UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedMarch 31, 2020September 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission file number 333-236022

BANCPLUS CORPORATION
(Exact name of registrant as specified in its charter)



Mississippi

64-0655312
(State or other jurisdiction of 
incorporation or organization)

(I.R.S. Employer
Identification Number)
1068 Highland Colony Parkway
Ridgeland, Mississippi 39157
(601) 898-8300
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
NoneN/AN/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer☐Accelerated filer☐
Non-accelerated filer☒Smaller reporting company☐
Emerging growth company☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
Shares of the registrant’s Common Stock, par value $1.00 per share, issued and outstanding as of May 7, 2020: 10,109,012November 8, 2021: 10,112,254



BANCPLUS CORPORATION
FORM 10-Q
MARCH 31, 2020For the Quarter Ended SEPTEMBER 30, 2021
INDEX
Page Number
2
42

42

Condensed Consolidated Balance Sheets at March 31, 2020September 30, 2021 (unaudited), and December 31, 20192020
42
Condensed Consolidated Statements of Income for thethree and nine months ended March 31, 2020September 30, 2021 and 20192020 (unaudited)
53
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2020September 30, 2021 and 20192020 (unaudited)
64
Condensed Consolidated Statements of Shareholders’ Shareholders’ Equity for the three and threenine months ended March 31, 2020September 30, 2021 and 20192020 (unaudited)
75
Condensed Consolidated Statements of Cash Flows for the threenine months ended March 31, 2020September 30, 2021 and 20192020 (unaudited)
87
109

2932
33

5363

5463

5464

5464

5564
7966

8066

8066

8066
8066
67

1
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains estimates, predictions, opinions, projections and other “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995 about BancPlus Corporation (“BancPlus,” the “Company,” “we,” “us” or “our”). Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations, and are subject to risks and uncertainties. These statements are often, but not always, preceded by, followed by or that otherwise include the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “continue,” “seek,” “plan,” “can,” “should,” “could,” “would,” “will,” “to be,” “predict,” “potential,” “may,” “likely,” “will likely result,” “target,” “project” and “outlook” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, based on certain assumptions and beliefs of the Company’s management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important risk factors that could cause actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:
•the effects of the novel coronavirus (“COVID-19”) pandemic on our business, financial condition and results of operations and on our customers, our employees, our third-party service providers and the economy;
•our ability to adequately measure and limit our credit risk;
•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
•additional loan losses and impairment of the collectability of loans, particularly as a result of the policies and programs implemented by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, including its automatic loan forbearance provisions;
•our ability to successfully integrate State Capital Corp. and State Bank & Trust Company into our business;
•our ability to prudently manage our growth and execute our strategy;
•the composition of our management team and our ability to attract and retain key personnel;
•changes in management personnel;
•geographic concentration of our business within Mississippi and neighboring markets;
•our ability to attract and retain customers;
•increased competition in the financial services industry, particularly from regional and national institutions;
•further government restrictions on overdraft programs;
•failure of our risk management framework;
•systems failures, unauthorized access, cyber-crime and other threats to data security or interruptions involving our information technology and telecommunications systems or third-party servicers, particularly in light of widespread remote work arrangements due to the COVID-19 pandemic;
2
Table of Contents
•difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which we operate and in which our loans are concentrated, including declines in housing markets, an increase in unemployment levels and slowdowns in economic growth, including as a result of the COVID-19 pandemic;
•our ability to maintain our historical rate of growth;
•our ability to manage the risks associated with our growth and expansion through de novo branching;
•our ability to identify potential candidates for, consummate, and achieve synergies resulting from, potential future acquisitions;
•deterioration of our asset quality;
•changes in the value of collateral securing our loans;
•changes in the laws, rules, regulations, interpretations or policies relating to financial institution, accounting, tax, trade, monetary and fiscal matters;
•further government intervention in the U.S. financial system, particularly in response to the COVID-19 pandemic;
•compliance with governmental and regulatory requirements, including relating to banking, consumer protection, securities and tax matters;
•operational risks associated with our business;
•volatility and direction of market interest rates, including as a result of the COVID-19 pandemic;
•our ability to maintain important deposit customer relationships, our reputation or otherwise avoid liquidity risks;
•the obligations associated with being a public reporting company;
•the commencement and outcome of litigation and other legal proceedings against us or to which we may become subject;
•natural disasters and adverse weather, public health crises, acts of terrorism, outbreaks of hostilities or other international or domestic calamities, and other matters beyond our control; and
•other factors that are discussed in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
New factors emerge from time to time, and it is not possible for us to predict which will arise. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Quarterly Report on Form 10-Q. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether written or oral, and whether as a result of new information, future developments or otherwise, except as specifically required by law.
3
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1.     Financial Statements
BancPlus Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
September 30, 2021December 31, 2020
(unaudited)
Assets:
Cash and due from banks$57,417 $109,233 
Interest bearing deposits with banks637,652 508,196 
Federal funds sold— 20,116 
Total cash and cash equivalents695,069 637,545 
Securities available for sale540,883 311,373 
Securities held to maturity - fair value: $78,905 - 2021; $94,436 - 202078,423 93,766 
Loans held for sale13,904 28,684 
Loans3,526,086 3,378,732 
Less: Allowance for loan losses44,001 36,000 
Net loans3,482,085 3,342,732 
Premises and equipment101,715 102,967 
Operating lease right-of-use assets35,305 35,936 
Accrued interest receivable17,120 18,061 
Goodwill2,616 2,616 
Other assets146,204 137,240 
$5,113,324 $4,710,920 
Liabilities:
Deposits$4,529,868 $4,152,810 
Advances from Federal Home Loan Bank and other borrowings31,026 33,771 
Subordinated debentures111,411 111,124 
Operating lease liabilities36,458 37,127 
Accrued interest payable2,647 2,709 
Other liabilities16,028 18,129 
Total liabilities4,727,438 4,355,670 
Redeemable common stock owned by the ESOP96,623 74,278 
Shareholders' equity:
Common Stock, par value $1.00 per share.
40,000,000 authorized at September 30, 2021 and December 31, 2020; 10,112,254 and 10,079,277 issued and outstanding at September 30, 2021 and December 31, 2020, respectively10,112 10,079 
Unearned Employee Stock Ownership Plan compensation(1,609)(2,650)
Additional paid-in capital66,767 67,742 
Retained earnings307,269 273,204 
Accumulated other comprehensive income, net3,347 6,875 
385,886 355,250 
Less: Redeemable common stock owned by the ESOP(96,623)(74,278)
Total shareholders' equity289,263 280,972 
$5,113,324 $4,710,920 
March 31, 2020December 31, 2019
(unaudited)
Assets:
Cash and due from banks$71,459  $45,475  
Interest bearing deposits with banks221,026  267,497  
Federal funds sold55,129  —  
Total cash and cash equivalents347,614  312,972  
Securities available for sale274,323  201,073  
Securities held to maturity - fair value: $107,069 - 2020; $179,225 - 2019106,767  177,854  
Loans held for sale16,312  16,092  
Loans2,094,112  2,078,997  
Less: Allowance for loan losses21,170  21,500  
Net loans2,072,942  2,057,497  
Premises and equipment74,645  75,072  
Operating lease right-of-use assets38,413  39,194  
Accrued interest receivable12,125  11,509  
Goodwill2,616  2,616  
Other assets87,055  85,185  
$3,032,812  $2,979,064  
Liabilities:
Deposits$2,639,004  $2,592,065  
Advances from Federal Home Loan Bank and other borrowings36,709  37,652  
Subordinated debentures payable to statutory trusts41,238  41,238  
Operating lease liabilities42,939  43,578  
Accrued interest payable1,068  1,083  
Other liabilities10,022  11,937  
Total liabilities2,770,980  2,727,553  
Redeemable common stock owned by the ESOP79,730  79,308  
Shareholders' equity:
Common Stock, par value $1.00 per share.
40,000,000 authorized at March 31, 2020 and December 31, 2019; 7,655,185 and 7,652,957 issued and outstanding at March 31, 2020 and December 31, 2019, respectively7,655  7,653  
Unearned Employee Stock Ownership Plan compensation(4,184) (4,476) 
Additional paid-in capital1,182  811  
Retained earnings252,264  247,241  
Accumulated other comprehensive income, net4,915  282  
261,832  251,511  
Less: Redeemable common stock owned by the ESOP(79,730) (79,308) 
Total shareholders' equity182,102  172,203  
$3,032,812  $2,979,064  
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Interest income:
Interest and fees on loans$43,835 $44,083 $129,066 $113,710 
Taxable securities2,097 1,815 6,024 5,157 
Tax-exempt securities455 573 1,473 1,942 
Interest bearing bank balances and other242 113 493 1,329 
Total interest income46,629 46,584 137,056 122,138 
Interest expense:
Deposits1,746 3,193 5,873 11,259 
Short-term borrowings— — — 2 
Advances from Federal Home Loan Bank78 79 233 239 
Other borrowings1,371 1,420 4,112 2,673 
Total interest expense3,195 4,692 10,218 14,173 
Net interest income43,434 41,892 126,838 107,965 
Provision for loan losses1,469 4,671 7,395 7,706 
Net interest income after provision for loan losses41,965 37,221 119,443 100,259 
Other operating income:
Service charges on deposit accounts7,484 5,690 19,226 16,674 
Mortgage origination income1,999 2,827 6,726 5,974 
Debit card interchange2,390 1,909 7,634 5,412 
Securities gains, net— 6 4 57 
Other income7,193 8,193 24,490 17,265 
Total other operating income19,066 18,625 58,080 45,382 
Other operating expenses:
Salaries and employee benefits expenses25,218 23,162 72,365 65,349 
Net occupancy expenses3,606 3,459 10,779 9,709 
Furniture, equipment and data processing expenses6,282 5,801 18,322 15,621 
Other expenses7,716 7,490 19,931 19,834 
Total other operating expenses42,822 39,912 121,397 110,513 
Income before income taxes18,209 15,934 56,126 35,128 
Income tax expense4,012 3,334 10,593 7,613 
Net income$14,197 $12,600 $45,533 $27,515 
Earnings per common share - basic$1.43 $1.25 $4.58 $2.98 
Earnings per common share - diluted$1.41 $1.24 $4.53 $2.96 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In Thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net income$14,197 $12,600 $45,533 $27,515 
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities available for sale(2,340)(225)(4,698)9,498 
Tax effect583 56 1,170 (2,365)
Total other comprehensive income (loss), net of tax(1,757)(169)(3,528)7,133 
Comprehensive income$12,440 $12,431 $42,005 $34,648 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of IncomeShareholders’ Equity
(Unaudited)
(In Thousands, Except Share and Per Share Data)
Three Months Ended
March 31, 2020		Three Months Ended
March 31, 2019
Interest income:
Interest and fees on loans$26,907  $27,478  
Taxable securities1,330  1,257  
Tax-exempt securities763  948  
Interest bearing bank balances and other1,112  781  
Total interest income30,112  30,464  
Interest expense:
Deposits4,252  4,226  
Short-term borrowings2  —  
Advances from Federal Home Loan Bank80  81  
Other borrowings483  621  
Total interest expense4,817  4,928  
Net interest income25,295  25,536  
Provision for loan losses185  288  
Net interest income after provision for loan losses25,110  25,248  
Other operating income:
Service charges on deposit accounts6,530  6,614  
Mortgage origination income1,259  747  
Debit card interchange1,447  1,575  
Securities gains, net37  —  
Other income4,927  4,482  
Total other operating income14,200  13,418  
Other operating expenses:
Salaries and employee benefits17,615  15,947  
Net occupancy expenses2,863  2,738  
Furniture, equipment and data processing expenses4,231  3,434  
Other expenses5,052  4,669  
Total other operating expenses29,761  26,788  
Income before income taxes9,549  11,878  
Income tax expense1,873  2,141  
Net income$7,676  $9,737  
Earnings per common share - basic$1.01  $1.29  
Earnings per common share - diluted$1.00  $1.28  

Unearned
ESOP
Compensation		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income		Less:
Redeemable
Common Stock
Owned by the ESOP		Total
Shareholders'
Equity
Common StockRetained
Earnings
SharesAmount
July 1, 202010,126,817 $10,127 $(3,375)$70,173 $255,990 $7,584 $(57,545)$282,954 
Net income— — — — 12,600 — — 12,600 
Other comprehensive loss, net— — — — — (169)— (169)
Purchase of Company stock(12,791)(13)— (588)— — — (601)
Issuance of restricted stock18,850 19 — (19)— — — — 
Stock based compensation— — — 367 — — — 367 
Net change fair value of ESOP shares— — — — — — (10,977)(10,977)
Common stock released by ESOP— — 433 — — — — 433 
Dividends declared ($0.35 per share)— — — — (3,527)— — (3,527)
September 30, 202010,132,876 $10,133 $(2,942)$69,933 $265,063 $7,415 $(68,522)$281,080 
January 1, 20207,652,957 $7,653 $(4,476)$811 $247,241 $282 $(79,308)$172,203 
Net income— — — — 27,515 — — 27,515 
Other comprehensive income, net— — — — — 7,133 — 7,133 
Acquisition of State Capital Corp.2,453,827 2,454 — 68,707 — — — 71,161 
Purchase of Company stock(12,791)(13)— (588)— — — (601)
Issuance of restricted stock39,155 39 — (39)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(272)— — (10)— — — (10)
Stock based compensation— — — 1,052 — — — 1,052 
Net change fair value of ESOP shares— — — — — — 10,786 10,786 
Common stock released by ESOP— — 1,534 — — — — 1,534 
Dividends declared ($1.05 per share)— — — — (9,693)— — (9,693)
September 30, 202010,132,876 $10,133 $(2,942)$69,933 $265,063 $7,415 $(68,522)$281,080 

The accompanying notes are an integral part of these condensed consolidated financial statements.


5
Table of Contents

BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive IncomeShareholders’ Equity (Continued)
(Unaudited)
(In Thousands)Thousands, Except Share and Per Share Data)
Three Months Ended
March 31, 2020		Three Months Ended
March 31, 2019
Net income$7,676  $9,737  
Other comprehensive income, net of tax:
Change in unrealized gains on securities available for sale6,169  411  
Tax effect(1,536) (102) 
Total other comprehensive income, net of tax4,633  309  
Comprehensive income$12,309  $10,046  
Unearned
ESOP
Compensation		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income		Less:
Redeemable
Common Stock
Owned by the ESOP		Total
Shareholders'
Equity
Common StockRetained
Earnings
SharesAmount
July 1, 202110,111,045 $10,111 $(1,957)$66,152 $296,900 $5,104 $(87,794)$288,516 
Net income— — — — 14,197 — — 14,197 
Other comprehensive loss, net— — — — — (1,757)— (1,757)
Issuance of restricted stock1,209 1 — (1)— — — — 
Stock based compensation— — — 616 — — — 616 
Net change in fair value of ESOP shares— — — — — — (8,829)(8,829)
Common stock released by ESOP— — 348 — — — — 348 
Dividends declared ($0.38 per share)— — — — (3,828)— — (3,828)
September 30, 202110,112,254 $10,112 $(1,609)$66,767 $307,269 $3,347 $(96,623)$289,263 
January 1, 202110,079,277 $10,079 $(2,650)$67,742 $273,204 $6,875 $(74,278)$280,972 
Net income— — — — 45,533 — — 45,533 
Other comprehensive loss, net— — — — — (3,528)— (3,528)
Issuance of restricted stock83,317 83 — (83)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(4,477)(4)— (225)— — — (229)
Purchase of Company stock(45,863)(46)— (2,387)— — — (2,433)
Stock based compensation— — — 1,720 — — — 1,720 
Net change fair value of ESOP shares— — — — — — (22,345)(22,345)
Common stock released by ESOP— — 1,041 — — — — 1,041 
Dividends declared ($1.14 per share)— — — — (11,468)— — (11,468)
September 30, 202110,112,254 $10,112 $(1,609)$66,767 $307,269 $3,347 $(96,623)$289,263 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
(In Thousands, Except Share and Per Share Data)
Class AClass BUnearned
ESOP
Compensation		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Common StockCommon StockCommon Stock
Retained
Earnings
SharesAmountSharesAmountSharesAmount
January 1, 2019—  $—  7,476,989  $7,477  115,005  $115  $(2,962) $180  $225,723  $(471) $(70,507) $159,555  
Net income—  —  —  —  —  —  —  —  9,737  —  —  9,737  
Impact of adoption of ASU 2016-02 related to leases—  —  —  —  —  —  —  —  (5,240) —  —  (5,240) 
Conversion of Class A and B Common Stock to Common Stock7,591,994  7,592  (7,476,989) (7,477) (115,005) (115) —  —  —  —  —  —  
Other comprehensive income, net—  —  —  —  —  —  —  —  —  309  —  309  
Issuance of restricted stock25,981  26  —  —  —  —  —  (26) —  —  —  —  
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(917) (1) —  —  —  —  —  (45) —  —  —  (46) 
Stock based compensation—  —  —  —  —  —  —  98  —  —  —  98  
Net change fair value of ESOP shares—  —  —  —  —  —  —  —  —  —  (5,629) (5,629) 
Common stock released by ESOP—  —  —  —  —  —  246  —  —  —  —  246  
Dividends declared ($0.32 per share)—  —  —  —  —  —  —  —  (2,405) —  —  (2,405) 
March 31, 20197,617,058  $7,617  —  $—  —  $—  $(2,716) $207  $227,815  $(162) $(76,136) $156,625  
January 1, 20207,652,957  $7,653  —  $—  —  $—  $(4,476) $811  $247,241  $282  $(79,308) $172,203  
Net income—  —  —  —  —  —  —  —  7,676  —  —  7,676  
Other comprehensive income, net—  —  —  —  —  —  —  —  —  4,633  —  4,633  
Issuance of restricted stock2,500  2  —  —  —  —  —  (2) —  —  —  —  
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(272) —  —  —  —  —  —  (10) —  —  —  (10) 
Stock based compensation—  —  —  —  —  —  —  383  —  —  —  383  
Net change fair value of ESOP shares—  —  —  —  —  —  —  —  —  —  (422) (422) 
Common stock released by ESOP—  —  —  —  —  —  292  —  —  —  —  292  
Dividends declared ($0.35 per share)—  —  —  —  —  —  —  —  (2,653) —  —  (2,653) 
March 31, 20207,655,185  $7,655  —  $—  —  $—  $(4,184) $1,182  $252,264  $4,915  $(79,730) $182,102  
The accompanying notes are an integral part of these condensed consolidated financial statements.
76
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended
March 31, 2020		Three Months Ended
March 31, 2019
Cash flows from operating activities:
Net income per condensed consolidated statements of income$7,676  $9,737  
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses185  288  
Depreciation and amortization1,303  1,349  
Net (gain) loss on sales of premises and equipment(4) 9  
Net (gain) loss on sales of other real estate owned(121) 241  
Write-downs of other real estate80  —  
Deferred income tax (benefit) expense(1,126) 3,138  
Federal Home Loan Bank stock dividends(14) (33) 
Common stock released by ESOP292  246  
Stock based compensation expense383  98  
Origination of loans held for sale(59,354) (32,780) 
Proceeds from loans held for sale59,134  34,280  
Earnings on bank-owned life insurance(395) (406) 
Net change in:
Accrued interest receivable and other assets(1,639) (1,999) 
Accrued interest payable and other liabilities(1,706) (3,178) 
Net cash from operating activities4,694  10,990  
Cash flows from investing activities:
Purchases of securities available for sale(44,603) (23,354) 
Maturities and calls of securities available for sale45,976  10,087  
Purchases of securities held to maturity—  (12,815) 
Maturities, prepayments and calls of securities held to maturity2,130  33,281  
Net increase in loans(16,761) (27,536) 
Purchases of premises and equipment(912) (2,113) 
Proceeds from sales of premises and equipment30  —  
Proceeds from sales of other real estate owned832  6,748  
Investment in unconsolidated entities, net(77) (28) 
Net cash used in investing activities(13,385) (15,730) 
Nine Months Ended September 30,
20212020
Cash flows from operating activities:
Net income per condensed consolidated statements of income$45,533 $27,515 
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses7,395 7,706 
Depreciation and amortization5,818 4,663 
Net loss on sales of premises and equipment279 294 
Net gain on sales of other real estate owned(169)(354)
Write-downs of other real estate-owned186 106 
Deferred income tax expense399 935 
Federal Home Loan Bank stock dividends(9)(41)
Common stock released by ESOP1,041 1,534 
Stock based compensation expense1,720 1,052 
Origination of loans held for sale(300,866)(274,668)
Proceeds from loans held for sale315,646 264,489 
Earnings on bank-owned life insurance(5,858)(1,526)
Bargain purchase gain on merger— (1,078)
Net change in:
Accrued interest receivable and other assets5,849 (2,987)
Accrued interest payable and other liabilities(2,163)(3,928)
Net cash from operating activities74,801 23,712 
Cash flows from investing activities:
Purchases of securities available for sale(317,600)(77,290)
Maturities and calls of securities available for sale81,015 112,835 
Purchases of securities held to maturity(19,103)(777)
Maturities, prepayments and calls of securities held to maturity34,318 12,071 
Net increase in loans(151,332)(465,459)
Purchases of premises and equipment(5,188)(6,992)
Proceeds from sales of premises and equipment31 40 
Proceeds from sales of other real estate owned4,672 4,955 
Investment in unconsolidated entities, net(96)(289)
Purchase of bank-owned life insurance(10,000)— 
Proceeds from bank-owned life insurance5,987 — 
Purchases or redemptions of Federal Home Loan Bank stock(163)2,562 
Cash received in excess of cash paid for acquisition— 75,303 
Net cash used in investing activities(377,459)(343,041)

87
Table of Contents
BancPlus Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (continued)
(Unaudited)
(In Thousands)
Three Months Ended
March 31, 2020		Three Months Ended
March 31, 2019
Cash flows from financing activities:
Net increase (decrease) in:
Noninterest-bearing deposits$29,452  $25,096  
Money market, NOW and savings deposits15,389  119,504  
Certificates of deposit2,098  (13,646) 
Payments on long-term FHLB advances(68) (72) 
Payments on other borrowings(875) (875) 
Cash dividends paid on common stock(2,653) (2,405) 
Shares withheld to pay taxes on restricted stock vesting(10) (46) 
Net cash from financing activities43,333  127,556  
Net change in cash and cash equivalents34,642  122,816  
Cash and cash equivalents at beginning of period312,972  145,197  
Cash and cash equivalents at end of period$347,614  $268,013  
Supplemental cash flow information:
Interest paid$4,832  $5,053  
Acquisition of real estate in non-cash foreclosures1,131  874  
Nine Months Ended September 30,
20212020
Cash flows from financing activities:
Net increase (decrease) in:
Noninterest-bearing deposits$168,926 $390,152 
Money market, negotiable order of withdrawal, and savings deposits265,081 21,169 
Certificates of deposit(56,950)(36,389)
Payments on Federal Home Loan Bank advances(120)(14,884)
Proceeds from issuance of subordinated debentures— 60,000 
Payment of subordinated debt issuance costs— (1,439)
Payments on other borrowings(2,625)(2,625)
Cash dividends paid on common stock(11,468)(9,693)
Purchase of Company stock(2,433)(601)
Shares withheld to pay taxes on restricted stock vesting(229)(10)
Net cash from financing activities360,182 405,680 
Net change in cash and cash equivalents57,524 86,351 
Cash and cash equivalents at beginning of period637,545 312,972 
Cash and cash equivalents at end of period$695,069 $399,323 
Supplemental cash flow information:
Interest paid$10,280 $10,889 
Federal and state income tax payments9,950 7,175 
Acquisition of real estate in non-cash foreclosures4,924 5,836 
Fair value of assets acquired net of liabilities assumed— 72,251 

The accompanying notes are an integral part of these condensed consolidated financial statements.
98
Table of Contents

BancPlus Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1: Basis of Presentation
BancPlus Corporation (the “Company”) is a bank holding company headquartered in Ridgeland, Mississippi operating in 1 reportable segment, financial services operations.segment. BankPlus (the “Bank”), the principal operating subsidiary and sole banking subsidiary of the Company, is a commercial bank primarily engaged in the business of commercial and consumer banking. In addition to general and consumer banking, other products and services offered though the Bank’s subsidiaries include certain insurance and annuity services, asset and investment management and financial planning services. Oakhurst Development, Inc. (“Oakhurst”) is a real estate subsidiary originally formed by the Company to liquidate a real estate development that was acquired by the Bank through foreclosure in 2002. Oakhurst became active again in March 2009 and wellness related services.holds loans and other real estate.
The unaudited interim condensed consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest.interest, and reflect all adjustments (consisting of normal recurring adjustments) that are necessary in the opinion of the Company’s management to fairly present the financial position, results of operations and cash flows of the Company. They have been derived from the audited consolidated financial statements for the fiscal year ended December 31, 2019;2020; however, certain notes and information have been omitted from the interim periods. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2019.2020. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. The accounting and financial reporting policespolicies followed by the Company conform, in all material respects, to the accounting principles generally accepted in the United States (“GAAP”) and to general practices within the financial services industry. The results of operations for the interim periods are not necessarily indicative of the results to be expected for future interim periods or for the entire year.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”)GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Particularly given the effects of the COVID-19 pandemic, the allowance for loan losses, provision for loan losses, and the fair value of financial instruments and the status of contingencies are particularly subject to change. Material estimates that are subject to significant change in the near term are the allowance for loan losses, provision for loan losses, valuation of other real estate owned and fair values of financial instruments. Actual results could differ from these estimates.
Recently Adopted Accounting Standards
Accounting Standards Update 2019-04 (“ASU 2019-04”), “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” In April 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04 clarifies that the reclassification of a debt security from held-to-maturity (“HTM”) to available-for-sale (“AFS”) under the transition guidance in Accounting Standards Update 2017-12, “Targeted Improvements to Accounting for Hedging Activities” would not (1) call into question the classification of other HTM securities, (2) be required to actually designate any reclassified security in a last-of-layer hedge, or (3) be restricted from selling any reclassified security. As part of the transition of ASU 2019-04, entities may reclassify securities that would qualify for designation as the hedged item in a last-of-layer hedging relationship from HTM to AFS; however, entities that already made such a reclassification upon their adoption of ASU 2017-12 are precluded from reclassifying additional securities. The Company did not reclassify any securities from HTM to AFS upon adoption of ASU 2017-12. ASU 2019-04 became effective as of the beginning of the first annual period after its issuance, which for the Company was January 1, 2020. See Note 3 Investment Securities for more information regarding the impact of the transfer of certain HTM debt securities to AFS.
Recently Issued But Not Yet Effective Accounting Standards
Accounting Standards Update 2016-13 (“ASU 2016-13”), “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit losses and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 was originally effective for the Company for annual and interim periods beginning on January 1, 2021. Subsequently, FASB approved a deferral of the effective date. ASU 2016-13 will now be effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has formed a cross functional team that is assessing data and system needs and evaluating the impact of adopting the new guidance. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the Company adopts the new
10
BancPlus Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(In Thousands, Except Per Share Data)
standard, but has not yet determined the magnitude of any suchthe one-time adjustmentsadjustment or the overall impact on the Company’s consolidated financial statements.

Accounting Standards Update 2020-04 (“ASU 2020-04”), “Reference Rate Reform - Topic 848.” In March 2020, the FASB issued ASU 2020-04, which provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications, hedge accounting, and other transactions affected that reference LIBORthe London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The company is still evaluating the impact of ASU 2020-04, but does not expect it to have a material impact on the Company’s consolidated financial statements.

9
Table of Contents
Note 2: Earnings Per Share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted number of common shares outstanding during the period and the number of common shares that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period.

Three Months Ended September 30,Nine Months Ended September 30,
(In thousands except per share data)(In thousands except per share data)March 31, 2020March 31, 2019(In thousands except per share data)2021202020212020
Net incomeNet income$7,676  $9,737  Net income$14,197 $12,600 $45,533 $27,515 
Weighted average common shares outstandingWeighted average common shares outstanding7,576  7,519  Weighted average common shares outstanding9,934 10,070 9,936 9,231 
Diluted effect of unallocated stockDiluted effect of unallocated stock79  76  Diluted effect of unallocated stock116 64 105 72 
Diluted common sharesDiluted common shares7,655  7,595  Diluted common shares10,050 10,134 10,041 9,303 
Basic earnings per common shareBasic earnings per common share$1.01  $1.29  Basic earnings per common share$1.43 $1.25 $4.58 $2.98 
Diluted earnings per common shareDiluted earnings per common share$1.00  $1.28  Diluted earnings per common share$1.41 $1.24 $4.53 $2.96 

Note 3: Business Combinations

State Capital Corp.

On April 1, 2020, the Company completed its previously announced merger with State Capital Corp. (“SCC”), the holding company of State Bank & Trust Company (“State Bank”). Pursuant to the terms of the Agreement and Plan of Share Exchange and Merger, dated September 18, 2019, by and among the Company, the Bank, SCC, and State Bank (the “Merger Agreement”), following BancPlus’ acquisition of SCC by a statutory share exchange, SCC was merged with and into the Company, with the Company surviving the merger (the “Merger”). Immediately thereafter, State Bank was merged with and into the Bank, with the Bank surviving the merger. As a result of the Merger, the Company’s geographic footprint expanded in Mississippi, Louisiana and Alabama, providing access to new markets and deposits.

Pursuant to the Merger Agreement, holders of SCC common stock received 0.6950 shares of the Company’s common stock, par value $1.00 per share, for each share of SCC common stock, par value $1.25 per share, held immediately prior to the effective time of the Merger, plus cash in lieu of fractional shares. The Company issued 2,453,827 shares of common stock to holders of SCC common stock, in addition to approximately $12,000 in lieu of fractional shares. In connection with the Merger, the Company incurred approximately $6.4 million of acquisition expenses, of which approximately $6.2 million were incurred during the nine months ended September 30, 2020. These expenses are recorded in other operating expenses and furniture, equipment and data processing expenses in the Company’s Condensed Consolidated Statement of Income for the nine months ended September 30, 2020.

The excess fair value of net assets acquired over cost paid was recorded as a gain on bargain purchase during 2020. The gain on bargain purchase was primarily the result of changes in the value of the Company’s common stock due to the timing of the closing of the Merger relative to when the Merger Agreement was signed and declines in the overall market as a result of the COVID-19 pandemic over that period.
10
Table of Contents
The following table reflects the consideration paid and the fair value allocation of assets acquired and liabilities assumed as of the acquisition date:
(In thousands)
Purchase price allocation:
Common stock issued$71,161 
Cash paid for fractional shares12 
Total purchase price$71,173 
Assets acquired:
Cash and due from banks$75,315 
Securities, Federal Home Loan Bank (“FHLB”) stock and First National Bankers Bankshares, Inc. stock97,910 
Loans, net880,390 
Premises and equipment29,968 
Accrued interest receivable3,664 
Bank-owned life insurance28,441 
Core deposit intangible6,045 
Taxes receivable7,787 
Deferred tax asset, net5,972 
Other assets3,330 
Total assets acquired$1,138,822 
Liabilities assumed:
Deposits$1,024,381 
Advances from FHLB and other borrowings14,563 
Subordinated debentures11,121 
Deferred compensation10,310 
Other liabilities6,196 
Total liabilities assumed$1,066,571 
Net assets acquired72,251 
Excess of fair value of net assets acquired over consideration paid - Gain on bargain purchase$(1,078)

In connection with the Merger, the Company recorded a $6.0 million core deposit intangible, which will be amortized over 10 years. The Company also acquired loans with a fair value of $880.4 million, net of a $19.1 million fair value discount, which included a credit mark discount of $11.6 million.

Revenues and earnings of the acquired company since the Merger date have not been disclosed as it is not practicable as SCC was merged into BancPlus and separate financial information for SCC is not available. The following table presents unaudited pro forma information as if the Merger with SCC had occurred on January 1, 2020. This pro forma information combines the historic condensed consolidated results of operations of BancPlus and SCC after giving effect to certain adjustments, including purchase accounting fair value adjustments and amortization of intangibles, as well as the related income tax effects of those adjustments. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Merger occurred on January 1, 2020.

11
Table of Contents
Three Months EndedNine Months Ended
(In thousands, except per share data)September 30, 2020September 30, 2020
Net interest income$43,828 $123,958 
Other operating income18,626 47,034 
Net income available to common shareholders13,993 27,539 
Earnings per common share:
Basic$1.39 $2.74 
Diluted1.38 2.72 

First Trust Corporation

On September 28, 2021, the Company entered in an Agreement and Plan of Share Exchange and Merger with First Trust Corporation (“FTC”), the parent company of First Bank and Trust (“FBT”), whereby the Company will acquire FTC and the Bank will acquire FBT (the “transaction”). The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including receipt of required regulatory approvals and the approval by shareholders of FTC.
Note 3:4: Investment Securities
The following is a summary of the amortized cost and fair value of securities available for sale.

 Amortized Gross Unrealized Fair
(In thousands)CostGainsLossesValue
September 30, 2021:
U.S. Government agency obligations$301,619 $421 $2,199 $299,841 
Residential mortgage-backed securities118,554 3,522 230 121,846 
Commercial mortgage-backed securities14,764 146 16 14,894 
Asset-backed securities13,068 506 35 13,539 
Corporate investments43,000 1,210 60 44,150 
State and political subdivisions45,422 1,310 119 46,613 
Total available for sale$536,427 $7,115 $2,659 $540,883 
December 31, 2020:
U.S. Government agency obligations$12,092 $342 $— $12,434 
Residential mortgage-backed securities181,569 5,644 1 187,212 
Commercial mortgage-backed securities16,793 538 — 17,331 
Asset backed securities13,990 543 86 14,447 
Corporate investments32,750 420 22 33,148 
State and political subdivisions45,025 1,833 57 46,801 
Total available for sale$302,219 $9,320 $166 $311,373 
 Amortized Gross Unrealized Fair
(In thousands)CostGainsLossesValue
March 31, 2020:
U.S. Government agency obligations$5,000  $188  $—  $5,188  
Residential mortgage-backed securities202,315  5,511  23  207,803  
Commercial mortgage-backed securities11,321  77  —  11,398  
Corporate investments4,000  —  15  3,985  
State and political subdivisions45,142  968  161  45,949  
Total available for sale$267,778  $6,744  $199  $274,323  
December 31, 2019:
U.S. Government agency obligations$17,999  $104  $1  $18,102  
Residential mortgage-backed securities175,696  693  510  175,879  
Commercial mortgage-backed securities3,002  8  —  3,010  
Corporate investments4,000  82  —  4,082  
Total available for sale$200,697  $887  $511  $201,073  
Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
1112
Table of Contents
The following is a summary of the amortized cost and fair value of securities held to maturity.

AmortizedGross UnrealizedFairAmortizedGross UnrealizedFair
(In thousands)(In thousands)CostGainsLossesValue(In thousands)CostGainsLossesValue
March 31, 2020:
September 30, 2021:September 30, 2021:
States and political subdivisionsStates and political subdivisions$106,767  $315  $13  $107,069  States and political subdivisions$78,423 $482 $— $78,905 
Total held to maturityTotal held to maturity$106,767  $315  $13  $107,069  Total held to maturity$78,423 $482 $— $78,905 
December 31, 2019:
U.S. Government agency obligations$5,000  $3  $—  $5,003  
Residential mortgage-backed securities1,071  41  —  1,112  
December 31, 2020:December 31, 2020:
States and political subdivisionsStates and political subdivisions171,783  1,339  12  173,110  States and political subdivisions$93,766 $670 $— $94,436 
Total held to maturityTotal held to maturity$177,854  $1,383  $12  $179,225  Total held to maturity$93,766 $670 $— $94,436 
All mortgage-backed securities in the above tables were issued or guaranteed by U.S. government agencies or sponsored agencies.
In the first quarter of 2020, the Company elected to reclassify certain prepayable debt securities from held to maturity to available for sale. Prepayable debt securities with a carrying value of $66.5 million were transferred from held-to-maturity to available for sale. The reclassified securities primarily consisted of states and political subdivisions.
Provided below is a summary of investment securities that were in an unrealized loss position and the length of time that individual securities have been in a continuous loss position.
Less Than 12 Months12 Months or MoreTotalLess Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
(In thousands)(In thousands)(In thousands)Unrealized LossesFair ValueUnrealized Losses
March 31, 2020:
September 30, 2021:September 30, 2021:
Available for sale:Available for sale:Available for sale:
U.S. Government agenciesU.S. Government agencies$255,063 $2,199 $— $— 255,063 $2,199 
Residential mortgage-backed securitiesResidential mortgage-backed securities$2,449  $23  $—  $—  2,449  $23  Residential mortgage-backed securities12,031 230 — — 12,031 230 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities3,174 16 — — 3,174 16 
Asset backed securitiesAsset backed securities— — 2,271 35 2,271 35 
Corporate investmentsCorporate investments3,985  15  —  —  3,985  15  Corporate investments6,941 60 — — 6,941 60 
States and political subdivisionsStates and political subdivisions3,955  161  —  —  3,955  161  States and political subdivisions5,636 119 — — 5,636 119 
$10,389  $199  $—  $—  10,389  $199  $282,845 $2,624 $2,271 $35 285,116 $2,659 
Held to maturity:
December 31, 2020:December 31, 2020:
Available for sale:Available for sale:
Residential mortgage-backed securitiesResidential mortgage-backed securities$4,471 $1 $— $— 4,471 $1 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities305 — — — 305 — 
Asset backed securitiesAsset backed securities2,492 86 — — 2,492 86 
Corporate investmentsCorporate investments9,229 22 — — 9,229 22 
States and political subdivisionsStates and political subdivisions$4,444  $13  $—  $—  $4,444  $13  States and political subdivisions3,028 57 — — 3,028 57 
$19,525 $166 $— $— 19,525 $166 
December 31, 2019:
Available for sale:
U. S. Government agency obligations$—  $—  $4,999  $1  4,999  $1  
Residential mortgage-backed securities92,323  466  2,240  44  94,563  $510  
$92,323  $466  $7,239  $45  99,562  $511  
Held to maturity:
States and political subdivisions$2,656  $8  $2,766  $4  $5,422  $12  
The number of debt securities in an unrealized loss position decreasedincreased from 3613 at December 31, 20192020 to 1762 at March 31, 2020.September 30, 2021. The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost bases, which may be at maturity, the Company does not consider these investments to be other-than temporarily impaired on an other-than-temporary basis at March 31, 2020.
12
Table of Contents
September 30, 2021.
The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations with, or without, call or prepayment penalties.
13

Table of Contents
Available for SaleHeld to MaturityAvailable for SaleHeld to Maturity
AmortizedFairAmortizedFairAmortizedFairAmortizedFair
(In thousands)(In thousands)CostValueCostValue(In thousands)CostValueCostValue
March 31, 2020:
September 30, 2021:September 30, 2021:
One year or lessOne year or less$3,739  $3,762  $15,048  $15,063  One year or less$11,330 $11,402 $12,437 $12,455 
After one through five yearsAfter one through five years19,566  19,838  47,264  47,334  After one through five years179,898 179,041 46,344 46,558 
After five through ten yearsAfter five through ten years38,016  38,831  40,910  41,127  After five through ten years204,514 205,651 16,887 17,137 
After ten yearsAfter ten years206,457  211,892  3,545  3,545  After ten years140,685 144,789 2,755 2,755 
$267,778  $274,323  $106,767  $107,069  $536,427 $540,883 $78,423 $78,905 

The following is a summary of the amortized cost and fair value for investment securities which were pledged to secure public deposits and for other purposes required or permitted by law.

Available for SaleHeld to Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
March 31, 2020$242,676  $248,826  $58,694  $58,988  
December 31, 2019$124,854  $125,103  $123,978  $125,241  

Available for SaleHeld to Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
September 30, 2021$441,300 $444,560 $44,697 $45,144 
December 31, 2020$251,913 $260,351 $57,110 $57,770 
Note 4:5: Loans
The following is a summary of the Company’s loan portfolio by loan class.

