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 ended	~~September 30, 2021~~March 31, 2022

	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to __________

Commission file number 333-236022

BANCPLUS CORPORATION

(Exact name of registrant as specified in its charter)



Mississippi						64-0655312
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

1068 Highland Colony Parkway

Ridgeland, Mississippi 39157

(601) 898-8300

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

None

N/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 filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Shares of the registrant’s Common Stock, par value $1.00 per share, issued and outstanding as of ~~November 8, 2021: 10,112,254~~May 6, 2022: 11,644,407

BANCPLUS CORPORATION

FORM 10-Q

For the Quarter Ended ~~SEPTEMBER 30, 2021~~MARCH 31, 2022

INDEX


			Page Number

PART I – FINANCIAL INFORMATION			2

Item 1. Financial Statements (Unaudited):			2

~~Condensed~~ Consolidated Balance Sheets at ~~September 30, 2021~~March 31, 2022 (unaudited), and December 31, ~~2020~~2021			2
~~Condensed~~ Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 (unaudited)			3
~~Condensed~~ Consolidated Statements of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 (unaudited)			4
~~Condensed~~ Consolidated Statements of Shareholders’ Equity for the three ~~and~~ ~~nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 (unaudited)			5
~~Condensed~~ Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 (unaudited)			76

Condensed Notes to the ~~Condensed~~ Consolidated Financial Statements (unaudited)			98

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3230

Cautionary Statement Regarding Forward-Looking Statements			3331

Item 3. Quantitative and Qualitative Disclosures about Market Risk			6356

Item 4. Controls and Procedures			6356

PART II – OTHER INFORMATION			6456

Item 1. Legal Proceedings			6456

Item 1A. Risk Factors			6457

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6657

Item 3. Defaults Upon Senior Securities			6657

Item 4. Mine Safety Disclosures			6657

Item 5. Other Information			6657

Item 6. Exhibits			6658

SIGNATURE PAGE			6759

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BancPlus Corporation and Subsidiaries

~~Condensed~~ Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(unaudited)					(unaudited)
Assets:	Assets:					Assets:
Cash and due from banks	Cash and due from banks	$	57,417	$	109,233	Cash and due from banks	$	74,563	$	55,603
Interest bearing deposits with banks	Interest bearing deposits with banks	637,652		508,196		Interest bearing deposits with banks	620,789		608,562
Federal funds sold		—		20,116
Total cash and cash equivalents	Total cash and cash equivalents	695,069		637,545		Total cash and cash equivalents	695,352		664,165
Securities available for sale	Securities available for sale	540,883		311,373		Securities available for sale	645,196		576,614
Securities held to maturity - fair value: $78,905 - 2021; $94,436 - 2020		78,423		93,766
Securities held to maturity - fair value: $68,858 - 2022; $72,084 - 2021						Securities held to maturity - fair value: $68,858 - 2022; $72,084 - 2021	68,873		71,648
Loans held for sale	Loans held for sale	13,904		28,684		Loans held for sale	11,744		10,621

Loans	Loans	3,526,086		3,378,732		Loans	4,740,406		3,619,172
Less: Allowance for loan losses	Less: Allowance for loan losses	44,001		36,000		Less: Allowance for loan losses	44,238		45,000
Net loans	Net loans	3,482,085		3,342,732		Net loans	4,696,168		3,574,172

Premises and equipment	Premises and equipment	101,715		102,967		Premises and equipment	117,342		101,965
Operating lease right-of-use assets	Operating lease right-of-use assets	35,305		35,936		Operating lease right-of-use assets	35,351		34,561
Accrued interest receivable	Accrued interest receivable	17,120		18,061		Accrued interest receivable	17,756		14,329
Goodwill	Goodwill	2,616		2,616		Goodwill	63,836		2,616
Other assets	Other assets	146,204		137,240		Other assets	163,640		145,587
		$	5,113,324	$	4,710,920		$	6,515,258	$	5,196,278

Liabilities:	Liabilities:					Liabilities:
Deposits	Deposits	$	4,529,868	$	4,152,810	Deposits	$	5,853,097	$	4,622,116
Advances from Federal Home Loan Bank and other borrowings	Advances from Federal Home Loan Bank and other borrowings	31,026		33,771		Advances from Federal Home Loan Bank and other borrowings	40,453		20,501
Subordinated debentures	Subordinated debentures	111,411		111,124		Subordinated debentures	133,338		111,509
Operating lease liabilities	Operating lease liabilities	36,458		37,127		Operating lease liabilities	36,615		35,793
Accrued interest payable	Accrued interest payable	2,647		2,709		Accrued interest payable	2,945		1,425
Other liabilities	Other liabilities	16,028		18,129		Other liabilities	13,993		14,515
Total liabilities	Total liabilities	4,727,438		4,355,670		Total liabilities	6,080,441		4,805,859

Redeemable common stock owned by the ESOP	Redeemable common stock owned by the ESOP	96,623		74,278		Redeemable common stock owned by the ESOP	102,425		100,487
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
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 September 30, 2021 and December 31, 2020; 10,112,254 and 10,079,277 issued and outstanding at September 30, 2021 and December 31, 2020, respectively		10,112		10,079
40,000,000 authorized at March 31, 2022 and December 31, 2021; 11,580,880 and 10,115,945 issued and outstanding at March 31, 2022 and December 31, 2021, respectively						40,000,000 authorized at March 31, 2022 and December 31, 2021; 11,580,880 and 10,115,945 issued and outstanding at March 31, 2022 and December 31, 2021, respectively	11,581		10,116
Unearned Employee Stock Ownership Plan compensation	Unearned Employee Stock Ownership Plan compensation	(1,609)		(2,650)		Unearned Employee Stock Ownership Plan compensation	—		(1,401)
Additional paid-in capital	Additional paid-in capital	66,767		67,742		Additional paid-in capital	123,005		67,380
Retained earnings	Retained earnings	307,269		273,204		Retained earnings	319,898		314,357
Accumulated other comprehensive income, net		3,347		6,875
Accumulated other comprehensive loss, net						Accumulated other comprehensive loss, net	(19,667)		(33)
		385,886		355,250			434,817		390,419
Less: Redeemable common stock owned by the ESOP	Less: Redeemable common stock owned by the ESOP	(96,623)		(74,278)		Less: Redeemable common stock owned by the ESOP	(102,425)		(100,487)
Total shareholders' equity	Total shareholders' equity	289,263		280,972		Total shareholders' equity	332,392		289,932
		$	5,113,324	$	4,710,920		$	6,515,258	$	5,196,278

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

Table of Contents

BancPlus Corporation and Subsidiaries

~~Condensed~~ Consolidated Statements of Income

(Unaudited)

(In Thousands, Except Per Share Data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021

Interest income:	Interest income:									Interest income:
Interest and fees on loans	Interest and fees on loans	$	43,835	$	44,083	$	129,066	$	113,710	Interest and fees on loans		$	42,987	$	43,142
Taxable securities	Taxable securities	2,097		1,815		6,024		5,157		Taxable securities		2,307		1,833
Tax-exempt securities	Tax-exempt securities	455		573		1,473		1,942		Tax-exempt securities		420		539
Interest bearing bank balances and other	Interest bearing bank balances and other	242		113		493		1,329		Interest bearing bank balances and other		231		138
Total interest income	Total interest income	46,629		46,584		137,056		122,138		Total interest income		45,945		45,652

Interest expense:	Interest expense:									Interest expense:
Deposits	Deposits	1,746		3,193		5,873		11,259		Deposits		1,677		2,164
Short-term borrowings		—		—		—		2
Advances from Federal Home Loan Bank	Advances from Federal Home Loan Bank	78		79		233		239		Advances from Federal Home Loan Bank		76		77
Other borrowings	Other borrowings	1,371		1,420		4,112		2,673		Other borrowings		1,425		1,369
Total interest expense	Total interest expense	3,195		4,692		10,218		14,173		Total interest expense		3,178		3,610

Net interest income	Net interest income	43,434		41,892		126,838		107,965		Net interest income		42,767		42,042
Provision for loan losses	Provision for loan losses	1,469		4,671		7,395		7,706		Provision for loan losses		217		3,889
Net interest income after provision for loan losses	Net interest income after provision for loan losses	41,965		37,221		119,443		100,259		Net interest income after provision for loan losses		42,550		38,153

Other operating income:	Other operating income:									Other operating income:
Service charges on deposit accounts	Service charges on deposit accounts	7,484		5,690		19,226		16,674		Service charges on deposit accounts		6,792		5,737
Mortgage origination income	Mortgage origination income	1,999		2,827		6,726		5,974		Mortgage origination income		2,238		2,714
Debit card interchange	Debit card interchange	2,390		1,909		7,634		5,412		Debit card interchange		2,428		2,640
Securities gains, net		—		6		4		57
Other income	Other income	7,193		8,193		24,490		17,265		Other income		6,507		9,186
Total other operating income	Total other operating income	19,066		18,625		58,080		45,382		Total other operating income		17,965		20,277

Other operating expenses:	Other operating expenses:									Other operating expenses:
Salaries and employee benefits expenses	Salaries and employee benefits expenses	25,218		23,162		72,365		65,349		Salaries and employee benefits expenses		25,845		23,025
Net occupancy expenses	Net occupancy expenses	3,606		3,459		10,779		9,709		Net occupancy expenses		4,116		3,345
Furniture, equipment and data processing expenses	Furniture, equipment and data processing expenses	6,282		5,801		18,322		15,621		Furniture, equipment and data processing expenses		6,616		5,932
Other expenses	Other expenses	7,716		7,490		19,931		19,834		Other expenses		11,493		5,835
Total other operating expenses	Total other operating expenses	42,822		39,912		121,397		110,513		Total other operating expenses		48,070		38,137

Income before income taxes	Income before income taxes	18,209		15,934		56,126		35,128		Income before income taxes		12,445		20,293
Income tax expense	Income tax expense	4,012		3,334		10,593		7,613		Income tax expense		2,756		3,021
Net income	Net income	$	14,197	$	12,600	$	45,533	$	27,515	Net income		$	9,689	$	17,272

Earnings per common share - basic	Earnings per common share - basic	$	1.43	$	1.25	$	4.58	$	2.98	Earnings per common share - basic		$	0.93	$	1.74
Earnings per common share - diluted	Earnings per common share - diluted	$	1.41	$	1.24	$	4.53	$	2.96	Earnings per common share - diluted		$	0.92	$	1.73

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

Table of Contents

BancPlus Corporation and Subsidiaries

~~Condensed~~ Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In Thousands)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021

Net income	Net income	$	14,197	$	12,600	$	45,533	$	27,515	Net income		$	9,689	$	17,272
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities available for sale		(2,340)		(225)		(4,698)		9,498
Unrealized losses on securities available for sale										Unrealized losses on securities available for sale		(26,144)		(4,936)
Tax effect	Tax effect	583		56		1,170		(2,365)		Tax effect		6,510		1,229
Total other comprehensive income (loss), net of tax		(1,757)		(169)		(3,528)		7,133
Comprehensive income		$	12,440	$	12,431	$	42,005	$	34,648
Total other comprehensive loss, net of tax										Total other comprehensive loss, net of tax		(19,634)		(3,707)
Comprehensive income (loss)										Comprehensive income (loss)		$	(9,945)	$	13,565

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

Table of Contents

BancPlus Corporation and Subsidiaries

~~Condensed~~ 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		Less: Redeemable Common Stock Owned by the ESOP		Total Shareholders' Equity						Unearned ESOP Compensation		Additional Paid-In Capital				Accumulated Other Comprehensive Income (Loss)		Less: Redeemable Common Stock Owned by the ESOP		Total Shareholders' Equity
		Common Stock							Retained Earnings									Common Stock							Retained Earnings
		Shares	Amount															Shares	Amount

July 1, 2020		10,126,817	$	10,127	$	(3,375)	$	70,173	$	255,990	$	7,584	$	(57,545)	$	282,954
January 1, 2021																	January 1, 2021	10,079,277	$	10,079	$	(2,650)	$	67,742	$	273,204	$	6,875	$	(74,278)	$	280,972

Net income	Net income	—	—		—		—		12,600		—		—		12,600		Net income	—	—		—		—		17,272		—		—		17,272
Other comprehensive loss, net	Other comprehensive loss, net	—	—		—		—		—		(169)		—		(169)		Other comprehensive loss, net	—	—		—		—		—		(3,707)		—		(3,707)
Purchase of Company stock	Purchase of Company stock	(12,791)	(13)		—		(588)		—		—		—		(601)		Purchase of Company stock	(36,449)	(36)		—		(1,832)		—		—		—		(1,868)
Issuance of restricted stock		18,850	19		—		(19)		—		—		—		—
Shares withheld to satisfy withholding obligation in the vesting of restricted stock																	Shares withheld to satisfy withholding obligation in the vesting of restricted stock	(1,500)	(2)		—		(75)		—		—		—		(77)
Stock based compensation	Stock based compensation	—	—		—		367		—		—		—		367		Stock based compensation	—	—		—		487		—		—		—		487
Net change fair value of ESOP shares	Net change fair value of ESOP shares	—	—		—		—		—		—		(10,977)		(10,977)		Net change fair value of ESOP shares	—	—		—		—		—		—		(13,125)		(13,125)
Common stock released by ESOP	Common stock released by ESOP	—	—		433		—		—		—		—		433		Common stock released by ESOP	—	—		346		—		—		—		—		346
Dividends declared ($0.35 per share)		—	—		—		—		(3,527)		—		—		(3,527)
September 30, 2020		10,132,876	$	10,133	$	(2,942)	$	69,933	$	265,063	$	7,415	$	(68,522)	$	281,080
Dividends paid ($0.38 per share)																	Dividends paid ($0.38 per share)	—	—		—		—		(3,811)		—		—		(3,811)
March 31, 2021																	March 31, 2021	10,041,328	$	10,041	$	(2,304)	$	66,322	$	286,665	$	3,168	$	(87,403)	$	276,489

January 1, 2020		7,652,957	$	7,653	$	(4,476)	$	811	$	247,241	$	282	$	(79,308)	$	172,203
January 1, 2022																	January 1, 2022	10,115,945	$	10,116	$	(1,401)	$	67,380	$	314,357	$	(33)	$	(100,487)	$	289,932

Net income	Net income	—	—		—		—		27,515		—		—		27,515		Net income	—	—		—		—		9,689		—		—		9,689
Other comprehensive income, net		—	—		—		—		—		7,133		—		7,133
Acquisition of State Capital Corp.		2,453,827	2,454		—		68,707		—		—		—		71,161
Purchase of Company stock		(12,791)	(13)		—		(588)		—		—		—		(601)
Issuance of common stock for acquisition of First Trust Corporations																	Issuance of common stock for acquisition of First Trust Corporations	1,444,732	1,445		—		55,044		—		—		—		56,489
Other comprehensive loss, net																	Other comprehensive loss, net	—	—		—		—		—		(19,634)		—		(19,634)
Issuance of restricted stock	Issuance of restricted stock	39,155	39		—		(39)		—		—		—		—		Issuance of restricted stock	21,367	21		—		(21)		—		—		—		—
Shares withheld to satisfy withholding obligation in the vesting of restricted stock	Shares withheld to satisfy withholding obligation in the vesting of restricted stock	(272)	—		—		(10)		—		—		—		(10)		Shares withheld to satisfy withholding obligation in the vesting of restricted stock	(1,164)	(1)		—		(78)		—		—		—		(79)
Stock based compensation	Stock based compensation	—	—		—		1,052		—		—		—		1,052		Stock based compensation	—	—		—		680		—		—		—		680
Net change fair value of ESOP shares	Net change fair value of ESOP shares	—	—		—		—		—		—		10,786		10,786		Net change fair value of ESOP shares	—	—		—		—		—		—		(1,938)		(1,938)
Common stock released by ESOP	Common stock released by ESOP	—	—		1,534		—		—		—		—		1,534		Common stock released by ESOP	—	—		1,401		—		—		—		—		1,401
Dividends declared ($1.05 per share)		—	—		—		—		(9,693)		—		—		(9,693)
September 30, 2020		10,132,876	$	10,133	$	(2,942)	$	69,933	$	265,063	$	7,415	$	(68,522)	$	281,080
Dividends paid ($0.41 per share)																	Dividends paid ($0.41 per share)	—	—		—		—		(4,148)		—		—		(4,148)
March 31, 2022																	March 31, 2022	11,580,880	$	11,581	$	—	$	123,005	$	319,898	$	(19,667)	$	(102,425)	$	332,392

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

~~Table of Contents~~

~~BancPlus Corporation and Subsidiaries~~

~~Condensed 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 Less:
Redeemable
Common Stock
Owned by the ESOP Total
Shareholders'
Equity
Common Stock Retained
Earnings
Shares Amount
July 1, 2021 10,111,045 $ 10,111 $ (1,957) $ 66,152 $ 296,900 $ 5,104 $ (87,794) $ 288,516
Net income — — — — 14,197 — — 14,197
Other comprehensive loss, net — — — — — (1,757) — (1,757)
Issuance of restricted stock 1,209 1 — (1) — — — —
Stock based compensation — — — 616 — — — 616
Net change in fair value of ESOP shares — — — — — — (8,829) (8,829)
Common stock released by ESOP — — 348 — — — — 348
Dividends declared ($0.38 per share) — — — — (3,828) — — (3,828)
September 30, 2021 10,112,254 $ 10,112 $ (1,609) $ 66,767 $ 307,269 $ 3,347 $ (96,623) $ 289,263
January 1, 2021 10,079,277 $ 10,079 $ (2,650) $ 67,742 $ 273,204 $ 6,875 $ (74,278) $ 280,972
Net income — — — — 45,533 — — 45,533
Other comprehensive loss, net — — — — — (3,528) — (3,528)
Issuance of restricted stock 83,317 83 — (83) — — — —
Shares withheld to satisfy withholding obligation in the vesting of restricted stock (4,477) (4) — (225) — — — (229)
Purchase of Company stock (45,863) (46) — (2,387) — — — (2,433)
Stock based compensation — — — 1,720 — — — 1,720
Net change fair value of ESOP shares — — — — — — (22,345) (22,345)
Common stock released by ESOP — — 1,041 — — — — 1,041
Dividends declared ($1.14 per share) — — — — (11,468) — — (11,468)
September 30, 2021 10,112,254 $ 10,112 $ (1,609) $ 66,767 $ 307,269 $ 3,347 $ (96,623) $ 289,263

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

Table of Contents

BancPlus Corporation and Subsidiaries

~~Condensed~~ Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income per condensed consolidated statements of income		$	45,533	$	27,515
Net income per consolidated statements of income						Net income per consolidated statements of income	$	9,689	$	17,272
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 losses	Provision for loan losses	7,395		7,706		Provision for loan losses	217		3,889
Depreciation and amortization	Depreciation and amortization	5,818		4,663		Depreciation and amortization	2,362		1,903
Net loss on sales of premises and equipment	Net loss on sales of premises and equipment	279		294		Net loss on sales of premises and equipment	1		85
Net gain on sales of other real estate owned	Net gain on sales of other real estate owned	(169)		(354)		Net gain on sales of other real estate owned	(19)		(171)
Write-downs of other real estate-owned	Write-downs of other real estate-owned	186		106		Write-downs of other real estate-owned	555		20
Deferred income tax expense		399		935
Deferred income tax expense (benefit)						Deferred income tax expense (benefit)	(162)		433
Federal Home Loan Bank stock dividends	Federal Home Loan Bank stock dividends	(9)		(41)		Federal Home Loan Bank stock dividends	(3)		(3)
Common stock released by ESOP	Common stock released by ESOP	1,041		1,534		Common stock released by ESOP	1,401		346
Stock based compensation expense	Stock based compensation expense	1,720		1,052		Stock based compensation expense	680		487
Origination of loans held for sale	Origination of loans held for sale	(300,866)		(274,668)		Origination of loans held for sale	(72,280)		(105,569)
Proceeds from loans held for sale	Proceeds from loans held for sale	315,646		264,489		Proceeds from loans held for sale	77,357		114,794
Earnings on bank-owned life insurance	Earnings on bank-owned life insurance	(5,858)		(1,526)		Earnings on bank-owned life insurance	(626)		(3,492)
Bargain purchase gain on merger		—		(1,078)
Net change in:	Net change in:					Net change in:
Accrued interest receivable and other assets	Accrued interest receivable and other assets	5,849		(2,987)		Accrued interest receivable and other assets	(3,374)		(1,365)
Accrued interest payable and other liabilities	Accrued interest payable and other liabilities	(2,163)		(3,928)		Accrued interest payable and other liabilities	(2,570)		(6,903)
Net cash from operating activities	Net cash from operating activities	74,801		23,712		Net cash from operating activities	13,228		21,726

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of securities available for sale	Purchases of securities available for sale	(317,600)		(77,290)		Purchases of securities available for sale	(82,822)		(296,923)
Maturities and calls of securities available for sale	Maturities and calls of securities available for sale	81,015		112,835		Maturities and calls of securities available for sale	20,801		29,822
Purchases of securities held to maturity	Purchases of securities held to maturity	(19,103)		(777)		Purchases of securities held to maturity	—		(19,103)
Maturities, prepayments and calls of securities held to maturity	Maturities, prepayments and calls of securities held to maturity	34,318		12,071		Maturities, prepayments and calls of securities held to maturity	2,745		22,005
Net increase in loans	Net increase in loans	(151,332)		(465,459)		Net increase in loans	(122,286)		(30,982)
Purchases of premises and equipment	Purchases of premises and equipment	(5,188)		(6,992)		Purchases of premises and equipment	(2,336)		(1,343)
Proceeds from sales of premises and equipment	Proceeds from sales of premises and equipment	31		40		Proceeds from sales of premises and equipment	—		26
Proceeds from sales of other real estate owned	Proceeds from sales of other real estate owned	4,672		4,955		Proceeds from sales of other real estate owned	181		1,539
Investment in unconsolidated entities, net	Investment in unconsolidated entities, net	(96)		(289)		Investment in unconsolidated entities, net	1,709		(122)
Purchase of bank-owned life insurance		(10,000)		—
Proceeds from bank-owned life insurance	Proceeds from bank-owned life insurance	5,987		—		Proceeds from bank-owned life insurance	—		4,336
Purchases or redemptions of Federal Home Loan Bank stock		(163)		2,562

Cash received in excess of cash paid for acquisition	Cash received in excess of cash paid for acquisition	—		75,303		Cash received in excess of cash paid for acquisition	165,974		—
Net cash used in investing activities	Net cash used in investing activities	(377,459)		(343,041)		Net cash used in investing activities	(16,034)		(290,745)

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BancPlus Corporation and Subsidiaries

~~Condensed~~ Consolidated Statements of Cash Flows (continued)

(Unaudited)

(In Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
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 deposits	Noninterest-bearing deposits	$	168,926	$	390,152	Noninterest-bearing deposits	$	42,746	$	82,692
Money market, negotiable order of withdrawal, and savings deposits	Money market, negotiable order of withdrawal, and savings deposits	265,081		21,169		Money market, negotiable order of withdrawal, and savings deposits	1,250		183,510
Certificates of deposit	Certificates of deposit	(56,950)		(36,389)		Certificates of deposit	(25,727)		(26,055)
Payments on Federal Home Loan Bank advances	Payments on Federal Home Loan Bank advances	(120)		(14,884)		Payments on Federal Home Loan Bank advances	(24)		(59)
Proceeds from issuance of subordinated debentures		—		60,000
Payment of subordinated debt issuance costs		—		(1,439)
Proceeds from other borrowings						Proceeds from other borrowings	20,000		—
Payments on other borrowings	Payments on other borrowings	(2,625)		(2,625)		Payments on other borrowings	—		(875)
Payment of debt issuance costs on other borrowings						Payment of debt issuance costs on other borrowings	(25)		—
Cash dividends paid on common stock	Cash dividends paid on common stock	(11,468)		(9,693)		Cash dividends paid on common stock	(4,148)		(3,811)
Purchase of Company stock	Purchase of Company stock	(2,433)		(601)		Purchase of Company stock	—		(1,868)
Shares withheld to pay taxes on restricted stock vesting	Shares withheld to pay taxes on restricted stock vesting	(229)		(10)		Shares withheld to pay taxes on restricted stock vesting	(79)		(77)
Net cash from financing activities	Net cash from financing activities	360,182		405,680		Net cash from financing activities	33,993		233,457

Net change in cash and cash equivalents	Net change in cash and cash equivalents	57,524		86,351		Net change in cash and cash equivalents	31,187		(35,562)

Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	637,545		312,972		Cash and cash equivalents at beginning of period	664,165		637,545

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	695,069	$	399,323	Cash and cash equivalents at end of period	$	695,352	$	601,983

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid	Interest paid	$	10,280	$	10,889	Interest paid	$	1,658	$	2,910
Federal and state income tax payments		9,950		7,175

Acquisition of real estate in non-cash foreclosures	Acquisition of real estate in non-cash foreclosures	4,924		5,836		Acquisition of real estate in non-cash foreclosures	455		2,272
Fair value of assets acquired net of liabilities assumed	Fair value of assets acquired net of liabilities assumed	—		72,251		Fair value of assets acquired net of liabilities assumed	58,508		—

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

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BancPlus Corporation and Subsidiaries

Condensed Notes to ~~Condensed~~ Consolidated Financial Statements

(Unaudited)

Note 1: Basis of Presentation

BancPlus Corporation (the “Company”) is a bank holding company headquartered in Ridgeland, Mississippi operating in 1 reportable segment. 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 ~~condensed~~ 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, ~~2020;~~2021; however, certain notes and information have been omitted from the interim periods. Therefore, these unaudited interim ~~condensed~~ consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2020.~~2021. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. The accounting and financial reporting policies followed by the Company conform, in all material respects, to the accounting principles generally accepted in the United States (“GAAP”) and to general practices within the financial services industry. The results of operations for the interim periods are not necessarily indicative of the results to be expected for future interim periods or for the entire year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Particularly given the effects of the COVID-19 pandemic, the ~~allowance for loan losses,~~ allowance/provision for loan losses, the fair value of financial instruments and the status of contingencies are particularly subject to change. Material estimates that are subject to significant change in the near term are the allowance for loan losses, provision for loan losses, valuation of other real estate owned and fair values of financial instruments. Actual results could differ from these estimates.

