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,June 30, 2022
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.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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 6,August 5, 2022: 11,644,40711,627,071




BANCPLUS CORPORATION
FORM 10-Q
For the Quarter Ended MARCH 31,JUNE 30, 2022
INDEX
Page Number


Consolidated Balance Sheets at March 31,June 30, 2022 (unaudited), and December 31, 2021
Consolidated Statements of Income for the three and six months ended March 31,June 30, 2022 and 2021 (unaudited)
Consolidated Statements of Shareholders’ Equity for the three and six months ended March 31,June 30, 2022 and 2021 (unaudited)
Consolidated Statements of Cash Flows for thethreesix months ended March 31,June 30, 2022 and 2021 (unaudited)










1

Table of ContentsContents
PART I – FINANCIAL INFORMATION
Item 1.     Financial Statements
BancPlus Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
March 31, 2022December 31, 2021June 30, 2022December 31, 2021
(unaudited)(unaudited)
Assets:Assets:Assets:
Cash and due from banksCash and due from banks$74,563 $55,603 Cash and due from banks$74,231 $55,603 
Interest bearing deposits with banksInterest bearing deposits with banks620,789 608,562 Interest bearing deposits with banks269,510 608,562 
Total cash and cash equivalentsTotal cash and cash equivalents695,352 664,165 Total cash and cash equivalents343,741 664,165 
Securities available for saleSecurities available for sale645,196 576,614 Securities available for sale627,027 576,614 
Securities held to maturity - fair value: $68,858 - 2022; $72,084 - 202168,873 71,648 
Securities held to maturity - fair value: $66,246 - 2022; $72,084 - 2021Securities held to maturity - fair value: $66,246 - 2022; $72,084 - 202166,359 71,648 
Loans held for saleLoans held for sale11,744 10,621 Loans held for sale14,757 10,621 
LoansLoans4,740,406 3,619,172 Loans5,159,706 3,619,172 
Less: Allowance for loan lossesLess: Allowance for loan losses44,238 45,000 Less: Allowance for loan losses43,353 45,000 
Net loansNet loans4,696,168 3,574,172 Net loans5,116,353 3,574,172 
Premises and equipmentPremises and equipment117,342 101,965 Premises and equipment122,192 101,965 
Operating lease right-of-use assetsOperating lease right-of-use assets35,351 34,561 Operating lease right-of-use assets35,968 34,561 
Accrued interest receivableAccrued interest receivable17,756 14,329 Accrued interest receivable17,549 14,329 
GoodwillGoodwill63,836 2,616 Goodwill63,836 2,616 
Other assetsOther assets163,640 145,587 Other assets167,020 145,587 
$6,515,258 $5,196,278 $6,574,802 $5,196,278 
Liabilities:Liabilities:Liabilities:
DepositsDeposits$5,853,097 $4,622,116 Deposits$5,682,850 $4,622,116 
Advances from Federal Home Loan Bank and other borrowingsAdvances from Federal Home Loan Bank and other borrowings40,453 20,501 Advances from Federal Home Loan Bank and other borrowings20,115 20,501 
Subordinated debenturesSubordinated debentures133,338 111,509 Subordinated debentures133,383 111,509 
Operating lease liabilitiesOperating lease liabilities36,615 35,793 Operating lease liabilities37,336 35,793 
Accrued interest payableAccrued interest payable2,945 1,425 Accrued interest payable1,476 1,425 
Other liabilitiesOther liabilities13,993 14,515 Other liabilities14,388 14,515 
Total liabilitiesTotal liabilities6,080,441 4,805,859 Total liabilities5,889,548 4,805,859 
Redeemable common stock owned by the ESOPRedeemable common stock owned by the ESOP102,425 100,487 Redeemable common stock owned by the ESOP97,799 100,487 
Shareholders' equity:Shareholders' equity:Shareholders' equity:
Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP, no par valueSenior Non-Cumulative Perpetual Preferred Stock, Series ECIP, no par value
250,000 and zero authorized, issued and outstanding at June 30, 2022 and December 31, 2021; aggregate liquidation preference of $250,000250,000 and zero authorized, issued and outstanding at June 30, 2022 and December 31, 2021; aggregate liquidation preference of $250,000250,000 — 
Common Stock, par value $1.00 per share.Common Stock, par value $1.00 per share.Common Stock, par value $1.00 per share.
40,000,000 authorized at March 31, 2022 and December 31, 2021; 11,580,880 and 10,115,945 issued and outstanding at March 31, 2022 and December 31, 2021, respectively11,581 10,116 
40,000,000 authorized at June 30, 2022 and December 31, 2021; 11,627,071 and 10,115,945 issued and outstanding at June 30, 2022 and December 31, 2021, respectively40,000,000 authorized at June 30, 2022 and December 31, 2021; 11,627,071 and 10,115,945 issued and outstanding at June 30, 2022 and December 31, 2021, respectively11,627 10,116 
Unearned Employee Stock Ownership Plan compensationUnearned Employee Stock Ownership Plan compensation— (1,401)Unearned Employee Stock Ownership Plan compensation— (1,401)
Additional paid-in capitalAdditional paid-in capital123,005 67,380 Additional paid-in capital122,132 67,380 
Retained earningsRetained earnings319,898 314,357 Retained earnings331,239 314,357 
Accumulated other comprehensive loss, netAccumulated other comprehensive loss, net(19,667)(33)Accumulated other comprehensive loss, net(29,744)(33)
434,817 390,419 685,254 390,419 
Less: Redeemable common stock owned by the ESOPLess: Redeemable common stock owned by the ESOP(102,425)(100,487)Less: Redeemable common stock owned by the ESOP(97,799)(100,487)
Total shareholders' equityTotal shareholders' equity332,392 289,932 Total shareholders' equity587,455 289,932 
$6,515,258 $5,196,278 $6,574,802 $5,196,278 
The accompanying notes are an integral part of these consolidated financial statements.
2

Table of ContentsContents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202220212022202120222021
Interest income:Interest income:Interest income:
Interest and fees on loansInterest and fees on loans$42,987 $43,142 Interest and fees on loans$53,712 $42,089 $96,699 $85,231 
Taxable securitiesTaxable securities2,307 1,833 Taxable securities2,502 2,094 4,809 3,927 
Tax-exempt securitiesTax-exempt securities420 539 Tax-exempt securities401 479 821 1,018 
Interest bearing bank balances and otherInterest bearing bank balances and other231 138 Interest bearing bank balances and other477 113 708 251 
Total interest incomeTotal interest income45,945 45,652 Total interest income57,092 44,775 103,037 90,427 
Interest expense:Interest expense:Interest expense:
DepositsDeposits1,677 2,164 Deposits2,362 1,963 4,039 4,127 
Advances from Federal Home Loan BankAdvances from Federal Home Loan Bank76 77 Advances from Federal Home Loan Bank77 78 153 155 
Other borrowingsOther borrowings1,425 1,369 Other borrowings1,808 1,372 3,233 2,741 
Total interest expenseTotal interest expense3,178 3,610 Total interest expense4,247 3,413 7,425 7,023 
Net interest incomeNet interest income42,767 42,042 Net interest income52,845 41,362 95,612 83,404 
Provision for loan lossesProvision for loan losses217 3,889 Provision for loan losses234 2,037 451 5,926 
Net interest income after provision for loan lossesNet interest income after provision for loan losses42,550 38,153 Net interest income after provision for loan losses52,611 39,325 95,161 77,478 
Other operating income:Other operating income:Other operating income:
Service charges on deposit accountsService charges on deposit accounts6,792 5,737 Service charges on deposit accounts7,701 6,005 14,493 11,742 
Mortgage origination incomeMortgage origination income2,238 2,714 Mortgage origination income2,304 2,013 4,542 4,727 
Debit card interchangeDebit card interchange2,428 2,640 Debit card interchange2,748 2,604 5,176 5,244 
Other incomeOther income6,507 9,186 Other income5,978 8,115 12,485 17,301 
Total other operating incomeTotal other operating income17,965 20,277 Total other operating income18,731 18,737 36,696 39,014 
Other operating expenses:Other operating expenses:Other operating expenses:
Salaries and employee benefits expensesSalaries and employee benefits expenses25,845 23,025 Salaries and employee benefits expenses29,805 24,122 55,650 47,147 
Net occupancy expensesNet occupancy expenses4,116 3,345 Net occupancy expenses4,891 3,828 9,007 7,173 
Furniture, equipment and data processing expensesFurniture, equipment and data processing expenses6,616 5,932 Furniture, equipment and data processing expenses7,670 6,108 14,286 12,040 
Other expensesOther expenses11,493 5,835 Other expenses8,649 6,380 20,142 12,215 
Total other operating expensesTotal other operating expenses48,070 38,137 Total other operating expenses51,015 40,438 99,085 78,575 
Income before income taxesIncome before income taxes12,445 20,293 Income before income taxes20,327 17,624 32,772 37,917 
Income tax expenseIncome tax expense2,756 3,021 Income tax expense4,212 3,560 6,968 6,581 
Net incomeNet income$9,689 $17,272 Net income$16,115 $14,064 $25,804 $31,336 
Earnings per common share - basicEarnings per common share - basic$0.93 $1.74 Earnings per common share - basic$1.41 $1.41 $2.35 $3.15 
Earnings per common share - dilutedEarnings per common share - diluted$0.92 $1.73 Earnings per common share - diluted$1.40 $1.40 $2.34 $3.12 
The accompanying notes are an integral part of these consolidated financial statements.
3

Table of ContentsContents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(In Thousands)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202220212022202120222021
Net incomeNet income$9,689 $17,272 Net income$16,115 $14,064 $25,804 $31,336 
Other comprehensive income (loss), net of tax:Other comprehensive income (loss), net of tax:Other comprehensive income (loss), net of tax:
Unrealized losses on securities available for sale(26,144)(4,936)
Unrealized gains (losses) on securities available for saleUnrealized gains (losses) on securities available for sale(13,418)2,578 (39,562)(2,358)
Tax effectTax effect6,510 1,229 Tax effect3,341 (642)9,851 587 
Total other comprehensive loss, net of tax(19,634)(3,707)
Total other comprehensive income (loss), net of taxTotal other comprehensive income (loss), net of tax(10,077)1,936 (29,711)(1,771)
Comprehensive income (loss)Comprehensive income (loss)$(9,945)$13,565 Comprehensive income (loss)$6,038 $16,000 $(3,907)$29,565 
The accompanying notes are an integral part of these consolidated financial statements.
4

Table of ContentsContents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Equity
(Unaudited)
(In Thousands, Except Share and Per Share Data)

Unearned
ESOP
Compensation
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Unearned
ESOP
Compensation
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Common StockRetained
Earnings
Common StockRetained
Earnings
SharesAmountSharesAmount
April 1, 2021April 1, 202110,041,328 $10,041 $(2,304)$66,322 $286,665 $3,168 $(87,403)$276,489 
Net incomeNet income— — — — 14,064 — — 14,064 
Other comprehensive income, netOther comprehensive income, net— — — — — 1,936 — 1,936 
Issuance of restricted stockIssuance of restricted stock82,108 82 — (82)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stockShares withheld to satisfy withholding obligation in the vesting of restricted stock(2,977)(2)— (150)— — — (152)
Purchase of Company stockPurchase of Company stock(9,414)(10)— (555)— — — (565)
Stock based compensationStock based compensation— — — 617 — — — 617 
Net change fair value of ESOP sharesNet change fair value of ESOP shares— — — — — — (391)(391)
Common stock released by ESOPCommon stock released by ESOP— — 347 — — — — 347 
Dividends paid ($0.38 per share)Dividends paid ($0.38 per share)— — — — (3,829)— — (3,829)
June 30, 2021June 30, 202110,111,045 $10,111 $(1,957)$66,152 $296,900 $5,104 $(87,794)$288,516 
January 1, 2021January 1, 202110,079,277 $10,079 $(2,650)$67,742 $273,204 $6,875 $(74,278)$280,972 January 1, 202110,079,277 $10,079 $(2,650)$67,742 $273,204 $6,875 $(74,278)$280,972 
Net incomeNet income— — — — 17,272 — — 17,272 Net income— — — — 31,336 — — 31,336 
Other comprehensive loss, netOther comprehensive loss, net— — — — — (3,707)— (3,707)Other comprehensive loss, net— — — — — (1,771)— (1,771)
Issuance of restricted stockIssuance of restricted stock82,108 82 — (82)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stockShares withheld to satisfy withholding obligation in the vesting of restricted stock(4,477)(4)— (225)— — — (229)
Purchase of Company stockPurchase of Company stock(36,449)(36)— (1,832)— — — (1,868)Purchase of Company stock(45,863)(46)— (2,387)— — — (2,433)
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(1,500)(2)— (75)— — — (77)
Stock based compensationStock based compensation— — — 487 — — — 487 Stock based compensation— — — 1,104 — — — 1,104 
Net change fair value of ESOP sharesNet change fair value of ESOP shares— — — — — — (13,125)(13,125)Net change fair value of ESOP shares— — — — — — (13,516)(13,516)
Common stock released by ESOPCommon stock released by ESOP— — 346 — — — — 346 Common stock released by ESOP— — 693 — — — — 693 
Dividends paid ($0.38 per share)— — — — (3,811)— — (3,811)
March 31, 202110,041,328 $10,041 $(2,304)$66,322 $286,665 $3,168 $(87,403)$276,489 
January 1, 202210,115,945 $10,116 $(1,401)$67,380 $314,357 $(33)$(100,487)$289,932 
Net income— — — — 9,689 — — 9,689 
Issuance of common stock for acquisition of First Trust Corporations1,444,732 1,445 — 55,044 — — — 56,489 
Other comprehensive loss, net— — — — — (19,634)— (19,634)
Issuance of restricted stock21,367 21 — (21)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock(1,164)(1)— (78)— — — (79)
Stock based compensation— — — 680 — — — 680 
Net change fair value of ESOP shares— — — — — — (1,938)(1,938)
Common stock released by ESOP— — 1,401 — — — — 1,401 
Dividends paid ($0.41 per share)— — — — (4,148)— — (4,148)
March 31, 202211,580,880 $11,581 $— $123,005 $319,898 $(19,667)$(102,425)$332,392 
Dividends paid ($0.76 per share)Dividends paid ($0.76 per share)— — — — (7,640)— — (7,640)
June 30, 2021June 30, 202110,111,045 $10,111 $(1,957)$66,152 $296,900 $5,104 $(87,794)$288,516 

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


5

Table of Contents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Continued)
(Unaudited)
(In Thousands, Except Share and Per Share Data)
Unearned
ESOP
Compensation
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Preferred StockCommon StockRetained
Earnings
SharesAmountSharesAmount
April 1, 2022— $— 11,580,880 $11,581 $— $123,005 $319,898 $(19,667)$(102,425)$332,392 
Net income— — — — — — 16,115 — — 16,115 
Issuance of preferred stock250,000 250,000 — — — — — — — 250,000 
Other comprehensive loss, net— — — — — — — (10,077)— (10,077)
Issuance of restricted stock— — 74,401 74 — (74)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (9,274)(9)— (624)— — — (633)
Purchase of Company stock— — (18,936)(19)— (1,231)— — — (1,250)
Stock based compensation— — — — — 1,056 — — — 1,056 
Net change fair value of ESOP shares— — — — — — — — 4,626 4,626 
Common stock released by ESOP— — — — — — — — — — 
Dividends paid ($0.41 per share)— — — — — — (4,774)— — (4,774)
June 30, 2022250,000 $250,000 11,627,071 $11,627 $— $122,132 $331,239 $(29,744)$(97,799)$587,455 
January 1, 2022— $— 10,115,945 $10,116 $(1,401)$67,380 $314,357 $(33)$(100,487)$289,932 
Net income— — — — — — 25,804 — — 25,804 
Issuance of preferred stock250,000 250,000 — — — — — — — 250,000 
Issuance of common stock for acquisition of First Trust Corporation— — 1,444,732 1,445 — 55,044 — — — 56,489 
Other comprehensive loss, net— — — — — — — (29,711)— (29,711)
Issuance of restricted stock— — 95,768 96 — (96)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (10,438)(11)— (701)— — — (712)
Purchase of Company stock— — (18,936)(19)(1,231)(1,250)
Stock based compensation— — — — — 1,736 — — — 1,736 
Net change fair value of ESOP shares— — — — — — — — 2,688 2,688 
Common stock released by ESOP— — — — 1,401 — — — — 1,401 
Dividends paid ($0.82 per share)— — — — — — (8,922)— — (8,922)
June 30, 2022250,000 $250,000 11,627,071 $11,627 $— $122,132 $331,239 $(29,744)$(97,799)$587,455 
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Table of ContentsContents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended March 31,Six Months Ended June 30,
2022202120222021
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net income per consolidated statements of incomeNet income per consolidated statements of income$9,689 $17,272 Net income per consolidated statements of income$25,804 $31,336 
Adjustments to reconcile net income to net cash from operating activities:Adjustments to reconcile net income to net cash from operating activities:Adjustments to reconcile net income to net cash from operating activities:
Provision for loan lossesProvision for loan losses217 3,889 Provision for loan losses451 5,926 
Depreciation and amortizationDepreciation and amortization2,362 1,903 Depreciation and amortization5,051 3,840 
Net loss on sales of premises and equipmentNet loss on sales of premises and equipment85 Net loss on sales of premises and equipment44 232 
Net gain on sales of other real estate owned(19)(171)
Net (gain) loss on sales of other real estate ownedNet (gain) loss on sales of other real estate owned124 (260)
Write-downs of other real estate-ownedWrite-downs of other real estate-owned555 20 Write-downs of other real estate-owned555 167 
Deferred income tax expense (benefit)(162)433 
Deferred income tax expenseDeferred income tax expense1,489 954 
Federal Home Loan Bank stock dividendsFederal Home Loan Bank stock dividends(3)(3)Federal Home Loan Bank stock dividends(8)(6)
Common stock released by ESOPCommon stock released by ESOP1,401 346 Common stock released by ESOP1,401 693 
Stock based compensation expenseStock based compensation expense680 487 Stock based compensation expense1,736 1,104 
Origination of loans held for saleOrigination of loans held for sale(72,280)(105,569)Origination of loans held for sale(166,236)(221,235)
Proceeds from loans held for saleProceeds from loans held for sale77,357 114,794 Proceeds from loans held for sale168,300 232,810 
Earnings on bank-owned life insuranceEarnings on bank-owned life insurance(626)(3,492)Earnings on bank-owned life insurance(1,265)(4,694)
Net change in:Net change in:Net change in:
Accrued interest receivable and other assetsAccrued interest receivable and other assets(3,374)(1,365)Accrued interest receivable and other assets(3,664)880 
Accrued interest payable and other liabilitiesAccrued interest payable and other liabilities(2,570)(6,903)Accrued interest payable and other liabilities(3,644)(9,116)
Net cash from operating activitiesNet cash from operating activities13,228 21,726 Net cash from operating activities30,138 42,631 
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Purchases of securities available for salePurchases of securities available for sale(82,822)(296,923)Purchases of securities available for sale(99,369)(302,423)
Maturities and calls of securities available for saleMaturities and calls of securities available for sale20,801 29,822 Maturities and calls of securities available for sale41,477 60,996 
Purchases of securities held to maturityPurchases of securities held to maturity— (19,103)Purchases of securities held to maturity— (19,103)
Maturities, prepayments and calls of securities held to maturityMaturities, prepayments and calls of securities held to maturity2,745 22,005 Maturities, prepayments and calls of securities held to maturity5,233 33,473 
Net increase in loansNet increase in loans(122,286)(30,982)Net increase in loans(543,140)(109,334)
Purchases of premises and equipmentPurchases of premises and equipment(2,336)(1,343)Purchases of premises and equipment(9,517)(2,580)
Proceeds from sales of premises and equipmentProceeds from sales of premises and equipment— 26 Proceeds from sales of premises and equipment— 31 
Proceeds from sales of other real estate ownedProceeds from sales of other real estate owned181 1,539 Proceeds from sales of other real estate owned1,374 3,100 
Investment in unconsolidated entities, net1,709 (122)
Investment in unconsolidated entitiesInvestment in unconsolidated entities(30)(109)
Distributions from unconsolidated entitiesDistributions from unconsolidated entities1,753 — 
Purchase of bank-owned life insurancePurchase of bank-owned life insurance— (10,000)
Proceeds from bank-owned life insuranceProceeds from bank-owned life insurance— 4,336 Proceeds from bank-owned life insurance— 4,492 
Purchases or redemptions of Federal Home Loan Bank stockPurchases or redemptions of Federal Home Loan Bank stock(1,044)(163)
Cash received in excess of cash paid for acquisitionCash received in excess of cash paid for acquisition165,974 — Cash received in excess of cash paid for acquisition165,974 — 
Net cash used in investing activitiesNet cash used in investing activities(16,034)(290,745)Net cash used in investing activities(437,289)(341,620)