(In thousands)(In thousands)March 31, 2020December 31, 2019(In thousands)September 30, 2021December 31, 2020
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$549,410  $555,413  Residential properties$773,928 $738,340 
Construction and land developmentConstruction and land development234,793  230,931  Construction and land development465,564 403,496 
FarmlandFarmland158,344  162,991  Farmland212,645 217,104 
Other commercialOther commercial686,657  664,145  Other commercial1,339,214 1,224,633 
Total real estateTotal real estate1,629,204  1,613,480  Total real estate2,791,351 2,583,573 
Commercial and industrial loansCommercial and industrial loans332,216  333,834  Commercial and industrial loans534,160 635,714 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers73,146  70,145  Agricultural production and other loans to farmers101,973 85,469 
Consumer and other loansConsumer and other loans59,546  61,538  Consumer and other loans98,602 73,976 
Total loans before allowance for loan lossesTotal loans before allowance for loan losses$2,094,112  $2,078,997  Total loans before allowance for loan losses$3,526,086 $3,378,732 
Loans are stated at the amount of unpaid principal, before allowance for loan losses. Interest on loans is calculated using the simple interest method on daily balances of the principal amount outstanding.
Loan Origination/Risk Management/Credit Concentration - The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. The Company’s Board of Directors reviews and approves these policies and procedures on a regular basis. Although the Company has a diversified loan portfolio, the Company has concentrations of credit risks related to the real estate market, including residential, commercial, and construction and land development lending. Most of the Company’s lending activity occurs within the State of Mississippi.Mississippi, Louisiana, and Alabama.
The risk characteristics of the Company’s material portfolio segments are as follows:
13
Table of Contents
Residential Real Estate Loans - The residential real estate loan portfolio consists of residential loans for single and multifamily properties. Residential loans are generally secured by owner occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can be impacted by economic conditions within their market area. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.
14
Table of Contents
Commercial Real Estate Loans - Commercial real estate loans include construction and land development loans, loans secured by farmland and other commercial real estate loans.
Construction and land development loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing.
FarmFarmland loans are generally made for the purpose of acquiring land devoted to crop production or livestock, the propagation of timber or the operation of a similar type of business on the secured property. Sources of repayment for these loans generally include income generated from operations of a business on the property, rental income, or sales of timber. Repayment may be impacted by changes in economic conditions which affect underlying collateral values.
Commercial real estate loans typically involve larger principal amounts and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates commercial real estate loans based on collateral and risk grade criteria.
Commercial and Industrial Loans - The commercial and industrial loan portfolio consists of loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchase or other expansion projects. Commercial loan underwriting standards are designed to promote relationship banking rather than transactional banking and are underwritten based on the borrower’s expected ability to profitably operate its business. The cash flows of borrowers, however, may not be as expected and collateral securing these loans may fluctuate in value. Most commercial loans are secured by assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. In the case of loans secured by accounts receivable, the availability of funds for repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
Consumer and otherOther Loans - The consumer and other loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes.  Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose.  Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s market area) and the creditworthiness of a borrower.
14
TableLoans that are 30 days or more past due based on payments received and applied to the loan are considered delinquent. Accrual of Contentsinterest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that a borrower's financial condition is such that collection of interest, but not necessarily principal, is doubtful. A loan is typically placed on non-accrual when the contractual payment of principal or interest becomes 90 days past due unless the loan is well-secured and in the process of collection. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. Current year interest previously recorded, but deemed not collectible, is reversed and charged against current year income. Prior year interest previously recorded, but deemed not collectible, is charged against the allowance.
Payments subsequently received on non-accrual loans are applied to principal. Interest income is recognized to the extent that cash payments are received in excess of principal due. A loan may return to accrual status when principal and interest payments are no longer past due and collectability is reasonably assured.
The following table presents the recorded investment in nonaccrual loans, segregated by class.

(In thousands)March 31, 2020December 31, 2019
Secured by real estate:
Residential properties$2,292  $2,419  
Construction and land development390  390  
Farmland—  —  
Other commercial8,193  9,034  
Total real estate10,875  11,843  
Commercial and industrial loans41  67  
Agricultural production and other loans to farmers62  62  
Consumer and other loans184  187  
Total nonaccrual loans$11,162  $12,159  
15
Table of Contents
(In thousands)September 30, 2021December 31, 2020
Secured by real estate:
Residential properties$3,318 $3,869 
Construction and land development58 1,863 
Farmland1,893 158 
Other commercial2,324 7,947 
Total real estate7,593 13,837 
Commercial and industrial loans106 12 
Agricultural production and other loans to farmers135 85 
Consumer and other loans210 177 
Total nonaccrual loans$8,044 $14,111 

An age analysis of past due loans (including both accruing and non-accruing loans) segregated by class of loans is as follows:
(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
September 30, 2021
Secured by real estate:
Residential properties$5,427 $2,008 $7,435 $766,493 $773,928 $696 
Construction and land development307 1,331 1,638 463,926 465,564 1,331 
Farmland189 515 704 211,941 212,645 46 
Other commercial4,037 317 4,354 1,334,860 1,339,214 14 
Total real estate9,960 4,171 14,131 2,777,220 2,791,351 2,087 
Commercial and industrial loans1,144 192 1,336 532,824 534,160 94 
Agricultural production and other loans to farmers23 226 249 101,724 101,973 94 
Consumer loans338 234 572 98,030 98,602 24 
Total$11,465 $4,823 $16,288 $3,509,798 $3,526,086 $2,299 
(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
March 31, 2020
Secured by real estate:
Residential properties$7,810  $1,887  $9,697  $539,713  $549,410  $1,479  
Construction and land development559  2,028  2,587  232,206  234,793  1,638  
Farmland357  295  652  157,692  158,344  295  
Other commercial4,214  411  4,625  682,032  686,657  334  
Total real estate12,940  4,621  17,561  1,611,643  1,629,204  3,746  
Commercial and industrial loans533  140  673  331,543  332,216  139  
Agricultural production and other loans to farmers265  15  280  72,866  73,146  15  
Consumer loans688  34  722  58,824  59,546  34  
Total$14,426  $4,810  $19,236  $2,074,876  $2,094,112  $3,934  

(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
December 31, 2019
Secured by real estate:
Residential properties$6,262  $2,610  $8,872  $546,541  $555,413  $1,745  
Construction and land development688  —  688  230,243  230,931  —  
Farmland253  149  402  162,589  162,991  149  
Other commercial1,227  724  1,951  662,194  664,145  418  
Total real estate8,430  3,483  11,913  1,601,567  1,613,480  2,312  
Commercial and industrial loans375  255  630  333,204  333,834  235  
Agricultural production and other loans to farmers400  20  420  69,725  70,145  20  
Consumer loans795  51  846  60,692  61,538  51  
Total$10,000  $3,809  $13,809  $2,065,188  $2,078,997  $2,618  

15
Table of Contents
(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
December 31, 2020
Secured by real estate:
Residential properties$5,836 $2,016 $7,852 $730,488 $738,340 $1,174 
Construction and land development713 3,086 3,799 399,697 403,496 1,843 
Farmland373 779 1,152 215,952 217,104 618 
Other commercial3,956 3,084 7,040 1,217,593 1,224,633 2,417 
Total real estate10,878 8,965 19,843 2,563,730 2,583,573 6,052 
Commercial and industrial loans2,195 135 2,330 633,384 635,714 135 
Agricultural production and other loans to farmers319 15 334 85,135 85,469 15 
Consumer loans444 278 722 73,254 73,976 101 
Total$13,836 $9,393 $23,229 $3,355,503 $3,378,732 $6,303 
Impaired Loans - Impaired loans include nonperforming loans, loans modified in troubled debt restructurings (“TDRs”) where concessions have been granted to borrowers experiencing financial difficulties, and certain other loans identified by management. Certain other loans identified by management consist of performing loans with specific allocations of the allowance for loan loss. Impaired loans, or portions thereof, are charged-off when deemed uncollectible. The principal, recorded balance, and related allowance on impaired loans while classified as impaired at March 31, 2020 and December 31, 2019, were as follows:

March 31, 2020
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$4,701  $3,650  $—  
Construction and land development3,919  2,009  —  
Farmland10,619  10,563  —  
Other commercial2,798  1,249  —  
Total real estate22,037  17,471  —  
Commercial and industrial356  41  —  
Agricultural production and other loans to farmers75  62  —  
Consumer and other loans211  183  —  
Total$22,679  $17,757  $—  
Impaired loans with related allowance:
Secured by real estate:
Residential properties$1,123  $1,123  $14  
Construction and land development—  —  —  
Farmland—  —  —  
Other commercial9,653  9,475  3,332  
Total real estate10,776  10,598  3,346  
Commercial and industrial423  423  34  
Agricultural production and other loans to farmers—  —  —  
Consumer and other loans—  —  —  
Total$11,199  $11,021  $3,380  
Total impaired loans$33,878  $28,778  $3,380  


16
Table of Contents
December 31, 2019
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$4,789  $3,789  $—  
Construction and land development3,919  2,009  —  
Farmland10,993  10,937  —  
Other commercial3,893  2,400  —  
Total real estate23,594  19,135  —  
Commercial and industrial384  67  —  
Agricultural production and other loans to farmers75  62  —  
Consumer and other loans211  187  —  
Total$24,264  $19,451  $—  
Impaired loans with related allowance:
Secured by real estate:
Residential properties$1,127  $1,127  $11  
Construction and land development—  —  —  
Farmland—  —  —  
Other commercial10,114  10,076  3,325  
Total real estate11,241  11,203  3,336  
Commercial and industrial427  427  34  
Agricultural production and other loans to farmers—  —  —  
Consumer and other loans—  —  —  
Total11,668  11,630  3,370  
Total impaired loans$35,932  $31,081  $3,370  
Impaired loans, segregated by class were as follows:

September 30, 2021
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$7,666 $5,099 $— 
Construction and land development3,669 1,656 — 
Farmland11,994 11,439 — 
Other commercial4,015 2,448 — 
Total real estate27,344 20,642 — 
Commercial and industrial19,723 19,393 — 
Agricultural production and other loans to farmers289 147 — 
Consumer and other loans236 210 — 
Total$47,592 $40,392 $— 
Impaired loans with related allowance:
Secured by real estate:
Residential properties$1,060 $1,060 $9 
Construction and land development— — — 
Farmland— — — 
Other commercial1,948 1,948 276 
Total real estate3,008 3,008 285 
Commercial and industrial2,324 2,324 991 
Agricultural production and other loans to farmers— — — 
Consumer and other loans— — — 
Total5,332 5,332 1,276 
Total impaired loans$52,924 $45,724 $1,276 

(1) Recorded balance represents the carrying value – the contractual principal obligation due from the customer less charge offs and payments applied.    
December 31, 2020
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$8,474 $5,795 $— 
Construction and land development5,530 3,462 — 
Farmland11,024 10,584 — 
Other commercial8,439 5,149 — 
Total real estate33,467 24,990 — 
Commercial and industrial10,386 9,962 — 
Agricultural production and other loans to farmers156 97 — 
Consumer and other loans216 177 — 
Total$44,225 $35,226 $— 
Impaired loans with related allowance:
Secured by real estate:
Residential properties$1,073 $1,073 $9 
Construction and land development— — — 
Farmland— — — 
Other commercial6,072 6,039 2,028 
Total real estate7,145 7,112 2,037 
Commercial and industrial4,430 4,430 2,158 
Agricultural production and other loans to farmers— — — 
Consumer and other loans— — — 
Total11,575 11,542 4,195 
Total impaired loans$55,800 $46,768 $4,195 

(1)Recorded balance represents the carrying value – the contractual principal obligation due from the customer less charge-offs and payments applied.

17
Table of Contents
The average recorded investment and interest recognized for impaired loans for the three and nine months ended March 31,September 30, 2021 and 2020 and 2019 are presented below.
Three Months Ended September 30,
20212020
AverageInterestAverageInterest
(In thousands)InvestmentRecognizedInvestmentRecognized
Secured by real estate:
  Residential properties$6,123 $42 $6,934 $38 
  Construction and land development1,139 23 2,026 31 
  Farmland11,150 104 10,515 127 
  Other commercial5,046 14 12,389 61 
    Total real estate23,458 183 31,864 257 
Commercial and industrial21,728 281 1,133 7 
Agricultural production and other loans to farmers146 3 97 — 
Consumer loans210 — 180 — 
    Total$45,542 $467 $33,274 $264 

Nine Months Ended September 30,
March 31, 2020March 31, 201920212020
AverageInterestAverageInterestAverageInterestAverageInterest
(In thousands)(In thousands)InvestmentRecognizedInvestmentRecognized(In thousands)InvestmentRecognizedInvestmentRecognized
Secured by real estate:Secured by real estate:Secured by real estate:
Residential properties Residential properties$4,773  $38  $4,548  $37   Residential properties$6,489 $106 $5,773 $114 
Construction and land developmentConstruction and land development2,009  35  2,414  55   Construction and land development2,107 80 2,013 96 
Farmland Farmland10,563  129  390  —   Farmland10,452 356 10,517 382 
Other commercial Other commercial10,724  58  12,427  70   Other commercial6,827 129 11,876 176 
Total real estate Total real estate28,069  260  19,779  162   Total real estate25,875 671 30,179 768 
Commercial and industrialCommercial and industrial464  8  693  7  Commercial and industrial20,076 753 689 20 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers62  —  85  —  Agricultural production and other loans to farmers94 3 78 — 
Consumer loansConsumer loans183  —  —  —  Consumer loans191 — 182 — 
Total Total$28,778  $268  $20,557  $169   Total$46,236 $1,427 $31,128 $788 
There were no modifications classified as TDRs for the threenine months ended March 31, 2020September 30, 2021 or 2019.2020. Although there were additional modifications of terms on some loans, the prevailing modifications during the reported periods were related to converting the loans to interest only for a period of time, reductions in the interest rates, and/or extensions of payment dates or maturity dates. Because the majority of these loans were classified as impaired loans before restructuring, the modifications did not materially impact the Company’s determination of the allowance for loan losses. The Company did not forgive any principal on the above loans. The allowance for loan losses attributable to restructured loans was $3.2 million$169,000 and $3.3$2.0 million at March 31, 2020September 30, 2021 and December 31, 2019,2020, respectively. The primary reason for the decrease in the allowance for loan losses attributable to restructured loans was a $1.8 million payment received in the first quarter of 2021 related to a loan classified as a TDR in 2019. The Company defines a payment default as a payment received more than 90 days after its due date.

Note 5:6: Allowance for Loan Losses

As management evaluates the allowance for loan losses, it is categorized as follows: (1) specific allocations; (2) allocations for classified assets with no specific allowance, based on historical loan experience for similar loans with similar characteristics, adjusted as necessary, to reflect the impact of current conditions; and (3) general allocations for each major loan category for loans not deemed impaired or classified, segmented by loan class based on historical loss experience and other risk factors. In assessing general economic conditions, management monitors several factors, including regional and national economic conditions, real estate market conditions and recently enacted regulations with potential economic effects.
18
Table of Contents

Credit Quality Indicators – The Company utilizes a risk grading matrix to assign a grade to each of its commercial and real estate loans. Loans are rated on a scale of 1 to 10. A description of the general characteristics of the 10 risk ratings is as followsfollows:
•Risk Grades 1, 2, 3, 4 and 5 – These grades include loans to borrowers of solid credit quality with no higher than normal risk of loss. Borrowers in these categories have satisfactory financial strength and adequate cash flow coverage to service debt requirements. Collateral type and quality, as well as protection, are adequate. The borrower’s management is strong and capable, financial information is timely and accurate, and guarantor support is strong.
•Risk Grade 6 – Pass and Watch – Loans in this category are currently protected, but risks are emerging that warrant more than normal attention and have above average risk of loss. These factors require a higher level of monitoring and may include emerging balance sheet weaknesses, strained liquidity, increased leverage ratio, and weakening management. Collateral support is less marketable or limited use and, although the protection is sufficient, the loan-to-value ratio may not meet policy guidelines. Guarantors may have a limited ability and willingness to provide intermediate support. Also, considerations surrounding industry deterioration, increased competition and minor policy exceptions concerning structure or amortization may affect the rating of these loans.
•Risk Grade 7 – Special Mention – The Company’s special mention rating is intended to closely align with the regulatory definition. A special mention asset has potential weaknesses that deserve management’s close attention. If left
18
Table of Contents
uncorrected, these weaknesses may result in deterioration of repayment prospects. These weaknesses may include deteriorating balance sheets, strained liquidity and elevated leverage ratios. Cash flow and profitability are marginally sufficient to service debt and collateral is exhibiting signs of decline in value; however, protection is currently sufficient. Limited management experience or weaknesses have emerged requiring more than normal supervision and uncertainties regarding the quality of the financials are not explained. Guarantor has very limited ability and willingness to provide short- termshort-term support. Moderate policy exceptions concerning structure or amortization may be considered in order to provide relief to the borrower. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
•Risk Grade 8 – Substandard – A loan in this category is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. Factors affecting these loans may include balance sheet deterioration that has resulted in illiquid, highly leveraged or deficit net worth, cash flow that is not able to service debts as structured, collateral protection that may be inadequate, guarantor support that may be virtually non-existent, and management that is poor. Loans may require a major policy exception concerning structure or amortization. They are characterized by the distinct possibility that the Company will incur some loss if the deficiencies are not corrected.
•Risk Grade 9 – Doubtful – Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
•Risk Grade 10 – Loss – Loans are considered uncollectible and of such little value that continuing to carry them as an active asset is not warranted. It does not mean that there will be no recovery, but, rather, it is not practical or desirable to defer writing off these assets even though a partial recovery may be possible in the future.
Classified loans for the Company include loans in Risk Grades 8, 9 and 10. Loans may be classified but not considered impaired, due to one of the following reasons: (i) the loan falls below the established minimum dollar thresholds for loan impairment testing or (ii) the loan was tested for impairment, but not deemed to be impaired.

19
Table of Contents
The following table summarizes the credit quality of the Company’s loan portfolio by loan class for the period indicated:

Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
March 31, 2020
Secured by real estate:
Residential properties$533,911  $177  $15,322  $—  $549,410  
Construction and land development233,483  403  907  —  234,793  
Farmland147,142  —  11,202  —  158,344  
Other commercial670,355  —  16,080  222  686,657  
Total real estate1,584,891  580  43,511  222  1,629,204  
Commercial and industrial330,078  95  1,995  48  332,216  
Agricultural production and other loans to farmers72,679  91  376  —  73,146  
Consumer and other loans59,213  —  333  —  59,546  
Total$2,046,861  $766  $46,215  $270  $2,094,112  

Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
December 31, 2019
Secured by real estate:
Residential properties$540,933  $177  $14,303  $—  $555,413  
Construction and land development229,933  388  610  —  230,931  
Farmland151,354  —  11,637  —  162,991  
Other commercial645,891  —  18,254  —  664,145  
Total real estate1,568,111  565  44,804  —  1,613,480  
Commercial and industrial331,693  —  2,060  81  333,834  
Agricultural production and other loans to farmers69,854  —  291  —  70,145  
Consumer and other loans61,220  —  318  —  61,538  
Total$2,030,878  $565  $47,473  $81  $2,078,997  
2019
Table of Contents
Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
September 30, 2021
Secured by real estate:
Residential properties$759,167 $21 $14,740 $— $773,928 
Construction and land development460,712 4,107 745 — 465,564 
Farmland199,608 — 13,037 — 212,645 
Other commercial1,330,515 1,001 7,621 77 1,339,214 
Total real estate2,750,002 5,129 36,143 77 2,791,351 
Commercial and industrial510,359 — 23,756 45 534,160 
Agricultural production and other loans to farmers101,549 71 353 — 101,973 
Consumer and other loans98,302 — 300 — 98,602 
Total$3,460,212 $5,200 $60,552 $122 $3,526,086 
Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
December 31, 2020
Secured by real estate:
Residential properties$721,024 $— $17,316 $— $738,340 
Construction and land development401,347 — 2,149 — 403,496 
Farmland205,211 — 11,893 — 217,104 
Other commercial1,209,365 — 15,041 227 1,224,633 
Total real estate2,536,947 — 46,399 227 2,583,573 
Commercial and industrial619,086 51 16,526 51 635,714 
Agricultural production and other loans to farmers85,197 91 181 — 85,469 
Consumer and other loans73,560 — 416 — 73,976 
Total$3,314,790 $142 $63,522 $278 $3,378,732 
Transactions in the allowance for loan losses and balances in the loan portfolio by loan segment are as follows:
20

Table of Contents
(In thousands)(In thousands)Commercial
and Industrial		Commercial
Real Estate		ResidentialConsumer
and other		UnallocatedTotal(In thousands)Commercial
and Industrial		Commercial
Real Estate		ResidentialConsumer
and other		Total
Three Months Ended March 31, 2020
Three Months Ended September 30, 2021Three Months Ended September 30, 2021
Allowance for loan losses:Allowance for loan losses:Allowance for loan losses:
Balance, beginning of year$2,773  $10,766  $5,568  $1,135  $1,258  $21,500  
Beginning balanceBeginning balance$6,493 $23,051 $10,234 $2,226 $42,004 
Provision for loan lossesProvision for loan losses(565)616 352 1,066 1,469 
Recoveries on loansRecoveries on loans175 1,625 59 449 2,308 
Loans charged offLoans charged off(37)(349)(122)(1,272)(1,780)
Ending balanceEnding balance$6,066 $24,943 $10,523 $2,469 $44,001��
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2021
Allowance for loan losses:Allowance for loan losses:
Beginning balanceBeginning balance$6,337 $20,163 $7,900 $1,600 $36,000 
Provision for loan lossesProvision for loan losses7  385  (67) 288  (428) 185  Provision for loan losses(433)3,481 2,581 1,766 7,395 
Recoveries on loansRecoveries on loans87  34  56  943  —  1,120  Recoveries on loans479 2,277 340 2,046 5,142 
Loans charged offLoans charged off(82) (217) (151) (1,185) —  (1,635) Loans charged off(317)(978)(298)(2,943)(4,536)
Ending balanceEnding balance$2,785  $10,968  $5,406  $1,181  $830  $21,170  Ending balance$6,066 $24,943 $10,523 $2,469 $44,001 
Period End Allowance Balance Allocated To:Period End Allowance Balance Allocated To:Period End Allowance Balance Allocated To:
Individually evaluated for impairmentIndividually evaluated for impairment$34  $3,332  $14  $—  $—  $3,380  Individually evaluated for impairment$991 $276 $9 $— $1,276 
Collectively evaluated for impairmentCollectively evaluated for impairment2,751  7,636  5,392  1,181  830  17,790  Collectively evaluated for impairment5,075 24,667 10,514 2,469 42,725 
Ending balanceEnding balance$2,785  $10,968  $5,406  $1,181  $830  $21,170  Ending balance$6,066 $24,943 $10,523 $2,469 $44,001 

(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherUnallocatedTotal
Three Months Ended March 31, 2019
Allowance for loan losses:
Balance, beginning of year$3,203  $12,920  $5,358  $1,134  $1,885  $24,500  
Provision for loan losses216  (1,057) 879  472  (222) 288  
Recoveries on loans16  262  46  958  —  1,282  
Loans charged off(63) (32) (475) (1,272) —  (1,842) 
Ending balance$3,372  $12,093  $5,808  $1,292  $1,663  $24,228  
Period End Allowance Balance Allocated To:
Individually evaluated for impairment$30  $4,248  $10  $—  $—  $4,288  
Collectively evaluated for impairment3,342  7,845  5,798  1,292  1,663  19,940  
Ending balance$3,372  $12,093  $5,808  $1,292  $1,663  $24,228  

(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherUnallocatedTotal
Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance$3,269 $12,580 $5,968 $1,340 $902 $24,059 
 Provision for loan losses2,812 1,835 170 (82)(64)4,671 
 Recoveries on loans34 103 140 827 — 1,104 
 Loans charged off(261)(1,960)(34)(731)— (2,986)
    Balance, end of year$5,854 $12,558 $6,244 $1,354 $838 $26,848 
Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance$2,773 $10,766 $5,568 $1,135 $1,258 $21,500 
Provision for loan losses3,427 3,824 707 168 (420)7,706 
Recoveries on loans148 150 237 2,619 — 3,154 
Loans charged off(494)(2,182)(268)(2,568)— (5,512)
Ending balance$5,854 $12,558 $6,244 $1,354 $838 $26,848 
Period End Allowance Balance Allocated To:
Individually evaluated for impairment$471 $1,949 $17 $— $— $2,437 
Collectively evaluated for impairment5,383 10,609 6,227 1,354 838 24,411 
Ending balance$5,854 $12,558 $6,244 $1,354 $838 $26,848 
21
Table of Contents

The following table provides the recorded investment in loans, net of unearned income, based on the Company’s impairment methodology as of the dates presented:
21
Table of Contents
(In thousands)(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
March 31, 2020
September 30, 2021September 30, 2021
Individually evaluated for impairmentIndividually evaluated for impairment$464  $23,296  $4,773  $245  $28,778  Individually evaluated for impairment$21,611 $14,046 $2,369 $174 $38,200 
Collectively evaluated for impairmentCollectively evaluated for impairment331,752  1,056,498  544,637  132,447  2,065,334  Collectively evaluated for impairment512,549 2,003,377 771,559 200,401 3,487,886 
Ending balanceEnding balance$332,216  $1,079,794  $549,410  $132,692  $2,094,112  Ending balance$534,160 $2,017,423 $773,928 $200,575 $3,526,086 
December 31, 2019
December 31, 2020December 31, 2020
Individually evaluated for impairmentIndividually evaluated for impairment$494  $25,422  $4,916  $249  $31,081  Individually evaluated for impairment$14,392 $25,234 $6,868 $274 $46,768 
Collectively evaluated for impairmentCollectively evaluated for impairment333,340  1,032,645  550,497  131,434  2,047,916  Collectively evaluated for impairment621,322 1,819,999 731,472 159,171 3,331,964 
Ending balance Ending balance$333,834  $1,058,067  $555,413  $131,683  $2,078,997   Ending balance$635,714 $1,845,233 $738,340 $159,445 $3,378,732 

Note 6:7: Regulatory Matters
The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies. Failure to meet minimum capital requirements triggers certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheetoff-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
The U.S. capital rules, which in substance adopted the international Basel III Capital Rules (“and accordingly are referred to as the Basel III”)III rules, became effective for both the Company and the Bank on January 1, 2015, with full compliance with all of the requirements being phased in over a multi-year schedule and fully phased in by January 1, 2019. The Basel III rules require banking institutions to comply with three minimum risk-based capital ratios for common equity Tier 1 (“CET1”) capital, Tier 1 capital, and total capital, as well as a minimum leverage ratio based on Tier 1 capital.

Under the Basel III rules, the Company must holdmaintain a capital conservation buffer of CET1 capital above the adequately capitalized risk basedminimum risk-based capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress and as detailed above, effectively increases the minimum required risk-weighted capital ratios. If, after deducting the buffer amount from its Common Equity Tier 1CET1 capital, (“CET1”), Tier 1 capital, and Totaltotal capital, any of these amounts results in a risk-based capital ratio below the minimum, a banking institution will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The capital conservation buffer, which was 2.50% at March 31, 2020September 30, 2021 and December 31, 2019,2020, is included in the minimum capital requirements relative to risk-weighted assets in the following table. Management believes as of March 31, 2020September 30, 2021 and December 31, 2019,2020, the Company and the Bank met Basel III minimum capital adequacy requirements to which they are subject.

The Bank is also subject to capital requirements under the prompt corrective action regime. As of March 31, 2020,September 30, 2021, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. The prompt corrective action framework applies only to insured depository institutions, such as the Bank, and not to their holding companies, such as the Company. To be categorized as well capitalized, an insured depository institution must maintain certain ratios of CET1 capital, Tier 1 capital and Totaltotal capital to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets. There are no conditions or events since that notification that management believes have changed the Bank'sBank’s category. The amounts of the Bank’s capital relative to the standards for well capitalized status are set forth in the following table.
The Company’s and the Bank’s CET1 capital includes total common equity reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions.liabilities. In connection with the adoption of Basel III, the Company elected to opt out of the requirement to include most components of accumulated other comprehensive income (loss) in CET1 capital.
22
Table of Contents
Tier 1 capital includes CET1 capital and additional Tier 1 capital. For the Company, additional Tier 1 capital at March 31, 2020September 30, 2021 and December 31, 20192020 included $40.0$51.0 million and $50.7 million of trust preferred securities issued by the Truststrusts (net of investment in the Trusts).trusts), respectively. The Bank did 0tnot have any additional Tier 1 capital beyond CET1 capital as of March 31, 2020September 30, 2021 and December 31, 2019.2020.
Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital for both the Company and the Bank includes a permissible portion of the allowance for loan losses. In addition, Tier 2 capital at September 30, 2021 and December 31, 2020 for the Company includes $58.8 million and $58.6 million, respectively, of subordinated debentures. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under Basel III.
22
Table of Contents
The following table presents actual and required capital ratios for the Company and the Bank under the Basel III rules.

 Actual Minimum requirement
Phase-In Schedule		 Required to be
Well Capitalized		 Actual Minimum Requirement Required to be
 Well Capitalized
(In thousands)(In thousands) Capital AmountRatio Capital AmountRatio Capital AmountRatio(In thousands) Capital AmountRatio Capital AmountRatio Capital AmountRatio
March 31, 2020:
September 30, 2021:September 30, 2021:
Company:Company:Company:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$253,944  10.99 %$161,718  7.00 %n/an/aCET1 Capital to Risk-Weighted Assets$374,642 9.57 %$273,936 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets293,944  12.72 %196,372  8.50 %n/an/aTier 1 Capital to Risk-Weighted Assets425,598 10.88 %332,636 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets315,115  13.64 %242,577  10.50 %n/an/aTotal Capital to Risk-Weighted Assets580,350 13.50 %410,904 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets293,944  9.60 %122,487  4.00 %n/an/aTier 1 Capital to Average Assets425,598 8.40 %202,413 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$288,640  12.53 %$161,227  7.00 %$149,711  6.50 %CET1 Capital to Risk-Weighted Assets$420,455 10.77 %$273,372 7.00 %$253,845 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets288,640  12.53 %195,776  8.50 %184,260  8.00 %Tier 1 Capital to Risk-Weighted Assets420,455 10.77 %331,951 8.50 %312,425 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets309,811  13.45 %241,841  10.50 %230,325  10.00 %Total Capital to Risk-Weighted Assets464,456 11.89 %410,058 10.50 %390,531 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets288,640  9.44 %122,274  4.00 %152,842  5.00 %Tier 1 Capital to Average Assets420,455 8.32 %202,059 4.00 %252,574 5.00 %
December 31, 2019:
December 31, 2020:December 31, 2020:
Company:Company:Company:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$248,247  10.86 %$160,002  7.00 %n/an/aCET1 Capital to Risk-Weighted Assets$339,936 9.94 %$239,437 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets288,247  12.61 %194,288  8.50 %n/an/aTier 1 Capital to Risk-Weighted Assets390,713 11.42 %290,745 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets309,747  13.55 %240,003  10.50 %n/an/aTotal Capital to Risk-Weighted Assets485,357 14.19 %359,155 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets288,247  9.74 %118,373  4.00 %n/an/aTier 1 Capital to Average Assets390,713 8.55 %182,853 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$284,513  12.49 %$159,469  7.00 %$148,078  6.50 %CET1 Capital to Risk-Weighted Assets$387,231 11.36 %$238,629 7.00 %$221,584 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets284,513  12.49 %193,641  8.50 %182,250  8.00 %Tier 1 Capital to Risk-Weighted Assets387,231 11.36 %289,763 8.50 %272,719 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets306,013  13.43 %239,203  10.50 %227,813  10.00 %Total Capital to Risk-Weighted Assets423,231 12.42 %357,943 10.50 %340,898 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets284,513  9.63 %118,134  4.00 %147,668  5.00 %Tier 1 Capital to Average Assets387,231 8.49 %182,531 4.00 %228,164 5.00 %
The ability of the Company to pay future dividends, pay its expenses and retire its debt is dependent upon future income tax benefits and dividends paid to the Company by the Bank. The Bank is subject to dividend restrictions as imposed by Federal and state regulatory authorities. These restrictions are not anticipated to have a material effect on the ability

23
Table of the Bank to pay dividends to the Company.Contents
Note 7:8: Fair Value
Financial Instruments Measured at Fair Value
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon:
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date
23
Table of Contents
Level 2
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3
Unobservable inputs that are significant to the fair value of the assets or liabilities that reflect a company’s own assumptions about the assumptions that market participants would use in pricing assets or liabilities

Management monitors the availability of observable market data to assess the appropriate classification of assets and liabilities within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers of financial instruments between fair value levels for any period presented.

The Company used the following methods and significant assumptions to estimate fair value.

Securities - The Company utilizes an independent pricing service to advise it on the value of the securities portfolio. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one, or a combination of several, observable inputs such as benchmark yields, reported trades, benchmark securities, bids, offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. For Level 3 securities, in addition to the inputs noted above, inputs used by the pricing service to determine fair value may also include estimated duration, municipal bond interest rate curve, and tax effected yield. There were no Level 3 securities as of March 31, 2020September 30, 2021 or December 31, 2019.2020. The Company’s treasury department and Asset Liability Management Committee (“ALCO”) review the aggregate fair values of the securities portfolio.
Impaired loans - Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment on a nonrecurringnon-recurring basis. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans. Specific allowances for impaired loans are based on comparisons of the recorded carrying values of the loans to the present value of the estimated cash flows of these loans at each loan’s effective interest rate or the fair value of the collateral net of selling costs if the loan is collateral dependent. Impaired loans are primarily collateral dependent loans and are assessed using a fair value approach. Fair value estimates for collateral dependent loans are derived from appraised values based on the current market value or as-is value of the property being appraised. Appraisals are based on certain assumptions, which may include construction or development status and the highest and best use of the property. The appraisals are reviewed by the Bank’s Appraisal Review DepartmentCompany’s appraisal department to ensure they are acceptable. Impaired loans are classified within Level 3 of the fair value hierarchy. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.
Other Real Estate Owned - Other real estate owned is initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated cost to sell. Fair value estimates begin with obtaining a current independent appraisal or internal evaluation of the collateral value. Subsequent
24
Table of Contents
to foreclosure, valuations are performed periodically by the Company’s appraisal department and any subsequent reduction in value is recognized by a charge to income.
Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified appraisers whose qualifications and licenses have been reviewed by the Company. These appraisals are reviewed by a member of the Appraisal DepartmentCompany’s appraisal department to ensure they are acceptable. Appraised values are adjusted down for costs associated with asset disposal. The significant unobservable inputs (Level 3) used in the fair value measurement of collateral for collateral impaired loans and other real estate owned are primarily based on appraisals, observable market conditions, and other factors which may affect collectability. The appraisals use marketability and comparability discounts, which generally range from 5% to 15%. Assessment of the significance of a specific input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. It is reasonably possible that a change in the estimated fair value for assets measured using Level 3 inputs could occur in the future.
24
Table of Contents
Assets and liabilities measured at fair value on a recurring basis are summarized below:

FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
September 30, 2021
U.S. Government agency obligations$299,841 $— $299,841 $— 
Residential mortgage-backed securities121,846 — 121,846 — 
Commercial mortgage-backed securities14,894 — 14,894 — 
Asset-backed securities13,539 — 13,539 — 
Corporate investments44,150 — 44,150 — 
State and political subdivisions46,613 — 46,613 — 
Total securities available for sale$540,883 $— $540,883 $— 
FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
March 31, 2020
December 31, 2020December 31, 2020
U.S. Government agency obligationsU.S. Government agency obligations$5,188  $—  $5,188  $—  U.S. Government agency obligations$12,434 $— $12,434 $— 
Residential mortgage-backed securitiesResidential mortgage-backed securities207,803  —  207,803  —  Residential mortgage-backed securities187,212 — 187,212 — 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities11,398  —  11,398  —  Commercial mortgage-backed securities17,331 — 17,331 — 
Asset backed securitiesAsset backed securities14,447 — 14,447 — 
Corporate investmentsCorporate investments3,985  —  3,985  —  Corporate investments33,148 — 33,148 — 
State and political subdivisionsState and political subdivisions45,949  —  45,949  —  State and political subdivisions46,801 — 46,801 — 
Total securities available for saleTotal securities available for sale$274,323  $—  $274,323  $—  Total securities available for sale$311,373 $— $311,373 $— 

December 31, 2019
U.S. Government agency obligations$18,102  $—  $18,102  $—  
Residential mortgage-backed securities175,879  —  175,879  —  
Commercial mortgage-backed securities3,010  —  3,010  —  
Corporate investments4,082  —  4,082  —  
Total securities available for sale$201,073  $—  $201,073  $—  
Assets measured at fair value on a non-recurring basis are summarized below.
FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
Impaired loans, net of allowance for loan losses:
March 31, 2020$25,398  $—  $—  $25,398  
December 31, 2019$27,711  $—  $—  $27,711  
Other real estate owned:
March 31, 2020$5,191  $—  $—  $5,191  
December 31, 2019$4,851  $—  $—  $4,851  
FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
Impaired loans, net of allowance for loan losses:
September 30, 2021$44,448 $— $— $44,448 
December 31, 2020$42,573 $— $— $42,573 
Other real estate owned:
September 30, 2021$6,989 $— $— $6,989 
December 31, 2020$6,754 $— $— $6,754 
The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis.
Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value		Valuation
Methods		Unobservable
Inputs		Range
March 31, 2020
Impaired loans, net of specific allowance$25,398 Third-party appraisalsSelling costs5% - 10%
Internal evaluations of real estate, accounts receivable and inventoryDiscount of book value15% - 50%
Other real estate owned$5,191 Third-party appraisalsSelling costs5% - 10%
25
Table of Contents

Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value		Valuation
Methods		Unobservable
Inputs		RangeWeighted Average
September 30, 2021
Impaired loans, net of specific allowance$44,448 Third-party appraisalsSelling costs5% - 10%6%
Other real estate owned$6,989 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%
Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value		Valuation
Methods		Unobservable
Inputs		Range
December 31, 2019
Impaired loans, net of specific allowance$27,711 Third-party appraisalsSelling costs5% - 10%
Internal evaluations of real estate, accounts receivable and inventoryDiscount of book value15% - 50%
Other real estate owned$4,851 Third-party appraisalsSelling costs5% - 10%
Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value		Valuation
Methods		Unobservable
Inputs		RangeWeighted Average
December 31, 2020
Impaired loans, net of specific allowance$42,573 Third-party appraisalsSelling costs5% - 10%6%
Other real estate owned$6,754 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%
Fair Value of Financial Instruments
Generally accepted accounting principles requireGAAP requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, that are not measured and reported at fair value on a recurring or non-recurring basis. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions significantly affect the estimates and, as such, the derived fair value may not be indicative of the value negotiated in an actual sale and may not be comparable to that reported by other financial institutions. In addition, the fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimatesestimates.

26
Table of Contents
The following table presents estimated fair values of the Company’s financial instruments not previously disclosed:
September 30, 2021December 31, 2020
(In thousands)Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents$695,069 $695,069 $637,545 $637,545 
Level 2 inputs:
Securities held to maturity78,423 78,905 93,766 94,436 
FHLB stock2,729 2,729 2,557 2,557 
Accrued interest receivable17,120 17,120 18,061 18,061 
Level 3 inputs:
Loans held for sale13,904 13,904 28,684 28,684 
Loans, net3,482,085 3,462,588 3,342,732 3,348,872 
Financial liabilities:
Level 2 inputs:
Deposits4,529,868 4,435,783 4,152,810 4,153,402 
FHLB and other borrowings31,026 31,778 33,771 34,941 
Subordinated debentures111,411 111,411 111,124 111,124 
Accrued interest payable2,647 2,647 2,709 2,709 

March 31, 2020December 31, 2019
(In thousands)Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents$347,614  $347,614  $312,972  $312,972  
Level 2 inputs:
Securities held to maturity106,767  107,069  177,854  179,225  
Federal Home Loan Bank stock2,598  2,598  2,585  2,585  
Accrued interest receivable12,125  12,125  11,509  11,509  
Level 3 inputs:
Loans held for sale16,312  16,312  16,092  16,092  
Loans, net2,072,942  2,073,761  2,057,497  2,050,169  
Financial liabilities:
Level 2 inputs:
Deposits2,639,004  2,638,611  2,592,065  2,593,910  
Federal Home Loan Bank and other borrowings36,709  37,696  37,652  37,298  
Subordinated debentures41,238  41,238  41,238  41,238  
Accrued interest payable1,068  1,068  1,083  1,083  
Note 9: Subordinated Debentures and Trust Preferred Securities

On June 4, 2020, the Company entered into a Subordinated Note Purchase Agreement with certain qualified institutional buyers and institutional accredited investors pursuant to which the Company issued and sold $60.0 million in aggregate principal amount of its 6.000% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030 (the “Notes”). The Company incurred issuance costs of $1.4 million in conjunction with the issuance of the Notes. These issuance costs are netted with the balance of the Notes on the Company’s Condensed Consolidated Balance Sheets and will be amortized over the life of the Notes. The Notes initially bear interest at a rate of 6.000% per annum from and including June 4, 2020, to but excluding June 15, 2025 or the early redemption date, with interest during this period payable semiannually in arrears. From and including June 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 586 basis points, with interest during this period payable quarterly in arrears. The Company used the proceeds of the private placement for general corporate purposes, including improving the Company’s liquidity and capital position.

