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 endedJune 30, 20222023
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 August 5, 2022: 11,627,07111, 2023: 11,624,935




BANCPLUS CORPORATION
FORM 10-Q
For the Quarter Ended JUNE 30, 20222023
INDEX
Page Number


Consolidated Balance Sheets at June 30, 20222023 (unaudited) and December 31, 20212022
Consolidated Statements of Income for the three and six months ended June 30, 20222023 and 20212022 (unaudited)
Consolidated Statements of Shareholders’ Equity for thethree and six months ended June 30, 20222023 and 20212022 (unaudited)
Consolidated Statements of Cash Flows for thesix months ended June 30, 20222023 and 20212022 (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)
June 30, 2022December 31, 2021June 30, 2023December 31, 2022
(unaudited)(unaudited)
Assets:Assets:Assets:
Cash and due from banksCash and due from banks$74,231 $55,603 Cash and due from banks$102,227 $107,402 
Interest bearing deposits with banksInterest bearing deposits with banks269,510 608,562 Interest bearing deposits with banks88,987 30,493 
Total cash and cash equivalentsTotal cash and cash equivalents343,741 664,165 Total cash and cash equivalents191,214 137,895 
Securities available for saleSecurities available for sale627,027 576,614 Securities available for sale806,110 623,920 
Securities held to maturity - fair value: $66,246 - 2022; $72,084 - 202166,359 71,648 
Securities held to maturity - fair value: $57,895 - 2023; $62,068 - 2022Securities held to maturity - fair value: $57,895 - 2023; $62,068 - 202258,118 62,274 
Loans held for saleLoans held for sale14,757 10,621 Loans held for sale13,176 5,373 
LoansLoans5,159,706 3,619,172 Loans6,088,814 5,824,149 
Less: Allowance for loan losses43,353 45,000 
Less: Allowance for credit lossesLess: Allowance for credit losses65,229 42,875 
Net loansNet loans5,116,353 3,574,172 Net loans6,023,585 5,781,274 
Premises and equipmentPremises and equipment122,192 101,965 Premises and equipment132,694 124,707 
Operating lease right-of-use assetsOperating lease right-of-use assets35,968 34,561 Operating lease right-of-use assets33,757 35,747 
Accrued interest receivableAccrued interest receivable17,549 14,329 Accrued interest receivable25,454 23,156 
GoodwillGoodwill63,836 2,616 Goodwill62,772 62,772 
Other assetsOther assets167,020 145,587 Other assets196,801 177,703 
$6,574,802 $5,196,278 $7,543,681 $7,034,821 
Liabilities:Liabilities:Liabilities:
DepositsDeposits$5,682,850 $4,622,116 Deposits$6,108,309 $5,824,904 
Advances from Federal Home Loan Bank and other borrowingsAdvances from Federal Home Loan Bank and other borrowings20,115 20,501 Advances from Federal Home Loan Bank and other borrowings540,065 318,084 
Subordinated debenturesSubordinated debentures133,383 111,509 Subordinated debentures133,579 133,478 
Operating lease liabilitiesOperating lease liabilities37,336 35,793 Operating lease liabilities35,475 37,439 
Accrued interest payableAccrued interest payable1,476 1,425 Accrued interest payable5,924 2,334 
Other liabilitiesOther liabilities14,388 14,515 Other liabilities29,522 20,482 
Total liabilitiesTotal liabilities5,889,548 4,805,859 Total liabilities6,852,874 6,336,721 
Redeemable common stock owned by the ESOPRedeemable common stock owned by the ESOP97,799 100,487 Redeemable common stock owned by the ESOP89,356 96,984 
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 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 — 
250,000 authorized, issued and outstanding at June 30, 2023 and December 31, 2022; aggregate liquidation preference of $250,000250,000 authorized, issued and outstanding at June 30, 2023 and December 31, 2022; aggregate liquidation preference of $250,000250,000 250,000 
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 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 compensation— (1,401)
100,000,000 and 40,000,000 authorized at June 30, 2023 and December 31, 2022, respectively; 11,626,670 and 11,599,595 issued and outstanding at June 30, 2023 and December 31, 2022, respectively100,000,000 and 40,000,000 authorized at June 30, 2023 and December 31, 2022, respectively; 11,626,670 and 11,599,595 issued and outstanding at June 30, 2023 and December 31, 2022, respectively11,626 11,599 
Additional paid-in capitalAdditional paid-in capital122,132 67,380 Additional paid-in capital121,268 122,890 
Retained earningsRetained earnings331,239 314,357 Retained earnings351,552 356,685 
Accumulated other comprehensive loss, netAccumulated other comprehensive loss, net(29,744)(33)Accumulated other comprehensive loss, net(43,639)(43,074)
685,254 390,419 690,807 698,100 
Less: Redeemable common stock owned by the ESOPLess: Redeemable common stock owned by the ESOP(97,799)(100,487)Less: Redeemable common stock owned by the ESOP(89,356)(96,984)
Total shareholders' equityTotal shareholders' equity587,455 289,932 Total shareholders' equity601,451 601,116 
$6,574,802 $5,196,278 $7,543,681 $7,034,821 
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 June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Interest income:Interest income:Interest income:
Interest and fees on loansInterest and fees on loans$53,712 $42,089 $96,699 $85,231 Interest and fees on loans$84,117 $53,712 $160,864 $96,699 
Taxable securitiesTaxable securities2,502 2,094 4,809 3,927 Taxable securities4,403 2,502 7,469 4,809 
Tax-exempt securitiesTax-exempt securities401 479 821 1,018 Tax-exempt securities364 401 744 821 
Interest bearing bank balances and otherInterest bearing bank balances and other477 113 708 251 Interest bearing bank balances and other778 477 1,356 708 
Total interest incomeTotal interest income57,092 44,775 103,037 90,427 Total interest income89,662 57,092 170,433 103,037 
Interest expense:Interest expense:Interest expense:
DepositsDeposits2,362 1,963 4,039 4,127 Deposits24,364 2,362 41,524 4,039 
Short-term borrowingsShort-term borrowings— 80 — 
Advances from Federal Home Loan BankAdvances from Federal Home Loan Bank77 78 153 155 Advances from Federal Home Loan Bank5,567 77 8,782 153 
Other borrowingsOther borrowings1,808 1,372 3,233 2,741 Other borrowings2,188 1,808 4,352 3,233 
Total interest expenseTotal interest expense4,247 3,413 7,425 7,023 Total interest expense32,120 4,247 54,738 7,425 
Net interest incomeNet interest income52,845 41,362 95,612 83,404 Net interest income57,542 52,845 115,695 95,612 
Provision for loan losses234 2,037 451 5,926 
Net interest income after provision for loan losses52,611 39,325 95,161 77,478 
Provision for credit lossesProvision for credit losses916 234 1,439 451 
Net interest income after provision for credit lossesNet interest income after provision for credit losses56,626 52,611 114,256 95,161 
Other operating income:Other operating income:Other operating income:
Service charges on deposit accountsService charges on deposit accounts7,701 6,005 14,493 11,742 Service charges on deposit accounts5,750 7,701 12,416 14,493 
Mortgage origination incomeMortgage origination income2,304 2,013 4,542 4,727 Mortgage origination income1,266 2,304 1,953 4,542 
Debit card interchangeDebit card interchange2,748 2,604 5,176 5,244 Debit card interchange2,609 2,748 5,175 5,176 
Other incomeOther income5,978 8,115 12,485 17,301 Other income5,369 5,978 11,289 12,485 
Total other operating incomeTotal other operating income18,731 18,737 36,696 39,014 Total other operating income14,994 18,731 30,833 36,696 
Other operating expenses:Other operating expenses:Other operating expenses:
Salaries and employee benefits expensesSalaries and employee benefits expenses29,805 24,122 55,650 47,147 Salaries and employee benefits expenses32,609 29,805 63,600 55,650 
Net occupancy expensesNet occupancy expenses4,891 3,828 9,007 7,173 Net occupancy expenses4,738 4,891 9,210 9,007 
Furniture, equipment and data processing expensesFurniture, equipment and data processing expenses7,670 6,108 14,286 12,040 Furniture, equipment and data processing expenses7,270 7,670 14,586 14,286 
Other expensesOther expenses8,649 6,380 20,142 12,215 Other expenses10,628 8,649 19,491 20,142 
Total other operating expensesTotal other operating expenses51,015 40,438 99,085 78,575 Total other operating expenses55,245 51,015 106,887 99,085 
Income before income taxesIncome before income taxes20,327 17,624 32,772 37,917 Income before income taxes16,375 20,327 38,202 32,772 
Income tax expenseIncome tax expense4,212 3,560 6,968 6,581 Income tax expense3,183 4,212 7,931 6,968 
Net incomeNet income$16,115 $14,064 $25,804 $31,336 Net income$13,192 $16,115 $30,271 $25,804 
Earnings per common share - basicEarnings per common share - basic$1.41 $1.41 $2.35 $3.15 Earnings per common share - basic$1.15 $1.41 $2.65 $2.35 
Earnings per common share - dilutedEarnings per common share - diluted$1.40 $1.40 $2.34 $3.12 Earnings per common share - diluted$1.15 $1.40 $2.64 $2.34 
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 June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Net incomeNet income$16,115 $14,064 $25,804 $31,336 Net income$13,192 $16,115 $30,271 $25,804 
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities available for sale(13,418)2,578 (39,562)(2,358)
Other comprehensive loss, net of tax:Other comprehensive loss, net of tax:
Unrealized losses on securities available for saleUnrealized losses on securities available for sale(7,791)(13,418)(752)(39,562)
Tax effectTax effect3,341 (642)9,851 587 Tax effect1,940 3,341 187 9,851 
Total other comprehensive income (loss), net of tax(10,077)1,936 (29,711)(1,771)
Total other comprehensive loss, net of taxTotal other comprehensive loss, net of tax(5,851)(10,077)(565)(29,711)
Comprehensive income (loss)Comprehensive income (loss)$6,038 $16,000 $(3,907)$29,565 Comprehensive income (loss)$7,341 $6,038 $29,706 $(3,907)
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
Loss
Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Common StockRetained
Earnings
Preferred StockCommon StockRetained
Earnings
SharesAmountSharesAmountSharesAmount
April 1, 202110,041,328 $10,041 $(2,304)$66,322 $286,665 $3,168 $(87,403)$276,489 
April 1, 2022April 1, 2022— $— 11,580,880 $11,581 $— $123,005 $319,898 $(19,667)$(102,425)$332,392 
Net incomeNet income— — — — 14,064 — — 14,064 Net income— — — — — — 16,115 — — 16,115 
Other comprehensive income, net— — — — — 1,936 — 1,936 
Issuance of preferred stockIssuance of preferred stock250,000 250,000 — — — — — — — 250,000 
Other comprehensive loss, netOther comprehensive loss, net— — — — — — — (10,077)— (10,077)
Issuance of restricted stockIssuance of restricted stock82,108 82 — (82)— — — — Issuance of restricted stock— — 74,401 74 — (74)— — — — 
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)Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (9,274)(9)— (624)— — — (633)
Purchase of Company stockPurchase of Company stock(9,414)(10)— (555)— — — (565)Purchase of Company stock— — (18,936)(19)— (1,231)— — — (1,250)
Stock based compensationStock based compensation— — — 617 — — — 617 Stock based compensation— — — — — 1,056 — — — 1,056 
Net change fair value of ESOP sharesNet change fair value of ESOP shares— — — — — — (391)(391)Net change fair value of ESOP shares— — — — — — — — 4,626 4,626 
Common stock released by ESOP— — 347 — — — — 347 
Dividends paid ($0.38 per share)— — — — (3,829)— — (3,829)
June 30, 202110,111,045 $10,111 $(1,957)$66,152 $296,900 $5,104 $(87,794)$288,516 
Dividends paid ($0.41 per share)Dividends paid ($0.41 per share)— — — — — — (4,774)— — (4,774)
June 30, 2022June 30, 2022250,000 $250,000 11,627,071 $11,627 $— $122,132 $331,239 $(29,744)$(97,799)$587,455 
January 1, 202110,079,277 $10,079 $(2,650)$67,742 $273,204 $6,875 $(74,278)$280,972 
January 1, 2022January 1, 2022— $— 10,115,945 $10,116 $(1,401)$67,380 $314,357 $(33)$(100,487)$289,932 
Net incomeNet income— — — — 31,336 — — 31,336 Net income— — — — — — 25,804 — — 25,804 
Issuance of preferred stockIssuance of preferred stock250,000 250,000 — — — — — — — 250,000 
Issuance of common stock for acquisition of First Trust CorporationIssuance of common stock for acquisition of First Trust Corporation— — 1,444,732 1,445 — 55,044 — — — 56,489 
Other comprehensive loss, netOther comprehensive loss, net— — — — — (1,771)— (1,771)Other comprehensive loss, net— — — — — — — (29,711)— (29,711)
Issuance of restricted stockIssuance of restricted stock82,108 82 — (82)— — — — Issuance of restricted stock— — 95,768 96 — (96)— — — — 
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)Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (10,438)(11)— (701)— — — (712)
Purchase of Company stockPurchase of Company stock(45,863)(46)— (2,387)— — — (2,433)Purchase of Company stock— — (18,936)(19)— (1,231)— — — (1,250)
Stock based compensationStock based compensation— — — 1,104 — — — 1,104 Stock based compensation— — — — — 1,736 — — — 1,736 
Net change fair value of ESOP sharesNet change fair value of ESOP shares— — — — — — (13,516)(13,516)Net change fair value of ESOP shares— — — — — — — — 2,688 2,688 
Common stock released by ESOPCommon stock released by ESOP— — 693 — — — — 693 Common stock released by ESOP— — — — 1,401 — — — — 1,401 
Dividends paid ($0.76 per share)— — — — (7,640)— — (7,640)
June 30, 202110,111,045 $10,111 $(1,957)$66,152 $296,900 $5,104 $(87,794)$288,516 
Dividends paid ($0.82 per share)Dividends paid ($0.82 per share)— — — — — — (8,922)— — (8,922)
June 30, 2022June 30, 2022250,000 $250,000 11,627,071 $11,627 $— $122,132 $331,239 $(29,744)$(97,799)$587,455 

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


5

Table of ContentsContents


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 
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Less:
Redeemable
Common Stock
Owned by the ESOP
Total
Shareholders'
Equity
Preferred StockCommon StockRetained
Earnings
SharesAmountSharesAmount
April 1, 2023250,000 $250,000 11,599,354 $11,599 $123,878 $343,591 $(37,788)$(96,984)$594,296 
Net income— — — — — 13,192 — — 13,192 
Other comprehensive loss, net— — — — — — (5,851)— (5,851)
Issuance of restricted stock— — 90,023 90 (90)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (15,046)(15)(989)— — — (1,004)
Purchase of Company Stock— — (47,661)(48)(2,812)— — — (2,860)
Stock based compensation— — — — 1,281 — — — 1,281 
Net change fair value of ESOP shares— — — — — — — 7,628 7,628 
Dividends declared ($0.45 per share)— — — — — (5,231)— — (5,231)
June 30, 2023250,000 $250,000 11,626,670 $11,626 $121,268 $351,552 $(43,639)$(89,356)$601,451 
January 1, 2023250,000 $250,000 11,599,595 $11,599 $122,890 $356,685 $(43,074)$(96,984)$601,116 
Cumulative change in accounting principle— — — — — (24,953)— — (24,953)
Balance at January 1, 2023 (as adjusted for change in accounting principle)250,000 250,000 11,599,595 11,599 122,890 331,732 (43,074)(96,984)576,163 
Net income— — — — — 30,271 — — 30,271 
Other comprehensive loss, net— — — — — — (565)— (565)
Issuance of restricted stock— — 90,023 90 (90)— — — — 
Shares withheld to satisfy withholding obligation in the vesting of restricted stock— — (15,287)(15)(1,005)— — — (1,020)
Purchase of Company Stock— — (47,661)(48)(2,812)— — — (2,860)
Stock based compensation— — — — 2,285 — — — 2,285 
Net change fair value of ESOP shares— — — — — — — 7,628 7,628 
Dividends paid ($0.90 per share)— — — — — (10,451)— — (10,451)
June 30, 2023250,000 $250,000 11,626,670 $11,626 $121,268 $351,552 $(43,639)$(89,356)$601,451 
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BancPlus Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Six Months Ended June 30,Six Months Ended June 30,
2022202120232022
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$25,804 $31,336 Net income per consolidated statements of income$30,271 $25,804 
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 losses451 5,926 
Provision for credit lossesProvision for credit losses1,439 451 
Depreciation and amortizationDepreciation and amortization5,051 3,840 Depreciation and amortization5,008 5,051 
Net loss on sales of premises and equipment44 232 
Net (gain) loss on sales of other real estate owned124 (260)
Net loss on disposal of premises and equipmentNet loss on disposal of premises and equipment325 44 
Net gain on sales of other real estate ownedNet gain on sales of other real estate owned— 124 
Write-downs of other real estate-ownedWrite-downs of other real estate-owned555 167 Write-downs of other real estate-owned277 555 
Deferred income tax expense1,489 954 
Deferred income tax benefitDeferred income tax benefit1,137 1,489 
Federal Home Loan Bank stock dividendsFederal Home Loan Bank stock dividends(8)(6)Federal Home Loan Bank stock dividends(488)(8)
Common stock released by ESOPCommon stock released by ESOP1,401 693 Common stock released by ESOP— 1,401 
Stock based compensation expenseStock based compensation expense1,736 1,104 Stock based compensation expense2,285 1,736 
Origination of loans held for saleOrigination of loans held for sale(166,236)(221,235)Origination of loans held for sale(141,964)(166,236)
Proceeds from loans held for saleProceeds from loans held for sale168,300 232,810 Proceeds from loans held for sale134,161 168,300 
Earnings on bank-owned life insuranceEarnings on bank-owned life insurance(1,265)(4,694)Earnings on bank-owned life insurance(1,326)(1,265)
Net change in:Net change in:Net change in:
Accrued interest receivable and other assetsAccrued interest receivable and other assets(3,664)880 Accrued interest receivable and other assets(8,282)(3,664)
Accrued interest payable and other liabilitiesAccrued interest payable and other liabilities(3,644)(9,116)Accrued interest payable and other liabilities892 (3,644)
Net cash from operating activitiesNet cash from operating activities30,138 42,631 Net cash from operating activities23,735 30,138 
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(99,369)(302,423)Purchases of securities available for sale(204,419)(99,369)
Maturities and calls of securities available for saleMaturities and calls of securities available for sale41,477 60,996 Maturities and calls of securities available for sale21,845 41,477 
Purchases of securities held to maturityPurchases of securities held to maturity— (19,103)Purchases of securities held to maturity— — 
Maturities, prepayments and calls of securities held to maturityMaturities, prepayments and calls of securities held to maturity5,233 33,473 Maturities, prepayments and calls of securities held to maturity4,115 5,233 
Net increase in loansNet increase in loans(543,140)(109,334)Net increase in loans(265,708)(543,140)
Purchases of premises and equipmentPurchases of premises and equipment(9,517)(2,580)Purchases of premises and equipment(12,861)(9,517)
Proceeds from sales of premises and equipmentProceeds from sales of premises and equipment— 31 Proceeds from sales of premises and equipment— 
Proceeds from sales of other real estate ownedProceeds from sales of other real estate owned1,374 3,100 Proceeds from sales of other real estate owned976 1,374 
Investment in unconsolidated entitiesInvestment in unconsolidated entities(30)(109)Investment in unconsolidated entities(77)(30)
Distributions from unconsolidated entitiesDistributions from unconsolidated entities1,753 — Distributions from unconsolidated entities483 1,753 
Purchase of bank-owned life insurance— (10,000)
Proceeds from bank-owned life insurance— 4,492 
Purchases or redemptions of Federal Home Loan Bank stock(1,044)(163)
Purchases of Federal Home Loan Bank stockPurchases of Federal Home Loan Bank stock(14,776)(1,044)
Redemptions of Federal Home Loan Bank stockRedemptions of Federal Home Loan Bank stock8,943 — 
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 acquisition— 165,974 
Net cash used in investing activitiesNet cash used in investing activities(437,289)(341,620)Net cash used in investing activities(461,471)(437,289)