Recently Issued But Not Yet Effective Accounting Standards

Accounting Standards Update 2016-13 (“ASU 2016-13”), “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit losses and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 was originally effective for the Company for annual and interim periods beginning on January 1, 2021. Subsequently, FASB approved a deferral of the effective date. ASU 2016-13 will now be effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has formed a cross functional team that is assessing data and system needs and evaluating the impact of adopting the new guidance. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the Company adopts the new standard, but has not yet determined the magnitude of the one-time adjustment or the overall impact on the Company’s consolidated financial statements.

Accounting Standards Update 2020-04 (“ASU 2020-04”), “Reference Rate Reform - Topic 848.” In March 2020, the FASB issued ASU 2020-04, which provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications, hedge accounting, and other transactions affected that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. ASU 2020-04 is effective upon issuance and can be applied through December 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.

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Note 2: Earnings Per Share

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In thousands except per share data)	(In thousands except per share data)	2021		2020		2021		2020		(In thousands except per share data)		2022		2021
Net income	Net income	$	14,197	$	12,600	$	45,533	$	27,515	Net income		$	9,689	$	17,272

Weighted average common shares outstanding	Weighted average common shares outstanding	9,934		10,070		9,936		9,231		Weighted average common shares outstanding		10,451		9,919
Diluted effect of unallocated stock	Diluted effect of unallocated stock	116		64		105		72		Diluted effect of unallocated stock		75		73
Diluted common shares	Diluted common shares	10,050		10,134		10,041		9,303		Diluted common shares		10,526		9,992

Basic earnings per common share	Basic earnings per common share	$	1.43	$	1.25	$	4.58	$	2.98	Basic earnings per common share		$	0.93	$	1.74
Diluted earnings per common share	Diluted earnings per common share	$	1.41	$	1.24	$	4.53	$	2.96	Diluted earnings per common share		$	0.92	$	1.73

Note 3: Business Combinations

~~State Capital Corp.~~First Trust Corporation

~~On April~~Effective March 1, ~~2020,~~2022, the Company completed its previously announced merger with ~~State Capital Corp.~~First Trust Corporation (“~~SCC”~~FTC”), the holding company of ~~State~~First Bank &and Trust ~~Company~~ (“~~State Bank”~~FBT”). Pursuant to the terms of the Agreement and Plan of Share Exchange and Merger, dated September ~~18, 2019,~~28, 2021, as amended on February 9, 2022, by and among the Company, ~~the Bank, SCC,~~BankPlus, FTC, and ~~State Bank~~FBT (the ~~“Merger~~“FTC Merger Agreement”), following ~~BancPlus’~~the Company’s acquisition of ~~SCC~~FTC by a statutory share exchange, ~~SCC~~FTC was merged with and into ~~the Company,~~BancPlus, with ~~the Company~~BancPlus surviving the merger (the ~~“Merger”~~“FTC Holding Company Merger”). Immediately thereafter ~~State Bank~~FBT was merged with and into BankPlus, with BankPlus surviving the ~~Bank,~~merger (together with the ~~Bank surviving~~FTC Holding Company Merger, the ~~merger. As a result of the~~“FTC Merger”). The FTC Merger expands the Company’s geographic footprint ~~expanded~~into Florida and adds additional locations in ~~Mississippi,~~ Louisiana and ~~Alabama,~~Mississippi, providing access to new markets and deposits.

Pursuant to the FTC Merger Agreement, holders of ~~SCC~~FTC stock received, in the aggregate, 1,444,764 shares of BancPlus common stock, ~~received 0.6950~~with cash paid in lieu of fractional shares, and $52.7 million in cash, plus up to $10.0 million, less certain fees, costs, and expenses, that is being held in escrow pursuant to the terms of ~~the Company’s common stock, par value $1.00 per share, for each share of SCC common stock, par value $1.25 per share, held~~a previously disclosed Indemnity and Escrow Agreement that was entered into immediately prior to the ~~effective~~completion of the FTC Merger pending a final determination from the Internal Revenue Service as to whether FTC’s subchapter S election will be reinstated retroactively to September 23, 2020. 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 ~~Merger, plus cash in lieu of fractional shares.~~stock consideration, assets acquired and liabilities assumed were not complete. The Company ~~issued 2,453,827 shares~~expects to finalize its analysis of ~~common stock~~the acquired assets and assumed liabilities in this transaction within one year of the completion of the FTC Merger. Therefore, adjustments to ~~holders of SCC common stock, in addition to approximately $12,000 in lieu of fractional shares. In connection with~~ the ~~Merger,~~estimated amounts and carrying values may occur.

During the three months ended March 31, 2022, the Company incurred approximately ~~$6.4~~$4.2 million of acquisition expenses ~~of which approximately $6.2 million were incurred during~~in connection with the ~~nine months ended September 30, 2020.~~FTC Merger. These expenses are recorded in other ~~operating expenses and furniture, equipment and data processing~~ expenses in the Company’s ~~Condensed~~ Consolidated Statement of Income for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2022.

The excess cost paid over the fair value of net assets acquired ~~over cost paid~~ was recorded as ~~a gain on bargain purchase~~goodwill during ~~2020. The gain on bargain purchase was primarily the result of changes~~2022. Goodwill, which reflects an enhanced presence in the ~~value of the Company’s common stock due~~Louisiana and Southern Mississippi market areas and expansion in to the ~~timing of the closing of the Merger relative to when the Merger Agreement was signed and declines in the overall~~Florida panhandle market as well as synergies expected as a result of the ~~COVID-19 pandemic over that period.~~combined operations, is not deductible for tax purposes.

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The following table reflects the consideration paid and the preliminary fair value allocation of assets acquired and liabilities assumed as of the acquisition date:


(In thousands)
Purchase price allocation:
Common stock issued			$	~~71,161~~56,489
Cash paid ~~for fractional shares~~			1263,239
Total purchase price			$	~~71,173~~119,728
Assets acquired:
Cash and due from banks	$	~~75,315~~229,213
Securities ~~Federal Home Loan Bank (“FHLB”) stock and First National Bankers Bankshares, Inc. stock~~	~~97,910~~33,407
Loans held for sale	6,200
Loans, net	~~880,390~~1,000,382
Premises and equipment	~~29,968~~15,152
Accrued interest receivable	~~3,664~~
~~Bank-owned life insurance~~	~~28,441~~1,441
Core deposit intangible	~~6,045~~
~~Taxes receivable~~	~~7,787~~
~~Deferred tax asset, net~~	~~5,972~~7,825
Other assets	~~3,330~~3,063
Total assets acquired	$	~~1,138,822~~1,296,683
Liabilities assumed:
Deposits	$	~~1,024,381~~
~~Advances from FHLB and other borrowings~~	~~14,563~~1,212,712
Subordinated debentures	~~11,121~~
~~Deferred compensation~~	~~10,310~~21,733
Other liabilities	~~6,196~~3,730
Total liabilities assumed	$	~~1,066,571~~1,238,175
Net assets acquired			~~72,251~~58,508
~~Excess of fair value of net assets acquired over consideration paid - Gain on bargain purchase~~Goodwill			$	~~(1,078)~~61,220

In connection with the FTC Merger, the Company recorded a ~~$6.0~~$7.8 million core deposit intangible, which will be amortized over 10 years. The Company also acquired loans with a fair value of ~~$880.4 million, net of a $19.1 million~~$1.000 billion. The fair value of acquired loans at the time of acquisition is recorded as a premium or discount to the unpaid balance of each acquired loan. The net premium or discount is accreted or amortized into interest income over the remaining life of the loan. The Company recorded a net discount of $6.6 million on the acquired FTC loans, which included a credit mark discount of ~~$11.6~~$15.7 million. Purchase credit impaired loans were insignificant.

Revenues and earnings of the acquired company since the FTC Merger date have not been disclosed as it is not practicable as ~~SCC~~FTC was merged into BancPlus and separate financial information for ~~SCC~~FTC is not available. The following table presents unaudited pro forma information as if the FTC Merger ~~with SCC~~ had occurred on January 1, ~~2020.~~2021. This pro forma information combines the historic ~~condensed~~ consolidated results of operations of BancPlus and ~~SCC~~FTC after giving effect to certain adjustments, including purchase accounting fair value adjustments and amortization of intangibles, as well as the related income tax effects of those adjustments. The pro forma information does not necessarily reflect the results of operations that would have occurred had the FTC Merger occurred on January 1, ~~2020.~~2021.

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Table of Contents

Three Months Ended Nine Months Ended
(In thousands, except per share data) September 30, 2020 September 30, 2020
Net interest income $ 43,828 $ 123,958
Other operating income 18,626 47,034
Net income available to common shareholders 13,993 27,539
Earnings per common share:
Basic $ 1.39 $ 2.74
Diluted 1.38 2.72

~~First Trust Corporation~~

On September 28, 2021, the Company entered in an Agreement and Plan of Share Exchange and Merger with First Trust Corporation (“FTC”), the parent company of First Bank and Trust (“FBT”), whereby the Company will acquire FTC and the Bank will acquire FBT (the “transaction”). The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including receipt of required regulatory approvals and the approval by shareholders of FTC.


	Three Months Ended March 31,
(In thousands, except per share data)		2022		2021
Net interest income		$	53,873	$	53,148
Other operating income		20,542		22,854
Net income available to common shareholders		13,924		21,507
Earnings per common share:
Basic		$	1.22	$	1.89
Diluted		1.21		1.87

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)	Cost		Gains		Losses		Value		(In thousands)	Cost		Gains		Losses		Value
September 30, 2021:
March 31, 2022:										March 31, 2022:
U.S. Treasuries										U.S. Treasuries	$	40,768	$	—	$	619	$	40,149
U.S. Government agency obligations	U.S. Government agency obligations	$	301,619	$	421	$	2,199	$	299,841	U.S. Government agency obligations	387,931		174		21,018		367,087
Residential mortgage-backed securities	Residential mortgage-backed securities	118,554		3,522		230		121,846		Residential mortgage-backed securities	123,989		221		2,896		121,314
Commercial mortgage-backed securities	Commercial mortgage-backed securities	14,764		146		16		14,894		Commercial mortgage-backed securities	14,137		—		883		13,254
Asset-backed securities	Asset-backed securities	13,068		506		35		13,539		Asset-backed securities	12,173		272		91		12,354
Corporate investments	Corporate investments	43,000		1,210		60		44,150		Corporate investments	46,000		324		932		45,392
State and political subdivisions	State and political subdivisions	45,422		1,310		119		46,613		State and political subdivisions	46,386		264		1,004		45,646
Total available for sale	Total available for sale	$	536,427	$	7,115	$	2,659	$	540,883	Total available for sale	$	671,384	$	1,255	$	27,443	$	645,196

December 31, 2020:
December 31, 2021:										December 31, 2021:
U.S. Government agency obligations	U.S. Government agency obligations	$	12,092	$	342	$	—	$	12,434	U.S. Government agency obligations	$	354,774	$	256	$	4,780	$	350,250
Residential mortgage-backed securities	Residential mortgage-backed securities	181,569		5,644		1		187,212		Residential mortgage-backed securities	107,772		2,312		297		109,787
Commercial mortgage-backed securities	Commercial mortgage-backed securities	16,793		538		—		17,331		Commercial mortgage-backed securities	14,286		41		51		14,276
Asset backed securities	Asset backed securities	13,990		543		86		14,447		Asset backed securities	12,730		421		44		13,107
Corporate investments	Corporate investments	32,750		420		22		33,148		Corporate investments	43,500		1,138		128		44,510
State and political subdivisions	State and political subdivisions	45,025		1,833		57		46,801		State and political subdivisions	43,596		1,200		112		44,684
Total available for sale	Total available for sale	$	302,219	$	9,320	$	166	$	311,373	Total available for sale	$	576,658	$	5,368	$	5,412	$	576,614

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

~~Table of Contents~~

The following is a summary of the amortized cost and fair value of securities held to maturity.


		Amortized		Gross Unrealized				Fair			Amortized		Gross Unrealized				Fair
(In thousands)	(In thousands)	Cost		Gains		Losses		Value		(In thousands)	Cost		Gains		Losses		Value
September 30, 2021:
March 31, 2022:										March 31, 2022:
States and political subdivisions	States and political subdivisions	$	78,423	$	482	$	—	$	78,905	States and political subdivisions	$	68,873	$	46	$	61	$	68,858
Total held to maturity	Total held to maturity	$	78,423	$	482	$	—	$	78,905	Total held to maturity	$	68,873	$	46	$	61	$	68,858

December 31, 2020:
December 31, 2021:										December 31, 2021:
States and political subdivisions	States and political subdivisions	$	93,766	$	670	$	—	$	94,436	States and political subdivisions	$	71,648	$	436	$	—	$	72,084
Total held to maturity	Total held to maturity	$	93,766	$	670	$	—	$	94,436	Total held to maturity	$	71,648	$	436	$	—	$	72,084

All mortgage-backed securities in the above tables were issued or guaranteed by U.S. government agencies or sponsored agencies.

Table of Contents

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 Months				12 Months or More					Total				Less Than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value	Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value	Unrealized Losses
(In thousands)	(In thousands)									(In thousands)
September 30, 2021:
March 31, 2022:														March 31, 2022:
Available for sale:														Available for sale:
U.S. Treasuries														U.S. Treasuries	$	30,150	$	619	$	—	$	—	30,150	$	619
U.S. Government agencies														U.S. Government agencies	236,649		13,035		124,827		7,983		361,476	21,018
Residential mortgage-backed securities														Residential mortgage-backed securities	87,476		2,896		—		—		87,476	2,896
Commercial mortgage-backed securities														Commercial mortgage-backed securities	13,254		883		—		—		13,254	883
Asset backed securities														Asset backed securities	2,144		40		2,068		51		4,212	91
Corporate investments														Corporate investments	30,159		841		1,909		91		32,068	932
States and political subdivisions														States and political subdivisions	16,165		541		4,851		463		21,016	1,004
															$	415,997	$	18,855	$	133,655	$	8,588	549,652	$	27,443

December 31, 2021:														December 31, 2021:
Available for sale:	Available for sale:													Available for sale:
U.S. Government agencies	U.S. Government agencies	$	255,063	$	2,199	$	—	$	—		255,063	$	2,199	U.S. Government agencies	$	314,614	$	4,780	$	—	$	—	314,614	$	4,780
Residential mortgage-backed securities	Residential mortgage-backed securities	12,031		230		—		—			12,031	230		Residential mortgage-backed securities	15,216		297		—		—		15,216	297
Commercial mortgage-backed securities	Commercial mortgage-backed securities	3,174		16		—		—			3,174	16		Commercial mortgage-backed securities	8,376		51		—		—		8,376	51
Asset backed securities	Asset backed securities	—		—		2,271		35			2,271	35		Asset backed securities	2,272		8		2,192		36		4,464	44
Corporate investments	Corporate investments	6,941		60		—		—			6,941	60		Corporate investments	6,117		112		—		—		6,117	112
States and political subdivisions	States and political subdivisions	5,636		119		—		—			5,636	119		States and political subdivisions	11,372		128		—		—		11,372	128
		$	282,845	$	2,624	$	2,271	$	35		285,116	$	2,659		$	357,967	$	5,376	$	2,192	$	36	360,159	$	5,412

December 31, 2020:
Available for sale:
Residential mortgage-backed securities		$	4,471	$	1	$	—	$	—		4,471	$	1
Commercial mortgage-backed securities		305		—		—		—			305	—
Asset backed securities		2,492		86		—		—			2,492	86
Corporate investments		9,229		22		—		—			9,229	22
States and political subdivisions		3,028		57		—		—			3,028	57
		$	19,525	$	166	$	—	$	—		19,525	$	166

The number of debt securities in an unrealized loss position increased from 1382 at December 31, ~~2020~~2021 to 62232 at ~~September 30, 2021.~~March 31, 2022. The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Because the Company does not intend to sell these securities and it is more likely 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 ~~September 30, 2021.~~March 31, 2022.

The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations with, or without, call or prepayment penalties.

~~Table of Contents~~


		Available for Sale				Held to Maturity					Available for Sale				Held to Maturity
		Amortized		Fair		Amortized		Fair			Amortized		Fair		Amortized		Fair
(In thousands)	(In thousands)	Cost		Value		Cost		Value		(In thousands)	Cost		Value		Cost		Value
September 30, 2021:
March 31, 2022:										March 31, 2022:
One year or less	One year or less	$	11,330	$	11,402	$	12,437	$	12,455	One year or less	$	12,048	$	12,050	$	7,529	$	7,530
After one through five years	After one through five years	179,898		179,041		46,344		46,558		After one through five years	328,003		313,889		47,762		47,745
After five through ten years	After five through ten years	204,514		205,651		16,887		17,137		After five through ten years	184,927		175,390		11,372		11,373
After ten years	After ten years	140,685		144,789		2,755		2,755		After ten years	146,406		143,867		2,210		2,210
		$	536,427	$	540,883	$	78,423	$	78,905		$	671,384	$	645,196	$	68,873	$	68,858

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 Sale Held to Maturity
Amortized Fair Amortized Fair
(In thousands) Cost Value Cost Value
September 30, 2021 $ 441,300 $ 444,560 $ 44,697 $ 45,144
December 31, 2020 $ 251,913 $ 260,351 $ 57,110 $ 57,770

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	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
March 31, 2022	$	580,152	$	555,294	$	38,645	$	38,644

December 31, 2021	$	451,402	$	450,480	$	38,704	$	39,102

Note 5: Loans

The following is a summary of the Company’s loan portfolio by loan class.


(In thousands)	(In thousands)	September 30, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Secured by real estate:	Secured by real estate:					Secured by real estate:
Residential properties	Residential properties	$	773,928	$	738,340	Residential properties	$	1,142,726	$	774,699
Construction and land development	Construction and land development	465,564		403,496		Construction and land development	676,562		543,763
Farmland	Farmland	212,645		217,104		Farmland	221,706		211,503
Other commercial	Other commercial	1,339,214		1,224,633		Other commercial	1,953,941		1,396,085
Total real estate	Total real estate	2,791,351		2,583,573		Total real estate	3,994,935		2,926,050
Commercial and industrial loans	Commercial and industrial loans	534,160		635,714		Commercial and industrial loans	584,565		527,102
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	101,973		85,469		Agricultural production and other loans to farmers	70,276		86,520
Consumer and other loans	Consumer and other loans	98,602		73,976		Consumer and other loans	90,630		79,500
Total loans before allowance for loan losses	Total loans before allowance for loan losses	$	3,526,086	$	3,378,732	Total loans before allowance for loan losses	$	4,740,406	$	3,619,172

Loans are stated at the amount of unpaid principal, before allowance for loan losses. Interest on loans is calculated using the simple interest method on daily balances of the principal amount outstanding.

Loan Origination/Risk Management/Credit Concentration - The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. The Company’s Board of Directors reviews and approves these policies and procedures on a regular basis. Although the Company has a diversified loan portfolio, the Company has concentrations of credit risks related to the real estate market, including residential, commercial, and construction and land development lending. Most of the Company’s lending activity occurs within Mississippi, Louisiana, Alabama, and ~~Alabama.~~Florida.

The risk characteristics of the Company’s material portfolio segments are as follows:

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.

~~Table of Contents~~

Commercial Real Estate Loans - Commercial real estate loans include construction and land development loans, loans secured by farmland and other commercial real estate loans.

Construction and land development loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing.

Farmland loans are generally made for the purpose of acquiring land devoted to crop production or livestock, the propagation of timber or the operation of a similar type of business on the secured property. Sources of repayment for these loans generally include income generated from operations of a business on the property, rental income, or sales of timber. Repayment may be impacted by changes in economic conditions which affect underlying collateral values.

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Commercial real estate loans typically involve larger principal amounts and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Management monitors and evaluates commercial real estate loans based on collateral and risk grade criteria.

Commercial and Industrial Loans - The commercial and industrial loan portfolio consists of loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchase or other expansion projects. Commercial loan underwriting standards are designed to promote relationship banking rather than transactional banking and are underwritten based on the borrower’s expected ability to profitably operate its business. The cash flows of borrowers, however, may not be as expected and collateral securing these loans may fluctuate in value. Most commercial loans are secured by assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. In the case of loans secured by accounts receivable, the availability of funds for repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Consumer and Other Loans - The consumer and other loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s market area) and the creditworthiness of a borrower.

Loans that are 30 days or more past due based on payments received and applied to the loan are considered delinquent. Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that a borrower's financial condition is such that collection of interest, but not necessarily principal, is doubtful. A loan is typically placed on non-accrual when the contractual payment of principal or interest becomes 90 days past due unless the loan is well-secured and in the process of collection. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. Current year interest previously recorded, but deemed not collectible, is reversed and charged against current year income. Prior year interest previously recorded, but deemed not collectible, is charged against the allowance.

Payments subsequently received on non-accrual loans are applied to principal. Interest income is recognized to the extent that cash payments are received in excess of principal due. A loan may return to accrual status when principal and interest payments are no longer past due and collectability is reasonably assured.

The following table presents the recorded investment in nonaccrual loans, segregated by class.

~~Table of Contents~~


(In thousands)	(In thousands)	September 30, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Secured by real estate:	Secured by real estate:					Secured by real estate:
Residential properties	Residential properties	$	3,318	$	3,869	Residential properties	$	3,373	$	3,154
Construction and land development	Construction and land development	58		1,863		Construction and land development	169		51
Farmland	Farmland	1,893		158		Farmland	1,445		1,327
Other commercial	Other commercial	2,324		7,947		Other commercial	2,486		1,176
Total real estate	Total real estate	7,593		13,837		Total real estate	7,473		5,708
Commercial and industrial loans	Commercial and industrial loans	106		12		Commercial and industrial loans	85		20
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	135		85		Agricultural production and other loans to farmers	14		3
Consumer and other loans	Consumer and other loans	210		177		Consumer and other loans	26		166
Total nonaccrual loans	Total nonaccrual loans	$	8,044	$	14,111	Total nonaccrual loans	$	7,598	$	5,897

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 Days Past Due 90 Days or More Total Past Due Current Total Loans Past Due 90 Days or More and Accruing
September 30, 2021
Secured by real estate:
Residential properties $ 5,427 $ 2,008 $ 7,435 $ 766,493 $ 773,928 $ 696
Construction and land development 307 1,331 1,638 463,926 465,564 1,331
Farmland 189 515 704 211,941 212,645 46
Other commercial 4,037 317 4,354 1,334,860 1,339,214 14
Total real estate 9,960 4,171 14,131 2,777,220 2,791,351 2,087
Commercial and industrial loans 1,144 192 1,336 532,824 534,160 94
Agricultural production and other loans to farmers 23 226 249 101,724 101,973 94
Consumer loans 338 234 572 98,030 98,602 24
Total $ 11,465 $ 4,823 $ 16,288 $ 3,509,798 $ 3,526,086 $ 2,299

(In thousands) Past Due 30-89 Days Past Due 90 Days or More Total Past Due Current Total Loans Past Due 90 Days or More and Accruing
December 31, 2020
Secured by real estate:
Residential properties $ 5,836 $ 2,016 $ 7,852 $ 730,488 $ 738,340 $ 1,174
Construction and land development 713 3,086 3,799 399,697 403,496 1,843
Farmland 373 779 1,152 215,952 217,104 618
Other commercial 3,956 3,084 7,040 1,217,593 1,224,633 2,417
Total real estate 10,878 8,965 19,843 2,563,730 2,583,573 6,052
Commercial and industrial loans 2,195 135 2,330 633,384 635,714 135
Agricultural production and other loans to farmers 319 15 334 85,135 85,469 15
Consumer loans 444 278 722 73,254 73,976 101
Total $ 13,836 $ 9,393 $ 23,229 $ 3,355,503 $ 3,378,732 $ 6,303

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(In thousands)	Past Due 30-89 Days		Past Due 90 Days or More		Total Past Due		Current		Total Loans		Past Due 90 Days or More and Accruing
March 31, 2022
Secured by real estate:
Residential properties	$	6,845	$	2,039	$	8,884	$	1,133,842	$	1,142,726	$	732
Construction and land development	674		1,759		2,433		674,129		676,562		1,635
Farmland	794		1,328		2,122		219,584		221,706		58
Other commercial	3,914		1,397		5,311		1,948,630		1,953,941		145
Total real estate	12,227		6,523		18,750		3,976,185		3,994,935		2,570
Commercial and industrial loans	1,698		200		1,898		582,667		584,565		118
Agricultural production and other loans to farmers	189		—		189		70,087		70,276		—
Consumer loans	612		485		1,097		89,533		90,630		459
Total	$	14,726	$	7,208	$	21,934	$	4,718,472	$	4,740,406	$	3,147


(In thousands)	Past Due 30-89 Days		Past Due 90 Days or More		Total Past Due		Current		Total Loans		Past 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 development	367		1,085		1,452		542,311		543,763		1,085
Farmland	600		425		1,025		210,478		211,503		30
Other commercial	1,589		1,118		2,707		1,393,378		1,396,085		212
Total real estate	7,093		4,660		11,753		2,914,297		2,926,050		2,192
Commercial and industrial loans	824		623		1,447		525,655		527,102		606
Agricultural production and other loans to farmers	311		32		343		86,177		86,520		32
Consumer loans	374		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. 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.