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Table of ContentsContents
BancPlus Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(Unaudited)
(In Thousands)
Three Months Ended March 31,Six Months Ended June 30,
2022202120222021
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Net increase (decrease) in:Net increase (decrease) in:Net increase (decrease) in:
Noninterest-bearing depositsNoninterest-bearing deposits$42,746 $82,692 Noninterest-bearing deposits$67,790 $119,496 
Money market, negotiable order of withdrawal, and savings depositsMoney market, negotiable order of withdrawal, and savings deposits1,250 183,510 Money market, negotiable order of withdrawal, and savings deposits(129,848)265,269 
Certificates of depositCertificates of deposit(25,727)(26,055)Certificates of deposit(89,920)(39,585)
Payments on Federal Home Loan Bank advancesPayments on Federal Home Loan Bank advances(24)(59)Payments on Federal Home Loan Bank advances(386)(95)
Proceeds from issuance of preferred stockProceeds from issuance of preferred stock250,000 — 
Proceeds from other borrowingsProceeds from other borrowings20,000 — Proceeds from other borrowings20,000 — 
Payments on other borrowingsPayments on other borrowings— (875)Payments on other borrowings(20,000)(1,750)
Payment of debt issuance costs on other borrowingsPayment of debt issuance costs on other borrowings(25)— Payment of debt issuance costs on other borrowings(25)— 
Cash dividends paid on common stockCash dividends paid on common stock(4,148)(3,811)Cash dividends paid on common stock(8,922)(7,640)
Purchase of Company stockPurchase of Company stock— (1,868)Purchase of Company stock(1,250)(2,433)
Shares withheld to pay taxes on restricted stock vestingShares withheld to pay taxes on restricted stock vesting(79)(77)Shares withheld to pay taxes on restricted stock vesting(712)(229)
Net cash from financing activitiesNet cash from financing activities33,993 233,457 Net cash from financing activities86,727 333,033 
Net change in cash and cash equivalentsNet change in cash and cash equivalents31,187 (35,562)Net change in cash and cash equivalents(320,424)34,044 
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period664,165 637,545 Cash and cash equivalents at beginning of period664,165 637,545 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$695,352 $601,983 Cash and cash equivalents at end of period$343,741 $671,589 
Supplemental cash flow information:Supplemental cash flow information:Supplemental cash flow information:
Interest paidInterest paid$1,658 $2,910 Interest paid$7,374 $7,537 
Federal and state income tax paymentsFederal and state income tax payments3,575 7,225 
Acquisition of real estate in non-cash foreclosuresAcquisition of real estate in non-cash foreclosures455 2,272 Acquisition of real estate in non-cash foreclosures890 3,597 
Fair value of assets acquired net of liabilities assumedFair value of assets acquired net of liabilities assumed58,508 — Fair value of assets acquired net of liabilities assumed58,508 — 

The accompanying notes are an integral part of these consolidated financial statements.
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BancPlus Corporation and Subsidiaries
Condensed Notes to 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. 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 holds loans and other real estate.
The unaudited interim consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial 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, 2021; however, certain notes and information have been omitted from the interim periods. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021. 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 policies 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 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/provision for loan losses, 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.
Unless otherwise indicated, references to “BancPlus” refer to BancPlus Corporation and its subsidiaries, on a consolidated basis, and reference to “BankPlus” refer to BankPlus, our wholly-owned subsidiary, as applicable.
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 Financial Accounting Standards Board (“FASB”) issued Accounting 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 dataworking with third-party vendors to build and system needs and evaluatingvalidate a model that will run parallel with the impactCompany’s current model prior to implementation of adopting the new guidance.ASU 2016-13. 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 standard, but has not yet determined the magnitude of the one-time adjustment 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 the 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
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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.

Accounting Standards Update 2022-02 (“ASU 2022-02”), “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” In March 2022, the FASB issued ASU 2022-02 which eliminates the TDR recognition and measurement guidance and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. ASU 2022-02 also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for the Company for annual and interim periods beginning on January 1, 2023. The Company is assessing ASU 2022-02 and its impact on the Company’s consolidated financial statements.

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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 March 31,Three Months Ended June 30,Six Months Ended June 30,
(In thousands except per share data)(In thousands except per share data)20222021(In thousands except per share data)2022202120222021
Net incomeNet income$9,689 $17,272 Net income$16,115 $14,064 $25,804 $31,336 
Weighted average common shares outstandingWeighted average common shares outstanding10,451 9,919 Weighted average common shares outstanding11,460 9,957 10,959 9,937 
Diluted effect of unallocated stockDiluted effect of unallocated stock75 73 Diluted effect of unallocated stock— 44 46 
Diluted effect of stock-based awardsDiluted effect of stock-based awards58 62 66 55 
Diluted common sharesDiluted common shares10,526 9,992 Diluted common shares11,518 10,063 11,034 10,038 
Basic earnings per common shareBasic earnings per common share$0.93 $1.74 Basic earnings per common share$1.41 $1.41 $2.35 $3.15 
Diluted earnings per common shareDiluted earnings per common share$0.92 $1.73 Diluted earnings per common share$1.40 $1.40 $2.34 $3.12 

Note 3: Business Combinations

First Trust Corporation

Effective March 1, 2022, the Company completed its previously announced merger with First Trust Corporation (“FTC”), the holding company of First Bank and Trust (“FBT”). Pursuant to the terms of the Agreement and Plan of Share Exchange and Merger, dated September 28, 2021, as amended on February 9, 2022, by and among the Company, BankPlus, FTC, and FBT (the “FTC Merger Agreement”), following the Company’s acquisition of FTC by statutory share exchange, FTC was merged with and into BancPlus, with BancPlus surviving the merger (the “FTC Holding Company Merger”). Immediately thereafter FBT was merged with and into BankPlus, with BankPlus surviving the merger (together with the FTC Holding Company Merger, the “FTC Merger”). The FTC Merger expands the Company’s geographic footprint into Florida and adds additional locations in Louisiana and Mississippi, providing access to new markets and deposits.

Pursuant to the FTC Merger Agreement, holders of FTC stock received, in the aggregate, 1,444,764 shares of BancPlus common stock, with cash paid in lieu of fractional shares, and $52.7 million in cash, plus up to $10.0 million, less certain fees, costs, and expenses, that is beingwas held in escrow pursuant to the terms of a previously disclosed Indemnity and Escrow Agreement that was entered into immediately prior to the completion of the FTC Merger pending a final determination from the Internal Revenue Service as to whether FTC’s subchapter S election willwould be reinstated retroactively to September 23, 2020. On June 27, 2022, the Company received notice from the IRS that FTC’s subchapter S election had been reinstated. On July 7, 2022, the escrow
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account balance of $10.0 million was paid to the former holders of FTC stock. The fair value of the common shares issued was determined based on a third-party appraisal at the date of the acquisition, as there is no active market for the Company’s stock. At the time of this filing, final valuations of the stock consideration, assets acquired and liabilities assumed were not complete. The Company expects to finalize its analysis of the acquired assets and assumed liabilities in this transaction within one year of the completion of the FTC Merger. Therefore, adjustments to the estimated amounts and carrying values may occur.

During the three and six months ended March 31,June 30, 2022, the Company incurred approximately $4.2$1.3 million and $5.5 million of acquisition expenses in connection with the FTC Merger.Merger, respectively. These expenses are recorded in other expenses in the Company’s Consolidated Statement of Income for the three and six months ended March 31,June 30, 2022.

The excess cost paid over the fair value of net assets acquired was recorded as goodwill during 2022. Goodwill, which reflects an enhanced presence in the Louisiana and Southern Mississippi market areas and expansion in to the Florida panhandle market as well as synergies expected as a result of the combined operations, is not deductible for tax purposes.

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The following table reflects the consideration paid and the preliminary fair value allocation of assets acquired and liabilities assumed as of the acquisition date:
(In thousands)
Purchase price allocation:
Common stock issued$56,489 
Cash paid63,239 
Total purchase price$119,728 
Assets acquired:
Cash and due from banks$229,213 
Securities33,407 
Loans held for sale6,200 
Loans, net1,000,382 
Premises and equipment15,152 
Accrued interest receivable1,441 
Core deposit intangible7,825 
Other assets3,063 
Total assets acquired$1,296,683 
Liabilities assumed:
Deposits$1,212,712 
Subordinated debentures21,733 
Other liabilities3,730 
Total liabilities assumed$1,238,175 
Net assets acquired58,508 
Goodwill$61,220 

In connection with the FTC Merger, the Company recorded a $7.8 million core deposit intangible, which will be amortized over 10 years. The Company also acquired loans with a fair value of $1.000 billion. The fair value of acquired loans at the time of acquisition is recorded as a premium or discount to the unpaid balance of each acquired loan. The net premium or discount is accreted or amortized into interest income over the remaining life of the loan. The Company recorded a net discount of $6.6 million on the acquired FTC loans, which included a credit mark discount of $15.7 million. Purchase credit impaired loans were insignificant.

Revenues and earnings of the acquired company since the FTC Merger date have not been disclosed as it is not practicable as FTC was merged into BancPlus and separate financial information for FTC is not available. The following table presents unaudited pro forma information as if the FTC Merger had occurred on January 1, 2021. This pro forma information combines the historic consolidated results of operations of BancPlus and FTC after giving effect to certain adjustments, including purchase
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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 FTC Merger occurred on January 1, 2021.

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Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
(In thousands, except per share data)(In thousands, except per share data)20222021(In thousands, except per share data)2022202120222021
Net interest incomeNet interest income$53,873 $53,148 Net interest income$49,180 $52,579 $103,053 $105,727 
Other operating incomeOther operating income20,542 22,854 Other operating income17,510 20,227 38,052 43,081 
Net income available to common shareholdersNet income available to common shareholders13,924 21,507 Net income available to common shareholders14,385 17,342 28,309 38,849 
Earnings per common share:Earnings per common share:Earnings per common share:
BasicBasic$1.22 $1.89 Basic$1.26 $1.52 $2.48 $3.41 
DilutedDiluted1.21 1.87 Diluted1.25 1.51 2.46 3.38 
Note 4: Investment Securities
The following is a summary of the amortized cost and fair value of securities available for sale.
 Amortized Gross Unrealized Fair Amortized Gross Unrealized Fair
(In thousands)(In thousands)CostGainsLossesValue(In thousands)CostGainsLossesValue
March 31, 2022:
June 30, 2022:June 30, 2022:
U.S. TreasuriesU.S. Treasuries$40,768 $— $619 $40,149 U.S. Treasuries$35,669 $— $940 $34,729 
U.S. Government agency obligationsU.S. Government agency obligations387,931 174 21,018 367,087 U.S. Government agency obligations396,361 167 27,134 369,394 
Residential mortgage-backed securitiesResidential mortgage-backed securities123,989 221 2,896 121,314 Residential mortgage-backed securities115,576 71 6,863 108,784 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities14,137 — 883 13,254 Commercial mortgage-backed securities14,075 — 1,208 12,867 
Asset-backed securitiesAsset-backed securities12,173 272 91 12,354 Asset-backed securities11,675 98 171 11,602 
Corporate investmentsCorporate investments46,000 324 932 45,392 Corporate investments48,000 53 1,928 46,125 
State and political subdivisionsState and political subdivisions46,386 264 1,004 45,646 State and political subdivisions45,277 53 1,804 43,526 
Total available for saleTotal available for sale$671,384 $1,255 $27,443 $645,196 Total available for sale$666,633 $442 $40,048 $627,027 
December 31, 2021:December 31, 2021:December 31, 2021:
U.S. Government agency obligationsU.S. Government agency obligations$354,774 $256 $4,780 $350,250 U.S. Government agency obligations$354,774 $256 $4,780 $350,250 
Residential mortgage-backed securitiesResidential mortgage-backed securities107,772 2,312 297 109,787 Residential mortgage-backed securities107,772 2,312 297 109,787 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities14,286 41 51 14,276 Commercial mortgage-backed securities14,286 41 51 14,276 
Asset backed securitiesAsset backed securities12,730 421 44 13,107 Asset backed securities12,730 421 44 13,107 
Corporate investmentsCorporate investments43,500 1,138 128 44,510 Corporate investments43,500 1,138 128 44,510 
State and political subdivisionsState and political subdivisions43,596 1,200 112 44,684 State and political subdivisions43,596 1,200 112 44,684 
Total available for saleTotal available for sale$576,658 $5,368 $5,412 $576,614 Total available for sale$576,658 $5,368 $5,412 $576,614 
Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
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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, 2022:
June 30, 2022:June 30, 2022:
States and political subdivisionsStates and political subdivisions$68,873 $46 $61 $68,858 States and political subdivisions$66,359 $11 $124 $66,246 
Total held to maturityTotal held to maturity$68,873 $46 $61 $68,858 Total held to maturity$66,359 $11 $124 $66,246 
December 31, 2021:December 31, 2021:December 31, 2021:
States and political subdivisionsStates and political subdivisions$71,648 $436 $— $72,084 States and political subdivisions$71,648 $436 $— $72,084 
Total held to maturityTotal held to maturity$71,648 $436 $— $72,084 Total held to maturity$71,648 $436 $— $72,084 
All mortgage-backed securities in the above tables were issued or guaranteed by U.S. government agencies or sponsored agencies.
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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)
March 31, 2022:
June 30, 2022:June 30, 2022:
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries$30,150 $619 $— $— 30,150 $619 U.S. Treasuries$34,729 $940 $— $— 34,729 $940 
U.S. Government agenciesU.S. Government agencies236,649 13,035 124,827 7,983 361,476 21,018 U.S. Government agencies236,812 17,123 127,649 10,011 364,461 27,134 
Residential mortgage-backed securitiesResidential mortgage-backed securities87,476 2,896 — — 87,476 2,896 Residential mortgage-backed securities101,307 6,863 — — 101,307 6,863 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities13,254 883 — — 13,254 883 Commercial mortgage-backed securities12,867 1,208 — — 12,867 1,208 
Asset backed securitiesAsset backed securities2,144 40 2,068 51 4,212 91 Asset backed securities4,148 91 1,929 80 6,077 171 
Corporate investmentsCorporate investments30,159 841 1,909 91 32,068 932 Corporate investments39,144 1,856 1,928 72 41,072 1,928 
States and political subdivisionsStates and political subdivisions28,502 1,250 4,740 554 33,242 1,804 
$457,509 $29,331 $136,246 $10,717 593,755 $40,048 
Held to maturity:Held to maturity:
States and political subdivisionsStates and political subdivisions16,165 541 4,851 463 21,016 1,004 States and political subdivisions$7,708 $124 $— $— 7,708 $124 
$415,997 $18,855 $133,655 $8,588 549,652 $27,443 $7,708 $124 $— $— 7,708 $124 
December 31, 2021:December 31, 2021:December 31, 2021:
Available for sale:Available for sale:Available for sale:
U.S. Government agenciesU.S. Government agencies$314,614 $4,780 $— $— 314,614 $4,780 U.S. Government agencies$314,614 $4,780 $— $— 314,614 $4,780 
Residential mortgage-backed securitiesResidential mortgage-backed securities15,216 297 — — 15,216 297 Residential mortgage-backed securities15,216 297 — — 15,216 297 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities8,376 51 — — 8,376 51 Commercial mortgage-backed securities8,376 51 — — 8,376 51 
Asset backed securitiesAsset backed securities2,272 2,192 36 4,464 44 Asset backed securities2,272 2,192 36 4,464 44 
Corporate investmentsCorporate investments6,117 112 — — 6,117 112 Corporate investments11,372 128 — — 11,372 128 
States and political subdivisionsStates and political subdivisions11,372 128 — — 11,372 128 States and political subdivisions6,117 112 — — 6,117 112 
$357,967 $5,376 $2,192 $36 360,159 $5,412 $357,967 $5,376 $2,192 $36 360,159 $5,412 
The number of debt securities in an unrealized loss position increased from 82 at December 31, 2021 to 232296 at March 31,June 30, 2022. 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
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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 impaired on an other-than-temporary basis at March 31,June 30, 2022.
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.
Available for SaleHeld to MaturityAvailable for SaleHeld to Maturity
AmortizedFairAmortizedFairAmortizedFairAmortizedFair
(In thousands)(In thousands)CostValueCostValue(In thousands)CostValueCostValue
March 31, 2022:
June 30, 2022:June 30, 2022:
One year or lessOne year or less$12,048 $12,050 $7,529 $7,530 One year or less$12,405 $12,216 $8,170 $8,169 
After one through five yearsAfter one through five years328,003 313,889 47,762 47,745 After one through five years354,342 335,018 46,172 46,099 
After five through ten yearsAfter five through ten years184,927 175,390 11,372 11,373 After five through ten years169,022 156,083 9,807 9,768 
After ten yearsAfter ten years146,406 143,867 2,210 2,210 After ten years130,864 123,710 2,210 2,210 
$671,384 $645,196 $68,873 $68,858 $666,633 $627,027 $66,359 $66,246 