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BancPlus Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(Unaudited)
(In Thousands)
Six Months Ended June 30,Six Months Ended June 30,
2022202120232022
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$67,790 $119,496 Noninterest-bearing deposits$(125,689)$67,790 
Money market, negotiable order of withdrawal, and savings depositsMoney market, negotiable order of withdrawal, and savings deposits(129,848)265,269 Money market, negotiable order of withdrawal, and savings deposits122,379 (129,848)
Certificates of depositCertificates of deposit(89,920)(39,585)Certificates of deposit286,715 (89,920)
Proceeds from Federal Home Loan Bank advancesProceeds from Federal Home Loan Bank advances5,320,000 — 
Payments on Federal Home Loan Bank advancesPayments on Federal Home Loan Bank advances(386)(95)Payments on Federal Home Loan Bank advances(5,098,019)(386)
Proceeds from issuance of preferred stockProceeds from issuance of preferred stock250,000 — Proceeds from issuance of preferred stock— 250,000 
Proceeds from other borrowingsProceeds from other borrowings20,000 — Proceeds from other borrowings— 20,000 
Payments on other borrowingsPayments on other borrowings(20,000)(1,750)Payments on other borrowings— (20,000)
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(8,922)(7,640)Cash dividends paid on common stock(10,451)(8,922)
Purchase of Company stockPurchase of Company stock(1,250)(2,433)Purchase of Company stock(2,860)(1,250)
Shares withheld to pay taxes on restricted stock vestingShares withheld to pay taxes on restricted stock vesting(712)(229)Shares withheld to pay taxes on restricted stock vesting(1,020)(712)
Net cash from financing activitiesNet cash from financing activities86,727 333,033 Net cash from financing activities491,055 86,727 
Net change in cash and cash equivalentsNet change in cash and cash equivalents(320,424)34,044 Net change in cash and cash equivalents53,319 (320,424)
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 period137,895 664,165 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$343,741 $671,589 Cash and cash equivalents at end of period$191,214 $343,741 
Supplemental cash flow information:Supplemental cash flow information:Supplemental cash flow information:
Interest paidInterest paid$7,374 $7,537 Interest paid$51,148 $7,374 
Federal and state income tax paymentsFederal and state income tax payments3,575 7,225 Federal and state income tax payments10,300 3,575 
Acquisition of real estate in non-cash foreclosuresAcquisition of real estate in non-cash foreclosures890 3,597 Acquisition of real estate in non-cash foreclosures743 890 
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 assumed— 58,508 

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 1one 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;2022; 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, 2021.2022. 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, theThe allowance/provision for loancredit 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 loancredit losses, provision for loancredit 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.
Effect of Recently Issued But Not Yet EffectiveAdopted Accounting Standards
Accounting Standards Update
ASU 2016-13, (“ASU 2016-13”), Financial“Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”)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 previous loss estimation techniques applied today willare still be permitted, although the inputs to those techniques will changehave changed 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 beis effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has a cross functional team thatmeasurement of expected credit losses under the current expected credit loss (“CECL”) methodology is working with third-party vendorsapplicable to buildfinancial assets measured at amortized cost, including loan receivables and validate a model that will run parallel with the Company’s current model priorheld-to-maturity debt securities. It also applies to implementation ofoff-balance sheet credit exposures. In addition, ASU 2016-13. The Company expects to recognize a one-time cumulative effect adjustment2016-13 made changes to the accounting for available-for-sale debt securities, which includes required presentation of credit losses to be presented as an allowance for loan lossesrather than as ofa write-down when management does not intend to sell 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.securities.

Accounting Standards Update 2020-04 (“The Company adopted ASU 2020-04”), “Reference Rate Reform - Topic 848.” In March 2020,2016-13 using the FASB issuedmodified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2020-04, which provides temporary optional expedients2016-13 while prior period amounts continue to be reported in accordance with the then applicable GAAP. As of January 1, 2023 the Company recognized a one-time, after-tax cumulative effect adjustment of approximately $25.0 million to retained earnings, increasing the allowance for credit losses on loans held for investment by approximately $20.7 million and exceptionsestablishing an allowance for credit losses on off-balance sheet credit exposures of approximately $12.5 million due to the GAAP guidance on contract modifications, hedge accounting,adoption of ASU 2016-13.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchase credit impaired (“PCI”) 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 Decemberaccounted for under ASC 310-30.
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31, 2022. In accordance with the standard, management is not required to reassess whether PCI assets meet the criteria for PCD assets as of the date of adoption.

The Company is still evaluatingfollowing table illustrates the impact of ASU 2020-04, but2016-13:

January 1, 2023
(In thousands)As Reported Under ASU 2016-13Pre-ASU 2016-13 AdoptionImpact of ASU 2016-13 Adoption
Assets:
Allowance for credit losses on debt securities held-to-maturity$— $— $— 
Allowance for credit losses on loans:
Commercial real estate39,471 26,701 12,770 
Residential16,422 9,958 6,464 
Commercial and industrial6,916 4,750 2,166 
Consumer and other810 1,466 (656)
Total allowance for credit losses on loans63,619 42,875 20,744 
Liabilities:
Allowance for credit losses on off-balance sheet exposures12,505 — 12,505 
Total allowance for credit losses$76,124 $42,875 $33,249 

Allowance for Credit Losses – Available-for-sale debt securities

For available-for-sale debt securities with fair value below amortized cost, when the Company does not expectintend to sell the debt security, and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, then the Company recognizes the credit component of a decline in fair value of a debt security in income and the remaining portion in other comprehensive income (loss). Decline in fair value related to a credit loss is measured using the discounted cash flow method. Credit loss recognition is limited to the amount that the fair value of the security is less than the amortized cost. The decline in fair value is recognized by establishing an allowance for credit loss (“ACL”) through provision for credit losses. Decline in fair value related to noncredit factors is recognized in accumulated other comprehensive income, net of applicable taxes. The Company has elected to exclude accrued interest from the estimate of credit losses for available-for-sale debt securities. The Company evaluates available-for-sale security declines in fair value on a quarterly basis.

Allowance for Credit Losses – Held-to-maturity debt securities

For held-to-maturity debt securities, expected losses are evaluated and calculated on a collective basis for those securities that share risk characteristics. The Company aggregates record level securities calculations and reports the security portfolio segments based on shared risk characteristics. The only segment included in the held to maturity portfolio is states and political subdivisions, which is comprised of municipals.

The Company performs a quarterly loss reserve calculation for municipal and corporate bonds leveraging history of defaults and recoveries as well as a baseline economic forecast. A probability of default/loss-given default approach is used, with any non-rated bonds receiving a comparable rating estimate. Losses in high grade municipals, in which the Company tends to invest, have historically been very limited. The Company has elected to exclude accrued interest from the estimate of credit losses for held-to-maturity debt securities.

Allowance for Credit Losses – Loans

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management's determination of the adequacy of the ACL is based on an assessment of the expected credit losses on loans over the expected life of the loan. The ACL is increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. Loans are charged off when management believes that the collection of the principal amount owed in full is unlikely. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Any interest that is accrued but not collected is reversed against interest
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income when a loan is placed on nonaccrual status, which typically occurs prior to charging off all, or a portion, of a loan. The Company made the policy election to exclude accrued interest receivable on loans from the estimate of credit losses.

The Company calculates estimated credit loss on its portfolio primarily using quantitative methodologies using relevant available information from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL is evaluated and calculated on a collective basis for those loans which share similar risk characteristics. At each reporting period, the Company evaluates whether the loans in a pool continue to exhibit similar risk characteristics as the other loans and whether it needs to evaluate the allowance on an individual basis. The Company has chosen to segment its portfolio consistent with the manner in which it manages the risk of the type of credit. The Company’s segments for loans include commercial real estate, commercial and industrial, residential and consumer.

Expected credit losses are estimated over the contractual term of each loan taking into consideration expected prepayments. The contractual term excludes expected extensions, renewals, and modifications. Also included in the allowance for loans are qualitative reserves to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative method or the economic assumptions described above. For example, factors that the Company considers include the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and non-accrual loans and current business conditions.

In addition to the ACL on loans held for investment, CECL requires a balance sheet liability for unfunded commitments, which is recognized if both of the following conditions are met: (1) the Company has a present contractual obligation to extend credit; and (2) the obligation is not unconditionally cancellable by the Company. Loan commitments may have a material impactfunded and unfunded portion, of which the liability for unfunded commitments is derived based upon the commitments to extend credit to a borrower (e.g., an estimate of expected credit losses is not established for unfunded portions of loan commitment that are unconditionally cancellable by the Company). The expected credit losses for funded portions are reported in the previously discussed ACL. The Company segments its unfunded commitment portfolio consistent with the ACL calculation. The Company incorporates the probability of funding (i.e., estimate of utilization) for each segment and then utilizes the ACL loss rates for each segment on an aggregate basis to calculate the Company’s consolidated financial statements.allowance for unfunded commitments.

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 adoption of ASU 2022-02 in the first quarter of 2023 did not materially impact 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 Generally Accepted Accounting Principles (“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 31, 2022. The Company is assessingstill evaluating the impact of ASU 2022-02 and its2020-04, but does not expect it to have a material impact on the Company’s consolidated financial statements.

Accounting Standards Update 2022-06 (“ASU 2022-06”), “Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848.” In December 2022, the FASB issued ASU 2022-06 which provides temporary relief during the transition period in complying with ASU 2020-04. The Board included a sunset provision within Topic 848 based on expectations of when LIBOR would cease being published. At the time that ASU 2020-04 was issued, the UK Financial Conduct Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022 - 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which was beyond the current sunset date of Topic 848.

Effect of Recently Issued, But Not Yet Effective Accounting Standards

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Accounting Standards Update 2023-02 (“ASU 2023-02”), “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” In March 2023, the FASB issued ASU 2023-02 which allows entities to elect to account for tax equity investments using the proportional amortization method, regardless of the tax credit program from which the income tax credits are received, if certain conditions are met. ASU 2023-02 is effective for the Company for annual and interim periods beginning on January 1, 2024. The Company does not expect it to have a material impact on its consolidated financial statements.

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 June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In thousands except per share data)(In thousands except per share data)2022202120222021(In thousands except per share data)2023202220232022
Net incomeNet income$16,115 $14,064 $25,804 $31,336 Net income$13,192 $16,115 $30,271 $25,804 
Weighted average common shares outstandingWeighted average common shares outstanding11,460 9,957 10,959 9,937 Weighted average common shares outstanding11,424 11,460 11,419 10,959 
Diluted effect of unallocated stockDiluted effect of unallocated stock— 44 46 Diluted effect of unallocated stock— — — 
Diluted effect of stock-based awardsDiluted effect of stock-based awards58 62 66 55 Diluted effect of stock-based awards13 58 37 66 
Diluted common sharesDiluted common shares11,518 10,063 11,034 10,038 Diluted common shares11,437 11,518 11,456 11,034 
Basic earnings per common shareBasic earnings per common share$1.41 $1.41 $2.35 $3.15 Basic earnings per common share$1.15 $1.41 $2.65 $2.35 
Diluted earnings per common shareDiluted earnings per common share$1.40 $1.40 $2.34 $3.12 Diluted earnings per common share$1.15 $1.40 $2.64 $2.34 

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

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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 tointo the Florida panhandle market as well as synergies expected as a result of the combined operations, is not deductible for tax purposes.

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 assets3,0634,584 
Total assets acquired$1,296,6831,298,204 
Liabilities assumed:
Deposits$1,212,712 
Subordinated debentures21,733 
Other liabilities3,7304,187 
Total liabilities assumed$1,238,1751,238,632 
Net assets acquired58,50859,572 
Goodwill$61,22060,156 

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$1.0 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 impaireddeteriorated loans were insignificant. In the third quarter of 2022, the Company increased the fair value of other real estate and deferred tax assets resulting in a corresponding decrease to goodwill of $1.1 million.

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, 2021.2022. 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, 2021.2022.

Three Months Ended June 30,Six Months Ended June 30,
(In thousands, except per share data)2022202120222021
Net interest income$49,180 $52,579 $103,053 $105,727 
Other operating income17,510 20,227 38,052 43,081 
Net income available to common shareholders14,385 17,342 28,309 38,849 
Earnings per common share:
Basic$1.26 $1.52 $2.48 $3.41 
Diluted1.25 1.51 2.46 3.38 
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Three Months Ended June 30,Six Months Ended June 30,
(In thousands, except per share data)20222022
Net interest income$49,180 $103,053 
Other operating income17,510 38,052 
Net income available to common shareholders14,385 28,309 
Earnings per common share:
Basic$1.26 $2.48 
Diluted1.25 2.46 
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
June 30, 2022:
June 30, 2023:June 30, 2023:
U.S. TreasuriesU.S. Treasuries$35,669 $— $940 $34,729 U.S. Treasuries$197,136 $45 $817 $196,364 
U.S. Government agency obligationsU.S. Government agency obligations396,361 167 27,134 369,394 U.S. Government agency obligations444,078 135 32,826 411,387 
Residential mortgage-backed securitiesResidential mortgage-backed securities115,576 71 6,863 108,784 Residential mortgage-backed securities99,015 11,502 87,519 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities14,075 — 1,208 12,867 Commercial mortgage-backed securities13,744 — 1,762 11,982 
Asset-backed securitiesAsset-backed securities11,675 98 171 11,602 Asset-backed securities7,533 91 63 7,561 
Corporate investmentsCorporate investments48,000 53 1,928 46,125 Corporate investments52,959 — 9,124 43,835 
State and political subdivisionsState and political subdivisions45,277 53 1,804 43,526 State and political subdivisions49,753 78 2,369 47,462 
Total available for saleTotal available for sale$666,633 $442 $40,048 $627,027 Total available for sale$864,218 $355 $58,463 $806,110 
December 31, 2021:
December 31, 2022:December 31, 2022:
U.S. TreasuriesU.S. Treasuries$35,814 $— $1,235 $34,579 
U.S. Government agency obligationsU.S. Government agency obligations$354,774 $256 $4,780 $350,250 U.S. Government agency obligations414,251 246 35,761 378,736 
Residential mortgage-backed securitiesResidential mortgage-backed securities107,772 2,312 297 109,787 Residential mortgage-backed securities105,580 13 11,461 94,132 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities14,286 41 51 14,276 Commercial mortgage-backed securities13,812 — 1,742 12,070 
Asset backed securitiesAsset backed securities12,730 421 44 13,107 Asset backed securities10,289 54 123 10,220 
Corporate investmentsCorporate investments43,500 1,138 128 44,510 Corporate investments51,000 — 4,967 46,033 
State and political subdivisionsState and political subdivisions43,596 1,200 112 44,684 State and political subdivisions50,530 77 2,457 48,150 
Total available for saleTotal available for sale$576,658 $5,368 $5,412 $576,614 Total available for sale$681,276 $390 $57,746 $623,920 
Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. All mortgage-backed securities in the above tables were issued or guaranteed by U.S. government agencies or sponsored agencies. At June 30, 2023, the Company had no allowance for credit losses on available for sale securities.

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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
June 30, 2022:
June 30, 2023:June 30, 2023:
States and political subdivisionsStates and political subdivisions$66,359 $11 $124 $66,246 States and political subdivisions$58,118 $— $223 $57,895 
Total held to maturityTotal held to maturity$66,359 $11 $124 $66,246 Total held to maturity$58,118 $— $223 $57,895 
December 31, 2021:
December 31, 2022:December 31, 2022:
States and political subdivisionsStates and political subdivisions$71,648 $436 $— $72,084 States and political subdivisions$62,274 $— $206 $62,068 
Total held to maturityTotal held to maturity$71,648 $436 $— $72,084 Total held to maturity$62,274 $— $206 $62,068 
All mortgage-backed securities inAt June 30, 2023, the above tables were issued or guaranteed by U.S. government agencies or sponsored agencies.Company had no allowance for credit losses on held to maturity securities.


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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)
June 30, 2022:
June 30, 2023:June 30, 2023:
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries$34,729 $940 $— $— 34,729 $940 U.S. Treasuries$41,605 $37 $30,174 $780 $71,779 $817 
U.S. Government agenciesU.S. Government agencies236,812 17,123 127,649 10,011 364,461 27,134 U.S. Government agencies46,851 895 342,529 31,931 389,380 32,826 
Residential mortgage-backed securitiesResidential mortgage-backed securities101,307 6,863 — — 101,307 6,863 Residential mortgage-backed securities6,051 205 80,823 11,297 86,874 11,502 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities12,867 1,208 — — 12,867 1,208 Commercial mortgage-backed securities— — 11,982 1,762 11,982 1,762 
Asset backed securitiesAsset backed securities4,148 91 1,929 80 6,077 171 Asset backed securities1,371 1,605 61 2,976 63 
Corporate investmentsCorporate investments39,144 1,856 1,928 72 41,072 1,928 Corporate investments11,507 1,451 32,328 7,673 43,835 9,124 
States and political subdivisionsStates and political subdivisions28,502 1,250 4,740 554 33,242 1,804 States and political subdivisions21,851 541 20,575 1,828 42,426 2,369 
$457,509 $29,331 $136,246 $10,717 593,755 $40,048 $129,236 $3,131 $520,016 $55,332 $649,252 $58,463 
Held to maturity:Held to maturity:Held to maturity:
States and political subdivisionsStates and political subdivisions$7,708 $124 $— $— 7,708 $124 States and political subdivisions$3,795 $87 $3,750 $136 $7,545 $223 
$7,708 $124 $— $— 7,708 $124 $3,795 $87 $3,750 $136 $7,545 $223 
December 31, 2021:
December 31, 2022:December 31, 2022:
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries$34,579 $1,235 $— $— $34,579 $1,235 
U.S. Government agenciesU.S. Government agencies$314,614 $4,780 $— $— 314,614 $4,780 U.S. Government agencies78,676 4,830 285,994 30,931 364,670 35,761 
Residential mortgage-backed securitiesResidential mortgage-backed securities15,216 297 — — 15,216 297 Residential mortgage-backed securities81,992 8,935 11,258 2,526 93,250 11,461 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities8,376 51 — — 8,376 51 Commercial mortgage-backed securities4,860 594 7,210 1,148 12,070 1,742 
Asset backed securitiesAsset backed securities2,272 2,192 36 4,464 44 Asset backed securities1,169 3,499 116 4,668 123 
Corporate investmentsCorporate investments11,372 128 — — 11,372 128 Corporate investments36,958 4,042 7,076 925 44,034 4,967 
States and political subdivisionsStates and political subdivisions6,117 112 — — 6,117 112 States and political subdivisions36,655 1,781 5,084 676 41,739 2,457 
$357,967 $5,376 $2,192 $36 360,159 $5,412 $274,889 $21,424 $320,121 $36,322 $595,010 $57,746 
Held to maturity:Held to maturity:
States and political subdivisionsStates and political subdivisions$9,259 $206 $— $— $9,259 $206 
$9,259 $206 $— $— $9,259 $206 
The number of debt securities in an unrealized loss position increaseddecreased from 82359 at December 31, 20212022 to 296338 at June 30, 2022.2023. 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 June 30, 2022.2023.
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 Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
June 30, 2022:
One year or less$12,405 $12,216 $8,170 $8,169 
After one through five years354,342 335,018 46,172 46,099 
After five through ten years169,022 156,083 9,807 9,768 
After ten years130,864 123,710 2,210 2,210 
$666,633 $627,027 $66,359 $66,246 
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Available for SaleHeld to Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
June 30, 2023:
One year or less$264,104 $261,766 $5,997 $5,978 
After one through five years370,859 343,157 44,173 44,011 
After five through ten years121,534 105,047 6,308 6,266 
After ten years107,721 96,140 1,640 1,640 
$864,218 $806,110 $58,118 $57,895 