1615

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Impaired loans, segregated by class were as follows:


		September 30, 2021							March 31, 2022
		Principal		Recorded		Related			Principal		Recorded		Related
(In thousands)	(In thousands)	Balance		Balance (1)		Allowance		(In thousands)	Balance		Balance (1)		Allowance
Impaired loans with no related allowance:	Impaired loans with no related allowance:							Impaired loans with no related allowance:
Secured by real estate:	Secured by real estate:							Secured by real estate:
Residential properties	Residential properties	$	7,666	$	5,099	$	—	Residential properties	$	7,328	$	5,373	$	—
Construction and land development	Construction and land development	3,669		1,656		—		Construction and land development	3,724		1,767		—
Farmland	Farmland	11,994		11,439		—		Farmland	3,161		2,738		—
Other commercial	Other commercial	4,015		2,448		—		Other commercial	5,081		3,685		—
Total real estate	Total real estate	27,344		20,642		—		Total real estate	19,294		13,563		—
Commercial and industrial	Commercial and industrial	19,723		19,393		—		Commercial and industrial	9,730		9,464		—
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	289		147		—		Agricultural production and other loans to farmers	40		14		—
Consumer and other loans	Consumer and other loans	236		210		—		Consumer and other loans	247		26		—
Total	Total	$	47,592	$	40,392	$	—	Total	$	29,311	$	23,067	$	—

Impaired loans with related allowance:	Impaired loans with related allowance:							Impaired loans with related allowance:
Secured by real estate:	Secured by real estate:							Secured by real estate:
Residential properties	Residential properties	$	1,060	$	1,060	$	9	Residential properties	$	809	$	809	$	7
Construction and land development	Construction and land development	—		—		—		Construction and land development	—		—		—
Farmland	Farmland	—		—		—		Farmland	—		—		—
Other commercial	Other commercial	1,948		1,948		276		Other commercial	1,865		1,865		308
Total real estate	Total real estate	3,008		3,008		285		Total real estate	2,674		2,674		315
Commercial and industrial	Commercial and industrial	2,324		2,324		991		Commercial and industrial	4,548		4,548		1,723
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	—		—		—		Agricultural production and other loans to farmers	—		—		—
Consumer and other loans	Consumer and other loans	—		—		—		Consumer and other loans	—		—		—
Total	Total	5,332		5,332		1,276		Total	7,222		7,222		2,038
Total impaired loans	Total impaired loans	$	52,924	$	45,724	$	1,276	Total impaired loans	$	36,533	$	30,289	$	2,038

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

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December 31, 2020
Principal Recorded Related
(In thousands) Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties $ 8,474 $ 5,795 $ —
Construction and land development 5,530 3,462 —
Farmland 11,024 10,584 —
Other commercial 8,439 5,149 —
Total real estate 33,467 24,990 —
Commercial and industrial 10,386 9,962 —
Agricultural production and other loans to farmers 156 97 —
Consumer and other loans 216 177 —
Total $ 44,225 $ 35,226 $ —
Impaired loans with related allowance:
Secured by real estate:
Residential properties $ 1,073 $ 1,073 $ 9
Construction and land development — — —
Farmland — — —
Other commercial 6,072 6,039 2,028
Total real estate 7,145 7,112 2,037
Commercial and industrial 4,430 4,430 2,158
Agricultural production and other loans to farmers — — —
Consumer and other loans — — —
Total 11,575 11,542 4,195
Total impaired loans $ 55,800 $ 46,768 $ 4,195


	December 31, 2021
	Principal		Recorded		Related
(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 development	3,615		1,649		—
Farmland	3,413		2,859		—
Other commercial	2,671		1,300		—
Total real estate	17,366		10,842		—
Commercial and industrial	17,528		17,300		—
Agricultural production and other loans to farmers	105		15		—
Consumer and other loans	249		166		—
Total	$	35,248	$	28,323	$	—

Impaired loans with related allowance:
Secured by real estate:
Residential properties	$	813	$	813	$	9
Construction and land development	—		—		—
Farmland	—		—		—
Other commercial	1,906		1,906		304
Total real estate	2,719		2,719		313
Commercial and industrial	4,542		4,542		1,701
Agricultural production and other loans to farmers	—		—		—
Consumer and other loans	—		—		—
Total	7,261		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 three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are presented below.
Three Months Ended September 30,
2021 2020
Average Interest Average Interest
(In thousands) Investment Recognized Investment Recognized
Secured by real estate:
  Residential properties $ 6,123 $ 42 $ 6,934 $ 38
  Construction and land development 1,139 23 2,026 31
  Farmland 11,150 104 10,515 127
  Other commercial 5,046 14 12,389 61
    Total real estate 23,458 183 31,864 257
Commercial and industrial 21,728 281 1,133 7
Agricultural production and other loans to farmers 146 3 97 —
Consumer loans 210 — 180 —
    Total $ 45,542 $ 467 $ 33,274 $ 264


		Nine Months Ended September 30,									Three Months Ended March 31,
		2021				2020					2022				2021
		Average		Interest		Average		Interest			Average		Interest		Average		Interest
(In thousands)	(In thousands)	Investment		Recognized		Investment		Recognized		(In thousands)	Investment		Recognized		Investment		Recognized
Secured by real estate:	Secured by real estate:									Secured by real estate:
Residential properties	Residential properties	$	6,489	$	106	$	5,773	$	114	Residential properties	$	5,704	$	9	$	6,657	$	37
Construction and land development	Construction and land development	2,107		80		2,013		96		Construction and land development	1,661		28		2,997		29
Farmland	Farmland	10,452		356		10,517		382		Farmland	2,743		20		10,432		124
Other commercial	Other commercial	6,827		129		11,876		176		Other commercial	4,128		22		9,311		57
Total real estate	Total real estate	25,875		671		30,179		768		Total real estate	14,236		79		29,397		247
Commercial and industrial	Commercial and industrial	20,076		753		689		20		Commercial and industrial	18,912		112		16,798		210
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	94		3		78		—		Agricultural production and other loans to farmers	7		—		81		—
Consumer loans	Consumer loans	191		—		182		—		Consumer loans	119		—		177		—
Total	Total	$	46,236	$	1,427	$	31,128	$	788	Total	$	33,274	$	191	$	46,453	$	457

There were no modifications classified as TDRs for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 or ~~2020.~~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 ~~Company did not forgive any principal on the above loans. The~~ allowance for loan losses attributable to restructured loans was ~~$169,000 and $2.0 million~~$139,000 at ~~September 30, 2021~~March 31, 2022 and December 31, 2020, respectively. The primary reason for the decrease in the allowance for loan losses attributable to restructured loans was a $1.8 million payment received in the first quarter of 2021 related to a loan classified as a TDR in 2019. The Company defines a payment default as a payment received more than 90 days after its due date.2021.

Note 6: Allowance for Loan Losses

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

~~Table of Contents~~

Credit Quality Indicators – The Company utilizes a risk grading matrix to assign a grade to each of its commercial and real estate loans. Loans are rated on a scale of 1 to 10. A description of the general characteristics of the 10 risk ratings is as follows:

•Risk Grades 1, 2, 3, 4 and 5 – These grades include loans to borrowers of solid credit quality with no higher than normal risk of loss. Borrowers in these categories have satisfactory financial strength and adequate cash flow coverage to service debt requirements. Collateral type and quality, as well as protection, are adequate. The borrower’s management is strong and capable, financial information is timely and accurate, and guarantor support is strong.

•Risk Grade 6 – Pass and Watch – Loans in this category are currently protected, but risks are emerging that warrant more than normal attention and have above average risk of loss. These factors require a higher level of monitoring and may include emerging balance sheet weaknesses, strained liquidity, increased leverage ratio, and weakening management. Collateral support is less marketable or limited use and, although the protection is sufficient, the loan-to-value ratio may not meet policy guidelines. Guarantors may have a limited ability and willingness to provide intermediate support. Also, considerations surrounding industry deterioration, increased competition and minor policy exceptions concerning structure or amortization may affect the rating of these loans.

•Risk Grade 7 – Special Mention – The Company’s special mention rating is intended to closely align with the regulatory definition. A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of repayment prospects. These weaknesses may include deteriorating balance sheets, strained liquidity and elevated leverage ratios. Cash flow and profitability are marginally sufficient to service debt and collateral is exhibiting signs of decline in value; however, protection is currently sufficient.

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Limited management experience or weaknesses have emerged requiring more than normal supervision and uncertainties regarding the quality of the financials are not explained. Guarantor has very limited ability and willingness to provide short-term support. Moderate policy exceptions concerning structure or amortization may be considered in order to provide relief to the borrower. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

•Risk Grade 8 – Substandard – A loan in this category is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. Factors affecting these loans may include balance sheet deterioration that has resulted in illiquid, highly leveraged or deficit net worth, cash flow that is not able to service debts as structured, collateral protection that may be inadequate, guarantor support that may be virtually non-existent, and management that is poor. Loans may require a major policy exception concerning structure or amortization. They are characterized by the distinct possibility that the Company will incur some loss if the deficiencies are not corrected.

•Risk Grade 9 – Doubtful – Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

•Risk Grade 10 – Loss – Loans are considered uncollectible and of such little value that continuing to carry them as an active asset is not warranted. It does not mean that there will be no recovery, but, rather, it is not practical or desirable to defer writing off these assets even though a partial recovery may be possible in the future.

Classified loans for the Company include loans in Risk Grades 8, 9 and 10. Loans may be classified but not considered impaired, due to one of the following reasons: (i) the loan falls below the established minimum dollar thresholds for loan impairment testing or (ii) the loan was tested for impairment, but not deemed to be impaired.

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

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		Risk Grades		Risk Grade		Risk Grade		Risk Grade					Risk Grades		Risk Grade		Risk Grade		Risk Grade
(In thousands)	(In thousands)	1-6		7		8		9		Total		(In thousands)	1-6		7		8		9		Total
September 30, 2021
March 31, 2022												March 31, 2022
Secured by real estate:	Secured by real estate:											Secured by real estate:
Residential properties	Residential properties	$	759,167	$	21	$	14,740	$	—	$	773,928	Residential properties	$	1,130,830	$	202	$	11,694	$	—	$	1,142,726
Construction and land development	Construction and land development	460,712		4,107		745		—		465,564		Construction and land development	670,156		4,107		2,299		—		676,562
Farmland	Farmland	199,608		—		13,037		—		212,645		Farmland	218,673		—		3,033		—		221,706
Other commercial	Other commercial	1,330,515		1,001		7,621		77		1,339,214		Other commercial	1,939,140		948		13,853		—		1,953,941
Total real estate	Total real estate	2,750,002		5,129		36,143		77		2,791,351		Total real estate	3,958,799		5,257		30,879		—		3,994,935
Commercial and industrial	Commercial and industrial	510,359		—		23,756		45		534,160		Commercial and industrial	567,923		—		16,642		—		584,565
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	101,549		71		353		—		101,973		Agricultural production and other loans to farmers	70,080		—		196		—		70,276
Consumer and other loans	Consumer and other loans	98,302		—		300		—		98,602		Consumer and other loans	90,501		—		129		—		90,630

Total	Total	$	3,460,212	$	5,200	$	60,552	$	122	$	3,526,086	Total	$	4,687,303	$	5,257	$	47,846	$	—	$	4,740,406


		Risk Grades		Risk Grade		Risk Grade		Risk Grade					Risk Grades		Risk Grade		Risk Grade		Risk Grade
(In thousands)	(In thousands)	1-6		7		8		9		Total		(In thousands)	1-6		7		8		9		Total
December 31, 2020
December 31, 2021												December 31, 2021
Secured by real estate:	Secured by real estate:											Secured by real estate:
Residential properties	Residential properties	$	721,024	$	—	$	17,316	$	—	$	738,340	Residential properties	$	763,116	$	—	$	11,583	$	—	$	774,699
Construction and land development	Construction and land development	401,347		—		2,149		—		403,496		Construction and land development	537,573		4,097		2,093		—		543,763
Farmland	Farmland	205,211		—		11,893		—		217,104		Farmland	208,318		—		3,185		—		211,503
Other commercial	Other commercial	1,209,365		—		15,041		227		1,224,633		Other commercial	1,386,240		—		9,845		—		1,396,085
Total real estate	Total real estate	2,536,947		—		46,399		227		2,583,573		Total real estate	2,895,247		4,097		26,706		—		2,926,050
Commercial and industrial	Commercial and industrial	619,086		51		16,526		51		635,714		Commercial and industrial	503,603		—		23,496		3		527,102
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	85,197		91		181		—		85,469		Agricultural production and other loans to farmers	86,292		—		228		—		86,520
Consumer and other loans	Consumer and other loans	73,560		—		416		—		73,976		Consumer and other loans	79,176		—		306		18		79,500

Total	Total	$	3,314,790	$	142	$	63,522	$	278	$	3,378,732	Total	$	3,564,318	$	4,097	$	50,736	$	21	$	3,619,172

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Transactions in the allowance for loan losses and balances in the loan portfolio by loan segment are as follows:

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(In thousands)	(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential		Consumer and other		Total		(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential		Consumer and other		Total
Three Months Ended September 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Allowance for loan losses:	Allowance for loan losses:											Allowance for loan losses:
Beginning balance	Beginning balance	$	6,493	$	23,051	$	10,234	$	2,226	$	42,004	Beginning balance	$	6,556	$	27,133	$	9,488	$	1,823	$	45,000
Provision for loan losses	Provision for loan losses	(565)		616		352		1,066		1,469		Provision for loan losses	(468)		75		311		299		217
Recoveries on loans	Recoveries on loans	175		1,625		59		449		2,308		Recoveries on loans	22		141		54		791		1,008
Loans charged off	Loans charged off	(37)		(349)		(122)		(1,272)		(1,780)		Loans charged off	(58)		(437)		(250)		(1,242)		(1,987)
Ending balance	Ending balance	$	6,066	$	24,943	$	10,523	$	2,469	$	44,001��	Ending balance	$	6,052	$	26,912	$	9,603	$	1,671	$	44,238

Nine Months Ended September 30, 2021
Allowance for loan losses:
Beginning balance		$	6,337	$	20,163	$	7,900	$	1,600	$	36,000
Provision for loan losses		(433)		3,481		2,581		1,766		7,395
Recoveries on loans		479		2,277		340		2,046		5,142
Loans charged off		(317)		(978)		(298)		(2,943)		(4,536)
Ending balance		$	6,066	$	24,943	$	10,523	$	2,469	$	44,001

Period End Allowance Balance Allocated To:	Period End Allowance Balance Allocated To:											Period End Allowance Balance Allocated To:
Individually evaluated for impairment	Individually evaluated for impairment	$	991	$	276	$	9	$	—	$	1,276	Individually evaluated for impairment	$	1,723	$	308	$	7	$	—	$	2,038
Collectively evaluated for impairment	Collectively evaluated for impairment	5,075		24,667		10,514		2,469		42,725		Collectively evaluated for impairment	4,329		26,604		9,596		1,671		42,200
Ending balance	Ending balance	$	6,066	$	24,943	$	10,523	$	2,469	$	44,001	Ending balance	$	6,052	$	26,912	$	9,603	$	1,671	$	44,238

(In thousands) Commercial and Industrial Commercial Real Estate Residential Consumer and other Unallocated Total
Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance $ 3,269 $ 12,580 $ 5,968 $ 1,340 $ 902 $ 24,059
Provision for loan losses 2,812 1,835 170 (82) (64) 4,671
Recoveries on loans 34 103 140 827 — 1,104
Loans charged off (261) (1,960) (34) (731) — (2,986)
Balance, end of year $ 5,854 $ 12,558 $ 6,244 $ 1,354 $ 838 $ 26,848
Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance $ 2,773 $ 10,766 $ 5,568 $ 1,135 $ 1,258 $ 21,500
Provision for loan losses 3,427 3,824 707 168 (420) 7,706
Recoveries on loans 148 150 237 2,619 — 3,154
Loans charged off (494) (2,182) (268) (2,568) — (5,512)
Ending balance $ 5,854 $ 12,558 $ 6,244 $ 1,354 $ 838 $ 26,848
Period End Allowance Balance Allocated To:
Individually evaluated for impairment $ 471 $ 1,949 $ 17 $ — $ — $ 2,437
Collectively evaluated for impairment 5,383 10,609 6,227 1,354 838 24,411
Ending balance $ 5,854 $ 12,558 $ 6,244 $ 1,354 $ 838 $ 26,848

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(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential		Consumer and other		Total
Three Months Ended March 31, 2021
Allowance for loan losses:
Beginning balance	$	6,337	$	20,163	$	7,900	$	1,600	$	36,000
Provision for loan losses	(290)		2,355		1,581		243		3,889
Recoveries on loans	107		413		84		882		1,486
Loans charged off	(19)		(315)		(126)		(874)		(1,334)
Balance, end of year	$	6,135	$	22,616	$	9,439	$	1,851	$	40,041









Period End Allowance Balance Allocated To:
Individually evaluated for impairment	$	1,725	$	254	$	9	$	—	$	1,988
Collectively evaluated for impairment	4,410		22,362		9,430		1,851		38,053
Ending balance	$	6,135	$	22,616	$	9,439	$	1,851	$	40,041

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) Commercial and Industrial Commercial Real Estate Residential Consumer and other Total
September 30, 2021
Individually evaluated for impairment $ 21,611 $ 14,046 $ 2,369 $ 174 $ 38,200
Collectively evaluated for impairment 512,549 2,003,377 771,559 200,401 3,487,886
Ending balance $ 534,160 $ 2,017,423 $ 773,928 $ 200,575 $ 3,526,086
December 31, 2020
Individually evaluated for impairment $ 14,392 $ 25,234 $ 6,868 $ 274 $ 46,768
Collectively evaluated for impairment 621,322 1,819,999 731,472 159,171 3,331,964
Ending balance $ 635,714 $ 1,845,233 $ 738,340 $ 159,445 $ 3,378,732

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(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential		Consumer and other		Total
March 31, 2022
Individually evaluated for impairment	$	13,928	$	4,235	$	1,629	$	—	$	19,792
Collectively evaluated for impairment	570,637		2,847,974		1,141,097		160,906		4,720,614
Ending balance	$	584,565	$	2,852,209	$	1,142,726	$	160,906	$	4,740,406

December 31, 2021
Individually evaluated for impairment	$	21,822	$	3,434	$	1,640	$	166	$	27,062
Collectively evaluated for impairment	505,280		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 capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The U.S. capital rules, which in substance adopted the international Basel III Capital Rules and accordingly are referred to as the Basel III rules, became effective for both the Company and the Bank on January 1, 2015, with full compliance with all of the requirements being phased in over a multi-year schedule and fully phased in by January 1, 2019. The Basel III rules require banking institutions to comply with three minimum risk-based capital ratios for common equity Tier 1 (“CET1”) capital, Tier 1 capital, and total capital, as well as a minimum leverage ratio based on Tier 1 capital.

Under the Basel III rules, the Company must maintain a capital conservation buffer of CET1 capital above the minimum risk-based capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress and effectively increases the minimum required risk-weighted capital ratios. If, after deducting the buffer amount from its CET1 capital, Tier 1 capital, and total capital, any of these amounts results in a risk-based capital ratio below the minimum, a banking institution will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The capital conservation buffer, which ~~was~~is 2.50% ~~at September 30, 2021 and December 31, 2020,~~, is included in the minimum capital requirements relative to risk-weighted assets in the following table. Management believes as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company and the Bank met Basel III minimum capital requirements to which they are subject.

The Bank is also subject to capital requirements under the prompt corrective action regime. As of ~~September 30, 2021,~~March 31, 2022, the ~~most recent notification from~~Bank maintained each of the ~~Federal Deposit Insurance Corporation~~capital ratios required to be categorized ~~the Bank~~ as well capitalized under the regulatory framework for prompt corrective action. The prompt corrective action framework applies only to insured depository institutions, such as the Bank, and not to their holding companies, such as the Company. To be categorized as well capitalized, an insured depository institution must maintain certain ratios of CET1 capital, Tier 1 capital and total capital to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets. There are no conditions or events since ~~that notification~~March 31, 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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 included ~~$51.0~~$51.1 million and ~~$50.7~~$51.0 million of trust preferred securities issued by the trusts (net of

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investment in the trusts), respectively. The Bank did not have any additional Tier 1 capital beyond CET1 capital as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital for both the Company and the Bank includes a permissible portion of the allowance for loan losses. In addition, Tier 2 capital at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 for the Company includes ~~$58.8~~$80.6 million and ~~$58.6~~$58.8 million, respectively, of subordinated debentures. Capital levels required to be considered well capitalized are based upon prompt corrective action ~~regulations, as amended to reflect the changes under Basel III.~~regulations.

The following table presents actual and required capital ratios for the Company and the Bank under the Basel III rules.


		Actual				Minimum Requirement				Required to be Well Capitalized					Actual				Minimum Requirement				Required to be Well Capitalized
(In thousands)	(In thousands)	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio		(In thousands)	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
September 30, 2021:
March 31, 2022:														March 31, 2022:
Company:	Company:													Company:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	374,642	9.57	%	$	273,936	7.00	%	N/A		N/A		CET1 Capital to Risk-Weighted Assets	$	381,074	7.52	%	$	354,634	7.00	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	425,598		10.88	%	332,636		8.50	%	N/A		N/A		Tier 1 Capital to Risk-Weighted Assets	432,154		8.53	%	430,626		8.50	%	N/A		N/A
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	580,350		13.50	%	410,904		10.50	%	N/A		N/A		Total Capital to Risk-Weighted Assets	556,947		10.99	%	531,950		10.50	%	N/A		N/A
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	425,598		8.40	%	202,413		4.00	%	N/A		N/A		Tier 1 Capital to Average Assets	432,154		7.73	%	223,690		4.00	%	N/A		N/A

Bank:	Bank:													Bank:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	420,455	10.77	%	$	273,372	7.00	%	$	253,845	6.50	%	CET1 Capital to Risk-Weighted Assets	$	510,266	10.23	%	$	349,248	7.00	%	$	324,301	6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	420,455		10.77	%	331,951		8.50	%	312,425		8.00	%	Tier 1 Capital to Risk-Weighted Assets	510,266		10.23	%	424,087		8.50	%	399,140		8.00	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	464,456		11.89	%	410,058		10.50	%	390,531		10.00	%	Total Capital to Risk-Weighted Assets	554,504		11.11	%	523,872		10.50	%	198,925		10.00	%
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	420,455		8.32	%	202,059		4.00	%	252,574		5.00	%	Tier 1 Capital to Average Assets	510,266		9.14	%	223,200		4.00	%	279,000		5.00	%

December 31, 2020:
December 31, 2021:														December 31, 2021:
Company:	Company:													Company:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	339,936	9.94	%	$	239,437	7.00	%	N/A		N/A		CET1 Capital to Risk-Weighted Assets	$	382,736	9.40	%	$	285,078	7.00	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	390,713		11.42	%	290,745		8.50	%	N/A		N/A		Tier 1 Capital to Risk-Weighted Assets	433,754		10.65	%	346,166		8.50	%	N/A		N/A
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	485,357		14.19	%	359,155		10.50	%	N/A		N/A		Total Capital to Risk-Weighted Assets	537,541		13.20	%	427,617		10.50	%	N/A		N/A
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	390,713		8.55	%	182,853		4.00	%	N/A		N/A		Tier 1 Capital to Average Assets	433,754		8.46	%	205,072		4.00	%	N/A		N/A

Bank:	Bank:													Bank:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	387,231	11.36	%	$	238,629	7.00	%	$	221,584	6.50	%	CET1 Capital to Risk-Weighted Assets	$	428,602	10.55	%	$	284,509	7.00	%	$	264,187	6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	387,231		11.36	%	289,763		8.50	%	272,719		8.00	%	Tier 1 Capital to Risk-Weighted Assets	428,602		10.55	%	345,475		8.50	%	325,153		8.00	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	423,231		12.42	%	357,943		10.50	%	340,898		10.00	%	Total Capital to Risk-Weighted Assets	473,602		11.65	%	426,763		10.50	%	406,441		10.00	%
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	387,231		8.49	%	182,531		4.00	%	228,164		5.00	%	Tier 1 Capital to Average Assets	428,602		8.37	%	204,714		4.00	%	255,893		5.00	%

The ability of the Company to pay future dividends, pay its expenses and retire its debt is dependent upon future income tax benefits and dividends paid to the Company by the Bank. The Bank is subject to dividend restrictions as imposed by Federal and state regulatory authorities.

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Note 8: Fair Value

Financial Instruments Measured at Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon:

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date

Level 2

Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3

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

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

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

Securities - The Company utilizes an independent pricing service to advise it on the value of the securities portfolio. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one, or a combination of several, observable inputs such as benchmark yields, reported trades, benchmark securities, bids, offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. For Level 3 securities, in addition to the inputs noted above, inputs used by the pricing service to determine fair value may also include estimated duration, municipal bond interest rate curve, and tax effected yield. There were no Level 3 securities as of ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021. The Company’s treasury department and Asset Liability Management Committee review the aggregate fair values of the securities portfolio.

Impaired loans - Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment on a non-recurring basis. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans. Specific allowances for impaired loans are based on comparisons of the recorded carrying values of the loans to the present value of the estimated cash flows of these loans at each loan’s effective interest rate or the fair value of the collateral net of selling costs if the loan is collateral dependent. Impaired loans are primarily collateral dependent loans and are assessed using a fair value approach. Fair value estimates for collateral dependent loans are derived from appraised values based on the current market value or as-is value of the property being appraised. Appraisals are based on certain assumptions, which may include construction or development status and the highest and best use of the property. The appraisals are reviewed by the Company’s appraisal department to ensure they are acceptable. Impaired loans are classified within Level 3 of the fair value hierarchy. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.