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.
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Available for SaleHeld to MaturityAvailable for SaleHeld to Maturity
AmortizedFairAmortizedFairAmortizedFairAmortizedFair
(In thousands)(In thousands)CostValueCostValue(In thousands)CostValueCostValue
March 31, 2022$580,152 $555,294 $38,645 $38,644 
June 30, 2022June 30, 2022$459,420 $428,934 $35,775 $35,693 
December 31, 2021December 31, 2021$451,402 $450,480 $38,704 $39,102 December 31, 2021$451,402 $450,480 $38,704 $39,102 
Note 5: Loans
The following is a summary of the Company’s loan portfolio by loan class.
(In thousands)(In thousands)March 31, 2022December 31, 2021(In thousands)June 30, 2022December 31, 2021
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$1,142,726 $774,699 Residential properties$1,236,278 $774,699 
Construction and land developmentConstruction and land development676,562 543,763 Construction and land development834,809 543,763 
FarmlandFarmland221,706 211,503 Farmland242,640 211,503 
Other commercialOther commercial1,953,941 1,396,085 Other commercial2,050,729 1,396,085 
Total real estateTotal real estate3,994,935 2,926,050 Total real estate4,364,456 2,926,050 
Commercial and industrial loansCommercial and industrial loans584,565 527,102 Commercial and industrial loans592,810 527,102 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers70,276 86,520 Agricultural production and other loans to farmers84,007 86,520 
Consumer and other loansConsumer and other loans90,630 79,500 Consumer and other loans118,433 79,500 
Total loans before allowance for loan lossesTotal loans before allowance for loan losses$4,740,406 $3,619,172 Total loans before allowance for loan losses$5,159,706 $3,619,172 
Loans are stated at the amount of unpaid principal net of discounts and premiums on acquired loans, 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 Mississippi, Louisiana, Alabama, and Florida.
The risk characteristics of the Company’s material portfolio segments are as follows:
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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.
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.
Farmland 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.
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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 Other 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.
Loans that are 30 days or more past due based on payments received and applied to the loan are considered delinquent. Accrual of interest 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, 2022December 31, 2021
Secured by real estate:
Residential properties$3,373 $3,154 
Construction and land development169 51 
Farmland1,445 1,327 
Other commercial2,486 1,176 
Total real estate7,473 5,708 
Commercial and industrial loans85 20 
Agricultural production and other loans to farmers14 
Consumer and other loans26 166 
Total nonaccrual loans$7,598 $5,897 
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(In thousands)June 30, 2022December 31, 2021
Secured by real estate:
Residential properties$2,878 $3,154 
Construction and land development40 51 
Farmland968 1,327 
Other commercial3,105 1,176 
Total real estate6,991 5,708 
Commercial and industrial loans1,625 20 
Agricultural production and other loans to farmers14 
Consumer and other loans26 166 
Total nonaccrual loans$8,656 $5,897 

An age analysis of past due loans (including both accruing and non-accruing loans) segregated by class of loans is as follows:

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(In thousands)(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
March 31, 2022
June 30, 2022June 30, 2022
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$6,845 $2,039 $8,884 $1,133,842 $1,142,726 $732 Residential properties$6,850 $1,527 $8,377 $1,227,901 $1,236,278 $694 
Construction and land developmentConstruction and land development674 1,759 2,433 674,129 676,562 1,635 Construction and land development368 951 1,319 833,490 834,809 951 
FarmlandFarmland794 1,328 2,122 219,584 221,706 58 Farmland868 972 1,840 240,800 242,640 — 
Other commercialOther commercial3,914 1,397 5,311 1,948,630 1,953,941 145 Other commercial875 1,677 2,552 2,048,177 2,050,729 385 
Total real estateTotal real estate12,227 6,523 18,750 3,976,185 3,994,935 2,570 Total real estate8,961 5,127 14,088 4,350,368 4,364,456 2,030 
Commercial and industrial loansCommercial and industrial loans1,698 200 1,898 582,667 584,565 118 Commercial and industrial loans3,304 301 3,605 589,205 592,810 218 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers189 — 189 70,087 70,276 — Agricultural production and other loans to farmers128 182 310 83,697 84,007 168 
Consumer loansConsumer loans612 485 1,097 89,533 90,630 459 Consumer loans344 48 392 118,041 118,433 21 
TotalTotal$14,726 $7,208 $21,934 $4,718,472 $4,740,406 $3,147 Total$12,737 $5,658 $18,395 $5,141,311 $5,159,706 $2,437 

(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
December 31, 2021
Secured by real estate:
Residential properties$4,537 $2,032 $6,569 $768,130 $774,699 $865 
Construction and land development367 1,085 1,452 542,311 543,763 1,085 
Farmland600 425 1,025 210,478 211,503 30 
Other commercial1,589 1,118 2,707 1,393,378 1,396,085 212 
Total real estate7,093 4,660 11,753 2,914,297 2,926,050 2,192 
Commercial and industrial loans824 623 1,447 525,655 527,102 606 
Agricultural production and other loans to farmers311 32 343 86,177 86,520 32 
Consumer loans374 250 624 78,876 79,500 84 
Total$8,602 $5,565 $14,167 $3,605,005 $3,619,172 $2,914 
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.
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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.

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Impaired loans, segregated by class were as follows:

March 31, 2022June 30, 2022
PrincipalRecordedRelatedPrincipalRecordedRelated
(In thousands)(In thousands)Balance
Balance (1)
Allowance(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:Impaired loans with no related allowance:Impaired loans with no related allowance:
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$7,328 $5,373 $— Residential properties$6,983 $4,701 $— 
Construction and land developmentConstruction and land development3,724 1,767 — Construction and land development2,196 654 — 
FarmlandFarmland3,161 2,738 — Farmland1,397 977 — 
Other commercialOther commercial5,081 3,685 — Other commercial7,515 6,100 — 
Total real estateTotal real estate19,294 13,563 — Total real estate18,091 12,432 — 
Commercial and industrialCommercial and industrial9,730 9,464 — Commercial and industrial13,906 12,833 — 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers40 14 — Agricultural production and other loans to farmers40 14 — 
Consumer and other loansConsumer and other loans247 26 — Consumer and other loans247 26 — 
TotalTotal$29,311 $23,067 $— Total$32,284 $25,305 $— 
Impaired loans with related allowance:Impaired loans with related allowance:Impaired loans with related allowance:
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$809 $809 $Residential properties$805 $805 $
Construction and land developmentConstruction and land development— — — Construction and land development— — — 
FarmlandFarmland— — — Farmland— — — 
Other commercialOther commercial1,865 1,865 308 Other commercial— — — 
Total real estateTotal real estate2,674 2,674 315 Total real estate805 805 
Commercial and industrialCommercial and industrial4,548 4,548 1,723 Commercial and industrial372 372 132 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers— — — Agricultural production and other loans to farmers— — — 
Consumer and other loansConsumer and other loans— — — Consumer and other loans— — — 
TotalTotal7,222 7,222 2,038 Total1,177 1,177 139 
Total impaired loansTotal impaired loans$36,533 $30,289 $2,038 Total impaired loans$33,461 $26,482 $139 

(1) Recorded balance represents the carrying value – the contractual principal obligation due from the customer less charge offs and payments applied.    
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December 31, 2021
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$7,667 $5,034 $— 
Construction and land development3,615 1,649 — 
Farmland3,413 2,859 — 
Other commercial2,671 1,300 — 
Total real estate17,366 10,842 — 
Commercial and industrial17,528 17,300 — 
Agricultural production and other loans to farmers105 15 — 
Consumer and other loans249 166 — 
Total$35,248 $28,323 $— 
Impaired loans with related allowance:
Secured by real estate:
Residential properties$813 $813 $
Construction and land development— — — 
Farmland— — — 
Other commercial1,906 1,906 304 
Total real estate2,719 2,719 313 
Commercial and industrial4,542 4,542 1,701 
Agricultural production and other loans to farmers— — — 
Consumer and other loans— — — 
Total7,261 7,261 2,014 
Total impaired loans$42,509 $35,584 $2,014 

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

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The average recorded investment and interest recognized for impaired loans for the threesix months ended March 31,June 30, 2022 and 2021 are presented below.
Three Months Ended March 31,Three Months Ended June 30,
2022202120222021
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$5,704 $$6,657 $37  Residential properties$5,085 $10 $6,685 $27 
Construction and land development Construction and land development1,661 28 2,997 29  Construction and land development1,119 27 2,186 28 
Farmland Farmland2,743 20 10,432 124  Farmland1,806 — 9,775 128 
Other commercial Other commercial4,128 22 9,311 57  Other commercial5,524 41 6,125 58 
Total real estate Total real estate14,236 79 29,397 247  Total real estate13,534 78 24,771 241 
Commercial and industrialCommercial and industrial18,912 112 16,798 210 Commercial and industrial13,733 112 21,702 262 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers— 81 — Agricultural production and other loans to farmers14 — 54 — 
Consumer loansConsumer loans119 — 177 — Consumer loans26 — 187 — 
Total Total$33,274 $191 $46,453 $457  Total$27,307 $190 $46,714 $503 
Six Months Ended June 30,
20222021
AverageInterestAverageInterest
(In thousands)InvestmentRecognizedInvestmentRecognized
Secured by real estate:
  Residential properties$5,395 $19 $6,671 $64 
  Construction and land development1,390 55 2,591 57 
  Farmland2,274 — 10,104 252 
  Other commercial4,826 63 7,718 115 
    Total real estate13,885 137 27,084 488 
Commercial and industrial16,322 224 19,250 472 
Agricultural production and other loans to farmers11 — 68 — 
Consumer loans72 — 182 — 
    Total$30,290 $361 $46,584 $960 
There were no modifications classified as TDRs for the threesix months ended March 31,June 30, 2022 or 2021. 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 allowance for loan losses attributable to restructured loans was $139,000 at March 31,June 30, 2022 and December 31, 2021.

Note 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.

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 follows:
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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 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.
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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-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.
The following table summarizes the credit quality of the Company’s loan portfolio by loan class for the period indicated:
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Risk GradesRisk GradeRisk GradeRisk GradeRisk GradesRisk GradeRisk GradeRisk Grade
(In thousands)(In thousands)1-6789Total(In thousands)1-6789Total
March 31, 2022
June 30, 2022June 30, 2022
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$1,130,830 $202 $11,694 $— $1,142,726 Residential properties$1,223,487 $173 $12,575 $43 $1,236,278 
Construction and land developmentConstruction and land development670,156 4,107 2,299 — 676,562 Construction and land development828,538 4,107 2,164 — 834,809 
FarmlandFarmland218,673 — 3,033 — 221,706 Farmland240,290 — 2,350 — 242,640 
Other commercialOther commercial1,939,140 948 13,853 — 1,953,941 Other commercial2,022,765 12,521 15,443 — 2,050,729 
Total real estateTotal real estate3,958,799 5,257 30,879 — 3,994,935 Total real estate4,315,080 16,801 32,532 43 4,364,456 
Commercial and industrialCommercial and industrial567,923 — 16,642 — 584,565 Commercial and industrial577,509 — 14,047 1,254 592,810 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers70,080 — 196 — 70,276 Agricultural production and other loans to farmers83,898 — 109 — 84,007 
Consumer and other loansConsumer and other loans90,501 — 129 — 90,630 Consumer and other loans118,330 — 103 — 118,433 
TotalTotal$4,687,303 $5,257 $47,846 $— $4,740,406 Total$5,094,817 $16,801 $46,791 $1,297 $5,159,706 
Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
December 31, 2021
Secured by real estate:
Residential properties$763,116 $— $11,583 $— $774,699 
Construction and land development537,573 4,097 2,093 — 543,763 
Farmland208,318 — 3,185 — 211,503 
Other commercial1,386,240 — 9,845 — 1,396,085 
Total real estate2,895,247 4,097 26,706 — 2,926,050 
Commercial and industrial503,603 — 23,496 527,102 
Agricultural production and other loans to farmers86,292 — 228 — 86,520 
Consumer and other loans79,176 — 306 18 79,500 
Total$3,564,318 $4,097 $50,736 $21 $3,619,172 
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Transactions in the allowance for loan losses and balances in the loan portfolio by loan segment are as follows:

(In thousands)Commercial
and Industrial
Commercial
Real Estate
ResidentialConsumer
and other
Total
Three Months Ended March 31, 2022
Allowance for loan losses:
Beginning balance$6,556 $27,133 $9,488 $1,823 $45,000 
Provision for loan losses(468)75 311 299 217 
Recoveries on loans22 141 54 791 1,008 
Loans charged off(58)(437)(250)(1,242)(1,987)
Ending balance$6,052 $26,912 $9,603 $1,671 $44,238 
Period End Allowance Balance Allocated To:
Individually evaluated for impairment$1,723 $308 $$— $2,038 
Collectively evaluated for impairment4,329 26,604 9,596 1,671 42,200 
Ending balance$6,052 $26,912 $9,603 $1,671 $44,238 
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(In thousands)Commercial
and Industrial
Commercial
Real Estate
ResidentialConsumer
and other
Total
Three Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance$6,052 $26,912 $9,603 $1,671 $44,238 
Provision for loan losses(1,063)635 146 516 234 
Recoveries on loans58 413 55 770 1,296 
Loans charged off(921)(3)(530)(961)(2,415)
Ending balance$4,126 $27,957 $9,274 $1,996 $43,353 
Six Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance$6,556 $27,133 $9,488 $1,823 $45,000 
Provision for loan losses(1,531)710 457 815 451 
Recoveries on loans80 554 109 1,561 2,304 
Loans charged off(979)(440)(780)(2,203)(4,402)
Ending balance$4,126 $27,957 $9,274 $1,996 $43,353 
Period End Allowance Balance Allocated To:
Individually evaluated for impairment$132 $— $$— $139 
Collectively evaluated for impairment3,994 27,957 9,267 1,996 43,214 
Ending balance$4,126 $27,957 $9,274 $1,996 $43,353 


(In thousands)(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
Three Months Ended March 31, 2021
Three Months Ended June 30, 2021Three Months Ended June 30, 2021
Allowance for loan losses:Allowance for loan losses:Allowance for loan losses:
Beginning balanceBeginning balance$6,337 $20,163 $7,900 $1,600 $36,000 Beginning balance$6,135 $22,616 $9,439 $1,851 $40,041 
Provision for loan losses Provision for loan losses(290)2,355 1,581 243 3,889  Provision for loan losses422 510 648 457 2,037 
Recoveries on loans Recoveries on loans107 413 84 882 1,486  Recoveries on loans197 239 197 715 1,348 
Loans charged off Loans charged off(19)(315)(126)(874)(1,334) Loans charged off(261)(314)(50)(797)(1,422)
Balance, end of year Balance, end of year$6,135 $22,616 $9,439 $1,851 $40,041  Balance, end of year$6,493 $23,051 $10,234 $2,226 $42,004 
Six Months Ended June 30, 2021Six Months Ended June 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 losses132 2,865 2,229 700 5,926 
Recoveries on loansRecoveries on loans304 652 281 1,597 2,834 
Loans charged offLoans charged off(280)(629)(176)(1,671)(2,756)
Ending balanceEnding balance$6,493 $23,051 $10,234 $2,226 $42,004 
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$1,725 $254 $$— $1,988 Individually evaluated for impairment$1,728 $302 $$— $2,039 
Collectively evaluated for impairmentCollectively evaluated for impairment4,410 22,362 9,430 1,851 38,053 Collectively evaluated for impairment4,765 22,749 10,225 2,226 39,965 
Ending balanceEnding balance$6,135 $22,616 $9,439 $1,851 $40,041 Ending balance$6,493 $23,051 $10,234 $2,226 $42,004 
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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:

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(In thousands)(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
March 31, 2022
June 30, 2022June 30, 2022
Individually evaluated for impairmentIndividually evaluated for impairment$13,928 $4,235 $1,629 $— $19,792 Individually evaluated for impairment$13,121 $4,584 $2,149 $— $19,854 
Collectively evaluated for impairmentCollectively evaluated for impairment570,637 2,847,974 1,141,097 160,906 4,720,614 Collectively evaluated for impairment579,689 3,123,594 1,234,129 202,440 5,139,852 
Ending balanceEnding balance$584,565 $2,852,209 $1,142,726 $160,906 $4,740,406 Ending balance$592,810 $3,128,178 $1,236,278 $202,440 $5,159,706 
December 31, 2021December 31, 2021December 31, 2021
Individually evaluated for impairmentIndividually evaluated for impairment$21,822 $3,434 $1,640 $166 $27,062 Individually evaluated for impairment$21,822 $3,434 $1,640 $166 $27,062 
Collectively evaluated for impairmentCollectively evaluated for impairment505,280 2,147,917 773,059 165,854 3,592,110 Collectively evaluated for impairment505,280 2,147,917 773,059 165,854 3,592,110 
Ending balance Ending balance$527,102 $2,151,351 $774,699 $166,020 $3,619,172  Ending balance$527,102 $2,151,351 $774,699 $166,020 $3,619,172 

Note 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 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 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 maintain a capital conservation buffer of CET1 capital above the minimum risk-based capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress and effectively increases the minimum required risk-weighted capital ratios. If, after deducting the buffer amount from its CET1 capital, Tier 1 capital, and total 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 is 2.50%, is included in the minimum capital requirements relative to risk-weighted assets in the following table. Management believes as of March 31,June 30, 2022 and December 31, 2021, the Company and the Bank met Basel III minimum capital requirements to which they are subject.

