortized cost was 0.26% for the six months ended June 30, 2026, compared to 0.27% for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Net interest margin<\/b> was 3.19% for the three months ended June 30, 2026, an increase of 9 basis points from the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Net interest margin<\/b> was 3.14% for the six months ended June 30, 2026, a decrease of 58 basis points from the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Efficiency ratio<\/b> was 77.39% for the three months ended June 30, 2026, compared to 77.80% for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Efficiency ratio <\/b>was 77.58% for the six months ended June 30, 2026, compared to 67.48% for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Return on average stockholders’ equity<\/b> was 1.89% for the three months ended June 30, 2026, compared to 5.62% for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Return on average stockholders’ equity<\/b> was 3.71% for the six months ended June 30, 2026, compared to 7.07% for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Return on average tangible common equity(1)<\/sup><\/b> was 2.19% for the three months ended June 30, 2026, compared to 5.95% for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Return on average tangible common equity(1) <\/sup><\/b>was 4.02% for the six months ended June 30, 2026, compared to 7.54% for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Non-interest income<\/b> was $21.8 million for the three months ended June 30, 2026, compared to $15.6 million for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Non-interest income<\/b> was $37.4 million for the six months ended June 30, 2026, compared to $25.3 million for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Core non-interest income(1)<\/sup><\/b> was $21.7 million for the three months ended June 30, 2026, compared to $18.0 million for the three months ended March 31, 2026.<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u25a0<\/p>\n<\/td>\n

\n

Core non-interest income(1)<\/sup><\/b> was $39.7 million for the six months ended June 30, 2026, compared to $21.5 million for the six months ended June 30, 2025.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n\n
\n

\n__________________<\/p>\n

\n(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most directly comparable GAAP measure.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

BALANCE SHEET SUMMARY<\/b><\/p>\n\n\n
\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nTotal assets increased $272.4 million to $8.5 billion as of June 30, 2026, from $8.2 billion as of March 31, 2026. The increase in assets was due primarily to loan growth.<\/p>\n

Loans<\/b><\/p>\n

\nTotal loans were $6.1 billion as of June 30, 2026, an increase of $276.1 million from $5.8 billion as of March 31, 2026. The increase in loans was due primarily to new originations and balance increases in Lender Finance within Commercial and Industrial and Real Estate Finance within Commercial Real Estate held for investment loans, as well as new originations of Corporate Finance within Commercial and Industrial loans held-for-sale.<\/p>\n

Investment Securities<\/b><\/p>\n

\nTotal carrying amount of investment securities was $1.3 billion as of June 30, 2026, compared to $1.3 billion as of March 31, 2026. Investment securities remained flat with maturities of U.S. Treasury securities replaced with purchases of Residential and Commercial Agency Mortgage-backed securities.<\/p>\n

Deposits<\/b><\/p>\n

\nTotal deposits were $7.3 billion as of June 30, 2026, compared to $7.1 billion as of March 31, 2026. The increase in deposits was due primarily to an increase in Digital Banking deposits offset partially by maturing wholesale certificates of deposit.<\/p>\n

Borrowed Funds<\/b><\/p>\n

\nTotal borrowed funds were $151.2 million as of June 30, 2026, compared to $151.1 million as of March 31, 2026.<\/p>\n

Stockholders’ Equity<\/b><\/p>\n

\nTotal stockholders’ equity was $967.2 million as of June 30, 2026, compared to $831.2 million as of March 31, 2026. The increase was primarily driven by the issuance of 7.9 million shares of common stock resulting in proceeds, net of issuance costs, of $131.0 million in connection with the Company’s initial public offering.<\/p>\n

OUR VIEW<\/b><\/p>\n\n\n
\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nLoan growth for the quarter was strong and generally balanced across our lending strategies with Healthcare Finance and Lender Finance having the largest shares of our nearly $1.2 billion in new and upsized loan commitments for the quarter. We continue to see a competitive market environment for loans, with spreads and structures stable compared with recent quarters. Our sector-focused lending strategies are finding attractive opportunities and we benefit from a strong, high-quality pipeline across all our strategies. We were also pleased that our newly launched Asset Finance strategy closed its first equipment financing transaction in June, a few months ahead of plan.<\/p>\n

