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, 2022~~March 31, 2023

	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 4, 2022: 11,602,114~~May 12, 2023: 11,626,496

BANCPLUS CORPORATION

FORM 10-Q

For the Quarter Ended ~~SEPTEMBER 30, 2022~~MARCH 31, 2023

INDEX


			Page Number

PART I – FINANCIAL INFORMATION			2

Item 1. Financial Statements (Unaudited):			2

Consolidated Balance Sheets at ~~September 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021~~2022			2
Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 (unaudited)			3
Consolidated Statements of Comprehensive Income (Loss) for the three ~~and~~ ~~nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 (unaudited)			4
Consolidated Statements of Shareholders’ Equity for thethree ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 (unaudited)			5
Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 (unaudited)			76

Condensed Notes to the Consolidated Financial Statements (unaudited)			98

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3331

Cautionary Statement Regarding Forward-Looking Statements			3332

Item 3. Quantitative and Qualitative Disclosures about Market Risk			6459

Item 4. Controls and Procedures			6460

PART II – OTHER INFORMATION			6460

Item 1. Legal Proceedings			6460

Item 1A. Risk Factors			6461

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6461

Item 3. Defaults Upon Senior Securities			6461

Item 4. Mine Safety Disclosures			6461

Item 5. Other Information			6461

Item 6. Exhibits			6562

SIGNATURE PAGE			6663

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BancPlus Corporation and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(unaudited)					(unaudited)
Assets:	Assets:					Assets:
Cash and due from banks	Cash and due from banks	$	54,726	$	55,603	Cash and due from banks	$	103,527	$	107,402
Interest bearing deposits with banks	Interest bearing deposits with banks	117,559		608,562		Interest bearing deposits with banks	17,693		30,493
Total cash and cash equivalents	Total cash and cash equivalents	172,285		664,165		Total cash and cash equivalents	121,220		137,895
Securities available for sale	Securities available for sale	614,658		576,614		Securities available for sale	659,581		623,920
Securities held to maturity - fair value: $65,505 - 2022; $72,084 - 2021		65,889		71,648
Securities held to maturity - fair value: $61,144 - 2023; $62,068 - 2022						Securities held to maturity - fair value: $61,144 - 2023; $62,068 - 2022	61,262		62,274
Loans held for sale	Loans held for sale	4,199		10,621		Loans held for sale	8,357		5,373

Loans	Loans	5,549,768		3,619,172		Loans	5,951,867		5,824,149
Less: Allowance for loan losses		42,533		45,000
Less: Allowance for credit losses						Less: Allowance for credit losses	64,403		42,875
Net loans	Net loans	5,507,235		3,574,172		Net loans	5,887,464		5,781,274

Premises and equipment	Premises and equipment	122,590		101,965		Premises and equipment	129,166		124,707
Operating lease right-of-use assets	Operating lease right-of-use assets	34,532		34,561		Operating lease right-of-use assets	34,748		35,747
Accrued interest receivable	Accrued interest receivable	20,315		14,329		Accrued interest receivable	24,025		23,156
Goodwill	Goodwill	62,772		2,616		Goodwill	62,772		62,772
Other assets	Other assets	176,758		145,587		Other assets	184,817		177,703
		$	6,781,233	$	5,196,278		$	7,173,412	$	7,034,821

Liabilities:	Liabilities:					Liabilities:
Deposits	Deposits	$	5,594,217	$	4,622,116	Deposits	$	5,966,656	$	5,824,904
Advances from Federal Home Loan Bank and other borrowings	Advances from Federal Home Loan Bank and other borrowings	310,099		20,501		Advances from Federal Home Loan Bank and other borrowings	310,068		318,084
Subordinated debentures	Subordinated debentures	133,430		111,509		Subordinated debentures	133,531		133,478
Operating lease liabilities	Operating lease liabilities	36,061		35,793		Operating lease liabilities	36,432		37,439
Accrued interest payable	Accrued interest payable	2,949		1,425		Accrued interest payable	4,407		2,334
Other liabilities	Other liabilities	21,407		14,515		Other liabilities	31,038		20,482
Total liabilities	Total liabilities	6,098,163		4,805,859		Total liabilities	6,482,132		6,336,721

Redeemable common stock owned by the ESOP	Redeemable common stock owned by the ESOP	93,352		100,487		Redeemable common stock owned by the ESOP	96,984		96,984
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP, no par value	Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP, no par value					Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP, no par value
250,000 and zero authorized, issued and outstanding at September 30, 2022 and December 31, 2021; aggregate liquidation preference of $250,000		250,000		—
250,000 authorized, issued and outstanding at March 31, 2023 and December 31, 2022; aggregate liquidation preference of $250,000						250,000 authorized, issued and outstanding at March 31, 2023 and December 31, 2022; aggregate liquidation preference of $250,000	250,000		250,000
Common Stock, par value $1.00 per share.	Common Stock, par value $1.00 per share.					Common Stock, par value $1.00 per share.
40,000,000 authorized at September 30, 2022 and December 31, 2021; 11,601,136 and 10,115,945 issued and outstanding at September 30, 2022 and December 31, 2021, respectively		11,601		10,116
Unearned Employee Stock Ownership Plan compensation		—		(1,401)
100,000,000 and 40,000,000 authorized at March 31, 2023 and December 31, 2022, respectively; 11,599,354 and 11,599,595 issued and outstanding at March 31, 2023 and December 31, 2022, respectively						100,000,000 and 40,000,000 authorized at March 31, 2023 and December 31, 2022, respectively; 11,599,354 and 11,599,595 issued and outstanding at March 31, 2023 and December 31, 2022, respectively	11,599		11,599
Additional paid-in capital	Additional paid-in capital	121,350		67,380		Additional paid-in capital	123,878		122,890
Retained earnings	Retained earnings	345,615		314,357		Retained earnings	343,591		356,685
Accumulated other comprehensive loss, net	Accumulated other comprehensive loss, net	(45,496)		(33)		Accumulated other comprehensive loss, net	(37,788)		(43,074)
		683,070		390,419			691,280		698,100
Less: Redeemable common stock owned by the ESOP	Less: Redeemable common stock owned by the ESOP	(93,352)		(100,487)		Less: Redeemable common stock owned by the ESOP	(96,984)		(96,984)
Total shareholders' equity	Total shareholders' equity	589,718		289,932		Total shareholders' equity	594,296		601,116
		$	6,781,233	$	5,196,278		$	7,173,412	$	7,034,821

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

Table of Contents

BancPlus Corporation and Subsidiaries

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,
		2022		2021		2022		2021				2023		2022

Interest income:	Interest income:									Interest income:
Interest and fees on loans	Interest and fees on loans	$	64,309	$	43,835	$	161,008	$	129,066	Interest and fees on loans		$	76,747	$	42,987
Taxable securities	Taxable securities	2,658		2,097		7,467		6,024		Taxable securities		3,066		2,307
Tax-exempt securities	Tax-exempt securities	387		455		1,208		1,473		Tax-exempt securities		380		420
Interest bearing bank balances and other	Interest bearing bank balances and other	463		242		1,171		493		Interest bearing bank balances and other		578		231
Total interest income	Total interest income	67,817		46,629		170,854		137,056		Total interest income		80,771		45,945