The Bank is also subject to capital requirements under the prompt corrective action regime. As of March 31,June 30, 2022, the Bank maintained each of the capital ratios required to be categorized 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 total capital to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets. There are no conditions or events since March 31,June 30, 2022 that management believes have changed the Bank’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. 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.
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Tier 1 capital includes CET1 capital and additional Tier 1 capital. For the Company, additional Tier 1 capital at March 31,June 30, 2022 and December 31, 2021 included $51.1 million and $51.0 million of trust preferred securities issued by the trusts (net of
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investment in the trusts), respectively. At June 30, 2022, additional Tier 1 capital at the Company also included $250.0 million of preferred stock. The Bank did not have any additional Tier 1 capital beyond CET1 capital as of March 31,June 30, 2022 and December 31, 2021.
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 March 31,June 30, 2022 and December 31, 2021 for the Company includes $80.6$80.5 million and $58.8 million, respectively, of subordinated debentures. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations.
The following table presents actual and required capital ratios for the Company and the Bank under the Basel III rules.
 Actual Minimum Requirement 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, 2022:
June 30, 2022:June 30, 2022:
Company:Company:Company:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$381,074 7.52 %$354,634 7.00 %N/AN/ACET1 Capital to Risk-Weighted Assets$391,892 7.02 %$391,002 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets432,154 8.53 %430,626 8.50 %N/AN/ATier 1 Capital to Risk-Weighted Assets693,031 12.41 %474,789 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets556,947 10.99 %531,950 10.50 %N/AN/ATotal Capital to Risk-Weighted Assets816,925 14.63 %586,504 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets432,154 7.73 %223,690 4.00 %N/AN/ATier 1 Capital to Average Assets693,031 10.83 %255,955 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$510,266 10.23 %$349,248 7.00 %$324,301 6.50 %CET1 Capital to Risk-Weighted Assets$606,332 10.87 %$390,536 7.00 %$362,641 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets510,266 10.23 %424,087 8.50 %399,140 8.00 %Tier 1 Capital to Risk-Weighted Assets606,332 10.87 %474,223 8.50 %446,327 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets554,504 11.11 %523,872 10.50 %198,925 10.00 %Total Capital to Risk-Weighted Assets649,685 11.65 %585,804 10.50 %557,909 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets510,266 9.14 %223,200 4.00 %279,000 5.00 %Tier 1 Capital to Average Assets606,332 9.49 %255,647 4.00 %319,559 5.00 %
December 31, 2021:December 31, 2021:December 31, 2021:
Company:Company:Company:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$382,736 9.40 %$285,078 7.00 %N/AN/ACET1 Capital to Risk-Weighted Assets$382,736 9.40 %$285,078 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets433,754 10.65 %346,166 8.50 %N/AN/ATier 1 Capital to Risk-Weighted Assets433,754 10.65 %346,166 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets537,541 13.20 %427,617 10.50 %N/AN/ATotal Capital to Risk-Weighted Assets537,541 13.20 %427,617 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets433,754 8.46 %205,072 4.00 %N/AN/ATier 1 Capital to Average Assets433,754 8.46 %205,072 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$428,602 10.55 %$284,509 7.00 %$264,187 6.50 %CET1 Capital to Risk-Weighted Assets$428,602 10.55 %$284,509 7.00 %$264,187 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets428,602 10.55 %345,475 8.50 %325,153 8.00 %Tier 1 Capital to Risk-Weighted Assets428,602 10.55 %345,475 8.50 %325,153 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets473,602 11.65 %426,763 10.50 %406,441 10.00 %Total Capital to Risk-Weighted Assets473,602 11.65 %426,763 10.50 %406,441 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets428,602 8.37 %204,714 4.00 %255,893 5.00 %Tier 1 Capital to Average Assets428,602 8.37 %204,714 4.00 %255,893 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.

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Note 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

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,June 30, 2022 or December 31, 2021. The Company’s treasury department and Asset Liability Management Committee 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 non-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 Company’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
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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 Company’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.
Assets and liabilities measured at fair value on a recurring basis are summarized below:
FairFair Value Measurements UsingFairFair Value Measurements Using
(In thousands)(In thousands)ValueLevel 1Level 2Level 3(In thousands)ValueLevel 1Level 2Level 3
March 31, 2022
June 30, 2022June 30, 2022
U.S. TreasuriesU.S. Treasuries$40,149 $— $40,149 $— U.S. Treasuries$34,729 $— $34,729 $— 
U.S. Government agency obligationsU.S. Government agency obligations367,087 — 367,087 — U.S. Government agency obligations369,394 — 369,394 — 
Residential mortgage-backed securitiesResidential mortgage-backed securities121,314 — 121,314 — Residential mortgage-backed securities108,784 — 108,784 — 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities13,254 — 13,254 — Commercial mortgage-backed securities12,867 — 12,867 — 
Asset-backed securitiesAsset-backed securities12,354 — 12,354 — Asset-backed securities11,602 — 11,602 — 
Corporate investmentsCorporate investments45,392 — 45,392 — Corporate investments46,125 — 46,125 — 
State and political subdivisionsState and political subdivisions45,646 — 45,646 — State and political subdivisions43,526 — 43,526 — 
Total securities available for saleTotal securities available for sale$645,196 $— $645,196 $— Total securities available for sale$627,027 $— $627,027 $— 
December 31, 2021
U.S. Government agency obligations$350,250 $— $350,250 $— 
Residential mortgage-backed securities109,787 — 109,787 — 
Commercial mortgage-backed securities14,276 — 14,276 — 
Asset backed securities13,107 — 13,107 — 
Corporate investments44,510 — 44,510 — 
State and political subdivisions44,684 — 44,684 — 
Total securities available for sale$576,614 $— $576,614 $— 
Assets measured at fair value on a non-recurring basis are summarized below.
FairFair Value Measurements UsingFairFair Value Measurements Using
(In thousands)(In thousands)ValueLevel 1Level 2Level 3(In thousands)ValueLevel 1Level 2Level 3
Impaired loans, net of allowance for loan losses:Impaired loans, net of allowance for loan losses:Impaired loans, net of allowance for loan losses:
March 31, 2022$28,251 $— $— $28,251 
June 30, 2022June 30, 2022$26,343 $— $— $26,343 
December 31, 2021December 31, 2021$33,570 $— $— $33,570 December 31, 2021$33,570 $— $— $33,570 
Other real estate owned:Other real estate owned:Other real estate owned:
March 31, 2022$7,363 $— $— $7,363 
June 30, 2022June 30, 2022$6,462 $— $— $6,462 
December 31, 2021December 31, 2021$5,815 $— $— $5,815 December 31, 2021$5,815 $— $— $5,815 
The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis.
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Qualitative Information about Level 3 Fair Value MeasurementsQualitative Information about Level 3 Fair Value Measurements
(In thousands)(In thousands)Carrying
Value
Valuation
Methods
Unobservable
Inputs
RangeWeighted Average(In thousands)Carrying
Value
Valuation
Methods
Unobservable
Inputs
RangeWeighted Average
March 31, 2022
June 30, 2022June 30, 2022
Impaired loans, net of specific allowanceImpaired loans, net of specific allowance$28,251 Third-party appraisalsSelling costs5% - 10%6%Impaired loans, net of specific allowance$26,343 Third-party appraisalsSelling costs5% - 10%6%
Other real estate ownedOther real estate owned$7,363 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%Other real estate owned$6,462 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
RangeWeighted Average
December 31, 2021
Impaired loans, net of specific allowance$33,570 Third-party appraisalsSelling costs5% - 10%6%
Other real estate owned$5,815 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%
Fair Value of Financial Instruments
GAAP 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 estimates.

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The following table presents estimated fair values of the Company’s financial instruments not previously disclosed:
March 31, 2022December 31, 2021June 30, 2022December 31, 2021
(In thousands)(In thousands)Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
(In thousands)Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Financial assets:Financial assets:Financial assets:
Level 1 inputs:Level 1 inputs:Level 1 inputs:
Cash and cash equivalentsCash and cash equivalents$695,352 $695,352 $664,165 $664,165 Cash and cash equivalents$343,741 $343,741 $664,165 $664,165 
Level 2 inputs:Level 2 inputs:Level 2 inputs:
Securities held to maturitySecurities held to maturity68,873 68,858 71,648 72,084 Securities held to maturity66,359 66,246 71,648 72,084 
FHLB stockFHLB stock4,529 4,529 2,731 2,731 FHLB stock5,578 5,578 2,731 2,731 
Accrued interest receivableAccrued interest receivable17,756 17,756 14,329 14,329 Accrued interest receivable17,549 17,549 14,329 14,329 
Level 3 inputs:Level 3 inputs:Level 3 inputs:
Loans held for saleLoans held for sale11,744 11,744 10,621 10,621 Loans held for sale14,757 14,757 10,621 10,621 
Loans, netLoans, net4,696,168 4,663,400 3,574,172 3,548,595 Loans, net5,116,353 5,053,300 3,574,172 3,548,595 
Financial liabilities:Financial liabilities:Financial liabilities:
Level 2 inputs:Level 2 inputs:Level 2 inputs:
DepositsDeposits5,853,097 5,514,119 4,622,116 4,493,657 Deposits5,682,850 5,266,566 4,622,116 4,493,657 
FHLB and other borrowingsFHLB and other borrowings40,453 40,584 20,501 21,024 FHLB and other borrowings20,115 20,119 20,501 21,024 
Subordinated debenturesSubordinated debentures133,338 133,338 111,509 111,509 Subordinated debentures133,383 139,701 111,509 111,509 
Accrued interest payableAccrued interest payable2,945 2,945 1,425 1,425 Accrued interest payable1,476 1,476 1,425 1,425 

Note 9: Subordinated Debentures and Trust Preferred Securities

Subordinated Debentures

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 Consolidated Balance Sheets and will be amortized over the life of the Notes. At both March 31,June 30, 2022 and December 31, 2021, the remaining unamortized balance of these issuance costs was $1.1 million and $1.2 million.million, respectively. 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 are 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.

Effective March 1, 2022, in conjunction with the FTC Merger, the Company assumed FTC’s obligations under its Subordinated Note Purchase Agreement, dated as of December 23, 2020, and the several purchasers of the $21.0 million aggregate principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued thereunder (the “Subordinated Notes”). The Subordinated Notes will mature on December 30, 2030 and bear interest at an initial fixed rate of 5.50% per annum, payable semi-annually in arrears. From and including December 30, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate plus 527 basis points, payable
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quarterly in arrears. BancPlus will be entitled to redeem the Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the Subordinated Notes in whole upon certain other events. The Subordinated Notes are not subject to redemption at the option of the holder. The Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at March 31,June 30, 2022 due to the remaining purchase premium of $733,000,$683,000, which was established upon closing of the FTC Merger and is being amortized over the remaining life of the debentures.

Trust Preferred Securities

The Company also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. Under a grandfathering provision in the Basel III capital rules that applies to bank holding companies with less than $15 billion in total consolidated assets, 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.

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)(In thousands)Year of
Maturity
Interest
Rate
March 31,
2022
December 31,
2021
(In thousands)Year of
Maturity
Interest
Rate
June 30,
2022
December 31,
2021
First Bancshares of Baton Rouge Statutory Trust IFirst Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 First Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IVState Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 State Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust IIBancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust IIIBancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 
State Capital Master TrustState Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 State Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 
$56,703 $56,703 $56,703 $56,703 

The subordinated debentures payable to statutory trusts vary from the amount carried on the Consolidated Balance Sheets at March 31,June 30, 2022 due to the remaining purchase discount of $3.9 million, which was established upon the merger with State Capital Corp. (“SCC”), in 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, 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. On March 15, 2022 the Adjustable Interest Rate (LIBOR) Act was signed into law as part of the Consolidated Appropriations Act, 2022. The Adjustable Interest Rate (LIBOR) Act establishes a nationwide process for replacing LIBOR in financial contracts that mature after the cessation of the overnight, one-, three-, six- and 12-month U.S. dollar LIBOR tenors on June 30, 2023 and that do not provide for an effective means to replace LIBOR upon its cessation. For contracts in which a party has the discretion to identify a replacement rate, the Act also provides a safe harbor to parties if they choose the Secured Overnight Financing Rate (“SOFR”)-based benchmark replacement rate to be identified by the Board of Governors of the Federal Reserve System. We are currently monitoring these developments 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.
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Note 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 1000 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 on the first 3% of an employee’s salary deferral contributions, 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 1,481,796 and 1,500,732 shares of the Company's common stock at both March 31,June 30, 2022 and December 31, 2021.2021, 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 arewere released to participants proportionately as the loan isloans were repaid. Dividends on allocated shares arewere recorded as dividends and charged to retained earnings. Dividends on unallocated shares that arewere used to repay the loan arewere treated as compensation expense. As of March 31,June 30, 2022, the ESOP had zero outstanding loans with the Company.
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, 2022December 31, 2021(In thousands, except share data)June 30, 2022December 31, 2021
Allocated sharesAllocated shares1,500,732 1,472,334 Allocated shares1,481,796 1,472,334 
Unearned sharesUnearned shares— 28,398 Unearned shares— 28,398 
Total ESOP sharesTotal ESOP shares1,500,732 1,500,732 Total ESOP shares1,481,796 1,500,732 
Fair value of unearned sharesFair value of unearned shares$— $1,938 Fair value of unearned shares$— $1,938 

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 allocated shares of common stock held by the ESOP are deducted from permanent shareholders’ equity in the 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 U.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 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 Statements of Shareholders’ Equity. The fair value of allocated shares held by the ESOP at March 31,June 30, 2022 was $102.4$97.8 million, based on the Company’s previously disclosed appraised value of $68.25$66.00 per share of common stock. The fair value at December 31, 2021 was $100.5 million, based on the Company’s previously disclosed appraised value of $68.25 per share of common stock. As previously disclosed, these appraised values were determined solely for purposes of the ESOP’s administration and are 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 the value of equity securities of banking institutions. Neither the Company nor the ESOP has any obligation to seek an adjusted valuation, to use these appraised values for any other purpose or, if the Company or the ESOP obtains a new appraised value, to disclose such new appraised value.
Note 11: Equity

The Company’s Articles of Incorporation authorize 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 of Directors. At

On June 22, 2022, the Company entered into a Letter Agreement (including annexes thereto, collectively, the “Purchase Agreement”) with the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell 250,000 shares of the Company’s preferred stock designated as Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP (the “Preferred Stock”) for an aggregate purchase price of $250.0 million in cash. The Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
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The Preferred Stock bears no dividend for the first two years following the issuance of the Preferred Stock. Thereafter, the annual dividend rate will be adjusted, not lower than 0.5% and not higher than 2.0%, based on our extension of credit for qualified lending as defined in the terms of the ECIP Interim Final Rule, the Purchase Agreement and the Certificate of Designations (the “Certificate of Designations”) and the investment amount. After the tenth anniversary of the issuance of the Preferred Stock, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10 compared to the baseline qualified lending and the average investment amount. The dividends will be payable quarterly in arrears on March 31, 202215, June 15, September 15, and December 31, 2021, there were zero shares15.

The Preferred Stock may be redeemed at the option of preferred stock issuedthe Company on or after September 15, 2027 (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and outstanding.in accordance with the federal banking agencies’ regulatory capital regulations. The restrictions on redemption are set forth in the Certificate of Designations filed with the Mississippi Secretary of State for the purpose of amending its Articles of Incorporation to fix the designations, preferences, limitations and relative rights of the Preferred Stock as described in Item 5.03 of our Current Report on Form 8-K filed with the SEC on June 23, 2022.

In the Purchase Agreement, the Company also agreed to, upon the future written request of the Treasury, comply with the terms of a Registration Rights Agreement included as an annex to the Purchase Agreement and incorporated by reference therein (the “Registration Rights Agreement”), providing for certain registration rights of the Treasury. As long as the Company is not eligible to file on Form S-3, upon written request of the Treasury, the Company would be required to prepare and file a shelf registration statement covering the potential resale of the Preferred Stock as promptly as practicable. Once the Company is eligible to file on Form S-3, the Company agreed to prepare and file such shelf registration statement within 30 days. The Registration Rights Agreement also includes customary “piggyback” registration rights, suspension rights, indemnification, contribution, and assignment provisions.

Note 12: Stock Based Compensation
Under the Company’s long-term incentive program, certain officers, employees and directors are eligible to receive equity-based awards under the 2018 Long-Term Incentive Plan (“LTIP”). Restricted stock awards (“RSAs”) granted under the LTIP generally vest over one to five years. Unvested RSAs are included in the Company’s common stock outstanding. Compensation expense
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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 $680,000$1.7 million for the threesix months ended March 31,June 30, 2022 and $487,000$1.1 million for same period of 2021. There were zero and 399 shares forfeited during the threesix months ended March 31,June 30, 2022 and 2021.2021, respectively. As of March 31,June 30, 2022, there was $6.4$10.4 million of total unrecognized compensation cost related to unvested RSAs. The cost is expected to be recognized over a remaining weighted average period of 3.03.2 years.
A summary of the Company’s equity-based award activity and related information for the Company’s RSAs is as follows:
Three Months EndedSix Months Ended
March 31, 2022March 31, 2021June 30, 2022June 30, 2021
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 period144,572 $51.56 91,109 $50.60 Beginning of period144,572 $51.56 91,109 $50.60 
GrantedGranted21,367 68.25 — — Granted95,768 68.25 82,507 51.25 
VestedVested(6,077)50.00 (9,878)50.91 Vested(54,537)53.34 (32,685)51.93 
ForfeitedForfeited— — — — Forfeited— — (399)47.96 
End of periodEnd of period159,862 $53.85 81,231 $50.56 End of period185,803 $59.64 140,532 $50.56 

Note 13: Contingencies

On 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
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Court-appointed Receiver for Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), naming the Bank, 3 former Bank employees, 1 one then-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 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. A Case Management Order (No.: 3:22-cv-36-CWRFKB) was entered on January 31, 2022 for the sole purpose of managing consolidated discovery in the four related cases. Phase one written discovery is underway until at least August 31, 2022. Phases two and three discovery, allowing depositions, will begin thereafter pursuant to a subsequent court order.

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 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 and its subsidiaries, on a consolidated basis. All references to “BankPlus” or “the Bank” refer to BankPlus, our wholly-owned subsidiary.

The following discussion and analysis of BancPlus’ financial condition and results of operations should be read in conjunction with the unaudited interim consolidated financial statements and related notes contained in Item 1 of this report.

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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. 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 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 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 and variants thereof (“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, and the efficacy of COVID-19 vaccines;
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;
our ability to prudently manage our growth and execute our strategy;
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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 recent acquisition of First Trust Corporation (“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, Louisiana, and Florida;
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, including due to our upcoming planned conversion of FTC’s core processing system to our core processing system;
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 inflation, and slowdowns in economic growth;
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;
our ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms;
any impairment of our goodwill or other intangible assets;
changes in the value of collateral securing our loans;
changes in the laws, rules, regulations, interpretations, policies or stimulus programs relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, and the uncertainty of the short- and long-term impacts of such changes;
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further government intervention in the U.S. financial system, including 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 and continuing worldwide macroeconomic uncertainty;
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, climate change 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 entitled “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, 2021, our Quarterly Report on Form 10-Q for the quarter ended March 31, 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, 2021, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 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 new information, future developments or otherwise, except as specifically required by law.