Other Real Estate Owned - Other real estate owned is initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated cost to sell. Fair value estimates begin with obtaining a current independent appraisal or internal evaluation of the collateral value. Subsequent

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to foreclosure, valuations are performed periodically by the Company’s appraisal department and any subsequent reduction in value is recognized by a charge to income.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified appraisers whose qualifications and licenses have been reviewed by the Company. These appraisals are reviewed by a member of the Company’s appraisal department to ensure they are acceptable. Appraised values are adjusted down for costs associated with asset disposal. The significant unobservable inputs (Level 3) used in the fair value measurement of collateral for collateral impaired loans and other real estate owned are primarily based on appraisals, observable market conditions, and other factors which may affect collectability. The appraisals use marketability and comparability discounts, which generally range from 5% to 15%. Assessment of the significance of a specific input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. It is reasonably possible that a change in the estimated fair value for assets measured using Level 3 inputs could occur in the future.

Assets and liabilities measured at fair value on a recurring basis are summarized below:


		Fair		Fair Value Measurements Using							Fair		Fair Value Measurements Using
(In thousands)	(In thousands)	Value		Level 1		Level 2		Level 3		(In thousands)	Value		Level 1		Level 2		Level 3
September 30, 2021
March 31, 2022										March 31, 2022
U.S. Treasuries										U.S. Treasuries	$	40,149	$	—	$	40,149	$	—
U.S. Government agency obligations	U.S. Government agency obligations	$	299,841	$	—	$	299,841	$	—	U.S. Government agency obligations	367,087		—		367,087		—
Residential mortgage-backed securities	Residential mortgage-backed securities	121,846		—		121,846		—		Residential mortgage-backed securities	121,314		—		121,314		—
Commercial mortgage-backed securities	Commercial mortgage-backed securities	14,894		—		14,894		—		Commercial mortgage-backed securities	13,254		—		13,254		—
Asset-backed securities	Asset-backed securities	13,539		—		13,539		—		Asset-backed securities	12,354		—		12,354		—
Corporate investments	Corporate investments	44,150		—		44,150		—		Corporate investments	45,392		—		45,392		—
State and political subdivisions	State and political subdivisions	46,613		—		46,613		—		State and political subdivisions	45,646		—		45,646		—
Total securities available for sale	Total securities available for sale	$	540,883	$	—	$	540,883	$	—	Total securities available for sale	$	645,196	$	—	$	645,196	$	—


December 31, 2020
December 31, 2021										December 31, 2021
U.S. Government agency obligations	U.S. Government agency obligations	$	12,434	$	—	$	12,434	$	—	U.S. Government agency obligations	$	350,250	$	—	$	350,250	$	—
Residential mortgage-backed securities	Residential mortgage-backed securities	187,212		—		187,212		—		Residential mortgage-backed securities	109,787		—		109,787		—
Commercial mortgage-backed securities	Commercial mortgage-backed securities	17,331		—		17,331		—		Commercial mortgage-backed securities	14,276		—		14,276		—
Asset backed securities	Asset backed securities	14,447		—		14,447		—		Asset backed securities	13,107		—		13,107		—
Corporate investments	Corporate investments	33,148		—		33,148		—		Corporate investments	44,510		—		44,510		—
State and political subdivisions	State and political subdivisions	46,801		—		46,801		—		State and political subdivisions	44,684		—		44,684		—
Total securities available for sale	Total securities available for sale	$	311,373	$	—	$	311,373	$	—	Total securities available for sale	$	576,614	$	—	$	576,614	$	—

Assets measured at fair value on a non-recurring basis are summarized below.
Fair Fair Value Measurements Using
(In thousands) Value Level 1 Level 2 Level 3
Impaired loans, net of allowance for loan losses:
September 30, 2021 $ 44,448 $ — $ — $ 44,448
December 31, 2020 $ 42,573 $ — $ — $ 42,573
Other real estate owned:
September 30, 2021 $ 6,989 $ — $ — $ 6,989
December 31, 2020 $ 6,754 $ — $ — $ 6,754


	Fair		Fair Value Measurements Using
(In thousands)	Value		Level 1		Level 2		Level 3
Impaired loans, net of allowance for loan losses:
March 31, 2022	$	28,251	$	—	$	—	$	28,251
December 31, 2021	$	33,570	$	—	$	—	$	33,570

Other real estate owned:
March 31, 2022	$	7,363	$	—	$	—	$	7,363
December 31, 2021	$	5,815	$	—	$	—	$	5,815

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis.

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Qualitative Information about Level 3 Fair Value Measurements

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

September 30, 2021

March 31, 2022

Impaired loans, net of specific allowance

44,448

Third-party appraisals

Selling costs

5% - 10%

Impaired loans, net of specific allowance

28,251

Third-party appraisals

Selling costs

5% - 10%

Other real estate owned

6,989

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

Other real estate owned

7,363

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

Qualitative Information about Level 3 Fair Value Measurements

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

December 31, 2020

December 31, 2021

Impaired loans, net of specific allowance

42,573

Third-party appraisals

Selling costs

5% - 10%

Impaired loans, net of specific allowance

33,570

Third-party appraisals

Selling costs

5% - 10%

Other real estate owned

6,754

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

Other real estate owned

5,815

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

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:


		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(In thousands)	(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:	Financial assets:									Financial assets:
Level 1 inputs:	Level 1 inputs:									Level 1 inputs:
Cash and cash equivalents	Cash and cash equivalents	$	695,069	$	695,069	$	637,545	$	637,545	Cash and cash equivalents	$	695,352	$	695,352	$	664,165	$	664,165

Level 2 inputs:	Level 2 inputs:									Level 2 inputs:
Securities held to maturity	Securities held to maturity	78,423		78,905		93,766		94,436		Securities held to maturity	68,873		68,858		71,648		72,084
FHLB stock	FHLB stock	2,729		2,729		2,557		2,557		FHLB stock	4,529		4,529		2,731		2,731
Accrued interest receivable	Accrued interest receivable	17,120		17,120		18,061		18,061		Accrued interest receivable	17,756		17,756		14,329		14,329
Level 3 inputs:	Level 3 inputs:									Level 3 inputs:
Loans held for sale	Loans held for sale	13,904		13,904		28,684		28,684		Loans held for sale	11,744		11,744		10,621		10,621
Loans, net	Loans, net	3,482,085		3,462,588		3,342,732		3,348,872		Loans, net	4,696,168		4,663,400		3,574,172		3,548,595

Financial liabilities:	Financial liabilities:									Financial liabilities:
Level 2 inputs:	Level 2 inputs:									Level 2 inputs:
Deposits	Deposits	4,529,868		4,435,783		4,152,810		4,153,402		Deposits	5,853,097		5,514,119		4,622,116		4,493,657
FHLB and other borrowings	FHLB and other borrowings	31,026		31,778		33,771		34,941		FHLB and other borrowings	40,453		40,584		20,501		21,024
Subordinated debentures	Subordinated debentures	111,411		111,411		111,124		111,124		Subordinated debentures	133,338		133,338		111,509		111,509
Accrued interest payable	Accrued interest payable	2,647		2,647		2,709		2,709		Accrued interest payable	2,945		2,945		1,425		1,425

Note 9: Subordinated Debentures and Trust Preferred Securities

Subordinated Debentures

On June 4, 2020, the Company entered into a Subordinated Note Purchase Agreement with certain qualified institutional buyers and institutional accredited investors pursuant to which the Company issued and sold $60.0 million in aggregate principal amount of its 6.000% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030 (the “Notes”). The Company incurred issuance costs of $1.4 million in conjunction with the issuance of the Notes. These issuance costs are netted with the balance of the Notes on the Company’s ~~Condensed~~ Consolidated Balance Sheets and will be amortized over the life of the Notes. At both March 31, 2022 and December 31, 2021, the remaining unamortized balance of these issuance costs was $1.2 million. The Notes initially bear interest at a rate of 6.000% per annum from and including June 4, 2020, to but excluding June 15, 2025 or the early redemption date, with interest during this period payable semiannually in arrears. From and including June 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 586 basis points, with interest during this period payable quarterly in arrears. The Company used the proceeds of the private placement for general corporate purposes, including improving the Company’s liquidity and capital position.

The Notes are not redeemable by the Company, in whole or in part, prior to the fifth anniversary of the original date of issue, except that the Notes may be redeemed at any time in whole but not in part in the event of a Tier 2 Capital Event, a Tax Event, or an Investment Company Event, each as defined and described in the Notes. On or after the fifth anniversary of the original date of issue, the Notes ~~shall be~~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.

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quarterly in arrears. BancPlus will be entitled to redeem the Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the Subordinated Notes in whole upon certain other events. The Subordinated Notes are not subject to redemption at the option of the holder. The Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at March 31, 2022 due to the remaining purchase premium of $733,000, 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. ~~These~~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.

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

The following is a summary of subordinated debentures payable to statutory trusts.


(In thousands)	(In thousands)	Year of Maturity	Interest Rate	September 30, 2021		December 31, 2020		(In thousands)	Year of Maturity	Interest Rate	March 31, 2022		December 31, 2021
First Bancshares of Baton Rouge Statutory Trust I	First Bancshares of Baton Rouge Statutory Trust I	2034	3 month LIBOR, plus 2.50%	$	4,124	$	4,124	First Bancshares of Baton Rouge Statutory Trust I	2034	3 month LIBOR, plus 2.50%	$	4,124	$	4,124
State Capital Statutory Trust IV	State Capital Statutory Trust IV	2035	3 month LIBOR, plus 1.99%	5,155		5,155		State Capital Statutory Trust IV	2035	3 month LIBOR, plus 1.99%	5,155		5,155
BancPlus Statutory Trust II	BancPlus Statutory Trust II	2036	3 month LIBOR, plus 1.50%	20,619		20,619		BancPlus Statutory Trust II	2036	3 month LIBOR, plus 1.50%	20,619		20,619
BancPlus Statutory Trust III	BancPlus Statutory Trust III	2037	3 month LIBOR, plus 1.35%	20,619		20,619		BancPlus Statutory Trust III	2037	3 month LIBOR, plus 1.35%	20,619		20,619
State Capital Master Trust	State Capital Master Trust	2037	3 month LIBOR, plus 1.46%	6,186		6,186		State Capital Master Trust	2037	3 month LIBOR, plus 1.46%	6,186		6,186
				$	56,703	$	56,703				$	56,703	$	56,703

The subordinated debentures payable to statutory trusts vary from the amount carried on the ~~Condensed~~ Consolidated Balance Sheets at ~~September 30, 2021~~March 31, 2022 due to the remaining purchase discount of ~~$4.0~~$3.9 million, which was established upon the ~~Merger~~merger with State Capital Corp. (“SCC”), in which BancPlus acquired SCC, the holding company of State Bank & Trust Company (“State Bank”) by a statutory share exchange and SCC was merged with and into BancPlus and State Bank was merged with and into BankPlus, with BancPlus and BankPlus surviving the mergers, which closed on April 1, 2020, and is being amortized over the remaining life of the debentures.

Interest rates adjust quarterly for the subordinated debentures with rates that are indexed with LIBOR. On March 15, 2022 the Adjustable Interest Rate (LIBOR) Act was signed into law as part of the Consolidated Appropriations Act, 2022. The Adjustable Interest Rate (LIBOR) Act establishes a nationwide process for replacing LIBOR in financial contracts that mature after the cessation of the overnight, one-, three-, six- and 12-month U.S. dollar LIBOR tenors on June 30, 2023 and that do not provide for an effective means to replace LIBOR upon its cessation.For contracts in which a party has the discretion to identify a replacement rate, the Act also provides a safe harbor to parties if they choose the Secured Overnight Financing Rate (“SOFR”)-based benchmark replacement rate to be identified by the Board of Governors of the Federal Reserve System.We are currently monitoring ~~the actions of LIBOR’s regulator and the implementation of alternative reference rates in advance of the expected discontinuation of LIBOR~~these developments to determine any potential impact on the subordinated debentures.

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

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Note 10: Employee Benefits

The Company has an Employee Stock Ownership Plan (“ESOP”) that covers all employees of the Bank who are at least 21 years of age and work in a position requiring at least 1000 hours of service annually. The plan also has 401(k) provisions that allow for employee tax deferred contributions. Participants may make contributions to the ESOP in accordance with applicable regulations and the ESOP’s provisions. The Company makes a 3% “safe harbor” matching contribution, 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 1,500,732 ~~and 1,499,459~~ shares of the Company's common stock at ~~September 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively.~~2021. The ESOP entered into loans, collateralized by ESOP shares, with the Company in connection with the repurchase of shares of Company stock that were sold by participants in accordance with diversification provisions of the ESOP. A total of 176,786 shares were repurchased through 2011, an additional 77,000 shares were repurchased under this program in 2012, and 27,594 shares were repurchased under this program in 2019. These unallocated shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Dividends on unallocated shares that are used to repay the loan are treated as compensation expense.

~~Table~~ As of ~~Contents~~

March 31, 2022, the ESOP had zero outstanding loans with the Company.

The following table presents information related to the Company’s ESOP-owned shares.


(In thousands, except share data)	(In thousands, except share data)	September 30, 2021		December 31, 2020		(In thousands, except share data)	March 31, 2022		December 31, 2021
Allocated shares	Allocated shares	1,469,547		1,449,335		Allocated shares	1,500,732		1,472,334
Unearned shares	Unearned shares	31,185		50,124		Unearned shares	—		28,398
Total ESOP shares	Total ESOP shares	1,500,732		1,499,459		Total ESOP shares	1,500,732		1,500,732

Fair value of unearned shares	Fair value of unearned shares	$	2,050	$	2,569	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 ~~Condensed~~ 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 ~~Condensed~~ Consolidated Statements of Shareholders’ Equity. The fair value of allocated shares held by the ESOP at ~~September 30, 2021~~March 31, 2022 was ~~$96.6~~$102.4 million, based on the Company’s previously disclosed appraised value of ~~$65.75~~$68.25 per share of common stock. The fair value at December 31, ~~2020~~2021 was ~~$74.3~~$100.5 million, based on the Company’s previously disclosed appraised value of ~~$51.25~~$68.25 per share of common stock. As previously disclosed, these appraised values were determined solely for purposes of the ESOP’s administration and are therefore subject to certain limitations, qualifications and assumptions and may not reflect the fair value of the Company’s common stock and should not be relied on for any reason. In particular, the COVID-19 pandemic has had a significant impact on the trading markets for equity securities, including the value of equity securities of banking institutions. Neither the Company nor the ESOP has any obligation to seek an adjusted valuation, to use these appraised values for any other purpose or, if the Company or the ESOP obtains a new appraised value, to disclose such new appraised value.

~~State Bank Employee Stock Ownership Plan~~

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

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

~~State Bank Defined Contribution Plan~~

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

~~State Bank Defined Benefit Pension Plan~~

As a result of the Merger, the Company assumed the Mississippi Southern Bank Pension Plan (“State Bank Pension Plan”), a defined benefit pension plan which was closed to new participants and benefits were frozen effective as of December 31, 2002.

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While no additional benefits accrue, the Company’s cumulative obligation is subject to adjustment due to changes in actuarial assumptions such as expected mortality and changes in interest rates. Net periodic pension costs for the quarterly period ended September 30, 2021 were not material to the Company’s Condensed Consolidated Statements of Income. The Company received approval of the termination of the State Bank Pension Plan from the IRS and plans to distribute all assets held by the State Bank Pension Plan in accordance with its terms as soon as reasonably possible.

Note 11: Equity

The Company’s Articles of Incorporation authorize 10,000,000 shares of preferred stock with no par value, which may be issued from time to time and in one or more classes or series upon authorization of the Board of Directors. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were zero shares of preferred stock issued and outstanding.

Note 12: Stock Based Compensation

Under the Company’s long-term incentive program, certain officers, employees and directors are eligible to receive equity-based awards under the 2018 Long-Term Incentive Plan (“LTIP”). Restricted stock awards (“RSAs”) granted under the LTIP generally vest over one to five years. Unvested RSAs are included in the Company’s common stock outstanding. Compensation expense

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for RSAs granted under the LTIP is recognized over the vesting period of the awards based on the fair value of the stock at the grant date, with forfeitures recognized as they occur.

Stock based compensation that has been charged against income was ~~$1.7 million~~$680,000 for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~$1.1 million~~$487,000 for same period of ~~2020.~~2021. There were ~~1,830 and~~ zero shares forfeited during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020, respectively.~~2021. As of ~~September 30, 2021,~~March 31, 2022, there was ~~$6.0~~$6.4 million of total unrecognized compensation cost related to unvested RSAs. The cost is expected to be recognized over a remaining weighted average period of 3.0 years.

A summary of the Company’s equity-based award activity and related information for the Company’s RSAs is as follows:


		Nine Months Ended							Three Months Ended
		September 30, 2021			September 30, 2020				March 31, 2022			March 31, 2021
		Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value			Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Beginning of period	Beginning of period	91,109	$	50.60	69,097	$	53.67	Beginning of period	144,572	$	51.56	91,109	$	50.60
Granted	Granted	85,147	51.59		39,155	45.36		Granted	21,367	68.25		—	—
Vested	Vested	(33,545)	52.03		(17,143)	51.03		Vested	(6,077)	50.00		(9,878)	50.91
Forfeited	Forfeited	(1,830)	49.46		—	—		Forfeited	—	—		—	—
End of period	End of period	140,881	$	50.88	91,109	$	50.60	End of period	159,862	$	53.85	81,231	$	50.56

Note 13: Contingencies

On March 20, 2019, a complaint (the “Complaint”), Mills v. BankPlus, et al., Case #3:19-cv-00196-CWR-FKB, was filed in the United States District Court for the Southern District of Mississippi, Northern Division, by Alysson Mills, in her capacity as Court-appointed Receiver for Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), naming the Bank, 3 former Bank employees, 1 one then-current ~~Bank~~BankPlus employee and other defendants, including defendants affiliated and unaffiliated with ~~the Bank~~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 ~~the Bank.~~BankPlus. A related motion for reconsideration was filed by ~~the Bank~~BankPlus on August 9, 2021. On September 30, 2021, an order was entered to consolidate for purposes of discovery this case (No.

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3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the Receiver. ~~By subsequent text-only order~~A Case Management Order (No.: 3:~~18-cv-00866-CWR-FKB) dated October 10, 2021,~~22-cv-36-CWRFKB) was entered on January 31, 2022 for the sole purpose of managing consolidated discovery in the four ~~consolidated cases are stayed until January 31, 2022.~~related cases.

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.

~~Note 14: COVID-19~~

In response to the economic impact of the COVID-19 pandemic, on March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. It contained substantial lending, tax and spending provisions, including creating and appropriating an initial $39 billion of funding to the Paycheck Protection Program (“PPP”), designed to aid small and medium-sized businesses through federally guaranteed, forgivable loans distributed by banks. On April 24, 2020, Congress enacted the Paycheck Protection Program and Healthcare Enhancement Act (the “Enhancement Act”) to, among other things, increase the available funding under the PPP by $310 billion to a total of $659 billion. The deadline for the first round of loan applications was August 8, 2020.

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

As of September 30, 2021, 5,756 Bank PPP loans totaling $348.7 million had been forgiven and paid by the Small Business Administration or paid off by the customer. As of September 30, 2021, the Company held 1,948 loans for customers under the PPP, totaling approximately $101.0 million. The loans have maturities ranging from February 2022 to April 2028. The Company expects to recognize total fee income of approximately $5.2 million over the lives of the remaining loans.

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

As of September 30, 2021, the Company had granted temporary modifications on 1,892 outstanding loans totaling approximately $735.0 million, or 20.8% of total outstanding loans, primarily secured by 1-4 family residences and multi-tenant retail commercial real estate. As of September 30, 2021, 3 loans totaling $27.2 million, or 0.8% of the Company’s loan portfolio, were still in deferment.

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, references in this report to “we”, “us”, “our company”, “the Company”, or “BancPlus” refer to BancPlus Corporation and its subsidiaries, on a consolidated basis. All references to “BankPlus” or “the Bank” refer to BankPlus, our wholly-owned subsidiary.

In November 2020, the Securities and Exchange Commission (the “SEC”) issued Release No. 33-10890 (the “Release”), “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information” which will become fully effective for a company’s first fiscal year that ends on or after August 9, 2021, with voluntary compliance permitted on or after February 10, 2021. BancPlus has adopted early this Release in this Quarterly Report on Form 10-Q, and has eliminated from this document the items that are no longer required, including the contractual obligations table, as well as

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~~incorporating the other required changes intended by the Release to modernize, simplify and enhance certain financial disclosure requirements.~~ The following discussion and analysis of BancPlus’ financial condition and results of operations should be read in conjunction with the unaudited interim ~~condensed~~ consolidated financial statements and related notes contained in Item 1 of this report.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

There are or will be important risk factors that could cause actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•the effects of the novel coronavirus and variants thereof ~~including the delta variant~~ (“COVID-19”) pandemic, on our business, financial condition and results of operations and on our customers, our employees, our third-party service providers and the economy, ~~especially as a vaccine becomes widely available;~~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, particularly as a result of the policies and programs implemented by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, including its automatic loan forbearance provisions, the Paycheck Protection Program (“PPP”) and complying with government-imposed foreclosure moratoriums;loans;

•our ability to prudently manage our growth and execute our strategy;

•our ability to complete the pending acquisition of First Trust Corporation (“FTC”) on the terms proposed, which is subject to a number of conditions, risks and uncertainties, including the possibility that the proposed acquisition does not close when expected or at all because all conditions to closing are not received or satisfied on a timely basis or at all, the failure to close for any other reason, diversion of management time on acquisition-related issues and the reaction to the acquisition of our customers, employees and counterparties;

•our ability to successfully integrate and fully realize the cost savings and other benefits of our acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition customer acceptance of the Company’s products and services and related customer disintermediation, including our ~~pending~~recent acquisition of ~~FTC;~~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 ~~Louisiana;~~Florida;

•our ability to attract and retain customers;

•increased competition in the financial services industry, particularly from regional and national institutions;

•further government restrictions on overdraft programs;

•failure of our risk management framework;

•systems failures, unauthorized access, cyber-crime and other threats to data security or interruptions involving our information technology and telecommunications systems or third-party servicers, ~~particularly in light of widespread remote work arrangements due to the COVID-19 pandemic or~~including due to our ~~recent~~upcoming planned conversion of FTC’s core processing ~~software conversion;~~system to our core processing system;

•difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which we operate and in which our loans are concentrated, including declines in housing markets, an increase in unemployment levels and slowdowns in economic ~~growth, including as a result of the COVID-19 pandemic;~~growth;

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•our ability to maintain our historical rate of growth;

•our ability to manage the risks associated with our growth and expansion through de novo branching;

•our ability to identify potential candidates for, consummate, and achieve synergies resulting from, potential future acquisitions;

•deterioration of our asset quality;

•our ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms;

•any impairment of our goodwill or other intangible assets;

•changes in the value of collateral securing our loans;

•changes in the laws, rules, regulations, interpretations, policies or stimulus programs relating to financial ~~institution,~~institutions, accounting, tax, trade, monetary and fiscal matters, and the uncertainty of the short- and long-term impacts of such changes;

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•further government intervention in the U.S. financial system, ~~particularly~~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;~~pandemic and continuing worldwide macroeconomic uncertainty;

•our ability to maintain important deposit customer relationships and our reputation or otherwise avoid liquidity risks;

•the obligations associated with being a public reporting company;

•the commencement and outcome of litigation and other legal proceedings against us or to which we may become subject;

•natural disasters, climate change and adverse weather, public health crises, acts of terrorism, outbreaks of hostilities or other international or domestic calamities, and other matters beyond our control; and

•other factors that are discussed in the sections ~~titled~~entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the annual period ended December 31, ~~2020, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30,~~ 2021, and in this Quarterly Report on Form 10-Q.

New factors emerge from time to time, and it is not possible for us to predict which will arise. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30,~~ 2021, and in this Quarterly Report on Form 10-Q. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether written or oral, and whether as a result of new information, future developments or otherwise, except as specifically required by law.

Overview

BancPlus is a bank holding company headquartered in Ridgeland, Mississippi. Its wholly-owned bank subsidiary, BankPlus, offers a full suite of products and services to a broad spectrum of customers, including individuals, businesses and public entities. As of ~~September 30, 2021,~~March 31, 2022, we operated 7993 branch offices across Mississippi, Louisiana, Alabama and ~~Alabama.~~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 ~~September 30, 2021,~~March 31, 2022, BancPlus held ~~$4.530~~$5.853 billion of total deposits, and our deposit base consisted of ~~96.3%~~95.9% core deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000, with a total deposit cost of ~~0.18%~~0.19%. Our loan portfolio was comprised of ~~75.3%~~74.0% commercial loans and ~~24.7%~~26.0% consumer loans for the same period. BancPlus currently holds meaningful market share in a number of attractive markets in Mississippi, including the number three position based on deposits in the Jackson, Mississippi metropolitan statistical area as of June 30, 2021, and we believe we are well-positioned for future growth.

~~2021 Third~~2022 First Quarter Highlights

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•Net income for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 was ~~$45.5~~$9.7 million, compared with ~~$27.5~~$17.3 million for the same period of ~~2020~~2021

•Diluted earnings per share for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 were ~~$4.53,~~$0.92, compared with ~~$2.96~~$1.73 for the same period of ~~2020~~2021

•Net interest income was ~~$126.8~~$42.8 million for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared with ~~$108.0~~$42.0 million for the same period of ~~2020~~2021

•Total loans held for investment were ~~$3.526~~$4.740 billion at ~~September 30, 2021,~~March 31, 2022, compared with ~~$3.379~~$3.619 billion at December 31, ~~2020~~2021

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Recent Developments

~~First Trust Corporation~~

On September 28, 2021, the Company entered in an Agreement and Plan of Share Exchange and Merger (the “definitive agreement”) with FTC, the parent company of First Bank and Trust (“FBT”), whereby the Company will acquire FTC and the Bank will acquire FBT (the “transaction”). The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including receipt of required regulatory approvals and the approval by shareholders of FTC.