The Notes are not redeemable by the Company, in whole or in part, prior to the fifth anniversary of the original date of issue, except that the Notes may be redeemed at any time in whole but not in part in the event of a Tier 2 Capital Event, a Tax Event, or an Investment Company Event, each as defined and described in the Notes. On or after the fifth anniversary of the original date of issue, the Notes shall be redeemable on any interest payment date at the option of the Company, in whole or in part in integral multiples of $1,000, at an amount equal to 100% of the outstanding principal amount redeemed plus accrued but unpaid interest thereon. Any partial redemption will be made on a pro rata basis as to the holders of the Notes. Any redemption of the Notes is subject to any applicable regulatory requirements and approvals.

The Company also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. These preferred capital securities have qualified as Tier 1 capital for the Company, subject to regulatory rules and limits. These trusts used the proceeds from the issuance of the common stock and the preferred capital securities to purchase subordinated debentures issued by the Company. These subordinated debentures are these trusts’ only assets, and quarterly interest payments on these subordinated debentures are the sole source of cash for these trusts to pay quarterly distributions on the common stock and preferred capital securities. The Company has fully and unconditionally guaranteed the trusts’ obligations with respect to the preferred capital securities.

2627
Table of Contents
The Company has the right to defer the payment of interest on the subordinated debentures at any time, or from time to time, for periods not exceeding five years. If interest payments on the subordinated debentures are deferred, the distributions on the trust preferred securities are also deferred. Interest on the subordinated debentures and distributions on the trust preferred securities are cumulative.

The following is a summary of subordinated debentures payable to statutory trusts.
(In thousands)Year of
Maturity		Interest
Rate		September 30,
2021		December 31,
2020
First Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 
State Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 
$56,703 $56,703 

The subordinated debentures payable to statutory trusts vary from the amount carried on the Condensed Consolidated Balance Sheets at September 30, 2021 due to the remaining purchase discount of $4.0 million, which was established upon the Merger with SCC and is being amortized over the remaining life of the debentures.

Interest rates adjust quarterly for the subordinated debentures with rates that are indexed with LIBOR. We are currently monitoring the actions of LIBOR’s regulator and the implementation of alternative reference rates in advance of the expected discontinuation of LIBOR to determine any potential impact on the subordinated debentures.

The Company has the right to redeem the subordinated debentures prior to maturity. Upon redemption of the subordinated debentures payable to a statutory trust, the trust will also liquidate its common stock and preferred capital securities.

Note 8:10: Employee Benefits

The Company has an Employee Stock Ownership Plan (“ESOP”) that covers all employees of the Bank who are at least 21 years of age and work in a position requiring at least one thousand1000 hours of service annually. The plan also has 401(k) provisions that allow for employee tax deferred contributions. Participants may make contributions to the ESOP in accordance with applicable regulations and the ESOP’s provisions. The Company makes a 3% “safe harbor” matching contribution, plus an additional matching contribution equal to 50% of the next 2% of an employee’s salary deferral contributions in excess of 3%. Additional contributions are made to the ESOP at the discretion of the Company’s Board of Directors.
The ESOP owned 1,434,6251,500,732 and 1,499,459 shares of the Company's common stock at March 31, 2020September 30, 2021 and December 31, 2019.2020, respectively. The ESOP entered into loans, collateralized by ESOP shares, with the Company in connection with the repurchase of shares of Company stock that were sold by participants in accordance with diversification provisions of the ESOP. A total of 176,786 shares were repurchased through 2011, an additional 77,000 shares were repurchased under this program in 2012, and 27,594 shares were repurchased under this program in 2019. These unallocated shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Dividends on unallocated shares that are used to repay the loan are treated as compensation expense.
28
Table of Contents
The following table presents information related to the Company’s ESOP-owned shares.

(In thousands, except share data)(In thousands, except share data)March 31, 2020December 31, 2019(In thousands, except share data)September 30, 2021December 31, 2020
Allocated sharesAllocated shares1,362,906  1,355,699  Allocated shares1,469,547 1,449,335 
Unearned sharesUnearned shares71,719  78,926  Unearned shares31,185 50,124 
Total ESOP sharesTotal ESOP shares1,434,625  1,434,625  Total ESOP shares1,500,732 1,499,459 
Fair value of unearned sharesFair value of unearned shares$4,196  $4,617  Fair value of unearned shares$2,050 $2,569 

Distributions of the ESOP may be either in cash or Company common stock. The allocated shares are subject to a put option, whereby the Company will provide a market for a specified period of time for shares distributed to participants. The put price is the appraised value of the stock. The fair value of shares of common stock held by the ESOP are deducted from permanent shareholders’ equity in the consolidated balance sheetsCondensed Consolidated Balance Sheets and reflected in a line item below liabilities and above shareholders’ equity. This presentation is necessary in order to recognize the put option within the ESOP-owned shares, consistent with SECU.S. Securities and Exchange Commission guidelines, that is present as long as the Company is not publicly traded. The Company uses a valuation by an external third-partythird party to determine the maximum possible cash obligation related to these securities. Increases or decreases in the value of the cash obligation are included in a separate line item in the consolidated statementCondensed Consolidated Statements of changes shareholders’ equity.Shareholders’ Equity. The fair value of shares held by the ESOP at March 31, 2020 and December 31, 2019September 30, 2021 was $79.7$96.6 million, and $79.3 million, respectively, based on ourthe Company’s previously disclosed appraised value of $58.50$65.75 per share of common stock. The fair value at December 31, 2020 was $74.3 million, based on the Company’s previously disclosed appraised value of $51.25 per share of common stock. As previously disclosed, thisthese appraised value wasvalues were determined solely for purposes of the ESOP’s administration and isare therefore subject to certain limitations, qualifications and assumptions and may not reflect the fair value of the Company’s common stock and should not be relied on for any reason. In particular, the COVID-19 pandemic has had a significant impact on the trading markets for equity securities, including in particular, the value of equity securities of banking institutions. Neither the Company nor the ESOP has any obligation to seek an adjusted valuation, to use thisthese appraised valuevalues for any other purpose or, if the Company or the ESOP obtains a new appraised value, to disclose such new appraised value.

State Bank Employee Stock Ownership Plan

In connection with the Company’s Merger with SCC, the State Bank & Trust Company Employee Stock Ownership Plan (“State Bank ESOP”) was amended on March 17, 2020, to be terminated effective March 31, 2020. As of March 31, 2020, all State Bank ESOP participants were fully vested in their respective account balances, no additional contributions were permitted by either the Company or the State Bank ESOP participants, and no additional participants were permitted to enter the State Bank ESOP. All shares of SCC common stock held in the State Bank ESOP were allocated to participants. The Company has no contribution obligations or compensation expense with respect to the State Bank ESOP. The Company received approval of the termination from the Internal Revenue Service (“IRS”) and all assets held by the State Bank ESOP have been distributed in accordance with its terms.

In connection with the Merger, all shares of SCC common stock held in the State Bank ESOP were converted into shares of the Company’s common stock using the exchange ratio provided for in the Merger Agreement. Distributions from the State Bank ESOP may be either in cash or Company common stock. The shares of Company common stock distributed by the State Bank ESOP were subject to a put option so long as the Company was not publicly traded and the valuation obtained for purposes of the ESOP was used to determine the put option price under the State Bank ESOP. As of September 30, 2021 and December 31, 2020, the State Bank ESOP held zero and 52,204 shares of Company common stock, respectively.

State Bank Defined Contribution Plan

On March 31, 2020, the State Bank & Trust Company 401(k) Plan (“State Bank 401(k)”) was amended to be terminated effective as of the same date in connection with the Merger. As of March 31, 2020, all State Bank 401(k) participants were fully vested in their respective account balances, no additional contributions were permitted by either the Company or the State Bank 401(k) participants, and no additional participants were permitted to enter into the State Bank 401(k). The Company has no contribution obligations or compensation expense with respect to the State Bank 401(k). The Company received approval of the termination from the IRS and has distributed all assets held by the State Bank 401(k) in accordance with its terms.

State Bank Defined Benefit Pension Plan

As a result of the Merger, the Company assumed the Mississippi Southern Bank Pension Plan (“State Bank Pension Plan”), a defined benefit pension plan which was closed to new participants and benefits were frozen effective as of December 31, 2002.
29
Table of Contents
While no additional benefits accrue, the Company’s cumulative obligation is subject to adjustment due to changes in actuarial assumptions such as expected mortality and changes in interest rates. Net periodic pension costs for the quarterly period ended September 30, 2021 were not material to the Company’s Condensed Consolidated Statements of Income. The Company received approval of the termination of the State Bank Pension Plan from the IRS and plans to distribute all assets held by the State Bank Pension Plan in accordance with its terms as soon as reasonably possible.

Note 9:11: Equity

In March 2019, theThe Company’s Board of Directors amended its Articles of Incorporation to reclassify the existing Class A Voting Common Stock and Class B Nonvoting Common Stock into a single class of $1.00 Par Value per Share Common Stock. This reclassification had no effect on share count or total shareholders’ equity. Additionally, in March 2019, the Company’s Board of Directors authorizedauthorize 10,000,000 shares of preferred stock with no par value, which may be issued from time to time and in one or more classes or series upon authorization of the Board.Board of Directors. At March 31, 2020September 30, 2021 and December 31, 2019,2020, there were 0zero shares of preferred stock issued and outstanding.

Note 10:12: Stock Based Compensation
Under the Company’s long-term incentive program, executivecertain officers, employees and directors are eligible to receive equity-based awards under the 20192018 Long-Term Incentive Plan (“LTIP”). During the three months ended March 31, 2020, restrictedRestricted stock awards (“RSA”RSAs”) were
27
Table of Contents
granted under the LTIP for 2,500 shares of common stock. RSAs granted under the LTIP generally vest over twoone to five years. Nonvested restricted stock awardsUnvested RSAs are included in the Company’s common stock outstanding. Compensation expense for RSAs granted under the LTIP is recognized over the vesting period of the awards based on the fair value of the stock at the grant date, with forfeitures recognized as they occur.
Stock based compensation that has been charged against income was $383,000$1.7 million for the threenine months ended March 31, 2020September 30, 2021 and $98,000$1.1 million for same period of 2019.2020. There were 0 forfeitures1,830 and zero shares forfeited during this period.the nine months ended September 30, 2021 and 2020, respectively. As of March 31, 2020,September 30, 2021, there was $2.8$6.0 million of total unrecognized compensation cost related to nonvestedunvested RSAs. The cost is expected to be recognized over a remaining weighted average period of 2.83.0 years.
A summary of ourthe Company’s equity-based award activity and related information for ourthe Company’s RSAs is as follows:
Three Months EndedNine Months Ended
March 31, 2020March 31, 2019September 30, 2021September 30, 2020
Number of SharesWeighted Average Grant Date Fair ValueNumber of SharesWeighted Average Grant Date Fair ValueNumber of SharesWeighted Average Grant Date Fair ValueNumber of SharesWeighted Average Grant Date Fair Value
Beginning of periodBeginning of period69,093  $53.67  12,693  $53.00  Beginning of period91,109 $50.60 69,097 $53.67 
GrantedGranted2,500  57.00  27,944  50.00  Granted85,147 51.59 39,155 45.36 
VestedVested(16,283) 50.78  (5,480) 53.00  Vested(33,545)52.03 (17,143)51.03 
ForfeitedForfeited—  —  —  —  Forfeited(1,830)49.46 — — 
End of periodEnd of period55,310  $54.68  35,157  $54.68  End of period140,881 $50.88 91,109 $50.60 

Note 11: Subsequent Event
Merger with State Capital Corp. (“SCC”)
On April 1, 2020, the Company completed its previously announced merger with SCC, the holding company of State Bank & Trust Company ("State Bank"). Pursuant to the terms of the Agreement and Plan of Share Exchange and Merger, dated September 18, 2019, by and among the Company, BankPlus, SCC, and State Bank (the "Merger Agreement"), following BancPlus' acquisition of SCC by a statutory share exchange, SCC was merged with and into BancPlus, with BancPlus surviving the merger (the "Merger"). Immediately thereafter, State Bank was merged with and into BankPlus, with BankPlus surviving the merger. As a result of the merger, the Company’s geographic footprint expanded in Mississippi, Louisiana and Alabama providing access to new markets and deposits.13: Contingencies

PursuantOn March 20, 2019, a complaint (the “Complaint”), Mills v. BankPlus, et al., Case #3:19-cv-00196-CWR-FKB, was filed in the United States District Court for the Southern District of Mississippi, Northern Division, by Alysson Mills, in her capacity as Court-appointed Receiver for Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), naming the Bank, 3 former Bank employees, 1 then-current Bank employee and other defendants, including defendants affiliated and unaffiliated with the Bank (“Defendants”). The Complaint seeks to recover damages from the Defendants for the benefit of the receivership estate related to certain investors who were allegedly defrauded by Adams and Madison Timber, whose actions were allegedly attributable to the Merger Agreement, holders of SCC common stock received 0.6950 shares of BancPlus common stock, par value $1.00 per share, for each share of SCC common stock, par value $1.25 per share, held immediately prior to the effective timeactions of the Merger, plus cashDefendants that allegedly enabled negligent, illegal or fraudulent activities engaged in lieuby Adams and Madison Timber. A brief description of fractional shares. BancPlus issued 2,453,827 sharesthe cause of common stock to holdersaction on the cover sheet filed with the Complaint includes securities, civil conspiracy, aiding and abetting, negligence, and other possible causes of SCC common stock, in addition to approximately $13,000 in lieuaction. The amount of fractional shares. Indamages (including punitive damages) requested against the first quarter of 2020, we incurred approximately $540,000 of acquisition expenses. These expense are recorded in noninterest expenseDefendants in the Company’s Condensed Consoldiated StatementComplaint is unspecified. On January 4, 2021, the plaintiff, Mills, filed an Amended Complaint. Answers and/or Motions to Dismiss the Amended complaint were filed by the Defendants. On July 8, 2021, the Court denied the Motion to Dismiss filed by the Bank. A related motion for reconsideration was filed by the Bank on August 9, 2021. On September 30, 2021, an order was entered to consolidate for purposes of Income fordiscovery this case (No.
30
Table of Contents
3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the three months ended MarchReceiver. By subsequent text-only order (No. 3:18-cv-00866-CWR-FKB) dated October 10, 2021, the four consolidated cases are stayed until January 31, 2020. At the time of this filing, final valuations of the assets acquired and liabilities assumed were not complete.2022.

ImpactIn addition to the above, the Company, including subsidiaries, is party to various legal proceedings arising in the ordinary course of business. We do not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on our consolidated financial position or liquidity.

Note 14: COVID-19

In response to the economic impact of the COVID-19 pandemic, on March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security ("CARES"(“CARES”) Act. It containscontained substantial lending, tax and spending provisions, including creating and appropriating an initial $39 billion of funding to the Paycheck Protection Program a nearly $350 billion program(“PPP”), designed to aid small and medium-sized businesses through federally guaranteed, forgivable loans distributed throughby banks. These loans are intended to guarantee eight weeks of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills. On April 24, 2020, Congress enacted the Paycheck Protection Program and Healthcare Enhancement Act (the “Enhancement Act”) to, among other things, increase the available funding under the PPP by $320$310 billion to a new total of $670$659 billion. The deadline for the first round of loan applications was August 8, 2020.

The Consolidated Appropriations Act, enacted on December 27, 2020, provided additional funding for the PPP of approximately $284 billion and allowed eligible borrowers, including certain borrowers who already received a PPP loan, to apply for PPP loans through March 31, 2021. Subsequently, the American Rescue Plan Act of 2021, enacted on March 11, 2021, expanded the eligibility criteria for both first and second draw PPP loans and revised the exclusions from payroll costs for purposes of loan forgiveness. The PPP Extension Act of 2021, enacted on March 30, 2021, extended the PPP through May 31, 2021.

As of May 1, 2020, including legacy SCC customers, weSeptember 30, 2021, 5,756 Bank PPP loans totaling $348.7 million had obtained approvals for approximately 3,316been forgiven and paid by the Small Business Administration or paid off by the customer. As of September 30, 2021, the Company held 1,948 loans for customers under the Paycheck Protection ProgramPPP, totaling approximately $293.4 million in approved$101.0 million. The loans have maturities ranging from which we expect additionalFebruary 2022 to April 2028. The Company expects to recognize total fee income of approximately $10 million.$5.2 million over the lives of the remaining loans.

28
Table of Contents
The CARES Act and related guidance from the federal banking agencies also providesprovide financial institutions the option to temporarily suspend requirements under GAAP related to classification of certain measuresloan modifications as TDRs, to support individualsaccount for the current and businessesanticipated effects of COVID-19. The CARES Act, as amended by the Consolidated Appropriations Act, 2021, specified that COVID-19 related loan modifications executed between March 1, 2020 and the earlier of (i) 60 days after the date of termination of the national emergency declared by the President and (ii) January 1, 2022, on loans that were current as of December 31, 2019 are not subject to TDR accounting requirements under GAAP. Additionally, under April 2020 interagency guidance from the federal banking agencies, other short-term modifications made on a good faith basis in maintaining solvency through monetaryresponse to COVID-19 to borrowers who were current prior to any relief includingare not TDRs under Accounting Standards Codification Subtopic 310-40, “Troubled Debt Restructuring by Creditors.” These modifications include short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in the form of financing, loan forgiveness and automatic forbearance. payment that are insignificant. The federal banking agencies also have encouraged banks to work with their borrowers to modify loans as may be appropriate.

As of March 31, 2020, weSeptember 30, 2021, the Company had granted temporary modifications on approximately 7781,892 outstanding loans totaling approximately $281$735.0 million, or 13%20.8% of total outstanding loans, primarily secured by 1-4 family residences and multi-tenant retail commercial real estate multi-tenant office buildings and major flag hotels. Through May 1, 2020, including legacy SCC customers, we have granted approximately 2,427 temporary loan modifications,estate. As of September 30, 2021, 3 loans totaling approximately $835$27.2 million, or 26%0.8% of total loans, primarily secured by commercial real estate multi-tenant office buildings and 1-4 family residences.the Company’s loan portfolio, were still in deferment.

Economic uncertainties have arisen which may negatively effectaffect the financial position, results of operations and cash flows of the Company. The duration of these uncertainties and ultimate financial effects cannot be reasonably estimated at this time.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated, references in this report to “we”, “us”, “our company”, “the Company”, or “BancPlus” refer to BancPlus Corporation.Corporation and its subsidiaries, on a consolidated basis. All references to “BankPlus” or “the Bank” refer to BankPlus, our wholly-owned subsidiary.

In November 2020, the Securities and Exchange Commission (the “SEC”) issued Release No. 33-10890 (the “Release”), “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information” which will become fully effective for a company’s first fiscal year that ends on or after August 9, 2021, with voluntary compliance permitted on or after February 10, 2021. BancPlus has adopted early this Release in this Quarterly Report on Form 10-Q, and has eliminated from this document the items that are no longer required, including the contractual obligations table, as well as
31
Table of Contents
incorporating the other required changes intended by the Release to modernize, simplify and enhance certain financial disclosure requirements. The following discussion and analysis of BancPlus’ financial condition and results of operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and related notes contained in Item 1 of this report.. report.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This discussionQuarterly Report on Form 10-Q contains estimates, predictions, opinions, projections and analysis contains forward-lookingother “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995 about BancPlus. Such statements thatinclude, without limitation, references to the Company’s predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations, and are subject to certain risks and uncertaintiesuncertainties. These statements often, but not always, are preceded by, followed by or otherwise include the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “continue,” “seek,” “plan,” “can,” “should,” “could,” “would,” “will,” “to be,” “predict,” “potential,” “may,” “likely,” “will likely result,” “target,” “project” and “outlook” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry based on certain assumptions and beliefs of the Company’s management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Although the Company believes that BancPlus believesthe expectations reflected in these forward-looking statements are reasonable butas of the date made, actual results may prove to be inaccurate. BancPlus assumes nomaterially different from the results expressed or implied by the forward-looking statements.
There are or will be important risk factors that could cause actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•the effects of the novel coronavirus and variants thereof, including the delta variant (“COVID-19”) pandemic, on our business, financial condition and results of operations and on our customers, our employees, our third-party service providers and the economy, especially as a vaccine becomes widely available;
•our ability to adequately measure and limit our credit risk;
•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
•possible additional loan losses and impairment of the collectability of loans, particularly as a result of the policies and programs implemented by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, including its automatic loan forbearance provisions, the Paycheck Protection Program (“PPP”) and complying with government-imposed foreclosure moratoriums;
•our ability to prudently manage our growth and execute our strategy;
•our ability to complete the pending acquisition of First Trust Corporation (“FTC”) on the terms proposed, which is subject to a number of conditions, risks and uncertainties, including the possibility that the proposed acquisition does not close when expected or at all because all conditions to closing are not received or satisfied on a timely basis or at all, the failure to close for any other reason, diversion of management time on acquisition-related issues and the reaction to the acquisition of our customers, employees and counterparties;
•our ability to successfully integrate and fully realize the cost savings and other benefits of our acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition customer acceptance of the Company’s products and services and related customer disintermediation, including our pending acquisition of FTC;
•the composition of our management team and our ability to attract and retain key personnel;
•changes in management personnel;
•geographic concentration of our business within Mississippi, Alabama and Louisiana;
•our ability to attract and retain customers;
•increased competition in the financial services industry, particularly from regional and national institutions;
•further government restrictions on overdraft programs;
•failure of our risk management framework;
•systems failures, unauthorized access, cyber-crime and other threats to data security or interruptions involving our information technology and telecommunications systems or third-party servicers, particularly in light of widespread remote work arrangements due to the COVID-19 pandemic or due to our recent core processing software conversion;
•difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which we operate and in which our loans are concentrated, including declines in housing markets, an increase in unemployment levels and slowdowns in economic growth, including as a result of the COVID-19 pandemic;
32
Table of Contents
•our ability to maintain our historical rate of growth;
•our ability to manage the risks associated with our growth and expansion through de novo branching;
•our ability to identify potential candidates for, consummate, and achieve synergies resulting from, potential future acquisitions;
•deterioration of our asset quality;
•changes in the value of collateral securing our loans;
•changes in the laws, rules, regulations, interpretations, policies or stimulus programs relating to financial institution, accounting, tax, trade, monetary and fiscal matters, and the uncertainty of the short- and long-term impacts of such changes;
•further government intervention in the U.S. financial system, particularly in response to the COVID-19 pandemic;
•the effects of regional or national civil unrest (including any resulting branch closures or damage);
•compliance with governmental and regulatory requirements, including relating to banking, consumer protection, securities and tax matters;
•operational risks associated with our business;
•volatility and direction of market interest rates, including as a result of the COVID-19 pandemic;
•our ability to maintain important deposit customer relationships and our reputation or otherwise avoid liquidity risks;
•the obligations associated with being a public reporting company;
•the commencement and outcome of litigation and other legal proceedings against us or to which we may become subject;
•natural disasters and adverse weather, public health crises, acts of terrorism, outbreaks of hostilities or other international or domestic calamities, and other matters beyond our control; and
•other factors that are discussed in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the annual period ended December 31, 2020, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and in this Quarterly Report on Form 10-Q.
New factors emerge from time to time, and it is not possible for us to predict which will arise. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and in this Quarterly Report on Form 10-Q. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether written or oral, and whether as a result of these forward-looking statements.new information, future developments or otherwise, except as specifically required by law.

Overview
BancPlus is a bank holding company headquartered in Ridgeland, Mississippi. Its wholly-owned bank subsidiary, BankPlus, offers a full suite of products and services to a broad spectrum of customers, including individuals, businesses and public entities. As of March 31, 2020,September 30, 2021, we operated 5579 branch offices across Mississippi, Louisiana and one in Mobile, Alabama. Our franchise is built on a community banking approach focused on personalized, relationship-driven service combined with local market management and expertise. We have one reportable segment, which is our financial services operations. While chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar.segment.
BancPlus’ business strategy is to provide exceptional community banking services and financial solutions within its markets, which enables us to fulfill our core purpose of enriching lives and building stronger communities. We believe our team of local, experienced and relationship-focused bankers, along with strong brand recognition in our communities, differentiate us from our competitors. As a result, we have a granular, stable deposit mix and a diversified loan portfolio. As of March 31, 2020,September 30, 2021, BancPlus held $2.6$4.530 billion of total deposits, and our deposit base consisted of 95.9%96.3% core deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000, with a total deposit cost of 0.64%0.18%. Our loan portfolio was comprised of 70.9%75.3% commercial loans and 29.1%24.7% consumer loans for the same period. BancPlus currently holds meaningful market share in a number of attractive markets in Mississippi, including the number three position based on deposits in the Jackson, Mississippi MSA,metropolitan statistical area as of June 30, 2021, and we believe we are well-positioned for future growth.
2020 First2021 Third Quarter Highlights

33
Table of Contents
•Net income for the quarternine months ended March 31, 2020September 30, 2021 was $7.7$45.5 million, compared with $9.7$27.5 million for the same period of 20192020
•Diluted earnings per share for the quarternine months ended March 31, 2020September 30, 2021 were $1.00,$4.53, compared with $1.28$2.96 for the same period of last year2020
•Net interest income was $25.3$126.8 million for the quarternine months ended March 31, 2020September 30, 2021, compared with $25.5$108.0 million for the first quartersame period of 20192020
•Total loans held for investment were $2.09$3.526 billion at March 31, 2020September 30, 2021, compared with $2.08$3.379 billion at December 31, 20192020
Recent Developments
Merger with State Capital Corp. (“SCC”)
On April 1, 2020, we completed our previously announced merger with SCC, the holding company of State Bank &First Trust Company (“State Bank”) which expanded our total number of branches to 89 across Mississippi, Louisiana, and Alabama. As part of the merger plan, nine of these branches will be closed in June 2020.
29
Table of Contents
Impact of COVID-19

In the first quarter of 2020, the outbreak of the novel coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization. The spread of COVID-19 has created a global public health crisis that has resulted in unprecedented uncertainty, volatility and disruption in financial markets. The federal, state, and local governmental response to the pandemic has included orders closing non-essential businesses and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions have resulted in rapid decreases in commercial and consumer activity and temporary closures of many businesses resulting in loss of revenues, a rapid increase in unemployment, disrupted global supply chains, market downturns and volatility, changes in consumer behavior related to pandemic fears, related emergency response legislation and an expectation that Federal Reserve policy will maintain a low interest rate environment for the foreseeable future. These changes have a significant adverse effect on the markets in which we conduct our business and the demand for our products and services.Corporation

On March 27, 2020, Congress enactedSeptember 28, 2021, the Coronavirus Aid, Relief,Company entered in an Agreement and Economic Security ("CARES"Plan of Share Exchange and Merger (the “definitive agreement”) Act. It contains substantial lending, taxwith FTC, the parent company of First Bank and spending provisions intendedTrust (“FBT”), whereby the Company will acquire FTC and the Bank will acquire FBT (the “transaction”). The transaction is expected to addressclose in the economic impactfirst quarter of 2022, subject to customary closing conditions, including receipt of required regulatory approvals and the COVID-19 pandemic, including the Paycheck Protection Program, a nearly $350 billion program designed to aid small and medium-sized businesses through federally guaranteed loans distributed through banks. These loans are intended to guarantee eight weeksapproval by shareholders of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills. On April 24, 2020, Congress enacted the Paycheck Protection Program and Healthcare Enhancement Act to, among other things, increase the available funding by $320 billion to a new total of $670 billion. As of May 1, 2020, including legacy SCC customers, we had obtained approvals for approximately 3,316 loans for customers under the Paycheck Protection Program totaling approximately $293.4 million in approved loans from which we expect additional fee income of approximately $10 million.FTC.

The CARES Act also provides certain measures to support individualsOther recent developments at September 30, 2021 did not significantly change from the recent developments as of December 31, 2020, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, and businesses in maintaining solvency through monetary relief, including in the formas of financing, loan forgivenessJune 30, 2021 and automatic forbearance. As of March 31, 2020, we had granted temporary modifications2021, which are disclosed in our Quarterly Reports on approximately 778 loans totaling approximately $281 million, or 13% of total loans, primarily secured by commercial real estate multi-tenant office buildingsForm 10-Q for the quarters ended June 30, 2021 and major flag hotels. Through May 1, 2020, including legacy SCC customers, we have granted approximately 2,427 temporary loan modifications, totaling approximately $835 million, or 26% of total loans, primarily secured by commercial real estate multi-tenant office buildings and 1-4 family residences.

The continuation of the economic effects of the COVID-19 outbreak and actions taken in response to it, including the impacts of loan forbearances and other provisions of the CARES Act and other federal and state measures, may adversely impact our business and results of operations and the operations of our borrowers, customers and business partners.The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and a significant decrease in consumer confidence and business generally, and may lead to an economic recession.The ultimate impact of these factors is highly uncertain at this time and we do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. However, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 may result in a material adverse effect to our business, financial condition and results of operations.For more information about these risks and uncertainties, see “Item 1A. Risk Factors.”March 31, 2021.

Results of Operations
The following discussion of BancPlus’ results of operations compares the three and nine months ended March 31, 2020September 30, 2021 to the three and nine months ended March 31, 2019.September 30, 2020. The results of operations for the three and nine months ended March 31, 2020September 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year endedending December 31, 2020.2021.
Net Income

Net income for the three months ended September 30, 2021 and 2020 was $14.2 million and $12.6 million, respectively. BancPlus’ annualized return on average assets for the three months ended September 30, 2021 and 2020 was 1.11% and 1.10%, respectively. BancPlus’ annualized return on average equity for the three months ended September 30, 2021 and 2020 was 14.67% and 14.59%, respectively.

Net income for the nine months ended September 30, 2021 and 2020 was $45.5 million and $27.5 million, respectively. BancPlus’ annualized return on average assets for the nine months ended September 30, 2021 and 2020 was 1.22% and 0.92%, respectively. BancPlus’ annualized return on average equity for the nine months ended September 30, 2021 and 2020 was 16.36% and 11.83%, respectively.
Net Interest Income

Net interest income represents interest income less interest expense. BancPlus generates interest income from interest, dividends and fees received on interest earninginterest-earning assets, including loans and investment securities. BancPlus incurs interest expense from interest paid on interest-bearing liabilities, including interest-bearing deposits, borrowings and other forms of indebtedness. Net interest income typically is the most significant contributor to BancPlus’ net income. To evaluate net interest income, BancPlus measures and monitors: (i) yields on its loans and other interest earninginterest-earning assets; (ii) the costs of its deposits and other funding sources; (iii) its net interest spread; and (iv) its net interest margin. Net interest spread is the difference between rates earned on interest earninginterest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income divided by average interest earninginterest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity, also fund interest earninginterest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources.

30
Table of Contents
Changes in market interest rates and interest BancPlus earns on interest earninginterest-earning assets or paypays on interest-bearing liabilities, as well as the volume and types of interest earninginterest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, usually have the largest impact on periodic changes in its net interest spread, net interest margin and net interest income. BancPlus measures net interest income before and after the provision for loan losses that BancPlus maintainsmaintains.
34
Table of Contents

For the three months ended March 31, 2020,September 30, 2021, net interest income was $25.3$43.4 million, a decreasean increase of $241,000,$1.5 million, or 0.9%3.7%, compared to net interest income of $25.5$41.9 million for the three months ended September 30, 2020. The increase in net interest income was primarily the result of increased interest-earning assets as a result of organic loan growth and the increase in our securities portfolio in the current year.

Net interest margin for the three months ended September 30, 2021 decreased 36 basis points to 3.66% from 4.02% for the same period of 2020 as the result of the lower interest rate environment in the current year.

For the nine months ended September 30, 2021, net interest income was $126.8 million, an increase of $18.9 million, or 17.5%, compared to net interest income of $108.0 million for the same period in 2019.of 2020. The decrease in net interest incomeincrease was largely attributable toprimarily the result of increased interest-earning assets as a decrease in yield on loans partially offset by anresult of organic loan growth and the increase in our securities portfolio in the current year.

Net interest earning cash investments.margin for the nine months ended September 30, 2021 decreased 25 basis points to 3.65% from 3.90% for the same period of 2020 as the result of the lower interest rate environment in the current year.

Our average interest earninginterest-earning assets at March 31, 2020,September 30, 2021, increased $212.4$942.0 million, or 8.07%25.49%, to $2.84$4.637 billion from $2.63$3.695 billion at March 31, 2019. This increase in average earning assets was primarily due to an increase in cash investments.September 30, 2020. BancPlus’ average interest-bearing liabilities at September 30, 2021 increased $121.2$556.2 million, or 6.08%20.74%, to $2.12$3.238 billion from $2.682 billion at March 31, 2020, from $1.99 billion at March 31, 2019.September 30, 2020. This increase in BancPlus’ average interest-earning assets and interest-bearing liabilities was primarily due to an increaseour previously disclosed merger with State Capital Corp. (“SCC”), in its average interest-bearing deposits.which BancPlus acquired SCC, the holding company of State Bank & Trust Company (“State Bank”) by a statutory share exchange and SCC was merged with and into BancPlus and State Bank was merged with and into BankPlus, with BancPlus and BankPlus surviving the mergers, which closed on April 1, 2020, as well as organic loan growth and increases in our securities portfolio. The ratio of BancPlus’ average interest earninginterest-earning assets to average interest-bearing liabilities was 134.4%143.2% and 131.9% for the three months ended March 31,137.7% at September 30, 2021 and 2020, and 2019, respectively.
BancPlus’ average interest earninginterest-earning assets produced a tax-equivalent yield of 4.24%3.93% and 3.94% for the first three and nine months of 2020ended September 30, 2021, respectively, compared to 4.63%4.47% and 4.41% for the first three and nine months of 2019.ended September 30, 2020, respectively. The average rate paid on interest-bearing liabilities was 0.91%0.39% and 0.42% for the three and nine months ended March 31, 2020September 30, 2021, respectively, compared to 0.99%0.63% and 0.70% for the three and nine months ended March 31, 2019.September 30, 2020, respectively. These year over year decreases in yields reflect the current low interest rate environment.
Average Balances and Yields
The following tables show, for the three and nine months ended March 31,September 30, 2021 and 2020, and 2019, the average balances of each principal category of BancPlus’ assets, liabilities and shareholders’ equity, and an analysis of net interest income. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. These tables are presented on a tax-equivalent basis, if applicable.

March 31, 2020March 31, 2019
(Dollars in thousands)Average BalanceInterest & Fees
Yield / Rate (4)
Average BalanceInterest & Fees
Yield / Rate (4)
ASSETS:
Interest earning assets:
Cash investments:
Interest-bearing cash deposits$319,901  $921  1.15 %$164,710  $748  1.82 %
Federal funds sold52,245  177  1.36 %—  —  — %
372,146  1,098  1.18 %164,710  7481.82 %
Investment securities:
Taxable investment securities256,878  1,330  2.07 %224,201  1,257  2.24 %
Tax-exempt investment securities121,341  763  2.52 %152,973  948  2.48 %
Total securities378,219  2,093  2.21 %377,174  2,205  2.34 %
Loans (1)
2,090,026  26,907  5.15 %2,086,232  27,478  5.27 %
Federal Home Loan Bank stock2,585  14  2.17 %2,503  33  5.27 %
Total interest earning assets2,842,976  30,112  4.24 %2,630,619  30,464  4.63 %
Noninterest earning assets225,438  256,182  
Total assets$3,068,414  $2,886,801  
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,055,926  $1,870  0.71 %$1,009,878  $2,184  0.87 %
Savings and money market deposits594,160  1,004  0.68 %509,392  864  0.68 %
Time deposits386,175  1,378  1.43 %392,641  1,178  1.20 %
Federal funds purchased605  2  1.32 %—  —  — %
Repurchase agreements—  —  — %—  —  — %
3135
Table of Contents
Three Months Ended September 30,
20212020
(Dollars in thousands)(Dollars in thousands)Average BalanceInterest & Fees
Yield / Rate (4)
Average BalanceInterest & Fees
Yield / Rate (4)
ASSETS:ASSETS:
Interest-earning assets:Interest-earning assets:
Cash investments:Cash investments:
Interest-bearing cash depositsInterest-bearing cash deposits$596,624 $231 0.15 %$278,871 $75 0.11 %
Federal funds soldFederal funds sold— — — %44,307 31 0.28 %
596,624 231 0.15 %323,178 106 0.13 %
Investment securities:Investment securities:
Taxable investment securitiesTaxable investment securities549,569 2,097 1.53 %345,536 1,815 2.10 %
Tax-exempt investment securitiesTax-exempt investment securities79,118 455 2.30 %98,198 573 2.33 %
Total securitiesTotal securities628,687 2,552 1.62 %443,734 2,388 2.15 %
Loans (1)
Loans (1)
3,517,978 43,835 4.98 %3,395,441 44,083 5.19 %
Federal Home Loan Bank (“FHLB”) stockFederal Home Loan Bank (“FHLB”) stock3,576 11 1.23 %5,025 7 0.56 %
Total interest-earning assetsTotal interest-earning assets4,746,865 46,629 3.93 %4,167,378 46,584 4.47 %
Noninterest-earning assetsNoninterest-earning assets329,425 378,971 
Total assetsTotal assets$5,076,290 $4,546,349 
LIABILITIES AND SHAREHOLDERS’ EQUITY:LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing transaction depositsInterest-bearing transaction deposits$1,468,126 $717 0.20 %$1,213,970 $1,313 0.43 %
Savings and money market depositsSavings and money market deposits1,021,448 186 0.07 %876,706 357 0.16 %
Time depositsTime deposits641,501 843 0.53 %719,566 1,523 0.85 %
Federal funds purchasedFederal funds purchased— — — %— — — %
FHLB advancesFHLB advances20,982  80  1.53 %21,260  81  1.52 %FHLB advances20,534 78 1.52 %20,725 79 1.52 %
Other borrowingsOther borrowings16,444  158  3.84 %19,960  190  3.81 %Other borrowings11,223 110 3.92 %14,723 144 3.91 %
Subordinated debenturesSubordinated debentures41,238  325  3.15 %41,238  431  4.18 %Subordinated debentures111,344 1,261 4.53 %110,982 1,276 4.60 %
Total interest-bearing liabilitiesTotal interest-bearing liabilities2,115,530  4,817  0.91 %1,994,369  4,928  0.99 %Total interest-bearing liabilities3,274,176 3,195 0.39 %2,956,672 4,692 0.63 %
Noninterest-bearing liabilities:Noninterest-bearing liabilities:Noninterest-bearing liabilities:
Noninterest-bearing transaction depositsNoninterest-bearing transaction deposits641,740  613,094  Noninterest-bearing transaction deposits1,364,915 1,175,118 
Other noninterest-bearing liabilitiesOther noninterest-bearing liabilities55,809  51,954  Other noninterest-bearing liabilities53,245 71,018 
Total noninterest-bearing liabilitiesTotal noninterest-bearing liabilities697,549  665,048  Total noninterest-bearing liabilities1,418,160 1,246,136 
Shareholders’ equity (6)
Shareholders’ equity (6)
255,335  227,384  
Shareholders’ equity (6)
383,954 343,541 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$3,068,414  $2,886,801  Total liabilities and shareholders’ equity$5,076,290 $4,546,349 
Net interest income/net interest margin (2)
Net interest income/net interest margin (2)
25,295  3.56 %25,536  3.88 %
Net interest income/net interest margin (2)
43,434 3.66 %41,892 4.02 %
Net interest spread (5)
Net interest spread (5)
3.33 %3.64 %
Net interest spread (5)
3.54 %3.84 %
Taxable equivalent adjustment:Taxable equivalent adjustment:Taxable equivalent adjustment:
Tax-exempt investment securities (3)
Tax-exempt investment securities (3)
246  306  
Tax-exempt investment securities (3)
146 184 
Net interest income/net interest margin (2)
Net interest income/net interest margin (2)
$25,541  3.59 %$25,842  3.93 %
Net interest income/net interest margin (2)
$43,580 3.67 %$42,076 4.04 %

(1)Average loan balances include nonaccrual loans.
(2)Net interest margin during the periods presented represents: (i) the difference between interest income on interest earninginterest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest earninginterest-earning assets for the period.
(3)Interest income and averages rates for tax exempt securities are presented on a tax-equivalent basis, assuming a combined federal and state income tax rate of 25% for 20202021 and 2019.2020.
(4)Yields and rates are annualized.
36
Table of Contents
(5)Net interest spread is the yield on BancPlus’ total interest-earning assets less the yield on its interest-bearing liabilities.
(6)Includes Employee Stock Ownership-owned shares.