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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,June 30, 2022, we operated 93 branch offices across Mississippi, Louisiana, Alabama and Florida. 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.
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,June 30, 2022, BancPlus held $5.853$5.683 billion of total deposits, and our deposit base consisted of 95.9%96.1% core deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000, with a total deposit cost of 0.19%0.15%. Our loan portfolio was comprised of 74.0%73.7% commercial loans and 26.0%26.3% 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 metropolitan statistical area as of June 30, 2021, and we believe we are well-positioned for future growth.
June 30, 2022 First Quarter Highlights

Net income for the threesix months ended March 31,June 30, 2022 was $9.7$25.8 million, compared with $17.3$31.3 million for the same period of 2021
Diluted earnings per share for the threesix months ended March 31,June 30, 2022 were $0.92,$2.34, compared with $1.73$3.12 for the same period of 2021
Net interest income was $42.8$95.6 million for the threesix months ended March 31,June 30, 2022, compared with $42.0$83.4 million for the same period of 2021
Total loans held for investment were $4.740$5.160 billion at March 31,June 30, 2022, compared with $3.619 billion at December 31, 2021
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Recent Developments
Recent
On June 22, 2022, the Company entered into a Letter Agreement (including annexes thereto, collectively, the “Purchase Agreement”) with the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”). Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage minority depository institutions and low- and moderate-income community financial institutions to augment their efforts to support small businesses and consumers in their communities. Under the program, the Treasury provided capital directly to certified Community Development Financial Institutions (“CDFI”), including the Bank, that we expect will enable us to, among other things, provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially in low-income and underserved communities, that may be disproportionately impacted by the economic effects of the COVID-19 pandemic. Pursuant to the Purchase Agreement, the Company agreed to issue and sell 250,000 shares of the Company’s preferred stock designated as Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP (the “Preferred Stock”) for an aggregate purchase price of $250.0 million in cash. The Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
For more information about the preferred stock issuance refer to Footnote 11 to our Condensed Notes to Consolidated Financial Statements for the quarter ended June 30, 2022 contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Other recent developments at March 31,June 30, 2022 did not significantly change from the recent developments as of December 31, 2021, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.2021, and as of March 31, 2022, which are disclosed in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Results of Operations
The following discussion of BancPlus’ results of operations compares the three and six months ended March 31,June 30, 2022 to the three and six months ended March 31,June 30, 2021. The results of operations for the three and six months ended March 31,June 30, 2022 are not
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necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022 or for any other period.
Net Income

Net income for the three months ended March 31,June 30, 2022 and 2021 was $9.7$16.1 million and $17.3$14.1 million, respectively. BancPlus’ annualized return on average assets for the three months ended March 31,June 30, 2022 and 2021 was 0.69%1.00% and 1.46%1.13%, respectively. BancPlus’ annualized return on average equity for the three months ended March 31,June 30, 2022 and 2021 was 9.60%13.99% and 19.58%15.34%, respectively. Net income for the six months ended June 30, 2022 and 2021 was $25.8 million and $31.3 million, respectively. BancPlus’ annualized return on average assets for the six months ended June 30, 2022 and 2021 was 0.86% and 1.29%, respectively. BancPlus’ annualized return on average equity for the six months ended June 30, 2022 and 2021 was 11.94% and 17.40%, respectively.

The decreaseincrease in net income and return metrics for the current yearthree months ended June 30, 2022 compared to datethe same period of 2021 was the result of decreased life insuranceincreased net interest income resulting from death benefits paid in the prior year and increased professional fees resulting from our previously disclosed merger with First Trust Corporation (“FTC”), in which BancPlus acquired FTC, the holding company of First Bank and Trust (“FBT”) by a statutory share exchange and FTC was merged with and into BancPlus, with BancPlus surviving the merger (the “FTC Holding Company Merger”), and FBT was merged with and into BankPlus, with BankPlus surviving the merger, effective March 1, 2022 (together with the FTC Holding Company Merger, the “FTC Merger”). as well as organic loan growth. The decrease in return metrics for the three months ended June 30, 2022 compared to the same period of 2021 was the result of an increase in noninterest expenses, including one-time acquisition-related expenses, and an increase in average assets and equity as a result of the FTC merger.

The decrease in net income and return metrics for the current year to date period was the result of decreased life insurance income resulting from death benefits paid in the prior year and increased professional fees resulting from our previously disclosed merger with FTC partially offset by the aforementioned second quarter growth in net interest income.

Net Interest Income

Net interest income represents interest income less interest expense. BancPlus generates interest income from interest, dividends and fees received on interest-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-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-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources.

Changes in market interest rates and interest BancPlus earns on interest-earning assets or pays on interest-bearing liabilities, as well as the volume and types of interest-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 maintains.

For the three months ended March 31,June 30, 2022, net interest income was $42.8$52.8 million, an increase of $725,000,$11.5 million, or 1.7%27.8%, compared to net interest income of $42.0$41.4 million for the three months ended March 31,June 30, 2021. The increase in net interest income was primarily the result of increased interest-earning assets as a result of the FTC Merger and organic loan growth.

For the six months ended June 30, 2022, net interest income was $95.6 million, an increase of $12.2 million, or 14.6%, compared to net interest income of $83.4 million for the six months ended June 30, 2021. The increase in net interest income was primarily the result of increased interest-earning assets as a result of the FTC Merger.

Net interest margin for the three months ended March 31,June 30, 2022 decreased 533 basis points to 3.22%3.51% from 3.75%3.54% for the same period of 2021 as the result of the lower interest rate environment seen earlier in the currentperiod. Net interest margin for the six months ended June 30, 2022 decreased 27 basis points to 3.37% from 3.64% for the same period of 2021 as the result of the lower interest rate environment seen earlier in the year.

Our year to date average interest-earning assets at March 31,June 30, 2022, increased $827.7 million,$1.09 billion, or 18.45%23.75%, to $5.313$5.67 billion from $4.486$4.58 billion at March 31,June 30, 2021. BancPlus’ year to date average interest-bearing liabilities at March 31,June 30, 2022 increased $462.2$632.9 million, or 14.50%19.65%, to $3.651$3.85 billion from $3.189$3.22 billion at March 31,June 30, 2021. This increaseThese increases in BancPlus’ average interest-earning assets and
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interest-bearing liabilities waswere primarily due to the FTC Merger.Merger and organic loan growth. The ratio of BancPlus’ average interest-earning assets to average interest-bearing liabilities was 145.5%147.1% and 140.7%142.2% at March 31,June 30, 2022 and 2021, respectively.
BancPlus’ average interest-earning assets produced a tax-equivalent yield of 3.46%3.79% and 3.64% for the three and six months ended March 31,June 30, 2022, respectively, compared to 4.07%3.83% and 3.95% for the three and six months ended March 31, 2021.June 30, 2021, respectively. The average rate paid on interest-bearing liabilities was 0.35%0.42% and 0.39% for the three and six months ended March 31,June 30, 2022, respectively, compared to 0.45%0.42% and 0.44% for the three and six months ended March 31, 2021.June 30, 2021, respectively. The year-over-year decrease in yields reflectreflects the current low interest rate environment.
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environment seen earlier in the year.
Average Balances and Yields
The following tables show, for the three months ended March 31,June 30, 2022 and 2021, 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.

Three Months Ended March 31,
20222021
(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$578,254 $227 0.16 %$526,113 $125 0.10 %
Federal funds sold— — — %20,109 10 0.20 %
578,254 227 0.16 %546,222 135 0.10 %
Investment securities:
Taxable investment securities629,208 2,307 1.47 %425,247 1,833 1.72 %
Tax-exempt investment securities72,432 420 2.32 %92,567 539 2.33 %
Total securities701,640 2,727 1.55 %517,814 2,372 1.83 %
Loans (1)
4,029,014 42,987 4.27 %3,418,232 43,142 5.05 %
Federal Home Loan Bank (“FHLB”) stock4,475 0.36 %3,407 0.35 %
Total interest-earning assets5,313,383 45,945 3.46 %4,485,675 45,652 4.07 %
Noninterest-earning assets345,648 334,691 
Total assets$5,659,031 $4,820,366 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,590,153 $711 0.18 %$1,427,926 $791 0.22 %
Savings and money market deposits1,199,908 312 0.10 %939,541 282 0.12 %
Time deposits714,438 654 0.37 %676,683 1,091 0.64 %
Federal funds purchased— — — %— — — %
FHLB advances20,485 76 1.48 %20,608 77 1.49 %
Other borrowings7,102 65 3.66 %12,960 124 3.83 %
Subordinated debentures119,024 1,360 4.57 %111,153 1,245 4.48 %
Total interest-bearing liabilities3,651,110 3,178 0.35 %3,188,871 3,610 0.45 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,545,452 1,218,780 
Other noninterest-bearing liabilities53,290 54,056 
Total noninterest-bearing liabilities1,598,742 1,272,836 
Shareholders’ equity (6)
409,179 358,659 
Total liabilities and shareholders’ equity$5,659,031 $4,820,366 
Net interest income/net interest margin (2)
42,767 3.22 %42,042 3.75 %
Net interest spread (5)
3.11 %3.62 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
135 173 
Net interest income/net interest margin (2)
$42,902 3.23 %$42,215 3.76 %
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Three Months Ended June 30,
20222021
(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$373,249 $469 0.50 %$555,725 $109 0.08 %
Federal funds sold— — — %1,322 0.30 %
373,249 469 0.50 %557,047 110 0.08 %
Investment securities:
Taxable investment securities626,928 2,502 1.60 %570,166 2,094 1.47 %
Tax-exempt investment securities68,614 401 2.34 %72,731 479 2.63 %
Total securities695,542 2,903 1.67 %642,897 2,573 1.60 %
Loans (1)
4,945,036 53,712 4.34 %3,471,227 42,089 4.85 %
Federal Home Loan Bank (“FHLB”) stock6,592 0.49 %3,541 0.34 %
Total interest-earning assets6,020,419 57,092 3.79 %4,674,712 44,775 3.83 %
Noninterest-earning assets418,532 329,668 
Total assets$6,438,951 $5,004,380 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,578,774 $1,118 0.28 %$1,462,402 $770 0.21 %
Savings and money market deposits1,456,402 577 0.16 %984,775 228 0.09 %
Time deposits845,637 667 0.32 %660,284 965 0.58 %
FHLB advances20,669 77 1.49 %20,559 78 1.52 %
Other borrowings18,221 205 4.50 %12,096 117 3.87 %
Subordinated debentures133,344 1,603 4.81 %111,246 1,255 4.51 %
Total interest-bearing liabilities4,053,047 4,247 0.42 %3,251,362 3,413 0.42 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,867,843 1,333,010 
Other noninterest-bearing liabilities56,162 52,217 
Total noninterest-bearing liabilities1,924,005 1,385,227 
Shareholders’ equity (6)
461,899 367,791 
Total liabilities and shareholders’ equity$6,438,951 $5,004,380 
Net interest income/net interest margin (2)
52,845 3.51 %41,362 3.54 %
Net interest spread (5)
3.37 %3.41 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
129 155 
Net interest income/net interest margin (2)
$52,974 3.52 %$41,517 3.55 %
________________________________
(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 2022 and 2021.
(4)Yields and rates are annualized.
(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.
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Six Months Ended June 30,
20222021
(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$475,185 $696 0.29 %$541,001 $234 0.09 %
Federal funds sold— — — %10,663 11 0.21 %
475,185 696 0.29 %551,664 245 0.09 %
Investment securities:
Taxable investment securities628,061 4,809 1.53 %492,799 3,927 1.59 %
Tax-exempt investment securities70,513 821 2.33 %87,901 1,018 2.32 %
Total securities698,574 5,630 1.61 %580,700 4,945 1.70 %
Loans (1)
4,489,556 96,699 4.31 %3,444,876 85,231 4.95 %
Federal Home Loan Bank (“FHLB”) stock5,539 12 0.43 %3,475 0.35 %
Total interest-earning assets5,668,854 103,037 3.64 %4,580,715 90,427 3.95 %
Noninterest-earning assets382,490 332,166 
Total assets$6,051,344 $4,912,881 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,584,432 $1,830 0.23 %$1,445,259 $1,562 0.22 %
Savings and money market deposits1,328,864 888 0.13 %962,283 509 0.11 %
Time deposits780,399 1,321 0.34 %668,438 2,056 0.62 %
FHLB advances20,577 153 1.49 %20,583 155 1.51 %
Other borrowings12,692 270 4.25 %12,526 242 3.86 %
Subordinated debentures126,224 2,963 4.69 %111,200 2,499 4.49 %
Total interest-bearing liabilities3,853,188 7,425 0.39 %3,220,289 7,023 0.44 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,707,538 1,276,210 
Other noninterest-bearing liabilities54,933 53,132 
Total noninterest-bearing liabilities1,762,471 1,329,342 
Shareholders’ equity (6)
435,685 363,250 
Total liabilities and shareholders’ equity$6,051,344 $4,912,881 
Net interest income/net interest margin (2)
95,612 3.37 %83,404 3.64 %
Net interest spread (5)
3.25 %3.51 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
264 328 
Net interest income/net interest margin (2)
$95,876 3.38 %$83,732 3.66 %
________________________________
(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 2022 and 2021.
(4)Yields and rates are annualized.
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(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.

Rate/Volume Analysis

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-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-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-bearing assets and liabilities for the dates indicated:

Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021
Change Due To:Change Due To:
(Dollars in thousands)(Dollars in thousands)VolumeRateInterest Variance(Dollars in thousands)VolumeRateInterest Variance
Interest-earning assets:Interest-earning assets:Interest-earning assets:
Cash investmentsCash investments$13 $79 $92 Cash investments$(231)$590 $359 
Investment securities:Investment securities:Investment securities:
Taxable investment securitiesTaxable investment securities748 (274)474 Taxable investment securities227 181 408 
Tax-exempt investment securitiesTax-exempt investment securities(117)(2)(119)Tax-exempt investment securities(24)(54)(78)
Total securitiesTotal securities631 (276)355 Total securities203 127 330 
Loans, netLoans, net6,517 (6,672)(155)Loans, net16,008 (4,385)11,623 
Federal Home Loan Bank stockFederal Home Loan Bank stock— Federal Home Loan Bank stock
Total interest-earning assetsTotal interest-earning assets$7,162 $(6,869)$293 Total interest-earning assets$15,984 $(3,667)$12,317 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing transaction depositsInterest-bearing transaction deposits$73 $(153)$(80)Interest-bearing transaction deposits$82 $266 $348 
Savings and money market depositsSavings and money market deposits68 (38)30 Savings and money market deposits187 162 349 
Time depositsTime deposits35 (472)(437)Time deposits146 (444)(298)
Federal funds purchased— — — 
FHLB advancesFHLB advances(1)— (1)FHLB advances— (1)(1)
Other borrowingsOther borrowings(54)(5)(59)Other borrowings69 19 88 
Subordinated debenturesSubordinated debentures90 25 115 Subordinated debentures266 82 348 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$211 $(643)$(432)Total interest-bearing liabilities$750 $84 $834 
Net interest incomeNet interest income$6,951 $(6,226)$725 Net interest income$15,234 $(3,751)$11,483 

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Six Months Ended June 30, 2022 Compared with Six Months Ended June 30, 2021
Change Due To:
(Dollars in thousands)VolumeRateInterest Variance
Interest-earning assets:
Cash investments$(112)$563 $451 
Investment securities:
Taxable investment securities1,036 (154)882 
Tax-exempt investment securities(202)(197)
Total securities834 (149)685 
Loans, net22,501 (11,033)11,468 
Federal Home Loan Bank stock
Total interest-earning assets$23,227 $(10,617)$12,610 
Interest-bearing liabilities:
Interest-bearing transaction deposits$161 $107 $268 
Savings and money market deposits245 134 379 
Time deposits189 (924)(735)
FHLB advances— — — 
Other borrowings25 28 
Subordinated debentures353 111 464 
Total interest-bearing liabilities$951 $(549)$402 
Net interest income$22,276 $(10,068)$12,208 

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.

For the three months ended March 31,June 30, 2022, the provision for loan losses was $217,000,$234,000, compared to $3.9$2.0 million for the same period of 2021, a decrease of $3.7$1.8 million, or 94.4%88.5%. For the six months ended June 30, 2022, the provision for loan losses was $451,000, compared to $5.9 million for the same period of 2021, a decrease of $5.5 million, or 92.4%. The decreasedecreases for thisthese year to date period isperiods are primarily attributable to the impact of the COVID-19 pandemic on the prior year period, including the impact of the Coronavirus Aid, Relief, and Economic Security (“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.

Noninterest Income

Noninterest income consists of, among other things: (i) service charges on deposit accounts; (ii) mortgage origination income; (iii) debit card interchange fees; (iv) income from fiduciary activities; (v) ATM income; (vi) brokerage and insurance fees and commissions, (vii) life insurance income, and (viii) 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 BancPlus’ deposit products, market interest rates, marketing efforts, and other factors.

Service 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 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.
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Brokerage and insurance fees and commissions includes stock and mutual fund brokerage fees earned by our wealth management group. Life insurance income includes earnings and benefits paid on bank-owned life insurance policies. Other income includes various types of income including gains on sale of other real estate, personalized check sales, and wire transfer fees.

Noninterest income was $18.0relatively flat at $18.7 million for both the three months ended March 31,June 30, 2022 compared to $20.3 million for the same period ofand 2021, with only a decrease of $2.3 million,$6,000, or 11.4%0.03%, primarily due to decreasesa decrease in life insurance incomeCDFI grants of $2.9$1.7 million, or 82.0%90.6%, and
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mortgage origination income of $476,000, or 17.5%; partially offset by an increase in service charges on deposit accounts of $1.1$1.7 million, or 18.4%28.2%.

The following table presents the major components of noninterest income for three months ended March 31,June 30, 2022, compared to the three months ended March 31,June 30, 2021:

Three Months Ended March 31,Three Months Ended June 30,
(Dollars in thousands)(Dollars in thousands)20222021$ Change% Change(Dollars in thousands)20222021$ Change% Change
Noninterest income:Noninterest income:Noninterest income:
Service charges on deposit accountsService charges on deposit accounts$6,792 $5,737 $1,055 18.4 %Service charges on deposit accounts$7,701 $6,005 $1,696 28.2 %
Mortgage origination incomeMortgage origination income2,238 2,714 (476)(17.5)%Mortgage origination income2,304 2,013 291 14.5 %
Debit card interchangeDebit card interchange2,428 2,640 (212)(8.0)%Debit card interchange2,748 2,604 144 5.5 %
Income from fiduciary activitiesIncome from fiduciary activities2,018 1,791 227 12.7 %Income from fiduciary activities2,032 1,875 157 8.4 %
ATM incomeATM income1,476 1,533 (57)(3.7)%ATM income1,580 1,710 (130)(7.6)%
Brokerage and insurance fees and commissionsBrokerage and insurance fees and commissions698 510 188 36.9 %Brokerage and insurance fees and commissions635 644 (9)(1.4)%
Life insurance incomeLife insurance income627 3,492 (2,865)(82.0)%Life insurance income638 1,202 (564)(46.9)%
CDFI grantsCDFI grants171 1,826 (1,655)(90.6)%
Other incomeOther income1,688 1,860 (172)(9.2)%Other income922 858 64 7.5 %
TotalTotal$17,965 $20,277 $(2,312)(11.4)%Total$18,731 $18,737 $(6)— %

Service charges on deposit accounts increased $1.1$1.7 million, or 18.4%28.2%, to $6.8$7.7 million for the three months ended March 31,June 30, 2022, compared to $5.7$6.0 million for the same period of 2021. The increase was the result of an increase in the number of deposit accounts held and a higher volume of transactions.transactions due to the FTC Merger.