The following is a summary of the amortized cost and fair value for investment securities which were pledged to secure public deposits and for other purposes required or permitted by law.
Available for SaleHeld to Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
June 30, 2022$459,420 $428,934 $35,775 $35,693 
December 31, 2021$451,402 $450,480 $38,704 $39,102 
Available for SaleHeld to Maturity
AmortizedFairAmortizedFair
(In thousands)CostValueCostValue
June 30, 2023$153,527 $144,737 $475 $469 
December 31, 2022$492,206 $451,638 $35,734 $35,562 

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings. The Company monitors the credit rating on a quarterly basis. The following table summarizes the amortized cost basis of held-to-maturity debt securities at June 30, 2023 by credit rating:

(In thousands)June 30, 2023
State and political subdivisions held-to-maturity:
S&P: AA+, AA, AA- / Moody's: Aa1, Aa2, Aa3$5,206 
S&P: A+, A, A- / Moody's: A1, A2, A3961 
S&P: BBB+, BBB, BBB- / Moody's: Baa, Ba, B496 
Not rated51,455 
$58,118 
Note 5: Loans
The following is a summary of the Company’s loan portfolio by loan class.
(In thousands)(In thousands)June 30, 2022December 31, 2021(In thousands)June 30, 2023December 31, 2022
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$1,236,278 $774,699 Residential properties$1,494,751 $1,403,974 
Construction and land developmentConstruction and land development834,809 543,763 Construction and land development813,512 772,357 
FarmlandFarmland242,640 211,503 Farmland301,778 283,832 
Other commercialOther commercial2,050,729 1,396,085 Other commercial2,587,757 2,467,216 
Total real estateTotal real estate4,364,456 2,926,050 Total real estate5,197,798 4,927,379 
Commercial and industrial loansCommercial and industrial loans592,810 527,102 Commercial and industrial loans699,305 706,466 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers84,007 86,520 Agricultural production and other loans to farmers92,885 80,770 
Consumer and other loansConsumer and other loans118,433 79,500 Consumer and other loans98,826 109,534 
Total loans before allowance for loan losses$5,159,706 $3,619,172 
Total loans before allowance for credit lossesTotal loans before allowance for credit losses$6,088,814 $5,824,149 
Loans are stated at the amount of unpaid principal net of discounts and premiums on acquired loans, before allowance for loancredit losses. Interest on loans is calculated using the simple interest method on daily balances of the principal amount outstanding.
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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.
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
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are considered past due. Current yearWhen a loan is placed on non-accrual status, any interest previously recorded,that is accrued, but deemed not collectible,collected, is reversed and charged against current yearinterest 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 inamortized cost basis of nonaccrual loans, segregated by class.class as of June 30, 2023.

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(In thousands)(In thousands)June 30, 2022December 31, 2021(In thousands)Total NonaccrualNonaccrual with no Allowance for Credit LossPast Due 90 days or more and Accruing
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$2,878 $3,154 Residential properties$2,287 $— $1,170 
Construction and land developmentConstruction and land development40 51 Construction and land development— — — 
FarmlandFarmland968 1,327 Farmland670 — 59 
Other commercialOther commercial3,105 1,176 Other commercial1,725 — 1,640 
Total real estateTotal real estate6,991 5,708 Total real estate4,682 — 2,869 
Commercial and industrial loansCommercial and industrial loans1,625 20 Commercial and industrial loans92 — 187 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers14 Agricultural production and other loans to farmers— — — 
Consumer and other loansConsumer and other loans26 166 Consumer and other loans— — 44 
Total nonaccrual loans$8,656 $5,897 
TotalTotal$4,774 $— $3,100 

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During the six months ended June 30, 2023, there were no significant changes to the collateral which secures the collateral-dependent loans, whether due to general deterioration or other reason. The following table presents the amortized cost basis of collateral-dependent loans by class and collateral type as of June 30, 2023.

(In thousands)Real EstateEnterprise ValueAccounts Receivable & Inventory
Secured by real estate:
Residential properties$— $— $— 
Construction and land development— — — 
Farmland— — — 
Other commercial2,913 1,527 — 
Total real estate2,913 1,527 — 
Commercial and industrial loans— — 9,015 
Agricultural production and other loans to farmers— — — 
Consumer loans— — — 
Total$2,913 $1,527 $9,015 
An age analysis of past due loans (including both accruing and non-accruing loans) segregated by class of loans is as follows:

(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal LoansPast Due 90 Days or More and Accruing
June 30, 2022
Secured by real estate:
Residential properties$6,850 $1,527 $8,377 $1,227,901 $1,236,278 $694 
Construction and land development368 951 1,319 833,490 834,809 951 
Farmland868 972 1,840 240,800 242,640 — 
Other commercial875 1,677 2,552 2,048,177 2,050,729 385 
Total real estate8,961 5,127 14,088 4,350,368 4,364,456 2,030 
Commercial and industrial loans3,304 301 3,605 589,205 592,810 218 
Agricultural production and other loans to farmers128 182 310 83,697 84,007 168 
Consumer loans344 48 392 118,041 118,433 21 
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.
(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal Loans
June 30, 2023
Secured by real estate:
Residential properties$6,108 $2,086 $8,194 $1,486,557 $1,494,751 
Construction and land development526 — 526 812,986 813,512 
Farmland569 738 1,307 300,471 301,778 
Other commercial1,387 1,989 3,376 2,584,381 2,587,757 
Total real estate8,590 4,813 13,403 5,184,395 5,197,798 
Commercial and industrial loans2,815 234 3,049 696,256 699,305 
Agricultural production and other loans to farmers12 — 12 92,873 92,885 
Consumer loans324 44 368 98,458 98,826 
Total$11,741 $5,091 $16,832 $6,071,982 $6,088,814 

Impaired
(In thousands)Past Due 30-89 DaysPast Due 90 Days or MoreTotal Past DueCurrentTotal Loans
December 31, 2022
Secured by real estate:
Residential properties$5,869 $2,015 $7,884 $1,396,090 $1,403,974 
Construction and land development526 1,578 2,104 770,253 772,357 
Farmland566 1,391 1,957 281,875 283,832 
Other commercial1,498 774 2,272 2,464,944 2,467,216 
Total real estate8,459 5,758 14,217 4,913,162 4,927,379 
Commercial and industrial loans902 677 1,579 704,887 706,466 
Agricultural production and other loans to farmers126 — 126 80,644 80,770 
Consumer loans1,530 697 2,227 107,307 109,534 
Total$11,017 $7,132 $18,149 $5,806,000 $5,824,149 
Modifications to Borrowers Experiencing Financial Difficulty From time to time, the Company may modify certain loans segregated by class were as follows:

June 30, 2022
PrincipalRecordedRelated
(In thousands)Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties$6,983 $4,701 $— 
Construction and land development2,196 654 — 
Farmland1,397 977 — 
Other commercial7,515 6,100 — 
Total real estate18,091 12,432 — 
Commercial and industrial13,906 12,833 — 
Agricultural production and other loans to farmers40 14 — 
Consumer and other loans247 26 — 
Total$32,284 $25,305 $— 
Impaired loans with related allowance:
Secured by real estate:
Residential properties$805 $805 $
Construction and land development— — — 
Farmland— — — 
Other commercial— — — 
Total real estate805 805 
Commercial and industrial372 372 132 
Agricultural production and other loans to farmers— — — 
Consumer and other loans— — — 
Total1,177 1,177 139 
Total impaired loans$33,461 $26,482 $139 

(1) Recorded balance representsto borrowers who are experiencing financial difficulty. In some cases, these modifications result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the carrying value – the contractualform of principal obligation due from the customer less charge offs and payments applied.    
17

Tableforgiveness, interest rate reduction, term extension, other-than-significant payment delay or a combination thereof, among other things. During both of Contents
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 six months ended June 30, 2023 and 2022, and 2021 are presented below.
Three Months Ended June 30,
20222021
AverageInterestAverageInterest
(In thousands)InvestmentRecognizedInvestmentRecognized
Secured by real estate:
  Residential properties$5,085 $10 $6,685 $27 
  Construction and land development1,119 27 2,186 28 
  Farmland1,806 — 9,775 128 
  Other commercial5,524 41 6,125 58 
    Total real estate13,534 78 24,771 241 
Commercial and industrial13,733 112 21,702 262 
Agricultural production and other loans to farmers14 — 54 — 
Consumer loans26 — 187 — 
    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 
Therethere were no modifications classified as TDRs for the six months ended 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 June 30, 2022 and December 31, 2021.borrowers experiencing financial difficulty.

Note 6: Allowance for LoanCredit Losses

On January 1, 2023, the Company adopted ASU 2016-13, which replaces the incurred loss methodology with an expected loss methodology that is referred to as CECL. See Note 1, Basis of Presentation. As a result of implementing CECL, there was a one-time adjustment to the 2023 opening allowance balance of approximately $20.7 million.

As management evaluates the allowance for loancredit 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 individually evaluated or deemed impairedcollateral-dependent 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.

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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. 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.
Pass loans for the Company include loans in Risk Grades 1 - 6. Classified loans for the Company include loans in Risk Grades 8, 9 and 10. Loans may be classified but not considered impaired,individually evaluated or collateral-dependent, due to one of the following reasons: (i) the loan falls below the established minimum dollar thresholds for loan impairment testingindividual evaluation or (ii) the loan was tested for impairment,individually evaluated, but not deemed to be impaired.collateral-dependent.
The following table reflects loans by credit quality indicator and origination year at June 30, 2023. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at June 30, 2023.
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Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
Pass$160,548 $445,706 $329,396 $137,374 $55,555 $94,057 $258,322 $1,480,958 
Special mention— — — — — — — — 
Classified80 1,042 2,078 2,465 1,545 5,230 1,353 13,793 
Total residential real estate$160,628 $446,748 $331,474 $139,839 $57,100 $99,287 $259,675 $1,494,751 
Current period gross write offs$— $— $$32 $— $143 $$178 
Construction & land development:
Pass$25,622 $65,499 $15,339 $4,629 $7,052 $8,051 $684,876 $811,068 
Special mention— 42 — — — — — 42 
Classified— 87 1,003 1,259 12 32 2,402 
Total construction & land development$25,622 $65,628 $15,348 $5,632 $8,311 $8,063 $684,908 $813,512 
Current period gross write offs$— $— $— $— $— $$— $
Farmland:
Pass$21,223 $87,058 $33,149 $29,396 $15,514 $26,373 $86,455 $299,168 
Special mention— — — — — — — — 
Classified22 153 589 118 65 1,411 252 2,610 
Total farmland$21,245 $87,211 $33,738 $29,514 $15,579 $27,784 $86,707 $301,778 
Current period gross write offs$— $$$— $— $109 $— $114 
Other commercial real estate:
Pass$126,216 $517,955 $411,413 $256,570 $123,526 $229,514 $910,237 $2,575,431 
Special mention— — — — — — — — 
Classified107 1,706 2,706 557 2,557 3,485 1,208 12,326 
Total other commercial real estate$126,323 $519,661 $414,119 $257,127 $126,083 $232,999 $911,445 $2,587,757 
Current period gross write offs$— $— $56 $— $— $— $— $56 
Commercial & industrial loans:
Pass$63,301 $172,135 $100,616 $45,688 $30,482 $11,796 $262,844 $686,862 
Special mention— — — — — — — — 
Classified49 711 95 479 139 10,569 401 12,443 
Total commercial & industrial loans$63,350 $172,846 $100,711 $46,167 $30,621 $22,365 $263,245 $699,305 
Current period gross write offs$— $62 $52 $$16 $$178 $317 
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Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Agricultural production & other loans to farmers:
Pass$9,352 $10,338 $5,088 $4,140 $1,443 $739 $61,700 $92,800 
Special mention— — — — — — — — 
Classified— — 54 11 13 — 85 
Total agricultural production & other loans to farmers$9,352 $10,345 $5,088 $4,194 $1,454 $752 $61,700 $92,885 
Current period gross write offs$— $$— $— $— $— $$13 
Consumer & other loans:
Pass$24,685 $24,416 $7,623 $5,517 $1,099 $493 $34,912 $98,745 
Special mention— — — — — — — — 
Classified12 15 — 11 39 81 
Total consumer & other loans$24,688 $24,428 $7,638 $5,518 $1,099 $504 $34,951 $98,826 
Current period gross write offs$1,388 $111 $32 $35 $11 $$14 $1,600 
The following table summarizes the credit quality of the Company’s loan portfolio by loan class at December 31, 2022:
Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
December 31, 2022
Secured by real estate:
Residential properties$1,391,039 $— $12,852 $83 $1,403,974 
Construction and land development768,699 303 3,355 — 772,357 
Farmland280,522 — 3,310 — 283,832 
Other commercial2,456,708 — 10,384 124 2,467,216 
Total real estate4,896,968 303 29,901 207 4,927,379 
Commercial and industrial693,963 — 12,503 — 706,466 
Agricultural production and other loans to farmers80,524 — 246 — 80,770 
Consumer and other loans108,279 — 1,255 — 109,534 
Total$5,779,734 $303 $43,905 $207 $5,824,149 
The allowance for credit loss represents the period indicated:estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The lifetime estimate also considers economic conditions. During the second quarter of 2023, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of supply chain disruptions, labor shortages, and the conflict in Ukraine. Although management
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Risk GradesRisk GradeRisk GradeRisk Grade
(In thousands)1-6789Total
June 30, 2022
Secured by real estate:
Residential properties$1,223,487 $173 $12,575 $43 $1,236,278 
Construction and land development828,538 4,107 2,164 — 834,809 
Farmland240,290 — 2,350 — 242,640 
Other commercial2,022,765 12,521 15,443 — 2,050,729 
Total real estate4,315,080 16,801 32,532 43 4,364,456 
Commercial and industrial577,509 — 14,047 1,254 592,810 
Agricultural production and other loans to farmers83,898 — 109 — 84,007 
Consumer and other loans118,330 — 103 — 118,433 
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 
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 credit losses.
Transactions in the allowance for loancredit 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 June 30, 2023
Allowance for credit losses:
Beginning balance$6,404 $40,494 $16,420 $1,085 $64,403 
Provision for credit losses(80)(175)937 104 786 
Recoveries on loans115 97 67 558 837 
Loans charged off(29)(106)(5)(657)(797)
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 
Six Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance$4,750 $26,701 $9,958 $1,466 $42,875 
Impact of adopting ASU 2016-132,166 12,770 6,464 (656)20,744 
Provision for credit losses(392)804 1,050 744 2,206 
Recoveries on loans203 212 125 1,149 1,689 
Loans charged off(317)(177)(178)(1,613)(2,285)
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 
Period End Allowance Balance Allocated To:
Individually evaluated$227 $— $— $— $227 
Collectively evaluated6,183 40,310 17,419 1,090 65,002 
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 

The allowance for credit losses increased for the six months ended June 30, 2023 primarily as a result of the adoption of ASU 2016-13. Accrued interest receivable on loans, reported as a component of accrued interest receivable on the balance sheet, totaled approximately $21.5 million at June 30, 2023 and is excluded from the estimate of credit losses.
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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)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
Three Months Ended June 30, 2021
Allowance for loan losses:
Beginning balance$6,135 $22,616 $9,439 $1,851 $40,041 
 Provision for loan losses422 510 648 457 2,037 
 Recoveries on loans197 239 197 715 1,348 
 Loans charged off(261)(314)(50)(797)(1,422)
    Balance, end of year$6,493 $23,051 $10,234 $2,226 $42,004 
Six Months Ended June 30, 2021
Allowance for loan losses:
Beginning balance$6,337 $20,163 $7,900 $1,600 $36,000 
Provision for loan losses132 2,865 2,229 700 5,926 
Recoveries on loans304 652 281 1,597 2,834 
Loans charged off(280)(629)(176)(1,671)(2,756)
Ending balance$6,493 $23,051 $10,234 $2,226 $42,004 
Period End Allowance Balance Allocated To:
Individually evaluated for impairment$1,728 $302 $$— $2,039 
Collectively evaluated for impairment4,765 22,749 10,225 2,226 39,965 
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:

(In thousands)(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
June 30, 2022
Three Months Ended June 30, 2022Three Months Ended June 30, 2022
Allowance for loan losses:Allowance for loan losses:
Beginning balanceBeginning balance$6,052 $26,912 $9,603 $1,671 $44,238 
Provision for loan losses Provision for loan losses(1,063)635 146 516 234 
Recoveries on loans Recoveries on loans58 413 55 770 1,296 
Loans charged off Loans charged off(921)(3)(530)(961)(2,415)
Balance, end of year Balance, end of year$4,126 $27,957 $9,274 $1,996 $43,353 
Six Months Ended June 30, 2022Six Months Ended June 30, 2022
Allowance for loan losses:Allowance for loan losses:
Beginning balanceBeginning balance$6,556 $27,133 $9,488 $1,823 $45,000 
Provision for loan lossesProvision for loan losses(1,531)710 457 815 451 
Recoveries on loansRecoveries on loans80 554 109 1,561 2,304 
Loans charged offLoans charged off(979)(440)(780)(2,203)(4,402)
Ending balanceEnding balance$4,126 $27,957 $9,274 $1,996 $43,353 
Period End Allowance Balance Allocated To:Period End Allowance Balance Allocated To:
Individually evaluated for impairmentIndividually evaluated for impairment$13,121 $4,584 $2,149 $— $19,854 Individually evaluated for impairment$132 $— $$— $139 
Collectively evaluated for impairmentCollectively evaluated for impairment579,689 3,123,594 1,234,129 202,440 5,139,852 Collectively evaluated for impairment3,994 27,957 9,267 1,996 43,214 
Ending balanceEnding balance$592,810 $3,128,178 $1,236,278 $202,440 $5,159,706 Ending balance$4,126 $27,957 $9,274 $1,996 $43,353 
December 31, 2021
Individually evaluated for impairment$21,822 $3,434 $1,640 $166 $27,062 
Collectively evaluated for impairment505,280 2,147,917 773,059 165,854 3,592,110 
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
In 2019, the federal bank regulatory agencies finalized a rule that simplifies capital requirements for qualifying community banks by providing an option to use a simple leverage ratio to measure capital adequacy guidelines and the regulatoryto not calculate risk-based capital ratios. A qualifying community bank has less than $10 billion in total consolidated assets, limited amounts of off-balance-sheet exposures and trading assets and liabilities, and a leverage ratio greater than 9.0%. The community bank leverage ratio (“CBLR”) framework for prompt corrective action,was effective on January 1, 2020, and the Company and the Bank must meet specificelected to adopt the optional CBLR framework in the third quarter of 2022, as an alternative to the generally applicable 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 judgmentsrules.