\nIn our fee businesses, closings in our FHA\/HUD business were behind plan, as several transactions moved into the third quarter due to processing backlogs at the FHA. Alliance Partners was behind plan, but we are hopeful that additional loan types in the pipeline can support continued growth.<\/p>\n

\nDeposit growth was on track during the quarter, and our new deposit promotion capability launched mid-June. This initial promotion in our digital bank has exceeded expectations, and is helping drive deposit growth well ahead of plan thus far in the third quarter.<\/p>\n

\nThe credit metrics we track most closely remained favorable during the second quarter. Our national lending strategies continue to perform very well from a credit perspective, with our limited stressed loans concentrated in our discontinued and shrinking legacy community bank portfolio.<\/p>\n

\nWe remained focused on expense management and are on track to meet our 2027 expense targets. This quarter showed good progress towards those goals.<\/p>\n

\nWe view the broader economy as benefiting from significant AI-related capital spending and inflation likely remaining elevated, driven mostly by geopolitical conflicts. We have very little credit exposure to the AI economy, which we view as an unattractive credit opportunity, or to software businesses that could be disrupted by new technologies. In general, broader economic conditions, while a consideration, are not central to our credit decisions, which rely on rigorous and disciplined bottom-up underwriting of asset values and cash flows.<\/p>\n

FORBRIGHT: PURPOSE BUILT FOR THE FUTURE<\/b><\/p>\n\n\n
\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nForbright sits at the intersection of two structural shifts reshaping U.S. banking. Each is durable and accelerating, and together they provide long-lasting momentum to our business model: a technology-enabled national deposit platform funding nationally sourced, sector-focused commercial lending. We pair this with a disciplined approach to maximizing returns on capital through prudent balance sheet allocation, risk-based pricing, and robust risk management. The result is the potential for long-duration growth in an exceptionally large addressable market, with stronger risk-adjusted return potential than legacy banks.<\/p>\n

Deposits Moving from Branch-Based to Digital<\/i><\/b><\/p>\n

\nThe deposit market is moving out of bank branches and into digital banks. Deposits held by direct banks increased from less than 1% in 2000 to approximately 10% as of December 31, 2025, according to the FFIEC and the Federal Reserve. Consistent with this increase, approximately 75% of American consumers in October 2025 preferred managing their bank accounts digitally, according to a survey by the American Bankers Association.<\/p>\n

\nForbright embodies this evolution. We gather deposits nationally without the fixed costs of real estate and branch staff, allowing us to return more to depositors in rate and service while running at an attractive all-in cost of funds. Our platform is built on a modern, API-driven technology stack rather than legacy core infrastructure, so it scales at low marginal cost and integrates new technologies quickly.<\/p>\n

\nWe believe AI will accelerate this shift by lowering the cost and raising the quality of deposit-gathering and the disruption is about to intensify as AI agents that maximize deposit yields for consumers gain widespread adoption. JPMorgan’s “Smart Cash,” for instance, automatically sweeps idle balances into higher-yielding accounts. As these agents proliferate, they strip away the inertia that lets branch banks hold large balances in low- or no-interest accounts. Money will move fluidly to whoever offers a fair rate through the cleanest digital rails – a clear advantage for digitally native banks like Forbright.<\/p>\n

The Increasing Sophistication of Commercial Lending<\/i><\/b><\/p>\n

\nThe U.S. economy has grown far more complex, and a more sophisticated economy generates more heterogeneous risk – risk that cannot be underwritten by a generalist credit box or a “one size fits all” credit underwriting criteria. Knowing whether a business will repay now requires genuine domain expertise: a client’s revenue durability, competitive moat, regulatory exposure, and what its collateral is worth in a downturn. And because commercial businesses are increasingly national in scope, geography matters far less in how they choose banking partners.<\/p>\n