Interest expense:	Interest expense:									Interest expense:
Deposits	Deposits	3,066		1,746		7,105		5,873		Deposits		17,160		1,677
Short-term borrowings										Short-term borrowings		79		—
Advances from Federal Home Loan Bank	Advances from Federal Home Loan Bank	1,093		78		1,246		233		Advances from Federal Home Loan Bank		3,215		76
Other borrowings	Other borrowings	1,781		1,371		5,014		4,112		Other borrowings		2,164		1,425
Total interest expense	Total interest expense	5,940		3,195		13,365		10,218		Total interest expense		22,618		3,178

Net interest income	Net interest income	61,877		43,434		157,489		126,838		Net interest income		58,153		42,767
Provision for loan losses		489		1,469		940		7,395
Net interest income after provision for loan losses		61,388		41,965		156,549		119,443
Provision for credit losses										Provision for credit losses		523		217
Net interest income after provision for credit losses										Net interest income after provision for credit losses		57,630		42,550

Other operating income:	Other operating income:									Other operating income:
Service charges on deposit accounts	Service charges on deposit accounts	8,203		7,484		22,696		19,226		Service charges on deposit accounts		6,666		6,792
Mortgage origination income	Mortgage origination income	1,119		1,999		5,661		6,726		Mortgage origination income		687		2,238
Debit card interchange	Debit card interchange	2,393		2,390		7,569		7,634		Debit card interchange		2,566		2,428
Other income	Other income	5,851		7,193		18,336		24,494		Other income		5,920		6,507
Total other operating income	Total other operating income	17,566		19,066		54,262		58,080		Total other operating income		15,839		17,965

Other operating expenses:	Other operating expenses:									Other operating expenses:
Salaries and employee benefits expenses	Salaries and employee benefits expenses	32,909		25,218		88,559		72,365		Salaries and employee benefits expenses		30,991		25,845
Net occupancy expenses	Net occupancy expenses	4,733		3,606		13,740		10,779		Net occupancy expenses		4,472		4,116
Furniture, equipment and data processing expenses	Furniture, equipment and data processing expenses	7,671		6,282		21,957		18,322		Furniture, equipment and data processing expenses		7,316		6,616
Other expenses	Other expenses	9,391		7,716		29,533		19,931		Other expenses		8,863		11,493
Total other operating expenses	Total other operating expenses	54,704		42,822		153,789		121,397		Total other operating expenses		51,642		48,070

Income before income taxes	Income before income taxes	24,250		18,209		57,022		56,126		Income before income taxes		21,827		12,445
Income tax expense	Income tax expense	5,107		4,012		12,075		10,593		Income tax expense		4,748		2,756
Net income	Net income	$	19,143	$	14,197	$	44,947	$	45,533	Net income		$	17,079	$	9,689

Earnings per common share - basic	Earnings per common share - basic	$	1.67	$	1.43	$	4.04	$	4.58	Earnings per common share - basic		$	1.50	$	0.93
Earnings per common share - diluted	Earnings per common share - diluted	$	1.67	$	1.41	$	4.01	$	4.53	Earnings per common share - diluted		$	1.49	$	0.92

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

Table of Contents

BancPlus Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In Thousands)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022

Net income	Net income	$	19,143	$	14,197	$	44,947	$	45,533	Net income		$	17,079	$	9,689
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Unrealized losses on securities available for sale		(20,975)		(2,340)		(60,537)		(4,698)
Unrealized gains (losses) on securities available for sale										Unrealized gains (losses) on securities available for sale		7,039		(26,144)
Tax effect	Tax effect	5,223		583		15,074		1,170		Tax effect		(1,753)		6,510
Total other comprehensive loss, net of tax		(15,752)		(1,757)		(45,463)		(3,528)
Total other comprehensive income (loss), net of tax										Total other comprehensive income (loss), net of tax		5,286		(19,634)
Comprehensive income (loss)	Comprehensive income (loss)	$	3,391	$	12,440	$	(516)	$	42,005	Comprehensive income (loss)		$	22,365	$	(9,945)

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

Table of Contents

BancPlus Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(In Thousands, Except Share and Per Share Data)


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

July 1, 2021		10,111,045	$	10,111	$	(1,957)	$	66,152	$	296,900	$	5,104	$	(87,794)	$	288,516
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	—	—		—		—		14,197		—		—		14,197		Net income	—	—		—	—		—		—		9,689		—		—		9,689
Other comprehensive loss, net	Other comprehensive loss, net	—	—		—		—		—		(1,757)		—		(1,757)		Other comprehensive loss, net	—	—		—	—		—		—		—		(19,634)		—		(19,634)
Issuance of common stock for the Acquisition of First Trust Corporation																	Issuance of common stock for the Acquisition of First Trust Corporation	—	—		1,444,732	1,445		—		55,044		—		—		—		56,489
Issuance of restricted stock	Issuance of restricted stock	1,209	1		—		(1)		—		—		—		—		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	—	—		(1,164)	(1)		—		(78)		—		—		—		(79)
Stock based compensation	Stock based compensation	—	—		—		616		—		—		—		616		Stock based compensation	—	—		—	—		—		680		—		—		—		680
Net change fair value of ESOP shares	Net change fair value of ESOP shares	—	—		—		—		—		—		(8,829)		(8,829)		Net change fair value of ESOP shares	—	—		—	—		—		—		—		—		(1,938)		(1,938)
Common stock released by ESOP	Common stock released by ESOP	—	—		348		—		—		—		—		348		Common stock released by ESOP	—	—		—	—		1,401		—		—		—		—		1,401
Dividends paid ($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
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

January 1, 2021		10,079,277	$	10,079	$	(2,650)	$	67,742	$	273,204	$	6,875	$	(74,278)	$	280,972
January 1, 2023																	January 1, 2023	250,000	$	250,000	11,599,595	$	11,599	$	—	$	122,890	$	356,685	$	(43,074)	$	(96,984)	$	601,116
Cumulative change in accounting principle																	Cumulative change in accounting principle	—	—		—	—		—		—		(24,953)		—		—		(24,953)
Balance at January 1, 2023 (as adjusted for change in accounting principle)																	Balance at January 1, 2023 (as adjusted for change in accounting principle)	250,000	250,000		11,599,595	11,599		—		122,890		331,732		(43,074)		(96,984)		576,163

Net income	Net income	—	—		—		—		45,533		—		—		45,533		Net income	—	—		—	—		—		—		17,079		—		—		17,079
Other comprehensive loss, net		—	—		—		—		—		(3,528)		—		(3,528)
Issuance of restricted stock		83,317	83		—		(83)		—		—		—		—
Other comprehensive income, net																	Other comprehensive income, net	—	—		—	—		—		—		—		5,286		—		5,286

Shares withheld to satisfy withholding obligation in the vesting of restricted stock	Shares withheld to satisfy withholding obligation in the vesting of restricted stock	(4,477)	(4)		—		(225)		—		—		—		(229)		Shares withheld to satisfy withholding obligation in the vesting of restricted stock	—	—		(241)	—		—		(16)		—		—		—		(16)
Purchase of Company stock		(45,863)	(46)		—		(2,387)		—		—		—		(2,433)
Stock based compensation	Stock based compensation	—	—		—		1,720		—		—		—		1,720		Stock based compensation	—	—		—	—		—		1,004		—		—		—		1,004
Net change fair value of ESOP shares		—	—		—		—		—		—		(22,345)		(22,345)
Common stock released by ESOP		—	—		1,041		—		—		—		—		1,041
Dividends paid ($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