Nine Months Ended September 30,
20212020
(Dollars in thousands)Average BalanceInterest & Fees
Yield / Rate (4)
Average BalanceInterest & Fees
Yield / Rate (4)
ASSETS:
Interest-earning assets:
Cash investments:
Interest-bearing cash deposits$559,746 $465 0.11 %$283,267 $1,046 0.49 %
Federal funds sold7,070 11 0.21 %55,101 241 0.58 %
566,816 476 0.11 %338,368 1,287 0.51 %
Investment securities:
Taxable investment securities511,923 6,024 1.57 %392,228 5,157 1.75 %
Tax-exempt investment securities84,939 1,473 2.31 %47,192 1,942 5.49 %
Total securities596,862 7,497 1.67 %439,420 7,099 2.15 %
Loans (1)
3,469,520 129,066 4.96 %2,912,471 113,710 5.21 %
FHLB stock3,509 17 0.65 %4,481 42 1.25 %
Total interest-earning assets4,636,707 137,056 3.94 %3,694,740 122,138 4.41 %
Noninterest-earning assets333,231 316,742 
Total assets$4,969,938 $4,011,482 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,452,965 $2,278 0.21 %$1,175,152 $4,691 0.53 %
Savings and money market deposits982,220 696 0.09 %779,321 1,973 0.34 %
Time deposits659,361 2,899 0.59 %615,619 4,595 1.00 %
Federal funds purchased— — — %201 2 1.33 %
FHLB advances20,567 233 1.51 %22,222 239 1.43 %
Other borrowings12,087 352 3.88 %15,585 453 3.88 %
Subordinated debentures111,248 3,760 4.51 %74,151 2,220 3.99 %
Total interest-bearing liabilities3,238,448 10,218 0.42 %2,682,251 14,173 0.70 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,306,105 948,275 
Other noninterest-bearing liabilities53,169 70,339 
Total noninterest-bearing liabilities1,359,274 1,018,614 
Shareholders’ equity (6)
372,216 310,617 
Total liabilities and shareholders’ equity$4,969,938 $4,011,482 
Net interest income/net interest margin (2)
126,838 3.65 %107,965 3.90 %
Net interest spread (5)
3.52 %3.70 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
474 638 
Net interest income/net interest margin (2)
$127,312 3.66 %$108,603 3.92 %
________________________________
37
Table of Contents
(1)Average loan balances include nonaccrual loans.
(2)Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.
(3)Interest income and averages rates for tax exempt securities are presented on a tax-equivalent basis, assuming a combined federal and state income tax rate of 25% for 2021 and 2020.
(4)Yields and rates are annualized.
(5)Net interest spread is the yield on BancPlus’ total interest earninginterest-earning assets less the yield on its interest-bearing liabilities.
(6)Includes Employee Stock Ownership (“ESOP”)-ownedOwnership-owned shares.

Rate/Volume Analysis

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earninginterest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest earninginterest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to the outstanding balances and those due to changes in interest rates. The change in interest attributable to rate has been determined by applying the change in rate between periods to average balances outstanding in the earlier period. The change in interest due to volume has been determined by applying the rate from the later period to the change in average balances outstanding between periods. The following table presents the changes in the volume and rate of BancPlus’ interest bearinginterest-bearing assets and liabilities for the dates indicated:

Three Months Ended September 30, 2021 Compared with Three Months Ended September 30, 2020
Change Due To:
(Dollars in thousands)VolumeRateInterest Variance
Interest-earning assets:
Cash investments$106 $19 $125 
Investment securities:
Taxable investment securities779 (497)282 
Tax-exempt investment securities(110)(8)(118)
Total securities669 (505)164 
Loans, net1,527 (1,775)(248)
Federal Home Loan Bank stock(4)8 4 
Total interest-earning assets$2,298 $(2,253)$45 
Interest-bearing liabilities:
Interest-bearing transaction deposits$124 $(720)$(596)
Savings and money market deposits26 (197)(171)
Time deposits(103)(577)(680)
Federal funds purchased— — — 
FHLB advances(1)— (1)
Other borrowings(34)— (34)
Subordinated debentures4 (19)(15)
Total interest-bearing liabilities$16 $(1,513)$(1,497)
Net interest income$2,282 $(740)$1,542 

32
38
Table of Contents
Three Months Ended March 31, 2020 Compared with Three Months Ended March 31, 2019Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020
Change Due To:InterestChange Due To:
(Dollars in thousands)(Dollars in thousands)VolumeRateVariance(Dollars in thousands)VolumeRate
Interest earning assets:
Interest-earning assets:Interest-earning assets:
Cash investmentsCash investments$611  $(262) $349  Cash investments$192 $(1,003)$(811)
Investment securities:Investment securities:Investment securities:
Taxable investment securitiesTaxable investment securities169  (96) 73  Taxable investment securities1,408 (541)867 
Tax-exempt investment securitiesTax-exempt investment securities(199) 14  (185) Tax-exempt investment securities655 (1,124)(469)
Total securitiesTotal securities(30) (82) (112) Total securities2,063 (1,665)398 
Loans, netLoans, net49  (619) (570) Loans, net20,722 (5,366)15,356 
Federal Home Loan Bank stockFederal Home Loan Bank stock—  (19) (19) Federal Home Loan Bank stock(5)(20)(25)
Total interest earning assets$630  $(982) $(352) 
Total interest-earning assetsTotal interest-earning assets$22,972 $(8,054)$14,918 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing transaction depositsInterest-bearing transaction deposits$82  $(396) $(314) Interest-bearing transaction deposits$436 $(2,849)$(2,413)
Savings and money market depositsSavings and money market deposits143  (3) 140  Savings and money market deposits144 (1,421)(1,277)
Time depositsTime deposits(23) 223  200  Time deposits192 (1,888)(1,696)
Federal funds purchasedFederal funds purchased2  —  2  Federal funds purchased— (2)(2)
Repurchase agreements—  —  —  
FHLB advancesFHLB advances(1) —  (1) FHLB advances(19)13 (6)
Other borrowingsOther borrowings(34) 2  (32) Other borrowings(102)1 (101)
Subordinated debenturesSubordinated debentures—  (106) (106) Subordinated debentures1,254 286 1,540 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$169  $(280) $(111) Total interest-bearing liabilities$1,905 $(5,860)$(3,955)
Net interest incomeNet interest income$461  $(702) $(241) Net interest income$21,067 $(2,194)$18,873 

Provision for Loan Losses

The provision for loan losses is the amount of expense that, based on BancPlus’ judgment, is required to maintain the allowance for loan losses at an adequate level to absorb probable losses inherent in the loan portfolio at the balance sheet date and that, in management’s judgment, is appropriate under relevant accounting guidance. The determination of the provision for loan losses is complex and involves a high degree of judgment and subjectivity.

TheFor the three months ended September 30, 2021, the provision for loan losses was $185,000$1.5 million, compared to $4.7 million for the three months ended March 31,same period of 2020, and $288,000 for the three months ended March 31, 2019, a decrease of $103,000,$3.2 million, or 35.8%68.6%. The allowanceFor the nine months ended September 30, 2021, the provision for loan losses was $7.4 million, compared to total loans was 1.01% at March 31,$7.7 million for the same period of 2020, and 1.03% at March 31, 2019. In lighta decrease of $311,000, or 4.0%. The decrease for these year to date periods is primarily attributable to the economic effectsimpact of the COVID-19 pandemic on the prior year period, including the impact of the CARES Act measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance, we expect that provision for loan losses in future periods may increase significantly.forbearance.

Noninterest Income

Noninterest income consists of, among other things: (i) service charges and other fees on deposit accounts; (ii) mortgage origination income; (iii) debit card interchange fees; (iv) wealth management service fees;income from fiduciary activities; (v) ATM network income; and (vi) other noninterest income. BancPlus’ income from service charges on deposit accounts and debit card interchange fees are largely impacted by the volume, growth and type of deposits BancPlus holds, which are impacted by prevailing market conditions for itsBancPlus’ deposit products, market interest rates, its marketing efforts, and other factors.

Noninterest income was $14.2 million for the first three months of 2020, compared to $13.4 million for the first three months of 2019, an increase of $782,000, or 5.8%, primarily due to an increase in mortgageService charges on deposit accounts includes fees and miscellaneous charges on deposit products offered by BancPlus. Mortgage origination income represents the gains recorded on the sale of $512,000, or 68.5%,mortgages originated by BancPlus. Debit card interchange represents income from the use of checkcards by our customers. Income from fiduciary activities includes retirement and management fee income from our wealth management group. ATM income is comprised of fees from our ATM network. Other
3339
Table of Contents
income includes various types of income including gains on sale of other real estate, personalized check sales, and wire transfer fees.

Noninterest income was $19.1 million for the three months ended September 30, 2021, compared to $18.6 million for the same period of 2020, an increase of $441,000, or 2.4%, primarily due to increases in service charges on deposit accounts of $1.8 million, or 31.5%; debit card interchange of $481,000, or 25.2%; income from fiduciary activities of $436,000 or 27.6%; life insurance income of $598,000, or 105.7%; partially offset by decreases in other income of $502,000,$1.8 million, or 56.7%60.8%, inand mortgage origination income of $828,000, or 29.3%.

The following table presents the first quartermajor components of noninterest income for three months ended September 30, 2021, compared to the three months ended September 30, 2020:

Three Months Ended September 30,
(Dollars in thousands)20212020$ Change% Change
Noninterest income:
Service charges on deposit accounts$7,484 $5,690 $1,794 31.5 %
Mortgage origination income1,999 2,827 (828)(29.3)%
Debit card interchange2,390 1,909 481 25.2 %
Income from fiduciary activities2,015 1,579 436 27.6 %
ATM income1,566 1,754 (188)(10.7)%
Brokerage and insurance fees and commissions648 533 115 21.6 %
Life insurance income1,164 566 598 105.7 %
Community Development Financial Institution (“CDFI”) grants645 823 (178)(21.6)%
Other income1,155 2,944 (1,789)(60.8)%
Total$19,066 $18,625 $441 2.4 %

Service charges on deposit accounts increased $1.8 million, or 31.5%, to $7.5 million for the three months ended September 30, 2021, compared to $5.7 million for the same period of 2020. The increase in mortgage origination income was driven bythe result of the impact on the prior year period of increased mortgage refinancing activity resulting fromcustomer liquidity as a result of various economic stimulus programs and reduced customer spending as a result of quarantine restrictions related to the lower interest rate environment inCOVID-19 pandemic.

Debit card interchange increased $481,000, or 25.2%, to $2.4 million for the first quarterthree months ended September 30, 2021, compared to $1.9 million for the same period of 2020. The increase was attributable to increased card spending and transaction levels for the current year period compared to the same period of 2020 which was negatively affected by quarantine restrictions related to the COVID-19 pandemic.

Income from fiduciary activities increased $436,000, or 27.6%, to $2.0 million for the three months ended September 30, 2021, compared to $1.6 million for the same period of 2020. The increase is primarily attributable to increases in assets under management as a result of higher equity markets in the current year.

Life insurance income increased $598,000, or 105.7%, to $1.2 million for the three months ended September 30, 2021, compared to $566,000 for the same period of 2020. The increase is primarily related to death benefits paid in the current year on policies held by the BancPlus.

Mortgage origination income decreased $828,000, or 29.3%, to $2.0 million for the three months ended September 30, 2021, compared to $2.8 million for the same period of 2020. The decrease was primarily the result of decreased mortgage origination activity in the three months ended September 30, 2021 as refinancing activity began to slow from increased levels seen over the previous 12 months.

Other income decreased $1.8 million, or 60.8%, to $1.2 million for the three months ended September 30, 2021, compared to $2.9 million for the same period of 2020. The decrease was primarily the result of the gain on the bargain purchase of $1.1 million recorded in the prior year period related to the merger with SCC.

Noninterest income was $58.1 million for the first nine months of 2021, compared to $45.4 million for the first nine months of 2020, an increase of $12.7 million, or 28.0%, primarily due to increases in service charges on deposit accounts of $2.6, or 15.3%;
40
Table of Contents
mortgage origination income of $752,000, or 12.6%; debit card interchange of $2.2 million, or 41.1%; income from fiduciary activities of $1.1 million, or 23.9%; ATM income of $835,000, or 21.0%; life insurance income of $4.3 million, or 284.1%; and CDFI grants of $1.6 million, or 200.2%; partially offset by a decrease in other income was primarily due to increased income from equity method investments in the first three months of 2020.$1.0 million, or 20.9%.

The following table presents the major components of noninterest income for the threenine months ended March 31, 2020,September 30, 2021, compared to the threenine months ended March 31, 2019:September 30, 2020:

Three Months Ended March 31,Increase/
(Decrease)		Nine Months Ended September 30,
(Dollars in thousands)(Dollars in thousands)20202019Increase/
(Decrease)		20212020$ Change% Change
Noninterest income:Noninterest income:
Service charges on deposit accountsService charges on deposit accounts$6,530  $6,614  $(84) Service charges on deposit accounts$19,226 $16,674 $2,552 15.3 %
Mortgage origination incomeMortgage origination income1,259  747  512  Mortgage origination income6,726 5,974 752 12.6 %
Debit card interchangeDebit card interchange1,447  1,575  (128) Debit card interchange7,634 5,412 2,222 41.1 %
Income from fiduciary activitiesIncome from fiduciary activities1,113  1,192  (79) Income from fiduciary activities5,681 4,585 1,096 23.9 %
ATM incomeATM income1,096  1,093  3  ATM income4,809 3,974 835 21.0 %
Brokerage and insurance fees and commissionsBrokerage and insurance fees and commissions972  905  67  Brokerage and insurance fees and commissions1,802 1,516 286 18.9 %
Life insurance incomeLife insurance income395  406  (11) Life insurance income5,858 1,525 4,333 284.1 %
CDFI grantsCDFI grants—  —  —  CDFI grants2,471 823 1,648 200.2 %
Other incomeOther income1,388  886  502  Other income3,873 4,899 (1,026)(20.9)%
TotalTotal$14,200  $13,418  $782  Total$58,080 $45,382 $12,698 28.0 %

Service charges on deposit accounts increased $2.6 million, or 15.3%, to $19.2 million for the nine months ended September 30, 2021, compared to $16.7 million for the same period of 2020. The increase was the result of the impact on the prior year period of increased customer liquidity as a result of various economic stimulus programs and reduced customer spending as a result of quarantine restrictions related to the COVID-19 pandemic.

Mortgage origination income increased $752,000, or 12.6%, to $6.7 million for the nine months ended September 30, 2021, compared to $6.0 million for the same period of 2020. The increase primarily related to increased mortgage origination activity in the first nine months of the current year as a result of the lower interest rate environment seen for much of 2021.

Debit card interchange increased $2.2 million, or 41.1%, to $7.6 million for the nine months ended September 30, 2021, compared to $5.4 million for the same period of 2020. The increase was attributable to increased card spending and transaction levels for the current year period compared to the same period of 2020 which was negatively affected by quarantine restrictions related to the COVID-19 pandemic as well as an additional three months of income in 2021 related to the merger with SCC.

Income from fiduciary activities increased $1.1 million, or 23.9%, to $5.7 million for the nine months ended September 30, 2021, compared to the $4.6 million for the same period of 2020. The increase is primarily attributable to increases in assets under management as a result of higher equity markets in the current year.

ATM income increased $835,000, or 21.0%, to $4.8 million for the nine months ended September 30, 2021, compared to $4.0 million for the same period of 2020. The increase is primarily related to increases in ATM usage in the current year period compared to same period of 2020 which was negatively affected by quarantine restrictions related to the COVID-19 pandemic as well as an additional three months of income in 2021 related to the merger with SCC.

Life insurance income increased $4.3 million, or 284.1%, to $5.9 million for the nine months ended September 30, 2021, compared to $1.5 million for the same period of 2020. The increase is primarily related to death benefits paid in the current year on policies held by BancPlus.

CDFI grant income increased $1.6 million, or 200.2%, to $2.5 million for the nine months ended September 30, 2021 from $823,000 for the same period of 2020. The current year period includes a $1.8 million grant received related to the CDFI Rapid Response Program, which was created in 2021 by the U.S. Department of the Treasury to provide capital for CDFI designated banks to respond to the economic challenges created by the COVID-19 pandemic.
Other income decreased $1.0 million, or 20.9%, to $3.9 million for the nine months ended September 30, 2021, compared to $4.9 million for the same period of 2020. The decrease was primarily the result of the gain on the bargain purchase of $1.1 million recorded in the prior year period related to the merger with SCC.
41
Table of Contents


Noninterest Expense

Noninterest expense includes, among other things:includes: (i) salaries and employee benefits;benefits expenses; (ii) net occupancy expenses; (iii) furniture, and equipment, expenses; (iv)and data processing expenses; (v)(iv) marketing and promotional expenses; (vi)(v) other real estate expenses;expenses and losses; (vi) professional fees; and (vii) other expenses.

Salaries and employee benefits includeexpenses includes compensation, employee benefits and tax expenses for BancPlus’ personnel. OccupancyNet occupancy expenses include depreciation expense on BancPlus’ owned properties, lease expense on its leased properties and other occupancy-related expenses. Furniture and equipment expenses include depreciation and maintenance and other expenses related to its furniture, fixtures and equipment. Data processing expenses include costs related to maintenance and monitoring of its systems and expenses paid to its third-party data processing system providers. Marketing and promotional expenses include costs for advertising, promotions and sponsorships. Other real estate expenses and losses include taxes, insurance, maintenance and other expenses related to BancPlus’ foreclosed properties. Professional fees include accounting and auditing, consulting and legal fees. Other expenses include expenses associated with Federal Deposit Insurance Corporation (“FDIC”) assessments, MDBCFMississippi Department of Banking and Consumer Finance (“MDBCF”) assessments, consulting and legal fees, communications, travel, meals, training, supplies and postage. Noninterest expenses generally increase as BancPlus grows its business. Noninterest expenses have increased commensurate with our growth over the past few years as BancPlus has grown organically and asthrough the merger with SCC. Additionally, BancPlus has built out and modernized its operational infrastructure and implemented its plan to build an efficient, technology-driven banking operation with capacity for growth.

For the three months ended March 31, 2020, noninterest expense totaled $29.8 million, a $3.0 million, or 11.1%, increase from $26.8 million for the three months ended March 31, 2019. This increase was primarily due to increases in salaries and employee benefits of $1.7 million, furniture, equipment and data processing of $797,000, marketing and promotional expenses of 301,000, and professional fees of $478,000 offset by a decrease in other real estate expenses and losses of $478,000 in the first quarter of 2020.

The following table presents the major components of noninterest expense for the three months ended March 31, 2020 compared to the three months ended March 31, 2019:

34
Table of Contents
Three Months Ended March 31,Increase/
(Decrease)
(Dollars in thousands)20202019
Noninterest expense:
Salaries and employee benefits$17,615  $15,947  $1,668  
Net occupancy expenses2,863  2,738  125  
Furniture, equipment and data processing expenses4,231  3,434  797  
Marketing and promotional expenses924  623  301  
Other real estate expenses and losses194  672  (478) 
Professional fees730  252  478  
Other expenses3,204  3,122  82  
Total$29,761  $26,788  $2,973  

Salaries and employee benefits expense is the largest component of noninterest expense representing 59.2% and 59.5% of total noninterest expense for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020, salaries and employee benefits expense increased $1.7 million, or 10.5%, to $17.6 million as compared to $15.9 million for the three months ended March 31, 2019. The increase in salaries and employee benefits expense is primarily due to an increase in employee salaries and employer payroll taxes as a result of annual salary increases and an increase in health insurance and other employee benefit expenses in the first quarter of 2020.

Furniture, equipment and data processing expense for the three months ended March 31, 2020 was $4.2 million, an increase of $797,000, or 23.2%, compared to $3.4 million for the three months ended March 31, 2019. This increase was primarily attributable to increases in data processing and software expenses in the first quarter of 2020.

Marketing and promotional expenses increased $301,000, or 48.3%, to $924,000 for the three months ended March 31, 2020 compared to $623,000 for the same period of 2019. The increase was primarily due to an increase in advertising expense in the first quarter of 2020.

Other real estate expenses and losses decreased $478,000, or 71.1%, to $194,000 for the three months ended March 31, 2020 compared to $672,000 for the same period of 2019. This decrease was primarily due to the decrease in our average balance of other real estate owned, which decreased from $11.2 million for the three months ended March 31, 2019 to $4.9 million for the same period of 2020.

Professional fees increased $478,000, or 189.7%, to $730,000 for the three months ended March 31, 2020 compared to $252,000 for the three months ended March 31, 2019, primarily due to expenses incurred in the first quarter of 2020 related to the acquisition of SCC.

BancPlus continues to focus efforts on supporting growth through sales efforts, product development, marketing and promotion, as well as investing in technology and its branch network, while also seeking to improve productivity and maintain appropriate cost structure and customer service levels.

For the three months ended September 30, 2021, noninterest expense totaled $42.8 million, an increase of $2.9 million, or 7.3%, from $39.9 million for the three months ended September 30, 2020, primarily due to increases in salaries and employee benefits expenses of $2.1 million, or 8.9%.

The following table presents the major components of noninterest expense for the three months ended September 30, 2021 compared to the three months ended September 30, 2020:
Three Months Ended September 30,
(Dollars in thousands)20212020$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$25,218 $23,162 $2,056 8.9 %
Net occupancy expenses3,606 3,459 147 4.2 %
Furniture, equipment and data processing expenses6,282 5,801 481 8.3 %
Marketing and promotional expenses1,154 1,000 154 15.4 %
Other real estate expenses and losses292 230 62 27.0 %
Professional fees1,232 1,651 (419)(25.4)%
Other expenses5,038 4,609 429 9.3 %
Total$42,822 $39,912 $2,910 7.3 %

Salaries and employee benefits expenses is the largest component of noninterest expense, representing 58.9% and 58.0% of total noninterest expense for the three months ended September 30, 2021 and 2020, respectively. During the three months ended September 30, 2021, salaries and employee benefits expense increased $2.1 million, or 8.9%, to $25.2 million, compared to $23.2 million for the three months ended September 30, 2020. The increase in salaries and employee benefits expense is primarily due to increased bonuses and normal annual salary increases for employees, as well as increased salary-related expenses in the third quarter of 2021 related to the Company’s recent core software conversion.

For the nine months ended September 30, 2021, noninterest expense totaled $121.4 million, an increase of $10.9 million, or 9.8%, from $110.5 million for the nine months ended September 30, 2020, primarily due to increases in salaries and employee benefits expenses of $7.0 million, or 10.7%; net occupancy expenses of $1.1 million, or 11.0%, furniture, equipment and data processing of $2.7 million, or 17.3%, and other expenses of $2.4 million, or 20.0%, partially offset by a decrease in professional fees of $2.2 million, or 46.7%.

42
Table of Contents
The following table presents the major components of noninterest expense for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020:

Nine Months Ended September 30,
(Dollars in thousands)20212020$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$72,365 $65,349 $7,016 10.7 %
Net occupancy expenses10,779 9,709 1,070 11.0 %
Furniture, equipment and data processing expenses18,322 15,621 2,701 17.3 %
Marketing and promotional expenses2,485 2,787 (302)(10.8)%
Other real estate expenses and losses744 506 238 47.0 %
Professional fees2,514 4,718 (2,204)(46.7)%
Other expenses14,188 11,823 2,365 20.0 %
Total$121,397 $110,513 $10,884 9.8 %

Salaries and employee benefits expenses is the largest component of noninterest expense, representing 59.6% and 59.1% of total noninterest expense for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021, salaries and employee benefits expense increased $7.0 million, or 10.7%, to $72.4 million, compared to $65.3 million for the nine months ended September 30, 2020. The increase in salaries and employee benefits expenses is primarily due to the merger with SCC in addition to normal annual salary increases for employees.

Net occupancy expenses increased $1.1 million, or 11.0%, to $10.8 million for the nine months ended September 30, 2021, compared to $9.7 million for the nine months ended September 30, 2020. The increase was primarily attributable to increased maintenance expenses in the current year period related to the upkeep of branches across our footprint.

Furniture, equipment and data processing expenses for the nine months ended September 30, 2021 was $18.3 million, an increase of $2.7 million, or 17.3%, compared to $15.6 million for the nine months ended September 30, 2020. This increase was primarily attributable to increases in depreciation, data processing and software expenses resulting from the merger with SCC in addition to expenses related to BancPlus’ software conversion during the third quarter of 2021.

Professional fees decreased $2.2 million, or 46.7%, to $2.5 million for the nine months ended September 30, 2021, compared to $4.7 million for the nine months ended September 30, 2020, primarily due to expenses incurred in the same period of 2020 related to the merger with SCC.

Other expenses increased $2.4 million, or 20.0%, to $14.2 million for the nine months ended September 30, 2021, compared to $11.8 million for the nine months ended September 30, 2020, primarily due to an increase in FDIC and state assessment fees as a result of increased deposits as well as the merger with SCC.
Income Tax Expense

The provision for income taxes includes both federal and state taxes. Fluctuations in effective tax rates reflect the effect of the differences in the inclusion or deductibility of certain income and expenses for income tax purposes, the mix of BancPlus’ taxable and tax-free investments and loans, and its overall taxable income.

BancPlus recorded income tax expense of $1.9$4.0 million for the first three months of 2020,ended September 30, 2021, compared to $2.1$3.3 million for the first three monthssame period of 2019.2020, an increase of $678,000, or 20.3%. BancPlus’ effective tax rate for the three months ended March 31, 2020 and 2019September 30, 2021 was 19.6% and 18.0%22.0%, respectively.compared to 20.9% for the same period of 2020.

Net IncomeBancPlus recorded income tax expense of $10.6 million for the nine months ended September 30, 2021, compared to $7.6 million for the same period of 2020, an increase of $3.0 million, or 39.1%. BancPlus’ effective tax rate for the nine months ended September 30, 2021 was 18.9%, compared to 21.7% for the same period of 2020.

NetFor both the three and nine month periods, the increase in income and nettax expense was the result of larger income available to holders of BancPlus common stockbefore taxes in the current year period. The increase in the effective tax rate for the three months ended March 31,September 30, 2021 compared with the same period of 2020 and 2019 was $7.7 million and $9.7 million, respectively.the result of the impact on the prior year period of permanent tax items. The decrease in net income was primarily attributable to increases in noninterest expense partially offset by an increase in noninterest income. BancPlus’ annualized return on average assetseffective tax rate for the three months
3543
Table of Contents
ended March 31, 2020the year to date periods was the result of BancPlus taking advantage of tax credits offered by Mississippi in the current year, non-taxable life insurance proceeds recorded in 2021, and 2019 was 1.00% and 1.35%, respectively.apportionment of state taxable income to Louisiana which exempts banks that pay a state tax on their shares of stock from their corporate income tax. BancPlus’ annualized return on average equity forLouisiana locations were acquired in the three months ended March 31, 2020 and 2019 was 12.02% and 17.13%, respectively.merger with SCC.

Financial Condition

The following discussion compares BancPlus’ financial condition as of March 31, 2020September 30, 2021 to December 31, 2019.2020.

Assets

Total assets increased $402.4 million, or 8.5%, to $5.113 billion at March 31, 2020 were $3.03 billion, an increase of $53.7 million overSeptember 30, 2021 from total assets of $2.98$4.711 billion at December 31, 2019.2020. Total cash and cash equivalents increased $34.6$57.5 million, or 11.1%9.0%, to $347.6$695.1 million at March 31, 2020,September 30, 2021, compared to $313.0$637.5 million at December 31, 2019,2020, primarily due to an increaseincreases in federal funds sold in the first quarter of 2020.interest bearing deposits with banks. Total loans increased $15.1$147.4 million, or 0.7%4.4%, to $2.09$3.526 billion at March 31, 2020,September 30, 2021, compared to $2.08$3.379 billion at December 31, 2019.2020 as a result of organic loan growth. Investment securities increased $2.2$214.2 million, or 0.6%52.9%, from $378.9$405.1 million at December 31, 20192020 to $381.1$619.3 million at March 31, 2020.September 30, 2021 as a result of increased purchases of available for sale securities.
Investment Securities Portfolio

BancPlus’ investment securities portfolio, which consists primarily of municipal securities, U.S. government agency obligations, mortgage-backed securities, municipal securities and corporate investments, is used as a source of liquidity and serves as collateral for certain types of deposits. BancPlus manages its investment securities portfolio according to a written investment policy. Balances in BancPlus’ investment securities portfolio change over time based on its funding needs and interest rate risk management objectives. BancPlus’ liquidity levels take into account anticipated future cash flows and all available sources of credit and are maintained at levels management believes ensure flexibility in meeting its anticipated funding needs.

As of March 31, 2020, 28.0%September 30, 2021, 12.7% of BancPlus’ investment securities portfolio was classified as held to maturity and 72.0%87.3% was classified as available for sale. As of December 31, 2019, 46.9%2020, 23.1% of BancPlus’ investment securities portfolio was classified as held to maturity and 53.1%76.9% was classified as available for sale. Securities available for sale increased $229.5 million, or 73.7%, from $311.4 million at December 31, 2020 to $540.9 million at September 30, 2021. Early in the period, BancPlus took advantage of the steeper yield curve to invest excess liquidity. BancPlus used a disciplined approach to build a ladder of non-callable state tax-exempt agency bonds. As market conditions allow, BancPlus will continue this strategy to enhance net interest margin and provide predictable cash flows for future loan demand.

At March 31, 2020, mortgage-backed securities represented 57.5% of the investment securities portfolio, municipal securities represented 40.1%,September 30, 2021, U.S. government agency obligations represented 1.4%48.4%, mortgage-backed securities represented 22.1%, municipal securities represented 20.2% and corporate investments represented 1.0%7.1% of the investment securities portfolio. At December 31, 2019,2020, mortgage-backed securities represented 47.5% of the investment securities portfolio,50.5%, municipal securities represented 45.3%34.7%, corporate investments represented 8.2% and U.S. government agency obligations represented 6.1% and corporate investments represented 1.1%3.1% of the investment securities portfolio. Other than the U. S.U.S. government and its agencies, BancPlus’ securities portfolio did not contain securities of any single issuer, including any securities issued by a state or political subdivision, that were payable from and secured by the same source of revenue or taxing authority where the aggregate carrying value of such securities exceeded 10% of shareholders’ equity.

The following table presents the carrying value of BancPlus’ investment securities portfolio as of the dates indicated:

3644
Table of Contents
March 31, 2020December 31, 2019September 30, 2021December 31, 2020
(Dollars in thousands)(Dollars in thousands)Carrying Value% of TotalCarrying Value% of Total(Dollars in thousands)Carrying Value% of TotalCarrying Value% of Total
Held to Maturity:Held to Maturity:Held to Maturity:
(At amortized cost)(At amortized cost)(At amortized cost)
U.S. Government agency obligations$—  — %$5,000  1.32 %
Issued by states and political subdivisionsIssued by states and political subdivisions106,767  28.02 %171,783  45.33 %Issued by states and political subdivisions$78,423 12.66 %$93,766 23.14 %
Residential mortgage-backed securities—  — %1,071  0.28 %
Total held-to-maturityTotal held-to-maturity$106,767  28.02 %$177,854  46.94 %Total held-to-maturity78,423 12.66 %93,766 23.14 %
Available for Sale:Available for Sale:Available for Sale:
(At fair value)(At fair value)(At fair value)
U.S. Government agency obligationsU.S. Government agency obligations5,188  1.36 %18,102  4.78 %U.S. Government agency obligations299,841 48.42 %12,434 3.07 %
Issued by states and political subdivisionsIssued by states and political subdivisions45,949  12.06 %—  — %Issued by states and political subdivisions46,613 7.53 %46,801 11.55 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential207,803  54.53 %175,879  46.42 %Residential121,846 19.67 %187,212 46.21 %
CommercialCommercial11,398  2.99 %3,010  0.79 %Commercial14,894 2.40 %17,331 4.28 %
Asset-backed securitiesAsset-backed securities13,539 2.19 %14,447 3.57 %
Corporate investmentsCorporate investments3,985  1.05 %4,082  1.08 %Corporate investments44,150 7.13 %33,148 8.18 %
Total available for saleTotal available for sale$274,323  71.98 %$201,073  53.06 %Total available for sale540,883 87.34 %311,373 76.86 %
Total investment securities$381,090  100.00 %$378,927  100.00 %
Total securitiesTotal securities$619,306 100.00 %$405,139 100.00 %
37
Table of Contents
The following tables present the carrying value of BancPlus’ investment securities portfolio by their stated maturities and the weighted average yields for each maturity range as of the dates indicated:indicated. Weighted-average yields have been computed on a fully tax equivalent basis using a tax rate of 21%.

Maturity as of March 31, 2020
Due in One Year or LessMore Than One Year to Five YearsMore Than Five Years to Ten YearsDue After Ten Years
(Dollars in thousands)AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield
Held to maturity:
U.S. Government agency obligations$—  — %$—  — %$—  — %$—  — %
Issued by states and political subdivisions15,048  2.65 %47,264  3.38 %40,910  4.40 %3,545  3.81 %
Mortgage-backed securities:
Residential—  — %—  — %—  — %—  — %
Commercial—  — %—  — %—  — %—  — %
Corporate investments—  — %—  — %—  — %—  — %
Total held to maturity$15,048  2.65 %$47,264  3.38 %$40,910  4.40 %$3,545  3.81 %
Available for sale:
U.S. Government agency obligations$—  — %$5,189  2.60 %$—  — %$—  — %
Issued by states and political subdivisions—  — %10,664  3.88 %19,567  3.20 %12,269  3.23 %
Mortgage-backed securities:
Residential—  — %—  — %19,264  1.66 %197,120  2.07 %
Commercial313  2.31 %—  — %—  — %2,503  2.65 %
Corporate investments3,449  3.79 %3,985  3.79 %—  — %—  — %
Total available for sale$3,762  3.67 %$19,838  3.53 %$38,831  2.44 %$211,892  2.14 %
Total securities$18,810  2.85 %$67,102  3.42 %$79,741  3.44 %$215,437  2.17 %

Maturity as of September 30, 2021
Due in One Year or LessMore Than One Year to Five YearsMore Than Five Years to Ten YearsDue After Ten Years
(Dollars in thousands)AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield
Held to maturity:
Issued by states and political subdivisions$12,437 3.19 %$46,344 2.81 %$16,887 2.54 %$2,755 4.17 %
Total held to maturity12,437 3.19 %46,344 2.81 %16,887 2.54 %2,755 4.17 %
Available for sale:
U.S. Government agency obligations5,037 2.60 %163,773 0.45 %126,630 1.19 %4,402 1.75 %
Issued by states and political subdivisions2,346 4.64 %14,770 2.64 %22,141 3.13 %7,356 3.17 %
Mortgage-backed securities:
Residential— — %— — %4,650 1.85 %117,196 2.41 %
Commercial— — %— — %13,659 1.54 %1,234 2.48 %
Asset-backed securities— — %— — %— — %13,539 1.88 %
Corporate investments4,019 2.13 %498 2.75 %38,571 4.14 %1,062 4.50 %
Total available for sale11,402 2.85 %179,041 0.64 %205,651 1.99 %144,789 2.39 %
Total securities$23,839 3.03 %$225,385 1.08 %$222,538 2.03 %$147,544 2.43 %
3845
Table of Contents
Maturity as of December 31, 2019Maturity as of December 31, 2020
Due in One Year or LessMore Than One Year to Five YearsMore Than Five Years to Ten YearsDue After Ten YearsDue in One Year or LessMore Than One Year to Five YearsMore Than Five Years to Ten YearsDue After Ten Years
(Dollars in thousands)(Dollars in thousands)AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		(Dollars in thousands)AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield		AmountWeighted
Average
Yield
Held to maturity:Held to maturity:Held to maturity:
U.S. Government agency obligations$—  — %$—  — %$5,000  3.00 %$—  — %
Issued by states and political subdivisionsIssued by states and political subdivisions23,318  3.52 %68,804  3.62 %62,411  4.03 %17,250  3.36 %Issued by states and political subdivisions$15,891 3.02 %$50,738 4.05 %$24,247 3.67 %$2,890 3.85 %
Mortgage-backed securities:
Residential—  — %—  — %—  — %1,071  3.68 %
Commercial—  — %—  — %—  — %—  — %
Corporate investments—  — %—  — %—  — %—  — %
Total held to maturityTotal held to maturity$23,318  3.52 %$68,804  3.62 %$67,411  3.95 %$18,321  3.38 %Total held to maturity15,891 3.02 %50,738 4.05 %24,247 3.67 %2,890 3.85 %
Available for sale:Available for sale:Available for sale:
U.S. Government agency obligationsU.S. Government agency obligations$9,999  1.52 %$8,103  2.68 %$—  — %$—  — %U.S. Government agency obligations— — %5,128 2.60 %2,508 3.19 %4,798 1.78 %
Issued by states and political subdivisionsIssued by states and political subdivisions—  — %—  — %—  — %—  — %Issued by states and political subdivisions3,803 3.08 %12,504 2.99 %20,538 3.18 %9,956 3.19 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential—  — %—  — %5,787  1.91 %170,092  2.43 %Residential— — %— — %10,991 0.93 %176,220 2.35 %
CommercialCommercial—  — %314  2.31 %—  — %2,696  2.67 %Commercial305 3.25 %— — %14,071 1.54 %2,955 2.53 %
Asset-backed securitiesAsset-backed securities— — %— — %— — %14,447 3.94 %
Corporate investmentsCorporate investments—  — %4,082  3.94 %—  — %—  — %Corporate investments— — %4,060 2.22 %28,084 4.48 %1,005 4.50 %
Total available for saleTotal available for sale$9,999  1.52 %$12,499  3.08 %$5,787  1.91 %$172,788  2.43 %Total available for sale4,108 3.09 %21,692 2.75 %76,192 3.03 %209,381 2.50 %
Total securitiesTotal securities$33,317  2.92 %$81,303  3.54 %$73,198  3.79 %$191,109  2.52 %Total securities$19,999 3.03 %$72,430 3.66 %$100,439 3.19 %$212,271 2.52 %

The objective of BancPlus’ investment policy is to invest funds to provide sufficient liquidity, optimize the total return of the portfolio, mitigate interest rate risk, and meet pledging requirements. In doing so, BancPlus balances the market and credit risks against the potential investment return, makemakes most investments compatible with the pledge requirements of any deposits of public funds, and maintainmaintains compliance with regulatory investment requirements. BancPlus’ investment policy allows portfolio holdings to include short-term securities purchased to provide needed liquidity and longer term securities purchased to generate levelstable income over periods of interest rate fluctuations.