CDFI grant income decreased $1.7 million, or 90.6%, to $171,000 for the three months ended June 30, 2022, compared to $1.8 million for the same period of 2021. The decrease was the result of a grant received in the prior year period 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.
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Noninterest income was $36.7 million for the six months ended June 30, 2022, compared to $39.0 million for the same period of 2021, a decrease of $2.3 million, or 5.9%, primarily due to decreases in life insurance income of $3.4 million, or 73.1% and CDFI grants of $1.7 million, or 90.6%; partially offset by an increase in service charges on deposit accounts of $2.8 million, or 23.4%.

The following table presents the major components of noninterest income for six months ended June 30, 2022, compared to the six months ended June 30, 2021:

Six Months Ended June 30,
(Dollars in thousands)20222021$ Change% Change
Noninterest income:
Service charges on deposit accounts$14,493 $11,742 $2,751 23.4 %
Mortgage origination income4,542 4,727 (185)(3.9)%
Debit card interchange5,176 5,244 (68)(1.3)%
Income from fiduciary activities4,050 3,666 384 10.5 %
ATM income3,056 3,243 (187)(5.8)%
Brokerage and insurance fees and commissions1,333 1,154 179 15.5 %
Life insurance income1,265 4,694 (3,429)(73.1)%
CDFI grants171 1,826 (1,655)(90.6)%
Other income2,610 2,718 (108)(4.0)%
Total$36,696 $39,014 $(2,318)(5.9)%

Service charges on deposit accounts increased $2.8 million, or 23.4%, to $14.5 million for the six months ended June 30, 2022, compared to $11.7 million for the same period of 2021. The increase was the result of an increase in the number of deposit accounts held and a higher volume of transactions due to the FTC Merger.

Life insurance income decreased $2.9$3.4 million, or 82.0%73.1%, to $627,000$1.3 million for the threesix months ended March 31,June 30, 2022, compared to $3.5$4.7 million for the same period of 2021. The decrease is primarily related to death benefits paid in the prior year period on policies held by BancPlus.

Mortgage originationCDFI grant income decreased $476,000,$1.7 million, or 17.5%90.6%, to $2.2 million$171,000 for the three months ended March 31,June 30, 2022, compared to $2.7$1.8 million for the same period of 2021. The decrease was primarily the result of overall decreases in mortgage origination activitya grant received in the three months ended March 31, 2022prior year period related to the CDFI Rapid Response Program as refinancing activity began to slow from increased levels in 2021, partially offset by increases in mortgage origination income resulting from the FTC Merger.described above.

Noninterest Expense

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

Salaries and employee benefits expenses includes compensation, employee benefits and tax expenses for BancPlus’ personnel. Net 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, Mississippi Department of Banking and Consumer Finance (“MDBCF”) assessments, communications, travel, meals, training, supplies and postage. Noninterest expensesexpense generally increaseincreases as BancPlus grows its business. Noninterest expenses haveexpense has increased commensurate with our growth over the past few years as BancPlus has grown organically and through our previously disclosed merger with State Capital Corp. (“SCC”), in 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, with BancPlus surviving the merger (the “SCC Holding Company Merger”), and State Bank was merged with and into BankPlus, with BankPlus surviving the merger (together with the SCC Holding Company Merger, the “SCC Merger”), which closed on April 1, 2020, and the FTC Merger. Additionally, BancPlus has built out and modernized its operational infrastructure and implemented its plan to build an
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efficient, technology-driven banking operation with capacity for growth. BancPlus continues to focus efforts on supporting growth through sales efforts, product development, marketing and promotion, as well as investing in technology and
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its branch network, while also seeking to improve productivity and maintain appropriate cost structure and customer service levels.

For the three months ended March 31,June 30, 2022, noninterest expense totaled $48.1$51.0 million, an increase of $9.9$10.6 million, or 26.0%26.2%, from $38.1$40.4 million for the three months ended March 31,June 30, 2021, primarily due to increases in professional fees of $4.1 million, or 751.7%, salaries and employee benefits expenses of $2.8$5.7 million, or 12.2%; net occupancy expenses of $771,000, or 23.0%;23.6% furniture, equipment and data processing expenses of $684,000,$1.6 million, or 11.5%25.6%; other real estate expenses and losses of $559,000,$1.3 million, or 321.3%29.2%; and marketing and promotionalnet occupancy expenses of $531,000,$1.1 million, or 92.0%27.8%.

The following table presents the major components of noninterest expense for the three months ended March 31,June 30, 2022 compared to the three months ended March 31,June 30, 2021:
Three Months Ended March 31,Three Months Ended June 30,
(Dollars in thousands)(Dollars in thousands)20222021$ Change% Change(Dollars in thousands)20222021$ Change% Change
Noninterest expense:Noninterest expense:Noninterest expense:
Salaries and employee benefits expensesSalaries and employee benefits expenses$25,845 $23,025 $2,820 12.2 %Salaries and employee benefits expenses$29,805 $24,122 $5,683 23.6 %
Net occupancy expensesNet occupancy expenses4,116 3,345 771 23.0 %Net occupancy expenses4,891 3,828 1,063 27.8 %
Furniture, equipment and data processing expensesFurniture, equipment and data processing expenses6,616 5,932 684 11.5 %Furniture, equipment and data processing expenses7,670 6,108 1,562 25.6 %
Marketing and promotional expensesMarketing and promotional expenses1,108 577 531 92.0 %Marketing and promotional expenses1,244 754 490 65.0 %
Other real estate expenses and lossesOther real estate expenses and losses733 174 559 321.3 %Other real estate expenses and losses310 278 32 11.5 %
Professional feesProfessional fees4,659 547 4,112 751.7 %Professional fees1,135 735 400 54.4 %
Other expensesOther expenses4,993 4,537 456 10.1 %Other expenses5,960 4,613 1,347 29.2 %
TotalTotal$48,070 $38,137 $9,933 26.0 %Total$51,015 $40,438 $10,577 26.2 %

Salaries and employee benefits expenses is the largest component of noninterest expense, representing 53.8%58.4% and 60.4%59.7% of total noninterest expense for the three months ended March 31,June 30, 2022 and 2021, respectively. During the three months ended March 31,June 30, 2022, salaries and employee benefits expense increased $2.8$5.7 million, or 12.2%23.6%, to $25.8$29.8 million, compared to $23.0$24.1 million for the three months ended March 31,June 30, 2021. The increase in salaries and employee benefits expense is primarily due the FTC Merger as well as to normal annual salary increases for employees, as well as increased salary-related expenses in March of 2022 related to the FTC Merger and increased bonuses.

Professional fees increased $4.1 million, or 751.7%, to $4.7 million for the three months ended March 31, 2022, compared to $547,000 for the same period of 2021. The increase was primarily the result of advisory fees as well as increased legal and accounting expenses in connection with the FTC Merger.employees.

Net occupancy expenses increased $771,000,$1.1 million, or 23.0%27.8%, to $4.1$4.9 million for the three months ended March 31,June 30, 2022, compared to $3.3$3.8 million for the same period of 2021. The primary reason for the increase is increased depreciation and rent expense as a result of the FTC Merger.

Furniture, fixtures and data processing expenses increased $684,000,$1.6 million, or 11.5%25.6%, to $6.6$7.7 million for the three months ended March 31,June 30, 2022, compared to $5.9$6.1 million for the same period of 2021. The increase is primarily due to increased data processing and equipment maintenance expenses in the current year period resulting from our recent core system upgrade.upgrade as well as costs associated with conversion of FTC customers to our core system.

Other real estate expenses and losses increased $559,000,$1.3 million, or 321.3%29.2%, to $733,000$6.0 million for the three months ended March 31,June 30, 2022, compared to $174,000$4.6 million for the same period of 2021. The increase wasis the primarily attributable to increases in FDIC assessments, amortization of intangible assets, and other expenses resulting from the FTC Merger.

For the six months ended June 30, 2022, noninterest expense totaled $99.1 million, an increase of $20.5 million, or 26.1%, from $78.6 million for the three months ended June 30, 2021, primarily due to increases in salaries and employee benefits expenses of $8.5 million, or 18.0%; professional fees of $4.5 million, or 352.0%; furniture, equipment and data processing expenses of $2.2 million, or 18.7%; net occupancy expenses of $1.8 million, or 25.6%; other expenses of $1.8 million, or 19.7%; and marketing and promotional expenses of $1.0 million, or 76.7%.

The following table presents the major components of noninterest expense for the six months ended June 30, 2022 compared to the three months ended June 30, 2021:

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Six Months Ended June 30,
(Dollars in thousands)20222021$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$55,650 $47,147 $8,503 18.0 %
Net occupancy expenses9,007 7,173 1,834 25.6 %
Furniture, equipment and data processing expenses14,286 12,040 2,246 18.7 %
Marketing and promotional expenses2,352 1,331 1,021 76.7 %
Other real estate expenses and losses1,043 452 591 130.8 %
Professional fees5,794 1,282 4,512 352.0 %
Other expenses10,953 9,150 1,803 19.7 %
Total$99,085 $78,575 $20,510 26.1 %

Salaries and employee benefits expenses is the largest component of noninterest expense, representing 56.2% and 60.0% of total noninterest expense for the six months ended June 30, 2022 and 2021, respectively. During the six months ended June 30, 2022, salaries and employee benefits expense increased $8.5 million, or 18.0%, to $55.7 million, compared to $47.1 million for the six months ended June 30, 2022. The increase in salaries and employee benefits expense is primarily due the FTC Merger as well as to normal annual salary increases for employees and increased bonuses.

Net occupancy expenses increased $1.8 million, or 25.6%, to $9.0 million for the six months ended June 30, 2022, compared to $7.2 million for the same period of 2021. The primary reason for the increase is increased depreciation and rent expense as a result of anthe FTC Merger.

Furniture, fixtures and data processing expenses increased $2.2 million, or 18.7%, to $14.3 million for the six months ended June 30, 2022, compared to $12.0 million for the same period of 2021. The increase in write downs on other real estate ownedis primarily due to increased data processing and equipment maintenance expenses in the current year period.period resulting from our recent core system upgrade as well as costs associated with conversion of FTC customers to our core system.

Market and promotional expenses increased $531,000,$1.0 million, or 92.0%76.7%, to $1.1$2.4 million for the threesix months ended March 31,June 30, 2022, compared to $577,000$1.3 million for the same period of 2021. The increase was primarily attributable to increased community sponsorship expense in the current year period.

Professional fees increased $4.5 million, or 352.0%, to $5.8 million for the six months ended June 30, 2022, compared to $1.3 million for the same period of 2021. The increase was primarily the result of advisory fees as well as increased legal and accounting expenses in connection with the FTC Merger.

Other expenses increased $1.8 million, or 19.7%, to $11.0 million for the six months ended June 30, 2022, compared to $9.2 million for the same period of 2021. The increase is the primarily attributable to increases in FDIC assessments, amortization of intangible assets, and other expenses resulting from the FTC Merger.

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.
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BancPlus recorded income tax expense of $2.8$4.2 million for the three months ended March 31,June 30, 2022, compared to $3.0$3.6 million for the same period of 2021, a decreasean increase of $265,000,$652,000, or 8.8%18.3%. BancPlus’ effective tax rate for the three months ended March 31,June 30, 2022 was 22.1%20.7%, compared to 14.9%20.2% for the same period of 2021.

BancPlus recorded income tax expense of $7.0 million for the six months ended June 30, 2022, compared to $6.6 million for the same period of 2021, an increase $387,000, or 5.9%. BancPlus’ effective tax rate for the six months ended June 30, 2022 was 21.3%, compared to 17.4% for the same period of 2021.

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The increase in the effective tax rate for the threesix months ended March 31,June 30, 2022 compared with the same period of 2021 was the result of the Company taking advantage of tax credits offered by Mississippi and non-taxable life insurance proceeds in the prior year period.

The decreaseincrease in income tax expense for the three and six months ended March 31,June 30, 2022, compared to the same periodperiods of 2021, was primarily the result of lowerhigher income before taxes in the current year.

Financial Condition

The following discussion compares BancPlus’ financial condition as of March 31,June 30, 2022 to December 31, 2021.

Assets

Total assets increased $1.319$1.38 billion, or 25.4%26.5%, to $6.515$6.57 billion at March 31,June 30, 2022 from total assets of $5.196$5.20 billion at December 31, 2021. Total cash and cash equivalents increased $31.2decreased $320.4 million, or 4.7%48.2%, to $695.4$343.7 million at March 31,June 30, 2022, compared to $664.2 million at December 31, 2021, primarily due to cash acquired in excess of cash paid for the FTC Merger partially offset by an increase in cash outflow for investments and loans made during the period. Total loans held for investment increased $1.121$1.54 billion, or 31.0%42.6%, to $4.740$5.16 billion at March 31,June 30, 2022, compared to $3.619$3.62 billion at December 31, 2021 as a result of the FTC Merger and organic loan growth. Investment securities increased $65.8$45.1 million, or 10.2%7.0%, from $648.3 million at December 31, 2021 to $714.1$693.4 million at March 31,June 30, 2022 as a result of securities acquired in the FTC Merger and excess liquidity.
Investment Securities Portfolio

BancPlus’ investment securities portfolio, which consists primarily of 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,June 30, 2022, 9.6% of BancPlus’ investment securities portfolio was classified as held to maturity and 90.4% was classified as available for sale. As of December 31, 2021, 11.1% of BancPlus’ investment securities portfolio was classified as held to maturity and 88.9% was classified as available for sale. Securities available for sale increased $68.6$50.4 million, or 11.9%8.7%, from $576.6 million at December 31, 2021 to $645.2$627.0 million at March 31,June 30, 2022.

At March 31,June 30, 2022, U.S. government agency obligations represented 51.4%53.3%, mortgage-backed securities represented 18.9%17.5%, municipal securities represented 16.0%15.8%, corporate investments represented 6.4%6.7%, U.S. Treasuries represented 5.6%5.0% and asset-backed securities represented 1.7% of the investment securities portfolio. At December 31, 2021, U.S. government agency obligations represented 54.0%, mortgage-backed securities represented 19.1%, municipal securities represented 18.0%17.9%, corporate investments represented 6.9% and asset-backed securities represented 2.0% of the investment securities portfolio. Other than the 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:
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March 31, 2022December 31, 2021June 30, 2022December 31, 2021
(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)
Issued by states and political subdivisionsIssued by states and political subdivisions$68,873 9.65 %$71,648 11.05 %Issued by states and political subdivisions$66,359 9.57 %$71,648 11.05 %
Total held-to-maturityTotal held-to-maturity68,873 9.65 %71,648 11.05 %Total held-to-maturity66,359 9.57 %71,648 11.05 %
Available for Sale:Available for Sale:Available for Sale:
(At fair value)(At fair value)(At fair value)
U.S. TreasuriesU.S. Treasuries40,149 5.62 %— — %U.S. Treasuries34,729 5.01 %— — %
U.S. Government agency obligationsU.S. Government agency obligations367,087 51.41 %350,250 54.03 %U.S. Government agency obligations369,394 53.27 %350,250 54.03 %
Issued by states and political subdivisionsIssued by states and political subdivisions45,646 6.39 %44,684 6.89 %Issued by states and political subdivisions43,526 6.28 %44,684 6.89 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential121,314 16.99 %109,787 16.94 %Residential108,784 15.69 %109,787 16.94 %
CommercialCommercial13,254 1.86 %14,276 2.20 %Commercial12,867 1.86 %14,276 2.20 %
Asset-backed securitiesAsset-backed securities12,354 1.73 %13,107 2.02 %Asset-backed securities11,602 1.67 %13,107 2.02 %
Corporate investmentsCorporate investments45,392 6.36 %44,510 6.87 %Corporate investments46,125 6.65 %44,510 6.87 %
Total available for saleTotal available for sale645,196 90.35 %576,614 88.95 %Total available for sale627,027 90.43 %576,614 88.95 %
Total securitiesTotal securities$714,069 100.00 %$648,262 100.00 %Total securities$693,386 100.00 %$648,262 100.00 %

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. Weighted-average yields have been computed on a fully tax equivalent basis using a tax rate of 21%.
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Maturity as of March 31, 2022Maturity as of June 30, 2022
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:
Issued by states and political subdivisionsIssued by states and political subdivisions$7,529 3.17 %$47,762 2.54 %$11,372 3.25 %$2,210 4.27 %Issued by states and political subdivisions$8,170 3.15 %$46,172 2.54 %$9,807 3.27 %$2,210 4.27 %
Total held to maturityTotal held to maturity7,529 3.17 %47,762 2.54 %11,372 3.25 %2,210 4.27 %Total held to maturity8,170 3.15 %46,172 2.54 %9,807 3.27 %2,210 4.27 %
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries9,999 0.08 %30,150 1.13 %— — %— — %U.S. Treasuries4,876 1.05 %29,854 1.36 %— — %— — %
U.S. Government agency obligationsU.S. Government agency obligations— — %265,004 0.64 %98,158 1.25 %3,925 1.78 %U.S. Government agency obligations4,873 0.80 %282,205 0.74 %78,900 1.28 %3,416 2.03 %
Issued by states and political subdivisionsIssued by states and political subdivisions2,051 3.87 %18,263 2.56 %18,977 3.19 %6,355 3.01 %Issued by states and political subdivisions2,467 2.85 %17,754 2.67 %18,074 3.24 %5,231 2.77 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential— — %— — %3,716 1.86 %117,598 2.51 %Residential— — %— — %6,878 2.18 %101,906 2.50 %
CommercialCommercial— — %— — %12,631 1.54 %623 2.49 %Commercial— — %4,741 1.55 %7,552 1.53 %575 2.50 %
Asset-backed securitiesAsset-backed securities— — %— — %— — %12,354 2.09 %Asset-backed securities— — %— — %— — %11,601 2.96 %
Corporate investmentsCorporate investments— — %472 2.75 %41,908 4.05 %3,012 4.00 %Corporate investments— — %464 2.75 %44,679 4.08 %981 4.50 %
Total available for saleTotal available for sale12,050 0.73 %313,889 0.80 %175,390 2.16 %143,867 2.51 %Total available for sale12,216 1.31 %335,018 0.91 %156,083 2.36 %123,710 2.56 %
Total securitiesTotal securities$19,579 1.67 %$361,651 1.03 %$186,762 2.23 %$146,077 2.53 %Total securities$20,386 2.05 %$381,190 1.11 %$165,890 2.41 %$125,920 2.59 %
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Maturity as of December 31, 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$9,286 3.00 %$44,803 2.77 %$15,349 2.41 %$2,210 4.27 %
Total held to maturity9,286 3.00 %44,803 2.77 %15,349 2.41 %2,210 4.27 %
Available for sale:
U.S. Government agency obligations5,006 2.60 %221,071 0.54 %120,049 1.20 %4,124 1.77 %
Issued by states and political subdivisions2,202 4.06 %15,110 2.63 %21,084 3.09 %6,288 3.24 %
Mortgage-backed securities:
Residential— — %— — %4,211 1.86 %105,576 2.42 %
Commercial— — %— — %13,512 1.54 %764 2.50 %
Asset-backed securities— — %— — %— — %13,107 1.83 %
Corporate investments4,004 2.13 %493 2.75 %38,953 4.12 %1,060 4.50 %
Total available for sale11,212 2.72 %236,674 0.68 %197,809 2.01 %130,919 2.40 %
Total securities$20,498 2.85 %$281,477 1.01 %$213,158 2.04 %$133,129 2.43 %

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, makes most investments compatible with the pledge requirements of any deposits of public funds, and maintains 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 stable income over periods of interest rate fluctuations.