Dividends paid ($0.45 per share)																	Dividends paid ($0.45 per share)	—	—		—	—		—		—		(5,220)		—		—		(5,220)
March 31, 2023																	March 31, 2023	250,000	$	250,000	11,599,354	$	11,599	$	—	$	123,878	$	343,591	$	(37,788)	$	(96,984)	$	594,296

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

~~Table of Contents~~

~~BancPlus Corporation and Subsidiaries~~

~~Consolidated Statements of Shareholders’ Equity (Continued)~~

~~(Unaudited)~~

~~(In Thousands, Except Share and Per Share Data)~~

Unearned
ESOP
Compensation Additional
Paid-In
Capital Accumulated Other Comprehensive Loss Less:
Redeemable
Common Stock
Owned by the ESOP Total
Shareholders'
Equity
Preferred Stock Common Stock Retained
Earnings
Shares Amount Shares Amount
July 1, 2022 250,000 $ 250,000 11,627,071 $ 11,627 $ — $ 122,132 $ 331,239 $ (29,744) $ (97,799) $ 587,455
Net income — — — — — — 19,143 — — 19,143
Other comprehensive loss, net — — — — — — — (15,752) — (15,752)
Issuance of restricted stock — — 2,911 3 — (3) — — — —
Purchase of Company stock — — (28,846) (29) — (1,824) — — — (1,853)
Stock based compensation — — — — — 1,045 — — — 1,045
Net change fair value of ESOP shares — — — — — — — — 4,447 4,447
Dividends paid ($0.41 per share) — — — — — — (4,767) — — (4,767)
September 30, 2022 250,000 $ 250,000 11,601,136 $ 11,601 $ — $ 121,350 $ 345,615 $ (45,496) $ (93,352) $ 589,718
January 1, 2022 — $ — 10,115,945 $ 10,116 $ (1,401) $ 67,380 $ 314,357 $ (33) $ (100,487) $ 289,932
Net income — — — — — — 44,947 — — 44,947
Issuance of preferred stock 250,000 250,000 — — — — — — — 250,000
Issuance of common stock for acquisition of First Trust Corporation — — 1,444,732 1,445 — 55,044 — — — 56,489
Other comprehensive loss, net — — — — — — — (45,463) — (45,463)
Issuance of restricted stock — — 98,679 99 — (99) — — — —
Shares withheld to satisfy withholding obligation in the vesting of restricted stock — — (10,438) (11) — (701) — — — (712)
Purchase of Company stock — — (47,782) (48) (3,055) (3,103)
Stock based compensation — — — — — 2,781 — — — 2,781
Net change fair value of ESOP shares — — — — — — — — 7,135 7,135
Common stock released by ESOP — — — — 1,401 — — — — 1,401
Dividends paid ($1.23 per share) — — — — — — (13,689) — — (13,689)
September 30, 2022 250,000 $ 250,000 11,601,136 $ 11,601 $ — $ 121,350 $ 345,615 $ (45,496) $ (93,352) $ 589,718

Table of Contents

BancPlus Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income per consolidated statements of income	Net income per consolidated statements of income	$	44,947	$	45,533	Net income per consolidated statements of income	$	17,079	$	9,689
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		940		7,395
Provision for credit losses						Provision for credit losses	523		217
Depreciation and amortization	Depreciation and amortization	7,466		5,818		Depreciation and amortization	2,440		2,362
Net loss on sales of premises and equipment	Net loss on sales of premises and equipment	278		279		Net loss on sales of premises and equipment	201		1
Net (gain) loss on sales of other real estate owned		74		(169)
Net gain on sales of other real estate owned						Net gain on sales of other real estate owned	—		(19)
Write-downs of other real estate-owned	Write-downs of other real estate-owned	563		186		Write-downs of other real estate-owned	2		555
Deferred income tax expense		911		399
Deferred income tax benefit						Deferred income tax benefit	(186)		(162)
Federal Home Loan Bank stock dividends	Federal Home Loan Bank stock dividends	(23)		(9)		Federal Home Loan Bank stock dividends	(221)		(3)
Common stock released by ESOP	Common stock released by ESOP	1,401		1,041		Common stock released by ESOP	—		1,401
Stock based compensation expense	Stock based compensation expense	2,781		1,720		Stock based compensation expense	1,004		680
Origination of loans held for sale	Origination of loans held for sale	(228,530)		(300,866)		Origination of loans held for sale	(47,764)		(72,280)
Proceeds from loans held for sale	Proceeds from loans held for sale	241,152		315,646		Proceeds from loans held for sale	44,780		77,357
Earnings on bank-owned life insurance	Earnings on bank-owned life insurance	(1,913)		(5,858)		Earnings on bank-owned life insurance	(656)		(626)
Net change in:	Net change in:					Net change in:
Accrued interest receivable and other assets	Accrued interest receivable and other assets	(933)		5,849		Accrued interest receivable and other assets	(1,188)		(3,374)
Accrued interest payable and other liabilities	Accrued interest payable and other liabilities	4,848		(2,163)		Accrued interest payable and other liabilities	1,020		(2,570)
Net cash from operating activities	Net cash from operating activities	73,962		74,801		Net cash from operating activities	17,034		13,228

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	(115,927)		(317,600)		Purchases of securities available for sale	(33,505)		(82,822)
Maturities and calls of securities available for sale	Maturities and calls of securities available for sale	48,856		81,015		Maturities and calls of securities available for sale	4,885		20,801
Purchases of securities held to maturity	Purchases of securities held to maturity	—		(19,103)		Purchases of securities held to maturity	—		—
Maturities, prepayments and calls of securities held to maturity	Maturities, prepayments and calls of securities held to maturity	5,678		34,318		Maturities, prepayments and calls of securities held to maturity	990		2,745
Net increase in loans	Net increase in loans	(934,387)		(151,332)		Net increase in loans	(128,754)		(122,286)
Purchases of premises and equipment	Purchases of premises and equipment	(12,162)		(5,188)		Purchases of premises and equipment	(7,015)		(2,336)
Proceeds from sales of premises and equipment		—		31

Proceeds from sales of other real estate owned	Proceeds from sales of other real estate owned	4,418		4,672		Proceeds from sales of other real estate owned	976		181
Investment in unconsolidated entities	Investment in unconsolidated entities	(30)		(96)		Investment in unconsolidated entities	(77)		1,709
Distributions from unconsolidated entities	Distributions from unconsolidated entities	2,490		—		Distributions from unconsolidated entities	483		—
Purchase of bank-owned life insurance		—		(10,000)
Proceeds from bank-owned life insurance		—		5,987