\nAs a result, we see bank lending as bifurcating. Commoditized credit will flow to whoever has scale and automation; commercial credit will flow to whoever has the deepest expertise and most attractive funding. Specialization earns premium spreads precisely because fewer do it, and produces better outcomes because the lender understands the risk. Forbright’s six national, specialized lending strategies – led by deeply experienced teams with centralized risk and credit management – let us find, structure, and fund only the strongest deals while diversifying away single-region and industry concentration.<\/p>\n

A Better Deal for Consumers Means a Higher Bar for Banks<\/i><\/b><\/p>\n

\nFor consumers, this shift is unambiguously beneficial. Digital competition and yield-seeking agents make it effortless to capture a fair rate, ending the era when banks benefited from idle, underpaid balances. We believe more than $50 billion a year in additional interest would flow to consumers if this shift were complete. As switching costs fall toward zero, banks can no longer rely on inertia for cheap funding \u2014 a profoundly healthy correction and a threat to business models built on not delivering fair value to depositors.<\/p>\n

\nFairly priced funding raises the bar on the other side of the balance sheet. To prosper, a bank must earn more on its assets through well-underwritten, higher-yielding loans; generate fee income that does not depend on a deposit subsidy; and operate free of expensive legacy infrastructure. This is the model Forbright was built to execute: lending nationally through multiple strategies competing for capital on risk-adjusted returns, complemented by capital-light fee income from syndication, advisory, and asset management, all on a branch-light, technology-enabled platform designed for efficiency.<\/p>\n

The Road Ahead<\/i><\/b><\/p>\n

\nThe road ahead is straightforward. Our digital banking platform has significant capacity to grow, and each of our national lending businesses can scale meaningfully. Because our operating infrastructure is already built, every incremental loan and deposit carries only marginal cost – so growth drives dramatic improvement in operating efficiency, and AI could lower costs further still. None of this is accidental. It is the product of deliberate design, disciplined execution, and a long-term commitment to building an enduring franchise.<\/p>\n

2026 FOCUS<\/b><\/p>\n\n\n
\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nFor the remainder of the year, our priorities are clear: drive prudent loan and fee growth across our six lending strategies and fee businesses; lower our cost of funds through the new promotion capability; successfully stand up our digital checking and payments product; and advance additional expense initiatives to improve operating efficiency.<\/p>\n

\nAt the same time, we are actively exploring adjacent opportunities where our deposit technology platform could provide a distinct advantage as AI reshapes the deposit market. We will evaluate these opportunities with discipline, but once the path is clear, we plan to pursue them with ambition.<\/p>\n

COMPARISONS<\/b><\/p>\n\n\n
\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Quarter-over-Quarter<\/b><\/p>\n

Net Interest Income<\/b><\/p>\n

\nNet interest income was $63.1 million for the three months ended June 30, 2026, compared to $59.6 million for the three months ended March 31, 2026, an increase of $3.6 million. The change reflects an increase in interest income of $5.3 million compared to an increase in interest expense of $1.7 million.<\/p>\n

\nTotal interest income increased $5.3 million to $129.1 million for the three months ended June 30, 2026, from $123.8 million for the three months ended March 31, 2026. The increase was due primarily to growth in average loans which increased 3.9% compared to the prior quarter. The remaining increase was largely due to a three basis point increase in loan yields and the benefit of one additional day in the quarter.<\/p>\n

\nTotal interest expense increased $1.7 million to $65.9 million for the three months ended June 30, 2026, from $64.2 million for the three months ended March 31, 2026. The increase in interest expense was due primarily to an increase in Digital Banking and third party sweeps balances, and an additional day in the quarter, offset partially by lower wholesale certificates of deposit balances and a two basis point decline in the cost of interest-bearing liabilities.<\/p>\n