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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, 2022As of December 31, 2021As of June 30, 2022As of December 31, 2021
(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$1,142,726 24.11 %$774,699 21.41 %Residential properties$1,236,278 23.96 %$774,699 21.41 %
Construction and land developmentConstruction and land development676,562 14.27 %543,763 15.02 %Construction and land development834,809 16.18 %543,763 15.02 %
FarmlandFarmland221,706 4.68 %211,503 5.84 %Farmland242,640 4.70 %211,503 5.84 %
Other commercialOther commercial1,953,941 41.22 %1,396,085 38.58 %Other commercial2,050,729 39.74 %1,396,085 38.58 %
Total real estateTotal real estate3,994,935 84.28 %2,926,050 80.85 %Total real estate4,364,456 84.58 %2,926,050 80.85 %
Commercial and industrialCommercial and industrial584,565 12.33 %527,102 14.56 %Commercial and industrial592,810 11.49 %527,102 14.56 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers70,276 1.48 %86,520 2.39 %Agricultural production and other loans to farmers84,007 1.63 %86,520 2.39 %
Consumer and otherConsumer and other90,630 1.91 %79,500 2.20 %Consumer and other118,433 2.30 %79,500 2.20 %
Total loans, grossTotal loans, gross4,740,406 100.00 %3,619,172 100.00 %Total loans, gross5,159,706 100.00 %3,619,172 100.00 %
Allowance for loan lossesAllowance for loan losses(44,238)(45,000)Allowance for loan losses(43,353)(45,000)
Total loans, netTotal loans, net$4,696,168 $3,574,172 Total loans, net$5,116,353 $3,574,172 

Our loan portfolio was comprised of 73.7% commercial loans and 26.3% consumer loans as of June 30, 2022, compared to 76.4% commercial loans and 23.6% consumer loans as of December 31, 2021. Commercial loans consist of our construction and land development, farmland, other commercial, commercial and industrial, agricultural production and other loans to farmers categories and our consumer loans consist of our residential property and consumer and other categories.
As a general practice, BancPlus originates substantially all of its loans, but BancPlus occasionally participates in syndications and other loan participations. At March 31,June 30, 2022, BancPlus’ loan portfolio included $337.9$341.3 million of loan participations purchased, or 7.13%6.61% of total loans, which includes $176.8$185.6 million of shared national credits. At December 31, 2021, BancPlus’ loan portfolio included $333.0 million of loan participations purchased, or 9.20% of total loans, which includes $177.5 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 March 31, 2022As of June 30, 2022
(Dollars in thousands)(Dollars in thousands)Due in
One Year or
Less
More Than
One Year
to Five
More Than Five Years to FifteenAfter Fifteen YearsTotal(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:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$137,491 $339,638 $598,344 $67,253 $1,142,726 Residential properties$101,072 $331,972 $502,340 $300,894 $1,236,278 
Construction and land developmentConstruction and land development254,996 297,558 108,116 15,892 676,562 Construction and land development207,891 448,221 138,621 40,076 834,809 
FarmlandFarmland33,910 113,781 61,250 12,765 221,706 Farmland24,013 120,881 76,937 20,809 242,640 
Other commercialOther commercial180,043 1,082,616 534,274 157,008 1,953,941 Other commercial143,014 1,015,202 642,712 249,801 2,050,729 
Total real estateTotal real estate606,440 1,833,593 1,301,984 252,918 3,994,935 Total real estate475,990 1,916,276 1,360,610 611,580 4,364,456 
Commercial and industrialCommercial and industrial153,465 342,181 83,539 5,380 584,565 Commercial and industrial159,696 338,246 94,868 — 592,810 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers29,486 40,168 622 — 70,276 Agricultural production and other loans to farmers30,976 51,089 1,942 — 84,007 
Consumer and other loansConsumer and other loans26,795 59,114 4,403 318 90,630 Consumer and other loans23,047 86,777 8,595 14 118,433 
Total loansTotal loans$816,186 $2,275,056 $1,390,548 $258,616 $4,740,406 Total loans$689,709 $2,392,388 $1,466,015 $611,594 $5,159,706 

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As of December 31, 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$105,854 $317,073 $340,436 $11,336 $774,699 
Construction and land development217,487 285,923 31,161 9,192 543,763 
Farmland38,671 104,034 61,553 7,245 211,503 
Other commercial172,914 878,887 299,853 44,431 1,396,085 
Total real estate534,926 1,585,917 733,003 72,204 2,926,050 
Commercial and industrial98,197 342,243 86,662 — 527,102 
Agricultural production and other loans to farmers49,748 36,214 558 — 86,520 
Consumer and other loans20,686 57,222 1,578 14 79,500 
Total loans$703,557 $2,021,596 $821,801 $72,218 $3,619,172 

As of March 31, 2022As of June 30, 2022
(Dollars in thousands)(Dollars in thousands)Fixed Interest RatesFloating or Adjustable RatesTotal(Dollars in thousands)Fixed Interest RatesFloating or Adjustable RatesTotal
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$896,194 $246,532 $1,142,726 Residential properties$989,554 $246,724 $1,236,278 
Construction and land developmentConstruction and land development295,517 381,045 676,562 Construction and land development357,261 477,548 834,809 
FarmlandFarmland156,807 64,899 221,706 Farmland165,772 76,868 242,640 
Other commercialOther commercial1,369,135 584,806 1,953,941 Other commercial1,493,690 557,039 2,050,729 
Total real estateTotal real estate2,717,653 1,277,282 3,994,935 Total real estate3,006,277 1,358,179 4,364,456 
Commercial and industrialCommercial and industrial287,336 297,229 584,565 Commercial and industrial299,582 293,228 592,810 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers42,438 27,838 70,276 Agricultural production and other loans to farmers46,631 37,376 84,007 
Consumer and other loansConsumer and other loans63,327 27,303 90,630 Consumer and other loans89,711 28,722 118,433 
Total loansTotal loans$3,110,754 $1,629,652 $4,740,406 Total loans$3,442,201 $1,717,505 $5,159,706 

As of December 31, 2021
(Dollars in thousands)Fixed Interest RatesFloating or Adjustable RatesTotal
Secured by real estate:
Residential properties$644,842 $129,857 $774,699 
Construction and land development262,573 281,190 543,763 
Farmland154,154 57,349 211,503 
Other commercial1,157,465 238,620 1,396,085 
Total real estate2,219,034 707,016 2,926,050 
Commercial and industrial258,036 269,066 527,102 
Agricultural production and other loans to farmers58,206 28,314 86,520 
Consumer and other loans54,923 24,577 79,500 
Total loans$2,590,199 $1,028,973 $3,619,172 

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
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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 March 31,June 30, 2022, BancPlus had total off-balance sheet commitments of $1.593$1.636 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.

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, 2022As of June 30, 2022
(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$1,131,032 $11,694 $— $1,142,726 Residential properties$1,223,660 $12,575 $43 $1,236,278 
Construction and land developmentConstruction and land development674,263 2,299 — 676,562 Construction and land development832,645 2,164 — 834,809 
FarmlandFarmland218,673 3,033 — 221,706 Farmland240,290 2,350 — 242,640 
Other commercialOther commercial1,940,088 13,853 — 1,953,941 Other commercial2,035,286 15,443 — 2,050,729 
Total real estateTotal real estate3,964,056 30,879 — 3,994,935 Total real estate4,331,881 32,532 43 4,364,456 
Commercial and industrialCommercial and industrial567,923 16,642 — 584,565 Commercial and industrial577,509 14,047 1,254 592,810 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers70,080 196 — 70,276 Agricultural production and other loans to farmers83,898 109 — 84,007 
Consumer and otherConsumer and other90,501 129 — 90,630 Consumer and other118,330 103 — 118,433 
TotalTotal$4,692,560 $47,846 $— $4,740,406 Total$5,111,618 $46,791 $1,297 $5,159,706 

As of December 31, 2021
(Dollars in thousands)Risk
Grades 1-7
SubstandardDoubtfulTotal
Secured by real estate:
Residential properties$763,116 $11,583 $— $774,699 
Construction and land development541,670 2,093 — 543,763 
Farmland208,318 3,185 — 211,503 
Other commercial1,386,240 9,845 — 1,396,085 
Total real estate2,899,344 26,706 — 2,926,050 
Commercial and industrial503,603 23,496 527,102 
Agricultural production and other loans to farmers86,292 228 — 86,520 
Consumer and other79,176 306 18 79,500 
Total$3,568,415 $50,736 $21 $3,619,172 
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Nonperforming Assets

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

The following table summarizes BancPlus’ nonperforming assets, by category, as of the dates indicated:
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)June 30, 2022December 31, 2021
Nonaccrual loans:Nonaccrual loans:Nonaccrual loans:
Real estate loans:Real estate loans:Real estate loans:
Residential propertiesResidential properties$3,373 $3,154 Residential properties$2,878 $3,154 
Construction and land developmentConstruction and land development169 51 Construction and land development40 51 
FarmlandFarmland1,445 1,327 Farmland968 1,327 
Other commercialOther commercial2,486 1,176 Other commercial3,105 1,176 
Total real estateTotal real estate7,473 5,708 Total real estate6,991 5,708 
Commercial and industrialCommercial and industrial85 20 Commercial and industrial1,625 20 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers14 Agricultural production and other loans to farmers14 
Consumer and otherConsumer and other26 166 Consumer and other26 166 
Total nonaccrual loansTotal nonaccrual loans7,598 5,897 Total nonaccrual loans8,656 5,897 
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 properties1,803 1,641 Residential properties1,615 1,641 
Construction and land developmentConstruction and land development1,558 1,558 Construction and land development574 1,558 
FarmlandFarmland— — Farmland— — 
Other commercialOther commercial— — Other commercial— — 
Total real estateTotal real estate3,361 3,199 Total real estate2,189 3,199 
Commercial and industrialCommercial and industrial375 381 Commercial and industrial— 381 
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 – accruing3,736 3,580 Total troubled debt restructuring loans – accruing2,189 3,580 
Total nonperforming loansTotal nonperforming loans11,334 9,477 Total nonperforming loans10,845 9,477 
Plus: foreclosed assetsPlus: foreclosed assets7,363 5,815 Plus: foreclosed assets6,462 5,815 
Total nonperforming assetsTotal nonperforming assets$18,697 $15,292 Total nonperforming assets$17,307 $15,292 
Nonaccrual loans to total loansNonaccrual loans to total loans0.16 %0.16 %Nonaccrual loans to total loans0.17 %0.16 %
Nonperforming loans to total loansNonperforming loans to total loans0.24 %0.26 %Nonperforming loans to total loans0.21 %0.26 %
Nonperforming assets to total assetsNonperforming assets to total assets0.29 %0.29 %Nonperforming assets to total assets0.26 %0.29 %
Allowance for loan losses to nonaccrual loansAllowance for loan losses to nonaccrual loans582.23 %763.10 %Allowance for loan losses to nonaccrual loans500.84 %763.10 %
90+ days past due and accruing90+ days past due and accruing$3,147 $2,914 90+ days past due and accruing$2,437 $2,914 
Total troubled debt restructuring loansTotal troubled debt restructuring loans$3,736 $3,746 Total troubled debt restructuring loans$2,561 $3,746 
Total nonperforming assets increased by $3.4$2.0 million, or 22.3%13.2%, from $15.3 million at December 31, 2021 to $18.7$17.3 million at March 31,June 30, 2022, primarily the result of nonperforming loans and foreclosed assets acquired in the FTC Merger.

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.
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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.

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 firstsecond quarter of 2022, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of the COVID-19 pandemic, supply chain disruptions, labor shortages, and the conflict in Ukraine.Ukraine, and the COVID-19 pandemic. 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 $44.2$43.4 million and $45.0 million, and the allowance for loan losses as a percentage of loans was 0.93%0.84% and 1.24%, at March 31,June 30, 2022 and December 31, 2021, respectively. Net charge-offs (recoveries) totaled $979,000$2.1 million and $(152,000)$(78,000) for the threesix months ended March 31,June 30, 2022 and 2021, respectively. The $1.1 million variance is primarily the result of current year charge-offs on consumer and other commercial categories.

The allowance for loan losses decreased by $762,000,$1.6 million, or 1.7%3.7%, to $44.2$43.4 million at March 31,June 30, 2022, from $45.0 million at December 31, 2021, primarily due to an increase in net charge-offs in the current period.

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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)(Dollars in thousands)March 31, 2022March 31, 2021(Dollars in thousands)June 30, 2022June 30, 2021
Balance, beginning of periodBalance, beginning of period$45,000 $36,000 Balance, beginning of period$45,000 $36,000 
Charge-offs:Charge-offs:Charge-offs:
Residential propertiesResidential properties250 126 Residential properties780 176 
Construction and land developmentConstruction and land development— 210 Construction and land development228 
FarmlandFarmland120 Farmland120 
Other commercialOther commercial317 101 Other commercial319 397 
Total real estateTotal real estate687 441 Total real estate1,220 805 
Commercial and industrialCommercial and industrial58 19 Commercial and industrial979 280 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers981 776 Agricultural production and other loans to farmers1,871 1,446 
Consumer and otherConsumer and other261 98 Consumer and other332 225 
Total charge-offsTotal charge-offs1,987 1,334 Total charge-offs4,402 2,756 
Recoveries:Recoveries:Recoveries:
Residential propertiesResidential properties54 84 Residential properties109 281 
Construction and land developmentConstruction and land development70 Construction and land development446 51 
FarmlandFarmland283 Farmland11 288 
Other commercialOther commercial66 122 Other commercial97 313 
Total real estateTotal real estate195 497 Total real estate663 933 
Commercial and industrialCommercial and industrial22 107 Commercial and industrial80 304 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers744 766 Agricultural production and other loans to farmers1,302 1,413 
Consumer and otherConsumer and other47 116 Consumer and other259 184 
Total recoveriesTotal recoveries1,008 1,486 Total recoveries2,304 2,834 
Net charge-offs (recoveries)Net charge-offs (recoveries)979 (152)Net charge-offs (recoveries)2,098 (78)
Provision for loan lossesProvision for loan losses217 3,889 Provision for loan losses451 5,926 
Balance, end of periodBalance, end of period$44,238 $40,041 Balance, end of period$43,353 $42,004 
Total loans, end of period (including loans held for sale)Total loans, end of period (including loans held for sale)$4,752,150 $3,427,393 Total loans, end of period (including loans held for sale)$5,174,463 $3,501,995 
Average loansAverage loans4,029,014 3,418,232 Average loans4,489,556 3,444,876 
Net charge-offs (annualized) to average loansNet charge-offs (annualized) to average loans0.10 %(0.02)%Net charge-offs (annualized) to average loans0.09 %— %
Allowance for loan losses to total loansAllowance for loan losses to total loans0.93 %1.17 %Allowance for loan losses to total loans0.84 %1.20 %
The table below reflects net charge-offs to average loans outstanding, by category, during the periods presented.
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Three Months Ended March 31,Six Months Ended June 30,
2022202120222021
(Dollars in thousands)(Dollars in thousands)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)(Dollars in thousands)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)Net Charge-offsAverage LoansNet Charge-offs to Average Loans (Annualized)
Residential propertiesResidential properties$196 $897,909 0.09 %$42 $732,682 0.02 %Residential properties$671 $1,046,523 0.13 %$(105)$744,655 (0.03)%
Construction and land developmentConstruction and land development(70)614,770 (0.05)%202 437,070 0.18 %Construction and land development(445)686,572 (0.13)%177 453,323 0.08 %
FarmlandFarmland115 216,353 0.21 %(279)209,550 (0.53)%Farmland109 223,491 0.10 %(284)206,211 (0.28)%
Other commercialOther commercial251 1,592,295 0.06 %(21)1,243,560 (0.01)%Other commercial222 1,797,364 0.02 %84 1,258,719 0.01 %
Commercial and industrialCommercial and industrial36 550,125 0.03 %(88)631,169 (0.06)%Commercial and industrial899 562,025 0.32 %(24)610,283 (0.01)%
Agricultural production and other loans to farmersAgricultural production and other loans to farmers237 64,658 1.47 %10 75,325 0.05 %Agricultural production and other loans to farmers569 71,852 1.58 %33 83,874 0.08 %
Consumer and otherConsumer and other214 83,964 1.02 %(18)75,546 (0.10)%Consumer and other73 91,834 0.16 %41 79,296 0.10 %
Loans held for saleLoans held for sale— 8,940 — %— 22,532 — %Loans held for sale— 9,895 — %— 8,515 — %
TotalTotal$979 $4,029,014 0.10 %$(152)$3,427,434 (0.02)%Total$2,098 $4,489,556 0.09 %$(78)$3,444,876 — %

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:

March 31, 2022December 31, 2021June 30, 2022December 31, 2021
(Dollars in thousands)(Dollars in thousands)AmountPercentAmountPercent(Dollars in thousands)AmountPercentAmountPercent
Residential propertiesResidential properties$9,603 21.7 %$9,488 21.1 %Residential properties$9,274 21.4 %$9,488 21.1 %
Construction and land developmentConstruction and land development6,539 14.8 %6,463 14.4 %Construction and land development7,385 17.0 %6,463 14.4 %
FarmlandFarmland1,860 4.2 %2,171 4.8 %Farmland1,763 4.1 %2,171 4.8 %
Other commercialOther commercial18,513 41.8 %18,499 41.1 %Other commercial18,809 43.4 %18,499 41.1 %
Total real estateTotal real estate36,515 82.5 %36,621 81.4 %Total real estate37,231 85.9 %36,621 81.4 %
Commercial and industrialCommercial and industrial6,052 13.7 %6,556 14.6 %Commercial and industrial4,126 9.5 %6,556 14.6 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers679 1.5 %958 2.1 %Agricultural production and other loans to farmers716 1.7 %958 2.1 %
Consumer and otherConsumer and other992 2.2 %865 1.9 %Consumer and other1,280 3.0 %865 1.9 %
Total allowance for loan lossesTotal allowance for loan losses$44,238 100.0 %$45,000 100.0 %Total allowance for loan losses$43,353 100.0 %$45,000 100.0 %

Goodwill and Other Intangible Assets

Goodwill was $63.8 million and $2.6 million March 31,June 30, 2022 and December 31, 2021, respectively. Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired by the Company in prior acquisitions. The increase in goodwill is the result of the FTC Merger. 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 a 2014 acquisition and core deposit intangibles from the SCC Merger and the FTC Merger. Total other intangible assets at March 31,June 30, 2022 and December 31, 2021 were $12.7$12.3 million and $5.1 million, respectively. Other intangible assets are amortized over their estimated useful life.