Purchases or redemptions of Federal Home Loan Bank stock	Purchases or redemptions of Federal Home Loan Bank stock	(12,210)		(163)		Purchases or redemptions of Federal Home Loan Bank stock	(192)		—
Cash received in excess of cash paid for acquisition	Cash received in excess of cash paid for acquisition	165,974		—		Cash received in excess of cash paid for acquisition	—		165,974
Net cash used in investing activities	Net cash used in investing activities	(847,300)		(377,459)		Net cash used in investing activities	(162,209)		(16,034)

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BancPlus Corporation and Subsidiaries

Consolidated Statements of Cash Flows (continued)

(Unaudited)

(In Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
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	$	(18,413)	$	168,926	Noninterest-bearing deposits	$	(72,106)	$	42,746
Money market, negotiable order of withdrawal, and savings deposits	Money market, negotiable order of withdrawal, and savings deposits	(89,991)		265,081		Money market, negotiable order of withdrawal, and savings deposits	129,308		1,250
Certificates of deposit	Certificates of deposit	(132,207)		(56,950)		Certificates of deposit	84,550		(25,727)
Proceeds from Federal Home Loan Bank advances	Proceeds from Federal Home Loan Bank advances	1,392,000		—		Proceeds from Federal Home Loan Bank advances	2,545,000		—
Payments on Federal Home Loan Bank advances	Payments on Federal Home Loan Bank advances	(1,102,402)		(120)		Payments on Federal Home Loan Bank advances	(2,553,016)		(24)
Proceeds from issuance of preferred stock		250,000		—

Proceeds from other borrowings	Proceeds from other borrowings	20,000		—		Proceeds from other borrowings	—		20,000
Payments on other borrowings		(20,000)		(2,625)

Payment of debt issuance costs on other borrowings	Payment of debt issuance costs on other borrowings	(25)		—		Payment of debt issuance costs on other borrowings	—		(25)
Cash dividends paid on common stock	Cash dividends paid on common stock	(13,689)		(11,468)		Cash dividends paid on common stock	(5,220)		(4,148)
Purchase of Company stock		(3,103)		(2,433)

Shares withheld to pay taxes on restricted stock vesting	Shares withheld to pay taxes on restricted stock vesting	(712)		(229)		Shares withheld to pay taxes on restricted stock vesting	(16)		(79)
Net cash from financing activities	Net cash from financing activities	281,458		360,182		Net cash from financing activities	128,500		33,993

Net change in cash and cash equivalents	Net change in cash and cash equivalents	(491,880)		57,524		Net change in cash and cash equivalents	(16,675)		31,187

Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	664,165		637,545		Cash and cash equivalents at beginning of period	137,895		664,165

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	172,285	$	695,069	Cash and cash equivalents at end of period	$	121,220	$	695,352

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid	Interest paid	$	11,840	$	10,280	Interest paid	$	20,545	$	1,658
Federal and state income tax payments	Federal and state income tax payments	5,750		9,950		Federal and state income tax payments	—		—
Acquisition of real estate in non-cash foreclosures	Acquisition of real estate in non-cash foreclosures	1,374		4,924		Acquisition of real estate in non-cash foreclosures	705		455
Fair value of assets acquired net of liabilities assumed	Fair value of assets acquired net of liabilities assumed	59,572		—		Fair value of assets acquired net of liabilities assumed	—		58,508

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

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BancPlus Corporation and Subsidiaries

Condensed Notes to Consolidated Financial Statements

(Unaudited)

Note 1: Basis of Presentation

BancPlus Corporation (the “Company”) is a bank holding company headquartered in Ridgeland, Mississippi operating in one reportable segment. BankPlus (the “Bank”), the principal operating subsidiary and sole banking subsidiary of the Company, is a commercial bank primarily engaged in the business of commercial and consumer banking. In addition to general and consumer banking, other products and services offered though the Bank’s subsidiaries include certain insurance and annuity services, asset and investment management and financial planning services. Oakhurst Development, Inc. (“Oakhurst”) is a real estate subsidiary originally formed by the Company to liquidate a real estate development that was acquired by the Bank through foreclosure in 2002. Oakhurst became active again in March 2009 and holds loans and other real estate.

The unaudited interim consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest, and reflect all adjustments (consisting of normal recurring adjustments) that are necessary in the opinion of the Company’s management to fairly present the financial position, results of operations and cash flows of the Company. They have been derived from the audited consolidated financial statements for the fiscal year ended December 31, ~~2021;~~2022; however, certain notes and information have been omitted from the interim periods. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2021.~~2022. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. The accounting and financial reporting policies followed by the Company conform, in all material respects, to the accounting principles generally accepted in the United States (“GAAP”) and to general practices within the financial services industry. The results of operations for the interim periods are not necessarily indicative of the results to be expected for future interim periods or for the entire year.

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

Unless otherwise indicated, references to “BancPlus” refer to BancPlus Corporation and its subsidiaries, on a consolidated basis, and reference to “BankPlus” refer to BankPlus, our wholly-owned subsidiary, as applicable.

Effect of Recently ~~Issued But Not Yet Effective~~Adopted Accounting Standards

~~Accounting Standards Update~~

ASU 2016-13, ~~(“ASU 2016-13”),~~ “~~Financial~~“Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~Accounting Standards Update (“ASU”)~~ASU 2016-13 which requires earlier measurement of credit losses and enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Many of the previous loss estimation techniques ~~applied today will~~are still be permitted, although the inputs to those techniques ~~will change~~have changed to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 ~~was originally effective for the Company for annual and interim periods beginning on January 1, 2021. Subsequently, FASB approved a deferral of the effective date. ASU 2016-13 will now be~~is effective for the Company for annual and interim periods beginning on January 1, 2023. The measurement of expected credit losses under the current expected credit loss (“CECL”) methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures. In addition, ASU 2016-13 made changes to the accounting for available-for-sale debt securities, which includes required presentation of credit losses to be presented as an allowance rather than as a write-down when management does not intend to sell the securities.

The Company ~~has a cross functional team that has been working with third-party vendors~~adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2016-13 while prior period amounts continue to ~~build and validate a CECL model which has been running parallel~~be reported in accordance with the ~~Company’s current model while validation~~then applicable GAAP. As of January 1, 2023 the ~~model is completed. The~~ Company ~~expects to recognize~~recognized a one-time, after-tax cumulative effect adjustment of approximately $25.0 million to retained earnings, increasing the allowance for ~~loan~~credit losses on loans held for investment by approximately $20.7 million and establishing an allowance for credit losses on off-balance sheet credit exposures of approximately $12.5 million due to the adoption of ASU 2016-13.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchase credit impaired (“PCI”) and accounted for under ASC 310-30.

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In accordance with the standard, management did not reassess whether PCI assets met the criteria for PCD assets as of the date of adoption. The amortized cost basis of the PCD assets has an insignificant impact on the allowance for credit losses as of January 1, 2023. The remaining noncredit discount (based on the ~~beginning~~adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2023.