\nNet interest margin was 3.19% for the three months ended June 30, 2026, compared to 3.10% for the three months ended March 31, 2026, due primarily to an eight basis point increase in the yield on earning-assets, reflecting favorable asset mix and higher loan yields, and a four basis point decrease in cost of funds, reflecting higher non-interest-bearing deposit balances and a two basis point decline in the cost of interest-bearing liabilities.<\/p>\n

Provision for Credit Losses<\/b><\/p>\n

\nThe Company recorded a provision for credit losses of $5.9 million for the three months ended June 30, 2026 compared to a provision of $3.5 million for the three months ended March 31, 2026. The provision for credit losses for the three months ended June 30, 2026 was driven by an increase in the allowance for credit losses on loans (“ACL \u2013 Loans”) of $1.8 million, net charge-offs of $2.7 million, and an increase in the allowance for credit losses on unfunded commitments (“ACL \u2013 Unfunded”) of $1.4 million. The provision for credit losses for the three months ended March 31, 2026 was driven by a decrease in the ACL \u2013 Loans of $0.2 million, net charge-offs of $4.1 million, and a reduction in the ACL \u2013 Unfunded of $0.4 million. Net charge-offs for the quarterly periods that relate to legacy Consumer and Commercial and Industrial forward flow loans were $1.7 million and $3.1 million, respectively for the three months ended June 30, 2026 and March 31, 2026.<\/p>\n

Non-interest Income<\/b><\/p>\n

\nTotal non-interest income was $21.8 million for the three months ended June 30, 2026, compared to $15.6 million for the three months ended March 31, 2026. The increase of $6.3 million was due primarily to solar loan administration fees related to the solar servicing business, an increase in FHA\/HUD originations, rental income from other tenants in our headquarters building, following our acquisition in April 2026, and realized and unrealized gains on loans and other real estate owned assets.<\/p>\n

\nCore non-interest income(1)<\/sup> was $21.7 million for the three months ended June 30, 2026, compared to $18.0 million for the three months ended March 31, 2026. The increase of $3.8 million was primarily due to the items noted for total non-interest income related to FHA\/HUD fees and solar servicing income.<\/p>\n

Non-interest Expense<\/b><\/p>\n

\nTotal non-interest expense was $65.8 million for the three months ended June 30, 2026 compared to $58.5 million for the three months ended March 31, 2026. The increase of $7.3 million was due primarily to the combination of (i) the personnel retention compensation program implemented in connection with our initial public offering, (ii) legal fees and sub-servicer fees related to the Solar Servicing business, which are largely reimbursed by counterparties to the loans and recognized in other non-interest income, and (iii) expenses related to the ownership of the Company\u2019s headquarters following the building acquisition in April 2026.<\/p>\n

Income Taxes<\/b><\/p>\n

\nIncome tax expense was $9.2 million for the three months ended June 30, 2026, resulting in an effective tax rate of 69.0%, compared to income tax expense of $1.6 million and an effective tax rate of 12.0% for the three months ended March 31, 2026. Income tax expense for the three months ended June 30, 2026 includes (i) a $5.6 million write-down of deferred tax assets as of December 31, 2025 for stock compensation in connection with the initial public offering, which is due to tax rules that limit executive compensation deductions for companies with publicly traded securities, and (ii) a $1.1 million benefit for accretion of the deferred credit, compared to a benefit of $1.7 million for the three months ended March 31, 2026.<\/p>\n

\nThe effective tax rate for the three months ended June 30, 2026 was 69.0%, compared to 12.0% for the three months ended March 31, 2026. For the three months ended June 30, 2026, the effective tax rate was increased by 42.3% related to the one-time deferred tax asset adjustment for stock compensation, offset by a reduction of 8.6% related to accretion of the deferred credit. The effective tax rate for the three months ended March 31, 2026 was reduced by 13.0% related to accretion of the deferred credit during that period.<\/p>\n\n\n
\n

\n__________________<\/p>\n

\n(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most directly comparable GAAP measure.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Year-over-Year<\/b><\/p>\n