A final rule adopted by the regulators about components, risk weightings and other factors.
The U.S. capital rules, whichfederal banking agencies in substance adoptedFebruary 2019 provides banking organizations with the international Basel III Capital Rules and accordingly are referredoption 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 phasedphase 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-basedthree-year period, the adverse day-one regulatory 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 amounteffects of the shortfall.adoption of CECL. The capital conservation buffer, which is 2.50%, is includedCompany adopted CECL in the minimum capital requirements relativefirst quarter of 2023 and has elected to risk-weighted assets inutilize the following table. Management believes as of June 30, 2022 and December 31, 2021, the Company and the Bank met Basel III minimum capital requirements to which they are subject.

three-year transition period.
The Bank is also subject to capital requirements under the prompt corrective action regime. As of 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 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 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 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 asCompany. As of June 30, 2022 and December 31, 2021.
Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital for both the Company and2023, the Bank includesmaintained a permissible portionleverage ratio of more than 9.0% and, as an institution has elected to adopt the allowance for loan losses. In addition, Tier 2 capital at June 30, 2022 and December 31, 2021 forCBLR framework, the Company includes $80.5 million and $58.8 million, respectively, of subordinated debentures. Capital levels required to be consideredBank was therefore well capitalized are based uponunder the regulatory framework for prompt corrective action regulations.action.
The following table presents actual and required capital ratios for the Company and the Bank under the Basel III rules.CBLR and prompt corrective action regulations for the relevant periods.
 Actual Minimum Requirement Required to be
 Well Capitalized
(In thousands) Capital AmountRatio Capital AmountRatio Capital AmountRatio
June 30, 2022:
Company:
CET1 Capital to Risk-Weighted Assets$391,892 7.02 %$391,002 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted Assets693,031 12.41 %474,789 8.50 %N/AN/A
Total Capital to Risk-Weighted Assets816,925 14.63 %586,504 10.50 %N/AN/A
Tier 1 Capital to Average Assets693,031 10.83 %255,955 4.00 %N/AN/A
Bank:
CET1 Capital to Risk-Weighted Assets$606,332 10.87 %$390,536 7.00 %$362,641 6.50 %
Tier 1 Capital to Risk-Weighted Assets606,332 10.87 %474,223 8.50 %446,327 8.00 %
Total Capital to Risk-Weighted Assets649,685 11.65 %585,804 10.50 %557,909 10.00 %
Tier 1 Capital to Average Assets606,332 9.49 %255,647 4.00 %319,559 5.00 %
December 31, 2021:
Company:
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 %
ActualMinimum Requirement to be Well Capitalized
(In thousands)Capital AmountRatioCapital AmountRatio
June 30, 2023:
Company:
Community Bank Leverage Ratio$733,707 10.00 %$660,411 9.00 %
Bank:
Community Bank Leverage Ratio$682,869 9.32 %$659,762 9.00 %

 ActualMinimum Requirement to be Well Capitalized
(In thousands) Capital AmountRatio Capital AmountRatio
December 31, 2022:
Company:
Community Bank Leverage Ratio$721,001 10.54 %$615,566 9.00 %
Bank:
Community Bank Leverage Ratio$636,007 9.31 %$614,973 9.00 %
The ability of the Company to pay future dividends, pay its expenses and retire its debt is dependent upon future dividends and income tax benefits and dividends paid to the Company by the Bank. The Bank is subject to dividend restrictions as imposed by Federalfederal 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

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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 June 30, 20222023 or December 31, 2021.2022. The Company’s treasury department and Asset Liability Management Committee review the aggregate fair values of the securities portfolio.
Impaired loans -Individually Evaluated Loans with Credit Losses – Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairmentto determine if any credit loss exists on a non-recurring basis. Allowable methods for determining the amount of impairmentthe credit loss include estimating fair value using the fair value of the collateral for collateral-dependent loans. Specific allowances for impairedthese 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 loanscollateral-dependent. Loans that are primarily collateral dependent loans and are assessed using a fair value approach. Fair value estimates for collateral dependentcollateral-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 loansLoans that have experienced a credit loss 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 impairedcollateral-dependent 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.
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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
June 30, 2022
June 30, 2023June 30, 2023
U.S. TreasuriesU.S. Treasuries$34,729 $— $34,729 $— U.S. Treasuries$196,364 $— $196,364 $— 
U.S. Government agency obligationsU.S. Government agency obligations369,394 — 369,394 — U.S. Government agency obligations411,387 — 411,387 — 
Residential mortgage-backed securitiesResidential mortgage-backed securities108,784 — 108,784 — Residential mortgage-backed securities87,519 — 87,519 — 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities12,867 — 12,867 — Commercial mortgage-backed securities11,982 — 11,982 — 
Asset-backed securitiesAsset-backed securities11,602 — 11,602 — Asset-backed securities7,561 — 7,561 — 
Corporate investmentsCorporate investments46,125 — 46,125 — Corporate investments43,835 — 43,835 — 
State and political subdivisionsState and political subdivisions43,526 — 43,526 — State and political subdivisions47,462 — 47,462 — 
Total securities available for saleTotal securities available for sale$627,027 $— $627,027 $— Total securities available for sale$806,110 $— $806,110 $— 
December 31, 2021
December 31, 2022December 31, 2022
U.S. TreasuriesU.S. Treasuries$34,579 $— $34,579 $— 
U.S. Government agency obligationsU.S. Government agency obligations$350,250 $— $350,250 $— U.S. Government agency obligations378,736 — 378,736 — 
Residential mortgage-backed securitiesResidential mortgage-backed securities109,787 — 109,787 — Residential mortgage-backed securities94,132 — 94,132 — 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities14,276 — 14,276 — Commercial mortgage-backed securities12,070 — 12,070 — 
Asset backed securitiesAsset backed securities13,107 — 13,107 — Asset backed securities10,220 — 10,220 — 
Corporate investmentsCorporate investments44,510 — 44,510 — Corporate investments46,033 — 46,033 — 
State and political subdivisionsState and political subdivisions44,684 — 44,684 — State and political subdivisions48,150 — 48,150 — 
Total securities available for saleTotal securities available for sale$576,614 $— $576,614 $— Total securities available for sale$623,920 $— $623,920 $— 
Assets measured at fair value on a non-recurring basis are summarized below.
FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
Impaired loans, net of allowance for loan losses:
June 30, 2022$26,343 $— $— $26,343 
December 31, 2021$33,570 $— $— $33,570 
Other real estate owned:
June 30, 2022$6,462 $— $— $6,462 
December 31, 2021$5,815 $— $— $5,815 
FairFair Value Measurements Using
(In thousands)ValueLevel 1Level 2Level 3
Individually evaluated loans with credit losses, net of allowance for credit losses:
June 30, 2023$1,300 $— $— $1,300 
Impaired loans, net of allowance for loan losses:
December 31, 2022$26,071 $— $— $26,071 
Other real estate owned:
June 30, 2023$3,722 $— $— $3,722 
December 31, 2022$4,231 $— $— $4,231 
The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis.
Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value
Valuation
Methods
Unobservable
Inputs
RangeWeighted Average
June 30, 2023
Individually evaluated loans with credit losses, net of specific allowance$1,300 Third-party appraisalsSelling costs5% - 10%6%
Other real estate owned$3,722 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%
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Qualitative Information about Level 3 Fair Value Measurements
(In thousands)Carrying
Value
Valuation
Methods
Unobservable
Inputs
RangeWeighted Average
June 30, 2022
Impaired loans, net of specific allowance$26,343 Third-party appraisalsSelling 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 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
December 31, 2021
Impaired loans, net of specific allowance$33,570 Third-party appraisalsSelling costs5% - 10%6%
December 31, 2022December 31, 2022
Impaired loans, net of allowance for loan lossesImpaired loans, net of allowance for loan losses$26,071 Third-party appraisalsSelling costs5% - 10%6%
Other real estate ownedOther real estate owned$5,815 Third-party appraisals and internal evaluationsSelling costs5% - 10%6%Other real estate owned$4,231 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:carried at fair value:
June 30, 2022December 31, 2021June 30, 2023December 31, 2022
(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$343,741 $343,741 $664,165 $664,165 Cash and cash equivalents$191,214 $191,214 $137,895 $137,895 
Level 2 inputs:Level 2 inputs:Level 2 inputs:
Securities held to maturitySecurities held to maturity66,359 66,246 71,648 72,084 Securities held to maturity58,118 57,895 62,274 62,068 
FHLB stockFHLB stock5,578 5,578 2,731 2,731 FHLB stock26,011 26,011 19,690 19,690 
Accrued interest receivableAccrued interest receivable17,549 17,549 14,329 14,329 Accrued interest receivable25,454 25,454 23,156 23,156 
Level 3 inputs:Level 3 inputs:Level 3 inputs:
Loans held for saleLoans held for sale14,757 14,757 10,621 10,621 Loans held for sale13,176 13,176 5,373 5,373 
Loans, netLoans, net5,116,353 5,053,300 3,574,172 3,548,595 Loans, net6,023,585 5,789,083 5,781,274 5,601,070 
Financial liabilities:Financial liabilities:Financial liabilities:
Level 2 inputs:Level 2 inputs:Level 2 inputs:
DepositsDeposits5,682,850 5,266,566 4,622,116 4,493,657 Deposits6,108,309 6,091,601 5,824,904 5,289,138 
FHLB and other borrowingsFHLB and other borrowings20,115 20,119 20,501 21,024 FHLB and other borrowings540,065 536,993 318,084 318,079 
Subordinated debenturesSubordinated debentures133,383 139,701 111,509 111,509 Subordinated debentures133,579 138,214 133,478 138,780 
Accrued interest payableAccrued interest payable1,476 1,476 1,425 1,425 Accrued interest payable5,924 5,924 2,334 2,334 

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
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Company’s Consolidated Balance Sheets and will be amortized over the life of the Notes. At June 30, 20222023 and December 31, 2021,2022, the remaining unamortized balance of these issuance costs was $1.1 million$999,000 and $1.2$1.1 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 (“SOFR”) 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“FTC Subordinated Notes”). The FTC 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 RateSOFR plus 527 basis points, payable
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quarterly in arrears. BancPlus will be entitled to redeem the FTC Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the FTC Subordinated Notes in whole upon certain other events. The FTC Subordinated Notes are not subject to redemption at the option of the holder. The FTC Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The FTC Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The FTC Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The FTC Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at June 30, 20222023 due to the remaining purchase premium of $683,000,$536,000, 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)Year of
Maturity
Interest
Rate
June 30,
2022
December 31,
2021
First Bancshares of Baton Rouge Statutory Trust I20343 month LIBOR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IV20353 month LIBOR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust II20363 month LIBOR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust III20373 month LIBOR, plus 1.35%20,619 20,619 
State Capital Master Trust20373 month LIBOR, plus 1.46%6,186 6,186 
$56,703 $56,703 
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(In thousands)Year of
Maturity
Interest
Rate
June 30,
2023
December 31,
2022
First Bancshares of Baton Rouge Statutory Trust I20343 month CME Term SOFR, plus 2.50%$4,124 $4,124 
State Capital Statutory Trust IV20353 month CME Term SOFR, plus 1.99%5,155 5,155 
BancPlus Statutory Trust II20363 month CME Term SOFR, plus 1.50%20,619 20,619 
BancPlus Statutory Trust III20373 month CME Term SOFR, plus 1.35%20,619 20,619 
State Capital Master Trust20373 month CME Term SOFR, plus 1.46%6,186 6,186 
$56,703 $56,703 

The subordinated debentures payable to statutory trusts vary from the amount carried on the Consolidated Balance Sheets at June 30, 20222023 due to the remaining purchase discount of $3.9$3.6 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 arewere nominally indexed with LIBOR. On March 15, 2022Following the LIBOR cessation date of June 30, 2023, the interest rate on the subordinated notes was replaced with SOFR pursuant to 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.Act.

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 1000one thousand 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 “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 1,500,7321,452,950 shares of the Company's common stock at both June 30, 20222023 and December 31, 2021, respectively.2022. The ESOP enteredcan enter 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 werewould be released to participants proportionately as the loans wereare repaid. Dividends on allocated shares wereare recorded as dividends and charged to retained earnings. Dividends on unallocated shares, if any, that wereare used to repay the loan werewould be treated as compensation expense. As of June 30, 2022,2023, 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)June 30, 2022December 31, 2021
Allocated shares1,481,796 1,472,334 
Unearned shares— 28,398 
Total ESOP shares1,481,796 1,500,732 
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 June 30, 20222023 was $97.8$89.4 million, based on the Company’s previously disclosed appraised value of $66.00$61.50 per share of common stock. The fair value at December 31, 20212022 was $100.5$97.0 million, based on the Company’s previously disclosed appraised value of $68.25$66.75 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.
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Note 11: Equity

Preferred Stock

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.

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 extensionextensions 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 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 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.

Common Stock

In the first quarter of 2023, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation increasing the number of authorized shares of the Company’s common stock from 40,000,000 shares to 100,000,000 shares.

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 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 $1.7$2.3 million for the six months ended June 30, 20222023 and $1.1$1.8 million for the same period of 2021.2022. There were zero3,186 and 399zero shares forfeited during the six months ended June 30, 20222023 and 2021,2022, respectively. As of June 30, 2022,2023, there was $10.4$11.7 million of total unrecognized compensation cost related to unvested RSAs. The cost is expected to be recognized over a remaining weighted average period of 3.23.0 years.
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A summary of the Company’s equity-based award activity and related information for the Company’s RSAs is as follows:
Six Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2023June 30, 2022
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 period184,284 $59.36 144,572 $51.56 
GrantedGranted95,768 68.25 82,507 51.25 Granted93,209 66.66 95,768 68.25 
VestedVested(54,537)53.34 (32,685)51.93 Vested(68,204)58.32 (54,537)53.34 
ForfeitedForfeited— — (399)47.96 Forfeited(3,186)61.13 — — 
End of periodEnd of period185,803 $59.64 140,532 $50.56 End of period206,103 $62.98 185,803 $59.64 

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, 3three former Bank employees, 1one 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. The Court denied that motion. 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.still underway. Phases two and three discovery, allowing depositions, will begin thereafterat a future date 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.Quarterly Report on Form 10-Q.

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,
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“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, maintain our historical rate of growth in light of associated risks, 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;
customers, particularly in light of increased competition in the financial services industry, and 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;servicers;
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 abilitythe impacts related to maintain our historical rate of growth;
our abilityor resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to manage the risks associated with our growth and expansion through de novo branching;macroeconomic conditions;
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;
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;rates;
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, civil unrest or other international or domestic calamities, and other matters beyond our control; and
other factors that are discussed in the sections entitled “Risk“Item 1A. Risk Factors” and “Management’s“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the annual periodyear 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.2022.
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, 2021,2022 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and in this Quarterly Report on Form 10-Q.2023. 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 June 30, 2022,2023, we operated 9395 branch offices across Mississippi, Alabama, 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 June 30, 2022,2023, BancPlus held $5.683$6.108 billion of total deposits, and our deposit base consisted of 96.1%94.4% core deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000, with a total deposit cost of 0.15%0.94%. Our loan portfolio was comprised of 73.7%73.8% commercial loans and 26.3%26.2% 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, 2021,2022, and we believe we are well-positioned for future growth.
June 30, 20222023 Highlights

Net income for the six months ended June 30, 20222023 was $25.8$30.3 million, compared with $31.3$25.8 million for the same period of 20212022
Diluted earnings per share for the six months ended June 30, 20222023 were $2.34,$2.64, compared with $3.12$2.34 for the same period of 20212022
Net interest income was $95.6$115.7 million for the six months ended June 30, 2022,2023, compared with $83.4$95.6 million for the same period of 20212022
Total loans held for investment were $5.160$6.089 billion at June 30, 2022,2023, compared with $3.619$5.824 billion at December 31, 20212022
Recent Developments

On June 22, 2022,The failures of Silicon Valley Bank, Santa Clara, California, Signature Bank, New York, New York, and First Republic Bank, San Francisco, California in March and May, 2023, may lead to regulatory changes and initiatives that could impact BancPlus. For example, President Biden has encouraged 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 createdfederal banking agencies 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”),adopt various reforms, including the Bank, that we expect will enable us to, among other things, provide loans, grants, and forbearancecompletion of an incentive compensation rule 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 registrationbank executives pursuant to Section 4(a)(2)956 of the SecuritiesDodd-Frank Act, of 1933, as amended.in response to these bank failures.

For more information aboutOn April 28, 2023, the preferred stock issuance referFederal Reserve and the Federal Deposit Insurance Corporation (the “FDIC”) issued reports on the failures of Silicon Valley Bank and Signature Bank, respectively, identifying potential causes that the federal banking agencies may seek to Footnoteaddress through changes to their supervisory and regulatory policies. Additionally, agency officials, including the Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, have called for changes to the manner in which banks’ capital, interest rate, and liquidity risks are supervised and regulated. The extent of final actions to be taken by the regulatory agencies in response to these bank failures, including the potential changes discussed by the Vice Chair or highlighted in the Federal Reserve and FDIC reports, remains unclear.

FDIC Special Assessment

On May 11, 2023, the FDIC published a proposed rule that would impose a special deposit insurance assessment on insured depository institutions in order to our Condensed Notesrecover losses that the FDIC's Deposit Insurance Fund (the “DIF”) has incurred in the receiverships of Silicon Valley Bank and Signature Bank. The proposed rule would require the payment of the special assessment over eight quarterly assessment periods beginning the first quarter of 2024, subject to Consolidated Financial Statements foradjustments if the quarter ended June 30, 2022 contained in Part I, Item 1total amount collected is insufficient to cover the DIF’s costs. Each quarterly special assessment would be equal to 3.13 basis points (0.0313%) of this Quarterly Report on Form 10-Q.
Other recent developments at June 30, 2022 did not significantly change from the recent developmentsamount of an institution’s estimated uninsured deposits that exceeded $5 billion as of December 31, 2021, which are disclosed in our Annual Report2022. As of December 31, 2022, BankPlus’s estimated amount of uninsured deposits was approximately $1.5 billion.

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Small Business Lending Data Collection Rule

On March 30, 2023, the Consumer Financial Protection Bureau (the “CFPB”) finalized a rule under section 1071 of the Dodd-Frank Act requiring lenders to collect and report data regarding small business lending activity. BancPlus is evaluating the impact of the new rule. The rule is scheduled to take effect on Form 10-KAugust 29, 2023, and requires compliance by October 1, 2024, April 1, 2025, or January 1, 2026, depending on the number of covered small business loans that a covered lender originates.

On July 31, 2023, the U.S. District Court for the year ended December 31, 2021,Southern District of Texas enjoined the CFPB from implementing and asenforcing the rule with respect to American Bankers Association members, which include the Company, pending the U.S. Supreme Court's consideration of March 31, 2022, which are disclosedthe constitutionality of the CFPB’s funding structure in our Quarterly Reporta separate case.

Third Party Risk Management Guidance

On June 6, 2023, the FDIC, the Federal Reserve and the OCC issued final guidance providing sound principles that support a risk-based approach to third-party risk management. BancPlus is evaluating the impact of this guidance on Form 10-Q for the quarter ended March 31, 2022.its practices.

Results of Operations
The following discussion of BancPlus’ results of operations compares the three and six months ended June 30, 20222023 to the three and six months ended June 30, 2021.2022. The results of operations for the three and six months ended June 30, 20222023 are not
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necessarily indicative of the results of operations that may be expected for the year ending December 31, 20222023 or for any other period.
Net Income

Net income for the three months ended June 30, 2023 and 2022 and 2021 was $16.1$13.2 million and $14.1$16.1 million, respectively. BancPlus’ annualized return on average assets for the three months ended June 30, 2023 and 2022 was 0.72% and 2021 was 1.00% and 1.13%, respectively. BancPlus’ annualized return on average equity for the three months ended June 30, 2023 and 2022 was 7.63% and 2021 was 13.99% and 15.34%, respectively. Net income for the six months ended June 30, 2023 and 2022 and 2021 was $25.8$30.3 million and $31.3$25.8 million, respectively. BancPlus’ annualized return on average assets for the six months ended June 30, 2023 and 2022 was 0.85% and 2021 was 0.86% and 1.29%, respectively. BancPlus’ annualized return on average equity for the six months ended June 30, 2023 and 2022 was 8.87% and 2021 was 11.94% and 17.40%, respectively.