The following table illustrates the impact of ASU 2016-13:


	January 1, 2023
(In thousands)	As Reported Under ASU 2016-13		Pre-ASU 2016-13 Adoption		Impact of ASU 2016-13 Adoption
Assets:
Allowance for credit losses on debt securities held-to-maturity	$	—	$	—	$	—
Allowance for credit losses on loans:
Commercial real estate	39,471		26,701		12,770
Residential	16,422		9,958		6,464
Commercial and industrial	6,916		4,750		2,166
Consumer and other	810		1,466		(656)
Total allowance for credit losses on loans	63,619		42,875		20,744
Liabilities:
Allowance for credit losses on off-balance sheet exposures	12,505		—		12,505
Total allowance for credit losses	$	76,124	$	42,875	$	33,249

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

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

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

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

The Company performs a quarterly loss reserve calculation for municipal and corporate bonds leveraging history of defaults and recoveries as well as a baseline economic forecast. A probability of default/loss-given default approach is used, with any non-rated bonds receiving a comparable rating estimate. Losses in high grade municipals, in which the Company ~~adopts~~tends to invest, have been very limited over the ~~new standard, but~~last 50 years. The Company has ~~not yet determined~~elected to exclude accrued interest from the ~~magnitude~~estimate of ~~the one-time adjustment or the overall impact on the Company’s consolidated financial statements.~~credit losses for held-to-maturity debt securities.

Allowance for Credit Losses – Loans

~~Accounting Standards Update 2020-04 (“ASU 2020-04”), “Reference Rate Reform - Topic 848.”~~
~~In March 2020,~~

The allowance for credit losses is a valuation account that is deducted from the ~~FASB issued ASU 2020-04, which provides temporary optional expedients and exceptions~~loans’ amortized cost basis to present 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~~net amount expected to be ~~discontinued. ASU 2020-04~~collected on the loans. Management's determination of the adequacy of the ACL is ~~effective upon issuance~~based on an assessment of the expected credit losses on loans over the expected life of the loan. The ACL is increased by provision expense and ~~can be applied through December~~decreased by charge-offs, net of recoveries of amounts previously charged-off. Loans are charged off when management believes that the collection of the principal amount owed in full is unlikely. Expected recoveries do not exceed the aggregate of amounts

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~~31, 2022.~~previously charged-off and expected to be charged-off. Any interest that is accrued but not collected is reversed against interest income when a loan is placed on nonaccrual status, which typically occurs prior to charging off all, or a portion, of a loan. The Company made the policy election to exclude accrued interest receivable on loans from the estimate of credit losses.

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

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

In addition to the ACL on loans held for investment, CECL requires a balance sheet liability for unfunded commitments, which is recognized if both of the following conditions are met: (1) the Company has a present contractual obligation to extend credit; and (2) the obligation is not unconditionally cancellable by the Company. Loan commitments may have a funded and unfunded portion, of which the liability for unfunded commitments is derived based upon the commitments to extend credit to a borrower (e.g., an estimate of expected credit losses is not established for unfunded portions of loan commitment that are unconditionally cancellable by the Company). The expected credit losses for funded portions are reported in the previously discussed ACL. The Company does not ~~expect ASU 2020-04~~have any commitments that are unconditionally cancellable and therefore all commitments are in scope for an ACL calculation. The Company segments its unfunded commitment portfolio consistent with the ACL calculation. The Company incorporates the probability of funding (i.e., estimate of utilization) for each segment and then utilizes the ACL loss rates for each segment on an aggregate basis to ~~have a material impact on~~calculate the ~~Company’s consolidated financial statements.~~allowance for unfunded commitments.

Accounting Standards Update 2022-02 (“ASU 2022-02”), “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” In March 2022, the FASB issued ASU 2022-02 which eliminates the TDR recognition and measurement guidance and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. ASU 2022-02 also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for the Company for annual and interim periods beginning on January 1, 2023. ~~Implementation~~The adoption of ASU 2022-02 isin the first quarter of 2023 did not ~~expected to~~ materially impact the Company’s consolidated financial statements.

Effect of Recently Issued, But Not Yet Effective Accounting Standards

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

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

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currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848.

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)	2022		2021		2022		2021		(In thousands except per share data)		2023		2022
Net income	Net income	$	19,143	$	14,197	$	44,947	$	45,533	Net income		$	17,079	$	9,689

Weighted average common shares outstanding	Weighted average common shares outstanding	11,437		9,934		11,120		9,936		Weighted average common shares outstanding		11,415		10,451
Diluted effect of unallocated stock	Diluted effect of unallocated stock	—		75		6		44		Diluted effect of unallocated stock		—		18
Diluted effect of stock-based awards	Diluted effect of stock-based awards	32		41		73		61		Diluted effect of stock-based awards		73		57
Diluted common shares	Diluted common shares	11,469		10,050		11,199		10,041		Diluted common shares		11,488		10,526

Basic earnings per common share	Basic earnings per common share	$	1.67	$	1.43	$	4.04	$	4.58	Basic earnings per common share		$	1.50	$	0.93
Diluted earnings per common share	Diluted earnings per common share	$	1.67	$	1.41	$	4.01	$	4.53	Diluted earnings per common share		$	1.49	$	0.92

Note 3: Business Combinations

First Trust Corporation

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

Pursuant to the FTC Merger Agreement, holders of FTC stock received, in the aggregate, 1,444,764 shares of BancPlus common stock, with cash paid in lieu of fractional shares, and $52.7 million in cash, plus up to $10.0 million, less certain fees, costs, and expenses, that was held in escrow pursuant to the terms of a previously disclosed Indemnity and Escrow Agreement that was entered into immediately prior to the completion of the FTC Merger pending a final determination from the Internal Revenue Service as to whether FTC’s subchapter S election would be reinstated retroactively to September 23, 2020. On June 27, 2022, the Company received notice from the IRS that FTC’s subchapter S election had been reinstated. On July 7, 2022, the escrow

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account balance of $10.0 million was paid to the former holders of FTC stock. The fair value of the common shares issued was determined based on a third-party appraisal at the date of the acquisition, as there is no active market for the Company’s stock. At the time of this filing, final valuations of the stock consideration, assets acquired and liabilities assumed were not complete. The Company expects to finalize its analysis of the acquired assets and assumed liabilities in this transaction within one year of the completion of the FTC Merger. Therefore, adjustments to the estimated amounts and carrying values may occur.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, the Company incurred approximately ~~$2.9 million and $8.4~~$4.2 million of acquisition expenses in connection with the FTC Merger, respectively. These expenses are recorded in other expenses in the Company’s Consolidated Statement of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022.

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

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


(In thousands)
Purchase price allocation:
Common stock issued			$	56,489
Cash paid			63,239
Total purchase price			$	119,728
Assets acquired:
Cash and due from banks	$	229,213
Securities	33,407
Loans held for sale	6,200
Loans, net	1,000,382
Premises and equipment	15,152
Accrued interest receivable	1,441
Core deposit intangible	7,825
Other assets	4,584
Total assets acquired	$	1,298,204
Liabilities assumed:
Deposits	$	1,212,712
Subordinated debentures	21,733
Other liabilities	4,187
Total liabilities assumed	$	1,238,632
Net assets acquired			59,572
Goodwill			$	60,156

In connection with the FTC Merger, the Company recorded a $7.8 million core deposit intangible, which will be amortized over 10 years. The Company also acquired loans with a fair value of ~~$1.000~~$1.00 billion. The fair value of acquired loans at the time of acquisition is recorded as a premium or discount to the unpaid balance of each acquired loan. The net premium or discount is accreted or amortized into interest income over the remaining life of the loan. The Company recorded a net discount of $6.6 million on the acquired FTC loans, which included a credit mark discount of $15.7 million. Purchase credit ~~impaired~~deteriorated loans were insignificant. In the third quarter of 2022, the Company increased the fair value of other real estate and deferred tax assets resulting in a corresponding decrease to goodwill of $1.1 million.