Net Interest Income<\/b><\/p>\n

\nNet interest income was $122.7 million for the six months ended June 30, 2026, compared to $122.8 million for the six months ended June 30, 2025. The slight decrease of $0.1 million was primarily due to an increase in interest expense of $8.7 million slightly exceeding an increase in interest income of $8.6 million.<\/p>\n

\nTotal interest income increased $8.6 million to $252.8 million for the six months ended June 30, 2026, from $244.2 million for the six months ended June 30, 2025. The increase was primarily due to increases in average loan balances and interest-earning deposits with banks, offset largely by a 137 basis point decrease in yield earned on loans, as well as lower average balances and yields on investment securities. The 137 basis point decrease in yield earned on loans was primarily driven by a 69 basis point decrease in average SOFR, lower average spreads reflecting changes in market pricing, and a mix shift in the loan portfolio towards lower yielding categories, and higher relative levels of amortization of deferred fees during the six months ended June 30, 2025, which included $4.1 million for restructured loans.<\/p>\n

\nTotal interest expense increased $8.7 million to $130.1 million for the six months ended June 30, 2026, from $121.4 million for the six months ended June 30, 2025. The increase in interest expense was primarily due to an increase in average balances in third-party sweep deposits and Digital Banking deposits offset largely by a 35 basis point decrease in the average rate paid on interest-bearing deposits.<\/p>\n

\nNet interest margin was 3.14% for the six months ended June 30, 2026, compared to 3.72% for the six months ended June 30, 2025, primarily due to a 137 basis point decrease in the yield on loans offset partially by a positive change in asset mix with loan growth exceeding growth in other earning asset categories, and a 40 basis point decrease in cost of funds.<\/p>\n

Provision for Credit Losses<\/b><\/p>\n

\nThe Company recorded a provision for credit losses of $9.4 million for the six months ended June 30, 2026 compared to $12.5 million for the six months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026 was driven by an increase in the ACL \u2013 Loans of $1.6 million, net charge-offs of $6.8 million, and an increase of $1.0 million in the ACL \u2013 Unfunded. The provision for credit losses for the six months ended June 30, 2025 was driven by an increase in the ACL \u2013 Loans of $6.0 million, $5.6 million in net charge-offs, and an increase of $0.9 million in the ACL \u2013 Unfunded. Net charge-offs for the year-to-date periods that relate to legacy Consumer and Commercial and Industrial forward flow loans were $4.8 million and $5.5 million, respectively for the six months ended June 30, 2026 and June 30, 2025.<\/p>\n

Non-interest Income<\/b><\/p>\n

\nTotal non-interest income was $37.4 million for the six months ended June 30, 2026, compared to $25.3 million for the six months ended June 30, 2025. The increase of $12.1 million was primarily due to servicing fees and trust administration income related to the solar servicing business. The increase was offset by a decrease in income related to lower volume of FHA\/HUD originations, less loan sales and fair value marks related to Corporate Finance loans, and lower investment advisory fees.<\/p>\n

\nCore non-interest income(1)<\/sup> was $39.7 million for the six months ended June 30, 2026, compared to $21.5 million for the six months ended June 30, 2025. The increase of $18.2 million was primarily due to the items noted for total non-interest income related to solar servicing income, offset partially by lower FHA\/HUD originations, and lower investment advisory fees.<\/p>\n

Non-interest Expense<\/b><\/p>\n

\nTotal non-interest expense was $124.2 million for the six months ended June 30, 2026, compared to $99.9 million for the six months ended June 30, 2025. The increase of $24.3 million resulted primarily due to (i) the acquisition of the Solar Servicing business, (ii) the personnel retention compensation program implemented in connection with our initial public offering, (iii) professional fees associated with the initial public offering, and (iv) expenses related to the ownership of the company\u2019s headquarters following the building acquisition in April 2026.<\/p>\n