39
46
Table of Contents
Loan Portfolio

The following tables detail composition and percentage composition of BancPlus’ loan portfolio, by category, as of the dates indicated:

As of March 31, 2020As of December 31, 2019As of September 30, 2021As of December 31, 2020
(Dollars in thousands)(Dollars in thousands)AmountPercentAmountPercent(Dollars in thousands)AmountPercentAmountPercent
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$549,410  26.24 %$555,413  26.72 %Residential properties$773,928 21.95 %$738,340 21.85 %
Construction and land developmentConstruction and land development234,793  11.21 %230,931  11.11 %Construction and land development465,564 13.20 %403,496 11.94 %
FarmlandFarmland158,344  7.56 %162,991  7.84 %Farmland212,645 6.03 %217,104 6.43 %
Other commercialOther commercial686,657  32.79 %664,145  31.95 %Other commercial1,339,214 37.98 %1,224,633 36.25 %
Total real estateTotal real estate1,629,204  77.80 %1,613,480  77.61 %Total real estate2,791,351 79.16 %2,583,573 76.47 %
Commercial and industrialCommercial and industrial332,216  15.86 %333,834  16.06 %Commercial and industrial534,160 15.15 %635,714 18.82 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers73,146  3.49 %70,145  3.37 %Agricultural production and other loans to farmers101,973 2.89 %85,469 2.53 %
Consumer and otherConsumer and other59,546  2.84 %61,538  2.96 %Consumer and other98,602 2.80 %73,976 2.19 %
Total loans, grossTotal loans, gross2,094,112  100.00 %2,078,997  100.00 %Total loans, gross3,526,086 100.00 %3,378,732 100.00 %
Allowance for loan lossesAllowance for loan losses(21,170) (21,500) Allowance for loan losses(44,001)(36,000)
Total loans, netTotal loans, net$2,072,942  $2,057,497  Total loans, net$3,482,085 $3,342,732 

As a general practice, BancPlus originates substantially all of its loans, but BancPlus occasionally participates in syndications and other loan participations. At March 31, 2020,September 30, 2021, BancPlus’ loan portfolio included $178.6$290.8 million of loan participations purchased, or 8.53%8.25% of total loans, which includes $62.9$146.8 million of shared national credits. At December 31, 2019,2020, BancPlus’ loan portfolio included $174.3$245.7 million of loan participations purchased, or 8.39%7.27% of total loans, which includes $62.8$93.8 million of shared national credits.

The following tables detail the contractual maturities and sensitivity to interest rate changes for BancPlus’ loan portfolio as of the dates indicated:
As of September 30, 2021
(Dollars in thousands)Due in
One Year or
Less		More Than
One Year
to Five		More Than Five Years to FifteenAfter Fifteen YearsTotal
Secured by real estate:
Residential properties$82,492 $329,147 $332,387 $29,901 $773,927 
Construction and land development142,510 260,274 53,777 9,004 465,565 
Farmland46,569 99,747 65,107 1,222 212,645 
Other commercial116,870 759,180 414,977 48,187 1,339,214 
Total real estate388,441 1,448,348 866,248 88,314 2,791,351 
Commercial and industrial69,926 345,296 118,887 51 534,160 
Agricultural production and other loans to farmers57,476 43,233 1,264 — 101,973 
Consumer and other loans29,347 64,777 4,463 15 98,602 
Total loans$545,190 $1,901,654 $990,862 $88,380 $3,526,086 

As of March 31, 2020
(Dollars in thousands)Due in
One Year or
Less		More Than
One Year
to Five		After
Five Years		Total
Secured by real estate:
Residential properties$76,708  $297,405  $175,297  $549,410  
Construction and land development91,993  114,541  28,259  234,793  
Farmland19,238  95,405  43,701  158,344  
Other commercial123,073  349,272  214,312  686,657  
Total real estate311,012  856,623  461,569  1,629,204  
Commercial and industrial78,566  212,383  41,267  332,216  
Agricultural production and other loans to farmers38,142  33,169  1,835  73,146  
Consumer and other loans14,788  43,862  896  59,546  
Total loans$442,508  $1,146,037  $505,567  $2,094,112  
Interest rate sensitivity:
Fixed interest rates$302,767  $863,736  $289,032  $1,455,535  
Floating or adjustable rates139,740  282,301  216,536  638,577  
Total loans$442,507  $1,146,037  $505,568  $2,094,112  
4047
Table of Contents
As of December 31, 2020
(Dollars in thousands)Due in
One Year or
Less		More Than
One Year
to Five		More Than Five Years to FifteenAfter Fifteen YearsTotal
Secured by real estate:
Residential properties$115,367 $388,731 $229,269 $4,973 $738,340 
Construction and land development160,382 187,403 49,445 6,266 403,496 
Farmland44,618 112,826 56,307 3,353 217,104 
Other commercial150,683 706,001 320,450 47,499 1,224,633 
Total real estate471,050 1,394,961 655,471 62,091 2,583,573 
Commercial and industrial102,129 473,283 60,302 — 635,714 
Agricultural production and other loans to farmers40,750 42,575 2,144 — 85,469 
Consumer and other loans18,814 53,319 1,828 15 73,976 
Total loans$632,743 $1,964,138 $719,745 $62,106 $3,378,732 

As of December 31, 2019As of September 30, 2021
(Dollars in thousands)(Dollars in thousands)Due in
One Year or
Less		More Than
One Year
to Five		After
Five Years		Total(Dollars in thousands)Fixed Interest RatesFloating or Adjustable RatesTotal
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$76,563  $303,216  $175,634  $555,413  Residential properties$640,997 $132,930 $773,927 
Construction and land developmentConstruction and land development83,399  111,860  35,672  230,931  Construction and land development232,987 232,578 465,565 
FarmlandFarmland22,719  98,212  42,060  162,991  Farmland160,339 52,306 212,645 
Other commercialOther commercial123,867  347,274  193,004  664,145  Other commercial1,097,871 241,343 1,339,214 
Total real estateTotal real estate306,548  860,562  446,370  1,613,480  Total real estate2,132,194 659,157 2,791,351 
Commercial and industrialCommercial and industrial83,618  211,760  38,456  333,834  Commercial and industrial289,928 244,232 534,160 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers28,282  39,999  1,864  70,145  Agricultural production and other loans to farmers62,997 38,976 101,973 
Consumer and other loansConsumer and other loans17,572  43,193  773  61,538  Consumer and other loans69,086 29,516 98,602 
Total loansTotal loans$436,020  $1,155,514  $487,463  $2,078,997  Total loans$2,554,205 $971,881 $3,526,086 
Interest rate sensitivity:
Fixed interest rates$303,237  $875,940  $276,107  $1,455,284  
Floating or adjustable rates132,783  279,574  211,356  623,713  
Total loans$436,020  $1,155,514  $487,463  $2,078,997  

As of December 31, 2020
(Dollars in thousands)Fixed Interest RatesFloating or Adjustable RatesTotal
Secured by real estate:
Residential properties$594,353 $143,987 $738,340 
Construction and land development213,944 189,552 403,496 
Farmland162,505 54,599 217,104 
Other commercial1,016,580 208,053 1,224,633 
Total real estate1,987,382 596,191 2,583,573 
Commercial and industrial425,874 209,840 635,714 
Agricultural production and other loans to farmers51,766 33,703 85,469 
Consumer and other loans52,692 21,284 73,976 
Total loans$2,517,714 $861,018 $3,378,732 

As of September 30, 2021, the Company held 1,948 loans for customers under the PPP, totaling approximately $101.0 million, a decrease of $104.2 million, or 50.8%, from $205.2 million as of December 31, 2020. The decrease is the result of PPP loans
48
Table of Contents
being forgiven and paid off by the SBA or being paid off by the customer, partially offset by originations of new PPP loans in 2021 while the program was still active.

Additionally, BancPlus enters into various other transactions to meet the financing needs of its customers including commitments to extend credit and letters of credit. Commitments to extend credit beyond current funding are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Such commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. At September 30, 2021, BancPlus had total off-balance sheet commitments of $1.230 billion.

Asset Quality

Federal regulations and BancPlus’ internal policies require that BancPlus utilize an asset classification system as a means of managing and reporting problem and potential problem assets. BancPlus has incorporated an internal asset classification system, substantially consistent with federal banking regulations, as part of its credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses present make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose BancPlus to sufficient risk to warrant classification in one of the categories mentioned above but possess weakness are required to be designated “watch” or “special mention.” Loans modified under Section 4013 of the CARES Act and related interagency guidance are excluded from being reported as troubled debt restructuring (“TDR”) loans.

4149
Table of Contents
The tables below set forth information on BancPlus’ asset classification as of the dates indicated. BancPlus had no assets classified as loss.

As of March 31, 2020As of September 30, 2021
(Dollars in thousands)(Dollars in thousands)Risk
Grades 1-7		SubstandardDoubtfulTotal(Dollars in thousands)Risk
Grades 1-7		SubstandardDoubtfulTotal
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$534,088  $15,322  $—  $549,410  Residential properties$759,188 $14,740 $— $773,928 
Construction and land developmentConstruction and land development233,886  907  —  234,793  Construction and land development464,819 745 — 465,564 
FarmlandFarmland147,142  11,202  —  158,344  Farmland199,608 13,037 — 212,645 
Other commercialOther commercial670,355  16,080  222  686,657  Other commercial1,331,516 7,621 77 1,339,214 
Total real estateTotal real estate1,585,471  43,511  222  1,629,204  Total real estate2,755,131 36,143 77 2,791,351 
Commercial and industrialCommercial and industrial330,173  1,995  48  332,216  Commercial and industrial510,359 23,756 45 534,160 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers72,770  376  —  73,146  Agricultural production and other loans to farmers101,620 353 — 101,973 
Consumer and otherConsumer and other59,213  333  —  59,546  Consumer and other98,302 300 — 98,602 
TotalTotal$2,047,627  $46,215  $270  $2,094,112  Total$3,465,412 $60,552 $122 $3,526,086 

As of December 31, 2019As of December 31, 2020
(Dollars in thousands)(Dollars in thousands)Risk
Grades 1-7		SubstandardDoubtfulTotal(Dollars in thousands)Risk
Grades 1-7		SubstandardDoubtfulTotal
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$541,110  $14,303  $—  $555,413  Residential properties$721,024 $17,316 $— $738,340 
Construction and land developmentConstruction and land development230,321  610  —  230,931  Construction and land development401,347 2,149 — 403,496 
FarmlandFarmland151,354  11,637  —  162,991  Farmland205,211 11,893 — 217,104 
Other commercialOther commercial645,891  18,254  —  664,145  Other commercial1,209,365 15,041 227 1,224,633 
Total real estateTotal real estate1,568,676  44,804  —  1,613,480  Total real estate2,536,947 46,399 227 2,583,573 
Commercial and industrialCommercial and industrial331,693  2,060  81  333,834  Commercial and industrial619,137 16,526 51 635,714 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers69,854  291  —  70,145  Agricultural production and other loans to farmers85,288 181 — 85,469 
Consumer and otherConsumer and other61,220  318  —  61,538  Consumer and other73,560 416 — 73,976 
TotalTotal$2,031,443  $47,473  $81  $2,078,997  Total$3,314,932 $63,522 $278 $3,378,732 

Nonperforming Assets

Nonperforming loans include loans accounted for on a nonaccrual basis and troubled debt restructuringTDR loans that are accruing. Nonperforming assets consist of nonperforming loans plus foreclosed assets (i.e. real estate acquired through foreclosure).

42
50
Table of Contents
The following table summarizes BancPlus’ nonperforming assets, by category, as of the dates indicated:

(Dollars in thousands)(Dollars in thousands)March 31, 2020December 31, 2019(Dollars in thousands)September 30, 2021December 31, 2020
Nonaccrual loans:Nonaccrual loans:Nonaccrual loans:
Real estate loans:Real estate loans:Real estate loans:
Residential propertiesResidential properties$2,292  $2,419  Residential properties$3,318 $3,869 
Construction and land developmentConstruction and land development390  390  Construction and land development58 1,863 
FarmlandFarmland—  —  Farmland1,893 158 
Other commercialOther commercial8,193  9,034  Other commercial2,324 7,947 
Total real estateTotal real estate10,875  11,843  Total real estate7,593 13,837 
Commercial and industrialCommercial and industrial41  67  Commercial and industrial106 12 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers62  62  Agricultural production and other loans to farmers135 85 
Consumer and otherConsumer and other184  187  Consumer and other210 177 
Total nonaccrual loansTotal nonaccrual loans11,162  12,159  Total nonaccrual loans8,044 14,111 
Troubled debt restructuring loans – accruing:Troubled debt restructuring loans – accruing:Troubled debt restructuring loans – accruing:
Real estate loans:Real estate loans:Real estate loans:
Residential propertiesResidential properties1,103  1,949  Residential properties1,898 1,916 
Construction and land developmentConstruction and land development1,619  1,619  Construction and land development1,558 — 
FarmlandFarmland—  —  Farmland— — 
Other commercialOther commercial—  —  Other commercial— — 
Total real estateTotal real estate2,722  3,568  Total real estate3,456 1,916 
Commercial and industrialCommercial and industrial423  427  Commercial and industrial388 — 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers—  —  Agricultural production and other loans to farmers— — 
Consumer and otherConsumer and other—  —  Consumer and other— — 
Total troubled debt restructuring loans – accruingTotal troubled debt restructuring loans – accruing3,145  3,995  Total troubled debt restructuring loans – accruing3,844 1,916 
Total nonperforming loansTotal nonperforming loans14,307  16,154  Total nonperforming loans11,888 16,027 
Plus: foreclosed assetsPlus: foreclosed assets5,191  4,851  Plus: foreclosed assets6,989 6,754 
Total nonperforming assetsTotal nonperforming assets$19,498  $21,005  Total nonperforming assets$18,877 $22,781 
Nonaccrual loans to total loansNonaccrual loans to total loans0.53 %0.58 %Nonaccrual loans to total loans0.23 %0.42 %
Nonperforming loans to total loansNonperforming loans to total loans0.68 %0.78 %Nonperforming loans to total loans0.34 %0.47 %
Nonperforming assets to total assetsNonperforming assets to total assets0.64 %0.71 %Nonperforming assets to total assets0.37 %0.48 %
Allowance for loan losses to nonaccrual loansAllowance for loan losses to nonaccrual loans547.00 %255.12 %
90+ days past due and accruing90+ days past due and accruing$3,934  $2,618  90+ days past due and accruing$2,299 $6,303 
Total troubled debt restructuring loansTotal troubled debt restructuring loans$11,639  $11,674  Total troubled debt restructuring loans$4,018 $8,537 
Total nonperforming assets decreased by $1.5$3.9 million, or 7.2%17.1%, from $21.0$22.8 million at December 31, 20192020 to $19.5$18.9 million at March 31, 2020,September 30, 2021, primarily due to salea decrease in nonaccrual loans as a result of foreclosed assetspayments and paydown of troubled debt restructuredforeclosures during the current year on loans that were in the first quarter ofnonaccrual status at December 31, 2020.

The balance of nonperforming assets can fluctuate due to changes in economic conditions. BancPlus has established a policy to discontinue accruing interest on a loan (that is, place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection. When a loan is placed on nonaccrual status, current year interest previously accrued but uncollected on such loans is reversed and charged against current income, and prior year interest, if any, is charged off against the allowance for loan losses. Generally, payments received on nonaccrual loans are applied directly to principal.

4351
Table of Contents
Allowance for Loan Losses

The allowance for loan losses is a reserve established through charges to earnings in the form of a provision for loan losses. BancPlus maintains an allowance for loan losses at a level management considers adequate to provide for known and probable incurred losses in the portfolio. The level of the allowance is based on management’s evaluation of estimated losses in the portfolio, after consideration of risk characteristics of the loans and prevailing economic conditions. Loan charge-offs (i.e. loans judged to be uncollectible) are charged against the reserve and any subsequent recovery is credited to the reserve. BancPlus’ officers analyze risk in the loan portfolio on an ongoing basis. A risk system, consisting of multiple grading categories for each portfolio class, is utilized as an analytical tool to assess risk and appropriate reserves. In addition to the risk system, management further evaluates risk characteristics of the loan portfolio under current and anticipated economic conditions and considers such factors as the financial condition of the borrower, past and expected loss experience, and other factors which management feels deserve recognition in establishing an appropriate reserve. These estimates are reviewed at least quarterly, and, as adjustments become necessary, they are recognized in the periods in which they become known. During the third quarter of 2021, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of the COVID-19 pandemic and development of the outbreak, including variants, such as the delta variant, and the severity of such variants, and the availability, effectiveness and acceptance of vaccines, all of which are also highly uncertain. The government’s response to these conditions includes certain provisions, such as automatic forbearance and forgiveness for certain federally backed loans that could affect these estimates. Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies all could cause changes to BancPlus’ allowance for loan losses.

The allowance for loan losses was $21.2$44.0 million and $21.5$36.0 million, and the allowance for loan losses as a percentage of loans was 1.01%1.24% and 1.03%1.06%, at March 31, 2020September 30, 2021 and December 31, 2019,2020, respectively. Net charge-offs (recoveries) totaled $515,000$(606,000) and $560,000$2.4 million for the threenine months ended March 31,September 30, 2021 and 2020, respectively. The $3.0 million variance is primarily the result of current year recoveries on consumer and 2019, respectively.other commercial categories as well as high charge offs in 2020 as a result of the COVID-19 pandemic.

The allowance for loan losses decreasedincreased by $330,000,$8.0 million, or 1.53%22.2%, to $21.2$44.0 million at March 31, 2020,September 30, 2021, from $21.5$36.0 million at December 31, 2019.2020, primarily due to the increase in provision for loan losses in the current period as a result of the continuing impact of the COVID-19 pandemic, including the impact of the CARES Act measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance.

4452
Table of Contents
The following is a summary of the activity in the allowance for loan loss reserve as of and for the year-to-date periods indicated:

(Dollars in thousands)September 30, 2021September 30, 2020
Balance, beginning of period$36,000 $21,500 
Charge-offs:
Residential properties298 268 
Construction and land development240 3 
Farmland157 — 
Other commercial581 2,179 
Total real estate1,276 2,450 
Commercial and industrial317 494 
Agricultural production and other loans to farmers111 2,270 
Consumer and other2,832 298 
Total charge-offs4,536 5,512 
Recoveries:
Residential properties340 237 
Construction and land development143 56 
Farmland292 — 
Other commercial1,842 94 
Total real estate2,617 387 
Commercial and industrial479 148 
Agricultural production and other loans to farmers3 2,365 
Consumer and other2,043 254 
Total recoveries5,142 3,154 
Net charge-offs (recoveries)(606)2,358 
Provision for loan losses7,395 7,706 
Balance, end of period$44,001 $26,848 
Total loans, end of period$3,539,990 $3,447,458 
Average loans3,469,520 2,912,471 
Net charge-offs (annualized) to average loans(0.02)%0.11 %
Allowance for loan losses to total loans1.24 %0.78 %
(Dollars in thousands)March 31, 2020March 31, 2019
Balance, beginning of period$21,500  $24,500  
Charge-offs:
Residential properties151  475  
Construction and land development—  —  
Farmland—  —  
Other commercials217  32  
Total real estate368  507  
Commercial and industrial82  63  
Agricultural production and other loans to farmers—  3  
Consumer and other1,185  1,269  
Total charge-offs1,635  1,842  
Recoveries:
Residential properties56  46  
Construction and land development19  76  
Farmland—  —  
Other commercial15  186  
Total real estate90  308  
Commercial and industrial87  16  
Agricultural production and other loans to farmers—  1  
Consumer and other943  957  
Total recoveries1,120  1,282  
Net charge-offs515  560  
Provision for loan losses185  288  
Balance, end of period$21,170  $24,228  
Total loans, end of period$2,094,112  $2,076,595  
Average loans2,081,364  2,056,695  
Net charge-offs to average loans0.02 %0.03 %
Allowance for loan losses to total loans1.01 %1.17 %

The table below reflects net charge-offs to average loans outstanding, by category, during the periods presented.
4553
Table of Contents
Nine Months Ended September 30,
20212020
(Dollars in thousands)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)
Residential properties$(42)$750,238 (0.01)%$31 $667,745 0.01 %
Construction and land development97 458,968 0.03 %(53)302,444 (0.02)%
Farmland(135)206,878 (0.09)%— 199,363 — %
Other commercial(1,261)1,274,874 (0.13)%2,085 1,003,236 0.28 %
Commercial and industrial(162)589,070 (0.04)%346 561,457 0.08 %
Agricultural production and other loans to farmers108 89,773 0.16 %(95)92,571 (0.14)%
Consumer and other789 83,432 1.26 %44 69,307 0.08 %
Loans held for sale— 16,287 — %— 16,348 — %
Total$(606)$3,469,520 (0.02)%$2,358 $2,912,471 0.11 %

The following tables present a summary of the allocation of the allowance for loan losses by loan portfolio category, and the percentage of loans in each category, for the periods indicated:
(Dollars in thousands)March 31, 2020December 31, 2019
AmountPercentAmountPercent
Residential properties$5,406  25.5 %$5,568  25.9 %
Construction and land development1,807  8.5 %1,709  7.9 %
Farmland762  3.6 %761  3.5 %
Other commercial8,399  39.7 %8,296  38.6 %
Total real estate16,374  77.3 %16,334  76.0 %
Commercial and industrial2,785  13.2 %2,773  12.9 %
Agricultural production and other loans to farmers477  2.3 %420  2.0 %
Consumer and other704  3.3 %715  3.3 %
Unallocated830  3.9 %1,258  5.9 %
Total allowance for loan losses$21,170  100.0 %$21,500  100.0 %

September 30, 2021December 31, 2020
(Dollars in thousands)AmountPercentAmountPercent
Residential properties$10,523 23.9 %$7,900 21.9 %
Construction and land development5,915 13.4 %4,618 12.8 %
Farmland2,330 5.3 %1,412 3.9 %
Other commercial16,698 37.9 %14,133 39.3 %
Total real estate35,466 80.6 %28,063 78.0 %
Commercial and industrial6,066 13.8 %6,337 17.6 %
Agricultural production and other loans to farmers1,170 2.7 %773 2.1 %
Consumer and other1,299 3.0 %827 2.3 %
Total allowance for loan losses$44,001 100.0 %$36,000 100.0 %

Goodwill and Other Intangible Assets

Goodwill was $2.6 million at March 31, 2020both September 30, 2021 and December 31, 2019.2020. Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired which originated fromby the acquisitions of Southeast Mississippi Bank, Home Savings Bank and The Mortgage Corporation of Mississippi during the 1990’s and the acquisition of First National Bank of Holmes CountyCompany in 2000.prior acquisitions. Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets consist of acquired customer relationships from thea 2014 acquisition of Mississippi Investment Management Company LLC.and core deposit intangibles from the merger with SCC. Total other intangible assets at March 31, 2020September 30, 2021 and December 31, 20192020 were $357,000$5.3 million and $366,000,$5.8 million, respectively. Other intangible assets are amortized over their estimated useful life.

54
Table of Contents
Deposits

The following table details composition and percentage composition of BancPlus’ deposit portfolio, by category, for the year to date periods indicated:
March 31, 2020December 31, 2019September 30, 2021December 31, 2020
(Dollars in thousands)(Dollars in thousands)Average
Balance		Average RatePercentAverage
Balance		Average RatePercent(Dollars in thousands)Average
Balance		Average RatePercentAverage
Balance		Average RatePercent
Non-interest bearingNon-interest bearing$641,740  0.00 %23.96 %$633,329  0.00 %24.81 %Non-interest bearing$1,306,105 0.00 %29.68 %$1,009,427 0.00 %27.69 %
Interest bearing:Interest bearing:Interest bearing:
Transaction accountsTransaction accounts1,055,926  0.71 %39.43 %990,555  0.90 %38.81 %Transaction accounts1,452,965 0.21 %33.02 %1,191,857 0.49 %32.69 %
Money market and other savings accountsMoney market and other savings accounts594,160  0.68 %22.19 %542,300  0.78 %21.25 %Money market and other savings accounts982,220 0.09 %22.32 %806,652 0.29 %22.13 %
Certificates of depositCertificates of deposit386,175  1.43 %14.42 %386,304  1.37 %15.13 %Certificates of deposit659,361 0.59 %14.98 %637,781 0.93 %17.49 %
Total depositsTotal deposits$2,678,001  0.64 %100.00 %$2,552,488  0.72 %100.00 %Total deposits$4,400,651 0.18 %100.00 %$3,645,717 0.39 %100.00 %

BancPlus relies on increasing its deposit base to fund loans and other asset growth. BancPlus competes for local deposits by offering a variety of products at competitive rates. The increase in total average deposits of $754.9 million, or 20.7%, to $4.401 billion at September 30, 2021 from $3.646 billion as of December 31, 2020 is primarily the result of recipients of PPP loans placing funds in deposit accounts held at the Bank. At September 30, 2021 and December 31, 2020, BancPlus held non-time deposits in excess of FDIC insurance limits estimated at $810.1 million and $889.3 million, respectively.

46
Table of Contents
The following table shows the maturity of certificates of deposit as of $100,000 or more, by time remaining until maturity:September 30, 2021:

(Dollars in thousands)March 31, 2020December 31, 2019
3 months or less$45,931  $41,196  
Over 3 months through 6 months39,092  42,686  
Over 6 months through 12 months83,909  74,294  
Over 12 months60,088  67,670  
Total deposits$229,020  $225,846  

Contractual Obligations

The table below presents the funding requirements of BancPlus’ contractual obligations, excluding interest, as of March 31, 2020:

Payments Due by Period
(Dollars in thousands)Greater
March 31, 2020Less Than One YearOne-Three YearsThree-Five YearsThan Five YearsTotal
Operating lease obligations$4,629  $9,146  $4,342  $43,851  $61,968  
FHLB advances (1)138  718  —  20,103  20,959  
Note payable (2)3,500  12,250  —  —  15,750  
Subordinated debentures (3)—  —  —  41,238  41,238  
Deposits with maturities279,047  96,346  11,422  —  386,815  
Low income housing tax credits4  9  9  7  29  
Total contractual obligations$287,318  $118,469  $15,773  $105,199  $526,759  

(1)Interest rates for BancPlus’ Federal Home Loan Bank (“FHLB”) advances outstanding ranged from 1.32% to 2.94% at March 31, 2020. These advances are subject to restrictions or penalties in the event of prepayment. Advances subject to calls are shown at their earliest call date.
(2)The interest rate on BancPlus’ note payable is a 3.75% fixed annual rate.
(3)These subordinated debentures represent the outstanding common securities of business trusts that have issued preferred capital securities to third parties. The interest rates on these debentures are based on 3 month LIBOR plus 1.35% and 3 month LIBOR plus 1.50%.
(Dollars in thousands)$250,000 or GreaterLess than $250,000TotalUninsured Portion
3 months or less$39,438 $105,705 $145,143 $15,938 
Over 3 months through 6 months26,404 87,066 113,470 12,404 
Over 6 months through 12 months54,549 132,074 186,623 30,049 
Over 12 months55,447 136,331 191,778 27,697 
Total certificates of deposit$175,838 $461,176 $637,014 $86,088 

Borrowed Funds

Short-term Borrowings. In addition to deposits, BancPlus uses short-term borrowings, which consist of federal funds purchased and securities sold under agreements to repurchase, to meet the daily liquidity needs of its customers and fund its loan growth. Federal funds purchased represent primarily overnight borrowings through relationships with correspondent banks. Securities sold under agreements to repurchase are considered overnight borrowings and are secured by U.S. Government agency securities. At March 31, 2020September 30, 2021 and December 31, 2019,2020, we had no short-term borrowings.

FHLB Advances and Other Borrowings. BankPlus is a member of the FHLB, and as a result, is eligible for advances from the FHLB pursuant to the terms of various borrowing agreements, which assist BancPlus in the funding of its loan and investment portfolios. BancPlus’ FHLB advances are collateralized by a blanket lien on first mortgage and other qualifying loans. As of March 31, 2020At both September 30, 2021 and December 31, 2019,2020, BancPlus had $21.0$20.5 million in FHLB borrowings, at a weighted average interest rate of 1.53% and 1.52%, respectively.1.50%.

In October 2016, BancPlus entered into a five-year loan agreement with a correspondent bank under which BancPlus borrowed $35.0 million in connection with the redemption of BancPlus preferred stock. BancPlus pledged 100% of its shares of BankPlus stock as collateral for the loan. The loan requiresrequired quarterly principal reductions of $875,000 and quarterly interest payments at a
47
Table of Contents
fixed 3.75% annual rate. The balance outstanding on this loan was $15.8$10.5 million and $16.6$13.1 million at March 31, 2020September 30, 2021 and December 31, 2019,2020, respectively. The Company repaid this loan at its maturity in October 2021.

55
Table of Contents
Required principal payments on FHLB advances and other borrowings were as follows:

(Dollars in thousands)(Dollars in thousands)March 31, 2020December 31, 2019(Dollars in thousands)September 30, 2021December 31, 2020
2020$2,763  $3,647  
2021202113,273  13,307  2021$10,525 $13,171 
20222022424  433  2022417 395 
20232023145  157  202325 110 
20242024—  —  202413 — 
2025202513 — 
ThereafterThereafter20,104  20,108  Thereafter20,033 20,095 
TotalTotal$36,709  $37,652  Total$31,026 $33,771 

Subordinated Debentures Payableand Trust Preferred Securities. On June 4, 2020, the Company entered into a Subordinated Note Purchase Agreement with certain qualified institutional buyers and institutional accredited investors pursuant to Statutory Trusts.which the Company issued and sold $60.0 million in aggregate principal amount of its 6.000% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030 (the “Notes”). The Company incurred issuance costs of $1.4 million in conjunction with the issuance of the Notes. These issuance costs are netted with the balance of the Notes on the Company’s Condensed Consolidated Balance Sheets and will be amortized over the life of the Notes. The Notes initially bear interest at a rate of 6.000% per annum from and including June 4, 2020, to but excluding June 15, 2025 or early redemption date, with interest during this period payable semiannually in arrears. From and including June 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 586 basis points, with interest during this period payable quarterly in arrears. The Company used the proceeds of the private placement for general corporate purposes, including improving the Company’s liquidity and capital position.

The Notes are not redeemable by the Company, in whole or in part, prior to the fifth anniversary of the original date of issue, except that the Notes may be redeemed at any time in whole but not in part in the event of a Tier 2 Capital Event, a Tax Event, or an Investment Company Event, each as defined and described in the Notes. On or after the fifth anniversary of the original date of issue, the Notes shall be redeemable on any interest payment date at the option of the Company, in whole or in part in integral multiples of $1,000, at an amount equal to 100% of the outstanding principal amount redeemed plus accrued but unpaid interest thereon. Any partial redemption will be made on a pro rata basis as to the holders of the Notes. Any redemption of the Notes is subject to any applicable regulatory requirements and approvals.

BancPlus also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. The preferred capital securities have qualified as Tier 1 capital, subject to regulatory rules and limits. These trusts used the proceeds from the issuance of the common stock and preferred capital securities to purchase subordinated debentures that BancPlus issued. The subordinated debentures are these trusts’ only assets, and quarterly interest payments on these subordinated debentures are the sole source of cash for these trusts to pay quarterly distributions on the common stock and preferred capital securities. BancPlus has fully and unconditionally guaranteed the trusts’ obligations on preferred capital securities.

The following table is a summary of debentures payable to statutory trusts:
(Dollars in thousands)Year of
Maturity		Interest
Rate		September 30, 2021December 31, 2020
First Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 
State Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 
$56,703 $56,703 

(Dollars in thousands)Year of MaturityInterest RateMarch 31, 2020December 31, 2019
BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%$20,619  $20,619  
BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619  20,619  
$41,238  $41,238  
The subordinated debentures payable to statutory trusts vary from the amount carried on the Condensed Consolidated Balance Sheets at September 30, 2021 due to the remaining purchase discount of $4.0 million, which was established upon the merger with SCC and is being amortized over the remaining life of the debentures. We are currently monitoring the actions of LIBOR’s regulator and the implementation of alternative reference rates in advance of the expected discontinuation of LIBOR to determine any potential impact on the subordinated debentures.
56
Table of Contents

BancPlus believes that it will be able to meet its principal and interest payment obligations as they come due through maintenance of adequate cash levels or subsequent borrowings. BancPlus expects to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. BancPlus has in place various borrowing mechanisms for both short-term and long-term liquidity needs.

Shareholders’ Equity

Shareholders’ equity is influenced primarily by earnings, quarterly dividend payments, changes in common stock outstanding, and changes in accumulated other comprehensive income (loss) (loss) caused primarily by fluctuations in unrealized holding gains or losses, net of taxes, on available for sale investment securities.

Shareholders’ equity increased $10.3$30.6 million, or 4.1%8.6%, to $261.8$385.9 million at March 31, 2020September 30, 2021 from $251.5$355.3 million at December 31, 2019,2020, primarily due to net income of $7.7$45.5 million and other comprehensive income of $4.6 million lesspartially offset by dividends paid of $2.7$11.5 million, and purchase of Company stock of $2.4 million for the year to date period.

Off-Balance Sheet Arrangements

In The purchase of Company stock was the normal courseresult of business, BancPlus enters into various transactions to meet the financing needs of its customers, which, in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), are not included in its consolidated balance sheets. These transactions include commitments to extend credit and letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excessmembers of the amounts recognized in BancPlus’ consolidated balance sheets. A numberState Bank Employee Stock Ownership Plan (“State Bank ESOP”), who took a distribution of these commitments are used only partially, or in some cases, not at all before they expire.

48
TableCompany stock from the State Bank ESOP, exercising a put option available to them following their distribution. The put option is available for shares of Contents
BancPlus’ exposure to credit loss in the event of non-performanceCompany stock distributed by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual or notional amount of those instruments. BancPlus decreases its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures.

The table below sets forth BancPlus’ commitments to extend credit by commitment expiration date indicated:

March 31, 2020
(Dollars in thousands)Less Than One YearOne-Three YearsThree-Five YearsGreater
Than Five Years		Total
Commitments to extend credit (1)
$262,120  $94,384  $115,794  $41,759  $514,057  
Standby letters of credit3,472  107  100  1,294  4,973  
Total off-balance sheet commitments$265,592  $94,491  $115,894  $43,053  $519,030  
____________________________
(1)Includes $184,157 of unconditionally cancellable commitments at March 31, 2020.

Commitments to extend credit beyond current funding are agreements to lend to a customer asState Bank ESOP, so long as therethe Company is no violationnot publicly traded, for a period of any condition established in60 days following the contract. Such commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. BancPlus evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on BancPlus’ credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing properties.

Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.distribution request.

Liquidity and Capital Resources

Bank Liquidity Management

Liquidity is BancPlus’ capacity to meet its cash and collateral obligations at a reasonable cost, having cash when BancPlus needs it and having the appropriate amount of cash and other assets that are quickly convertible into cash without incurring significant loss. BancPlus is expected to maintain adequate liquidity at BankPlus to meet the cash flow requirements of its customers who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Maintaining an adequate level of liquidity depends on BancPlus’ ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting either BancPlus’ daily operations or its financial condition. BancPlus’ Asset Liability MangementManagement Committee (“ALCO”), which is comprised of members of senior management, is responsible for managing commitments to meet the needs of customers while achieving its financial objectives. ALCO meets regularly to review balance sheet composition, funding capacities, and current and forecasted loan demand, and BancPlus’ Treasury Management department continuously monitors its liquidity position to ensure that assets and liabilities are managed in a manner that will meet all of its short-term and long-term cash requirements.

BancPlus manages its liquidity by maintaining adequate levels of cash and other assets from on and off-balance sheet arrangements. Specifically, on-balance sheet liquidity consists of cash and due from banks and unpledged investment securities, which BancPlus considers its primary liquidity. Furthermore, a significant portion of these unencumbered liquid assets are comprised of U.S. government agency obligations, mortgage backed securities and other agency securities, which the regulatory bodies consider the most marketable and liquid, especially in a stress scenario. In regard to off-balance sheet capacity, BancPlus maintains available borrowing capacity under secured borrowing lines with the FHLB and the Federal Reserve Bank of St. Louis, as well as unsecured lines of credit for the purpose of overnight funds with various correspondent banks, which BancPlus considerconsiders its secondary liquidity, and other funding avenues, including the Paycheck Protection Program Liquidity Facility.liquidity. BancPlus also monitors its liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios, FHLB borrowings and deposits. As part of its liquidity management
49
Table of Contents
strategy, BancPlus is also focused on minimizing its costs of liquidity and attempting to decrease these costs by growing its noninterest-bearing and other low-cost deposits and replacing higher cost borrowed funds.

The following tables provide a summary of BancPlus’ primary and secondary liquidity levels.
57

Table of Contents
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
March 31, 2020December 31, 2019
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
September 30, 2021December 31, 2020
Cash and cash equivalentsCash and cash equivalents$347,614  $312,972  Cash and cash equivalents$695,069 $637,545 
Total securitiesTotal securities381,090  378,927  Total securities619,306 405,139 
Less: pledged securitiesLess: pledged securities(307,520) (249,081) Less: pledged securities(489,257)(317,461)
Total primary liquidityTotal primary liquidity$421,184  $442,818  Total primary liquidity$825,118 $725,223 
Ratio of primary liquidity to total depositsRatio of primary liquidity to total deposits16.0 %17.1 %Ratio of primary liquidity to total deposits18.2 %17.5 %

Secondary Liquidity – Off-Balance Sheet Borrowing CapacitySecondary Liquidity – Off-Balance Sheet Borrowing CapacityMarch 31, 2020December 31, 2019Secondary Liquidity – Off-Balance Sheet Borrowing CapacitySeptember 30, 2021December 31, 2020
Net secured borrowing capacity with the FHLBNet secured borrowing capacity with the FHLB$694,828  $711,552  Net secured borrowing capacity with the FHLB$1,499,630 $1,408,005 
Net secured borrowing capacity with the Federal Reserve BankNet secured borrowing capacity with the Federal Reserve Bank204,455  206,837  Net secured borrowing capacity with the Federal Reserve Bank210,239 211,407 
Unsecured borrowing capacity with correspondent lendersUnsecured borrowing capacity with correspondent lenders148,000  148,000  Unsecured borrowing capacity with correspondent lenders203,000 228,000 
Total secondary liquidityTotal secondary liquidity$1,047,283  $1,066,389  Total secondary liquidity$1,912,869 $1,847,412 
Ratio of primary and secondary liquidity to total depositsRatio of primary and secondary liquidity to total deposits55.6 %58.2 %Ratio of primary and secondary liquidity to total deposits60.4 %61.9 %

During the threenine months ended March 31, 2020,September 30, 2021, BancPlus’ primary liquidity decreasedincreased by $21.6$99.9 million to $421.2$825.1 million, compared to $442.8$725.2 million at December 31, 2019,2020, primarily due an increase in our pledged securities partially offset by an increase in cash and cash equivalents.our pledged securities. Secondary liquidity decreasedincreased by $19.1$65.5 million to $1.05$1.913 billion as of March 31, 2020September 30, 2021 from $1.07$1.847 billion as of December 31, 2019.2020. This decreaseincrease was primarily due to a reductionan increase in BancPlus’ FHLB borrowing capacity in the first quarter of 2020.capacity.

In addition to its primary liquidity, BancPlus generates liquidity from cash flows from its loan and securities portfolios and from its large base of core customer deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000. Core deposits totaled $2.532$4.363 billion and $2.485$3.973 billion and represented 95.9%96.3% and 95.9%95.7% of total deposits as of March 31, 2020September 30, 2021 and December 31, 2019,2020, respectively. These core deposits are normally less volatile, often with customer relationships tied to other products, which promote long-standing relationships and stable funding sources. Although BancPlus’ policy allows the use of brokered deposits, BankPlus did not utilize this funding source during the 20202021 and 20192020 year to date periods.

BancPlus’ liquidity policy includes both policy limits and policy guidelines for measuring and monitoring liquidity. BancPlus’ policy measures include an Internal Liquidity Ratio, andan Internal Liquidity Ratio adjusted for FHLB, an Internal Dependency Ratio adjusted for FHLB and a Maximum Available Funds to Total Assets Ratio. These ratios are calculated monthly. BancPlus also utilizes eleven liquidity guidelines that are reported quarterly. As of March 31, 2020September 30, 2021 and December 31, 2019,2020, BancPlus was in compliance with all of its established liquidity guidelines.policies.