~~Other recent~~Recent developments at ~~September 30, 2021~~March 31, 2022 did not significantly change from the recent developments ~~as of December 31, 2020, which are~~ disclosed in our Annual Report on Form 10-K for the year ended December ~~31, 2020, and as of June 30, 2021 and March 31, 2021, which are disclosed in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2021 and March~~ 31, 2021.

Results of Operations

The following discussion of BancPlus’ results of operations compares the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 to the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, ~~2021.~~2022 or for any other period.

Net Income

Net income for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ was ~~$14.2~~$9.7 million and ~~$12.6~~$17.3 million, respectively. BancPlus’ annualized return on average assets for the three months ended ~~September 30,~~March 31, 2022 and 2021 was 0.69% and ~~2020 was 1.11% and 1.10%~~1.46%, respectively. BancPlus’ annualized return on average equity for the three months ended ~~September 30,~~March 31, 2022 and 2021 was 9.60% and ~~2020 was 14.67% and 14.59%~~19.58%, respectively. 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 First Trust Corporation (“FTC”), in which BancPlus acquired FTC, the holding company of First Bank and Trust (“FBT”) by a statutory share exchange and FTC was merged with and into BancPlus, with BancPlus surviving the merger (the “FTC Holding Company Merger”), and FBT was merged with and into BankPlus, with BankPlus surviving the merger, effective March 1, 2022 (together with the FTC Holding Company Merger, the “FTC Merger”).

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

Net Interest Income

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

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

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For the three months ended ~~September 30, 2021,~~March 31, 2022, net interest income was ~~$43.4~~$42.8 million, an increase of ~~$1.5 million,~~$725,000, or ~~3.7%~~1.7%, compared to net interest income of ~~$41.9~~$42.0 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The increase in net interest income was primarily the result of increased interest-earning assets as a result of ~~organic loan growth and~~ the ~~increase in our securities portfolio in the current year.~~FTC Merger.

Net interest margin for the three months ended ~~September 30, 2021~~March 31, 2022 decreased 3653 basis points to ~~3.66%~~3.22% from ~~4.02%~~3.75% for the same period of ~~2020 as the result of the lower interest rate environment in the current year.~~

~~For the nine months ended September 30,~~ 2021 net interest income was $126.8 million, an increase of $18.9 million, or 17.5%, compared to net interest income of $108.0 million for the same period of 2020. The increase was primarily the result of increased interest-earning assets as a result of organic loan growth and the increase in our securities portfolio in the current year.

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

Our average interest-earning assets at ~~September 30, 2021,~~March 31, 2022, increased ~~$942.0~~$827.7 million, or ~~25.49%~~18.45%, to ~~$4.637~~$5.313 billion from ~~$3.695~~$4.486 billion at ~~September 30, 2020.~~March 31, 2021. BancPlus’ average interest-bearing liabilities at ~~September 30, 2021~~March 31, 2022 increased ~~$556.2~~$462.2 million, or ~~20.74%~~14.50%, to ~~$3.238~~$3.651 billion from ~~$2.682~~$3.189 billion at ~~September 30, 2020.~~March 31, 2021. This increase in BancPlus’ average interest-earning assets and interest-bearing liabilities was primarily due to ~~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 and State Bank was merged with and into BankPlus, with BancPlus and BankPlus surviving the mergers, which closed on April 1, 2020, as well as organic loan growth and increases in our securities portfolio.FTC Merger. The ratio of BancPlus’ average interest-earning assets to average interest-bearing liabilities was ~~143.2%~~145.5% and ~~137.7%~~140.7% at ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

BancPlus’ average interest-earning assets produced a tax-equivalent yield of ~~3.93% and 3.94%~~3.46% for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022, compared to ~~4.47% and 4.41%~~4.07% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively.~~March 31, 2021. The average rate paid on interest-bearing liabilities was ~~0.39% and 0.42%~~0.35% for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022, compared to ~~0.63% and 0.70%~~0.45% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively. These year over year decreases~~March 31, 2021. The year-over-year decrease in yields reflect the current low interest rate environment.

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Average Balances and Yields

The following tables show, for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the average balances of each principal category of BancPlus’ assets, liabilities and shareholders’ equity, and an analysis of net interest income. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. These tables are presented on a tax-equivalent basis, if applicable.


	Three Months Ended March 31,
	2022						2021
(Dollars in thousands)	Average Balance		Interest & Fees		Yield / Rate (4)		Average Balance		Interest & Fees		Yield / Rate (4)
ASSETS:
Interest-earning assets:
Cash investments:
Interest-bearing cash deposits	$	578,254	$	227	0.16	%	$	526,113	$	125	0.10	%
Federal funds sold	—		—		—	%	20,109		10		0.20	%
	578,254		227		0.16	%	546,222		135		0.10	%
Investment securities:
Taxable investment securities	629,208		2,307		1.47	%	425,247		1,833		1.72	%
Tax-exempt investment securities	72,432		420		2.32	%	92,567		539		2.33	%
Total securities	701,640		2,727		1.55	%	517,814		2,372		1.83	%
Loans (1)	4,029,014		42,987		4.27	%	3,418,232		43,142		5.05	%
Federal Home Loan Bank (“FHLB”) stock	4,475		4		0.36	%	3,407		3		0.35	%
Total interest-earning assets	5,313,383		45,945		3.46	%	4,485,675		45,652		4.07	%
Noninterest-earning assets	345,648						334,691
Total assets	$	5,659,031					$	4,820,366

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits	$	1,590,153	$	711	0.18	%	$	1,427,926	$	791	0.22	%
Savings and money market deposits	1,199,908		312		0.10	%	939,541		282		0.12	%
Time deposits	714,438		654		0.37	%	676,683		1,091		0.64	%
Federal funds purchased	—		—		—	%	—		—		—	%
FHLB advances	20,485		76		1.48	%	20,608		77		1.49	%
Other borrowings	7,102		65		3.66	%	12,960		124		3.83	%
Subordinated debentures	119,024		1,360		4.57	%	111,153		1,245		4.48	%
Total interest-bearing liabilities	3,651,110		3,178		0.35	%	3,188,871		3,610		0.45	%
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits	1,545,452						1,218,780
Other noninterest-bearing liabilities	53,290						54,056
Total noninterest-bearing liabilities	1,598,742						1,272,836
Shareholders’ equity (6)	409,179						358,659
Total liabilities and shareholders’ equity	$	5,659,031					$	4,820,366
Net interest income/net interest margin (2)			42,767		3.22	%			42,042		3.75	%
Net interest spread (5)					3.11	%					3.62	%
Taxable equivalent adjustment:
Tax-exempt investment securities (3)			135						173
Net interest income/net interest margin (2)			$	42,902	3.23	%			$	42,215	3.76	%

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Three Months Ended September 30,
2021 2020
(Dollars in thousands) Average Balance Interest & Fees
Yield / Rate (4)
Average Balance Interest & Fees
Yield / Rate (4)
ASSETS:
Interest-earning assets:
Cash investments:
Interest-bearing cash deposits $ 596,624 $ 231 0.15 % $ 278,871 $ 75 0.11 %
Federal funds sold — — — % 44,307 31 0.28 %
596,624 231 0.15 % 323,178 106 0.13 %
Investment securities:
Taxable investment securities 549,569 2,097 1.53 % 345,536 1,815 2.10 %
Tax-exempt investment securities 79,118 455 2.30 % 98,198 573 2.33 %
Total securities 628,687 2,552 1.62 % 443,734 2,388 2.15 %
Loans (1)
3,517,978 43,835 4.98 % 3,395,441 44,083 5.19 %
Federal Home Loan Bank (“FHLB”) stock 3,576 11 1.23 % 5,025 7 0.56 %
Total interest-earning assets 4,746,865 46,629 3.93 % 4,167,378 46,584 4.47 %
Noninterest-earning assets 329,425 378,971
Total assets $ 5,076,290 $ 4,546,349
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 1,468,126 $ 717 0.20 % $ 1,213,970 $ 1,313 0.43 %
Savings and money market deposits 1,021,448 186 0.07 % 876,706 357 0.16 %
Time deposits 641,501 843 0.53 % 719,566 1,523 0.85 %
Federal funds purchased — — — % — — — %
FHLB advances 20,534 78 1.52 % 20,725 79 1.52 %
Other borrowings 11,223 110 3.92 % 14,723 144 3.91 %
Subordinated debentures 111,344 1,261 4.53 % 110,982 1,276 4.60 %
Total interest-bearing liabilities 3,274,176 3,195 0.39 % 2,956,672 4,692 0.63 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits 1,364,915 1,175,118
Other noninterest-bearing liabilities 53,245 71,018
Total noninterest-bearing liabilities 1,418,160 1,246,136
Shareholders’ equity (6)
383,954 343,541
Total liabilities and shareholders’ equity $ 5,076,290 $ 4,546,349
Net interest income/net interest margin (2)
43,434 3.66 % 41,892 4.02 %
Net interest spread (5)
3.54 % 3.84 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
146 184
Net interest income/net interest margin (2)
$ 43,580 3.67 % $ 42,076 4.04 %

(1)Average loan balances include nonaccrual loans.

(2)Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.

(3)Interest income and averages rates for tax exempt securities are presented on a tax-equivalent basis, assuming a combined federal and state income tax rate of 25% for ~~2021~~2022 and ~~2020.~~

~~(4)Yields and rates are annualized.~~

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~~(5)Net interest spread is the yield on BancPlus’ total interest-earning assets less the yield on its interest-bearing liabilities.~~

~~(6)Includes Employee Stock Ownership-owned shares.~~

Nine Months Ended September 30,
2021 2020
(Dollars in thousands) Average Balance Interest & Fees
Yield / Rate (4)
Average Balance Interest & Fees
Yield / Rate (4)
ASSETS:
Interest-earning assets:
Cash investments:
Interest-bearing cash deposits $ 559,746 $ 465 0.11 % $ 283,267 $ 1,046 0.49 %
Federal funds sold 7,070 11 0.21 % 55,101 241 0.58 %
566,816 476 0.11 % 338,368 1,287 0.51 %
Investment securities:
Taxable investment securities 511,923 6,024 1.57 % 392,228 5,157 1.75 %
Tax-exempt investment securities 84,939 1,473 2.31 % 47,192 1,942 5.49 %
Total securities 596,862 7,497 1.67 % 439,420 7,099 2.15 %
Loans (1)
3,469,520 129,066 4.96 % 2,912,471 113,710 5.21 %
FHLB stock 3,509 17 0.65 % 4,481 42 1.25 %
Total interest-earning assets 4,636,707 137,056 3.94 % 3,694,740 122,138 4.41 %
Noninterest-earning assets 333,231 316,742
Total assets $ 4,969,938 $ 4,011,482
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 1,452,965 $ 2,278 0.21 % $ 1,175,152 $ 4,691 0.53 %
Savings and money market deposits 982,220 696 0.09 % 779,321 1,973 0.34 %
Time deposits 659,361 2,899 0.59 % 615,619 4,595 1.00 %
Federal funds purchased — — — % 201 2 1.33 %
FHLB advances 20,567 233 1.51 % 22,222 239 1.43 %
Other borrowings 12,087 352 3.88 % 15,585 453 3.88 %
Subordinated debentures 111,248 3,760 4.51 % 74,151 2,220 3.99 %
Total interest-bearing liabilities 3,238,448 10,218 0.42 % 2,682,251 14,173 0.70 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits 1,306,105 948,275
Other noninterest-bearing liabilities 53,169 70,339
Total noninterest-bearing liabilities 1,359,274 1,018,614
Shareholders’ equity (6)
372,216 310,617
Total liabilities and shareholders’ equity $ 4,969,938 $ 4,011,482
Net interest income/net interest margin (2)
126,838 3.65 % 107,965 3.90 %
Net interest spread (5)
3.52 % 3.70 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
474 638
Net interest income/net interest margin (2)
$ 127,312 3.66 % $ 108,603 3.92 %
~~________________________________~~

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~~(1)Average loan balances include nonaccrual loans.~~

~~(2)~~Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.

~~(3)Interest income and averages rates for tax exempt securities are presented on a tax-equivalent basis, assuming a combined federal and state income tax rate of 25% for 2021 and 2020.~~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.

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 September 30, 2021 Compared with Three Months Ended September 30, 2020
Change Due To:
(Dollars in thousands) Volume Rate Interest Variance
Interest-earning assets:
Cash investments $ 106 $ 19 $ 125
Investment securities:
Taxable investment securities 779 (497) 282
Tax-exempt investment securities (110) (8) (118)
Total securities 669 (505) 164
Loans, net 1,527 (1,775) (248)
Federal Home Loan Bank stock (4) 8 4
Total interest-earning assets $ 2,298 $ (2,253) $ 45
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 124 $ (720) $ (596)
Savings and money market deposits 26 (197) (171)
Time deposits (103) (577) (680)
Federal funds purchased — — —
FHLB advances (1) — (1)
Other borrowings (34) — (34)
Subordinated debentures 4 (19) (15)
Total interest-bearing liabilities $ 16 $ (1,513) $ (1,497)
Net interest income $ 2,282 $ (740) $ 1,542


	Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021
	Change Due To:
(Dollars in thousands)	Volume		Rate		Interest Variance
Interest-earning assets:
Cash investments	$	13	$	79	$	92
Investment securities:
Taxable investment securities	748		(274)		474
Tax-exempt investment securities	(117)		(2)		(119)
Total securities	631		(276)		355
Loans, net	6,517		(6,672)		(155)
Federal Home Loan Bank stock	1		—		1
Total interest-earning assets	$	7,162	$	(6,869)	$	293

Interest-bearing liabilities:
Interest-bearing transaction deposits	$	73	$	(153)	$	(80)
Savings and money market deposits	68		(38)		30
Time deposits	35		(472)		(437)
Federal funds purchased	—		—		—
FHLB advances	(1)		—		(1)
Other borrowings	(54)		(5)		(59)
Subordinated debentures	90		25		115
Total interest-bearing liabilities	$	211	$	(643)	$	(432)
Net interest income	$	6,951	$	(6,226)	$	725

3835

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Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020
Change Due To:
(Dollars in thousands) Volume Rate Interest Variance
Interest-earning assets:
Cash investments $ 192 $ (1,003) $ (811)
Investment securities:
Taxable investment securities 1,408 (541) 867
Tax-exempt investment securities 655 (1,124) (469)
Total securities 2,063 (1,665) 398
Loans, net 20,722 (5,366) 15,356
Federal Home Loan Bank stock (5) (20) (25)
Total interest-earning assets $ 22,972 $ (8,054) $ 14,918
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 436 $ (2,849) $ (2,413)
Savings and money market deposits 144 (1,421) (1,277)
Time deposits 192 (1,888) (1,696)
Federal funds purchased — (2) (2)
FHLB advances (19) 13 (6)
Other borrowings (102) 1 (101)
Subordinated debentures 1,254 286 1,540
Total interest-bearing liabilities $ 1,905 $ (5,860) $ (3,955)
Net interest income $ 21,067 $ (2,194) $ 18,873

Provision for Loan Losses

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

For the three months ended ~~September 30, 2021,~~March 31, 2022, the provision for loan losses was ~~$1.5 million,~~$217,000, compared to ~~$4.7~~$3.9 million for the same period of ~~2020,~~2021, a decrease of ~~$3.2~~$3.7 million, or ~~68.6%. For the nine months ended September 30, 2021, the provision for loan losses was $7.4 million, compared to $7.7 million for the same period of 2020, a decrease of $311,000, or 4.0%~~94.4%. The decrease for ~~these~~this year to date ~~periods~~period is primarily attributable to the impact of the COVID-19 pandemic on the prior year period, including the impact of the ~~CARES~~Coronavirus Aid, Relief, and Economic Security (“CARES”) Act measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance.

Noninterest Income

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

Service charges on deposit accounts includes fees and miscellaneous charges on deposit products offered by BancPlus. Mortgage origination income represents the gains recorded on the sale of mortgages originated by BancPlus. Debit card interchange represents income from the use of checkcards by our customers. Income from fiduciary activities includes retirement and management fee income from our wealth management group. ATM income is comprised of fees from our ATM network. 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

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income includes various types of income including gains on sale of other real estate, personalized check sales, and wire transfer fees.

Noninterest income was ~~$19.1~~$18.0 million for the three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$18.6~~$20.3 million for the same period of ~~2020, an increase~~2021, a decrease of ~~$441,000,~~$2.3 million, or ~~2.4%~~11.4%, primarily due to ~~increases~~decreases in life insurance income of $2.9 million, or 82.0%, and

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mortgage origination income of $476,000, or 17.5%; partially offset by an increase in service charges on deposit accounts of ~~$1.8~~$1.1 million, or 31.5%; debit card interchange of $481,000, or 25.2%; income from fiduciary activities of $436,000 or 27.6%; life insurance income of $598,000, or 105.7%; partially offset by decreases in other income of $1.8 million, or 60.8%, and mortgage origination income of $828,000, or 29.3%18.4%.

The following table presents the major components of noninterest income for three months ended ~~September 30, 2021,~~March 31, 2022, compared to the three months ended ~~September 30, 2020:~~March 31, 2021:


		Three Months Ended September 30,									Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		$ Change		% Change		(Dollars in thousands)	2022		2021		$ Change		% Change
Noninterest income:	Noninterest income:									Noninterest income:
Service charges on deposit accounts	Service charges on deposit accounts	$	7,484	$	5,690	$	1,794	31.5	%	Service charges on deposit accounts	$	6,792	$	5,737	$	1,055	18.4	%
Mortgage origination income	Mortgage origination income	1,999		2,827		(828)		(29.3)	%	Mortgage origination income	2,238		2,714		(476)		(17.5)	%
Debit card interchange	Debit card interchange	2,390		1,909		481		25.2	%	Debit card interchange	2,428		2,640		(212)		(8.0)	%
Income from fiduciary activities	Income from fiduciary activities	2,015		1,579		436		27.6	%	Income from fiduciary activities	2,018		1,791		227		12.7	%
ATM income	ATM income	1,566		1,754		(188)		(10.7)	%	ATM income	1,476		1,533		(57)		(3.7)	%
Brokerage and insurance fees and commissions	Brokerage and insurance fees and commissions	648		533		115		21.6	%	Brokerage and insurance fees and commissions	698		510		188		36.9	%
Life insurance income	Life insurance income	1,164		566		598		105.7	%	Life insurance income	627		3,492		(2,865)		(82.0)	%
Community Development Financial Institution (“CDFI”) grants		645		823		(178)		(21.6)	%

Other income	Other income	1,155		2,944		(1,789)		(60.8)	%	Other income	1,688		1,860		(172)		(9.2)	%
Total	Total	$	19,066	$	18,625	$	441	2.4	%	Total	$	17,965	$	20,277	$	(2,312)	(11.4)	%

Service charges on deposit accounts increased ~~$1.8~~$1.1 million, or ~~31.5%~~18.4%, to ~~$7.5~~$6.8 million for the three months ended ~~September 30, 2021,~~March 31, 2022, compared to $5.7 million for the same period of ~~2020.~~2021. The increase was the result of an increase in the ~~impact on the prior year period~~number of ~~increased customer liquidity as~~deposit accounts held and a ~~result~~higher volume of ~~various economic stimulus programs and reduced customer spending as a result of quarantine restrictions related to the COVID-19 pandemic.~~transactions.

~~Debit card interchange increased $481,000,~~Life insurance income decreased $2.9 million, or ~~25.2%~~82.0%, to ~~$2.4 million~~$627,000 for the three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$1.9~~$3.5 million for the same period of ~~2020.~~2021. The increase was attributable to increased card spending and transaction levels for the current year period compared to the same period of 2020 which was negatively affected by quarantine restrictions related to the COVID-19 pandemic.

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

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

Mortgage origination income decreased ~~$828,000,~~$476,000, or ~~29.3%~~17.5%, to ~~$2.0~~$2.2 million for the three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$2.8~~$2.7 million for the same period of ~~2020.~~2021. The decrease was primarily the result of ~~decreased~~overall decreases in mortgage origination activity in the three months ended ~~September 30, 2021~~March 31, 2022 as refinancing activity began to slow from increased levels ~~seen over the previous 12 months.~~

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

~~Noninterest income was $58.1 million for the first nine months of 2021, compared to $45.4 million for the first nine months of 2020, an increase of $12.7 million, or 28.0%, primarily due to~~partially offset by increases in ~~service charges on deposit accounts of $2.6, or 15.3%;~~

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mortgage origination income ~~of $752,000, or 12.6%; debit card interchange of $2.2 million, or 41.1%; income~~resulting from fiduciary activities of $1.1 million, or 23.9%; ATM income of $835,000, or 21.0%; life insurance income of $4.3 million, or 284.1%; and CDFI grants of $1.6 million, or 200.2%; partially offset by a decrease in other income of $1.0 million, or 20.9%.

~~The following table presents~~ the ~~major components of noninterest income for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020:~~

Nine Months Ended September 30,
(Dollars in thousands) 2021 2020 $ Change % Change
Noninterest income:
Service charges on deposit accounts $ 19,226 $ 16,674 $ 2,552 15.3 %
Mortgage origination income 6,726 5,974 752 12.6 %
Debit card interchange 7,634 5,412 2,222 41.1 %
Income from fiduciary activities 5,681 4,585 1,096 23.9 %
ATM income 4,809 3,974 835 21.0 %
Brokerage and insurance fees and commissions 1,802 1,516 286 18.9 %
Life insurance income 5,858 1,525 4,333 284.1 %
CDFI grants 2,471 823 1,648 200.2 %
Other income 3,873 4,899 (1,026) (20.9) %
Total $ 58,080 $ 45,382 $ 12,698 28.0 %

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

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

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

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

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

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

CDFI grant income increased $1.6 million, or 200.2%, to $2.5 million for the nine months ended September 30, 2021 from $823,000 for the same period of 2020. The current year period includes a $1.8 million grant received related to the CDFI Rapid Response Program, which was created in 2021 by the U.S. Department of the Treasury to provide capital for CDFI designated banks to respond to the economic challenges created by the COVID-19 pandemic.

Other income decreased $1.0 million, or 20.9%, to $3.9 million for the nine months ended September 30, 2021, compared to $4.9 million for the same period of 2020. The decrease was primarily the result of the gain on the bargain purchase of $1.1 million recorded in the prior year period related to the merger with SCC.

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FTC Merger.

Noninterest Expense

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

Salaries and employee benefits expenses includes compensation, employee benefits and tax expenses for BancPlus’ personnel. Net occupancy expenses include depreciation expense on BancPlus’ owned properties, lease expense on its leased properties and other occupancy-related expenses. Furniture and equipment expenses include depreciation and maintenance and other expenses related to its furniture, fixtures and equipment. Data processing expenses include costs related to maintenance and monitoring of its systems and expenses paid to its third-party data processing system providers. Marketing and promotional expenses include costs for advertising, promotions and sponsorships. Other real estate expenses and losses include taxes, insurance, maintenance and other expenses related to BancPlus’ foreclosed properties. Professional fees include accounting and auditing, consulting and legal fees. Other expenses include expenses associated with Federal Deposit Insurance Corporation (“FDIC”) assessments, Mississippi Department of Banking and Consumer Finance (“MDBCF”) assessments, communications, travel, meals, training, supplies and postage. Noninterest expenses generally increase as BancPlus grows its business. Noninterest expenses have increased commensurate with our growth over the past few years as BancPlus has grown organically and 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 ~~SCC.~~and into BankPlus, with BankPlus surviving the merger (together with the SCC Holding Company Merger, the “SCC Merger”), which closed on April 1, 2020, and the FTC Merger. Additionally, BancPlus has built out and modernized its operational infrastructure and implemented its plan to build an efficient, technology-driven banking operation with capacity for growth. BancPlus continues to focus efforts on supporting growth through sales efforts, product development, marketing and promotion, as well as investing in technology and

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its branch network, while also seeking to improve productivity and maintain appropriate cost structure and customer service levels.

For the three months ended ~~September 30, 2021,~~March 31, 2022, noninterest expense totaled ~~$42.8~~$48.1 million, an increase of ~~$2.9~~$9.9 million, or ~~7.3%~~26.0%, from ~~$39.9~~$38.1 million for the three months ended ~~September 30, 2020,~~March 31, 2021, primarily due to increases in professional fees of $4.1 million, or 751.7%, salaries and employee benefits expenses of ~~$2.1~~$2.8 million, or ~~8.9%~~12.2%; net occupancy expenses of $771,000, or 23.0%; furniture, equipment and data processing expenses of $684,000, or 11.5%; other real estate expenses and losses of $559,000, or 321.3%; and marketing and promotional expenses of $531,000, or 92.0%.