Revenues and earnings of the acquired company since the FTC Merger date have not been disclosed as it is not practicable as FTC was merged into BancPlus and separate financial information for FTC is not available. The following table presents unaudited pro forma information as if the FTC Merger had occurred on January 1, ~~2021.~~2022. This pro forma information combines

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the historic consolidated results of operations of BancPlus and 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, ~~2021.~~2022.

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands, except per share data) 2022 2021 2022 2021
Net interest income $ 62,029 $ 55,280 $ 165,082 $ 161,007
Other operating income 17,443 20,544 55,494 63,624
Net income available to common shareholders 19,268 18,514 47,576 57,363
Earnings per common share:
Basic $ 1.68 $ 1.63 $ 4.16 $ 5.04
Diluted 1.68 1.61 4.13 4.99

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

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, 2022:
March 31, 2023:										March 31, 2023:
U.S. Treasuries	U.S. Treasuries	$	35,741	$	—	$	1,390	$	34,351	U.S. Treasuries	$	35,886	$	—	$	894	$	34,992
U.S. Government agency obligations	U.S. Government agency obligations	405,428		140		37,885		367,683		U.S. Government agency obligations	444,962		805		30,703		415,064
Residential mortgage-backed securities	Residential mortgage-backed securities	109,693		15		11,887		97,821		Residential mortgage-backed securities	102,616		13		10,363		92,266
Commercial mortgage-backed securities	Commercial mortgage-backed securities	13,846		—		1,808		12,038		Commercial mortgage-backed securities	13,778		—		1,540		12,238
Asset-backed securities	Asset-backed securities	11,094		137		144		11,087		Asset-backed securities	9,470		58		137		9,391
Corporate investments	Corporate investments	49,000		—		4,091		44,909		Corporate investments	52,959		—		5,980		46,979
State and political subdivisions	State and political subdivisions	50,437		2		3,670		46,769		State and political subdivisions	50,227		154		1,730		48,651
Total available for sale	Total available for sale	$	675,239	$	294	$	60,875	$	614,658	Total available for sale	$	709,898	$	1,030	$	51,347	$	659,581

December 31, 2021:
December 31, 2022:										December 31, 2022:
U.S. Treasuries										U.S. Treasuries	$	35,814	$	—	$	1,235	$	34,579
U.S. Government agency obligations	U.S. Government agency obligations	$	354,774	$	256	$	4,780	$	350,250	U.S. Government agency obligations	414,251		246		35,761		378,736
Residential mortgage-backed securities	Residential mortgage-backed securities	107,772		2,312		297		109,787		Residential mortgage-backed securities	105,580		13		11,461		94,132
Commercial mortgage-backed securities	Commercial mortgage-backed securities	14,286		41		51		14,276		Commercial mortgage-backed securities	13,812		—		1,742		12,070
Asset backed securities	Asset backed securities	12,730		421		44		13,107		Asset backed securities	10,289		54		123		10,220
Corporate investments	Corporate investments	43,500		1,138		128		44,510		Corporate investments	51,000		—		4,967		46,033
State and political subdivisions	State and political subdivisions	43,596		1,200		112		44,684		State and political subdivisions	50,530		77		2,457		48,150
Total available for sale	Total available for sale	$	576,658	$	5,368	$	5,412	$	576,614	Total available for sale	$	681,276	$	390	$	57,746	$	623,920

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

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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, 2022:
March 31, 2023:										March 31, 2023:
States and political subdivisions	States and political subdivisions	$	65,889	$	—	$	384	$	65,505	States and political subdivisions	$	61,262	$	11	$	129	$	61,144
Total held to maturity	Total held to maturity	$	65,889	$	—	$	384	$	65,505	Total held to maturity	$	61,262	$	11	$	129	$	61,144

December 31, 2021:
December 31, 2022:										December 31, 2022:
States and political subdivisions	States and political subdivisions	$	71,648	$	436	$	—	$	72,084	States and political subdivisions	$	62,274	$	—	$	206	$	62,068
Total held to maturity	Total held to maturity	$	71,648	$	436	$	—	$	72,084	Total held to maturity	$	62,274	$	—	$	206	$	62,068

All mortgage-backed securities in the above tables were issued or guaranteed by U.S. government agencies or sponsored ~~agencies.~~agencies, with no allowance for credit losses.

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Provided below is a summary of investment securities that were in an unrealized loss position and the length of time that individual securities have been in a continuous loss position.


		Less Than 12 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, 2022:
March 31, 2023:														March 31, 2023:
Available for sale:	Available for sale:													Available for sale:
U.S. Treasuries	U.S. Treasuries	$	34,351	$	1,390	$	—	$	—		34,351	$	1,390	U.S. Treasuries	$	4,898	$	47	$	30,094	$	847	$	34,992	$	894
U.S. Government agencies	U.S. Government agencies	149,098		13,997		214,034		23,888			363,132	37,885		U.S. Government agencies	19,303		484		349,846		30,219		369,149		30,703
Residential mortgage-backed securities	Residential mortgage-backed securities	86,999		9,799		8,740		2,088			95,739	11,887		Residential mortgage-backed securities	26,160		2,496		64,977		7,867		91,137		10,363
Commercial mortgage-backed securities	Commercial mortgage-backed securities	9,412		1,266		2,626		542			12,038	1,808		Commercial mortgage-backed securities	—		—		12,238		1,540		12,238		1,540
Asset backed securities	Asset backed securities	1,909		75		1,831		69			3,740	144		Asset backed securities	3,199		10		3,210		127		6,409		137
Corporate investments	Corporate investments	40,379		3,622		4,530		469			44,909	4,091		Corporate investments	18,443		1,515		28,536		4,465		46,979		5,980
States and political subdivisions	States and political subdivisions	40,406		2,939		4,542		731			44,948	3,670		States and political subdivisions	22,312		400		17,187		1,330		39,499		1,730
		$	362,554	$	33,088	$	236,303	$	27,787		598,857	$	60,875		$	94,315	$	4,952	$	506,088	$	46,395	$	600,403	$	51,347

Held to maturity:	Held to maturity:													Held to maturity:
States and political subdivisions	States and political subdivisions	$	9,758	$	384	$	—	$	—		9,758	$	384	States and political subdivisions	$	3,984	$	59	$	3,690	$	70	$	7,674	$	129
		$	9,758	$	384	$	—	$	—		9,758	$	384		$	3,984	$	59	$	3,690	$	70	$	7,674	$	129