Holding Company Liquidity Management

BancPlus is a corporation separate and apart from BankPlus and, therefore, it must provide for its own liquidity. BancPlus’ main source of funding is dividends declared and paid to it by BankPlus. Statutory and regulatory limitations exist that affect the ability of BankPlus to pay dividends to the holding company. BancPlus believes that these limitations will not impact the ability of the holding company to meet its ongoing short-term cash obligations.

Due to state banking laws, BankPlus may not declare dividends without the prior approval of the Mississippi Department of Banking and Consumer Finance (“MDBCF”).MDBCF. BankPlus received permission from the MDBCF to pay dividends of $2.7$11.5 million and $2.4$9.7 million for the year-to-date periods ended March 31,September 30, 2021 and September 30, 2020, and March 31, 2019, respectively. These dividends were used by the holding company to pay dividends to the BancPlus shareholders, principal and interest payments on debt and general operating expenses.
50
Table of Contents
Capital Management and Regulatory Capital Requirements

BancPlus is subject to various capital requirements administered by federal banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct material effect on BancPlus’ business operations.

Under the regulatory capital rules, BancPlus must maintain minimum amounts and ratios of common equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, referred to as
58
Table of Contents
the leverage ratio. The adequacy of our capital levels is also subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors.

In addition, BancPlus must maintain a capital conservation buffer of 2.5%, consisting of CET1 capital, on top of the risk-based capital.minimum capital ratios. A banking organization with a conservation buffer of less than the required amount of 2.50%2.5% will be subject to limitations on capital distributions, including dividend payments, and certain discretionary bonus payments to executive officers. Minimum capital requirements, including the capital conservation buffer, to which BankPlus and BancPlus are subject are summarized in the tables below.

Further, under prompt corrective action regulations, an insured depository institution is classified in one of several tiers based on its level of capital and other factors, and may be subject to an escalating series of remedial measures if it is less than “well capitalized.” An institution is deemed “well capitalized” if it satisfies certain capital ratios, summarized in the tables below, and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

As of September 30, 2021 and December 31, 2020, BancPlus and BankPlus met all applicable capital adequacy requirements as of March 31, 2020 and December 31, 2019.BankPlus was deemed “well capitalized.” As a bank holding company, BancPlus is not subject to the prompt corrective action regime that applies to insured depository institutions, including BankPlus.
59
Table of Contents

BancPlus’ consolidated and BankPlus’ actual capital amounts and ratios are shown in the following tables as of the dates indicated (dollars in thousands):

ActualMinimum For Capital Adequacy PurposesRequired to be Well Capitalized
As of September 30, 2021:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:
CET1 Capital to Risk-Weighted Assets$374,642 9.57 %$273,936 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted Assets425,598 10.88 %332,636 8.50 %N/AN/A
Total Capital to Risk-Weighted Assets580,350 13.50 %410,904 10.50 %N/AN/A
Tier 1 Capital to Average Assets425,598 8.40 %202,413 4.00 %N/AN/A
Bank:
CET1 Capital to Risk-Weighted Assets$420,455 10.77 %$273,372 7.00 %$253,845 6.50 %
Tier 1 Capital to Risk-Weighted Assets420,455 10.77 %331,951 8.50 %312,425 8.00 %
Total Capital to Risk-Weighted Assets464,456 11.89 %410,058 10.50 %390,531 10.00 %
Tier 1 Capital to Average Assets420,455 8.32 %202,059 4.00 %252,574 5.00 %
ActualFor Capital Adequacy PurposesRequired to be Well CapitalizedActualMinimum For Capital Adequacy PurposesRequired to be Well Capitalized
As of March 31, 2020:Capital AmountRatioCapital AmountRatioCapital AmountRatio
As of December 31, 2020:As of December 31, 2020:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:Consolidated:Consolidated:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$253,944  10.99 %$161,718  7.00 %n/a  n/a  CET1 Capital to Risk-Weighted Assets$339,936 9.94 %$239,437 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets293,944  12.72 %196,372  8.50 %n/a  n/a  Tier 1 Capital to Risk-Weighted Assets390,713 11.42 %290,745 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets315,115  13.64 %242,577  10.50 %n/a  n/a  Total Capital to Risk-Weighted Assets485,357 14.19 %359,155 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets293,944  9.60 %122,487  4.00 %n/a  n/a  Tier 1 Capital to Average Assets390,713 8.55 %182,853 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$288,640  12.53 %$161,227  7.00 %$149,711  6.50 %CET1 Capital to Risk-Weighted Assets$387,231 11.36 %$238,629 7.00 %$221,584 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets288,640  12.53 %195,776  8.50 %184,260  8.00 %Tier 1 Capital to Risk-Weighted Assets387,231 11.36 %289,763 8.50 %272,719 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets309,811  13.45 %241,841  10.50 %230,325  10.00 %Total Capital to Risk-Weighted Assets423,231 12.42 %357,943 10.50 %340,898 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets288,640  9.44 %122,274  4.00 %152,842  5.00 %Tier 1 Capital to Average Assets387,231 8.49 %182,531 4.00 %228,164 5.00 %

51
Table of Contents
ActualFor Capital Adequacy PurposesRequired to be Well Capitalized
As of December 31, 2019:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:
CET1 Capital to Risk-Weighted Assets$248,247  10.86 %$160,002  7.00 %n/a  n/a  
Tier 1 Capital to Risk-Weighted Assets288,247  12.61 %194,288  8.50 %n/a  n/a  
Total Capital to Risk-Weighted Assets309,747  13.55 %240,003  10.50 %n/a  n/a  
Tier 1 Capital to Average Assets288,247  9.74 %118,373  4.00 %n/a  n/a  
Bank:
CET1 Capital to Risk-Weighted Assets$284,513  12.49 %$159,469  7.00 %$148,078  6.50 %
Tier 1 Capital to Risk-Weighted Assets284,513  12.49 %193,641  8.50 %182,250  8.00 %
Total Capital to Risk-Weighted Assets306,013  13.43 %239,203  10.50 %227,813  10.00 %
Tier 1 Capital to Average Assets284,513  9.63 %118,134  4.00 %147,668  5.00 %
Contractual Obligations

Contractual obligations as of September 30, 2021, totaled $827.6 million and were primarily comprised of deposits with maturities of $637.0 million, subordinated debentures of $111.4 million and operating lease obligations of $48.1 million. Contractual obligations due within the next twelve months were $460.6 million and were primarily related to time deposits with maturity dates. Contractual obligations due in more than 12 months were $367.0 million and were comprised of $191.8 million of time deposits with maturity dates and $111.4 million of subordinated debentures with maturities ranging from 2034 through 2037. BancPlus expects to have adequate liquidity to meet these short and long-term obligations through profitability, repayments from loans and investment securities, deposit gathering activity and access to borrowing sources.

Recent Accounting Pronouncements

ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit losses and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and
60
Table of Contents
other commitments to extend credit held by a reporting entity at each reporting date. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 is effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has formed a cross functional team that is assessing data and system needs and evaluating the impact of adopting the new guidance. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but has not yet determined the magnitude of any such one-time adjustments or the overall impact on the Company’s financial statements.

ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” In April 2019, the FASB issued ASU 2019-04 clarifies that the reclassification of a debt security from held-to-maturity (“HTM”) to available-for-sale (“AFS”) under the transition guidance in Accounting Standards Update 2017-12, “Targeted Improvements to Accounting for Hedging Activities” would not (1) call into question the classification of other HTM securities, (2) be required to actually designate any reclassified security in a last-of-layer hedge, or (3) be restricted from selling any reclassified security. As part of the transition of ASU 2019-04, entities may reclassify securities that would qualify for designation as the hedged item in a last-of-layer hedging relationship from HTM to AFS; however, entities that already made such a reclassification upon their adoption of ASU 2017-12 are precluded from reclassifying additional securities. The Company did not reclassify any securities from HTM to AFS upon adoption of ASU 2017-12. ASU 2019-04 became effective as of the beginning of the first annual period after its issuance, which for the Company was January 1, 2020. See Note 3 Investment Securities to our Condensed Consolidated Financial Statements for more information regarding the impact of the transfer of certain HTM debt securities to AFS.
ASU 2020-04, “Reference Rate Reform - Topic 848.” In March 2020, the FASB issued ASU 2020-04 which provides temporary optional expedients and exceptions to the GAAPaccounting principles generally accepted in the United States (“GAAP”) guidance on contract modifications, hedge accounting, and other transactions affected that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The companyCompany is still evaluating the impact of ASU 2020-04, but does not expect it to have a material impact on the Company’s consolidated financial statements.

Critical Accounting Policies and Estimates

BancPlus’ unaudited interim condensed consolidated financial statements are prepared based on the application of certain accounting policies, the most significant of which are described in the notes to its condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variation and may significantly affect its reported results and financial position for the current period or in future periods. The use of estimates, assumptions, and judgments are necessary when financial assets and liabilities are required to be recorded at, or adjusted to reflect, fair value. Assets carried at fair value inherently result in more financial statement volatility. Fair values and information used to record valuation adjustments for certain assets and liabilities are based on either quoted market prices or are provided by other independent third-party sources, when available. When such information is not available, management estimates valuation adjustments. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on BancPlus’ future financial condition and results of operations.
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits BancPlus, as an emerging growth company, to take advantage of an extended transition period for complying with new or revised accounting standards affecting public companies. BancPlus has elected to take advantage of this extended transition period, which means that the financial statements included in this Quarterly Report on Form 10-Q will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as BancPlus remains an emerging growth company or until BancPlus affirmatively and irrevocably opts out of the extended transition period under the JOBS Act.
The following is a discussion of the critical accounting policies and significant estimates that BancPlus believes require BancPlus to make the most complex or subjective decisions or assessments. Additional information about these policies can be found in Note 1 of our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.
Allowance for Loan Losses

The allowance for loan losses, sometimes referred to as the “allowance,” is established through a provision for loan losses which is charged to expense. Loan losses are charged against the allowance when management determines all or a portion of the loan balance to be uncollectible. Subsequent recoveries, if any, are credited to the allowance for cash received on previously charged-off amounts. If the allowance is considered inadequate to absorb future loan losses on existing loans for any reason, including but not limited to, increases in the size of the loan portfolio, increases in charge-offs or changes in the risk characteristics of the loan portfolio, the provision for loan losses is increased.

A loan is considered impaired when, based on current information and events, it is probable that BancPlus will be unable to collect all amounts due according to the original contractual terms of the loan agreement. The collection of all amounts due according to contractual terms means that both the contractual interest and principal payments of a loan will be collected as scheduled in the loan agreement. An impaired loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or, as a practical expedient, at the loan’s observable market price, or the fair value of the underlying collateral. The fair value of collateral, reduced by costs to sell on a discounted basis, is used if a loan is collateral dependent.

In situations where, for economic or legal reasons related to a borrower’s financial difficulties, BancPlus grants a concession to the borrower that BancPlus would not otherwise consider, the related loan is classified as a TDR. BancPlus measures any loss on
52
61
Table of Contents
the TDR in accordance with the guidance concerning impaired loans set forth above. Additionally, TDRs are generally placed on non-accrual status at the time of restructuring and included in impaired loans. These loans are returned to accrual status after the borrower demonstrates performance with the modified terms for a sustained period of time and has the capacity to continue to perform in accordance with the modified terms of the restructured debt.

Investment Securities Impairment

Periodically, BancPlus may need to assess whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired on an other-than-temporary basis. In any such instance, BancPlus would consider many factors, including the length of time and the extent to which the fair value has been less than the amortized cost basis, the market liquidity for the security, the financial condition and the near-term prospects of the issuer, expected cash flows, and its intent and ability to hold the investment for a period of time sufficient to recover the temporary loss. Securities on which there is an unrealized loss that is deemed to be other-than-temporary are written down to fair value, with the write-down recorded as a realized loss in securities gains (losses).

The fair values of investment securities are generally determined by various pricing models, monitoring credit ratings and periodic reviews of key metrics. BancPlus evaluates the methodologies used to develop the resulting fair values. BancPlus’ procedures include initial and ongoing review of pricing methodologies and trends. BancPlus seeks to ensure prices represent a reasonable estimate of fair value through the use of broker quotes, current sales transactions from its portfolio and pricing techniques, which are based on the net present value of future expected cash flows discounted at a rate of return market participants would require. As a result of this analysis, if BancPlus determines there is a more appropriate fair value, the price is adjusted accordingly.

Other Real Estate

Other real estate acquired through partial or total satisfaction of loans is initially carried at the fair value less cost to sell at the acquisition, establishing a new cost. Any loss incurred at the date of acquisition is charged to loan loss. Subsequent gains or loss on such assets and related operating income and expenses are reported in current operations when earned or incurred.
Income Tax Accounting

BancPlus uses the asset and liability method of accounting for income taxes as prescribed by GAAP. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If currently available information indicates it is “more likely than not” that the deferred tax asset will not be realized, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Accounting for deferred income taxes is a critical accounting estimate because BancPlus exercises significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. Management’s determination of the realization of deferred tax assets is based upon management’s judgment of various future events and uncertainties, including the timing and amount of future income, reversing temporary differences which may offset, and the implementation of various tax plans to maximize realization of the deferred tax asset. These judgments and estimates are inherently subjective and reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require BancPlus to record a valuation allowance against its deferred tax assets.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Risk

As a financial institution, BancPlus’ primary market risk is interest rate risk, which is defined as the risk of economic loss due to changes in interest rates. These economic losses can be reflected as a loss of future net interest income and/or loss of current fair market value. BancPlus continually seeks to measure and manage the potential impact of interest rate risk. Interest rate risk occurs when interest earning assets and interest-bearing liabilities mature or re-price at different times, on a different basis or in unequal amounts. Interest rate risk also arises when BancPlus’ assets and liabilities each respond differently to changes in interest rates.

BancPlus’ management of interest rate risk is overseen by the Asset Liability Management Committee (“ALCO”). BancPlus’ risk management infrastructure approved by the BancPlus board outlines reporting and measurement requirements. In particular, this infrastructure establishes limits and management targets for various metrics, including net interest income at risk and economic value of equity at risk, given instantaneous parallel shifts in interest rates. BancPlus’ risk management infrastructure also requires a periodic review of all key assumptions used, such as appropriate interest rate scenarios, loan prepayment rates, and transaction deposit durations.

BancPlus currently does not utilize derivative products to manage interest rate risk, although its policy does allow the use of derivatives within established parameters. BancPlus manages the interest rate risk associated with its interest bearing liabilities by managing the interest rates and terms associated with its borrowings and customer deposits on which BancPlus relies for funding. For instance, BancPlus occasionally uses special offers on deposits to attract additional balances and manage terms associated with its interest-bearing liabilities. BancPlus manages the interest rate risk associated with its earning assets by managing the interest rates and terms associated with its loan portfolio and investment securities portfolio.

Net Interest Income Simulation and Economic Value Analysis

On a quarterly basis, BancPlus uses a model to simulate and measure potential changes in its net interest income and economic value of equity (“EVE”) given instantaneous parallel shifts in interest rates of +/- 400 basis points. BancPlus’ net interest income at risk simulation measures shorter term risk over 12 and 24 month time frames. EVE measures the period end market value of assets minus the market value of liabilities and the change in this value given the changes in rates. EVE is a point-in-time measurement that helps quantify longer term interest rate risk. The model has inherent limitations since the results are based on a given set of rate changes and assumptions as of a certain point in time. For purpose of the simulation, BancPlus assumes no balance sheet growth. Therefore, the model’s results reflect an interest rate shock to a static balance sheet.

Potential changes to BancPlus’ net interest income and EVE in hypothetical rising and declining interest rate scenarios calculated as of March 31, 2020 and December 31, 2019 are presented in the table below (dollars in thousands). The projections assume immediate, parallel shifts down from the March 31, 2020 and December 31, 2019 yield curves of 100 and 200 basis points and immediate, parallel shifts up 100, 200, and 300 basis points. In the current interest rate environment, a downward shift of the yield curve of 300 and 400 basis points does not provide BancPlus with meaningful results and therefore is not presented.

As of March 31, 2020As of December 31, 2019
Change in Net Interest IncomeChange in Economic
Value
of Equity		Change in Net
Interest Income		Change in Economic Value
of Equity
(In thousands)$%$%$%$%
+3008,616  8.7 %56,315  17.9 %7,111  7.1 %51,192  12.9 %
+2005,669  5.8 %42,252  13.5 %5,038  5.0 %38,816  9.8 %
+1002,874  2.9 %23,417  7.5 %2,650  2.6 %22,030  5.6 %
0—  — %—  — %—  — %—  — %
-100(1,720) (1.7)%(51,911) (16.5)%(3,753) (3.7)%(35,734) (9.0)%
-200(1,633) (1.7)%(80,973) (25.8)%(5,613) (5.6)%(81,371) (20.6)%

The table above indicates that in the event of an immediate and sustained 300 basis point increase in interest rates, BancPlus would have experienced an 8.7% increase in net interest income and a 17.9% increase in EVE as of March 31, 2020, and a 7.1%
53
Table of Contents
increase in net interest income and a 12.9% increase in EVE as of December 31, 2019. In the event of an immediate 100 basis point decrease in interest rates, BancPlus would have experienced a 1.7% decrease in net interest income and an 16.5% decrease in EVE as of March 31, 2020, and a 3.7% decrease in net interest income and a 9.0% decrease in EVE as of December 31, 2019.

The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. The timing and magnitude of interest rate changes (including, for example, the sharp reduction in interest rates by the Federal Reserve Board in response to the economic and financial effects of the COVID-19 pandemic) will most likely differ substantially from what is depicted. The shape or steepness of the yield curve typically changes with each change in the Fed Funds target range. Increasing rates could reduce net interest income if BancPlus is required to increase deposit rates faster than planned to maintain volumes or its mix of assets and funding changes. Results could also change depending on faster or slower prepays in loans or early withdrawals in deposits than those assumed in the model. Finally, the results do not incorporate growth in the balance sheet or strategic changes made in response to changes in rates.

Because of the flaws in the nature of the static balance sheet rate shocks, ALCO also periodically runs model simulations that incorporate many of the factors mentioned above. These alternate scenarios change given the current economic environment, but may include the following: (1) expected balance sheet growth, (2) 25 basis point changes in rates timed with Federal Open Market Committee meetings, (3) increased early withdrawals of time deposits, (4) shifts in funding out of deposits and into wholesale borrowings, and (5) increasing balances of variable rate loans versus fixed rate loans. Using a variety of scenarios in addition to BancPlus’ standard shocked scenarios enables ALCO to form a more accurate analysis of BancPlus’ overall interest rate sensitivity.

Impact of Inflation and Changing Prices

BancPlus’ consolidated financial statements and related notes have been prepared in accordance with GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Unlike most industrial companies, nearly all of BancPlus’ assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on BancPlus’ performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods or services.Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by management with the participation of BancPlus’ Chief Executive Officer and Chief Financial Officer, of the effectiveness of BancPlus’ disclosure controls and procedures (as defined in Rule 13a-15(e)15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, BancPlus’ disclosure controls and procedures were effective to ensure that information required to be disclosed by BancPlus in the reports required to be filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within time periods specified in the U.S. Securities and Exchange Commission’sSEC’s rules and forms..forms.
62
Table of Contents

Changes in Internal Control over Financial Reporting

There has been no change in BancPlus’ internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, BancPlus’ internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On March 20, 2019, a Complaint,complaint (the “Complaint”), Mills v. BankPlus, et al,al., Case #3:19-cv-00196-CWR-FKB, was filed in the United States District Court for the Southern District of Mississippi, Northern Division, by Alysson Mills, in her capacity as Court-appointed Receiver for Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), naming BankPlus, three former BankPlus employees, one currentthen-current BankPlus employee and other defendants, including defendants affiliated and unaffiliated with BankPlus (“Defendants”). The Complaint seeks to recover damages from the Defendants for the benefit of the receivership estate related to certain investors who were allegedly defrauded by Adams and Madison Timber, whose actions were allegedly attributable to the actions of the Defendants that allegedly enabled negligent, illegal or fraudulent activities engaged in by Adams
54
Table of Contents
and Madison Timber. A brief description of the cause of action on the cover sheet filed with the Complaint includes securities, civil conspiracy, aiding and abetting, negligence, and other possible causes of action. The amount of damages (including punitive damages) requested against the Defendants in the Complaint is unspecified. On January 4, 2021, the plaintiff, Mills, filed an Amended Complaint. Answers and/or Motions to Dismiss the Amended complaint were filed by the Defendants. On July 8, 2021, the Court denied the Motion to Dismiss filed by BankPlus. A related motion for reconsideration was filed by BankPlus on August 9, 2021. On September 30, 2021, an order was entered to consolidate for purposes of discovery this case (No. 3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the Receiver. By subsequent text-only order (No. 3:18-cv-00866-CWR-FKB) dated October 10, 2021, the four consolidated cases are stayed until January 31, 2022.

In addition to the above, the Company, including subsidiaries, is party to various legal proceedings arising in the ordinary course of business. We do not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on our consolidated financial position or liquidity.

Item 1A. Risk Factors

CertainThere have been no material changes to the risk factors may have a material adverse effect on our business, financial condition and results of operations. You should carefully consider the following risks, together with allpreviously disclosed under Item 1A of the other information contained in this QuarterlyCompany’s Annual Report on Form 10-Q, including10-K for the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements andyear ended December 31, 2020, previously filed with the related notes included elsewhere in this Quarterly Report on Form 10-Q. Any of the following risks could have an adverse effect on our business, financial condition, operating results, or prospects and could cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. Our business, financial condition, operating results, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.

Risks Related to the Business and Industry of BancPlusSEC, except as noted below.

The novel coronavirus ("COVID-19"acquisition of First Trust Corporation (“FTC”) pandemicby BancPlus and the impact of actionsFirst Bank and Trust by BankPlus, (the “transaction”) is subject to mitigate it could continue to adversely affect, our business, financial condition and results of operations.

The spread of COVID-19 has created a global public health crisiscertain closing conditions that, has resulted in unprecedented uncertainty, volatility and disruption in financial markets. The federal, state and local governmental response to the pandemic has included orders closing non-essential businesses and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions have resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses, resulting in loss of revenues, a rapid increase in unemployment, disrupted global supply chains, market downturns and volatility, changes in consumer behavior related to pandemic fears, related emergency response legislation and an expectation that Federal Reserve policyif not satisfied or waived, will maintain a low interest rate environment for the foreseeable future. These changes have a significant adverse effect on the markets in which we conduct our business and the demand for our products and services.

In response to the economic and financial effects of COVID-19, the Federal Reserve Board has sharply reduced interest rates and instituted quantitative easing measures as well as domestic and global capital market support programs. In addition, the Trump Administration, Congress, various federal agencies and state governments have taken measures to address the economic and social consequences of the pandemic, including the passage of the Coronavirus Aid, Relief, and Economic Security (“CARES”) and the Main Street Lending Program. The CARES Act, among other things, provides certain measures to support individuals and businesses in maintaining solvency through monetary relief, includingresult in the form of financing, loan forgiveness and automatic forbearance. Beginning in April 2020, we began processing loan applications under the Paycheck Protection Program created under the CARES Act. The Federal Reserve’s Main Street Lending Program will offer deferred interest on 4-year loans to small and mid-sized businesses. All of the federal banking regulatory agencies have encouraged lenders to extend additional loans, and the federal government is considering additional stimulus and support legislation focused on providing aid to various sectors, including small businesses. We are also experiencing a high level of temporary loan modifications. The full impact on our lending and other business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reaction to such activities, remains uncertain. We face an increased risk of litigation and governmental, regulatory, and third party scrutiny as a result of the effects of COVID-19 on economic conditions and actions governmental authorities take in response to these conditions, such as the Paycheck Protection Program, are complex and our participation may lead to additional litigation and regulatory scrutiny, negative publicity and damage to our reputation.

The economic effects of the COVID-19 outbreak have had a destabilizing effect on financial markets, key market indices and overall economic activity. The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and may lead to an economic recession and/or a significant decrease in consumer confidence and business generally. The continuation of these conditions caused by the outbreak, including the impacts of the CARES Act and other federal and state measures, specifically with respect to loan forbearances, can be expected to adversely impact our businesses and results of operations and the operations of our borrowers, customers and business partners. In particular, these events can be expected to, among other things:transaction not being completed.

•impairThe transaction is subject to customary conditions to closing, including the abilityreceipt of borrowers to repay outstanding loans or other obligations, resulting in increases in delinquencies and modifications to loans;
55
Table of Contents
•impair the value of collateral securing loans (particularly with respect to real estate);
•impair the value of our securities portfolio;
•require a significant increase in our allowance and provision for loan losses,required regulatory approvals and the possibility of additional loan losses;
•adversely affect the stability of our deposit base or otherwise impair our liquidity;
•reduce our revenues from fee-based services, including wealth management, and the demand for our products and services;
•create stress on our operations and systems associated with our participation in the Paycheck Protection Program as a result of high demand and volume of applications;
•result in increased compliance risk as we become subject to new regulatory and other requirements associated with the Paycheck Protection Program and other new programs in which we participate;
•impair the ability of loan guarantors to honor commitments;
•negatively impact our regulatory capital ratios;
•negatively impact the productivity and availability of key personnel and other employees necessary to conduct our business, and of third-party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices necessitated by the outbreak and related governmental actions; and
•increase cyber and payment fraud risk, given increased online and remote activity.

Prolonged measures by health or other governmental authorities encouraging or requiring significant restrictions on travel, assembly or other core business practices could further harm our business and those of our customers, in particular our small to medium sized business customers. Although we have business continuity plans and other safeguards in place, there is no assurance that they will be effective.

The ultimate impact of these factors is highly uncertain at this time and we do not yet know the full extentapproval of the impacts on our business, our operations or the global economy as a whole. However, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 has had, and may continue to have, a material adverse effect to our business, financialshareholders of FTC. If any condition and results of operations and may heighten many of our other known risks described below.

BancPlus may not be able to adequately measure and limit its credit risk, which could lead to unexpected losses.

BancPlus’ business depends on its ability to successfully measure and manage credit risk. As a lender, BancPlus is exposed to the risk thattransaction is not satisfied or waived (to the principal of, or interest on, a loanextent waiver is legally permitted at all), the transaction will not be repaid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover its outstanding exposure.completed. In addition, BancPlus and FTC may terminate the definitive agreementunder certain circumstances even if the transaction is exposedapproved by FTC’s shareholders, including but not limited to risks with respectif the statutory share exchange has not been completed on or before March 31, 2022 (unless the required regulatory approvals are pending and have not been finally resolved, in which event such date shall be automatically extended to June 30, 2022), or if FTC fails to obtain the periodapproval of time over whichits shareholders; provided, that the loan mayfailure of the closing to occur by such date cannot be repaid, risks relating to proper loan underwriting, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual loans and borrowers. The creditworthiness of a borrower is affected by many factors including local market conditions and general economic conditions. If the economic climate in the U.S. generally, or in BancPlus’ market areas, continue to experience material disruption, particularly due to the COVID-19 pandemic, its borrowers may experience difficulties in repaying their loans, the collateral BancPlus holds may decrease in value or become illiquid, and the level of nonperforming loans, charge-offs and delinquencies could rise and require significant additional provisions for loan losses. Additional factors related to the credit quality of commercial loans include the qualityfailure of the managementparty seeking to terminate the definitive agreement to perform or observe the covenants and agreements of such party as set forth in the definitive agreement. In the event the definitive agreementis terminated, BancPlus would not realize any of the business andexpected benefits of having completed the borrower’s ability to effectively respond to changes in local markets and general economic conditions and to other disruptions intransaction. If the borrowers’ businesses. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property.

BancPlus’ risk management practices, such as monitoring the concentration of its loans within specific industries and markets and its credit approval, review and administrative practices maytransaction is not adequately assess and reduce credit risk, and BancPlus’ credit administration personnel, policies and procedures may not adequately adapt to changes in economic or any other conditions affecting customers and the quality of the loan portfolio. A failure to effectively measure and limit the credit risk associated with BancPlus’ loan portfolio may result in loan defaults, foreclosures andcompleted, additional charge-offs, and may necessitate that BancPlus significantly increase its allowance for loan losses, each ofrisks could materialize, which could adversely affect its net income. As a result, BancPlus’ inability to successfully manage credit risk could have a material adverse effect on itsthe business, financial condition or results of operations.

There is no organized public trading market for BancPlus common stock, and there can be no assurance that a public market will develop.

There is no organized trading market for the sharesoperations of common stock of BancPlus. There can be no expectation that a public market for BancPlus common stock will develop. BancPlus is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as a result, BancPlus may consider the development of a public market for
56
Table of Contents
its common stock. However, no such decision has been made. BancPlus does not presently intend to list its common stock on a securities exchange or have its shares quoted on a quotation system.

BancPlus may not be able to successfully integrate SCCFTC or realize the anticipated benefits of the transaction on a timely basis or at all, and doing so may be more difficult or costly than expected.transaction.

The transaction involves the combination of two bank holding companies and two banks that previously have operated and, until completion of the transaction, will continue to operate independently. A successful combination of the operations of BancPlus and State Capital Corp. (“SCC”) following the merger of BancPlus and SCC (the “Merger”)two entities will depend substantially on the BancPlus’ ability to consolidate operations, systems and procedures and to eliminate redundancies and costs and has required, and will continue to require, the dedication of the time and resources of BancPlus’ management.costs. BancPlus may not be able to combine the operations of SCCFTC with its operations or otherwise realize the anticipated benefits of the Merger on a timely basis or at all without encountering difficulties, such as:
63
Table of Contents

•the loss of key employees and customers;
•the disruption of operations and business;
•the inability to maintain and increase competitive presence;
•deposit attrition, customer loss and revenue loss;
•possible inconsistencies in standards, control procedures and policies;
•unexpected problems with costs, operations, personnel, technology and credit;
•general market and economic conditions and governmental actions affecting the financial services industry generally; and/or
•problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.

Additionally, as a resultgeneral market and economic conditions and governmental actions affecting the financial industry generally may inhibit BancPlus’ successful integration of FTC. Further, BancPlus entered into the Merger, BancPlus has expanded its operations to include four additional branches in Alabama and 11 branches in Louisiana. While BancPlus has had some experience with banking transactions in the past in these states, it is developing additional plans to maintain and grow its business in these states. BancPlus is less familiardefinitive agreement with the economiesexpectation that the transaction will result in various benefits including, among other things, benefits relating to enhanced revenues, additional geographic markets, cross-selling opportunities, technology, cost savings and business environment and opportunities in these states and will be required to devote additional time to operations there.

BancPlus’ efforts to successfully integrate SCC and otherwise realizeoperating efficiencies. Achieving the anticipated benefits of the Mergertransaction is subject to a number of uncertainties, including whether BancPlus integrates FTC in an efficient and effective manner, and general competitive factors in the marketplace. BancPlus’ failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materiallyadversely impact itsBancPlus’ business, financial condition and operating results.or results of operation. In addition, the attention and effort devoted to the integration of SCCFTC with BancPlus’ existing operations may divert management’s attention from other important issues and could seriously harm its business.BancPlus’ business, financial condition or results of operation. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

Because a significant portion of BancPlus’ loan portfolio is comprised of real estate loans, negative changes inBancPlus expects to incur substantial expenses related to the economy affecting real estate values and liquidity could impair the value of collateral securing BancPlus’ real estate loans and result in loan and other losses.transaction.

Real estate valuesBancPlus expects to incur substantial expenses in BancPlus’ marketsconnection with consummation of the transaction and combining the business, operations, networks, systems, technologies, policies and procedures of FTC with BancPlus. Although BancPlus and FTC have experienced periodsassumed that a certain level of fluctuation overtransaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the last several years,total amount or the timing of their combination expenses. Many of the expenses thatwill be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and recoverycombination expenses associated with the transaction could, particularly in the near term, exceed the savings that BancPlus expects to achieve from declines in value has been slow and uneven and illiquiditythe elimination of real estate holdings has increased. The market value of real estate can fluctuate significantly in a short period of time. As of March 31, 2020, $1.6 billion, or 78.6%, of BancPlus’ total loan portfolio was comprised of loans with real estate as a primary component of collateral. Adverse changes affecting real estate valuesduplicative expenses and the liquidityrealization of real estate in one or moreeconomies of BancPlus’ markets could increasescale and cost savings related to the credit risk associated with its loan portfolio, and could result in losses that adversely affect its business, financial condition, and resultscombination of operation. Negative changes in the economy affecting real estate values and liquidity in BancPlus’ market areas, including asbusinesses following the consummation of the transaction. As a result of these expenses, both BancPlus and FTC expect to take charges against their earnings before and after the COVID-19 pandemic, could significantly impaircompletion of the value of property pledged as collateral on loans and affect its ability to selltransaction. The charges taken in connection with the collateral upon foreclosure without a loss or additional losses. Collateral may havetransaction are expected to be sold for less thansignificant, although the outstanding balanceaggregate amount and timing of such charges are uncertain at present.

The transaction is subject to the receipt of consents and approvals from governmental entities that may impose conditions that could delay or prevent the completion of the loan, which could result in losses on such loans. Such declines and losses couldtransaction or have an adverse effect on the BancPlus following the transaction.

Before the transaction may be completed, various approvals or consents or waivers must be obtained from the Federal Reserve, FDIC, and the MDBCF. These governmental entities may request additional information regarding BancPlus’ and FTC’s regulatory applications and notices, and they may impose conditions on the completion of the transaction or require changes to the terms of the transaction. Such conditions or changes could have the effect of delaying or preventing completion of the transaction or imposing additional costs on, or limiting the revenues of, BancPlus following the transaction, any of which might have an adverse effect on BancPlus following the transaction. Such a condition may also constitute a burdensome condition that may allow FTC to terminate the definitive agreement after June 30, 2022.

BancPlus will be subject to business uncertainties and contractual restrictions while the transaction is pending.

Uncertainty about the effect of the transaction on employees, customers (including depositors and borrowers), suppliers and vendors may have an adverse effect on the business, financial condition or results of operations. If real estate values decline, it is also more likely that BancPlus would be required to increase its allowance for loan losses, which could have a material adverse effect on its business, financial conditionoperations of BancPlus. These uncertainties may impair BancPlus’ or results of operations.

With BankPlus’ significant reliance on real estate secured loans before and during the most recent recession, BankPlus and BancPlus’ wholly owned subsidiary, Oakhurst Development, Inc. (“Oakhurst”), have carried a significant amount of other real estate owned (“OREO”) acquired by foreclosure or otherwise in satisfaction of debts previously contracted. As of March 31, 2020, $5.2 million was carried in OREO at either BankPlus or at Oakhurst, which was acquired by foreclosure or otherwise in satisfaction of debts previously contracted. Although foreclosures and acquisitions of OREO are expected, the most recent recession exacerbated the conditions faced by many borrowers and BankPlus had no choice but to foreclose upon collateral. Negative changes in the economy affecting real estate values and the liquidity of real estate in BancPlus’ market areas could
57
Table of Contents
significantly impair the value of property carried in its OREO accounts, increase the loss associated with OREO and affect BancPlus’ ability to sell such real estate without additional loss. Such negative changes in the economy affecting real estate values and the liquidity of real estate in BancPlus’ market areas could adversely affect its business, financial condition or results of operations.

Further, BancPlus’ loan portfolio includes owner-occupied and non-owner-occupied commercial real estate loans for individuals and businesses for various purposes, which are secured by commercial properties, as well as real estate construction and development loans. As of March 31, 2020, BancPlus’ commercial real estate loans totaled $921.5 million, or 44.0%, of its total loan portfolio. These loans typically involve repayment dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions. These loans expose BancPlus to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate because there are fewer potential purchasers of the collateral. Additionally, commercial real estate loans generally involve relatively large balances to single borrowers or related groups of borrowers. Accordingly, charge-offs on commercial real estate loans may be larger on a per loan basis than those incurred with BancPlus’ residential or consumer loan portfolios. Unexpected deterioration in the credit quality of BancPlus’ commercial real estate loan portfolio would require it to increase its provision for loan losses, which would reduce its profitability and could materially and adversely affect its business, financial condition or results of operations.

BancPlus’ success is largely dependent upon its ability to successfully execute its business strategy, and if it is unable to successfully execute its business strategy, its business, growth prospects, financial results and operations could be materially and adversely impacted.

BancPlus’ success, including its ability to achieve its growth and profitability goals, is dependent on the ability of its management team to execute on BancPlus’ long-term business strategy, which requires it to, among other things:

◦attract and retain experienced and talented bankers in each of its markets;
◦maintain adequate funding sources, including by continuing to attract stable, low-cost deposits;
◦enhance its market penetration in its metropolitan markets and maintain its leadership position in its community markets;
◦increase its operating efficiency;
◦implement new technologies to enhance the client experience, keep pace with its competitors and improve efficiency;
◦attract and maintain commercial banking relationships with well-qualified businesses, real estate developers and investors with proven track records in its market areas;
◦attract sufficient loans that meet prudent credit standards, including in its commercial and industrial and owner-occupied commercial real estate loan categories;
◦maintain and grow its existing streams of noninterest income and develop new streams of noninterest income;
◦maintain adequate liquidity and regulatory capital and comply with applicable federal and state banking regulations;
◦obtain federal and state regulatory approvals;
◦manage its credit, interest rate and liquidity risk;
◦originate conforming residential mortgage loans for resale into the secondary market to provide mortgage banking income;
◦oversee the performance of third party service providers that provide material services to its business;
◦maintain expenses in line with current projections; and
◦develop markets which it enters on a de novo basis.

Failure to achieve these strategic goals could adversely affect BancPlus’ ability to successfully implement its business strategies and could negatively impact its business, growth prospects, financial condition and results of operations. Furthermore, if BancPlus does not manage its growth effectively, its business, financial condition, results of operations and future prospects could be negatively affected, and it may not be able to continue to implement its business strategy and successfully conduct its operations.

BancPlus relies heavily on its executive management team and other key employees, and the loss of any of these individuals could adversely impact its business or reputation.

BancPlus’ success depends in large part on the performance of its key personnel, as well as on itsFTC’s ability to attract, motivate and retain highly qualified senior and middle management and other skilled employees. For example, BancPlus’ ability to retain and grow its loans, deposits and fee income depends upon the business generation capabilities, reputation and relationship management skills of its bankers. If BancPlus were to lose the services of any of its bankers to a new or existing competitor or otherwise, BancPlus may not be able to retain valuable relationships and some of its customers could choose to use the services of a competitor instead of BancPlus’ services.

58
Table of Contents
Qualified individuals are in high demand, and BancPlus may incur significant costs to attract and retain them. BancPlus may not be successful in retaining its key employees, and the unexpected loss of services of one or more of itsmotivate key personnel could have an adverse effect on its business. For example, BancPlus may face difficulties in recruiting and retaining bankers of its desired caliber, including as a result of competition from other financial institutions. In particular, many of BancPlus’ competitors are significantly larger with greater financial resourcescustomers (including depositors and may be able to offer more attractive compensation packages and broader career opportunities. Additionally, BancPlus may incur significant expenses and expend significant time and resources on training, integration and business development before it is able to determine whether a new banker will be profitable or effective. If BancPlus is unable to attract and retain profitable bankers, or if its bankers fail to meet its expectations in terms of customer relationships and profitability, BancPlus may be unable to execute its business strategy, which could have a material adverse effect on its business, financial condition or results of operations.

Ifborrowers) pending the services of any of BancPlus’ key personnel should become unavailable for any reason, BancPlus may not be able to identify and hire qualified persons on terms acceptable to BancPlus, or at all, which could have a material adverse effect on its business, financial condition or results of operations.

The current geographic concentration of BancPlus’ markets in Mississippi, Alabama and Louisiana makes BancPlus more sensitive to adverse changes in the local economy than its more geographically diversified competitors, and adverse economic conditions in these markets could negatively impact BancPlus’ business, financial condition or results of operations.