The decrease in net income and return on average assets and equity for the three months ended June 30, 2023 compared to the same period of 2022 was primarily the result of decreased other operating income and increased other operating expenses in the current year period as well as increases in average assets and equity as a result of organic loan and deposit growth.

The increase in net income for the threesix months ended June 30, 20222023 compared to the same period of 20212022 was primarily the result of increased net interest income from our previously disclosed merger with First Trust Corporation (“FTC”),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 rising interest rate environment seen in the current year period. The decreasedecreases in return metrics for the three months ended June 30, 2022 compared to the same period of 2021 was primarily the result of an increase in noninterest expenses, including one-time acquisition-related expenses, and an increaseincreases in average assets and equity as a result of organic loan and deposit growth and 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.Merger.

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 loancredit losses that BancPlus maintains.

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For the three months ended June 30, 2022, net2023, interest income was $52.8$89.7 million, an increase of $11.5$32.6 million, or 27.8%57.0%, compared to net interest income of $41.4$57.1 million for the three months ended June 30, 2021.2022. The increase in net interest income for the three months ended June 30, 2023 compared to the same period of 2022 was primarily the result of higher interest rates in the current year period as well as increased interest-earning assets as a result of the FTC Merger and organic loan growth.

For the six months ended June 30, 2022, net2023, interest income was $95.6$170.4 million, an increase of $12.2$67.4 million, or 14.6%65.4%, compared to net interest income of $83.4$103.0 million for the six months ended June 30, 2021.2022. The increase in net interest income for the six months ended June 30, 2023 compared to the same period of 2022 was primarily the result of higher interest rates in the current year period as well as increased interest-earning assets as a result of organic loan growth and the FTC Merger.

For the three months ended June 30, 2023, interest expense was $32.1 million, an increase of $27.9 million, or 656.3%, compared to interest expense of $4.2 million for the three months ended June 30, 2022. The increase in interest expense for the three months ended June 30, 2023 compared to the same period of 2022 was primarily the result of higher interest rates in the current year period.

For the six months ended June 30, 2023, interest expense was $54.7 million, an increase of $47.3 million, or 637.2%, compared to $7.4 million for the six months ended June 30, 2022. The increase in interest expense for the six months ended June 30, 2023 compared to the same period of 2022 was primarily the result of higher interest rates in the current year period as well as increased interest-bearing liabilities as a result of the FTC Merger.

For the three months ended June 30, 2023, net interest income was $57.5 million, an increase of $4.7 million, or 8.9%, compared to net interest income of $52.8 million for the three months ended June 30, 2022. For the six months ended June 30, 2023, net interest income was $115.7 million, an increase of $20.1 million, or 21.0%, compared to net interest income of $95.6 million for the six months ended June 30, 2022.

Net interest margin for the three months ended June 30, 20222023 decreased 317 basis points to 3.51%3.34% from 3.54%3.51% for the same period of 20212022, primarily as thea result of the lowerrising interest rate environment seen earlier in the period.current year as rates on interest-bearing liabilities rose faster than yields on interest-earning assets in the current quarter. Net interest margin for the six months ended June 30, 2022 decreased 272023 increased 5 basis points to 3.37%3.42% from 3.64%3.37% for the same period of 20212022, primarily as thea result of the lowerrising interest rate environment seen earlier in the year.current year period.

Our year to date average interest-earning assets at June 30, 2022,2023 increased $1.09$1.10 billion, or 23.75%19.33%, to $5.67$6.76 billion from $4.58$5.67 billion at June 30, 2021.2022. BancPlus’ year to date average interest-bearing liabilities at June 30, 20222023 increased $632.9 million,$1.04 billion, or 19.65%27.01%, to $3.85$4.89 billion from $3.22$3.85 billion at June 30, 2021.2022. These increases in BancPlus’ average interest-earning assets and
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interest-bearing liabilities were primarily due to organic loan and deposit growth and the FTC Merger and organic loan growth.Merger. The ratio of BancPlus’ average interest-earning assets to average interest-bearing liabilities was 147.1%138.2% and 142.2%147.1% at June 30, 20222023 and 2021,2022, respectively.
BancPlus’ average interest-earning assets produced a tax-equivalent yield of 5.20% and 5.04% for the three and six months ended June 30, 2023, compared to 3.79% and 3.64% for the three and six months ended June 30, 2022, respectively, compared to 3.83%respectively. The average rate paid on interest-bearing liabilities was 2.54% and 3.95%2.24% for the three and six months ended June 30, 2021, respectively. The average rate paid on interest-bearing liabilities was2023, compared to 0.42% and 0.39% for the three and six months ended June 30, 2022, respectively, compared to 0.42% and 0.44% for the three and six months ended June 30, 2021, respectively. The year-over-year decreasechanges in yields reflects the lowrising interest rate environment seen earlier in the year.current year period.
Average Balances and Yields
The following tables show, for the three and six months ended June 30, 20222023 and 2021,2022, 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.

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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 %
_
Three Months Ended June 30,
20232022
(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$39,710 $504 5.08 %$373,249 $469 0.50 %
39,710 504 5.08 %373,249 469 0.50 %
Investment securities:
Taxable investment securities743,930 4,403 2.37 %626,928 2,502 1.60 %
Tax-exempt investment securities61,193 364 2.38 %68,614 401 2.34 %
Total securities805,123 4,767 2.37 %695,542 2,903 1.67 %
Loans (1)
6,022,376 84,117 5.59 %4,945,036 53,712 4.34 %
Federal Home Loan Bank (“FHLB”) stock24,715 274 4.43 %6,592 0.49 %
Total interest-earning assets6,891,924 89,662 5.20 %6,020,419 57,092 3.79 %
Noninterest-earning assets447,005 418,532 
Total assets$7,338,929 $6,438,951 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,512,195 $3,945 1.04 %$1,578,774 $1,118 0.28 %
Savings and money market deposits2,008,480 14,236 2.84 %1,456,402 577 0.16 %
Time deposits946,001 6,183 2.61 %845,637 667 0.32 %
Federal funds purchased242 1.65 %— — — %
FHLB advances447,923 5,567 4.97 %20,669 77 1.49 %
Other borrowings49 12 97.96 %18,221 205 4.50 %
Subordinated debentures133,536 2,176 6.52 %133,344 1,603 4.81 %
Total interest-bearing liabilities5,048,426 32,120 2.54 %4,053,047 4,247 0.42 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,520,136 1,867,843 
Other noninterest-bearing liabilities76,442 56,162 
Total noninterest-bearing liabilities1,596,578 1,924,005 
Shareholders’ equity (6)
693,925 461,899 
Total liabilities and shareholders’ equity$7,338,929 $6,438,951 
Net interest income/net interest margin (2)
57,542 3.34 %52,845 3.51 %
Net interest spread (5)
2.66 %3.37 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
117 129 
Net interest income/net interest margin (2)
$57,659 3.35 %$52,974 3.52 %
_______________________________
(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 20222023 and 2021.2022.
(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 BancPlus Corporation Employee Stock Ownership-ownedOwnership Plan-owned shares.
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Six Months Ended June 30,
20232022
(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$35,694 $861 4.82 %$475,185 $696 0.29 %
35,694 861 4.82 %475,185 696 0.29 %
Investment securities:
Taxable investment securities689,937 7,469 2.17 %628,061 4,809 1.53 %
Tax-exempt investment securities62,658 744 2.37 %70,513 821 2.33 %
Total securities752,595 8,213 2.18 %698,574 5,630 1.61 %
Loans (1)
5,952,466 160,864 5.40 %4,489,556 96,699 4.31 %
Federal Home Loan Bank (“FHLB”) stock23,753 495 4.17 %5,539 12 0.43 %
Total interest-earning assets6,764,508 170,433 5.04 %5,668,854 103,037 3.64 %
Noninterest-earning assets448,002 382,490 
Total assets$7,212,510 $6,051,344 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits$1,584,138 $7,169 0.91 %$1,584,432 $1,830 0.23 %
Savings and money market deposits1,934,851 24,814 2.56 %1,328,864 888 0.13 %
Time deposits878,776 9,541 2.17 %780,399 1,321 0.34 %
Federal funds purchased3,310 80 4.83 %— — — %
FHLB advances359,050 8,782 4.89 %20,577 153 1.49 %
Other borrowings467 25 10.71 %12,692 270 4.25 %
Subordinated debentures133,510 4,327 6.48 %126,224 2,963 4.69 %
Total interest-bearing liabilities4,894,102 54,738 2.24 %3,853,188 7,425 0.39 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits1,552,818 1,707,538 
Other noninterest-bearing liabilities77,542 54,933 
Total noninterest-bearing liabilities1,630,360 1,762,471 
Shareholders’ equity (6)
688,048 435,685 
Total liabilities and shareholders’ equity$7,212,510 $6,051,344 
Net interest income/net interest margin (2)
115,695 3.42 %95,612 3.37 %
Net interest spread (5)
2.80 %3.25 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
240 264 
Net interest income/net interest margin (2)
$115,935 3.43 %$95,876 3.38 %
_______________________________
(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 2023 and 2022.
(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 BancPlus Corporation Employee Stock Ownership Plan-owned shares.

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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 June 30, 2022 Compared with Three Months Ended June 30, 2021Three Months Ended June 30, 2023 Compared with Three Months Ended June 30, 2022
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$(231)$590 $359 Cash investments$(4,233)$4,268 $35 
Investment securities:Investment securities:Investment securities:
Taxable investment securitiesTaxable investment securities227 181 408 Taxable investment securities692 1,209 1,901 
Tax-exempt investment securitiesTax-exempt investment securities(24)(54)(78)Tax-exempt investment securities(44)(37)
Total securitiesTotal securities203 127 330 Total securities648 1,216 1,864 
Loans, netLoans, net16,008 (4,385)11,623 Loans, net15,047 15,358 30,405 
Federal Home Loan Bank stockFederal Home Loan Bank stockFederal Home Loan Bank stock201 65 266 
Total interest-earning assetsTotal interest-earning assets$15,984 $(3,667)$12,317 Total interest-earning assets$11,663 $20,907 $32,570 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing transaction depositsInterest-bearing transaction deposits$82 $266 $348 Interest-bearing transaction deposits$(174)$3,001 $2,827 
Savings and money market depositsSavings and money market deposits187 162 349 Savings and money market deposits3,913 9,746 13,659 
Time depositsTime deposits146 (444)(298)Time deposits656 4,860 5,516 
Federal funds purchasedFederal funds purchased— 
FHLB advancesFHLB advances— (1)(1)FHLB advances5,310 180 5,490 
Other borrowingsOther borrowings69 19 88 Other borrowings(4,450)4,257 (193)
Subordinated debenturesSubordinated debentures266 82 348 Subordinated debentures570 573 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$750 $84 $834 Total interest-bearing liabilities$5,259 $22,614 $27,873 
Net interest incomeNet interest income$15,234 $(3,751)$11,483 Net interest income$6,404 $(1,707)$4,697 

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Six Months Ended June 30, 2022 Compared with Six Months Ended June 30, 2021Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022
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$(112)$563 $451 Cash investments$(10,601)$10,766 $165 
Investment securities:Investment securities:Investment securities:
Taxable investment securitiesTaxable investment securities1,036 (154)882 Taxable investment securities670 1,990 2,660 
Tax-exempt investment securitiesTax-exempt investment securities(202)(197)Tax-exempt investment securities(93)16 (77)
Total securitiesTotal securities834 (149)685 Total securities577 2,006 2,583 
Loans, netLoans, net22,501 (11,033)11,468 Loans, net39,535 24,630 64,165 
Federal Home Loan Bank stockFederal Home Loan Bank stockFederal Home Loan Bank stock380 103 483 
Total interest-earning assetsTotal interest-earning assets$23,227 $(10,617)$12,610 Total interest-earning assets$29,891 $37,505 $67,396 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing transaction depositsInterest-bearing transaction deposits$161 $107 $268 Interest-bearing transaction deposits$(1)$5,340 $5,339 
Savings and money market depositsSavings and money market deposits245 134 379 Savings and money market deposits7,772 16,154 23,926 
Time depositsTime deposits189 (924)(735)Time deposits1,068 7,152 8,220 
Federal funds purchasedFederal funds purchased80 — 80 
FHLB advancesFHLB advances— — — FHLB advances8,279 350 8,629 
Other borrowingsOther borrowings25 28 Other borrowings(654)409 (245)
Subordinated debenturesSubordinated debentures353 111 464 Subordinated debentures236 1,128 1,364 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$951 $(549)$402 Total interest-bearing liabilities$16,780 $30,533 $47,313 
Net interest incomeNet interest income$22,276 $(10,068)$12,208 Net interest income$13,111 $6,972 $20,083 

Provision for LoanCredit Losses

The provision for loancredit losses is the amount of expense that, based on BancPlus’ judgment, is required to maintain the allowance for loancredit 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 loancredit losses is complex and involves a high degree of judgment and subjectivity.

For the three months ended June 30, 2022,2023, the provision for loancredit losses was $234,000,$916,000, compared to $2.0 million$234,000 for the same period of 2021, a decrease2022, an increase of $1.8 million,$682,000, or 88.5%291.5%. For the six months ended June 30, 2022,2023, the provision for loancredit losses was $451,000,$1.4 million, compared to $5.9 million$451,000 for the same period of 2021, a decrease2022, an increase of $5.5 million,$988,000, or 92.4%219.1%. The decreases for theseincrease was primarily attributable to increased loan balances resulting from organic loan growth in both the quarter and year to date periods are primarily attributablewith the FTC Merger also impacting the year 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.date period.

Noninterest Income

Noninterest income consists of, among other things:of: (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, (viii) CDFI grants, and (viii)(ix) other noninterest income.

BancPlus’ income from service charges on deposit accounts and debit card interchange fees areis largely impactedaffected 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 includesinclude 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 checkcardscheck cards by our customers. Income from fiduciary activities includes retirement and
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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 relatively flat at $18.7decreased $3.7 million, or 19.95%, to $15.0 million for both the three months ended June 30, 2022 and 2021, with only a decrease2023 compared to $18.7 million for the same period of $6,000, or 0.03%,2022, primarily due to a decrease in CDFI grants of $1.7 million, or 90.6%, offset by an increasedecreases in service charges on deposit accounts of $1.7 million, or 28.2%.and mortgage origination income.

The following table presents the major components of noninterest income for three months ended June 30, 2022,2023, compared to the three months ended June 30, 2021:2022:

Three Months Ended June 30,Three Months Ended June 30,
(Dollars in thousands)(Dollars in thousands)20222021$ Change% Change(Dollars in thousands)20232022$ Change% Change
Noninterest income:Noninterest income:Noninterest income:
Service charges on deposit accountsService charges on deposit accounts$7,701 $6,005 $1,696 28.2 %Service charges on deposit accounts$5,750 $7,701 $(1,951)(25.3)%
Mortgage origination incomeMortgage origination income2,304 2,013 291 14.5 %Mortgage origination income1,266 2,304 (1,038)(45.1)%
Debit card interchangeDebit card interchange2,748 2,604 144 5.5 %Debit card interchange2,609 2,748 (139)(5.1)%
Income from fiduciary activitiesIncome from fiduciary activities2,032 1,875 157 8.4 %Income from fiduciary activities2,009 2,032 (23)(1.1)%
ATM incomeATM income1,580 1,710 (130)(7.6)%ATM income1,499 1,580 (81)(5.1)%
Brokerage and insurance fees and commissionsBrokerage and insurance fees and commissions635 644 (9)(1.4)%Brokerage and insurance fees and commissions592 635 (43)(6.8)%
Life insurance incomeLife insurance income638 1,202 (564)(46.9)%Life insurance income670 638 32 5.0 %
CDFI grantsCDFI grants171 1,826 (1,655)(90.6)%CDFI grants— 171 (171)(100.0)%
Other incomeOther income922 858 64 7.5 %Other income599 922 (323)(35.0)%
TotalTotal$18,731 $18,737 $(6)— %Total$14,994 $18,731 $(3,737)(20.0)%

Service charges on deposit accounts increased $1.7decreased $2.0 million, or 28.2%25.3%, to $7.7$5.8 million for the three months ended June 30, 2022,2023, compared to $6.0$7.7 million for the same period of 2021.2022. The increasedecrease was primarily the result of an increaselower non-sufficient funds fees in the number of deposit accounts held and a higher volume of transactions due to the FTC Merger.current year period.

CDFI grantMortgage origination income decreased $1.7$1.0 million, or 90.6%45.1%, to $171,000$1.3 million for the three months ended June 30, 2022,2023, compared to $1.8$2.3 million for the same period of 2021.2022. The decrease was primarily the result of a grant receiveddecreased mortgage origination activity as refinancing activity has slowed 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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current higher interest rate environment.

Noninterest income was $36.7decreased $5.9 million, or 16.0%, to $30.8 million for the six months ended June 30, 2022,2023 compared to $39.0$36.7 million for the same period of 2021, a decrease of $2.3 million, or 5.9%,2022, 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%.mortgage origination income and other income.

The following table presents the major components of noninterest income for six months ended June 30, 2022,2023, compared to the six months ended June 30, 2021:2022:

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 $(2,318)(5.9)%
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Six Months Ended June 30,
(Dollars in thousands)20232022$ Change% Change
Noninterest income:
Service charges on deposit accounts$12,416 $14,493 $(2,077)(14.3)%
Mortgage origination income1,953 4,542 (2,589)(57.0)%
Debit card interchange5,175 5,176 (1)— %
Income from fiduciary activities3,915 4,050 (135)(3.3)%
ATM income2,973 3,056 (83)(2.7)%
Brokerage and insurance fees and commissions1,229 1,333 (104)(7.8)%
Life insurance income1,326 1,265 61 4.8 %
CDFI grants— 171 (171)(100.0)%
Other income1,846 2,610 (764)(29.3)%
Total$30,833 $36,696 $(5,863)(16.0)%

Service charges on deposit accounts increased $2.8decreased $2.1 million, or 23.4%14.3%, to $14.5$12.4 million for the six months ended June 30, 2022,2023, compared to $11.7$14.5 million for the same period of 2021.2022. The increasedecrease was primarily the result of an increaselower non-sufficient funds fees in the number of deposit accounts held and a higher volume of transactions due to the FTC Merger.current year period.

Life insuranceMortgage origination income decreased $3.4$2.6 million, or 73.1%57.0%, to $1.3$2.0 million for the six months ended June 30, 2022,2023, compared to $4.7$4.5 million for the same period of 2021.2022. The decrease iswas primarily related to death benefits paidthe result of decreased mortgage origination activity as refinancing activity has slowed in the prior year period on policies held by BancPlus.current higher interest rate environment.

CDFI grantOther income decreased $1.7 million,$764,000, or 90.6%29.3%, to $171,000$1.8 million for the threesix months ended June 30, 2022,2023, compared to $1.8$2.6 million for the same period of 2021.2022. The decrease was primarily the result of a grant receiveddecreases in the prior year period related to the CDFI Rapid Response Program as described above.personalized check sales, rental income and other miscellaneous income.

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 includesinclude 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”)FDIC assessments, Mississippi Department of Banking and Consumer Finance (“MDBCF”) assessments, communications, travel, meals, training, supplies, and postage.

Noninterest expense generally increases as BancPlus grows its business. Noninterest expense 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.acquisitions. 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 its branch network, while also seeking to improve productivity and maintain appropriate cost structure and customer service levels.

For the three months ended June 30, 2022,2023, noninterest expense totaled $51.0$55.2 million, an increase of $10.6$4.2 million, or 26.2%8.3%, from $40.4$51.0 million for the three months ended June 30, 2021,2022, primarily due to increases in salaries and employee benefits expenses, of $5.7 million, or 23.6% furniture, equipment and data processing expenses of $1.6 million, or 25.6%; other expenses, of $1.3 million, or 29.2%; and net occupancy expenses of $1.1 million, or 27.8%.marketing and promotional expenses.