The following table presents the major components of noninterest expense for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the three months ended ~~September 30, 2020:~~March 31, 2021:


		Three Months Ended September 30,									Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		$ Change		% Change		(Dollars in thousands)	2022		2021		$ Change		% Change
Noninterest expense:	Noninterest expense:									Noninterest expense:
Salaries and employee benefits expenses	Salaries and employee benefits expenses	$	25,218	$	23,162	$	2,056	8.9	%	Salaries and employee benefits expenses	$	25,845	$	23,025	$	2,820	12.2	%
Net occupancy expenses	Net occupancy expenses	3,606		3,459		147		4.2	%	Net occupancy expenses	4,116		3,345		771		23.0	%
Furniture, equipment and data processing expenses	Furniture, equipment and data processing expenses	6,282		5,801		481		8.3	%	Furniture, equipment and data processing expenses	6,616		5,932		684		11.5	%
Marketing and promotional expenses	Marketing and promotional expenses	1,154		1,000		154		15.4	%	Marketing and promotional expenses	1,108		577		531		92.0	%
Other real estate expenses and losses	Other real estate expenses and losses	292		230		62		27.0	%	Other real estate expenses and losses	733		174		559		321.3	%
Professional fees	Professional fees	1,232		1,651		(419)		(25.4)	%	Professional fees	4,659		547		4,112		751.7	%
Other expenses	Other expenses	5,038		4,609		429		9.3	%	Other expenses	4,993		4,537		456		10.1	%
Total	Total	$	42,822	$	39,912	$	2,910	7.3	%	Total	$	48,070	$	38,137	$	9,933	26.0	%

Salaries and employee benefits expenses is the largest component of noninterest expense, representing ~~58.9%~~53.8% and ~~58.0%~~60.4% of total noninterest expense for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. During the three months ended ~~September 30, 2021,~~March 31, 2022, salaries and employee benefits expense increased ~~$2.1~~$2.8 million, or ~~8.9%~~12.2%, to ~~$25.2~~$25.8 million, compared to ~~$23.2~~$23.0 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The increase in salaries and employee benefits expense is primarily due to ~~increased bonuses and~~ normal annual salary increases for employees, as well as increased salary-related expenses in ~~the third quarter~~March of ~~2021~~2022 related to the ~~Company’s recent core software conversion.~~FTC Merger and increased bonuses.

~~For the nine months ended September 30, 2021, noninterest expense totaled $121.4 million, an increase of $10.9~~Professional fees increased $4.1 million, or ~~9.8%~~751.7%, ~~from $110.5~~to $4.7 million for the ~~nine~~three months ended ~~September 30, 2020, primarily due~~March 31, 2022, compared to increases in salaries and employee benefits expenses of $7.0 million, or 10.7%; net occupancy expenses of $1.1 million, or 11.0%, furniture, equipment and data processing of $2.7 million, or 17.3%, and other expenses of $2.4 million, or 20.0%, partially offset by a decrease in professional fees of $2.2 million, or 46.7%.

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~~The following table presents the major components of noninterest expense~~$547,000 for the ~~nine months ended September 30, 2021 compared to the nine months ended September 30, 2020:~~

Nine Months Ended September 30,
(Dollars in thousands) 2021 2020 $ Change % Change
Noninterest expense:
Salaries and employee benefits expenses $ 72,365 $ 65,349 $ 7,016 10.7 %
Net occupancy expenses 10,779 9,709 1,070 11.0 %
Furniture, equipment and data processing expenses 18,322 15,621 2,701 17.3 %
Marketing and promotional expenses 2,485 2,787 (302) (10.8) %
Other real estate expenses and losses 744 506 238 47.0 %
Professional fees 2,514 4,718 (2,204) (46.7) %
Other expenses 14,188 11,823 2,365 20.0 %
Total $ 121,397 $ 110,513 $ 10,884 9.8 %

~~Salaries and employee benefits expenses is the largest component~~same period of noninterest expense, representing 59.6% and 59.1% of total noninterest expense for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021, salaries and employee benefits expense increased $7.0 million, or 10.7%, to $72.4 million, compared to $65.3 million for the nine months ended September 30, 2020.2021. The increase was primarily the result of advisory fees as well as increased legal and accounting expenses in ~~salaries and employee benefits expenses is primarily due to~~connection with the ~~merger with SCC in addition to normal annual salary increases for employees.~~FTC Merger.

Net occupancy expenses increased ~~$1.1 million,~~$771,000, or ~~11.0%~~23.0%, to ~~$10.8~~$4.1 million for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$9.7~~$3.3 million for the ~~nine~~same period of 2021. The primary reason for the increase is increased depreciation and rent expense as a result of the FTC Merger.

Furniture, fixtures and data processing expenses increased $684,000, or 11.5%, to $6.6 million for the three months ended ~~September 30, 2020.~~March 31, 2022, compared to $5.9 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.

Other real estate expenses and losses increased $559,000, or 321.3%, to $733,000 for the three months ended March 31, 2022, compared to $174,000 for the same period of 2021. The increase was the result of an increase in write downs on other real estate owned in the current year period.

Market and promotional expenses increased $531,000, or 92.0%, to $1.1 million for the three months ended March 31, 2022, compared to $577,000 for the same period of 2021. The increase was primarily attributable to increased ~~maintenance expenses~~community sponsorship expense in the current year ~~period related to the upkeep of branches across our footprint.~~period.

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

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

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

Income Tax Expense

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

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BancPlus recorded income tax expense of ~~$4.0~~$2.8 million for the three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$3.3~~$3.0 million for the same period of ~~2020, an increase~~2021, a decrease of ~~$678,000,~~$265,000, or ~~20.3%~~8.8%. BancPlus’ effective tax rate for the three months ended ~~September 30, 2021~~March 31, 2022 was ~~22.0%~~22.1%, compared to ~~20.9%~~14.9% for the same period of ~~2020.~~2021.

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

~~For both the three and nine month periods, the increase in income tax expense was the result of larger income before taxes in the current year period.~~ The increase in the effective tax rate for the three months ended ~~September 30, 2021~~March 31, 2022 compared with the same period of ~~2020~~2021 was the result of the ~~impact on the prior year period of permanent tax items. The decrease in effective tax rate for~~

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~~the year to date periods was the result of BancPlus~~Company taking advantage of tax credits offered by Mississippi ~~in the current year,~~and non-taxable life insurance proceeds recorded in 2021, and apportionment of state taxable income to Louisiana which exempts banks that pay a state tax on their shares of stock from their corporate income tax. BancPlus’ Louisiana locations were acquired in the ~~merger with SCC.~~prior year period.

The decrease in income tax expense for the three months ended March 31, 2022, compared to the same period of 2021, was primarily the result of lower income before taxes in the current year.

Financial Condition

The following discussion compares BancPlus’ financial condition as of ~~September 30, 2021~~March 31, 2022 to December 31, ~~2020.~~2021.

Assets

Total assets increased ~~$402.4 million,~~$1.319 billion, or ~~8.5%~~25.4%, to ~~$5.113~~$6.515 billion at ~~September 30, 2021~~March 31, 2022 from total assets of ~~$4.711~~$5.196 billion at December 31, ~~2020.~~2021. Total cash and cash equivalents increased ~~$57.5~~$31.2 million, or ~~9.0%~~4.7%, to ~~$695.1~~$695.4 million at ~~September 30, 2021,~~March 31, 2022, compared to ~~$637.5~~$664.2 million at December 31, ~~2020,~~2021, primarily due to ~~increases~~cash acquired in ~~interest bearing deposits with banks.~~excess of cash paid for the FTC Merger partially offset by an increase in cash outflow for investments and loans made during the period. Total loans held for investment increased ~~$147.4 million,~~$1.121 billion, or ~~4.4%~~31.0%, to ~~$3.526~~$4.740 billion at ~~September 30, 2021,~~March 31, 2022, compared to ~~$3.379~~$3.619 billion at December 31, ~~2020~~2021 as a result of the FTC Merger and organic loan growth. Investment securities increased ~~$214.2~~$65.8 million, or ~~52.9%~~10.2%, from ~~$405.1~~$648.3 million at December 31, ~~2020~~2021 to ~~$619.3~~$714.1 million at ~~September 30, 2021~~March 31, 2022 as a result of ~~increased purchases of available for sale securities.~~securities acquired in the FTC Merger and excess liquidity.

Investment Securities Portfolio

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

As of ~~September 30, 2021, 12.7%~~March 31, 2022, 9.6% of BancPlus’ investment securities portfolio was classified as held to maturity and ~~87.3%~~90.4% was classified as available for sale. As of December 31, ~~2020, 23.1%~~2021, 11.1% of BancPlus’ investment securities portfolio was classified as held to maturity and ~~76.9%~~88.9% was classified as available for sale. Securities available for sale increased ~~$229.5~~$68.6 million, or ~~73.7%~~11.9%, from ~~$311.4~~$576.6 million at December 31, ~~2020~~2021 to ~~$540.9~~$645.2 million at September 30, 2021. Early in the period, BancPlus took advantage of the steeper yield curve to invest excess liquidity. BancPlus used a disciplined approach to build a ladder of non-callable state tax-exempt agency bonds. As market conditions allow, BancPlus will continue this strategy to enhance net interest margin and provide predictable cash flows for future loan demand.March 31, 2022.

At ~~September 30, 2021,~~March 31, 2022, U.S. government agency obligations represented ~~48.4%~~51.4%, mortgage-backed securities represented ~~22.1%~~18.9%, municipal securities represented ~~20.2% and~~16.0%, corporate investments represented ~~7.1%~~6.4%, U.S. Treasuries represented 5.6% and asset-backed securities represented 1.7% of the investment securities portfolio. At December 31, ~~2020, mortgage-backed securities represented 50.5%, municipal securities represented 34.7%, corporate investments represented 8.2% and~~2021, U.S. government agency obligations represented ~~3.1%~~54.0%, mortgage-backed securities represented 19.1%, municipal securities represented 18.0%, corporate investments represented 6.9% and asset-backed securities represented 2.0% of the investment securities portfolio. Other than the U.S. government and its agencies, BancPlus’ securities portfolio did not contain securities of any single issuer, including any securities issued by a state or political subdivision, that were payable from and secured by the same source of revenue or taxing authority where the aggregate carrying value of such securities exceeded 10% of shareholders’ equity.

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

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		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Carrying Value		% of Total		Carrying Value		% of Total		(Dollars in thousands)	Carrying Value		% of Total		Carrying Value		% of Total
Held to Maturity:	Held to Maturity:									Held to Maturity:
(At amortized cost)	(At amortized cost)									(At amortized cost)

Issued by states and political subdivisions	Issued by states and political subdivisions	$	78,423	12.66	%	$	93,766	23.14	%	Issued by states and political subdivisions	$	68,873	9.65	%	$	71,648	11.05	%

Total held-to-maturity	Total held-to-maturity	78,423		12.66	%	93,766		23.14	%	Total held-to-maturity	68,873		9.65	%	71,648		11.05	%

Available for Sale:	Available for Sale:									Available for Sale:
(At fair value)	(At fair value)									(At fair value)
U.S. Treasuries										U.S. Treasuries	40,149		5.62	%	—		—	%
U.S. Government agency obligations	U.S. Government agency obligations	299,841		48.42	%	12,434		3.07	%	U.S. Government agency obligations	367,087		51.41	%	350,250		54.03	%
Issued by states and political subdivisions	Issued by states and political subdivisions	46,613		7.53	%	46,801		11.55	%	Issued by states and political subdivisions	45,646		6.39	%	44,684		6.89	%
Mortgage-backed securities:	Mortgage-backed securities:									Mortgage-backed securities:
Residential	Residential	121,846		19.67	%	187,212		46.21	%	Residential	121,314		16.99	%	109,787		16.94	%
Commercial	Commercial	14,894		2.40	%	17,331		4.28	%	Commercial	13,254		1.86	%	14,276		2.20	%
Asset-backed securities	Asset-backed securities	13,539		2.19	%	14,447		3.57	%	Asset-backed securities	12,354		1.73	%	13,107		2.02	%
Corporate investments	Corporate investments	44,150		7.13	%	33,148		8.18	%	Corporate investments	45,392		6.36	%	44,510		6.87	%
Total available for sale	Total available for sale	540,883		87.34	%	311,373		76.86	%	Total available for sale	645,196		90.35	%	576,614		88.95	%

Total securities	Total securities	$	619,306	100.00	%	$	405,139	100.00	%	Total securities	$	714,069	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%.

Maturity as of September 30, 2021
Due in One Year or Less More Than One Year to Five Years More Than Five Years to Ten Years Due After Ten Years
(Dollars in thousands) Amount Weighted
Average
Yield Amount Weighted
Average
Yield Amount Weighted
Average
Yield Amount Weighted
Average
Yield
Held to maturity:
Issued by states and political subdivisions $ 12,437 3.19 % $ 46,344 2.81 % $ 16,887 2.54 % $ 2,755 4.17 %
Total held to maturity 12,437 3.19 % 46,344 2.81 % 16,887 2.54 % 2,755 4.17 %
Available for sale:
U.S. Government agency obligations 5,037 2.60 % 163,773 0.45 % 126,630 1.19 % 4,402 1.75 %
Issued by states and political subdivisions 2,346 4.64 % 14,770 2.64 % 22,141 3.13 % 7,356 3.17 %
Mortgage-backed securities:
Residential — — % — — % 4,650 1.85 % 117,196 2.41 %
Commercial — — % — — % 13,659 1.54 % 1,234 2.48 %
Asset-backed securities — — % — — % — — % 13,539 1.88 %
Corporate investments 4,019 2.13 % 498 2.75 % 38,571 4.14 % 1,062 4.50 %
Total available for sale 11,402 2.85 % 179,041 0.64 % 205,651 1.99 % 144,789 2.39 %
Total securities $ 23,839 3.03 % $ 225,385 1.08 % $ 222,538 2.03 % $ 147,544 2.43 %

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		Maturity as of December 31, 2020																	Maturity as of March 31, 2022
		Due in One Year or Less				More Than One Year to Five Years				More Than Five Years to Ten Years				Due After Ten Years					Due in One Year or Less				More Than One Year to Five Years				More Than Five Years to Ten Years				Due After Ten Years
(Dollars in thousands)	(Dollars in thousands)	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		(Dollars in thousands)	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield
Held to maturity:	Held to maturity:																	Held to maturity:

Issued by states and political subdivisions	Issued by states and political subdivisions	$	15,891	3.02	%	$	50,738	4.05	%	$	24,247	3.67	%	$	2,890	3.85	%	Issued by states and political subdivisions	$	7,529	3.17	%	$	47,762	2.54	%	$	11,372	3.25	%	$	2,210	4.27	%

Total held to maturity	Total held to maturity	15,891		3.02	%	50,738		4.05	%	24,247		3.67	%	2,890		3.85	%	Total held to maturity	7,529		3.17	%	47,762		2.54	%	11,372		3.25	%	2,210		4.27	%

Available for sale:	Available for sale:																	Available for sale:
U.S. Treasuries																		U.S. Treasuries	9,999		0.08	%	30,150		1.13	%	—		—	%	—		—	%
U.S. Government agency obligations	U.S. Government agency obligations	—		—	%	5,128		2.60	%	2,508		3.19	%	4,798		1.78	%	U.S. Government agency obligations	—		—	%	265,004		0.64	%	98,158		1.25	%	3,925		1.78	%
Issued by states and political subdivisions	Issued by states and political subdivisions	3,803		3.08	%	12,504		2.99	%	20,538		3.18	%	9,956		3.19	%	Issued by states and political subdivisions	2,051		3.87	%	18,263		2.56	%	18,977		3.19	%	6,355		3.01	%
Mortgage-backed securities:	Mortgage-backed securities:																	Mortgage-backed securities:
Residential	Residential	—		—	%	—		—	%	10,991		0.93	%	176,220		2.35	%	Residential	—		—	%	—		—	%	3,716		1.86	%	117,598		2.51	%
Commercial	Commercial	305		3.25	%	—		—	%	14,071		1.54	%	2,955		2.53	%	Commercial	—		—	%	—		—	%	12,631		1.54	%	623		2.49	%
Asset-backed securities	Asset-backed securities	—		—	%	—		—	%	—		—	%	14,447		3.94	%	Asset-backed securities	—		—	%	—		—	%	—		—	%	12,354		2.09	%
Corporate investments	Corporate investments	—		—	%	4,060		2.22	%	28,084		4.48	%	1,005		4.50	%	Corporate investments	—		—	%	472		2.75	%	41,908		4.05	%	3,012		4.00	%
Total available for sale	Total available for sale	4,108		3.09	%	21,692		2.75	%	76,192		3.03	%	209,381		2.50	%	Total available for sale	12,050		0.73	%	313,889		0.80	%	175,390		2.16	%	143,867		2.51	%

Total securities	Total securities	$	19,999	3.03	%	$	72,430	3.66	%	$	100,439	3.19	%	$	212,271	2.52	%	Total securities	$	19,579	1.67	%	$	361,651	1.03	%	$	186,762	2.23	%	$	146,077	2.53	%

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	Maturity as of December 31, 2021
	Due in One Year or Less				More Than One Year to Five Years				More Than Five Years to Ten Years				Due After Ten Years
(Dollars in thousands)	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield
Held to maturity:

Issued by states and political subdivisions	$	9,286	3.00	%	$	44,803	2.77	%	$	15,349	2.41	%	$	2,210	4.27	%




Total held to maturity	9,286		3.00	%	44,803		2.77	%	15,349		2.41	%	2,210		4.27	%

Available for sale:
U.S. Government agency obligations	5,006		2.60	%	221,071		0.54	%	120,049		1.20	%	4,124		1.77	%
Issued by states and political subdivisions	2,202		4.06	%	15,110		2.63	%	21,084		3.09	%	6,288		3.24	%
Mortgage-backed securities:
Residential	—		—	%	—		—	%	4,211		1.86	%	105,576		2.42	%
Commercial	—		—	%	—		—	%	13,512		1.54	%	764		2.50	%
Asset-backed securities	—		—	%	—		—	%	—		—	%	13,107		1.83	%
Corporate investments	4,004		2.13	%	493		2.75	%	38,953		4.12	%	1,060		4.50	%
Total available for sale	11,212		2.72	%	236,674		0.68	%	197,809		2.01	%	130,919		2.40	%

Total securities	$	20,498	2.85	%	$	281,477	1.01	%	$	213,158	2.04	%	$	133,129	2.43	%

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

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Loan Portfolio

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


		As of September 30, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Amount		Percent		Amount		Percent		(Dollars in thousands)	Amount		Percent		Amount		Percent

Secured by real estate:	Secured by real estate:									Secured by real estate:
Residential properties	Residential properties	$	773,928	21.95	%	$	738,340	21.85	%	Residential properties	$	1,142,726	24.11	%	$	774,699	21.41	%
Construction and land development	Construction and land development	465,564		13.20	%	403,496		11.94	%	Construction and land development	676,562		14.27	%	543,763		15.02	%
Farmland	Farmland	212,645		6.03	%	217,104		6.43	%	Farmland	221,706		4.68	%	211,503		5.84	%
Other commercial	Other commercial	1,339,214		37.98	%	1,224,633		36.25	%	Other commercial	1,953,941		41.22	%	1,396,085		38.58	%
Total real estate	Total real estate	2,791,351		79.16	%	2,583,573		76.47	%	Total real estate	3,994,935		84.28	%	2,926,050		80.85	%
Commercial and industrial	Commercial and industrial	534,160		15.15	%	635,714		18.82	%	Commercial and industrial	584,565		12.33	%	527,102		14.56	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	101,973		2.89	%	85,469		2.53	%	Agricultural production and other loans to farmers	70,276		1.48	%	86,520		2.39	%
Consumer and other	Consumer and other	98,602		2.80	%	73,976		2.19	%	Consumer and other	90,630		1.91	%	79,500		2.20	%
Total loans, gross	Total loans, gross	3,526,086		100.00	%	3,378,732		100.00	%	Total loans, gross	4,740,406		100.00	%	3,619,172		100.00	%
Allowance for loan losses	Allowance for loan losses	(44,001)				(36,000)				Allowance for loan losses	(44,238)				(45,000)
Total loans, net	Total loans, net	$	3,482,085			$	3,342,732			Total loans, net	$	4,696,168			$	3,574,172

As a general practice, BancPlus originates substantially all of its loans, but BancPlus occasionally participates in syndications and other loan participations. At ~~September 30, 2021,~~March 31, 2022, BancPlus’ loan portfolio included ~~$290.8~~$337.9 million of loan participations purchased, or ~~8.25%~~7.13% of total loans, which includes ~~$146.8~~$176.8 million of shared national credits. At December 31, ~~2020,~~2021, BancPlus’ loan portfolio included ~~$245.7~~$333.0 million of loan participations purchased, or ~~7.27%~~9.20% of total loans, which includes ~~$93.8~~$177.5 million of shared national credits.

The following tables detail the contractual maturities and sensitivity to interest rate changes for BancPlus’ loan portfolio as of the dates indicated:


		As of September 30, 2021											As of March 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 Fifteen		After Fifteen Years		Total		(Dollars in thousands)	Due in One Year or Less		More Than One Year to Five		More Than Five Years to Fifteen		After Fifteen Years		Total
Secured by real estate:	Secured by real estate:											Secured by real estate:
Residential properties	Residential properties	$	82,492	$	329,147	$	332,387	$	29,901	$	773,927	Residential properties	$	137,491	$	339,638	$	598,344	$	67,253	$	1,142,726
Construction and land development	Construction and land development	142,510		260,274		53,777		9,004		465,565		Construction and land development	254,996		297,558		108,116		15,892		676,562
Farmland	Farmland	46,569		99,747		65,107		1,222		212,645		Farmland	33,910		113,781		61,250		12,765		221,706
Other commercial	Other commercial	116,870		759,180		414,977		48,187		1,339,214		Other commercial	180,043		1,082,616		534,274		157,008		1,953,941
Total real estate	Total real estate	388,441		1,448,348		866,248		88,314		2,791,351		Total real estate	606,440		1,833,593		1,301,984		252,918		3,994,935
Commercial and industrial	Commercial and industrial	69,926		345,296		118,887		51		534,160		Commercial and industrial	153,465		342,181		83,539		5,380		584,565
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	57,476		43,233		1,264		—		101,973		Agricultural production and other loans to farmers	29,486		40,168		622		—		70,276
Consumer and other loans	Consumer and other loans	29,347		64,777		4,463		15		98,602		Consumer and other loans	26,795		59,114		4,403		318		90,630
Total loans	Total loans	$	545,190	$	1,901,654	$	990,862	$	88,380	$	3,526,086	Total loans	$	816,186	$	2,275,056	$	1,390,548	$	258,616	$	4,740,406

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		As of December 31, 2020											As of December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Due in One Year or Less		More Than One Year to Five		More Than Five Years to Fifteen		After Fifteen Years		Total		(Dollars in thousands)	Due in One Year or Less		More Than One Year to Five		More Than Five Years to Fifteen		After Fifteen Years		Total
Secured by real estate:	Secured by real estate:											Secured by real estate:
Residential properties	Residential properties	$	115,367	$	388,731	$	229,269	$	4,973	$	738,340	Residential properties	$	105,854	$	317,073	$	340,436	$	11,336	$	774,699
Construction and land development	Construction and land development	160,382		187,403		49,445		6,266		403,496		Construction and land development	217,487		285,923		31,161		9,192		543,763
Farmland	Farmland	44,618		112,826		56,307		3,353		217,104		Farmland	38,671		104,034		61,553		7,245		211,503
Other commercial	Other commercial	150,683		706,001		320,450		47,499		1,224,633		Other commercial	172,914		878,887		299,853		44,431		1,396,085
Total real estate	Total real estate	471,050		1,394,961		655,471		62,091		2,583,573		Total real estate	534,926		1,585,917		733,003		72,204		2,926,050
Commercial and industrial	Commercial and industrial	102,129		473,283		60,302		—		635,714		Commercial and industrial	98,197		342,243		86,662		—		527,102
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	40,750		42,575		2,144		—		85,469		Agricultural production and other loans to farmers	49,748		36,214		558		—		86,520
Consumer and other loans	Consumer and other loans	18,814		53,319		1,828		15		73,976		Consumer and other loans	20,686		57,222		1,578		14		79,500
Total loans	Total loans	$	632,743	$	1,964,138	$	719,745	$	62,106	$	3,378,732	Total loans	$	703,557	$	2,021,596	$	821,801	$	72,218	$	3,619,172


		As of September 30, 2021							As of March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Fixed Interest Rates		Floating or Adjustable Rates		Total		(Dollars in thousands)	Fixed Interest Rates		Floating or Adjustable Rates		Total
Secured by real estate:	Secured by real estate:							Secured by real estate:
Residential properties	Residential properties	$	640,997	$	132,930	$	773,927	Residential properties	$	896,194	$	246,532	$	1,142,726
Construction and land development	Construction and land development	232,987		232,578		465,565		Construction and land development	295,517		381,045		676,562
Farmland	Farmland	160,339		52,306		212,645		Farmland	156,807		64,899		221,706
Other commercial	Other commercial	1,097,871		241,343		1,339,214		Other commercial	1,369,135		584,806		1,953,941
Total real estate	Total real estate	2,132,194		659,157		2,791,351		Total real estate	2,717,653		1,277,282		3,994,935
Commercial and industrial	Commercial and industrial	289,928		244,232		534,160		Commercial and industrial	287,336		297,229		584,565
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	62,997		38,976		101,973		Agricultural production and other loans to farmers	42,438		27,838		70,276
Consumer and other loans	Consumer and other loans	69,086		29,516		98,602		Consumer and other loans	63,327		27,303		90,630
Total loans	Total loans	$	2,554,205	$	971,881	$	3,526,086	Total loans	$	3,110,754	$	1,629,652	$	4,740,406

As of December 31, 2020
(Dollars in thousands) Fixed Interest Rates Floating or Adjustable Rates Total
Secured by real estate:
Residential properties $ 594,353 $ 143,987 $ 738,340
Construction and land development 213,944 189,552 403,496
Farmland 162,505 54,599 217,104
Other commercial 1,016,580 208,053 1,224,633
Total real estate 1,987,382 596,191 2,583,573
Commercial and industrial 425,874 209,840 635,714
Agricultural production and other loans to farmers 51,766 33,703 85,469
Consumer and other loans 52,692 21,284 73,976
Total loans $ 2,517,714 $ 861,018 $ 3,378,732

As of September 30, 2021, the Company held 1,948 loans for customers under the PPP, totaling approximately $101.0 million, a decrease of $104.2 million, or 50.8%, from $205.2 million as of December 31, 2020. The decrease is the result of PPP loans

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~~being forgiven and paid off by the SBA or being paid off by the customer, partially offset by originations of new PPP loans in 2021 while the program was still active.~~


	As of December 31, 2021
(Dollars in thousands)	Fixed Interest Rates		Floating or Adjustable Rates		Total
Secured by real estate:
Residential properties	$	644,842	$	129,857	$	774,699
Construction and land development	262,573		281,190		543,763
Farmland	154,154		57,349		211,503
Other commercial	1,157,465		238,620		1,396,085
Total real estate	2,219,034		707,016		2,926,050
Commercial and industrial	258,036		269,066		527,102
Agricultural production and other loans to farmers	58,206		28,314		86,520
Consumer and other loans	54,923		24,577		79,500
Total loans	$	2,590,199	$	1,028,973	$	3,619,172

Additionally, BancPlus enters into various other transactions to meet the financing needs of its customers including commitments to extend credit and letters of credit. Commitments to extend credit beyond current funding are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Such commitments generally have fixed expiration

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dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. At ~~September 30, 2021,~~March 31, 2022, BancPlus had total off-balance sheet commitments of ~~$1.230~~$1.593 billion.