Unlike larger financial institutions that are more geographically diverse, BancPlus is primarily a Mississippi banking franchise concentrated in the Mississippi Delta, Northwest Mississippi, Northeast Mississippi, the Jackson metropolitan statistical area (“MSA”) and Southeast Mississippi. Following consummation of the Merger, BancPlus has locations in Alabamatransaction, as such personnel and Louisiana. As of March 31, 2020, a significant amount of BancPlus’ total loans (by dollar amount) were made to borrowers who reside or conduct business in the Mississippi markets,customers may experience uncertainty about their future roles and substantially all of BancPlus’ real estate loans are secured by properties located in these markets. Loans that BancPlus acquired in the Merger in Mississippi, Alabama and Louisiana are similarly secured. A deterioration in local economic conditions or in the residential or commercial real estate markets could have an adverse effect on the quality of BancPlus’ portfolio, the demand for its products and services, the ability of borrowers to timely repay loans and the value of the collateral securing loans. If the population, employment or income growth in one of BancPlus’ markets is negative or slower than projected, income levels, deposits and real estate development could be adversely impacted. Some of BancPlus’ larger competitors that are more geographically diverse may be better able to manage and mitigate risks posed by adverse conditions impacting only local or regional markets. For these reasons, any regional or local economic downturn could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

BancPlus faces significant competition to attract and retain customers, which could impair its growth, decrease its profitability or result in loss of market share.

BancPlus operates in the highly competitive banking industry and in very competitive markets and faces significant competition for customers from bank and non-bank competitors, particularly regional institutions, in originating loans, attracting deposits and providing other financial services. BancPlus’ competitors are generally larger and may have significantly more resources, greater name recognition, and more extensive and established branch networks or geographic footprints than BancPlus does. Because of their scale, many of these competitors can be more aggressive than BancPlus can be on loan and deposit pricing. Also, many of BancPlus’ non-bank competitors have fewer regulatory constraints and may have lower cost structures. BancPlus expects competition to continue to intensify due to financial institution consolidation, legislative, regulatory and technological changes and the emergence of alternative banking sources.

BancPlus’ ability to compete successfully will depend on a number of factors, including, among others:

◦its ability to develop, maintain and build long-term customer relationships based on top quality service, high ethical standards and safe, sound assets;
◦its scope, relevance and pricing of products and services offered to meet customer needs and demands;
◦the rate at which it introduces new products and services relative to its competitors;
◦customer satisfaction with its level of service;
◦its ability to expand its market position;
◦industry and general economic trends; and
◦its ability to keep pace with technological advances and to invest in new technology.

Increased competition could require BancPlus to increase the rates it pays on deposits or lower the rates it offers on loans, which could reduce its profitability. BancPlus’ failure to compete effectively in its primary markets could cause it to lose market share and could have a material adverse effect on its business, financial condition or results of operations.

59
Table of Contents
BancPlus is dependent upon significant non-interest income, including deposit fees, some of which are under continual review by federal regulators and Congress.

As of March 31, 2020, BancPlus’ non-interest income, including service charges on deposits, totaled $14.2 million and constituted 32.0% of total revenue. BancPlus’ transaction account deposit base generates a significant contribution to its fee income through service charges on deposit accounts, largely in the form of overdraft fees, non-sufficient fund fees, and other deposit related service charges. BankPlus offers a discretionary overdraft service and many of BancPlus’ deposit customers elect to use this service, which will generate overdraft fees when the service is accessed. Such programs are under continual scrutiny by the prudential bank regulators as well as consumer rights groups. While BancPlus continually adjusts to comply with industry best practices, federal bank regulators or Congress could impose additional restrictions on overdraft programs, which could reduce fees on the products offered. Because BancPlus derives a significant portion of its revenues from non-interest income, a reduction in such fees could have a material adverse impact on its business, financial condition or results of operations.

BancPlus’ risk management framework may not be effective in mitigating risks and/or losses to it.

BancPlus’ risk management framework is comprised of various processes, systems and strategies, and is designed to manage the types of risk to which it is subject, including, among others, credit, market, liquidity, interest rate and compliance. BancPlus’ framework also includes financial or other modeling methodologies that involve management assumptions and judgment. Its risk management framework may not be effective under all circumstances and may not adequately mitigate any risk or loss. If its risk management framework is not effective, BancPlus could suffer unexpected losses and its business, financial condition, results of operations or growth prospects could be materially and adversely affected. BancPlus may also be subject to potentially adverse regulatory consequences.

BancPlus relies on third parties to provide key components of its business infrastructure, and a failure of these parties to perform for any reason could disrupt its operations.

Third parties provide key components of BancPlus’ business infrastructure such as data processing, internet connections, network access, core application processing, statement production and other services. BancPlus’ business depends on the successful and uninterrupted functioning of its information technology and telecommunications systems and third-party servicers. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt BancPlus’ operations. Because its information technology and telecommunications systems interface with and depend on third-party systems, BancPlus could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. Replacing vendors or addressing other issues with BancPlus’ third-party service providers could entail significant delay and expense. Moreover, the laws and policies on third party service providers that the federal banking agencies implement impose additional compliance burdens on BankPlus. If BancPlus is unable to efficiently replace ineffective service providers, or if it experiences a significant, sustained or repeated, system failure or service denial, it could compromise its ability to operate effectively, damage its reputation, result in a loss of customer business, and subject it to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on its business, financial condition or results of operations.

Unauthorized access, cyber-crime and other threats to data security may require significant resources, harm BancPlus’ reputation, and otherwise cause harm to its business.

BancPlus necessarily collects, uses and holds personal and financial information concerning individuals and businesses with which it has a banking relationship. Threats to data security, including unauthorized access and cyber-attacks, rapidly emerge and change, exposing BancPlus to additional costs for protection or remediation and competing time constraints to secure its data in accordance with customer expectations and statutory and regulatory privacy and other requirements. It is difficult or impossible to defend against every risk posed by changing technologies, as well as criminals that are intent on committing cyber-crime. Increasing sophistication of cyber-criminals and terrorists make keeping up with new threats difficult and could result in a breach. Controls employed by BancPlus’ information technology department and its other employees and vendors could prove inadequate. BancPlus could also experience a breach due to intentional or negligent conduct on the part of employees or other internal sources, software bugs, other technical malfunctions, or other causes. As a result of any of these threats, BancPlus’ customer accounts may become vulnerable to account takeover schemes or cyber-fraud. BancPlus’ systems and those of its third party vendors may also become vulnerable to damage or disruption due to circumstances beyond its or their control, such as from catastrophic events, power anomalies or outages, natural disasters, network failures, viruses and malware.

A breach of BancPlus’ security that results in unauthorized access to its data could expose it to a disruption or challenges relating to its daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs and reputational damage, any of which could have a material adverse effect on BancPlus’ business, results of operations, financial condition or future prospects.
60
Table of Contents

Such financial losses incurred may not be covered under applicable general liability insurance coverage or current cyber-insurance coverages. The insurance market for policies to cover cyber related fraud is in constant flux and there is no assurance adequate coverage has been or may be obtained.

As a business operating in the financial services industry, BancPlus’ business and operations may be adversely affected in numerous and complex ways by weak economic conditions.

BancPlus’ business and operations, which primarily consist of lending money to customers in the form of loans, borrowing money from customers in the form of deposits and investing in securities, are sensitive to general business and economic conditions in the U.S. Although the U.S. economy, as a whole, has improved significantly over the past several years, the business environment in which BancPlus operates been impacted by the effects of the COVID-19 pandemic. Uncertainty about the federal fiscal policymaking process and the medium and long-term fiscal outlook of the federal government and U.S. economy is a concern for businesses, consumers and investors in the U.S. In addition, economic conditions in foreign countries, including global political hostilities, uncertainty over the stability of the euro currency and imposition of tariffs on products, could further affect the stability of global financial markets, which could hinder domestic economic growth. The current economic environment is characterized by recent interest rate changes that impacted BancPlus’ cost of funds and could adversely affect its net interest margin, which in turn is expected to decrease its earnings. All of these factors could individually or in the aggregate be detrimental to BancPlus’ business, and the interplay between these factors can be complex and unpredictable. BancPlus’ business is also significantly affected by monetary and related policies of the U.S. government and its agencies. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond BancPlus’ control. Adverse economic conditions and government policy responses to such conditions could have a material adverse effect on BancPlus’ business, financial condition, results of operations or prospects.

Historically, the Mississippi, Alabama and Louisiana economies have experienced growth at rates less than the national average, resulting in a limited pool of loans and deposits for which BancPlus must compete with other financial institutions.

The Mississippi, Alabama and Louisiana economies grew at overall rates less than the United States economy, as a whole. For its market share to increase substantially, BancPlus must attract customers from competition. If BancPlus is unable to do so, it may be unable to execute its business strategy, which could have an adverse effect on its business, financial condition or results of operations.

BancPlus’ business has grown at a steady pace, but it may not be able to maintain its historical rate of growth, which could have an adverse effect on its ability to successfully implement its business strategy.

BancPlus’ primary strategy focuses on organic growth, supplemented by acquisitions of banking teams or other financial institutions. BancPlus may be unable to execute on aspects of its growth strategy to sustain its historical rate of growth, or BancPlus may be unable to grow at all. More specifically, BancPlus may be unable to generate sufficient new loans and deposits within acceptable risk and expense tolerances, obtain the personnel or funding necessary for additional growth or find suitable banking teams or acquisition candidates. Various factors, such as economic conditions and competition, may impede or prohibit the growth of BancPlus’ operations, the opening of new branches andfollowing the consummation of acquisitions.the transaction. In addition, these uncertainties could cause customers (including depositors and borrowers), vendors and others who deal with BancPlus and/or FTC to seek to change existing business relationships with BancPlus and/or FTC or fail to extend an existing relationship with BancPlus and/or FTC. Moreover, competitors may target each party’s existing customers by highlighting potential uncertainties and integration difficulties that may result from the transaction. The successpursuit of BancPlus’ strategy also depends on its ability to effectively manage growth, which is dependent upon a number of factors, including its ability to adapt existing credit, operational, technology and governance infrastructure to accommodate expanded operations. If BancPlus fails to build infrastructure sufficient to support rapid growth or fails to implement one or more aspects of its strategy, it may be unable to maintain historical earnings trends, which could have a material adverse effect on its business, financial condition or results of operations.

BancPlus may not be able to manage the risks associated with its growth and expansion through de novo branching.

BancPlus’ business strategy includes evaluating strategic opportunities to grow through de novo branching, and it believes that banking location expansion has been meaningful to its growth since inception. Over the last five years, BancPlus has entered two new markets where it opened five new locations. De novo branching carries with it certain potential risks, including significant startup costs and anticipated initial operating losses; an inability to gain regulatory approval; an inability to secure the services of qualified senior management to operate the de novo banking location and successfully integrate and promote BancPlus’ corporate culture; poor market reception for de novo banking locations established in markets where it does not have a preexisting reputation; challenges posed by local economic conditions; challenges associated with securing attractive locations at a reasonable cost;transaction and the additional strainpreparation for the integration may place a burden on BancPlus’ management resources and internal systems and controls. Failure to adequately manage the risks associated with BancPlus’ growth through de novo branching could have a material adverse effect on its business, financial condition or results of operations.

61
Table of Contents
BancPlus may pursue acquisitions in the future, which could expose it to financial, execution and operational risks.

Although it plans to continue to grow its business organically, BancPlus may from time to time consider acquisition opportunities that BancPlus believes complement its activities and have the ability to enhance its profitability. If BancPlus is successful in expansion by acquisitions, BancPlus may experience rapid growth. Financial institutions that grow rapidly can experienceresources. Any significant difficulties as a result of rapid growth such as problems with successfully integrating personnel, internal operations and data processing, as well as properly evaluating the increased risks with entering new markets, such as understanding the customer base, local drivers of the economy and the strength of competitors. BancPlus’ acquisition activities could be material to its business and involve a number of risks, including those associated with:

◦the identification of suitable candidates for acquisition;
◦the diversion of management attention away from ongoing business concerns and any difficulties encountered in the operation of its existing business to identify, evaluatetransition and negotiate potential transactions;
◦the ability to attract funding to support additional growth within acceptable risk tolerances;
◦the use of inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target institution or assets;
◦the ability to maintain asset quality;
◦the adequacy of due diligence and the potential exposure to unknown or contingent liabilities related to the acquisition;
◦the retention of customers and key personnel, including bankers;
◦the timing and uncertainty associated with obtaining necessary regulatory approvals;
◦the risk of losing its Community Development Financial Institution (“CDFI”) status due to the addition of markets that do not qualify as low- or moderate-income markets;
◦the incurrence of an impairment of goodwill associated with an acquisition and material adverse effects on its results of operations;
◦the ability to successfully integrate acquired businesses; and
◦the maintenance of adequate regulatory capital.

The market for acquisition targets is highly competitive, which mayintegration process could adversely affect BancPlus’ ability to find acquisition candidates that fit its strategy and standards at acceptable prices. BancPlus faces significant competition in pursuing acquisition targets from other banks and financial institutions, many of which possess greater financial, human, technical and other resources than BancPlus does. Its ability to compete in acquiring target institutions will depend on BancPlus’ available financial resources to fund the acquisitions, including the amount of cash and cash equivalents it has and the liquidity and value of its common stock. In addition, increased competition may also drive up the acquisition consideration that BancPlus will be required to pay in order to successfully capitalize on attractive acquisition opportunities. To the extent that BancPlus is unable to find suitable acquisition targets, an important component of its growth strategy may not be realized.

Acquisitions of financial institutions also involve operational risks and uncertainties, such as unknown or contingent liabilities with no available manner of recourse, exposure to unexpected problems such as asset quality, the retention of key employees and customers, and other issues that could negatively affect BancPlus’ business. BancPlus may not be able to complete future acquisitions or, if completed, it may not be able to successfully integrate the operations, technology platforms, management, products and services of the entities that it acquires or to realize its attempts to eliminate redundancies. The integration process may also require significant time and attention from BancPlus’ management that would otherwise be directed toward servicing existing business and developing new business. Failure to successfully integrate the entities BancPlus acquires into its existing operations in a timely manner may increase its operating costs significantly and could have an adverse effect on its business, financial condition or results of operations. Further, acquisitions typically involve the payment of a premium over book and market values and, therefore, some dilution of BancPlus’ tangible book value and net income per common share may occur in connection with any future acquisition, and the carrying amount of any goodwill that it currently maintains or may acquire may be subject to impairment in future periods.

BancPlus’ ability to maintain its reputation is critical to the success of its business.

BancPlus’ business plan emphasizes superior service to its customers and communities. BancPlus has benefited from strong relationships with and among its customers. As a result, its reputation is one of the most valuable components of its business. BancPlus’ growth over the past several years has depended on attracting new customers from competing financial institutions and increasing its market share, primarily by its involvement in its primary markets and word-of-mouth advertising, rather than on growth in the market for banking services in its primary markets. As such, BancPlus strives to enhance its reputation by recruiting, hiring and retaining employees who share its core values of being an integral part of the communities it serves and delivering superior service to its customers. If BancPlus’ reputation is negatively affected by the actions of its employees; litigation or regulatory actions; compliance failures; any perceived weakness in its financial strength or liquidity, technological, cybersecurity; or other security breaches resulting in improper disclosure of client or personal information; or otherwise, its
62
Table of Contents
existing relationships may be damaged. BancPlus could lose some of its existing customers, including groups of large customers who have relationships with each other, and BancPlus may not be successful in attracting new customers. Any such developments could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

In the event BancPlus determines it to be in its best financial interest to close branches, BancPlus could suffer reputational damage from community opposition and Federal Deposit Insurance Corporation (“FDIC”) scrutiny, as well as loss of customers who choose not to transfer business to a different branch. In addition, there is a financial risk that the retired branch real estate could not be sold without loss.

If BancPlus were to lose its status as a CDFI, its ability to obtain grants and awards as a CDFI like those it has received in the past may be diminished or lost.

BancPlus is committed to excellence in community banking that includes community service and community development. A portion of its community development business has historically been augmented by its status as a CDFI. CDFI status increases the potential for receiving grants and awards that, in turn, enable a financial institution to increase the level of community development financial services that it provides to communities. In the event BancPlus does not meet one or more of the annual recertification criteria, the CDFI Fund, in its sole discretion, may provide an opportunity for BancPlus to cure deficiencies prior to issuing a notice of termination of certification. From 2014 through 2019, BancPlus has received an aggregate of $8.3 million in grants made possible due to its status as a CDFI. A loss of such status, and the resulting inability to obtain certain grants and awards received in the past, could have an adverse effect on BancPlus’ business, financial condition or results of operations.

BancPlus is dependent on the use of data and modeling in its management’s decision-making and faulty data or modeling approaches could negatively impact its decision-making ability or possibly subject it to regulatory scrutiny in the future.

The use of statistical and quantitative models and other quantitative analyses is endemic to bank decision-making, and the employment of such analyses is becoming increasingly widespread in BancPlus’ operations. Liquidity stress testing, interest rate sensitivity analysis, and the identification of possible violations of anti-money laundering regulations are all examples of areas in which BancPlus is dependent on models and the data that underlie them. The use of statistical and quantitative models is also becoming more prevalent in regulatory compliance. While BancPlus is not currently subject to annual stress testing under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the Comprehensive Capital Analysis and Review submissions, it currently utilizes stress testing for capital, credit and liquidity purposes and anticipates that model-derived testing may become more extensively implemented by regulators in the future.

BancPlus anticipates data-based modeling will penetrate further into bank decision-making, particularly risk management efforts, as the capacities developed to meet rigorous stress testing requirements are able to be employed more widely and in differing applications. While BancPlus believes these quantitative techniques and approaches improve its decision-making, they also create the possibility that faulty data or flawed quantitative approaches could negatively impact BancPlus’ decision-making ability or, if it becomes subject to regulatory stress-testing in the future, adverse regulatory scrutiny. BancPlus seeks to mitigate this risk by performing back-testing to analyze the accuracy of these techniques and approaches. Secondarily, because of the complexity inherent in these approaches, misunderstanding or misuse of their outputs could similarly result in suboptimal decision-making.

New lines of business, products, product enhancements or services may subject BancPlus to additional risks.

From time to time, BancPlus implements new lines of business, or offers new products and product enhancements as well as new services within its existing lines of business, and it will continue to do so in the future. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In implementing, developing or marketing new lines of business, products, product enhancements or services, BancPlus may invest significant time and resources, but BancPlus may not assign the appropriate level of resources or expertise necessary to make these new lines of business, products, product enhancements or services successful or to realize their expected benefits. Further, initial timetables for the introduction and development of new lines of business, products, product enhancements or services may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the ultimate implementation of new lines of business or offerings of new products, product enhancements or services. Furthermore, any new line of business, product, product enhancement or service could have a significant impact on the effectiveness of BancPlus’ system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

63
Table of Contents
BancPlus may need to raise additional capital in the future, and if it fails to maintain sufficient capital, BancPlus may not be able to maintain regulatory compliance.

BancPlus faces significant capital and other regulatory requirements as a financial institution. BancPlus may need to raise additional capital in the future to provide it with sufficient capital resources and liquidity to meet its commitments and business needs, which could include the possibility of financing acquisitions. In addition, BancPlus, on a consolidated basis, and BankPlus, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity in such amounts as bank regulators may require from time to time, as described in greater detail below in “—Risks Related to the Regulation of BancPlus’ Industry.” Importantly, regulatory capital requirements could increase from current levels, which could require BancPlus to raise additional capital or reduce its operations. The Economic Growth, Regulatory Relief and Consumer Protection Act (“2018 Act”) required the federal banking agencies to establish regulatory capital requirements as an alternative to complying with Basel III requirements, including establishment of a Community Bank Leverage Ratio (“CBLR”) between 8 and 10% for institutions with less than $10 billion of assets. The agencies issued a final rule in September 2019 that set the CBLR at “greater than 9%,” effective January 1, 2020. In light of the COVID-19 pandemic, the federal banking regulators on April 6, 2020, temporarily reduced the CBLR to 8% for the remainder of 2020 and to 8.5% in calendar year 2021. The CBLR will return to 9% in 2022. The agencies also announced a two-quarter grace period for qualifying community banks whose leverage ratios fall less than 1% below the minimum. Even if BancPlus satisfies all applicable regulatory capital minimums, its regulators could ask it, and in some cases, require it, to maintain capital levels which are significantly in excess of those minimums. BancPlus’ ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, and on its financial condition and performance. Accordingly, BancPlus cannot assure you that it will be able to raise additional capital if needed or on terms acceptable to it. If BancPlus fails to maintain capital to meet regulatory requirements, it could be subject to enforcement actions or other regulatory consequences, which could have a material adverse effect on its business, financial condition or results of operation.

BancPlus’ financial results depend on management’s selection of accounting methods and certain assumptions and estimates.

The preparation of BancPlus’ financial statements requires it to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities and the reported amount of related revenues and expenses. Certain accounting policies are inherently based to a greater extent on estimates, assumptions and judgments of management and, as such, have a greater possibility of producing results that could be materially different than originally estimated. These critical accounting policies include the allowance for loan losses, accounting for income taxes, the determination of fair value for financial instruments, the impairment of tax credit investments and accounting for stock-based compensation. This also includes estimates, judgments and assumptions for assessing the amortization/accretion of purchase accounting fair value differences and the impairment of long-lived assets, goodwill and other intangible assets in connection with the merger with SCC. In particular, ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) will be effective for BancPlus for annual and interim periods beginning on January 1, 2023 and will replace the incurred loss impairment methodology with the current expected credit loss (“CECL”) methodology. The CECL methodology will require management consideration of a broader range of information to determine credit loss estimates and could result in a significant increase in the allowance for credit losses through the increased provision; result in negative adjustment to retained earnings and, correspondingly, BancPlus’ regulatory capital levels; and enhance volatility in loan loss provision and allowance levels from quarter to quarter and year to year. Management’s judgment and the data relied upon by management may be based on assumptions that prove to be inaccurate, particularly in times of market stress or other unforeseen circumstances. Even if the relevant factual assumptions are accurate, BancPlus’ decisions may prove to be inadequate or inaccurate because of other flaws in the design or use of analytical tools used by management. Any such failures in BancPlus’ processes for producing accounting estimates and managing risks could have a material adverse effect on its business, financial condition or results of operations.

The financial services industry is undergoing rapid technological change, and BancPlus may not have the resources to effectively implement new technology, or it may experience operational challenges when implementing new technology.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to reduce costs while increasing customer service and convenience. BancPlus’ future success will depend, at least in part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as create additional efficiencies in its operations as it continues to grow and expand its products and service offerings. BancPlus may experience operational challenges as it implements these new technology enhancements or products, which could result in BancPlus not fully realizing the anticipated benefits from such new technology or incurring significant costs to remedy any such challenges in a timely manner.

64
Table of Contents
Many of BancPlus’ larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products compared to those that BancPlus will be able to provide, which would put it at a competitive disadvantage. Accordingly, BancPlus may lose customers seeking new technology-driven products and services to the extent it is unable to provide such products and services.

BancPlus could be subject to losses, regulatory action or reputational harm due to fraudulent and negligent acts on the part of loan applicants, its employees and vendors.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, and the terms of any such transaction, BancPlus may rely on information furnished by or on behalf of clients and counterparties, including financial statements, property appraisals, title information, employment and income documentation, account information and other financial information. BancPlus may also rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Any such misrepresentation or incorrect or incomplete information, whether fraudulent or inadvertent, may not be detected prior to funding.

In addition, one or more of BancPlus’ employees or vendors could cause a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates BancPlus’ loan documentation, operations or systems. Employee errors and employee and client misconduct could subject BancPlus to financial losses or regulatory sanctions and seriously harm its reputation. Misconduct by its employees could include hiding unauthorized activities from BancPlus, improper or unauthorized activities on behalf of its clients or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions BancPlus takes to prevent and detect this activity may not be effective in all cases. Employee errors could also subject BancPlus to financial claims for negligence.

Whether a misrepresentation is made by the applicant or another third party, BancPlus generally bears the risk of loss associated with the misrepresentation. A loan subject to a material misrepresentation is typically unsellable or subject to repurchase if it is sold prior to detection of such misrepresentation. The sources of misrepresentations may also be difficult to locate, and BancPlus may be unable to recover any of the monetary losses it may suffer as a result of misrepresentations. Any of these developments could have an adverse effect on BancPlus’ business, financial condition or results of operations.

BancPlus engages in lending secured by real estate and may be forced to foreclose on In addition, the collateral and owndefinitive agreement restricts each party from taking certain actions without the underlying real estate, subjecting it toother party’s consent while the costs and potential risks associated with the ownership of the real property.

Since BancPlus originates loans secured by real estate, it may have to foreclose on the collateral property to protect its investment and may thereafter own and operate such property, in which case it would be exposed to the risks inherent in the ownership of real estate. As of March 31, 2020, BancPlus held $5.2 million in OREO, the bulk of which resulted from issues stemming from the most recent recession. The amount that BancPlus, as a mortgagee, may realize after a defaulttransaction is dependent upon factors outside of its control, including, but not limited to general or local economic conditions, environmental cleanup liability, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters. BancPlus’ inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO,pending. These restrictions could have a materialan adverse effecton its business, financial condition or results of operations.

A portion of BancPlus’ loan portfolio is comprised of commercial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could expose it to credit losses.

As of March 31, 2020, approximately $332.2 million, or 15.9%, of BancPlus’ total loans were commercial loans to businesses. In general, these loans are collateralized by general business assets, including, among other things, accounts receivable, inventory and equipment and most are backed by a personal guaranty of the borrower or principal. These commercial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial loans is subject to the ongoing business operations of the borrower and will continue to be affected by the automatic forbearance provisions of the CARES Act. The collateral securing such loans generally includes movable property, such as equipment and inventory, which may decline in value more rapidly than BancPlus anticipates, exposing it to increased credit risk. In addition, a portion of BancPlus’ customer base, including customers in the real estate business, may be exposed to volatile businesses or industries which are sensitive to commodity prices or market fluctuations. Accordingly, negative changes in commodity prices and real estate values and liquidity could impair the value of the collateral securing these loans. Significant adverse changes in the economy or local market conditions in which BancPlus’ commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets resulting in inadequate collateral coverage that may expose it to credit losses and could materially and adversely affect its business, financial condition or results of operations.

65
Table of Contents
BancPlus’ loan portfolio contains a number of large loans to certain borrowers, and a deterioration in the financial condition of these borrowers could have a significant adverse impact on its asset quality.

BancPlus’ growth over the past several years has been partially attributable to its ability to originate and retain relatively large loans given its asset size. As of March 31, 2020, BancPlus’ 20 largest borrowing relationships represented 13.1% of its total outstanding loan portfolio, including mortgage loans held for sale, and 13.7% of its total commitments to extend credit. Along with other risks inherent in BancPlus’ loans, such as the deterioration of the underlying businesses or property securing these loans, the larger size of these loans presents a risk to its lending operations. If any of its largest borrowers become unable to repay their loan obligations as a result of economic or market conditions or personal circumstances, or are otherwise granted forgiveness or automatic forbearance under the CARES Act or other temporary modifications as a result of the COVID-19 pandemic, BancPlus’ nonperforming loans and its provision for loan losses could increase significantly, which could have a material adverse effect on its business, financial condition or results of operations.

BancPlus’ allowance for loan losses may prove to be insufficient to absorb losses inherent in its loan portfolio, which could have an adverse effect on its business, financial condition and results of operations.

BancPlus’ experience in the banking industry indicates that some portion of its loans will not be fully repaid in a timely manner or at all. Accordingly, BancPlus maintains an allowance for loan losses that represents management’s judgment of probable losses and risks inherent in its loan portfolio. The level of the allowance reflects management’s continuing evaluation of general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. The determination of the appropriate level of the allowance for loan losses is inherently highly subjective and requires BancPlus to make significant estimates of and assumptions regarding current credit risks and future trends, all of which may undergo material changes. As of March 31, 2020, BancPlus’ allowance for loan losses was $21.2 million. Inaccurate management assumptions, continued deterioration of economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, temporary modifications, loan forgiveness, automatic forbearance and other factors, both within and outside of BancPlus’ control, may require it to increase its allowance for loan losses. In addition, federal and state banking regulators, as an integral part of their periodic examination, review the adequacy of BancPlus’ allowance for loan losses and may direct it to make additions to the allowance based on their judgments about information available to them at the time of their examination. Further, if actual charge-offs in future periods exceed the amounts allocated to the allowance for loan losses, BancPlus may need additional provision for loan losses to restore the adequacy of its allowance for loan losses. If BancPlus is required to materially increase its level of allowance for loan losses for any reason, such increases could have an adverse effect on its business, financial condition or results of operations.

In addition, in June 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that will replace the current approach under U.S. Generally Accepted Accounting Principles (“GAAP”) for establishing the allowance for loan losses, which generally considers only past events and current conditions. This new standard, referred to as Current Expected Credit Loss (“CECL”), requires financial institutions to project a loan’s lifetime losses at origination, as opposed to the current framework which allows adjustments to the provision for loan and lease losses when losses are assessed as probable in an existing loan. On November 15, 2019, FASB issued a new accounting standard, which delayed the effective date for certain companies. As a result, this standard will be effective for BancPlus for interim periods and fiscal years beginning after December 15, 2022. At this time, BancPlus does not know and cannot reasonably quantify the impact of the adoption of CECL from the current incurred loss method, although the new standard is expected to generally result in increases to allowance levels and will require the application of the revised methodology to existing financial assets through a one-time adjustment to retained earnings upon initial effectiveness. On May 14, 2018, the FDIC, Federal Reserve and Office of the Comptroller of the Currency issued a Notice of Proposed Rulemaking that would provide an optional CECL Transition Provision, which will allow a banking organization that experiences a reduction in retained earnings as of the CECL adoption date to elect to phase in the regulatory capital impact over a three-year period. A failure to effectively measure the effect of CECL may result in significant overstatement or understatement of BancPlus’ allowance for loan and lease losses, and in the event of an understatement, may necessitate that it significantly increase its allowance for loan and lease losses, which could adversely affect its net income.

Appraisals and other valuation techniques BancPlus uses in evaluating and monitoring loans secured by real property, OREO and repossessed personal property may not accurately describe the net value of the asset.

In considering whether to make a loan secured by real property, BancPlus generally requires an appraisal of the property. However, in BancPlus’ rural markets, the ability to secure an appraisal may be difficult due to a lack of appraisers or lack of comparable transactions. An appraisal or other evaluation is only an estimate of the value of the property at the time the appraisal or evaluation is made, and, as real estate values may change significantly in relatively short periods of time (especially in periods of heightened economic uncertainty), this estimate may not accurately describe the net value of the real property collateral after the loan is made. As a result, BancPlus may not be able to realize the full amount of any remaining indebtedness if it forecloses on and sells the relevant property. In addition, BancPlus relies on appraisals and other valuation techniques to establish the value of
66
Table of Contents
its OREO and personal property that it acquires through foreclosure proceedings and to determine certain loan impairments. If any of these valuations are inaccurate, BancPlus’ consolidated financial statements may not reflect the correct value of its OREO, and its allowance for loan losses may not reflect accurate loan impairments. This could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

The amount of nonperforming and classified assets may increase significantly, resulting in additional losses, costs and expenses.

At March 31, 2020, BancPlus had a total of approximately $19.5 million of nonperforming assets, or approximately 0.64% of total assets. In addition, total loans classified as “substandard,” “doubtful” or “loss” as of March 31, 2020 were approximately $47.3 million, or approximately 1.56% of total assets. An asset is generally considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Assets so classified must have one or more well-defined weaknesses that jeopardize the liquidation of the debt. “Substandard” assets include those characterized by the “distinct possibility” that BancPlus will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

Should the amount of nonperforming assets increase in the future, BancPlus may incur losses, and the costs and expenses to maintain such assets likewise can be expected to increase and potentially negatively affect earnings. An additional increase in losses due to such assets could have a material adverse effect on BancPlus’ business, financial condition or results of operations. Such effects may be particularly pronounced in a market of reduced real estate values and excess inventory.

Nonperforming assets can take significant time and resources to resolve.

Nonperforming assets adversely affect BancPlus’ net income in various ways. BancPlus generally does not record interest income on OREO or on nonperforming loans, thereby adversely affecting its income and increasing loan administration costs. In addition, when BancPlus takes collateral in foreclosures and similar proceedings, it is required to mark the related asset to the then fair value less estimated selling costs of the collateral, which may ultimately result in a loss. An increase in the level of nonperforming assets increases BancPlus’ risk profile and may also impact the capital levels regulators believe are appropriate in light of the ensuing risk profile. While BancPlus seeks to reduce problem assets through loan workouts, restructurings, and otherwise, decreases in the value of the underlying collateral, or in these borrowers’ performance or financial condition, whether or not due to economic and market conditions beyond its control, could have a material effect on its business, financial condition and results of operations. In addition, the resolution of nonperforming assets can require significant commitments of time from management, which may materially and adversely impact their ability to perform their other responsibilities. BancPlus may not experience future increases in the value of nonperforming assets.

BancPlus may be required to repurchase mortgage loans in some circumstances, which could diminish its liquidity.

Historically, BancPlus has originated its mortgage loans for sale in the secondary market. When mortgage loans are sold in the secondary market, BancPlus is required to make customary representations and warranties to the purchasers about the mortgage loans and the manner in which they were originated. The mortgage loan sale agreements require BancPlus to repurchase or substitute mortgage loans or indemnify buyers against losses, in the event it breaches these representations and warranties. In addition, BancPlus may be required to repurchase mortgage loans as a result of early payment default of the borrower on a mortgage loan. If repurchase and indemnity demands increase and such demands are valid claims, BancPlus’ liquidity could diminish, which could have an adverse effect on its business, financial condition or results of operations. BancPlus was not required to repurchase during 2019, 2018, 2017 or 2016 any material amount of mortgage loans sold into the secondary market.

BancPlus is subject to claims, litigation, and regulatory actions in the ordinary course of banking.

BancPlus may become involved in litigation matters in the ordinary course of business. Legal actions could include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages. Further, BancPlus may in the future be subject to consent orders or other enforcement actions by its regulators. BancPlus may also, from time to time, be the subject of subpoenas, requests for information, reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding its current and/or prior business activities. Any such legal or regulatory actions may subject BancPlus to substantial compensatory or punitive damages, significant fines, penalties, obligations to change its business practices or other requirements resulting in increased expenses, diminished income and damage to its reputation. BancPlus’ involvement in
67
Table of Contents
any such matters, whether tangential or otherwise and even if the matters are ultimately determined in its favor, could also cause significant harm to its reputation and divert management’s attention from the operation of its business. Further, any settlement, consent order or adverse judgment in connection with any formal or informal proceeding or investigation by government agencies may result in litigation, investigations or proceedings as other litigants and government agencies begin independent reviews of the same activities. As a result, the outcome of legal and regulatory actions could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

In addition, BancPlus is subject to litigation related to intellectual property. Banking and other financial services companies, such as BancPlus’, rely on technology companies to provide information technology products and services necessary to support their day-to-day operations. Technology companies frequently enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, patent holding companies seek to monetize patents they have purchased or otherwise obtained. Competitors of BancPlus’ vendors, or other individuals or companies, may from time to time claim to hold intellectual property sold to BancPlus by its vendors. Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors. The plaintiffs in these actions frequently seek injunctions and substantial damages.

Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, BancPlus may have to engage in protracted litigation. Such litigation is often expensive, time-consuming and disruptive to BancPlus’ operations and distracting to management. If BancPlus is found to infringe one or more patents or other intellectual property rights, BancPlus may be required to pay substantial damages or royalties to a third party. In certain cases, BancPlus may consider entering into licensing agreements for disputed intellectual property, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur. These licenses may also significantly increase BancPlus’ operating expenses. If legal matters related to intellectual property claims are resolved against BancPlus or settled, BancPlus could be required to make payments in amounts that could have a material adverse effect on its business, financial condition or results of operations.

BancPlus is subject to environmental liability risk associated with its lending activities.

In the course of its business, BancPlus may purchase real estate, or it may foreclose on and take title to real estate. As a result, BancPlus could be subject to environmental liabilities with respect to these properties. BancPlus may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or may be required to investigate or clean up hazardous or toxic substances or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if BancPlus is the owner or former owner of a contaminated site, it may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. Any significant environmental liabilities could cause a material adverse effect on BancPlus’ business, financial condition or results of operations.

The markets in which BancPlus operates are susceptible to tornadoes, flooding, natural disasters, public health crises and other catastrophic events, which could result in a disruption of BancPlus’ operations and increases in loan losses.

A significant portion of BancPlus’ business is generated from markets that have been, and may continue to be, susceptible to damage by major seasonal flooding, tornadoes, hurricanes and other natural disasters and adverse weather. Natural disasters can disrupt BancPlus’ operations, cause widespread property damage, and severely depress the local economies in which it operates. Additionally, acts of war or terrorism and other adverse external events could have a significant impact on BancPlus’ business, financial condition or operations. If the economies in BancPlus’ primary markets experience an overall decline as a result of a natural disaster, adverse weather, a public health crisis or other catastrophic event, demand for loans and BancPlus’ other products and services could be reduced. In addition, the rates of delinquencies, foreclosures, bankruptcies and loan losses may increase substantially, as uninsured property losses or sustained job interruption or loss may materially impair the ability of borrowers to repay their loans. Moreover, the value of real estate or other collateral that secures the loans could be materially and adversely affected by a disaster. A natural or man-made disaster could, therefore, result in decreased revenue and loan losses that could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

The small to medium-sized businesses to which BancPlus lends may be more vulnerable to adverse business developments, which may impair BancPlus’ borrowers’ ability to repay loans.

BancPlus focuses its business development and marketing strategy primarily on small to medium-sized businesses. Small to medium-sized businesses frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower’s ability to repay a loan. This may be especially true given the effects of the
68
Table of Contents
COVID-19 pandemic. In addition, the success of a small or medium-sized business often depends on the management skills, talents and efforts of one or two people or a small group of people, and the death, disability or resignation of one or more of these people could have an adverse impact on the business and its ability to repay its loan. If general economic conditions negatively impact the markets in which BancPlus operates and small to medium-sized businesses are adversely affected, or BancPlus’ borrowers are otherwise harmed by adverse business developments, this, in turn, could have a material adverse effect on its business, financial condition or results of operations.

The borrowing needs of BancPlus’ customers may increase, especially during a challenging economic environment, which could result in increased borrowing against BancPlus’ contractual obligations to extend credit.

A commitment to extend credit is a formal agreement to lend funds to a customer as long as there is no violation of any condition established under the agreement. The actual borrowing needs of BancPlus’ customers under these credit commitments have historically been lower than the contractual amount of the commitments. Because of the credit profile of its customers, BancPlus typically has a substantial amount of total unfunded credit commitments, which is not reflected on its balance sheet. As of March 31, 2020, BancPlus had $519.0 million in unfunded credit commitments to its customers. Actual borrowing needs of BancPlus’ customers may exceed BancPlus’ expectations, especially during a challenging economic environment when customers’ companies may be more dependent on BancPlus’ credit commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financing from other sources. The COVID-19 pandemic and the resulting stresses on the economy has substantially increased, and continue to increase, the borrowing needs of customers. This could adversely affect BancPlus’ liquidity, which could impair its ability to fund operations and meet obligations as they become due. Any failure to meet BancPlus’ unfunded credit commitments in accordance with the actual borrowing needs of its clients could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

Interest rate shifts could reduce net interest income.

The majority of BancPlus’ banking assets are monetary in nature and subject to risk from changes in interest rates. Like most financial institutions, BancPlus’ earnings depend to a great extent upon the level of its net interest income, or the difference between the interest income it earns on loans, investments and other interest earning assets, and the interest it pays on interest-bearing liabilities, such as deposits and borrowings. Changes in interest rates can increase or decrease BancPlus’ net interest income depending on the make-up of its assets and liabilities. When interest-bearing liabilities mature or reprice more quickly, or to a greater degree than interest earning assets in a period, an increase in interest rates could reduce net interest income. Similarly, when interest earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. As of March 31, 2020, 33.6% of BancPlus’ interest earning assets and 12.6% of its interest-bearing liabilities were variable rate. These percentages of variable rate balances, as well as the terms of BancPlus’ fixed rate interest-bearing balances resulted in a slightly asset sensitive balance sheet as March 31, 2020. Assuming a stable product mix, no change in customer behavior, no change in yield curve and stability of related items, BancPlus’ net interest income would increase with rising interest rates and decrease with falling interest rates.