The following table presents the major components of noninterest expense for the three months ended June 30, 20222023 compared to the three months ended June 30, 2021:2022:
Three Months Ended June 30,
(Dollars in thousands)20222021$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$29,805 $24,122 $5,683 23.6 %
Net occupancy expenses4,891 3,828 1,063 27.8 %
Furniture, equipment and data processing expenses7,670 6,108 1,562 25.6 %
Marketing and promotional expenses1,244 754 490 65.0 %
Other real estate expenses and losses310 278 32 11.5 %
Professional fees1,135 735 400 54.4 %
Other expenses5,960 4,613 1,347 29.2 %
Total$51,015 $40,438 $10,577 26.2 %

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Three Months Ended June 30,
(Dollars in thousands)20232022$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$32,609 $29,805 $2,804 9.4 %
Net occupancy expenses4,738 4,891 (153)(3.1)%
Furniture, equipment and data processing expenses7,270 7,670 (400)(5.2)%
Marketing and promotional expenses2,000 1,244 756 60.8 %
Other real estate expenses and losses315 310 1.6 %
Professional fees1,043 1,135 (92)(8.1)%
Other expenses7,270 5,960 1,310 22.0 %
Total$55,245 $51,015 $4,230 8.3 %

Salaries and employee benefits expenses iswas the largest component of noninterest expense, representing 58.4%59.0% and 59.7%58.4% of total noninterest expense for the three months ended June 30, 20222023 and 2021,2022, respectively. During the three months ended June 30, 2022,2023, salaries and employee benefits expense increased $5.7$2.8 million, or 23.6%9.4%, to $32.6 million, compared to $29.8 million compared to $24.1 million for the three months ended June 30, 2021.same period of 2022. The increase in salaries and employee benefits expense iswas primarily due the FTC Merger as well as to normal annual salary increases for employees.

Net occupancyand related expenses increased $1.1 million, or 27.8%, to $4.9 million for the three months ended June 30, 2022, compared to $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 $1.6 million, or 25.6%, to $7.7 million for the three months ended June 30, 2022, compared to $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 as well as costs associated with conversion of FTC customers to our core system.increased benefits expense.

Other expenses increased $1.3 million, or 29.2%22.0%, to $6.0$7.3 million for the three months ended June 30, 2022,2023, compared to $4.6$6.0 million for the same period of 2021.2022. The increase is thewas primarily attributable to increases in FDIC assessments amortizationand Louisiana shares tax, as well as an increase in loss on disposal of intangiblefixed assets in the current year period.

Marketing and otherpromotional expenses resulting fromincreased $756,000, or 60.8%, to $2.0 million for the FTC Merger.three months ended June 30, 2023, compared to $1.2 million for the same period of 2022. The increase was primarily attributable to expanded marketing campaigns in new and existing markets.

For the six months ended June 30, 2022,2023, noninterest expense totaled $99.1$106.9 million, an increase of $20.5$7.8 million, or 26.1%7.9%, from $78.6$99.1 million for the threesix months ended June 30, 2021,2022, 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%.partially offset by decreases in professional fees and other real estate expenses and losses.

The following table presents the major components of noninterest expense for the six months ended June 30, 20222023 compared to the threesix months ended June 30, 2021:2022:


Six Months Ended June 30,
(Dollars in thousands)20232022$ Change% Change
Noninterest expense:
Salaries and employee benefits expenses$63,600 $55,650 $7,950 14.3 %
Net occupancy expenses9,210 9,007 203 2.3 %
Furniture, equipment and data processing expenses14,586 14,286 300 2.1 %
Marketing and promotional expenses3,537 2,352 1,185 50.4 %
Other real estate expenses and losses371 1,043 (672)(64.4)%
Professional fees1,906 5,794 (3,888)(67.1)%
Other expenses13,677 10,953 2,724 24.9 %
Total$106,887 $99,085 $7,802 7.9 %
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Six Months Ended June 30,
(Dollars in thousands)20222021$ 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 iswas the largest component of noninterest expense, representing 56.2%59.5% and 60.0%56.2% of total noninterest expense for the six months ended June 30, 20222023 and 2021,2022, respectively. During the six months ended June 30, 2022,2023, salaries and employee benefits expense increased $8.5$8.0 million, or 18.0%14.3%, to $55.7$63.6 million, compared to $47.1$55.7 million for the six months ended June 30, 2022. The increase in salaries and employee benefits expense iswas primarily due the FTC Merger as well as to normal annual salary increases for employees and increased bonuses.related expenses.

Net occupancyOther expenses increased $1.8$2.7 million, or 25.6%24.9%, to $9.0$13.7 million for the six months ended June 30, 2022,2023, compared to $7.2$11.0 million for the same period of 2021.2022. The primary reason for the increase is increased depreciationwas primarily attributable to increases in amortization of intangible assets and rent expense as a result ofLouisiana shares tax resulting from the FTC Merger.Merger, as well as increases in FDIC assessments, fees and commissions expense and loss on disposal of fixed assets in the current year period.

Furniture, fixturesMarketing and data processingpromotional expenses increased $2.2$1.2 million, or 18.7%50.4%, to $14.3$3.5 million for the six months ended June 30, 2022,2023, compared to $12.0$2.4 million for the same period of 2021.2022. The increase iswas primarily dueattributable to increased data processingexpanded marketing campaigns in new and equipment maintenance expenses in the current year period resulting from our recent core system upgrade as well as costs associated with conversion of FTC customers to our core system.existing markets.

Market and promotional expenses increased $1.0Professional fees decreased $3.9 million, or 76.7%67.1%, to $2.4$1.9 million for the six months ended June 30, 2022,2023, compared to $1.3$5.8 million for the same period of 2021.2022. 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 increasedecrease was primarily the result of advisory fees as well as increased legal and accounting expenses in the prior year in connection with the FTC Merger.

Other real estate expenses increased $1.8 million,and losses decreased $672,000, or 19.7%64.4%, to $11.0 million$371,000 for the six months ended June 30, 2022,2023, compared to $9.2$1.0 million for the same period of 2021.2022. The increase is thedecrease was primarily attributablerelated to increases in FDIC assessments, amortization of intangible assets, andwrite downs on other expenses resulting fromreal estate owned in the FTC Merger.prior year period.

Income Tax Expense

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

BancPlus recorded income tax expense of $4.2$3.2 million for the three months ended June 30, 2022,2023, compared to $3.6$4.2 million for the same period of 2021, an increase2022, a decrease of $652,000,$1.0 million, or 18.3%24.4%. BancPlus’ effective tax rate for the three months ended June 30, 20222023 was 20.7%19.4%, compared to 20.2%20.7% for the same period of 2021.2022.

The decrease in the effective tax rate and income tax expense for the three months ended June 30, 2023 compared with the same period of 2022 was the result of non-deductible expenses related to the FTC Merger in the prior year period.

BancPlus recorded income tax expense of $7.0$7.9 million for the six months ended June 30, 2022,2023, compared to $6.6$7.0 million for the same period of 2021,2022, an increase $387,000,of $1.0 million, or 5.9%13.8%. BancPlus’ effective tax rate for the six months ended June 30, 20222023 was 21.3%20.8%, compared to 17.4%21.3% for the same period of 2021.2022.

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The increasedecrease in the effective tax rate for the six months ended June 30, 20222023 compared with the same period of 20212022 was the result of non-deductible expenses related to the Company taking advantage of tax credits offered by Mississippi and non-taxable life insurance proceedsFTC Merger in the prior year period.

The increase in income tax expense for the three and six months ended June 30, 2022,2023, compared to the same periods of 2021,2022, was primarily the result of higher income before taxes in the current year.year to date period.

Financial Condition

The following discussion compares BancPlus’ financial condition as of June 30, 20222023 to December 31, 2021.2022.

Assets

Total assets increased $1.38$0.51 billion, or 26.5%7.2%, to $6.57$7.54 billion at June 30, 2022 from2023 over total assets of $5.20$7.03 billion at December 31, 2021.2022. Total cash and cash equivalents decreased $320.4increased $53.3 million, or 48.2%38.7%, to $343.7$191.2 million at June 30, 2022,2023, compared to $664.2$137.9 million at December 31, 2021,2022, primarily due to increases in deposits and proceeds from Federal Home Loan Bank advances, partially offset by an increase in cash outflow for investments and loans made during the period. Total loans held for investment increased $1.54$0.26 billion, or 42.6%4.5%, to $5.16$6.09 billion at June 30, 2022,2023, compared to $3.62$5.82 billion at December 31, 20212022 as a result of the FTC Merger and
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organic loan growth. Investment securities increased $45.1$178.0 million, or 7.0%25.9%, from $648.3$686.2 million at December 31, 20212022 to $693.4$864.2 million at June 30, 20222023 primarily as a result of securities acquiredincreases in the FTC Merger and excess liquidity.BancPlus’ portfolio of U.S. Government agency obligations.
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 June 30, 2022, 9.6%2023, 6.7% of BancPlus’ investment securities portfolio was classified as held to maturity and 90.4%93.3% was classified as available for sale. As of December 31, 2021, 11.1%2022, 9.1% of BancPlus’ investment securities portfolio was classified as held to maturity and 88.9%90.9% was classified as available for sale. Securities available for sale increased $50.4$182.2 million, or 8.7%29.2%, from $576.6$623.9 million at December 31, 20212022 to $627.0$806.1 million at June 30, 2022.2023 primarily as a result of increases in BancPlus’ portfolio of U.S. Government agency obligations.

At June 30, 2023, U.S. government agency obligations represented 47.6%, mortgage-backed securities represented 11.5%, municipal securities represented 12.2%, corporate investments represented 5.1%, U.S. Treasuries represented 22.7% and asset-backed securities represented 0.9% of BancPlus’ investment securities portfolio. At December 31, 2022, U.S. government agency obligations represented 53.3%55.2%, mortgage-backed securities represented 17.5%15.5%, municipal securities represented 15.8%16.1%, corporate investments represented 6.7%, U.S. Treasuries represented 5.0% and asset-backed securities represented 1.7%1.5% 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 17.9%, corporate investments represented 6.9% and asset-backed securities represented 2.0% of theBancPlus’ 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:
June 30, 2023December 31, 2022
(Dollars in thousands)Carrying Value% of TotalCarrying Value% of Total
Held to Maturity:
(At amortized cost)
Issued by states and political subdivisions$58,118 6.72 %$62,274 9.08 %
Total held-to-maturity58,118 6.72 %62,274 9.08 %
Available for Sale:
(At fair value)
U.S. Treasuries196,364 22.72 %34,579 5.04 %
U.S. Government agency obligations411,387 47.60 %378,736 55.19 %
Issued by states and political subdivisions47,462 5.49 %48,150 7.02 %
Mortgage-backed securities:
Residential87,519 10.13 %94,132 13.72 %
Commercial11,982 1.39 %12,070 1.76 %
Asset-backed securities7,561 0.87 %10,220 1.49 %
Corporate investments43,835 5.07 %46,033 6.71 %
Total available for sale806,110 93.28 %623,920 90.92 %
Total investment securities$864,228 100.00 %$686,194 100.00 %

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June 30, 2022December 31, 2021
(Dollars in thousands)Carrying Value% of TotalCarrying Value% of Total
Held to Maturity:
(At amortized cost)
Issued by states and political subdivisions$66,359 9.57 %$71,648 11.05 %
Total held-to-maturity66,359 9.57 %71,648 11.05 %
Available for Sale:
(At fair value)
U.S. Treasuries34,729 5.01 %— — %
U.S. Government agency obligations369,394 53.27 %350,250 54.03 %
Issued by states and political subdivisions43,526 6.28 %44,684 6.89 %
Mortgage-backed securities:
Residential108,784 15.69 %109,787 16.94 %
Commercial12,867 1.86 %14,276 2.20 %
Asset-backed securities11,602 1.67 %13,107 2.02 %
Corporate investments46,125 6.65 %44,510 6.87 %
Total available for sale627,027 90.43 %576,614 88.95 %
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 June 30, 2022Maturity as of June 30, 2023
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$8,170 3.15 %$46,172 2.54 %$9,807 3.27 %$2,210 4.27 %Issued by states and political subdivisions$5,997 2.70 %$44,173 2.46 %$6,308 3.62 %$1,640 4.28 %
Total held to maturityTotal held to maturity8,170 3.15 %46,172 2.54 %9,807 3.27 %2,210 4.27 %Total held to maturity5,997 2.70 %44,173 2.46 %6,308 3.62 %1,640 4.28 %
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries4,876 1.05 %29,854 1.36 %— — %— — %U.S. Treasuries176,673 4.59 %19,691 4.28 %— — %— — %
U.S. Government agency obligationsU.S. Government agency obligations4,873 0.80 %282,205 0.74 %78,900 1.28 %3,416 2.03 %U.S. Government agency obligations82,173 0.56 %286,691 1.39 %40,289 1.97 %2,234 6.61 %
Issued by states and political subdivisionsIssued by states and political subdivisions2,467 2.85 %17,754 2.67 %18,074 3.24 %5,231 2.77 %Issued by states and political subdivisions2,920 3.46 %24,508 2.78 %16,882 3.11 %3,152 4.02 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential— — %— — %6,878 2.18 %101,906 2.50 %Residential— — %1,876 1.82 %3,482 2.51 %82,161 2.56 %
CommercialCommercial— — %4,741 1.55 %7,552 1.53 %575 2.50 %Commercial— — %9,030 1.52 %2,630 1.58 %322 2.51 %
Asset-backed securitiesAsset-backed securities— — %— — %— — %11,601 2.96 %Asset-backed securities— — %— — %— — %7,561 6.55 %
Corporate investmentsCorporate investments— — %464 2.75 %44,679 4.08 %981 4.50 %Corporate investments— — %1,361 5.94 %41,764 4.26 %710 4.50 %
Total available for saleTotal available for sale12,216 1.31 %335,018 0.91 %156,083 2.36 %123,710 2.56 %Total available for sale261,766 3.31 %343,157 1.68 %105,047 3.07 %96,140 3.03 %
Total securities$20,386 2.05 %$381,190 1.11 %$165,890 2.41 %$125,920 2.59 %
Total investment securitiesTotal investment securities$267,763 3.30 %$387,330 1.77 %$111,355 3.10 %$97,780 3.05 %
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Maturity as of December 31, 2021Maturity as of December 31, 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$9,286 3.00 %$44,803 2.77 %$15,349 2.41 %$2,210 4.27 %Issued by states and political subdivisions$6,961 2.71 %$47,221 2.53 %$6,452 3.77 %$1,640 4.39 %
Total held to maturityTotal held to maturity9,286 3.00 %44,803 2.77 %15,349 2.41 %2,210 4.27 %Total held to maturity6,961 2.71 %47,221 2.53 %6,452 3.77 %1,640 4.39 %
Available for sale:Available for sale:Available for sale:
U.S. TreasuriesU.S. Treasuries25,302 1.35 %9,277 1.24 %— — %— — %
U.S. Government agency obligationsU.S. Government agency obligations5,006 2.60 %221,071 0.54 %120,049 1.20 %4,124 1.77 %U.S. Government agency obligations57,051 0.57 %259,397 1.02 %59,604 1.38 %2,684 4.79 %
Issued by states and political subdivisionsIssued by states and political subdivisions2,202 4.06 %15,110 2.63 %21,084 3.09 %6,288 3.24 %Issued by states and political subdivisions3,391 2.72 %22,436 2.96 %19,230 3.19 %3,093 3.62 %
Mortgage-backed securities:Mortgage-backed securities:Mortgage-backed securities:
ResidentialResidential— — %— — %4,211 1.86 %105,576 2.42 %Residential— — %386 1.48 %5,691 2.29 %88,056 2.54 %
CommercialCommercial— — %— — %13,512 1.54 %764 2.50 %Commercial— — %9,082 1.52 %2,637 1.58 %350 2.56 %
Asset-backed securitiesAsset-backed securities— — %— — %— — %13,107 1.83 %Asset-backed securities— — %— — %— — %10,220 5.57 %
Corporate investmentsCorporate investments4,004 2.13 %493 2.75 %38,953 4.12 %1,060 4.50 %Corporate investments— — %437 2.75 %42,767 4.12 %2,829 6.33 %
Total available for saleTotal available for sale11,212 2.72 %236,674 0.68 %197,809 2.01 %130,919 2.40 %Total available for sale85,744 0.89 %301,015 1.19 %129,929 2.59 %107,232 3.02 %
Total securities$20,498 2.85 %$281,477 1.01 %$213,158 2.04 %$133,129 2.43 %
Total investment securitiesTotal investment securities$92,705 1.02 %$348,236 1.37 %$136,381 2.65 %$108,872 3.04 %

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 June 30, 2022As of December 31, 2021As of June 30, 2023As of December 31, 2022
(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$1,236,278 23.96 %$774,699 21.41 %Residential properties$1,494,751 24.55 %$1,403,974 24.11 %
Construction and land developmentConstruction and land development834,809 16.18 %543,763 15.02 %Construction and land development813,512 13.36 %772,357 13.26 %
FarmlandFarmland242,640 4.70 %211,503 5.84 %Farmland301,778 4.96 %283,832 4.87 %
Other commercialOther commercial2,050,729 39.74 %1,396,085 38.58 %Other commercial2,587,757 42.49 %2,467,216 42.36 %
Total real estateTotal real estate4,364,456 84.58 %2,926,050 80.85 %Total real estate5,197,798 85.36 %4,927,379 84.60 %
Commercial and industrialCommercial and industrial592,810 11.49 %527,102 14.56 %Commercial and industrial699,305 11.49 %706,466 12.13 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers84,007 1.63 %86,520 2.39 %Agricultural production and other loans to farmers92,885 1.53 %80,770 1.39 %
Consumer and otherConsumer and other118,433 2.30 %79,500 2.20 %Consumer and other98,826 1.62 %109,534 1.88 %
Total loans, grossTotal loans, gross5,159,706 100.00 %3,619,172 100.00 %Total loans, gross6,088,814 100.00 %5,824,149 100.00 %
Allowance for loan losses(43,353)(45,000)
Allowance for credit lossesAllowance for credit losses(65,229)(42,875)
Total loans, netTotal loans, net$5,116,353 $3,574,172 Total loans, net$6,023,585 $5,781,274 

Our loan portfolio was comprised of 73.7%73.8% commercial loans and 26.3%26.2% consumer loans as of June 30, 2022,2023, compared to 76.4% commercial loans and 23.6% consumer loans as of December 31, 2021.2022. 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 June 30, 2022,2023, BancPlus’ loan portfolio included $341.3$498.3 million of loan participations purchased, or 6.61%8.18% of total loans, which includes $185.6included $298.7 million of shared national credits. At December 31, 2021,2022, BancPlus’ loan portfolio included $333.0$471.3 million of loan participations purchased, or 9.20%8.09% of total loans, which includes $177.5included $274.4 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 June 30, 2022As of June 30, 2023
(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$101,072 $331,972 $502,340 $300,894 $1,236,278 Residential properties$153,411 $451,976 $489,698 $399,666 $1,494,751 
Construction and land developmentConstruction and land development207,891 448,221 138,621 40,076 834,809 Construction and land development333,889 351,823 113,583 14,217 813,512 
FarmlandFarmland24,013 120,881 76,937 20,809 242,640 Farmland46,862 117,973 107,038 29,905 301,778 
Other commercialOther commercial143,014 1,015,202 642,712 249,801 2,050,729 Other commercial301,991 1,607,785 468,921 209,060 2,587,757 
Total real estateTotal real estate475,990 1,916,276 1,360,610 611,580 4,364,456 Total real estate836,153 2,529,557 1,179,240 652,848 5,197,798 
Commercial and industrialCommercial and industrial159,696 338,246 94,868 — 592,810 Commercial and industrial125,961 501,922 71,422 — 699,305 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers30,976 51,089 1,942 — 84,007 Agricultural production and other loans to farmers46,877 45,556 452 — 92,885 
Consumer and other loansConsumer and other loans23,047 86,777 8,595 14 118,433 Consumer and other loans23,991 69,270 5,546 19 98,826 
Total loansTotal loans$689,709 $2,392,388 $1,466,015 $611,594 $5,159,706 Total loans$1,032,982 $3,146,305 $1,256,660 $652,867 $6,088,814 