Asset Quality

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

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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 September 30, 2021									As of March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Risk Grades 1-7		Substandard		Doubtful		Total		(Dollars in thousands)	Risk Grades 1-7		Substandard		Doubtful		Total
Secured by real estate:	Secured by real estate:									Secured by real estate:
Residential properties	Residential properties	$	759,188	$	14,740	$	—	$	773,928	Residential properties	$	1,131,032	$	11,694	$	—	$	1,142,726
Construction and land development	Construction and land development	464,819		745		—		465,564		Construction and land development	674,263		2,299		—		676,562
Farmland	Farmland	199,608		13,037		—		212,645		Farmland	218,673		3,033		—		221,706
Other commercial	Other commercial	1,331,516		7,621		77		1,339,214		Other commercial	1,940,088		13,853		—		1,953,941
Total real estate	Total real estate	2,755,131		36,143		77		2,791,351		Total real estate	3,964,056		30,879		—		3,994,935
Commercial and industrial	Commercial and industrial	510,359		23,756		45		534,160		Commercial and industrial	567,923		16,642		—		584,565
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	101,620		353		—		101,973		Agricultural production and other loans to farmers	70,080		196		—		70,276
Consumer and other	Consumer and other	98,302		300		—		98,602		Consumer and other	90,501		129		—		90,630
Total	Total	$	3,465,412	$	60,552	$	122	$	3,526,086	Total	$	4,692,560	$	47,846	$	—	$	4,740,406


		As of December 31, 2020									As of December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Risk Grades 1-7		Substandard		Doubtful		Total		(Dollars in thousands)	Risk Grades 1-7		Substandard		Doubtful		Total
Secured by real estate:	Secured by real estate:									Secured by real estate:
Residential properties	Residential properties	$	721,024	$	17,316	$	—	$	738,340	Residential properties	$	763,116	$	11,583	$	—	$	774,699
Construction and land development	Construction and land development	401,347		2,149		—		403,496		Construction and land development	541,670		2,093		—		543,763
Farmland	Farmland	205,211		11,893		—		217,104		Farmland	208,318		3,185		—		211,503
Other commercial	Other commercial	1,209,365		15,041		227		1,224,633		Other commercial	1,386,240		9,845		—		1,396,085
Total real estate	Total real estate	2,536,947		46,399		227		2,583,573		Total real estate	2,899,344		26,706		—		2,926,050
Commercial and industrial	Commercial and industrial	619,137		16,526		51		635,714		Commercial and industrial	503,603		23,496		3		527,102
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	85,288		181		—		85,469		Agricultural production and other loans to farmers	86,292		228		—		86,520
Consumer and other	Consumer and other	73,560		416		—		73,976		Consumer and other	79,176		306		18		79,500
Total	Total	$	3,314,932	$	63,522	$	278	$	3,378,732	Total	$	3,568,415	$	50,736	$	21	$	3,619,172

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Nonperforming Assets

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

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


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021			December 31, 2020			(Dollars in thousands)	March 31, 2022			December 31, 2021
Nonaccrual loans:	Nonaccrual loans:							Nonaccrual loans:
Real estate loans:	Real estate loans:							Real estate loans:
Residential properties	Residential properties	$	3,318		$	3,869		Residential properties	$	3,373		$	3,154
Construction and land development	Construction and land development	58			1,863			Construction and land development	169			51
Farmland	Farmland	1,893			158			Farmland	1,445			1,327
Other commercial	Other commercial	2,324			7,947			Other commercial	2,486			1,176
Total real estate	Total real estate	7,593			13,837			Total real estate	7,473			5,708
Commercial and industrial	Commercial and industrial	106			12			Commercial and industrial	85			20
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	135			85			Agricultural production and other loans to farmers	14			3
Consumer and other	Consumer and other	210			177			Consumer and other	26			166
Total nonaccrual loans	Total nonaccrual loans	8,044			14,111			Total nonaccrual loans	7,598			5,897

Troubled debt restructuring loans – accruing:	Troubled debt restructuring loans – accruing:							Troubled debt restructuring loans – accruing:
Real estate loans:	Real estate loans:							Real estate loans:
Residential properties	Residential properties	1,898			1,916			Residential properties	1,803			1,641
Construction and land development	Construction and land development	1,558			—			Construction and land development	1,558			1,558
Farmland	Farmland	—			—			Farmland	—			—
Other commercial	Other commercial	—			—			Other commercial	—			—
Total real estate	Total real estate	3,456			1,916			Total real estate	3,361			3,199
Commercial and industrial	Commercial and industrial	388			—			Commercial and industrial	375			381
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	—			—			Agricultural production and other loans to farmers	—			—
Consumer and other	Consumer and other	—			—			Consumer and other	—			—
Total troubled debt restructuring loans – accruing	Total troubled debt restructuring loans – accruing	3,844			1,916			Total troubled debt restructuring loans – accruing	3,736			3,580
Total nonperforming loans	Total nonperforming loans	11,888			16,027			Total nonperforming loans	11,334			9,477
Plus: foreclosed assets	Plus: foreclosed assets	6,989			6,754			Plus: foreclosed assets	7,363			5,815
Total nonperforming assets	Total nonperforming assets	$	18,877		$	22,781		Total nonperforming assets	$	18,697		$	15,292

Nonaccrual loans to total loans	Nonaccrual loans to total loans	0.23		%	0.42		%	Nonaccrual loans to total loans	0.16		%	0.16		%
Nonperforming loans to total loans	Nonperforming loans to total loans	0.34		%	0.47		%	Nonperforming loans to total loans	0.24		%	0.26		%
Nonperforming assets to total assets	Nonperforming assets to total assets	0.37		%	0.48		%	Nonperforming assets to total assets	0.29		%	0.29		%
Allowance for loan losses to nonaccrual loans	Allowance for loan losses to nonaccrual loans	547.00		%	255.12		%	Allowance for loan losses to nonaccrual loans	582.23		%	763.10		%
90+ days past due and accruing	90+ days past due and accruing	$	2,299		$	6,303		90+ days past due and accruing	$	3,147		$	2,914
Total troubled debt restructuring loans	Total troubled debt restructuring loans	$	4,018		$	8,537		Total troubled debt restructuring loans	$	3,736		$	3,746

Total nonperforming assets ~~decreased~~increased by ~~$3.9~~$3.4 million, or ~~17.1%~~22.3%, from ~~$22.8~~$15.3 million at December 31, ~~2020~~2021 to ~~$18.9~~$18.7 million at ~~September 30, 2021,~~March 31, 2022, primarily ~~due to a decrease in nonaccrual loans as a~~the result of ~~payments~~nonperforming loans and ~~foreclosures during~~foreclosed assets acquired in the ~~current year on loans that were in nonaccrual status at December 31, 2020.~~FTC Merger.

The balance of nonperforming assets can fluctuate due to changes in economic conditions. BancPlus has established a policy to discontinue accruing interest on a loan (that is, place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection.

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When a loan is placed on nonaccrual status, current year interest previously accrued but uncollected on such loans is reversed and charged against current income, and prior year interest, if any, is charged off against the allowance for loan losses. Generally, payments received on nonaccrual loans are applied directly to principal.

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Allowance for Loan Losses

The allowance for loan losses is a reserve established through charges to earnings in the form of a provision for loan losses. BancPlus maintains an allowance for loan losses at a level management considers adequate to provide for known and probable incurred losses in the portfolio. The level of the allowance is based on management’s evaluation of estimated losses in the portfolio, after consideration of risk characteristics of the loans and prevailing economic conditions. Loan charge-offs (i.e. loans judged to be uncollectible) are charged against the reserve and any subsequent recovery is credited to the reserve. BancPlus’ officers analyze risk in the loan portfolio on an ongoing basis. A risk system, consisting of multiple grading categories for each portfolio class, is utilized as an analytical tool to assess risk and appropriate reserves. In addition to the risk system, management further evaluates risk characteristics of the loan portfolio under current and anticipated economic conditions and considers such factors as the financial condition of the borrower, past and expected loss experience, and other factors which management feels deserve recognition in establishing an appropriate reserve. These estimates are reviewed at least quarterly, and, as adjustments become necessary, they are recognized in the periods in which they become known. During the ~~third~~first quarter of ~~2021,~~2022, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of the COVID-19 pandemic, ~~and development of the outbreak, including variants, such as the delta variant,~~supply chain disruptions, labor shortages and the severity of such variants, and the availability, effectiveness and acceptance of vaccines, all of which are also highly uncertain. The government’s response to these conditions includes certain provisions, such as automatic forbearance and forgiveness for certain federally backed loans that could affect these estimates.conflict in 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 loan losses.

The allowance for loan losses was ~~$44.0~~$44.2 million and ~~$36.0~~$45.0 million, and the allowance for loan losses as a percentage of loans was ~~1.24%~~0.93% and ~~1.06%~~1.24%, at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Net charge-offs (recoveries) totaled ~~$(606,000)~~$979,000 and ~~$2.4 million~~$(152,000) for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~$3.0~~$1.1 million variance is primarily the result of current year ~~recoveries~~charge-offs on consumer and other commercial ~~categories as well as high charge offs in 2020 as a result of the COVID-19 pandemic.~~categories.

The allowance for loan losses ~~increased~~decreased by ~~$8.0 million,~~$762,000, or ~~22.2%~~1.7%, to ~~$44.0~~$44.2 million at ~~September 30, 2021,~~March 31, 2022, from ~~$36.0~~$45.0 million at December 31, ~~2020,~~2021, primarily due to ~~the~~an increase in ~~provision for loan losses~~net charge-offs in the current period as a result of the continuing impact of the COVID-19 pandemic, including the impact of the CARES Act measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance.period.

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


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021			September 30, 2020			(Dollars in thousands)	March 31, 2022			March 31, 2021

Balance, beginning of period	Balance, beginning of period	$	36,000		$	21,500		Balance, beginning of period	$	45,000		$	36,000
Charge-offs:	Charge-offs:							Charge-offs:
Residential properties	Residential properties	298			268			Residential properties	250			126
Construction and land development	Construction and land development	240			3			Construction and land development	—			210
Farmland	Farmland	157			—			Farmland	120			4
Other commercial	Other commercial	581			2,179			Other commercial	317			101
Total real estate	Total real estate	1,276			2,450			Total real estate	687			441
Commercial and industrial	Commercial and industrial	317			494			Commercial and industrial	58			19
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	111			2,270			Agricultural production and other loans to farmers	981			776
Consumer and other	Consumer and other	2,832			298			Consumer and other	261			98
Total charge-offs	Total charge-offs	4,536			5,512			Total charge-offs	1,987			1,334
Recoveries:	Recoveries:							Recoveries:
Residential properties	Residential properties	340			237			Residential properties	54			84
Construction and land development	Construction and land development	143			56			Construction and land development	70			8
Farmland	Farmland	292			—			Farmland	5			283
Other commercial	Other commercial	1,842			94			Other commercial	66			122
Total real estate	Total real estate	2,617			387			Total real estate	195			497
Commercial and industrial	Commercial and industrial	479			148			Commercial and industrial	22			107
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	3			2,365			Agricultural production and other loans to farmers	744			766
Consumer and other	Consumer and other	2,043			254			Consumer and other	47			116
Total recoveries	Total recoveries	5,142			3,154			Total recoveries	1,008			1,486
Net charge-offs (recoveries)	Net charge-offs (recoveries)	(606)			2,358			Net charge-offs (recoveries)	979			(152)
Provision for loan losses	Provision for loan losses	7,395			7,706			Provision for loan losses	217			3,889
Balance, end of period	Balance, end of period	$	44,001		$	26,848		Balance, end of period	$	44,238		$	40,041

Total loans, end of period		$	3,539,990		$	3,447,458
Total loans, end of period (including loans held for sale)								Total loans, end of period (including loans held for sale)	$	4,752,150		$	3,427,393
Average loans	Average loans	3,469,520			2,912,471			Average loans	4,029,014			3,418,232
Net charge-offs (annualized) to average loans	Net charge-offs (annualized) to average loans	(0.02)		%	0.11		%	Net charge-offs (annualized) to average loans	0.10		%	(0.02)		%
Allowance for loan losses to total loans	Allowance for loan losses to total loans	1.24		%	0.78		%	Allowance for loan losses to total loans	0.93		%	1.17		%

The table below reflects net charge-offs to average loans outstanding, by category, during the periods presented.

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		Nine Months Ended September 30,													Three Months Ended March 31,
		2021						2020							2022						2021
(Dollars in thousands)	(Dollars in thousands)	Net Charge-offs		Average Loans		Net Charge-offs to Average Loans (Annualized)		Net Charge-offs		Average Loans		Net Charge-offs to Average Loans (Annualized)		(Dollars in thousands)	Net Charge-offs		Average Loans		Net Charge-offs to Average Loans (Annualized)		Net Charge-offs		Average Loans		Net Charge-offs to Average Loans (Annualized)
Residential properties	Residential properties	$	(42)	$	750,238	(0.01)	%	$	31	$	667,745	0.01	%	Residential properties	$	196	$	897,909	0.09	%	$	42	$	732,682	0.02	%
Construction and land development	Construction and land development	97		458,968		0.03	%	(53)		302,444		(0.02)	%	Construction and land development	(70)		614,770		(0.05)	%	202		437,070		0.18	%
Farmland	Farmland	(135)		206,878		(0.09)	%	—		199,363		—	%	Farmland	115		216,353		0.21	%	(279)		209,550		(0.53)	%
Other commercial	Other commercial	(1,261)		1,274,874		(0.13)	%	2,085		1,003,236		0.28	%	Other commercial	251		1,592,295		0.06	%	(21)		1,243,560		(0.01)	%
Commercial and industrial	Commercial and industrial	(162)		589,070		(0.04)	%	346		561,457		0.08	%	Commercial and industrial	36		550,125		0.03	%	(88)		631,169		(0.06)	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	108		89,773		0.16	%	(95)		92,571		(0.14)	%	Agricultural production and other loans to farmers	237		64,658		1.47	%	10		75,325		0.05	%
Consumer and other	Consumer and other	789		83,432		1.26	%	44		69,307		0.08	%	Consumer and other	214		83,964		1.02	%	(18)		75,546		(0.10)	%
Loans held for sale	Loans held for sale	—		16,287		—	%	—		16,348		—	%	Loans held for sale	—		8,940		—	%	—		22,532		—	%
Total	Total	$	(606)	$	3,469,520	(0.02)	%	$	2,358	$	2,912,471	0.11	%	Total	$	979	$	4,029,014	0.10	%	$	(152)	$	3,427,434	(0.02)	%

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


		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Amount		Percent		Amount		Percent		(Dollars in thousands)	Amount		Percent		Amount		Percent
Residential properties	Residential properties	$	10,523	23.9	%	$	7,900	21.9	%	Residential properties	$	9,603	21.7	%	$	9,488	21.1	%
Construction and land development	Construction and land development	5,915		13.4	%	4,618		12.8	%	Construction and land development	6,539		14.8	%	6,463		14.4	%
Farmland	Farmland	2,330		5.3	%	1,412		3.9	%	Farmland	1,860		4.2	%	2,171		4.8	%
Other commercial	Other commercial	16,698		37.9	%	14,133		39.3	%	Other commercial	18,513		41.8	%	18,499		41.1	%
Total real estate	Total real estate	35,466		80.6	%	28,063		78.0	%	Total real estate	36,515		82.5	%	36,621		81.4	%
Commercial and industrial	Commercial and industrial	6,066		13.8	%	6,337		17.6	%	Commercial and industrial	6,052		13.7	%	6,556		14.6	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	1,170		2.7	%	773		2.1	%	Agricultural production and other loans to farmers	679		1.5	%	958		2.1	%
Consumer and other	Consumer and other	1,299		3.0	%	827		2.3	%	Consumer and other	992		2.2	%	865		1.9	%
Total allowance for loan losses	Total allowance for loan losses	$	44,001	100.0	%	$	36,000	100.0	%	Total allowance for loan losses	$	44,238	100.0	%	$	45,000	100.0	%

Goodwill and Other Intangible Assets

Goodwill was $63.8 million and $2.6 million ~~at both September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021, respectively. Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired by the Company in prior acquisitions. The increase in goodwill is the result of the FTC Merger. Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets consist of acquired customer relationships from a 2014 acquisition and core deposit intangibles from the ~~merger with SCC.~~SCC Merger and the FTC Merger. Total other intangible assets at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were ~~$5.3~~$12.7 million and ~~$5.8~~$5.1 million, respectively. Other intangible assets are amortized over their estimated useful life.

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Deposits

The following table details composition and percentage composition of BancPlus’ deposit portfolio, by category, for the year to date periods indicated:


		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Average Balance		Average Rate		Percent		Average Balance		Average Rate		Percent		(Dollars in thousands)	Average Balance		Average Rate		Percent		Average Balance		Average Rate		Percent

Non-interest bearing	Non-interest bearing	$	1,306,105	0.00	%	29.68	%	$	1,009,427	0.00	%	27.69	%	Non-interest bearing	$	1,545,452	0.00	%	30.60	%	$	1,337,985	0.00	%	30.13	%
Interest bearing:	Interest bearing:													Interest bearing:
Transaction accounts	Transaction accounts	1,452,965		0.21	%	33.02	%	1,191,857		0.49	%	32.69	%	Transaction accounts	1,590,153		0.18	%	31.49	%	1,453,493		0.20	%	32.74	%
Money market and other savings accounts	Money market and other savings accounts	982,220		0.09	%	22.32	%	806,652		0.29	%	22.13	%	Money market and other savings accounts	1,199,908		0.10	%	23.76	%	996,420		0.09	%	22.44	%
Certificates of deposit	Certificates of deposit	659,361		0.59	%	14.98	%	637,781		0.93	%	17.49	%	Certificates of deposit	714,438		0.37	%	14.15	%	652,247		0.56	%	14.69	%
Total deposits	Total deposits	$	4,400,651	0.18	%	100.00	%	$	3,645,717	0.39	%	100.00	%	Total deposits	$	5,049,951	0.13	%	100.00	%	$	4,440,145	0.17	%	100.00	%

BancPlus relies on increasing its deposit base to fund loans and other asset growth. BancPlus competes for local deposits by offering a variety of products at competitive rates. The increase in total average deposits of ~~$754.9~~$609.8 million, or ~~20.7%~~13.7%, to ~~$4.401~~$5.050 billion at ~~September 30, 2021~~March 31, 2022 from ~~$3.646~~$4.440 billion as of December 31, ~~2020 is~~2021 primarily resulted from the ~~result of recipients of PPP loans placing funds in deposit accounts held at the Bank.~~FTC Merger. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, BancPlus held non-time deposits in excess of FDIC insurance limits estimated at ~~$810.1 million~~$1.188 billion and ~~$889.3~~$802.9 million, respectively.

The following table shows the maturity of certificates of deposit as of ~~September 30, 2021:~~March 31, 2022:


(Dollars in thousands)	(Dollars in thousands)	$250,000 or Greater		Less than $250,000		Total		Uninsured Portion		(Dollars in thousands)	$250,000 or Greater		Less than $250,000		Total		Uninsured Portion
3 months or less	3 months or less	$	39,438	$	105,705	$	145,143	$	15,938	3 months or less	$	58,906	$	145,774	$	204,680	$	29,906
Over 3 months through 6 months	Over 3 months through 6 months	26,404		87,066		113,470		12,404		Over 3 months through 6 months	49,727		122,640		172,367		25,477
Over 6 months through 12 months	Over 6 months through 12 months	54,549		132,074		186,623		30,049		Over 6 months through 12 months	65,916		184,495		250,411		33,166
Over 12 months	Over 12 months	55,447		136,331		191,778		27,697		Over 12 months	74,189		181,283		255,472		36,189
Total certificates of deposit	Total certificates of deposit	$	175,838	$	461,176	$	637,014	$	86,088	Total certificates of deposit	$	248,738	$	634,192	$	882,930	$	124,738

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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had no short-term borrowings.

~~FHLB~~ Advances from Federal Home Loan Bank (“FHLB”) and Other Borrowings. BankPlus is a member of the FHLB, and as a result, is eligible for advances from the FHLB pursuant to the terms of various borrowing agreements, which assist BancPlus in the funding of its loan and investment portfolios. BancPlus’ FHLB advances are collateralized by a blanket lien on first mortgage and other qualifying loans. At both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, BancPlus had $20.5 million in FHLB borrowings, at a weighted average interest rate of ~~1.50%~~1.49%.

~~In October 2016, BancPlus~~On February 25, 2022, the Company entered into a ~~five-year loan agreement~~$20.0 million revolving line of credit with a correspondent ~~bank under which BancPlus borrowed $35.0 million in connection with the redemption~~bank. The line of ~~BancPlus preferred stock. BancPlus pledged 100% of its~~credit is collateralized by 9,000 shares of BankPlus ~~stock as collateral for the loan.~~common stock. The ~~loan required quarterly principal reductions~~line of ~~$875,000 and quarterly~~credit bears interest ~~payments~~ at a ~~fixed 3.75% annual rate.~~floating rate of Wall Street Journal Prime with 3.25% interest rate floor. At March 31, 2022, the interest rate was 3.50%. Interest only payments are due on a quarterly basis with the principal due at maturity on February 25, 2024. The balance outstanding on this loan was ~~$10.5~~$20.0 million and ~~$13.1 million~~zero at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. ~~The Company repaid this loan at its maturity in October 2021.~~

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Required principal payments on FHLB advances and other borrowings were as follows:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021		December 31, 2020		(Dollars in thousands)	March 31, 2022		December 31, 2021
2021		$	10,525	$	13,171
2022	2022	417		395		2022	$	397	$	417
2023	2023	25		110		2023	25		25
2024	2024	13		—		2024	20,013		13
2025	2025	13		—		2025	13		13
2026						2026	14		14
Thereafter	Thereafter	20,033		20,095		Thereafter	20,015		20,019
Total	Total	$	31,026	$	33,771	Total	$	40,477	$	20,501

Subordinated ~~Debentures and Trust Preferred Securities.~~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 ~~Condensed~~ Consolidated Balance Sheets and will be amortized over the life of the Notes. The Notes initially bear interest at a rate of 6.000% per annum from and including June 4, 2020, to but excluding June 15, 2025 or early redemption date, with interest during this period payable semiannually in arrears. From and including June 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 586 basis points, with interest during this period payable quarterly in arrears. The Company used the proceeds of the private placement for general corporate purposes, including improving the Company’s liquidity and capital position.

Effective March 1, 2022, in conjunction with the FTC Merger, the Company assumed FTC’s obligations under its Subordinated Note Purchase Agreement, dated as of December 23, 2020, and the several purchasers of the $21.0 million aggregate principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued thereunder (the “Subordinated Notes”). The Subordinated Notes will mature on December 30, 2030 and bear interest at an initial fixed rate of 5.50% per annum, payable semi-annually in arrears. From and including December 30, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate plus 527 basis points, payable quarterly in arrears. BancPlus will be entitled to redeem the Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the Subordinated Notes in whole upon certain other events. The Subordinated Notes are not subject to redemption at the option of the holder. The Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at March 31, 2022 due to the remaining purchase premium of $733,000, 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. ~~The~~Under a grandfathering provision in the Basel III capital rules that applies to bank holding companies with less than $15 billion in total consolidated assets, the preferred capital securities have qualified as Tier 1 capital, subject to regulatory rules and limits. These trusts used the proceeds from the issuance of the common stock and preferred capital securities to purchase subordinated debentures that BancPlus issued. The subordinated debentures are these trusts’ only assets, and quarterly interest payments on these subordinated debentures are the sole source of cash for these trusts to pay quarterly distributions on the common stock and preferred capital securities. BancPlus has fully and unconditionally guaranteed the trusts’ obligations on preferred capital securities.