December 31, 2021:
December 31, 2022:														December 31, 2022:
Available for sale:	Available for sale:													Available for sale:
U.S. Treasuries														U.S. Treasuries	$	34,579	$	1,235	$	—	$	—	$	34,579	$	1,235
U.S. Government agencies	U.S. Government agencies	$	314,614	$	4,780	$	—	$	—		314,614	$	4,780	U.S. Government agencies	78,676		4,830		285,994		30,931		364,670		35,761
Residential mortgage-backed securities	Residential mortgage-backed securities	15,216		297		—		—			15,216	297		Residential mortgage-backed securities	81,992		8,935		11,258		2,526		93,250		11,461
Commercial mortgage-backed securities	Commercial mortgage-backed securities	8,376		51		—		—			8,376	51		Commercial mortgage-backed securities	4,860		594		7,210		1,148		12,070		1,742
Asset backed securities	Asset backed securities	2,272		8		2,192		36			4,464	44		Asset backed securities	1,169		7		3,499		116		4,668		123
Corporate investments	Corporate investments	11,372		128		—		—			11,372	128		Corporate investments	36,958		4,042		7,076		925		44,034		4,967
States and political subdivisions	States and political subdivisions	6,117		112		—		—			6,117	112		States and political subdivisions	36,655		1,781		5,084		676		41,739		2,457
		$	357,967	$	5,376	$	2,192	$	36		360,159	$	5,412		$	274,889	$	21,424	$	320,121	$	36,322	$	595,010	$	57,746

Held to maturity:														Held to maturity:
States and political subdivisions														States and political subdivisions	$	9,259	$	206	$	—	$	—	$	9,259	$	206
															$	9,259	$	206	$	—	$	—	$	9,259	$	206

The number of debt securities in an unrealized loss position ~~increased~~decreased from 82359 at December 31, ~~2021~~2022 to ~~344~~340 at ~~September 30, 2022.~~March 31, 2023. The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost bases, which may be

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at maturity, the Company does not consider these investments to be impaired on an other-than-temporary basis at ~~September 30, 2022.~~March 31, 2023.

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

Available for Sale Held to Maturity
Amortized Fair Amortized Fair
(In thousands) Cost Value Cost Value
September 30, 2022:
One year or less $ 34,491 $ 33,739 $ 7,868 $ 7,851
After one through five years 363,116 334,048 47,439 47,155
After five through ten years 153,343 134,894 8,372 8,289
After ten years 124,289 111,977 2,210 2,210
$ 675,239 $ 614,658 $ 65,889 $ 65,505

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	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
March 31, 2023:
One year or less	$	106,679	$	104,245	$	6,974	$	6,955
After one through five years	343,910		322,010		46,198		46,110
After five through ten years	146,387		130,851		6,450		6,439
After ten years	112,922		102,475		1,640		1,640
	$	709,898	$	659,581	$	61,262	$	61,144

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, 2022 $ 436,693 $ 393,434 $ 35,755 $ 35,433
December 31, 2021 $ 451,402 $ 450,480 $ 38,704 $ 39,102


	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
March 31, 2023	$	620,381	$	576,828	$	31,678	$	31,569

December 31, 2022	$	492,206	$	451,638	$	35,734	$	35,562

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings. The Company monitors the credit rating on a quarterly basis. The following table summarizes the amortized cost basis of held-to-maturity debt securities at March 31, 2023 by credit rating:


(In thousands)	March 31, 2023
State and political subdivisions held-to-maturity:
S&P: AA+, AA, AA- / Moody's: Aa1, Aa2, Aa3	$	5,981
S&P: A+, A, A- / Moody's: A1, A2, A3	1,083
S&P: BBB+, BBB, BBB- / Moody's: Baa, Ba, B	495
Not rated	53,703
	$	61,262

Note 5: Loans

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


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	March 31, 2023		December 31, 2022
Secured by real estate:	Secured by real estate:					Secured by real estate:
Residential properties	Residential properties	$	1,311,672	$	774,699	Residential properties	$	1,429,332	$	1,403,974
Construction and land development	Construction and land development	945,639		543,763		Construction and land development	809,390		772,357
Farmland	Farmland	273,575		211,503		Farmland	288,970		283,832
Other commercial	Other commercial	2,145,785		1,396,085		Other commercial	2,525,887		2,467,216
Total real estate	Total real estate	4,676,671		2,926,050		Total real estate	5,053,579		4,927,379
Commercial and industrial loans	Commercial and industrial loans	664,439		527,102		Commercial and industrial loans	718,740		706,466
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	90,647		86,520		Agricultural production and other loans to farmers	75,509		80,770
Consumer and other loans	Consumer and other loans	118,011		79,500		Consumer and other loans	104,039		109,534
Total loans before allowance for loan losses		$	5,549,768	$	3,619,172
Total loans before allowance for credit losses						Total loans before allowance for credit losses	$	5,951,867	$	5,824,149

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

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

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

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Residential Real Estate Loans – The residential real estate loan portfolio consists of residential loans for single and multifamily properties. Residential loans are generally secured by owner occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can be impacted by economic conditions within their market area. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

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

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

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

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

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

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

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

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are considered past due. Current 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~~amortized cost basis of nonaccrual loans, segregated by ~~class.~~class as of March 31, 2023.

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(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	Total Nonaccrual		Nonaccrual with no Allowance for Credit Loss		Past Due 90 days or more and Accruing
Secured by real estate:	Secured by real estate:					Secured by real estate:
Residential properties	Residential properties	$	2,902	$	3,154	Residential properties	$	2,585	$	—	$	1,497
Construction and land development	Construction and land development	30		51		Construction and land development	—		—		—
Farmland	Farmland	960		1,327		Farmland	1,434		—		158
Other commercial	Other commercial	1,502		1,176		Other commercial	1,795		—		175
Total real estate	Total real estate	5,394		5,708		Total real estate	5,814		—		1,830
Commercial and industrial loans	Commercial and industrial loans	759		20		Commercial and industrial loans	201		—		204
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	—		3		Agricultural production and other loans to farmers	—		—		—
Consumer and other loans	Consumer and other loans	26		166		Consumer and other loans	—		—		946
Total nonaccrual loans		$	6,179	$	5,897
Total						Total	$	6,015	$	—	$	2,980

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During three months ended March 31, 2023, there were no significant changes to the collateral which secures the collateral-dependent loans, whether due to general deterioration or other reason. The following table presents the amortized cost basis of collateral-dependent loans by class and collateral type as of March 31, 2023.


(In thousands)	Real Estate		Enterprise Value		Accounts Receivable & Inventory
Secured by real estate:
Residential properties	$	—	$	—	$	—
Construction and land development	—		—		—
Farmland	—		—		—
Other commercial	1,433		1,554		—
Total real estate	1,433		1,554		—
Commercial and industrial loans	—		—		9,099
Agricultural production and other loans to farmers	—		—		—
Consumer loans	—		—		—
Total	$	1,433	$	1,554	$	9,099

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, 2022
Secured by real estate:
Residential properties $ 6,833 $ 1,674 $ 8,507 $ 1,303,165 $ 1,311,672 $ 829
Construction and land development 194 66 260 945,379 945,639 66
Farmland 313 1,039 1,352 272,223 273,575 75
Other commercial 819 916 1,735 2,144,050 2,145,785 287
Total real estate 8,159 3,695 11,854 4,664,817 4,676,671 1,257
Commercial and industrial loans 1,444 174 1,618 662,821 664,439 107
Agricultural production and other loans to farmers 181 168 349 90,298 90,647 168
Consumer loans 909 52 961 117,050 118,011 26
Total $ 10,693 $ 4,089 $ 14,782 $ 5,534,986 $ 5,549,768 $ 1,558

(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.