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As of December 31, 2021As of December 31, 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$105,854 $317,073 $340,436 $11,336 $774,699 Residential properties$149,146 $401,119 $497,926 $355,783 $1,403,974 
Construction and land developmentConstruction and land development217,487 285,923 31,161 9,192 543,763 Construction and land development272,454 379,245 104,632 16,026 772,357 
FarmlandFarmland38,671 104,034 61,553 7,245 211,503 Farmland46,925 114,854 96,937 25,116 283,832 
Other commercialOther commercial172,914 878,887 299,853 44,431 1,396,085 Other commercial254,430 1,504,253 487,890 220,643 2,467,216 
Total real estateTotal real estate534,926 1,585,917 733,003 72,204 2,926,050 Total real estate722,955 2,399,471 1,187,385 617,568 4,927,379 
Commercial and industrialCommercial and industrial98,197 342,243 86,662 — 527,102 Commercial and industrial151,895 451,261 103,310 — 706,466 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers49,748 36,214 558 — 86,520 Agricultural production and other loans to farmers40,558 39,665 547 — 80,770 
Consumer and other loansConsumer and other loans20,686 57,222 1,578 14 79,500 Consumer and other loans39,667 64,715 5,138 14 109,534 
Total loansTotal loans$703,557 $2,021,596 $821,801 $72,218 $3,619,172 Total loans$955,075 $2,955,112 $1,296,380 $617,582 $5,824,149 

As of June 30, 2022As of June 30, 2023
(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$989,554 $246,724 $1,236,278 Residential properties$1,190,415 $304,336 $1,494,751 
Construction and land developmentConstruction and land development357,261 477,548 834,809 Construction and land development450,384 363,128 813,512 
FarmlandFarmland165,772 76,868 242,640 Farmland184,134 117,644 301,778 
Other commercialOther commercial1,493,690 557,039 2,050,729 Other commercial1,862,123 725,634 2,587,757 
Total real estateTotal real estate3,006,277 1,358,179 4,364,456 Total real estate3,687,056 1,510,742 5,197,798 
Commercial and industrialCommercial and industrial299,582 293,228 592,810 Commercial and industrial328,200 371,105 699,305 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers46,631 37,376 84,007 Agricultural production and other loans to farmers48,357 44,528 92,885 
Consumer and other loansConsumer and other loans89,711 28,722 118,433 Consumer and other loans63,701 35,125 98,826 
Total loansTotal loans$3,442,201 $1,717,505 $5,159,706 Total loans$4,127,314 $1,961,500 $6,088,814 

As of December 31, 2021As of December 31, 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$644,842 $129,857 $774,699 Residential properties$1,115,571 $288,403 $1,403,974 
Construction and land developmentConstruction and land development262,573 281,190 543,763 Construction and land development413,291 359,066 772,357 
FarmlandFarmland154,154 57,349 211,503 Farmland181,973 101,859 283,832 
Other commercialOther commercial1,157,465 238,620 1,396,085 Other commercial1,748,802 718,414 2,467,216 
Total real estateTotal real estate2,219,034 707,016 2,926,050 Total real estate3,459,637 1,467,742 4,927,379 
Commercial and industrialCommercial and industrial258,036 269,066 527,102 Commercial and industrial316,909 389,557 706,466 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers58,206 28,314 86,520 Agricultural production and other loans to farmers44,941 35,829 80,770 
Consumer and other loansConsumer and other loans54,923 24,577 79,500 Consumer and other loans78,411 31,123 109,534 
Total loansTotal loans$2,590,199 $1,028,973 $3,619,172 Total loans$3,899,898 $1,924,251 $5,824,149 

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
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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 June 30, 2022,2023, BancPlus had total off-balance sheet commitments of $1.636$1.484 billion. At June 30, 2023, BancPlus had an allowance for credit loss on off-balance sheet commitments of $11.7 million.

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.

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The tables below set forth information on BancPlus’ asset classification as of the dates indicated. BancPlus had no assets classified as loss.
As of June 30, 2022As of June 30, 2023
(Dollars in thousands)(Dollars in thousands)Risk
Grades 1-7
SubstandardDoubtfulTotal(Dollars in thousands)Risk
Grades 1-6
Special MentionSubstandardDoubtfulTotal
Secured by real estate:Secured by real estate:Secured by real estate:
Residential propertiesResidential properties$1,223,660 $12,575 $43 $1,236,278 Residential properties$1,480,958 $— $13,777 $16 $1,494,751 
Construction and land developmentConstruction and land development832,645 2,164 — 834,809 Construction and land development811,068 42 2,402 — 813,512 
FarmlandFarmland240,290 2,350 — 242,640 Farmland299,168 — 2,610 — 301,778 
Other commercialOther commercial2,035,286 15,443 — 2,050,729 Other commercial2,575,431 — 12,326 — 2,587,757 
Total real estateTotal real estate4,331,881 32,532 43 4,364,456 Total real estate5,166,625 42 31,115 16 5,197,798 
Commercial and industrialCommercial and industrial577,509 14,047 1,254 592,810 Commercial and industrial686,862 — 10,852 1,591 699,305 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers83,898 109 — 84,007 Agricultural production and other loans to farmers92,800 — 85 — 92,885 
Consumer and otherConsumer and other118,330 103 — 118,433 Consumer and other98,745 — 81 — 98,826 
TotalTotal$5,111,618 $46,791 $1,297 $5,159,706 Total$6,045,032 $42 $42,133 $1,607 $6,088,814 

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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As of December 31, 2022
(Dollars in thousands)Risk
Grades 1-6
Special MentionSubstandardDoubtfulTotal
Secured by real estate:
Residential properties$1,391,039 $— $12,852 $83 $1,403,974 
Construction and land development768,699 303 3,355 — 772,357 
Farmland280,522 — 3,310 — 283,832 
Other commercial2,456,708 — 10,384 124 2,467,216 
Total real estate4,896,968 303 29,901 207 4,927,379 
Commercial and industrial693,963 — 12,503 — 706,466 
Agricultural production and other loans to farmers80,524 — 246 — 80,770 
Consumer and other108,279 — 1,255 — 109,534 
Total$5,779,734 $303 $43,905 $207 $5,824,149 

Nonperforming Assets

Nonperforming loans include loans accounted for on a nonaccrual basis and TDR loans that are 90 days past due and still accruing. Nonperforming assets consist of nonperforming loans plus foreclosed assets (i.e. real estate acquired through foreclosure).

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The following table summarizes BancPlus’ nonperforming assets, by category, as of the dates indicated:
(Dollars in thousands)(Dollars in thousands)June 30, 2022December 31, 2021(Dollars in thousands)June 30, 2023December 31, 2022
Nonaccrual loans:Nonaccrual loans:Nonaccrual loans:
Real estate loans:Real estate loans:Real estate loans:
Residential propertiesResidential properties$2,878 $3,154 Residential properties$2,287 $2,726 
Construction and land developmentConstruction and land development40 51 Construction and land development— 24 
FarmlandFarmland968 1,327 Farmland670 960 
Other commercialOther commercial3,105 1,176 Other commercial1,725 1,215 
Total real estateTotal real estate6,991 5,708 Total real estate4,682 4,925 
Commercial and industrialCommercial and industrial1,625 20 Commercial and industrial92 192 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers14 Agricultural production and other loans to farmers— 155 
Consumer and otherConsumer and other26 166 Consumer and other— — 
Total nonaccrual loansTotal nonaccrual loans8,656 5,897 Total nonaccrual loans4,774 5,272 
Troubled debt restructuring loans – accruing:
90+ days past due and accruing:90+ days past due and accruing:
Real estate loans:Real estate loans:Real estate loans:
Residential propertiesResidential properties1,615 1,641 Residential properties1,170 1,079 
Construction and land developmentConstruction and land development574 1,558 Construction and land development— 1,578 
FarmlandFarmland— — Farmland59 427 
Other commercialOther commercial— — Other commercial1,640 216 
Total real estateTotal real estate2,189 3,199 Total real estate2,869 3,300 
Commercial and industrialCommercial and industrial— 381 Commercial and industrial187 545 
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 other44 697 
Total troubled debt restructuring loans – accruing2,189 3,580 
Total 90+ days past due and accruingTotal 90+ days past due and accruing3,100 4,542 
Total nonperforming loansTotal nonperforming loans10,845 9,477 Total nonperforming loans7,874 9,814 
Plus: foreclosed assetsPlus: foreclosed assets6,462 5,815 Plus: foreclosed assets3,722 4,231 
Total nonperforming assetsTotal nonperforming assets$17,307 $15,292 Total nonperforming assets$11,596 $14,045 
Nonaccrual loans to total loansNonaccrual loans to total loans0.17 %0.16 %Nonaccrual loans to total loans0.08 %0.09 %
Nonperforming loans to total loansNonperforming loans to total loans0.21 %0.26 %Nonperforming loans to total loans0.13 %0.17 %
Nonperforming assets to total assetsNonperforming assets to total assets0.26 %0.29 %Nonperforming assets to total assets0.15 %0.20 %
Allowance for loan losses to nonaccrual loans500.84 %763.10 %
90+ days past due and accruing$2,437 $2,914 
Total troubled debt restructuring loans$2,561 $3,746 
Allowance for credit losses to nonaccrual loansAllowance for credit losses to nonaccrual loans1366.34 %813.26 %

Total nonperforming assets increaseddecreased by $2.0$2.4 million, or 13.2%17.4%, from $15.3$14.0 million at December 31, 20212022 to $17.3$11.6 million at June 30, 2022,2023, primarily the result of collections in the current year to date period on loans there were 90+ days past due at December 31, 2022. This decrease in nonperforming loans and foreclosed assets acquiredfor the period ended June 30, 2023 resulted in corresponding decreases in the FTC Merger.ratios for nonperforming loans to total loans and nonperforming assets to total assets, as well as the increase in the ratio of allowance for credit losses to nonaccrual loans.

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-collateralizedwell-secured and is actively in the process of collection.
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When a loan is placed on nonaccrual status, current year interest previouslythat is accrued but uncollected on such loansnot collected is reversed and charged against current income, and prior year interest if any, is charged off against the allowance for loan losses.income. Generally, payments received on nonaccrual loans are applied directly to principal.

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Allowance for LoanCredit Losses

The allowance for loancredit losses is a reserve established through charges to earnings in the form of a provision for loancredit losses. BancPlus maintains an allowance for loancredit losses at a level management considers adequate to provide for known and probable incurredexpected credit losses inon loans over the portfolio.life of the loan. 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 analyzeBancPlus made the policy election to exclude accrued interest receivable on loans from the estimate of credit losses. The Company calculates estimated credit loss on its portfolio primarily using quantitative methodologies using relevant available information from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL is evaluated and calculated on a collective basis for those loans which share similar risk characteristics. At each reporting period, the Company evaluates whether the loans in a pool continue to exhibit similar risk characteristics as the other loans and whether it needs to evaluate the allowance on an individual basis. The Company has chosen to segment its portfolio consistent with the manner in which it manages the risk of the type of credit. The Company’s segments for loans include commercial real estate, commercial and industrial, residential and consumer.

Expected credit losses are estimated over the contractual term of each loan taking into consideration expected prepayments. The contractual term excludes expected extensions, renewals, and modifications. Also included in the loan portfolio on an ongoing basis. A risk system, consisting of multiple grading categoriesallowance for each portfolio class, is utilized as an analytical toolcredit losses are qualitative reserves to assess riskcover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative method or the economic assumptions described above. For example, factors that the Company considers include the nature and appropriate reserves. In addition to the risk system, management further evaluates risk characteristicssize of the loan portfolio, underportfolio concentrations, the volume and severity of past due loans and non-accrual loans and 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. business conditions.

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 second quarter of 2022,2023, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of supply chain disruptions, labor shortages, and the conflict in Ukraine, and the COVID-19 pandemic.Ukraine. 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 loancredit losses.

The allowance for loancredit losses was $43.4$65.2 million and $45.0$42.9 million, and the allowance for loancredit losses as a percentage of loans was 0.84%1.07% and 1.24%0.74%, at June 30, 20222023 and December 31, 2021,2022, respectively. Net charge-offs (recoveries) totaled $596,000 and $2.1 million and $(78,000) for the six months ended June 30, 20222023 and 2021,2022, respectively. The variance iswas primarily the result of current yeara decrease in charge-offs on agricultural production and other loans to farmers and residential properties partially offset by an increase in charge-offs on consumer and other commercial categories.loans in the current year.

The allowance for loancredit losses decreasedincreased by $1.6$22.4 million, or 3.7%52.1%, to $43.4$65.2 million at June 30, 2022,2023, from $45.0$42.9 million at December 31, 2021,2022, primarily due to an increase in net charge-offs in the current period.adoption of ASU 2016-13.

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The following is a summary of the activity in the allowance for loancredit loss reserve as of and for the year-to-date periods indicated:
(Dollars in thousands)(Dollars in thousands)June 30, 2022June 30, 2021(Dollars in thousands)June 30, 2023June 30, 2022
Balance, beginning of periodBalance, beginning of period$45,000 $36,000 Balance, beginning of period$42,875 $45,000 
Impact of adopting ASU 2016-13Impact of adopting ASU 2016-1320,744 — 
Charge-offs:Charge-offs:Charge-offs:
Residential propertiesResidential properties780 176 Residential properties178 780 
Construction and land developmentConstruction and land development228 Construction and land development
FarmlandFarmland120 Farmland114 120 
Other commercialOther commercial319 397 Other commercial56 319 
Total real estateTotal real estate1,220 805 Total real estate355 1,220 
Commercial and industrialCommercial and industrial979 280 Commercial and industrial317 979 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers1,871 1,446 Agricultural production and other loans to farmers13 1,871 
Consumer and otherConsumer and other332 225 Consumer and other1,600 332 
Total charge-offsTotal charge-offs4,402 2,756 Total charge-offs2,285 4,402 
Recoveries:Recoveries:Recoveries:
Residential propertiesResidential properties109 281 Residential properties125 109 
Construction and land developmentConstruction and land development446 51 Construction and land development446 
FarmlandFarmland11 288 Farmland92 11 
Other commercialOther commercial97 313 Other commercial112 97 
Total real estateTotal real estate663 933 Total real estate337 663 
Commercial and industrialCommercial and industrial80 304 Commercial and industrial203 80 
Agricultural production and other loans to farmersAgricultural production and other loans to farmers1,302 1,413 Agricultural production and other loans to farmers1,302 
Consumer and otherConsumer and other259 184 Consumer and other1,147 259 
Total recoveriesTotal recoveries2,304 2,834 Total recoveries1,689 2,304 
Net charge-offs (recoveries)Net charge-offs (recoveries)2,098 (78)Net charge-offs (recoveries)596 2,098 
Provision for loan losses451 5,926 
Provision for credit lossesProvision for credit losses2,206 451 
Balance, end of periodBalance, end of period$43,353 $42,004 Balance, end of period$65,229 $43,353 
Total loans, end of period (including loans held for sale)Total loans, end of period (including loans held for sale)$5,174,463 $3,501,995 Total loans, end of period (including loans held for sale)$6,101,990 $5,174,463 
Average loansAverage loans4,489,556 3,444,876 Average loans$5,952,466 $4,489,556 
Net charge-offs (annualized) to average loansNet charge-offs (annualized) to average loans0.09 %— %Net charge-offs (annualized) to average loans0.02 %0.09 %
Allowance for loan losses to total loans0.84 %1.20 %
Allowance for credit losses to total loansAllowance for credit losses to total loans1.07 %0.84 %
The table below reflects net charge-offs to average loans outstanding, by category, during the periods presented.
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Six Months Ended June 30,Six Months Ended June 30,
2022202120232022
(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$671 $1,046,523 0.13 %$(105)$744,655 (0.03)%Residential properties$53 $1,432,183 0.01 %$671 $1,046,523 0.13 %
Construction and land developmentConstruction and land development(445)686,572 (0.13)%177 453,323 0.08 %Construction and land development(1)822,157 — %(445)686,572 (0.13)%
FarmlandFarmland109 223,491 0.10 %(284)206,211 (0.28)%Farmland22 288,611 0.02 %109 223,491 0.10 %
Other commercialOther commercial222 1,797,364 0.02 %84 1,258,719 0.01 %Other commercial(56)2,514,487 — %222 1,797,364 0.02 %
Commercial and industrialCommercial and industrial899 562,025 0.32 %(24)610,283 (0.01)%Commercial and industrial114 712,114 0.03 %899 562,025 0.32 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers569 71,852 1.58 %33 83,874 0.08 %Agricultural production and other loans to farmers11 76,667 0.03 %569 71,852 1.58 %
Consumer and otherConsumer and other73 91,834 0.16 %41 79,296 0.10 %Consumer and other453 100,696 0.90 %73 91,834 0.16 %
Loans held for saleLoans held for sale— 9,895 — %— 8,515 — %Loans held for sale— 5,551 — %— 9,895 — %
TotalTotal$2,098 $4,489,556 0.09 %$(78)$3,444,876 — %Total$596 $5,952,466 0.02 %$2,098 $4,489,556 0.09 %

The following tables present a summary of the allocation of the allowance for loancredit losses by loan portfolio category, and the percentage of loans in each category, for the periods indicated:

June 30, 2022December 31, 2021June 30, 2023December 31, 2022
(Dollars in thousands)(Dollars in thousands)AmountPercentAmountPercent(Dollars in thousands)AmountPercentAmountPercent
Residential propertiesResidential properties$9,274 21.4 %$9,488 21.1 %Residential properties$17,419 26.7 %$9,958 23.2 %
Construction and land developmentConstruction and land development7,385 17.0 %6,463 14.4 %Construction and land development18,980 29.1 %6,519 15.2 %
FarmlandFarmland1,763 4.1 %2,171 4.8 %Farmland1,412 2.2 %1,963 4.6 %
Other commercialOther commercial18,809 43.4 %18,499 41.1 %Other commercial19,918 30.5 %18,219 42.5 %
Total real estateTotal real estate37,231 85.9 %36,621 81.4 %Total real estate57,729 88.5 %36,659 85.5 %
Commercial and industrialCommercial and industrial4,126 9.5 %6,556 14.6 %Commercial and industrial6,410 9.8 %4,750 11.1 %
Agricultural production and other loans to farmersAgricultural production and other loans to farmers716 1.7 %958 2.1 %Agricultural production and other loans to farmers449 0.7 %641 1.5 %
Consumer and otherConsumer and other1,280 3.0 %865 1.9 %Consumer and other641 1.0 %825 1.9 %
Total allowance for loan losses$43,353 100.0 %$45,000 100.0 %
Total allowance for credit lossesTotal allowance for credit losses$65,229 100.0 %$42,875 100.0 %

Goodwill and Other Intangible Assets

Goodwill was $63.8$62.8 million and $2.6 millionas of both June 30, 20222023 and December 31, 2021, respectively.2022. 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 consistconsisted 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 June 30, 20222023 and December 31, 20212022 were $12.3$10.7 million and $5.1$11.5 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:
June 30, 2022December 31, 2021June 30, 2023December 31, 2022
(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$1,707,538 0.00 %31.61 %$1,337,985 0.00 %30.13 %Non-interest bearing$1,552,818 0.00 %26.10 %$1,740,283 0.00 %31.61 %
Interest bearing:Interest bearing:Interest bearing:
Transaction accountsTransaction accounts1,584,432 0.23 %29.33 %1,453,493 0.20 %32.74 %Transaction accounts1,584,138 0.91 %26.62 %1,574,512 0.35 %28.60 %
Money market and other savings accountsMoney market and other savings accounts1,328,864 0.13 %24.60 %996,420 0.09 %22.44 %Money market and other savings accounts1,934,851 2.56 %32.52 %1,408,355 0.42 %25.58 %
Certificates of depositCertificates of deposit780,399 0.34 %14.45 %652,247 0.56 %14.69 %Certificates of deposit878,776 2.17 %14.77 %783,047 0.45 %14.22 %
Total depositsTotal deposits$5,401,233 0.15 %100.00 %$4,440,145 0.17 %100.00 %Total deposits$5,950,583 1.40 %100.00 %$5,506,197 0.27 %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 $961.1$444.4 million, or 21.6%8.1%, to $5.40$5.95 billion at June 30, 20222023 from $4.44$5.51 billion as of December 31, 20212022 primarily resulted from increases in money market and other savings accounts driven by the FTC Merger.higher interest rate market. At June 30, 20222023 and December 31, 2021,2022, BancPlus held non-time deposits in excess of FDIC insurance limits estimated at $1.40$2.14 billion and $802.9 million,$1.53 billion, respectively.

