Forbright shares rose in early trading. It's the bank of Biden's former Democratic Party rival

Shares of Forbright Bank rose just above the offering price in the first trading after the IPO. It is so far the only bank to list in the US this year. The bank is led by Democrat John Delaney, who is running against Joe Biden for the US presidential nomination in 2020.

Shares of Forbright were up 0.56% in trading on Thursday, June 11. At the peak during the day the securities were up 3%.

The bank raised $142 million in its IPO on Nasdaq, offering 7.9 million shares at $18 apiece - at the lower end of its originally announced price range ($18-20). At the end of initial trading, the bank's market value was about $900 million, Reuters noted.

The company has not yet figured out where exactly it will spend the money received as a result of the deal and reserves the right to use it in any way it deems appropriate, said the prospectus for the IPO Forbright. The bank intended to invest the unused funds in various capital preservation instruments.

Investors appear to have overlooked Forbright's IPO, given that "all eyes are on" Elon Musk's space company SpaceX, Renaissance Capital senior strategist Matt Kennedy said, as quoted by Reuters. But such options can sometimes prove to be winners in the long run, the analyst suggested.

Forbright traces its roots back to a small Congressional Bank founded in 2003, but a new chapter began for it in 2020, the company wrote in its IPO filing. That's when former U.S. House of Representatives member John Delaney returned to business after losing the Democratic presidential primary to Joe Biden.

In 2021, a consortium of investors, which, in addition to Delaney, included Centerbridge Partners, Gallatin Point Capital and Bayview Asset Management, invested $369 million in the capital of Congressional Bank and gained control over it. That same year, Delaney took over the bank and renamed it Forbright in 2022.

The capital injection allowed the company to expand the range of products and services, the company wrote in the prospectus for the IPO. From 2020 to March 31, 2026, Forbright's assets increased from $1.9 billion to $8.2 billion, Reuters notes.

The bank now lends to medium-sized businesses, provides retail banking, strategic advisory and asset management services.

The middle market represents one of the largest, fastest-growing and most economically significant segments of the U.S. economy, according to IPO documents. Forbright estimates the market for lending to this segment at $10 trillion.

The company also points to significant growth potential in digital banking: it is preferred by 76% of U.S. consumers, but such platforms account for only 10% of total deposits in the country.

One of Forbright's pluses is its focus on lending to middle-market businesses, IPO expert Donovan Jones wrote in a blog post on Seeking Alpha.

The main risks are competition with banking and non-banking services, says Freedom Broker analyst Alem Bektemirov. The company may also face operational risks, including fraud. Freedom set a target price of $19 for Forbright shares - in the middle of the announced price range and only 5% higher than the actual offering price.

Jones also highlights the slow growth in interest income, the high sensitivity of fintech deposits to changes in interest rates, and the large concentration of the loan portfolio in the real estate and construction segments.