Additionally, an increase in interest rates may, among other things, reduce the demand for loans, decrease loan repayment rates, and increase early withdrawals on term deposits. A decrease in the general level of interest rates, including the Federal Reserve Board’s sharp reduction in interest rates in response to the economic and financial effects of COVID-19, may affect BancPlus through, among other things, increased prepayments on its loan portfolio and its cost of funds may not fall as quickly as yields on earning assets. BancPlus’ asset-liability management strategy may not be effective in mitigating exposure to the risks related to changes in market interest rates.

A lack of liquidity could impair BancPlus’ ability to fund operations.

Liquidity is essential to BancPlus’ business, and BancPlus monitors its liquidity and manages its liquidity risk at the BancPlus and BankPlus levels. BancPlus relies on its ability to generate deposits and effectively manage the repayment and maturity schedules of its loans and investment securities, respectively, to ensure that it has adequate liquidity to fund its operations. An inability to raise funds through deposits, borrowings, the sale of BancPlus’ investment securities, the sale of loans, and other sources could have a substantial negative effect on BancPlus’ liquidity. BancPlus’ most important source of funds is deposits, and its future growth will largely depend on its ability to retain and grow its deposit base. Deposits are subject to potentially dramatic fluctuations in availability or price due to certain factors outside of BancPlus’ control, such as increasing competitive pressures for deposits, including when customers perceive alternative investments as providing a better risk/return tradeoff, changes in interest rates and returns on other investment classes, customer perceptions of BancPlus’ financial health and general reputation, or a loss of confidence by customers in BancPlus’ or the banking sector generally, which could result in significant outflows of deposits within short periods of time or significant changes in pricing necessary to maintain current customer deposits or attract additional deposits. If customers move money out of bank deposits and into other investments such as money market funds,
69
Table of Contents
BancPlus would lose a relatively low-cost source of funds, increasing its funding costs and reducing its net interest income and net income.

Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities. BancPlus has the ability to borrow from Federal Home Loan Bank of Dallas and the Federal Reserve Bank of St. Louis, which provides it access to a secondary source of funds. BancPlus may also borrow funds from third-party lenders, such as other financial institutions, and has access to other funding avenues, including the Paycheck Protection Program Liquidity Facility. An additional source of funds is the proceeds from the issuance and sale of BancPlus’ equity and debt securities to investors. BancPlus’ access to funding sources in amounts adequate to finance or capitalize its activities, or on terms that are acceptable to it, could be impaired by factors that affect BancPlus directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, including negative impacts on the economy and markets caused by the COVID-19 pandemic. BancPlus’ access to funding sources could also be affected by a decrease in the level of its business activity as a result of a downturn in its primary market area or by one or more adverse regulatory actions against it.

Any decline in available funding could adversely impact BancPlus’ ability to originate loans, invest in securities, meet its expenses, or to fulfill obligations such as repaying its borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity and could, in turn, have an adverse effect on its business, financial condition or results of operations. In addition, because BancPlus’ primary asset at the holding company level is BankPlus, BancPlus’ liquidity at the holding company level depends primarily on its receipt of dividends from BankPlus. If BankPlus is unable to pay dividends to BancPlus for any reason, BancPlus may be unable to satisfy its holding company level obligations, which include funding operating expenses, debt service and dividends.

The fair value of BancPlus’ investment securities can fluctuate due to factors outside of its control.

As of March 31, 2020, the fair value of BancPlus’ portfolio of available for sale investment securities was approximately $274.3 million, which included a net unrealized gain of approximately $6.5 million. Factors beyond BancPlus’ control can cause potential adverse changes to the fair value of these securities. These factors include, but are not limited to, rating agency actions, defaults by the issuer, changes in market interest rates and instability in the capital markets. Many factors could cause other-than-temporary impairments and realized or unrealized losses in future periods. The process for determining whether impairment of a security is other-than-temporary often requires complex, subjective judgments about whether there has been a significant deterioration in the financial condition of the issuer, whether management has the intent or ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value, the future financial performance and liquidity of the issuer and any collateral underlying the security, and other relevant factors.

BancPlus’ current asset mix and its current investments may not be indicative of its future asset mix and investments, which may make it difficult to predict its future financial and operating performance.

Certain factors make it difficult to predict BancPlus’ future financial and operating performance including, among others: (i) BancPlus’ current asset mix may not be representative of its anticipated future asset mix and may change as BancPlus continues to execute on its plans for organic loan origination and banking activities and potentially grow through future acquisitions; (ii) BancPlus’ significant liquid securities portfolio may not necessarily be representative of its future liquid securities position; and (iii) BancPlus’ cost structure and capital expenditure requirements during the periods for which financial information is available may not be reflective of its anticipated cost structure and capital spending as BancPlus continues to realize efficiencies in its business, integrates future acquisitions and continues to grow its organic banking platform.

If BancPlus fails to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, it may not be able to accurately report its financial results or prevent fraud.

BancPlus is subject to the reporting requirements of Section 15(d) of the Exchange Act and to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) . The Sarbanes-Oxley Act requires, among other things, that BancPlus maintain effective disclosure controls and procedures, and internal control over financial reporting. BancPlus expects that the requirements of the Exchange Act, the Sarbanes-Oxley Act and associated rules and regulations will continue to increase its legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on its personnel, systems and resources.

BancPlus’ current controls and any new controls that it develops may become inadequate because of changes in conditions in its business. Further, weaknesses in BancPlus’ disclosure controls or its internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in the implementation or improvement of such controls, could harm BancPlus’ results of operations or cause it to fail to meet its reporting obligations and
70
Table of Contents
may result in a restatement of BancPlus’ financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of BancPlus’ internal control over financial reporting that it will eventually be required to include in its periodic reports that will be filed with the U.S. Securities and Exchange Commission (“SEC”).

BancPlus’ independent registered public accounting firm is not required to formally attest to the effectiveness of BancPlus’ internal control over financial reporting until after BancPlus is no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), but no later than December 31, 2025. At such time, BancPlus’ independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which BancPlus’ internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on BancPlus’ business and results of operations and could cause a decline in the price of its common stock.

Material weaknesses in BancPlus’ financial reporting or internal controls could result in a material misstatement in BancPlus’ financial statements and could materially and adversely affect its business.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of BancPlus’ annual or interim financial statements will not be prevented or detected on a timely basis. As a consequence, BancPlus would have to disclose in periodic reports it files with the SEC any material weakness in its internal control over financial reporting. The existence of a material weakness would preclude management from concluding that BancPlus’ internal control over financial reporting is effective and would preclude its independent auditors from expressing an unqualified opinion on the effectiveness of its internal control over financial reporting. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud.

BancPlus cannot be certain that, at some point in the future, material weaknesses will not be identified or its internal control systems will not fail to detect a matter they are designed to prevent, and failure to remedy such material weaknesses could result in a material misstatement in BancPlus’ financial statements and have a material adverse impact on its business, financial condition or results of operations. The identification of any additional material weakness could also result in investors losing confidence in BancPlus’ internal control systems and questioning its reported financial information, which, among other things, could have a negative impact on the price of BancPlus common stock. Additionally, BancPlus could become subject to increased regulatory scrutiny and a higher risk of shareholder litigation, which could result in significant additional expenses and require additional financial and management resources.

Reforms to and uncertainty regarding London Inter-Bank Offered Rate (“LIBOR”) may adversely affect our business.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it will no longer compel banks to submit rates for the calculation of LIBOR by the end of 2021. This indicates that LIBOR will be discontinued on December 31, 2021. In June 2017, the U.S. Federal Reserve Bank’s Alternative Reference Rates Committee (“ARRC”) selected the Secured Overnight Financing Rate (“SOFR”) as the preferred alternative rate to LIBOR. SOFR differs from LIBOR in two respects: SOFR is a single overnight rate, while LIBOR includes rates of several tenors, and SOFR is deemed a credit risk-free rate while LIBOR incorporates an evaluation of credit risk. The ARRC and other entities intend for the transition to be economically neutral. The Federal Reserve Bank of New York has proposed a methodology for generating SOFRs of three different tenors and plans to publish an index on a daily basis beginning in the first half of 2020. The ARRC has developed a methodology for adjusting SOFR to reflect the risk considerations that underlie LIBOR. On July 12, 2019, the SEC issued a statement on LIBOR transition, indicating the significant impact that the discontinuation of LIBOR could have on financial markets and market participants. BancPlus has been closely monitoring the impact of COVID-19 and any potential delay in the cessation of LIBOR. Although the FCA has expressed that it is assessing the potential impacts of COVID-19 on transition timelines, the target date currently remains unchanged. The transition, if not sufficiently planned for and managed by BancPlus, could adversely affect BancPlus’ financial condition and results of operation by, among other things, resulting in BancPlus incurring significant expenses in effecting the transition and subjecting BancPlus to disputes or additional scrutiny in connection with its use of substitute indices.

If BancPlus chooses to engage in derivative transactions, it will be exposed to additional credit and market risk.

BancPlus may choose to use interest rate swaps to help manage its interest rate risk from recorded financial assets and liabilities when they can be demonstrated to effectively hedge a designated asset or liability and the asset or liability exposes it to interest rate risk or risks inherent in customer related derivatives. BancPlus may choose to use other derivative financial instruments to help manage other economic risks, such as liquidity and credit risk, including exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. BancPlus’ derivative financial instruments are used to manage differences in the amount, timing, and duration of its known or
71
Table of Contents
expected cash receipts principally related to its fixed rate loan assets. Hedging interest rate risk is a complex process, requiring sophisticated models and routine monitoring, and is not a perfect science. As a result of interest rate fluctuations, hedged assets and liabilities will appreciate or depreciate in market value. The effect of this unrealized appreciation or depreciation will generally be offset by income or loss on the derivative instruments that are linked to the hedged assets and liabilities. By engaging in derivative transactions, BancPlus would be exposed to credit and market risk. If the counterparty fails to perform, credit risk exists to the extent of the fair value gain in the derivative. Market risk exists to the extent that interest rates change in ways that are significantly different from what BancPlus expected when it entered into the derivative transaction. The existence of credit and market risk associated with BancPlus’ derivative instruments could adversely affect its net interest income and, therefore, could have a material adverse effect on its business, financial condition or results of operations.

Risks Related to the Regulation of BancPlus’ Industry

The ongoing implementation of the Dodd-Frank Act and the 2018 Act could require significant management attention and resources and subject BancPlus to more stringent regulatory requirements.

On July 21, 2010, the Dodd-Frank Act was signed into law, and the process of implementation is ongoing. The Dodd-Frank Act imposes significant regulatory and compliance changes on many industries, including BancPlus’. Even today, the changes resulting from the Dodd-Frank Act may impact the profitability of BancPlus’ business activities, require changes to certain of its business practices, require the development of new compliance infrastructure, impose upon BancPlus more stringent capital, liquidity and leverage requirements or otherwise adversely affect BancPlus’ business. These changes may also require BancPlus to invest significant management attention and resources to evaluate and make any changes necessary to comply with new statutory and regulatory requirements. Failure to comply with the new requirements or with any future changes in laws or regulations could adversely affect BancPlus’ business, financial condition or results of operations.

The 2018 Act mandates a roll-back of many of the requirements of the Dodd-Frank Act in a number of areas, some of which were implemented upon effectiveness of the 2018 Act on May 24, 2018. Among these changes are changes to mortgage rules, the creation of the CBLR and simplification of financial reports. Whether these implementations may result in cost savings or otherwise have a positive effect on BancPlus’ business, financial condition or results of operations is unknown.

BancPlus is subject to stringent capital requirements, which may result in lower returns on equity, require BancPlus to raise additional capital, limit growth opportunities or result in regulatory restrictions.

Beginning January 1, 2015, BancPlus became subject to new rules issued by the federal bank regulatory agencies (the Federal Reserve and the FDIC), commonly known as Basel III rules. The Basel III rules established a new regulatory capital standard based on common equity Tier 1, increased the minimum Tier 1 risk-based capital ratio and, as fully phased in on January 1, 2019, imposed a capital conservation buffer of at least 2.5% of common equity Tier 1 capital above the new minimum regulatory capital ratios. The U.S. version of the Basel III rules generally require BancPlus to maintain greater amounts of regulatory capital than it was required to maintain prior to implementation of such rules and may also limit or restrict how BancPlus utilizes its capital.
The 2018 Act provides for a community bank leverage ratio for banks with less than $10.0 billion that is an alternative to the Basel III rules. The federal banking agencies have by rule set the CBLR at 9.0% although in response to the COVID-19 pandemic, they have lowered it to 8.0% for the remainder of 2020 and 8.5% for calendar year 2021. A qualifying community banking organization that maintains the CBLR is exempt from risk-based capital requirements. Should BankPlus fail to maintain capital in excess of the CBLR, it will become subject to the Basel III rules.

If BankPlus does not meet minimum capital requirements, it will be subject to prompt corrective action by the FDIC. Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions. While BancPlus is not subject to formal capital planning requirements at its size, it has provided a capital plan to its regulators. Even if BancPlus satisfies the objectives of its capital plan and meets minimum capital requirements, it is possible that BancPlus’ regulators may ask it to raise additional capital.

BancPlus is subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential or proprietary information of individuals could damage BancPlus’ reputation and subject it to regulatory action or penalties.

BancPlus’ business requires the collection and retention of large volumes of customer data, including personally identifiable information in various information systems that it maintains and in those maintained by third parties with whom BancPlus contracts to provide data services. BancPlus also maintains important internal company data such as personally identifiable information about its employees and information relating to its operations. BancPlus is subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals (including customers, employees, suppliers and other third parties). For example, BancPlus’ business is subject to the Gramm-Leach-Bliley Act which, among other
72
Table of Contents
things imposes certain limitations on its ability to share nonpublic personal information about its customers with nonaffiliated third parties; requires that BancPlus provide certain disclosures to customers about its information collection, sharing and security practices; and afford customers the right to “opt out” of any information sharing by BancPlus with nonaffiliated third parties (with certain exceptions); and requires that BancPlus develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on its size and complexity, the nature and scope of its activities, and the sensitivity of customer information BancPlus processes, as well as plans for responding to data security breaches.

Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach. Ensuring that BancPlus’ collection, use, transfer and storage of personal information complies with all applicable laws and regulations can increase its costs. Furthermore, BancPlus may not be able to ensure that all of its clients, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with BancPlus, particularly where such information is transmitted by electronic means. If personal, confidential or proprietary information of customers or others were to be mishandled or misused (in situations where, for example, such information was erroneously provided to parties who are not permitted to have the information, or where such information was intercepted or otherwise compromised by third parties), BancPlus could be exposed to litigation or regulatory sanctions under personal information laws and regulations. Concerns regarding the effectiveness of BancPlus’ measures to safeguard personal information, or even the perception that such measures are inadequate, could cause BancPlus to lose customers or potential customers for its products and services and thereby reduce its revenues. Accordingly, any failure or perceived failure to comply with applicable privacy or data protection laws and regulations may subject BancPlus to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices or in significant liabilities, fines or penalties, and could damage its reputation and otherwise materially and adversely affect its operations or financial condition.

BancPlus’ use of third party vendors and its other ongoing third party business relationships are subject to increasing regulatory requirements and attention.

BancPlus regularly uses third party vendors in its business, and it relies on some of these vendors for critical functions including, but not limited to, its core processing function and mortgage broker relationships. Third party relationships are subject to increasingly demanding regulatory requirements and attention by bank regulators. BancPlus expects its regulators to hold BancPlus responsible for deficiencies in its oversight or control of its third party vendor relationships and in the performance of the parties with which it has these relationships. As a result, if BancPlus’ regulators conclude that it has not exercised adequate oversight and control over its third party vendors or that such vendors have not performed adequately, BancPlus could be subject to administrative penalties or fines as well as requirements for consumer remediation, any of which could have a material adverse effect on its business, financial condition or results of operations.

BancPlus’ industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a materially adverse effect on its business, financial condition, and results of operations.

BancPlus operates in a highly regulated environment, and the laws and regulations that govern its operations, corporate governance, executive compensation and accounting principles, or changes in them, or its failure to comply with them, could subject it to regulatory action or penalties.

BancPlus is subject to extensive regulation, supervision and legal requirements that govern almost all aspects of its operations. These laws and regulations are not intended to protect BancPlus’ shareholders. Rather, these laws and regulations are intended to protect customers, depositors, the Deposit Insurance Fund and the overall financial stability of the U.S., and not shareholders or counterparties. These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which BancPlus can engage, limit the dividends or distributions that BankPlus can pay to BancPlus, and that BancPlus can pay to its shareholders, and impose certain specific accounting requirements on BancPlus that may be more restrictive and may result in greater or earlier charges to earnings or reductions in BancPlus’ capital than GAAP would require. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. BancPlus’ failure to comply with these laws and regulations, even if the failure follows good faith effort or reflects a difference in interpretation, could subject BancPlus to restrictions on its business activities, fines and other penalties, any of which could adversely affect its results of operations, capital base and the price of its securities. Further, any new laws, rules and regulations could make compliance more difficult or expensive. All of these laws and regulations, and the supervisory framework applicable to BancPlus’ industry, could have a material adverse effect on its business, financial condition or results of operations.

Federal and state banking agencies periodically conduct examinations of BancPlus’ business, including compliance with laws and regulations, and its failure to comply with any supervisory actions to which it is or becomes subject to as a result of such examinations could result in regulatory action or penalties.
73
Table of Contents

The Federal Reserve, the FDIC, and the Mississippi Department of Banking & Consumer Finance periodically conduct examinations of BancPlus’ business, including its compliance with laws and regulations. If, as a result of an examination, a federal or state banking agency were to determine that BancPlus’ financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of its operations had become unsatisfactory, or that BancPlus and/or BankPlus was/were in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in BancPlus’ capital, to restrict its growth, to assess civil monetary penalties against it or BankPlus or BancPlus’ respective officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate BankPlus’ deposit insurance and place it into receivership or conservatorship. Any such regulatory action could have a material adverse effect on BancPlus’ business, results of operations, financial condition or prospects.

New activities and expansion require regulatory approvals, and failure to obtain them may restrict BancPlus’ growth.

From time to time, BancPlus may complement and expand its business by pursuing strategic acquisitions of financial institutions and other complementary businesses. Generally, BancPlus must receive state and federal regulatory approval before it can acquire an FDIC-insured depository institution or related business. In determining whether to approve a proposed acquisition, federal banking regulators will consider, among other factors, the effect of the acquisition on competition, BancPlus’ financial condition, its future prospects, and the impact of the proposal on U.S. financial stability. The regulators also review current and projected capital ratios and levels, the competence, experience and integrity of management and its record of compliance with laws and regulations, the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the Community Reinvestment Act of 1977 (“CRA”), and the effectiveness of the acquiring institution in combating money laundering activities. Such regulatory approvals may not be granted on terms that are acceptable to BancPlus, or at all. BancPlus may also be required to sell branches as a condition to receiving regulatory approval, which condition may not be acceptable to BancPlus or, if acceptable to BancPlus, may reduce the benefit of any acquisition.

In addition to the acquisition of existing financial institutions, as opportunities arise, BancPlus plans to continue de novo branching as a part of its organic growth strategy. De novo branching and any acquisitions carry with them numerous risks, including the inability to obtain all required regulatory approvals, or the imposition of certain conditions or restrictions as a part of such approvals. The failure to obtain these regulatory approvals for potential future strategic acquisitions and de novo branches could impact BancPlus’ business plans and restrict its growth.

BancPlus faces a risk of noncompliance and enforcement action with the Bank Secrecy Act, other anti-money laundering statutes and regulations and sanctions regulations.

The Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual federal banking regulators, state agencies and law enforcement officials, the U.S. Department of Justice, Drug Enforcement Administration, Office of Foreign Assets Control (“OFAC”), and the Internal Revenue Service (“IRS”). BancPlus is also subject to increased scrutiny of compliance with the rules enforced by OFAC. To comply with regulations, guidelines and examination procedures in these areas, BancPlus has dedicated significant resources to its anti-money laundering program and OFAC compliance. If BancPlus’ policies, procedures and systems are deemed deficient, BancPlus could be subject to liability, including fines and regulatory actions, which may include restrictions on its ability to pay dividends and inability to obtain regulatory approvals to proceed with certain aspects of its business plan, including acquisitions and de novo branching. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for BancPlus.

BancPlus is subject to numerous laws designed to protect consumers, including fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution’s performance under fair lending laws and regulations could result in a wide variety of direct or indirect negative consequences, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in
74
Table of Contents
private class action litigation. Such actions could have a material adverse effect on BancPlus’ business, financial condition, results of operations or prospects.

In addition, financial institutions face scrutiny on actions and policies that are deemed to adversely impact consumers under Section 5 of the Federal Trade Commission Act for unfair, deceptive or abusive acts and practices. The Consumer Financial Protection Bureau (“CFPB”) and bank regulators are responsible for enforcing Section 5. Section 5 has been applied to perceived customer abuse in connection with account openings and fees charged where inadequate or no services are rendered for which charges were imposed, as well as other instances where consumers may have been misled through bank disclosures.

Failure by BankPlus to perform satisfactorily on its CRA evaluations could make it more difficult for BancPlus’ business to grow.

The performance of a bank under the CRA in meeting the credit needs of its community is a factor that must be taken into consideration when the federal banking agencies evaluate applications related to mergers and acquisitions, as well as branch opening and relocations. If BankPlus is unable to maintain at least a “satisfactory” CRA rating, its ability to complete the acquisition of another financial institution or open a new branch will be adversely impacted. If BankPlus received an overall CRA rating of less than “satisfactory,” the FDIC would not re-evaluate its rating until its next CRA examination, which may not occur for several more years, and it is possible that a low CRA rating would not improve in the future. BankPlus received an Outstanding Rating in its most recent CRA performance evaluation, as of January 8, 2018.

Federal, state and local consumer lending laws may restrict BancPlus’ ability to originate certain mortgage loans, increase BancPlus’ risk of liability with respect to such loans, or increase the time and expense associated with the foreclosure process or prevent BancPlus from foreclosing at all.

Federal, state and local laws have been adopted that are intended to eliminate certain lending practices considered “predatory.” These laws prohibit practices such as steering borrowers away from more affordable products, selling unnecessary insurance to borrowers, repeatedly refinancing loans and making loans without a reasonable expectation that the borrowers will be able to repay the loans irrespective of the value of the underlying property. It is BancPlus’ policy not to make predatory loans, but these laws create the potential for liability with respect to BancPlus’ lending and loan investment activities. They increase BancPlus’ cost of doing business and, ultimately, may prevent BancPlus from making certain loans and cause BancPlus to reduce the average percentage rate or the points and fees on loans that BancPlus does make.

Additionally, consumer protection initiatives or changes in state or federal law, including the CARES Act and its automatic loan forbearance provisions, may substantially increase the time and expenses associated with the foreclosure process or prevent BancPlus from foreclosing at all. While historically the states in which BancPlus operates have had foreclosure laws that are favorable to lenders, a number of states in recent years have either considered or adopted foreclosure reform laws that make it substantially more difficult and expensive for lenders to foreclose on properties in default, and BancPlus cannot be certain that the states in which it operates will not adopt similar legislation in the future. Additionally, federal regulators have prosecuted a number of mortgage servicing companies for alleged consumer law violations. If additional new state or federal laws or regulations are ultimately enacted that significantly raise the cost of foreclosure or raise outright barriers, such laws or regulations could have a material adverse effect on BancPlus’ business, financial condition or results of operation.

An expansion of federal, state and local regulations and/or the licensing of loan servicing, collections or other aspects of BancPlus’ business and sales of loans to third parties may increase the cost of compliance and the risks of noncompliance and subject BancPlus to litigation.

BancPlus services consumer loans it holds on its balance sheet. The servicing of consumer loans is subject to extensive regulation by federal, state and local governmental authorities as well as to various laws and judicial and administrative decisions imposing requirements and restrictions on those activities. The volume of new or modified laws and regulations has increased in recent years and, in addition, some individual municipalities have begun to enact laws that restrict loan servicing activities including delaying or temporarily preventing foreclosures or forcing the modification of certain mortgages. The CARES Act permits borrowers of certain mortgage loans to direct lenders to forbear from collections of principal and interest for up to 12 months. If regulators impose new or more restrictive requirements, BancPlus may incur additional significant costs to comply with such requirements, which may further adversely affect BancPlus. In addition, were BancPlus to be subject to regulatory investigation or regulatory action regarding BancPlus’ loan modification and foreclosure practices, it could have a material adverse effect on BancPlus’ business, financial condition or results of operation.

In addition, BancPlus has sold loans to third parties. In connection with these sales, BancPlus or certain of its subsidiaries or legacy companies make or have made various representations and warranties, breaches of which may result in a requirement that BancPlus repurchase the loans, or otherwise make whole or provide other remedies to counterparties. These aspects of BancPlus’
75
Table of Contents
business or its failure to comply with applicable laws and regulations could possibly lead to: civil and criminal liability; loss of licensure; damage to BancPlus’ reputation in the industry; fines and penalties and litigation, including class action lawsuits; and administrative enforcement actions. Any of these outcomes could materially and adversely affect BancPlus.

Potential limitations on incentive compensation contained in proposed federal agency rulemaking may adversely affect BancPlus’ ability to attract and retain its highest performing employees.

In April 2011 and May 2016, the federal prudential bank regulators and other federal financial agencies jointly published proposed rules designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at covered financial institutions, which includes a bank or bank holding company with $1.0 billion or more in assets, such as BancPlus and BankPlus. It cannot be determined at this time whether or when final rules will be adopted and whether compliance with any such rules will substantially affect the manner in which BancPlus structures compensation for its executives and other employees. Depending on the nature and application of the final rules, BancPlus may not be able to successfully compete with certain financial institutions and other companies that are not subject to some or all of the rules to retain and attract executives and other high performing employees. If this were to occur, relationships that BancPlus has established with its customers may be impaired, which could in turn materially and adversely impact BancPlus’ business, financial condition or results of operations.

Increases in FDIC insurance premiums could adversely affect BancPlus’ earnings and results of operations.

The deposits of BankPlus are insured by the FDIC up to legal limits and, accordingly, subject it to the payment of FDIC deposit insurance assessments. BankPlus’ regular assessments are determined by the level of its assessment base and its risk classification, which is based on its regulatory capital levels, other financial measurements and the level of supervisory concern that it poses. Moreover, the FDIC has the unilateral power to change deposit insurance assessment rates and the manner in which deposit insurance is calculated and also to charge special assessments to FDIC-insured institutions. The FDIC utilized all of these powers during the financial crisis for the purpose of restoring the reserve ratios of the Deposit Insurance Fund. Any future special assessments, increases in assessment rates or premiums, or required prepayments in FDIC insurance premiums could reduce BancPlus’ profitability or limit its ability to pursue certain business opportunities, which could materially and adversely affect BancPlus’ business, financial condition or results of operations.

The Federal Reserve may require BancPlus to commit capital resources to support BankPlus.

Under longstanding Federal Reserve policy, which was codified by the Dodd-Frank Act, BancPlus is expected to act as a source of financial and managerial strength to BankPlus and to commit resources to support BankPlus. Under this “source of strength” doctrine, the Federal Reserve may require BancPlus to make capital injections into BankPlus at times when BancPlus may not be inclined to do so and may charge BancPlus with engaging in unsafe and unsound practices for failure to commit such resources. Accordingly, BancPlus could be required to provide financial assistance to BankPlus if it experiences financial distress.

Such a capital injection may be required at a time when BancPlus’ resources are limited and BancPlus may be required to borrow the funds or to raise additional equity capital to make the required capital injection. In the event of BancPlus’ bankruptcy, the bankruptcy trustee will assume any commitment by BancPlus to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of BancPlus’ general unsecured creditors, including the holders of any note obligations.

Monetary policies and regulations of the Federal Reserve could adversely affect BancPlus’ business, financial condition and results of operations.

In addition to being affected by general economic conditions, BancPlus’ earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market operations in U.S. government securities, adjustments of the discount rate and changes in reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits. The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effects of such policies upon BancPlus’ business, financial condition or results of operations cannot be predicted.

BancPlus is subject to commercial real estate lending guidance issued by the federal banking regulators that impacts BancPlus’ operations and capital requirements.

76
Table of Contents
The federal banking regulators have issued guidance regarding concentrations in commercial real estate lending directed at institutions that have particularly high concentrations of commercial real estate loans within their lending portfolios. This guidance suggests that institutions whose commercial real estate loans exceed certain percentages of capital may have commercial real estate concentration risk and will be subject to further regulatory scrutiny with respect to their risk management practices for commercial real estate lending. Based on BancPlus’ commercial real estate concentration as of March 31, 2020, BancPlus believes that it is in compliance with the guidelines. However, increases in BancPlus’ commercial real estate lending, particularly as BancPlus expands into metropolitan markets and makes more of these loans, could subject BancPlus to additional supervisory analysis. BancPlus cannot guarantee that any risk management practices it implements will be effective to prevent losses relating to its commercial real estate portfolio. Management has implemented controls to monitor BancPlus’ commercial real estate lending concentrations, but BancPlus cannot predict the extent to which this guidance will impact its operations or capital requirements.

Rulemaking changes implemented by the CFPB could result in higher regulatory and compliance costs that may adversely affect BancPlus’ business.

The Dodd-Frank Act established the CFPB, which has the authority to implement, examine and enforce compliance with federal consumer financial protection laws that apply to banking institutions and certain other companies. Because BankPlus has assets of less than $10.0 billion, its primary federal regulator, the FDIC, continues to examine and enforce BankPlus’ compliance with consumer financial protection laws. Rulemaking and policymaking, however, remain with the CFPB. The approach of the CFPB to interpretation and enforcement of the consumer financial protection laws has varied considerably over the years, and it is difficult to predict what actions the CFPB may take in the future. Such actions could result in changes to pricing, practices, products and procedures. It could also result in increased costs related to regulatory oversight, supervision and examination. These changes could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

BancPlus may be adversely affected by the soundness of other financial institutions.

BancPlus’ ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty and other relationships. BancPlus has exposure to different industries and counterparties, and through transactions with counterparties in the financial services industry, including broker-dealers, commercial banks, investment banks and other financial intermediaries. In addition, BancPlus participates in loans originated by other institutions and syndicated transactions (including shared national credits) in which other lenders serve as the lead bank. As a result, defaults by, declines in the financial condition of, or even rumors or questions about, one or more financial institutions, financial service companies or the financial services industry generally, may lead to difficulties related to liquidity, asset quality or other problems and could lead to losses or defaults by BancPlus or by other institutions. These problems, losses or defaults could have a material adverse effect on BancPlus’ business, financial condition or results of operations.

The rights of BancPlus’ common shareholders are generally subordinate to the rights of the holders of any debt instruments that BancPlus may issue and may be subordinate to the holders of any other series of preferred stock that BancPlus may issue in the future.

As of March 31, 2020, BancPlus had an aggregate of $57.0 million indebtedness outstanding in the form of a senior loan and trust preferred securities. BancPlus’ existing indebtedness is, and any future indebtedness that BancPlus may incur will be, senior to BancPlus common stock. BancPlus must make payments on its indebtedness before any dividends can be paid on BancPlus common stock, and, in the event of its bankruptcy, dissolution or liquidation, the holders of any indebtedness must be satisfied in full before any distributions can be made to the holders of its common stock.

The Articles of Incorporation of BancPlus (the “BancPlus Articles”) authorize the board of directors of BancPlus (the “Board”) to issue in the aggregate up to ten million shares of its preferred stock, and to determine the terms of each issue of preferred stock and any indebtedness without shareholder approval. Accordingly, you should assume that any shares of preferred stock and any indebtedness that BancPlus may issue in the future will also be senior to its common stock. As a result, holders of BancPlus common stock bear the risk that BancPlus’ future issuances of debt or equity securities or BancPlus’ incurrence of other borrowings may negatively affect the price of BancPlus common stock.

BancPlus’ dividend policy may change without notice, and its future ability to pay dividends is subject to restrictions.

Holders of BancPlus common stock are entitled to receive only such cash dividends as the Board may declare out of funds legally available for the payment of dividends. However, the amount and frequency of cash dividends, if any, will be determined by the Board after consideration of a number of factors, including, but not limited to: (1) BancPlus’ historical and projected financial condition, liquidity and results of operations; (2) BancPlus’ capital levels and needs; (3) any acquisitions or potential acquisitions
77
Table of Contents
that BancPlus is considering; (4) contractual, statutory and regulatory prohibitions and other limitations; (5) general economic conditions; and (6) other factors deemed relevant by the Board. BancPlus’ ability to pay dividends may also be limited on account of BancPlus’ outstanding indebtedness, as it generally must make payments on its junior subordinated debentures and its outstanding indebtedness before any dividends can be paid on BancPlus’ common stock. Finally, because BancPlus’ primary asset is its investment in the stock of BankPlus, BancPlus is dependent upon dividends from BankPlus to pay its operating expenses, satisfy its obligations and pay dividends on BancPlus common stock, and BankPlus’ ability to pay dividends on its common stock will substantially depend upon its earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate and other factors deemed relevant by the board of BankPlus. There are numerous laws and banking regulations and guidance that limit BancPlus’ and BankPlus’ ability to pay dividends. Therefore, there can be no assurance that BancPlus will pay any dividends to holders of its common stock, or as to the amount of any such dividends.

BancPlus’ corporate governance documents, and certain corporate and banking laws applicable to BancPlus, could make a takeover more difficult, which could adversely affect the price of BancPlus common stock.

Certain provisions of the BancPlus Articles and By-laws of BancPlus (the “BancPlus By-laws”) and corporate and federal banking laws, could make it more difficult for a third party to acquire control of BancPlus’ organization or conduct a proxy contest, even if those events were perceived by many of BancPlus’ shareholders as beneficial to their interests. These provisions, and the corporate and banking laws and regulations applicable to BancPlus:

◦enable the Board to issue additional shares of authorized, but unissued capital stock without further shareholder approval;
◦enable the Board to issue “blank check” preferred stock with such designations, rights and preferences as may be determined from time to time by the board;
◦enable the Board to increase the size of the board and to fill vacancies caused by an increase in the number of directors, a director’s removal, resignation, death, failure to qualify, or any other cause;
◦divide the Board into three classes serving staggered three-year terms;
◦do not provide for cumulative voting in the election of directors;
◦enable the BancPlus board to amend the BancPlus By-laws without shareholder approval;
◦require a two-thirds vote of BancPlus shareholders to modify the sections of the BancPlus Articles addressing the number, term and removal of its directors, the filling of vacancies on the Board, the calling of special meetings of shareholders, limitations on certain personal liabilities of directors, director and officer indemnification and the amendment, adoption, alternation or repeal of the BancPlus By-laws;
◦not permit shareholder action by less than unanimous written consent;
◦prohibit shareholders from calling special meetings;
◦establish an advance notice procedure for director nominations and other shareholder proposals; and
◦require prior regulatory application and approval of any transaction involving control of its organization.

These provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including under circumstances in which BancPlus shareholders might otherwise receive a premium over the price of BancPlus shares.

The BancPlus By-laws designate the Madison County Chancery Court of the State of Mississippi as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by BancPlus shareholders, which could limit BancPlus shareholders’ ability to obtain a favorable judicial forum for disputes with BancPlus or its directors, officers or employees.

The BancPlus bylaws provide that, unless BancPlus consents in writing to the selection of an alternative forum, the Madison County Chancery Court of the State of Mississippi shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on BancPlus’ behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of BancPlus to BancPlus or its shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Mississippi Business Corporation Act, or (iv) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of BancPlus shall be deemed to have notice of and consented to the provisions of the BancPlus By-laws described in the preceding sentence provided, however, that shareholders will not be deemed to have waived BancPlus’ compliance with the federal securities laws and the rules and regulations thereunder. BancPlus has chosen the Madison County Chancery Court of the State of Mississippi as the exclusive forum for such causes of action because its principal executive offices are located in Ridgeland, Mississippi. BancPlus recognizes that the federal district court forum selection clause may impose additional litigation costs on shareholders who assert the provision is not enforceable and may impose more general additional litigation costs in pursuing any such claims, particularly if the shareholders do not reside in or near Mississippi. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with BancPlus or its directors, officers or employees, which may discourage such lawsuits against BancPlus and such persons. Alternatively, if a court were to find these provisions of the BancPlus bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings,
78
Table of Contents
BancPlus may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition or results of operations. The Madison County Chancery Court of the State of Mississippi may also reach different judgments or results than would other courts, including courts where a shareholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to BancPlus than BancPlus shareholders. BancPlus’ forum selection provision is not intended to apply to claims arising under the Securities Act and the Exchange Act. To the extent the provision could be construed to apply to such claims, there is uncertainty as to whether a court would enforce the provision in such respect, and BancPlus shareholders cannot waive BancPlus’ compliance with federal securities laws and the rules and regulations thereunder.

There are substantial regulatory limitations on changes of control of bank holding companies that may discourage investors from purchasing shares of BancPlus common stock.

With limited exceptions, federal regulations prohibit a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring more than 10% (5% if the acquirer is a bank holding company) of any class of BancPlus’ voting stock or obtaining the ability to control in any manner the election of a majority of the directors or otherwise direct the management or policies of BancPlus without prior notice or application to, and the approval of, the Federal Reserve. Companies investing in banks and bank holding companies receive additional review and may be required to become bank holding companies, subject to regulatory supervision. Accordingly, prospective investors must be aware of and comply with these requirements, if applicable, in connection with any purchase of shares of BancPlus common stock. These provisions could discourage third parties from seeking to acquire significant interests in BancPlus or in attempting to acquire control of BancPlus, which, in turn, could materially and adversely affect the price of BancPlus common stock.

Because BancPlus has elected to use the extended transition period for complying with new or revised accounting standards for an emerging growth company, BancPlus’ financial statements may not be comparable to companies that comply with these accounting standards as of the public company effective dates.

BancPlus has elected to use the extended transition period for complying with new or revised accounting standards under Section 7(a)(2)(B) of the Securities Act. This election allows BancPlus to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, BancPlus’ financial statements may not be comparable to companies that comply with these accounting standards and investors may have difficulty evaluating or comparing BancPlus’ business, financial results or prospects in comparison to other public companies. This may have a negative impact on the value and liquidity of BancPlus common stock. BancPlus cannot predict if investors will find its common stock less attractive because BancPlus plans to rely on this exemption.

As a reporting company subject to the reporting requirements of Section 15(d) of the Exchange Act, BancPlus incurs significant legal, accounting, insurance, compliance and other expenses.

As a reporting company, BancPlus incurs significant legal, accounting, insurance and other expenses. SEC rules require that BancPlus’ Chief Executive Officer and Chief Financial Officer periodically certify the existence and effectiveness of its internal control over financial reporting. Beginning with the time BancPlus is no longer an “emerging growth company” as defined in the JOBS Act, but no later than December 31, 2025, BancPlus will be required to engage its independent registered public accounting firm to audit and opine on the design and operating effectiveness of its internal control over financial reporting. This process will require significant documentation of policies, procedures and systems, and review of that documentation and testing of BancPlus’ internal control over financial reporting by its internal auditing and accounting staff and its independent registered public accounting firm. This process will require considerable time and attention from management, which could prevent BancPlus from successfully implementing its business initiatives and improving its business, financial condition and results of operations, strain its internal resources, and increase its operating costs. BancPlus may experience higher than anticipated operating expenses, including those associated with SEC reporting, and outside auditor fees during the implementation of these changes and thereafter.

Investment in BancPlus common stock is not an insured deposit and is subject to risk of loss.

An investment in BancPlus common stock will not be a bank deposit and will not be insured or guaranteed by the FDIC or any other government agency. Your investment will be subject to investment risk, and as a result, you could lose some or all of your investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

79
Table of Contents
Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits


2.1*
2.2*
3.1
3.2
4.1
3.24.2
4.1
10.1
10.1
31.1
31.2
32.1
32.2
101Inline XBRL Interactive Data
104Cover Page Interactive Data File (embedded within the Inline XBRL document)document in Exhibit 101)

* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the Securities and Exchange CommissionSEC upon request.

8065
Table of Contents
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BancPlus Corporation

Date:May 11, 2020November 15, 2021By:/s/ William A. Ray
William A. Ray
President and Chief Executive Officer

Date:May 11, 2020November 15, 2021By:/s/ M. Ann Southerland
M. Ann Southerland
Senior Executive Vice President and Chief Financial Officer

8166