Income Taxes<\/b><\/p>\n

\nIncome tax expense was $10.8 million for the six months ended June 30, 2026, resulting in an effective tax rate of 40.6%, compared to income tax expense of $9.4 million and an effective tax rate of 26.3% for the six months ended June 30, 2025. Income tax expense for the six months ended June 30, 2026 includes (i) a $5.6 million write-down of deferred tax assets as of December 31, 2025 for stock compensation in connection with the initial public offering, which is due to tax rules that limit executive compensation deductions for companies with publicly traded securities, and (ii) a $2.9 million benefit for accretion of the deferred credit.<\/p>\n

\nThe effective tax rate for the six months ended June 30, 2026 was 40.6%, compared to 26.3% for the six months ended June 30, 2025. For the six months ended June 30, 2026, the effective tax rate was increased by 21.2% related to the one-time deferred tax asset adjustment for stock compensation, offset by a reduction of 10.8% related to accretion of the deferred credit.<\/p>\n\n\n
\n

\n__________________<\/p>\n

\n(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most directly comparable GAAP measure.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n\n
\n

ASSET QUALITY<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nThe Company’s ACL \u2013 Loans held for investment at amortized cost was $54.6 million, or 0.98% of total loans held for investment at amortized cost, as of June 30, 2026, compared to $52.8 million, or 0.98%, as of March 31, 2026. The increase in the allowance for June 30, 2026 compared to March 31, 2026 was primarily due to increases in the ACL \u2013 Loans for forward flow consumer loans driven by recent portfolio performance and was offset partially by a favorable mix shift within the portfolio toward portfolios with lower ACL \u2013 Loans to loans held for investment at amortized cost ratios.<\/p>\n

\nNet charge-offs were $2.7 million, or 0.20% of average loans held for investment at amortized cost, for the three months ended June 30, 2026, compared to $4.1 million, or 0.32%, for the three months ended March 31, 2026. Of the net charge-offs for the three months ended June 30, 2026 and March 31, 2026 $1.7 million and $3.1 million were related to legacy Consumer and Commercial and Industrial forward flow loans.<\/p>\n

\nNet charge-offs were $6.8 million, or 0.26% of average loans held for investment at amortized cost, for the six months ended June 30, 2026, compared to $5.6 million, or 0.27%, for the six months ended June 30, 2025. Of the net charge-offs for the six months ended June 30, 2026 and June 30, 2025 $4.8 million and $5.5 million were related to legacy Consumer and Commercial and Industrial forward flow loans.<\/p>\n

\nNon-performing assets were $92.9 million as of June 30, 2026, compared to $93.3 million as of March 31, 2026. Non-performing assets as a percentage of total assets were 1.09% as of June 30, 2026, compared to 1.13% as of March 31, 2026. Both in total, and as a percentage of total assets, non-performing assets remained relatively flat during the periods presented.<\/p>\n

\nNon-performing loans held for investment at amortized cost were $72.5 million as of June 30, 2026, compared to $74.3 million as of March 31, 2026. Non-performing loans as a percentage of total loans held for investment at amortized cost was 1.30% as of June 30, 2026, compared to 1.38% as of March 31, 2026. Non-performing loans held for investment at amortized cost remained relatively flat both in total and as a percentage of held for investment loans at amortized cost for the periods presented.<\/p>\n\n\n
\n

CAPITAL<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nAs of June 30, 2026, the Company\u2019s and Bank\u2019s Tier 1 leverage ratio was 10.38% and 11.24%, respectively, compared to 8.92% and 10.19%, respectively, as of March 31, 2026.<\/p>\n

\nAs of June 30, 2026, the Company\u2019s and Bank\u2019s Common Equity Tier 1 ratio was 12.97% and 14.08%, respectively, compared to 11.47% and 13.11%, respectively, as of March 31, 2026.<\/p>\n

\nTotal stockholders’ equity was $967.2 million as of June 30, 2026, compared to $831.2 million as of March 31, 2026. The increase was primarily driven by the issuance of 7.9 million shares of common stock resulting in proceeds, net of issuance costs, of $131.0 million in connection with the Company’s initial public offering.<\/p>\n

\nAs of June 30, 2026, the Company had:<\/p>\n