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Deposits

The following table details composition and percentage composition of BancPlus’ deposit portfolio, by category, for the year to date periods indicated:
March 31, 2022December 31, 2021June 30, 2022December 31, 2021
(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$1,545,452 0.00 %30.60 %$1,337,985 0.00 %30.13 %Non-interest bearing$1,707,538 0.00 %31.61 %$1,337,985 0.00 %30.13 %
Interest bearing:Interest bearing:Interest bearing:
Transaction accountsTransaction accounts1,590,153 0.18 %31.49 %1,453,493 0.20 %32.74 %Transaction accounts1,584,432 0.23 %29.33 %1,453,493 0.20 %32.74 %
Money market and other savings accountsMoney market and other savings accounts1,199,908 0.10 %23.76 %996,420 0.09 %22.44 %Money market and other savings accounts1,328,864 0.13 %24.60 %996,420 0.09 %22.44 %
Certificates of depositCertificates of deposit714,438 0.37 %14.15 %652,247 0.56 %14.69 %Certificates of deposit780,399 0.34 %14.45 %652,247 0.56 %14.69 %
Total depositsTotal deposits$5,049,951 0.13 %100.00 %$4,440,145 0.17 %100.00 %Total deposits$5,401,233 0.15 %100.00 %$4,440,145 0.17 %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 $609.8$961.1 million, or 13.7%21.6%, to $5.050$5.40 billion at March 31,June 30, 2022 from $4.440$4.44 billion as of December 31, 2021 primarily resulted from the FTC Merger. At March 31,June 30, 2022 and December 31, 2021, BancPlus held non-time deposits in excess of FDIC insurance limits estimated at $1.188$1.40 billion and $802.9 million, respectively.

The following table shows the maturity of certificates of deposit as of March 31,June 30, 2022:

(Dollars in thousands)(Dollars in thousands)$250,000 or GreaterLess than $250,000TotalUninsured Portion(Dollars in thousands)$250,000 or GreaterLess than $250,000TotalUninsured Portion
3 months or less3 months or less$58,906 $145,774 $204,680 $29,906 3 months or less$22,823 $42,620 $65,443 $13,823 
Over 3 months through 6 monthsOver 3 months through 6 months49,727 122,640 172,367 25,477 Over 3 months through 6 months43,044 126,549 169,593 20,794 
Over 6 months through 12 monthsOver 6 months through 12 months65,916 184,495 250,411 33,166 Over 6 months through 12 months86,230 190,631 276,861 52,480 
Over 12 monthsOver 12 months74,189 181,283 255,472 36,189 Over 12 months75,630 231,209 306,839 29,880 
Total certificates of depositTotal certificates of deposit$248,738 $634,192 $882,930 $124,738 Total certificates of deposit$227,727 $591,009 $818,736 $116,977 

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,June 30, 2022 and December 31, 2021, we had no short-term borrowings.

Advances from Federal Home Loan Bank (“FHLB”) 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. At both March 31,June 30, 2022 and December 31, 2021, BancPlus had $20.1 million and $20.5 million in FHLB borrowings, at a weighted average interest rate of 1.48% and 1.49%., respectively.

On February 25, 2022, the Company entered into a $20.0 million revolving line of credit with a correspondent bank. The line of credit is collateralized by 9,000 shares of BankPlus common stock. The line of credit bears interest at a floating rate of Wall Street Journal Prime with 3.25% interest rate floor. At March 31, 2022, the interest rate was 3.50%. Interest only payments are due on a quarterly basis with the principal due at maturity on February 25, 2024. The balance outstanding on this loanrevolving line of credit was $20.0 million and zero at March 31,June 30, 2022 and December 31, 2021, respectively.2021.


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Required principal payments on FHLB advances and other borrowings were as follows:
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)June 30, 2022December 31, 2021
20222022$397 $417 2022$35 $417 
2023202325 25 202325 25 
2024202420,013 13 202413 13 
2025202513 13 202513 13 
2026202614 14 202614 14 
ThereafterThereafter20,015 20,019 Thereafter20,015 20,019 
TotalTotal$40,477 $20,501 Total$20,115 $20,501 

Subordinated Debentures. 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 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 are 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.

Effective March 1, 2022, in conjunction with the FTC Merger, the Company assumed FTC’s obligations under its Subordinated Note Purchase Agreement, dated as of December 23, 2020, and the several purchasers of the $21.0 million aggregate principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued thereunder (the “Subordinated Notes”). The Subordinated Notes will mature on December 30, 2030 and bear interest at an initial fixed rate of 5.50% per annum, payable semi-annually in arrears. From and including December 30, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate plus 527 basis points, payable quarterly in arrears. BancPlus will be entitled to redeem the Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the Subordinated Notes in whole upon certain other events. The Subordinated Notes are not subject to redemption at the option of the holder. The Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at March 31,June 30, 2022 due to the remaining purchase premium of $733,000,$683,000, which was established upon closing of the FTC Merger and is being amortized over the remaining life of the debentures.

BancPlus also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. Under a grandfathering provision in the Basel III capital rules that applies to bank holding companies with less than $15 billion in total consolidated assets, 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:
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(Dollars in thousands)(Dollars in thousands)Year of
Maturity
Interest
Rate
March 31, 2022December 31, 2021(Dollars in thousands)Year of
Maturity
Interest
Rate
June 30, 2022December 31, 2021
First Bancshares of Baton Rouge Statutory Trust IFirst Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 First Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IVState Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 State Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust IIBancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust IIIBancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 
State Capital Master TrustState Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 State Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 
$56,703 $56,703 $56,703 $56,703 

The subordinated debentures payable to statutory trusts vary from the amount carried on the Consolidated Balance Sheets at March 31,June 30, 2022 due to the remaining purchase discount of $3.9 million, which was established upon the SCC Merger 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. On March 15, 2022 the Adjustable Interest Rate (LIBOR) Act was signed into law as part of the Consolidated Appropriations Act, 2022. The Adjustable Interest Rate (LIBOR) Act establishes a nationwide process for replacing LIBOR in financial contracts that mature after the cessation of the overnight, one-, three-, six- and 12-month U.S. dollar LIBOR tenors on June 30, 2023 and that do not provide for an effective means to replace LIBOR upon its cessation. For contracts in which a party has the discretion to identify a replacement rate, the Act also provides a safe harbor to parties if they choose the SOFR-based benchmark replacement rate to be identified by the Board of Governors of the Federal Reserve System. We are currently monitoring these developments to determine any potential impact on the subordinated debentures.

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) caused primarily by fluctuations in unrealized holding gains or losses, net of taxes, on available for sale investment securities.

Shareholders’ equity increased $44.4$294.8 million, or 11.4%75.5%, to $434.8$685.3 million at March 31,June 30, 2022 from $390.4 million at December 31, 2021, primarily due to the issuance of $250.0 million of preferred stock, $56.5 million of equity issued in the FTC Merger, net income of $9.7$25.8 million, and $1.4 million of common stock released by the ESOP, partially offset by other comprehensive loss of $19.6$29.7 million and dividends paid of $4.1$8.9 million.

On June 22, 2022, the Company entered into a Letter Agreement with the Treasury under ECIP. Pursuant to the Purchase Agreement, the Company agreed to issue and sell 250,000 shares of Preferred Stock for an aggregate purchase price of $250.0 million in cash. The Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

The Preferred Stock bears no dividend for the first two years following the issuance of the Preferred Stock. Thereafter, the annual dividend rate will be adjusted, not lower than 0.5% and not higher than 2.0%, based on our extension of credit for qualified lending as defined in the terms of the ECIP Interim Final Rule, Purchase Agreement and the Certificate of Designations (the “Certificate of Designations”) and the investment amount. After the tenth anniversary of the issuance of the Preferred Stock, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10 compared to the baseline qualified lending and the average investment amount. The dividends will be payable quarterly in arrears on March 15, June 15, September 15, and December 15.

The Preferred Stock may be redeemed at the option of the Company on or after September 15, 2027 (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations. The restrictions on redemption are set forth in the Certificate of Designations filed with the Mississippi Secretary of State for the purpose of amending its Articles of Incorporation to fix the
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designations, preferences, limitations and relative rights of the Preferred Stock as described in Item 5.03 of our Current Report on Form 8-K filed with the SEC on June 23, 2022.

In the Purchase Agreement, the Company also agreed to, upon the future written request of the Treasury, comply with the terms of a Registration Rights Agreement included as an annex to the Purchase Agreement and incorporated by reference therein (the “Registration Rights Agreement”), providing for certain registration rights of the Treasury. As long as the Company is not eligible to file on Form S-3, upon written request of the Treasury, the Company would be required to prepare and file a shelf registration statement covering the potential resale of the Preferred Stock as promptly as practicable. Once the Company is eligible to file on Form S-3, the Company agreed to prepare and file such shelf registration statement within 30 days. The Registration Rights Agreement also includes customary “piggyback” registration rights, suspension rights, indemnification, contribution, and assignment provisions.

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 Management 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.

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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 considers its secondary 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 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.
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
March 31, 2022December 31, 2021
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
June 30, 2022December 31, 2021
Cash and cash equivalentsCash and cash equivalents$695,352 $664,165 Cash and cash equivalents$343,741 $664,165 
Total securitiesTotal securities714,069 648,262 Total securities693,386 648,262 
Less: pledged securitiesLess: pledged securities(593,939)(489,184)Less: pledged securities(464,709)(489,184)
Total primary liquidityTotal primary liquidity$815,482 $823,243 Total primary liquidity$572,418 $823,243 
Ratio of primary liquidity to total depositsRatio of primary liquidity to total deposits13.9 %17.8 %Ratio of primary liquidity to total deposits10.1 %17.8 %

Secondary Liquidity – Off-Balance Sheet Borrowing CapacityMarch 31, 2022December 31, 2021
Net secured borrowing capacity with the FHLB$1,365,483 $1,476,825 
Net secured borrowing capacity with the Federal Reserve Bank258,410 189,497 
Unsecured borrowing capacity with correspondent lenders223,000 223,000 
Total secondary liquidity$1,846,893 $1,889,322 
Ratio of primary and secondary liquidity to total deposits45.5 %58.7 %
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Secondary Liquidity – Off-Balance Sheet Borrowing CapacityJune 30, 2022December 31, 2021
Net secured borrowing capacity with the FHLB$1,889,933 $1,476,825 
Net secured borrowing capacity with the Federal Reserve Bank282,783 189,497 
Unsecured borrowing capacity with correspondent lenders243,000 223,000 
Available capacity on revolving line of credit$20,000 $— 
Total secondary liquidity$2,435,716 $1,889,322 
Ratio of primary and secondary liquidity to total deposits52.9 %58.7 %

During the threesix months ended March 31,June 30, 2022, BancPlus’ primary liquidity decreased by $7.8$250.8 million to $815.5$572.4 million, compared to $823.2 million at December 31, 2021, primarily due anto changes in cash and cash equivalents as a result of a net increase in securitiesloans as a result of the FTC Merger and organic loan growth, and a decrease in money market, negotiable orders of withdrawal, and savings deposits, partially offset by anthe increase in our pledged securities.cash as a result of ECIP. Secondary liquidity decreasedincreased by $42.4$546.4 million to $1.847$2.44 billion as of March 31,June 30, 2022 from $1.889$1.89 billion as of December 31, 2021. This decreaseincrease was primarily due to an decreaseincrease in BancPlus’ FHLB borrowing capacity.capacity due to the FTC Merger.

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 $5.612$5.46 billion and $4.450$4.45 billion and represented 95.9%96.1% and 96.3% of total deposits as of March 31,June 30, 2022 and December 31, 2021, 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 2022 and 2021 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, an 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,June 30, 2022 and December 31, 2021, BancPlus was in compliance with all of its established liquidity guidelines.

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.
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Due to state banking laws, BankPlus may not declare dividends without the prior approval of the MDBCF. BankPlus received permission from the MDBCF to pay dividends of $6.3$12.6 million and $5.4$10.8 million for the year-to-date periods ended March 31,June 30, 2022 and March 31,June 30, 2021, 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.

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 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 minimum capital ratios. A banking organization with a conservation buffer of less than the required amount of 2.5% will be subject to limitations on capital distributions, including dividend payments, and certain discretionary bonus payments to executive
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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 March 31,June 30, 2022 and December 31, 2021, BancPlus and BankPlus met all applicable capital adequacy requirements and 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.
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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 CapitalizedActualMinimum For Capital Adequacy PurposesRequired to be Well Capitalized
As of March 31, 2022:Capital AmountRatioCapital AmountRatioCapital AmountRatio
As of June 30, 2022:As of June 30, 2022:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:Consolidated:Consolidated:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$381,074 7.52 %$354,634 7.00 %N/AN/ACET1 Capital to Risk-Weighted Assets$391,892 7.02 %$391,002 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets432,154 8.53 %430,626 8.50 %N/AN/ATier 1 Capital to Risk-Weighted Assets693,031 12.41 %474,789 8.50 %N/AN/A
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets556,947 10.99 %531,950 10.50 %N/AN/ATotal Capital to Risk-Weighted Assets816,925 14.63 %586,504 10.50 %N/AN/A
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets432,154 7.73 %223,690 4.00 %N/AN/ATier 1 Capital to Average Assets693,031 10.83 %255,955 4.00 %N/AN/A
Bank:Bank:Bank:
CET1 Capital to Risk-Weighted AssetsCET1 Capital to Risk-Weighted Assets$510,266 10.23 %$349,248 7.00 %$324,301 6.50 %CET1 Capital to Risk-Weighted Assets$606,332 10.87 %$390,536 7.00 %$362,641 6.50 %
Tier 1 Capital to Risk-Weighted AssetsTier 1 Capital to Risk-Weighted Assets510,266 10.23 %424,087 8.50 %399,140 8.00 %Tier 1 Capital to Risk-Weighted Assets606,332 10.87 %474,223 8.50 %446,327 8.00 %
Total Capital to Risk-Weighted AssetsTotal Capital to Risk-Weighted Assets554,504 11.11 %523,872 10.50 %198,925 10.00 %Total Capital to Risk-Weighted Assets649,685 11.65 %585,804 10.50 %557,909 10.00 %
Tier 1 Capital to Average AssetsTier 1 Capital to Average Assets510,266 9.14 %223,200 4.00 %279,000 5.00 %Tier 1 Capital to Average Assets606,332 9.49 %255,647 4.00 %319,559 5.00 %
ActualMinimum For Capital Adequacy PurposesRequired to be Well Capitalized
As of December 31, 2021:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:
CET1 Capital to Risk-Weighted Assets$382,736 9.40 %$285,078 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted Assets433,754 10.65 %346,166 8.50 %N/AN/A
Total Capital to Risk-Weighted Assets537,541 13.20 %427,617 10.50 %N/AN/A
Tier 1 Capital to Average Assets433,754 8.46 %205,072 4.00 %N/AN/A
Bank:
CET1 Capital to Risk-Weighted Assets$428,602 10.55 %$284,509 7.00 %$264,187 6.50 %
Tier 1 Capital to Risk-Weighted Assets428,602 10.55 %345,475 8.50 %325,153 8.00 %
Total Capital to Risk-Weighted Assets473,602 11.65 %426,763 10.50 %406,441 10.00 %
Tier 1 Capital to Average Assets428,602 8.37 %204,714 4.00 %255,893 5.00 %
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Contractual Obligations

Contractual obligations as of March 31,June 30, 2022, totaled $1,093.4 million$1.01 billion and were primarily comprised of deposits with maturities of $882.9$818.7 million, subordinated debentures of $133.3$133.4 million and operating lease obligations of $36.6$37.3 million. Contractual obligations due within the next twelve months were $627.9$512.0 million and were primarily related to time deposits with maturity dates. Contractual obligations due in more than 12 months were $465.5$497.6 million and were comprised of $255.5$306.8 million of time deposits with maturity dates and $133.3$133.4 million of subordinated debentures with maturities ranging from 2030 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

Accounting Standards Update 2016-13 (“ASU 2016-13, “Financial2016-13”), Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting 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
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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 iswas 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 dataworking with third-party vendors to build and system needs and evaluatingvalidate a model that will run parallel with the impactCompany’s current model prior to implementation of adopting the new guidance.ASU 2016-13. 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 standard, is effective, 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 2020-04,2020-04”), “Reference Rate Reform - Topic 848.” In March 2020, the FASB issued ASU 2020-04, which provides temporary optional expedients and exceptions to the accounting principles generally accepted in the United States (“GAAP”)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.

Accounting Standards Update 2022-02 (“ASU 2022-02”), “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” In March 2022, the FASB issued ASU 2022-02 which eliminates the TDR recognition and measurement guidance and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. ASU 2022-02 also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for the Company for annual and interim periods beginning on January 1, 2023. The Company is assessing ASU 2022-02 and its impact on the Company’s consolidated financial statements.

Critical Accounting Policies and Estimates

There have been no material changes to the critical accounting policies and estimates previously disclosed under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, previously filed with the SEC.

Recent Supervision and Regulation Developments

On June 21, 2022 the FDIC issued a proposed rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning in with the first quarterly assessment period of 2023. The proposed assessment rate schedules would remain in effect unless and until the reserve ratio of the Deposit Insurance Fund meets or
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exceeds 2 percent. If the proposed rule is finalized as proposed, the FDIC insurance costs of insured depository institutions, including BankPlus, would generally increase.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

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 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 SEC’s rules and forms.

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 (the “Complaint”), Mills v. BankPlus, et al., Case #3:19-cv-00196-CWR-FKB, was filed in the United States District CourtFor information about our legal proceedings refer to Footnote 13 to our Condensed Notes to Consolidated Financial Statements for the Southern Districtquarter ended June 30, 2022 contained in Part I, Item 1 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 then-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 and Madison Timber. A brief description of the cause of actionthis Quarterly Report 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
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consolidate for purposes of discovery this case (No. 3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the Receiver. A Case Management Order (No.: 3:22-cv-36-CWRFKB) was entered on January 31, 2022 for the sole purpose of managing consolidated discovery in the four related cases.Form 10-Q

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

There have been no material changes to the risk factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, previously filed with the SEC.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

2.1*
2.2*
3.1
3.2
4.1
4.2
4.3
4.4
10.1
10.2
10.3*
10.4
10.5
10.6
31.1
31.2
32.1
32.2
101Inline XBRL Interactive Data
104Cover Page Interactive Data File (embedded within the Inline XBRL 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 SEC upon request.

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SIGNATURES

Pursuant to the requirements 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 13,August 11, 2022By:/s/ William A. Ray
William A. Ray
President and Chief Executive Officer

Date:May 13,August 11, 2022By:/s/ M. Ann SoutherlandKarlen Turbeville
M. Ann SoutherlandKarlen Turbeville
Senior Executive Vice President and Chief Financial Officer

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