The following table is a summary of debentures payable to statutory trusts:

(Dollars in thousands) Year of
Maturity Interest
Rate September 30, 2021 December 31, 2020
First Bancshares of Baton Rouge Statutory Trust I 2034 3 month LIBOR, plus 2.50% $ 4,124 $ 4,124
State Capital Statutory Trust IV 2035 3 month LIBOR, plus 1.99% 5,155 5,155
BancPlus Statutory Trust II 2036 3 month LIBOR, plus 1.50% 20,619 20,619
BancPlus Statutory Trust III 2037 3 month LIBOR, plus 1.35% 20,619 20,619
State Capital Master Trust 2037 3 month LIBOR, plus 1.46% 6,186 6,186
$ 56,703 $ 56,703

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(Dollars in thousands)	Year of Maturity	Interest Rate	March 31, 2022		December 31, 2021
First Bancshares of Baton Rouge Statutory Trust I	2034	3 month LIBOR, plus 2.50%	$	4,124	$	4,124
State Capital Statutory Trust IV	2035	3 month LIBOR, plus 1.99%	5,155		5,155
BancPlus Statutory Trust II	2036	3 month LIBOR, plus 1.50%	20,619		20,619
BancPlus Statutory Trust III	2037	3 month LIBOR, plus 1.35%	20,619		20,619
State Capital Master Trust	2037	3 month LIBOR, plus 1.46%	6,186		6,186
			$	56,703	$	56,703

Interest rates adjust quarterly for the subordinated debentures with rates that are indexed with LIBOR.On March 15, 2022 the Adjustable Interest Rate (LIBOR) Act was signed into law as part of the Consolidated Appropriations Act, 2022. The Adjustable Interest Rate (LIBOR) Act establishes a nationwide process for replacing LIBOR in financial contracts that mature after the cessation of the overnight, one-, three-, six- and 12-month U.S. dollar LIBOR tenors on June 30, 2023 and that do not provide for an effective means to replace LIBOR upon its cessation.For contracts in which a party has the discretion to identify a replacement rate, the Act also provides a safe harbor to parties if they choose the SOFR-based benchmark replacement rate to be identified by the Board of Governors of the Federal Reserve System.We are currently monitoring ~~the actions of LIBOR’s regulator and the implementation of alternative reference rates in advance of the expected discontinuation of LIBOR~~these developments to determine any potential impact on the subordinated debentures.

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

Shareholders’ Equity

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

Shareholders’ equity increased ~~$30.6~~$44.4 million, or ~~8.6%~~11.4%, to ~~$385.9~~$434.8 million at ~~September 30, 2021~~March 31, 2022 from ~~$355.3~~$390.4 million at December 31, ~~2020,~~2021, primarily due to $56.5 million of equity issued in the FTC Merger, net income of ~~$45.5~~$9.7 million, and $1.4 million of common stock released by the ESOP, partially offset by other comprehensive loss of $19.6 million and dividends paid of $11.5 million, and purchase of Company stock of $2.4 million for the year to date period. The purchase of Company stock was the result of members of the State Bank Employee Stock Ownership Plan (“State Bank ESOP”), who took a distribution of Company stock from the State Bank ESOP, exercising a put option available to them following their distribution. The put option is available for shares of Company stock distributed by the State Bank ESOP, so long as the Company is not publicly traded, for a period of 60 days following the distribution request.$4.1 million.

Liquidity and Capital Resources

Bank Liquidity Management

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

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

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

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(Dollars in thousands) Primary Liquidity – On-Balance Sheet	(Dollars in thousands) Primary Liquidity – On-Balance Sheet	September 30, 2021			December 31, 2020			(Dollars in thousands) Primary Liquidity – On-Balance Sheet	March 31, 2022			December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	695,069		$	637,545		Cash and cash equivalents	$	695,352		$	664,165
Total securities	Total securities	619,306			405,139			Total securities	714,069			648,262
Less: pledged securities	Less: pledged securities	(489,257)			(317,461)			Less: pledged securities	(593,939)			(489,184)
Total primary liquidity	Total primary liquidity	$	825,118		$	725,223		Total primary liquidity	$	815,482		$	823,243
Ratio of primary liquidity to total deposits	Ratio of primary liquidity to total deposits	18.2		%	17.5		%	Ratio of primary liquidity to total deposits	13.9		%	17.8		%


Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	September 30, 2021			December 31, 2020			Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	March 31, 2022			December 31, 2021
Net secured borrowing capacity with the FHLB	Net secured borrowing capacity with the FHLB	$	1,499,630		$	1,408,005		Net secured borrowing capacity with the FHLB	$	1,365,483		$	1,476,825
Net secured borrowing capacity with the Federal Reserve Bank	Net secured borrowing capacity with the Federal Reserve Bank	210,239			211,407			Net secured borrowing capacity with the Federal Reserve Bank	258,410			189,497
Unsecured borrowing capacity with correspondent lenders	Unsecured borrowing capacity with correspondent lenders	203,000			228,000			Unsecured borrowing capacity with correspondent lenders	223,000			223,000
Total secondary liquidity	Total secondary liquidity	$	1,912,869		$	1,847,412		Total secondary liquidity	$	1,846,893		$	1,889,322
Ratio of primary and secondary liquidity to total deposits	Ratio of primary and secondary liquidity to total deposits	60.4		%	61.9		%	Ratio of primary and secondary liquidity to total deposits	45.5		%	58.7		%

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, BancPlus’ primary liquidity ~~increased~~decreased by ~~$99.9~~$7.8 million to ~~$825.1~~$815.5 million, compared to ~~$725.2~~$823.2 million at December 31, ~~2020,~~2021, primarily due an increase in securities partially offset by an increase in our pledged securities. Secondary liquidity ~~increased~~decreased by ~~$65.5~~$42.4 million to ~~$1.913~~$1.847 billion as of ~~September 30, 2021~~March 31, 2022 from ~~$1.847~~$1.889 billion as of December 31, ~~2020.~~2021. This ~~increase~~decrease was primarily due to an ~~increase~~decrease in BancPlus’ FHLB borrowing 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 ~~$4.363~~$5.612 billion and ~~$3.973~~$4.450 billion and represented ~~96.3%~~95.9% and ~~95.7%~~96.3% of total deposits as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. These core deposits are normally less volatile, often with customer relationships tied to other products, which promote long-standing relationships and stable funding sources. Although BancPlus’ policy allows the use of brokered deposits, BankPlus did not utilize this funding source during the ~~2021~~2022 and ~~2020~~2021 year to date periods.

BancPlus’ liquidity policy includes both policy limits and policy guidelines for measuring and monitoring liquidity. BancPlus’ policy measures include an Internal Liquidity Ratio, an Internal Liquidity Ratio adjusted for FHLB, an Internal Dependency Ratio adjusted for FHLB and a Maximum Available Funds to Total Assets Ratio. These ratios are calculated monthly. BancPlus also utilizes eleven liquidity guidelines that are reported quarterly. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, BancPlus was in compliance with all of its established liquidity ~~policies.~~guidelines.

Holding Company Liquidity Management

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

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Due to state banking laws, BankPlus may not declare dividends without the prior approval of the MDBCF. BankPlus received permission from the MDBCF to pay dividends of ~~$11.5~~$6.3 million and ~~$9.7~~$5.4 million for the year-to-date periods ended ~~September 30,~~March 31, 2022 and March 31, 2021, ~~and September 30, 2020,~~ respectively. These dividends were used by the holding company to pay dividends to the BancPlus shareholders, principal and interest payments on debt and general operating expenses.

Capital Management and Regulatory Capital Requirements

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

Under the regulatory capital rules, BancPlus must maintain minimum amounts and ratios of common equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, referred to as

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the leverage ratio. The adequacy of our capital levels is also subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors.

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

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

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, BancPlus and BankPlus met all applicable capital adequacy requirements and BankPlus was deemed “well capitalized.” As a bank holding company, BancPlus is not subject to the prompt corrective action regime that applies to insured depository institutions, including BankPlus.

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


		Actual				Minimum For Capital Adequacy Purposes				Required to be Well Capitalized					Actual				Minimum For Capital Adequacy Purposes				Required to be Well Capitalized
As of September 30, 2021:		Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
As of March 31, 2022:														As of March 31, 2022:	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
Consolidated:	Consolidated:													Consolidated:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	374,642	9.57	%	$	273,936	7.00	%	N/A		N/A		CET1 Capital to Risk-Weighted Assets	$	381,074	7.52	%	$	354,634	7.00	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	425,598		10.88	%	332,636		8.50	%	N/A		N/A		Tier 1 Capital to Risk-Weighted Assets	432,154		8.53	%	430,626		8.50	%	N/A		N/A
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	580,350		13.50	%	410,904		10.50	%	N/A		N/A		Total Capital to Risk-Weighted Assets	556,947		10.99	%	531,950		10.50	%	N/A		N/A
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	425,598		8.40	%	202,413		4.00	%	N/A		N/A		Tier 1 Capital to Average Assets	432,154		7.73	%	223,690		4.00	%	N/A		N/A

Bank:	Bank:													Bank:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	420,455	10.77	%	$	273,372	7.00	%	$	253,845	6.50	%	CET1 Capital to Risk-Weighted Assets	$	510,266	10.23	%	$	349,248	7.00	%	$	324,301	6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	420,455		10.77	%	331,951		8.50	%	312,425		8.00	%	Tier 1 Capital to Risk-Weighted Assets	510,266		10.23	%	424,087		8.50	%	399,140		8.00	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	464,456		11.89	%	410,058		10.50	%	390,531		10.00	%	Total Capital to Risk-Weighted Assets	554,504		11.11	%	523,872		10.50	%	198,925		10.00	%
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	420,455		8.32	%	202,059		4.00	%	252,574		5.00	%	Tier 1 Capital to Average Assets	510,266		9.14	%	223,200		4.00	%	279,000		5.00	%


		Actual				Minimum For Capital Adequacy Purposes				Required to be Well Capitalized					Actual				Minimum For Capital Adequacy Purposes				Required to be Well Capitalized
As of December 31, 2020:		Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
As of December 31, 2021:														As of December 31, 2021:	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
Consolidated:	Consolidated:													Consolidated:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	339,936	9.94	%	$	239,437	7.00	%	N/A		N/A		CET1 Capital to Risk-Weighted Assets	$	382,736	9.40	%	$	285,078	7.00	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	390,713		11.42	%	290,745		8.50	%	N/A		N/A		Tier 1 Capital to Risk-Weighted Assets	433,754		10.65	%	346,166		8.50	%	N/A		N/A
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	485,357		14.19	%	359,155		10.50	%	N/A		N/A		Total Capital to Risk-Weighted Assets	537,541		13.20	%	427,617		10.50	%	N/A		N/A
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	390,713		8.55	%	182,853		4.00	%	N/A		N/A		Tier 1 Capital to Average Assets	433,754		8.46	%	205,072		4.00	%	N/A		N/A

Bank:	Bank:													Bank:
CET1 Capital to Risk-Weighted Assets	CET1 Capital to Risk-Weighted Assets	$	387,231	11.36	%	$	238,629	7.00	%	$	221,584	6.50	%	CET1 Capital to Risk-Weighted Assets	$	428,602	10.55	%	$	284,509	7.00	%	$	264,187	6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	387,231		11.36	%	289,763		8.50	%	272,719		8.00	%	Tier 1 Capital to Risk-Weighted Assets	428,602		10.55	%	345,475		8.50	%	325,153		8.00	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	423,231		12.42	%	357,943		10.50	%	340,898		10.00	%	Total Capital to Risk-Weighted Assets	473,602		11.65	%	426,763		10.50	%	406,441		10.00	%
Tier 1 Capital to Average Assets	Tier 1 Capital to Average Assets	387,231		8.49	%	182,531		4.00	%	228,164		5.00	%	Tier 1 Capital to Average Assets	428,602		8.37	%	204,714		4.00	%	255,893		5.00	%

Contractual Obligations

Contractual obligations as of ~~September 30, 2021,~~March 31, 2022, totaled ~~$827.6~~$1,093.4 million and were primarily comprised of deposits with maturities of ~~$637.0~~$882.9 million, subordinated debentures of ~~$111.4~~$133.3 million and operating lease obligations of ~~$48.1~~$36.6 million. Contractual obligations due within the next twelve months were ~~$460.6~~$627.9 million and were primarily related to time deposits with maturity dates. Contractual obligations due in more than 12 months were ~~$367.0~~$465.5 million and were comprised of ~~$191.8~~$255.5 million of time deposits with maturity dates and ~~$111.4~~$133.3 million of subordinated debentures with maturities ranging from ~~2034~~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

ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit losses and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and

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other commitments to extend credit held by a reporting entity at each reporting date. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 is effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has formed a cross functional team that is assessing data and system needs and evaluating the impact of adopting the new guidance. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but has not yet determined the magnitude of any such one-time adjustments or the overall impact on the Company’s financial statements.

ASU 2020-04, “Reference Rate Reform - Topic 848.” In March 2020, the FASB issued ASU 2020-04 which provides temporary optional expedients and exceptions to the accounting principles generally accepted in the United States (“GAAP”) guidance on contract modifications, hedge accounting, and other transactions affected that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The 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.

Critical Accounting Policies and Estimates

~~BancPlus’ unaudited interim condensed consolidated financial statements are prepared based on the application of certain accounting policies, the most significant of which are described in the notes~~There have been no material changes to its condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variation and may significantly affect its reported results and financial position for the current period or in future periods. The use of estimates, assumptions, and judgments are necessary when financial assets and liabilities are required to be recorded at, or adjusted to reflect, fair value. Assets carried at fair value inherently result in more financial statement volatility. Fair values and information used to record valuation adjustments for certain assets and liabilities are based on either quoted market prices or are provided by other independent third-party sources, when available. When such information is not available, management estimates valuation adjustments. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on BancPlus’ future financial condition and results of operations.

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits BancPlus, as an emerging growth company, to take advantage of an extended transition period for complying with new or revised accounting standards affecting public companies. BancPlus has elected to take advantage of this extended transition period, which means that the financial statements included in this Quarterly Report on Form 10-Q will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as BancPlus remains an emerging growth company or until BancPlus affirmatively and irrevocably opts out of the extended transition period under the JOBS Act.

~~The following is a discussion of~~ the critical accounting policies and ~~significant~~ estimates ~~that BancPlus believes require BancPlus to make~~previously disclosed under Item 7 of the ~~most complex or subjective decisions or assessments. Additional information about these policies can be found in Note 1 of our consolidated financial statements in our~~Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

~~Allowance for Loan Losses~~

The allowance for loan losses, sometimes referred to as the “allowance,” is established through a provision for loan losses which is charged to expense. Loan losses are charged against the allowance when management determines all or a portion of the loan balance to be uncollectible. Subsequent recoveries, if any, are credited to the allowance for cash received on2021, previously charged-off amounts. If the allowance is considered inadequate to absorb future loan losses on existing loans for any reason, including but not limited to, increases in the size of the loan portfolio, increases in charge-offs or changes in the risk characteristics of the loan portfolio, the provision for loan losses is increased.

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

In situations where, for economic or legal reasons related to a borrower’s financial difficulties, BancPlus grants a concession to the borrower that BancPlus would not otherwise consider, the related loan is classified as a TDR. BancPlus measures any loss on

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~~the TDR in accordance~~filed with the guidance concerning impaired loans set forth above. Additionally, TDRs are generally placed on non-accrual status at the time of restructuring and included in impaired loans. These loans are returned to accrual status after the borrower demonstrates performance with the modified terms for a sustained period of time and has the capacity to continue to perform in accordance with the modified terms of the restructured debt.

~~Investment Securities Impairment~~

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

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

~~Other Real Estate~~

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

~~Income Tax Accounting~~

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

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

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Changes in Internal Control over Financial Reporting

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On March 20, 2019, a complaint (the “Complaint”), Mills v. BankPlus, et al., Case #3:19-cv-00196-CWR-FKB, was filed in the United States District Court for the Southern District of Mississippi, Northern Division, by Alysson Mills, in her capacity as Court-appointed Receiver for Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), naming BankPlus, three former BankPlus employees, one then-current BankPlus employee and other defendants, including defendants affiliated and unaffiliated with BankPlus (“Defendants”). The Complaint seeks to recover damages from the Defendants for the benefit of the receivership estate related to certain investors who were allegedly defrauded by Adams and Madison Timber, whose actions were allegedly attributable to the actions of the Defendants that allegedly enabled negligent, illegal or fraudulent activities engaged in by Adams and Madison Timber. A brief description of the cause of action on the cover sheet filed with the Complaint includes securities, civil conspiracy, aiding and abetting, negligence, and other possible causes of action. The amount of damages (including punitive damages) requested against the Defendants in the Complaint is unspecified. On January 4, 2021, the plaintiff, Mills, filed an Amended Complaint. Answers and/or Motions to Dismiss the Amended complaint were filed by the Defendants. On July 8, 2021, the Court denied the Motion to Dismiss filed by BankPlus. A related motion for reconsideration was filed by BankPlus on August 9, 2021. On September 30, 2021, an order was entered to

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consolidate for purposes of discovery this case (No. 3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the Receiver. ~~By subsequent text-only order~~A Case Management Order (No.: 3:~~18-cv-00866-CWR-FKB) dated October 10, 2021,~~22-cv-36-CWRFKB) was entered on January 31, 2022 for the sole purpose of managing consolidated discovery in the four ~~consolidated cases are stayed until January 31, 2022.~~related cases.

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, ~~2020,~~2021, previously filed with the ~~SEC, except as noted below.~~

The acquisition of First Trust Corporation (“FTC”) by BancPlus and of First Bank and Trust by BankPlus, (the “transaction”) is subject to certain closing conditions that, if not satisfied or waived, will result in the transaction not being completed.

The transaction is subject to customary conditions to closing, including the receipt of required regulatory approvals and the approval of the shareholders of FTC. If any condition to the transaction is not satisfied or waived (to the extent waiver is legally permitted at all), the transaction will not be completed. In addition, BancPlus and FTC may terminate the definitive agreementunder certain circumstances even if the transaction is approved by FTC’s shareholders, including but not limited to if the statutory share exchange has not been completed on or before March 31, 2022 (unless the required regulatory approvals are pending and have not been finally resolved, in which event such date shall be automatically extended to June 30, 2022), or if FTC fails to obtain the approval of its shareholders; provided, that the failure of the closing to occur by such date cannot be due to the failure of the party seeking to terminate the definitive agreement to perform or observe the covenants and agreements of such party as set forth in the definitive agreement. In the event the definitive agreementis terminated, BancPlus would not realize any of the expected benefits of having completed the transaction. If the transaction is not completed, additional risks could materialize, which could adversely affect the business, financial condition or results of operations of BancPlus.

~~BancPlus may not be able to successfully integrate FTC or realize the anticipated benefits of the transaction.~~

The transaction involves the combination of two bank holding companies and two banks that previously have operated and, until completion of the transaction, will continue to operate independently. A successful combination of the operations of the two entities will depend substantially on the BancPlus’ ability to consolidate operations, systems and procedures and to eliminate redundancies and costs. BancPlus may not be able to combine the operations of FTC with its operations without encountering difficulties, such as:

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•~~the loss of key employees and customers;~~

•~~the disruption of operations and business;~~

•~~inability to maintain and increase competitive presence;~~

•~~deposit attrition, customer loss and revenue loss;~~

•~~possible inconsistencies in standards, control procedures and policies;~~

•~~unexpected problems with costs, operations, personnel, technology and credit; and/or~~

•~~problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.~~

Additionally, general market and economic conditions and governmental actions affecting the financial industry generally may inhibit BancPlus’ successful integration of FTC. Further, BancPlus entered into the definitive agreement with the expectation that the transaction will result in various benefits including, among other things, benefits relating to enhanced revenues, additional geographic markets, cross-selling opportunities, technology, cost savings and operating efficiencies. Achieving the anticipated benefits of the transaction is subject to a number of uncertainties, including whether BancPlus integrates FTC in an efficient and effective manner, and general competitive factors in the marketplace. BancPlus’ failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could adversely impact BancPlus’ business, financial condition or results of operation. In addition, the attention and effort devoted to the integration of FTC with BancPlus’ existing operations may divert management’s attention from other important issues and could seriously harm BancPlus’ business, financial condition or results of operation. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

~~BancPlus expects to incur substantial expenses related to the transaction.~~

BancPlus expects to incur substantial expenses in connection with consummation of the transaction and combining the business, operations, networks, systems, technologies, policies and procedures of FTC with BancPlus. Although BancPlus and FTC have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses thatwill be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and combination expenses associated with the transaction could, particularly in the near term, exceed the savings that BancPlus expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the consummation of the transaction. As a result of these expenses, both BancPlus and FTC expect to take charges against their earnings before and after the completion of the transaction. The charges taken in connection with the transaction are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

The transaction is subject to the receipt of consents and approvals from governmental entities that may impose conditions that could delay or prevent the completion of the transaction or have an adverse effect on the BancPlus following the transaction.

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

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

Uncertainty about the effect of the transaction on employees, customers (including depositors and borrowers), suppliers and vendors may have an adverse effect on the business, financial condition or results of operations of BancPlus. These uncertainties may impair BancPlus’ or FTC’s ability to attract, retain and motivate key personnel and customers (including depositors and borrowers) pending the consummation of the transaction, as such personnel and customers may experience uncertainty about their future roles and relationships following the consummation of the transaction. In addition, these uncertainties could cause customers (including depositors and borrowers), vendors and others who deal with BancPlus and/or FTC to seek to change existing business relationships with BancPlus and/or FTC or fail to extend an existing relationship with BancPlus and/or FTC. Moreover, competitors may target each party’s existing customers by highlighting potential uncertainties and integration difficulties that may result from the transaction. The pursuit of the transaction and the preparation for the integration may place a burden on BancPlus’ management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could adversely affect BancPlus’

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business, financial condition or results of operations. In addition, the definitive agreement restricts each party from taking certain actions without the other party’s consent while the transaction is pending. These restrictions could have an adverse effect~~on BancPlus’ business, financial condition or results of operations.~~SEC.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits


2.1*			Agreement and Plan of Share Exchange and Merger, dated September 28, 2021, as amended February 9, 2022, by and among BancPlus Corporation, BankPlus, First Trust Corporation and First Bank &and Trust (incorporated by reference to ~~Exhibit 2.1~~Annex A of the ~~Current Report~~Company’s Registration Statement on Form ~~8-K of the Registrant~~S-4 (File No. 333-261311), as amended, filed on ~~September 29, 2021)~~February 11, 2022)
2.2*			Agreement and Plan of Share Exchange and Merger, dated September 18, 2019, by and among BancPlus Corporation, BankPlus, State Capital Corp., and State Bank & Trust Company (incorporated by reference to Annex A of the Company's Registration Statement on Form S-4, as amended (File No. 333-236022), of the Registrant, filed on February 10, 2020)
3.1			Articles of Incorporation of BancPlus Corporation (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-4, as amended (File No. 333-236022), of the Registrant, filed on January 31, 2020)
3.2			By-laws of BancPlus Corporation (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-4, as amended (File No. 333-236022), of the Registrant, filed on February 10, 2020)
4.1			Specimen Certificate for BancPlus Corporation Common Stock (incorporated by reference to Exhibit 4.1 of the Registration Statement on Form S-4 as amended (File No. 333-236022), of the Registrant, filed on January 31, 2020)
4.2			Form of 6.000% Fixed-to-Floating Rate Subordinated Notes due 2030 (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of the Registrant filed on June 5, 2020)
~~10.1~~4.3			Form of ~~Shareholder Support~~5.50% Fixed-to-Floating Subordinated Note due 2030
4.4			Registration Rights Agreement, dated February 28, 2022, by and among BancPlus Corporation and Joseph C. Canizaro, and Joseph C. Canizaro, as trustee of The Corte Trust (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of the Registrant filed on March 1, 2022)
10.1			Amended and Restated BancPlus Corporation 2018 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of the Registrant filed on ~~September 29, 2021)~~March 16, 2022)
10.2			Form of Subordinated Note Purchase Agreement, dated December 23, 2020 (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K of the Registrant filed on March 1, 2022)
10.3*			Loan Agreement, dated February 25, 2022, by and between BancPlus Corporation and First Horizon Bank (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of the Registrant filed on February 28, 2022)
10.4			Pledge Agreement, dated February 25, 2022, by and between BancPlus Corporation and First Horizon Bank (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K of the Registrant filed on February 28, 2022)
10.5			Indemnity and Escrow Agreement, dated February 28, 2022, by and among First Horizon Bank, BancPlus Corporation, First Trust Corporation and Joseph C. Canizaro (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of the Registrant filed on March 1, 2022)
10.6			Form of Restrictive Covenant Agreement (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K of the Registrant filed on March 1, 2022)
31.1			Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
31.2			Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
32.1			Certification by Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2			Certification by Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			Inline XBRL Interactive Data
104			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.

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SIGNATURES

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

BancPlus Corporation


Date:	~~November 15, 2021~~May 13, 2022	By:	/s/ William A. Ray
			William A. Ray
			President and Chief Executive Officer


Date:	~~November 15, 2021~~May 13, 2022	By:	/s/ M. Ann Southerland
			M. Ann Southerland
			Senior Executive Vice President and Chief Financial Officer

6659


	Maturity as of September 30, 2021
	Due in One Year or Less				More Than One Year to Five Years				More Than Five Years to Ten Years				Due After Ten Years
(Dollars in thousands)	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield
Held to maturity:

Issued by states and political subdivisions	$	12,437	3.19	%	$	46,344	2.81	%	$	16,887	2.54	%	$	2,755	4.17	%




Total held to maturity	12,437		3.19	%	46,344		2.81	%	16,887		2.54	%	2,755		4.17	%

Available for sale:
U.S. Government agency obligations	5,037		2.60	%	163,773		0.45	%	126,630		1.19	%	4,402		1.75	%
Issued by states and political subdivisions	2,346		4.64	%	14,770		2.64	%	22,141		3.13	%	7,356		3.17	%
Mortgage-backed securities:
Residential	—		—	%	—		—	%	4,650		1.85	%	117,196		2.41	%
Commercial	—		—	%	—		—	%	13,659		1.54	%	1,234		2.48	%
Asset-backed securities	—		—	%	—		—	%	—		—	%	13,539		1.88	%
Corporate investments	4,019		2.13	%	498		2.75	%	38,571		4.14	%	1,062		4.50	%
Total available for sale	11,402		2.85	%	179,041		0.64	%	205,651		1.99	%	144,789		2.39	%

Total securities	$	23,839	3.03	%	$	225,385	1.08	%	$	222,538	2.03	%	$	147,544	2.43	%