Forbright, Inc. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Dividends on Common Stock Forbright, Inc. historically has not paid any cash dividends on its shares of common stock and does not expect to do so in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of Forbright, Inc.’s Board of Directors and will depend on a number of factors, including earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate, ability to service any equity or debt obligations senior to our common stock and other factors deemed relevant by the Board of Directors. In addition, as a bank holding company, Forbright, Inc. is subject to general regulatory restrictions on the payment of cash dividends. Federal bank regulatory agencies have the authority to prohibit bank holding companies from engaging in unsafe or unsound practices in conducting their business, which, depending on the financial condition and liquidity of the holding company at the time, could include the payment of dividends. Further, various federal and state statutory provisions limit the amount of dividends that bank subsidiaries can pay to their parent holding company without regulatory approval. Generally, subsidiaries are prohibited from paying dividends when doing so would cause them to fall below the regulatory minimum capital levels, and limits exist on paying dividends in excess of net income for specified periods. The ability to pay dividends and the amounts that can be paid is limited to the extent the Bank’s capital ratios do not exceed the minimum required levels plus 250 basis points. Use of Proceeds We received net proceeds from our IPO of $131.0 million ($148.1 million including the underwriters execution of their option to purchase additional shares of Class A common stock in full), after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds that we received for general corporate purposes. At this time, we have not identified a specific use or uses for which we intend to employ the entirety of the net proceeds and, accordingly, we intend to invest any unused proceeds in a variety of capital preservation investments, including short-term, liquid investment-grade and interest-bearing instruments. We reserve the right to use the net proceeds that we received in any manner we consider to be appropriate, to the benefit of our business and operations. Although we do not currently contemplate changes in the proposed use of proceeds, to the extent we find that adjustment is required for other uses, by reason of existing business conditions, we may adjust the use of proceeds and apply them in our discretion. The actual use of the proceeds could differ from those outlined in the section entitled “Risk Factors” in our Form S-1 as filed with the SEC. Our management will have broad discretion in the application of the net proceeds accruing to us, and investors will be relying on the judgment of our management regarding the application of such proceeds. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. 129