The following table shows the maturity of certificates of deposit as of June 30, 2022:2023:

(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$22,823 $42,620 $65,443 $13,823 3 months or less$23,797 $64,814 $88,611 $9,973 
Over 3 months through 6 monthsOver 3 months through 6 months43,044 126,549 169,593 20,794 Over 3 months through 6 months72,485 142,119 214,604 38,920 
Over 6 months through 12 monthsOver 6 months through 12 months86,230 190,631 276,861 52,480 Over 6 months through 12 months115,661 274,237 389,898 44,308 
Over 12 monthsOver 12 months75,630 231,209 306,839 29,880 Over 12 months115,608 235,524 351,132 51,788 
Total certificates of depositTotal certificates of deposit$227,727 $591,009 $818,736 $116,977 Total certificates of deposit$327,551 $716,694 $1,044,245 $144,989 

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 June 30, 20222023 and December 31, 2021, we2022, BancPlus had no short-term borrowings. The following is a summary of our short-term borrowings during the periods presented.

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(Dollars in thousands)Balances OutstandingWeighted Average Rate
June 30, 2023Maximum Month EndAverage DailyAt Period EndDuring PeriodAt Period End
Federal funds purchased$— $3,310 $— 4.83 %— %
Securities sold under agreements to repurchase— — — — %— %
$— $— $— 
December 31, 2022
Federal funds purchased$20,003 $1,136 $— 4.39 %— %
Securities sold under agreements to repurchase— — — — %— %
$20,003 $1,136 $— 

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 June 30, 20222023 and December 31, 2021,2022, BancPlus had $20.1$540.1 million and $20.5$318.1 million in FHLB borrowings, at a weighted average interest rate of 1.48%4.94% and 1.49%4.52%, 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. Interest only payments are due on a quarterly basis with the principal due at maturity on February 25, 2024. Unused fees on the revolving line of credit are paid quarterly at 0.25%. For the six months ended June 30, 2023, the Company paid unused fees of $25,000. The balance outstanding on this revolving line of credit was zero at June 30, 20222023 and December 31, 2021.2022.


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Required principal payments on FHLB advances and other borrowings were as follows:
(Dollars in thousands)(Dollars in thousands)June 30, 2022December 31, 2021(Dollars in thousands)June 30, 2023December 31, 2022
2022$35 $417 
2023202325 25 2023$230,006 $318,025 
2024202413 13 2024125,013 13 
2025202513 13 2025125,013 13 
2026202614 14 202660,014 14 
2027202714 14 
ThereafterThereafter20,015 20,019 Thereafter
TotalTotal$20,115 $20,501 Total$540,065 $318,084 

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 Sheetsconsolidated balance sheet and will beare being 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 the Three-Month Term Secured Overnight Financing Rate (“SOFR”) plus 586 basis points, with interest during this period payable quarterly in arrears. The notes qualify as Tier 2 capital for regulatory capital purposes. The Company used the proceeds offrom the private placementNotes 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
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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“FTC Subordinated Notes”). The FTC 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 RateSOFR plus 527 basis points, payable quarterly in arrears. BancPlus will be entitled to redeem the FTC Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the FTC Subordinated Notes in whole upon certain other events. The FTC Subordinated Notes are not subject to redemption at the option of the holder. The FTC Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The FTC 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 FTC Subordinated Notes vary from the amount carried on the Consolidated Balance Sheetsconsolidated balance sheet at June 30, 20222023 due to the remaining purchase premium of $683,000,$536,000, 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, theThe 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
June 30, 2022December 31, 2021(Dollars in thousands)Year of
Maturity
Interest
Rate
June 30, 2023December 31, 2022
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 CME Term SOFR, 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 CME Term SOFR, 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 CME Term SOFR, 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 CME Term SOFR, 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 CME Term SOFR, 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 Sheetsconsolidated balance sheet at June 30, 20222023 due to the remaining purchase discount of $3.9$3.6 million, which was established upon the SCC Merger and is being amortized over the remaining life of the debentures. At June 30, 2023 and December 31, 2022, the remaining unamortized purchase discount was $3.6 million and $3.7 million, respectively.

Interest rates adjust quarterly for the subordinated debentures with rates that arewere nominally indexed with LIBOR. On March 15, 2022Following the LIBOR cessation date of June 30, 2023, the interest rate on the subordinated notes was replaced with SOFR pursuant to 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.Act.

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

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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 $294.8decreased $7.3 million, or 75.5%1.0%, to $685.3$690.8 million at June 30, 20222023 from $390.4$698.1 million at December 31, 2021,2022, primarily due to the issuancecumulative change in accounting principle related to the adoption of $250.0ASU 2016-13 of $25.0 million, dividends paid of preferred$10.5 million, purchase of common stock $56.5of the Company of $2.9 million, of equity issuedshares withheld to satisfy withholding obligation in the FTC Merger, net incomevesting of $25.8restricted stock of $1.0 million partially offset byand other comprehensive loss of $29.7$565,000, partially offset by net income of $30.3 million and dividends paidstock based compensation of $8.9$2.3 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.

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 considersconsider 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
June 30, 2022December 31, 2021
(Dollars in thousands)
Primary Liquidity – On-Balance Sheet
June 30, 2023December 31, 2022
Cash and cash equivalentsCash and cash equivalents$343,741 $664,165 Cash and cash equivalents$191,214 $137,895 
Total securitiesTotal securities693,386 648,262 Total securities864,228 686,194 
Less: pledged securitiesLess: pledged securities(464,709)(489,184)Less: pledged securities(145,212)(487,372)
Total primary liquidityTotal primary liquidity$572,418 $823,243 Total primary liquidity$910,230 $336,717 
Ratio of primary liquidity to total depositsRatio of primary liquidity to total deposits10.1 %17.8 %Ratio of primary liquidity to total deposits14.9 %5.8 %

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Secondary Liquidity – Off-Balance Sheet Borrowing CapacitySecondary Liquidity – Off-Balance Sheet Borrowing CapacityJune 30, 2022December 31, 2021Secondary Liquidity – Off-Balance Sheet Borrowing CapacityJune 30, 2023December 31, 2022
Net secured borrowing capacity with the FHLBNet secured borrowing capacity with the FHLB$1,889,933 $1,476,825 Net secured borrowing capacity with the FHLB$1,548,377 $1,880,392 
Net secured borrowing capacity with the Federal Reserve BankNet secured borrowing capacity with the Federal Reserve Bank282,783 189,497 Net secured borrowing capacity with the Federal Reserve Bank586,511 573,588 
Unsecured borrowing capacity with correspondent lendersUnsecured borrowing capacity with correspondent lenders243,000 223,000 Unsecured borrowing capacity with correspondent lenders243,000 243,000 
Available capacity on revolving line of creditAvailable capacity on revolving line of credit$20,000 $— Available capacity on revolving line of credit20,000 20,000 
Total secondary liquidityTotal secondary liquidity$2,435,716 $1,889,322 Total secondary liquidity$2,397,888 $2,716,980 
Ratio of primary and secondary liquidity to total depositsRatio of primary and secondary liquidity to total deposits52.9 %58.7 %Ratio of primary and secondary liquidity to total deposits54.2 %52.4 %

During the six months ended June 30, 2022,2023, BancPlus’ primary liquidity decreasedincreased by $250.8$573.5 million to $572.4$910.2 million, compared to $823.2$336.7 million at December 31, 2021, primarily due to changes in cash and cash equivalents as a result of a net increase in loans 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 the increase in cash as a result of ECIP. Secondary liquidity increased by $546.4 million to $2.44 billion as of June 30, 2022, from $1.89 billion as of December 31, 2021. This increase was primarily due to an increase in cash and securites and a decrease in pledged securities. Secondary liquidity decreased by $319.1 million to $2.40 billion as of June 30, 2023 from $2.72 billion as of December 31, 2022. This decrease was primarily due to a decrease in BancPlus’ FHLB borrowing capacity due to the FTC Merger.capacity.

In addition to its primary liquidity, BancPlus generates liquidity from cash flows from its loan and securities portfolios and from its large base of core customer deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000. Core deposits totaled $5.46$5.77 billion and $4.45$5.66 billion and represented 96.1% and 96.3%94.4% of total deposits as of both June 30, 20222023 and December 31, 2021, respectively.2022. 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 2022periods ended June 30, 2023 and 2021 year to date periods.December 31, 2022.

BancPlus’ liquidity policy includes both policy limits and policy guidelines for measuring and monitoring liquidity. BancPlus’ policy measureslimits 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 along with additional liquidity measures not specified in policy are calculatedreviewed monthly. BancPlus also utilizes eleven liquidityLiquidity policy guidelines that are reportedreviewed quarterly. As of June 30, 2022 and December 31, 2021,2023, BancPlus was in compliance with all of its established liquidity guidelines.policy limits.

Holding Company Liquidity Management

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

Due to state banking laws, BankPlus may not declarepay dividends without the prior approval of the MDBCF. BankPlus received permission from the MDBCF to pay dividends of $12.6$14.4 million and $10.8$12.6 million for the year-to-date periods ended June 30, 20222023 and June 30, 2021, respectively.2022, respectively to BancPlus. 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 byIn 2019, the federal banking regulators about components, risk weightingsbank regulatory agencies finalized a rule that simplifies capital requirements for qualifying community banks by providing an option to use a simple leverage ratio to measure capital adequacy and other factors.

In addition, BancPlus must maintain a capital conservation buffer of 2.5%, consisting of CET1 capital, on top of theto not calculate risk-based minimum capital ratios. A banking organization with a conservation buffer ofqualifying community bank has less than $10 billion in total consolidated assets, limited amounts of off-balance-sheet exposures and trading assets and liabilities, and a leverage ratio greater than 9.0%. The community bank leverage ratio (“CBLR”) framework was effective on January 1, 2020, and the required amount of 2.5% will be subjectCompany and the Bank elected to limitations on capital distributions, including dividend payments, and certain discretionary bonus payments to executive
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officers. Minimum capital requirements, includingadopt the capital conservation buffer, to which BankPlus and BancPlus are subject are summarizedoptional CBLR framework in the tables below.third quarter of 2022, as an alternative to the generally applicable capital rules.

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
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capital measure. As of June 30, 2023, the Bank maintained a leverage ratio of more than 9.0% and, as an institution has elected to adopt the CBLR framework, the Bank was therefore well capitalized under the regulatory framework for prompt corrective action.

As of June 30, 20222023 and December 31, 2021,2022, BancPlus and BankPlus met all applicablethe minimum CBLR requirement and therefore satisfied the capital adequacy requirements and BankPlus was deemed “well capitalized.”to which they are subject. As a bank holding company, BancPlus is not subject to the prompt corrective action regime that applies to insured depository institutions, including BankPlus.

BancPlus’ consolidated and BankPlus’ actual capital amounts and ratios are shown in the following tables as of the dates indicated (dollars in thousands):
ActualMinimum For Capital Adequacy PurposesRequired to be Well Capitalized
As of June 30, 2022:Capital AmountRatioCapital AmountRatioCapital AmountRatio
Consolidated:
CET1 Capital to Risk-Weighted Assets$391,892 7.02 %$391,002 7.00 %N/AN/A
Tier 1 Capital to Risk-Weighted Assets693,031 12.41 %474,789 8.50 %N/AN/A
Total Capital to Risk-Weighted Assets816,925 14.63 %586,504 10.50 %N/AN/A
Tier 1 Capital to Average Assets693,031 10.83 %255,955 4.00 %N/AN/A
Bank:
CET1 Capital to Risk-Weighted Assets$606,332 10.87 %$390,536 7.00 %$362,641 6.50 %
Tier 1 Capital to Risk-Weighted Assets606,332 10.87 %474,223 8.50 %446,327 8.00 %
Total Capital to Risk-Weighted Assets649,685 11.65 %585,804 10.50 %557,909 10.00 %
Tier 1 Capital to Average Assets606,332 9.49 %255,647 4.00 %319,559 5.00 %
ActualMinimum Requirement to be Well Capitalized
As of June 30, 2023:Capital AmountRatioCapital AmountRatio
Consolidated:
Community Bank Leverage Ratio$733,707 10.00 %$660,411 9.00 %
Bank:
Community Bank Leverage Ratio$682,869 9.32 %$659,762 9.00 %
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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ActualMinimum Requirement to be Well Capitalized
As of December 31, 2022:Capital AmountRatioCapital AmountRatio
Consolidated:
Community Bank Leverage Ratio$721,001 10.54 %$615,566 9.00 %
Bank:
Community Bank Leverage Ratio$636,007 9.31 %$614,973 9.00 %

Contractual Obligations

Contractual obligations as of June 30, 2022,2023 totaled $1.01$1.76 billion and were primarily comprised of deposits with maturities of $818.7 million,$1.04 billion, subordinated debentures of $133.4$133.6 million and operating lease obligations of $37.3$46.5 million. Contractual obligations due within the next twelve months were $512.0 million$1.01 billion and were primarily related to time deposits with maturity dates.dates and short-term FHLB advances due in 2023-2024. Contractual obligations due in more than 12 months were $497.6$755.8 million and were comprised of $306.8$351.1 million of time deposits with maturity dates and $133.4$133.6 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”), See Note 1 Basis of Presentation in our Condensed Notes to Consolidated Financial Instruments – Credit Losses (Topic 326): MeasurementStatements elsewhere in this Quarterly Report on Form 10-Q for details of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”)recently issued Accounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit lossesaccounting pronouncements and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about thetheir 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 a cross functional team that is working with third-party vendors to build and validate a model that will run parallel with the Company’s current model prior to implementation of 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’sour 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 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, 2021,2022, 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.Interest Rate Risk

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

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

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

Net Interest Income Simulation and Economic Value Analysis

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

Potential changes to BancPlus’ net interest income and EVE in hypothetical rising and declining interest rate scenarios calculated as of June 30, 2023 and December 31, 2022 are presented in the table below (dollars in thousands). The projections for June 30, 2023 and December 31, 2022 assume immediate, parallel shifts down from the yield curves of 100, 200, and 300 basis points and immediate, parallel shifts up of 100, 200, and 300 basis points.

As of June 30, 2023As of December 31, 2022
(Dollars in thousands)Change in Net Interest IncomeChange in Economic
Value
of Equity
Change in Net Interest IncomeChange in Economic
Value
of Equity
Parallel Rate Shift (basis points)$%$%$%$%
300$(10,788)(4.4)%$(70,881)(8.8)%$(907)(0.4)%$(28,909)(2.7)%
200$(6,966)(2.8)%$(46,772)(5.8)%$(3,041)(1.2)%$(19,101)(1.8)%
100$(3,369)(1.4)%$(23,141)(2.9)%$(2,090)(0.8)%$(9,706)(0.9)%
Unchanged$— — %$— — %$— — %$— — %
-100$3,488 1.4 %$16,262 2.0 %$430 0.2 %$13,299 1.2 %
-200$5,694 2.3 %$25,495 3.2 %$(394)(0.2)%$17,758 1.7 %
-300$7,321 3.0 %$32,049 4.0 %$(9,414)(3.7)%$6,027 0.6 %

The table above indicates that in the event of an immediate and sustained 300 basis point increase in interest rates, BancPlus would have experienced a 4.4% decrease in net interest income in year one and an 8.8% decrease in EVE as of June 30, 2023. At December 31, 2022, in the event of an immediate and sustained 300 basis point increase in interest, BancPlus would have experienced a 0.4% decrease in net interest income and a 2.7% decrease in EVE. In the event of an immediate 100 basis point
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decrease in interest rates, BancPlus would have experienced an increase of 1.4% in net interest income and a 2.0% increase in EVE as of June 30, 2023, and a 0.2% increase in net interest income and a 1.2% increase in EVE as of December 31, 2022.

The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. The timing and magnitude of interest rate changes will most likely differ substantially from what is depicted. The shape or steepness of the yield curve typically changes with each change in the Fed Funds target range. Increasing deposit competition could reduce net interest income further if BancPlus is required to borrow at wholesale funding rates due to deposit runoff. Results could also change depending on faster or slower prepays in loans or early withdrawals in deposits than those assumed in the model. Finally, the results do not incorporate growth in the balance sheet or strategic changes made in response to changes in rates.

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

Impact of Inflation and Changing Prices

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

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 our management, with the participation of BancPlus’ ChiefPrincipal Executive Officer and ChiefPrincipal Financial Officer, of the effectiveness of BancPlus’ disclosure controls and procedures, (asas defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the ChiefPrincipal Executive Officer and the ChiefPrincipal 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.forms and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Effective January 1, 2023, BancPlus adopted FASB ASU 2016-13. BancPlus implemented changes to its policies, processes and controls over the estimation of the allowance for credit losses to support the adoption of FASB ASU 2016-13. Management revised previous internal controls used under legacy GAAP and incorporated new internal controls to ensure adequacy of the reserve levels under the new allowance for credit losses methodology. Changes to internal controls as a result of adopting FASB ASU 2016-13 were a result of changes in the calculation under the new allowance for credit losses methodology and did not change the overall nature of the controls.

There has been no change in BancPlus’ internal control over financial reporting identified in connection with the evaluation required by Rule 15d-15(e) under the Exchange Act that occurred during the last fiscal quarterperiod covered by this report 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

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For information about our legal proceedings refer to Footnote 13 to our Condensed Notes to Consolidated Financial Statements for the quarter ended June 30, 20222023 contained in Part I, Item 1 of this Quarterly Report on Form 10-Q10-Q.

In addition to the above, the Company, including its 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, 2021,2022, 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.Securities Trading Plans Of Directors and Executive Officers

During the three months ended June 30, 2023, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

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Item 6. Exhibits

2.1*
2.2*3.1
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.34.6
10.1
31.131.1+
31.231.2+
32.132.1++
32.232.2++
101101+Inline XBRL Interactive Data
104104+Cover 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.

+ Filed herewith.
++ Furnished herewith.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BancPlus Corporation

Date:August 11, 20222023By:/s/ William A. Ray
William A. Ray
Vice Chairman, President and Chief Executive Officer
(Principal Executive Officer)

Date:August 11, 20222023By:/s/ Karlen Turbeville
Karlen Turbeville
Senior Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

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