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Certain other loans identified by management consist of performing loans with specific allocations of the allowance for loan loss. Impaired loans, or portions thereof, are charged-off when deemed uncollectible.

~~Impaired loans, segregated by class were as follows:~~

September 30, 2022
Principal Recorded Related
(In thousands) Balance
Balance (1)
Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties $ 7,255 $ 4,752 $ —
Construction and land development 2,273 908 —
Farmland 1,387 969 —
Other commercial 8,372 7,250 —
Total real estate 19,287 13,879 —
Commercial and industrial 15,173 11,710 —
Agricultural production and other loans to farmers 36 — —
Consumer and other loans 276 53 —
Total $ 34,772 $ 25,642 $ —
Impaired loans with related allowance:
Secured by real estate:
Residential properties $ 800 $ 800 $ 7
Construction and land development — — —
Farmland — — —
Other commercial — — —
Total real estate 800 800 7
Commercial and industrial — — —
Agricultural production and other loans to farmers — — —
Consumer and other loans — — —
Total 800 800 7
Total impaired loans $ 35,572 $ 26,442 $ 7

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

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December 31, 2021
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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(In thousands)	Past Due 30-89 Days		Past Due 90 Days or More		Total Past Due		Current		Total Loans
March 31, 2023
Secured by real estate:
Residential properties	$	6,188	$	2,668	$	8,856	$	1,420,476	$	1,429,332
Construction and land development	216		—		216		809,174		809,390
Farmland	468		1,601		2,069		286,901		288,970
Other commercial	1,393		1,061		2,454		2,523,433		2,525,887
Total real estate	8,265		5,330		13,595		5,039,984		5,053,579
Commercial and industrial loans	755		370		1,125		717,615		718,740
Agricultural production and other loans to farmers	93		—		93		75,416		75,509
Consumer loans	906		946		1,852		102,187		104,039
Total	$	10,019	$	6,646	$	16,665	$	5,935,202	$	5,951,867

~~The average recorded investment and~~


(In thousands)	Past Due 30-89 Days		Past Due 90 Days or More		Total Past Due		Current		Total Loans
December 31, 2022
Secured by real estate:
Residential properties	$	5,869	$	2,015	$	7,884	$	1,396,090	$	1,403,974
Construction and land development	526		1,578		2,104		770,253		772,357
Farmland	566		1,391		1,957		281,875		283,832
Other commercial	1,498		774		2,272		2,464,944		2,467,216
Total real estate	8,459		5,758		14,217		4,913,162		4,927,379
Commercial and industrial loans	902		677		1,579		704,887		706,466
Agricultural production and other loans to farmers	126		—		126		80,644		80,770
Consumer loans	1,530		697		2,227		107,307		109,534
Total	$	11,017	$	7,132	$	18,149	$	5,806,000	$	5,824,149

Modifications to Borrowers Experiencing Financial Difficulty –From time to time, the Company may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, interest ~~recognized for impaired loans for~~rate reduction, term extension, other-than-significant payment delay or a combination thereof, among other things. During both of the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021 are presented below.~~
Three Months Ended September 30,
2022 2021
Average Interest Average Interest
(In thousands) Investment Recognized Investment Recognized
Secured by real estate:
  Residential properties $ 5,034 $ 47 $ 6,123 $ 42
  Construction and land development 881 22 1,139 23
  Farmland 965 — 11,150 104
  Other commercial 6,066 68 5,046 14
    Total real estate 12,946 137 23,458 183
Commercial and industrial 12,165 282 21,728 281
Agricultural production and other loans to farmers 5 1 146 3
Consumer loans 45 — 210 —
    Total $ 25,161 $ 420 $ 45,542 $ 467

Nine Months Ended September 30,
2022 2021
Average Interest Average Interest
(In thousands) Investment Recognized Investment Recognized
Secured by real estate:
  Residential properties $ 5,274 $ 66 $ 6,489 $ 106
  Construction and land development 1,221 77 2,107 80
  Farmland 1,838 — 10,452 356
  Other commercial 5,239 131 6,827 129
    Total real estate 13,572 274 25,875 671
Commercial and industrial 14,936 506 20,076 753
Agricultural production and other loans to farmers 9 1 94 3
Consumer loans 64 — 191 —
    Total $ 28,581 $ 781 $ 46,236 $ 1,427

~~There~~there were no modifications ~~classified as TDRs for the nine months ended September 30, 2022 or 2021. Although there were additional modifications~~ of ~~terms on some loans, the prevailing modifications during the reported periods were related to converting the~~ loans to interest only for a period of time, reductions in the interest rates, and/or extensions of payment dates or maturity dates. Because the majority of these loans were classified as impaired loans before restructuring, the modifications did not materially impact the Company’s determination of the allowance for loan losses. The allowance for loan losses attributable to restructured loans was $7,000 and $139,000 at September 30, 2022 and December 31, 2021, respectively.borrowers experiencing financial difficulty.

Note 6: Allowance for ~~Loan~~Credit Losses

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

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

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

~~Table of Contents~~

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

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

•Risk Grade 7 – Special Mention – The Company’s special mention rating is intended to closely align with the regulatory definition. A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of repayment prospects. These weaknesses may include deteriorating balance sheets, strained liquidity and elevated leverage ratios. Cash flow and profitability are marginally sufficient to service debt and collateral is exhibiting signs of decline in value; however, protection is currently sufficient. Limited management experience or weaknesses have emerged requiring more than normal supervision and uncertainties regarding the quality of the financials are not explained. Guarantor has very limited ability and willingness to provide short-term support. Moderate policy exceptions concerning structure or amortization may be considered in order to provide relief to the borrower. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

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

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

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

Pass loans for the Company include loans in Risk Grades 1 - 6. Classified loans for the Company include loans in Risk Grades 8, 9 and 10. Loans may be classified but not considered ~~impaired,~~individually evaluated or collateral-dependent, due to one of the following reasons: (i) the loan falls below the established minimum dollar thresholds for ~~loan impairment testing~~individual evaluation or (ii) the loan was ~~tested for impairment,~~individually evaluated, but not deemed to be ~~impaired.~~collateral-dependent.

The following table reflects loans by credit quality indicator and origination year at March 31, 2023. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at March 31, 2023.

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	Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2023		2022		2021				2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Residential real estate:
Pass	$	56,509	$	458,488	$	343,007			$	142,538	$	58,061	$	105,708	$	250,166	$	1,414,477
Special mention	—		—		—				—		—		—		—		—
Classified	31		946		2,241				3,087		1,629		5,756		1,165		14,855
Total residential real estate	$	56,540	$	459,434	$	345,248			$	145,625	$	59,690	$	111,464	$	251,331	$	1,429,332
Current period gross write offs	$	—	$	—	$	—			$	32	$	—	$	140	$	1	$	173

Construction & land development:																	0
Pass	$	18,762	$	73,087	$	18,267			$	6,838	$	7,244	$	6,891	$	675,494	$	806,583
Special mention	—		43		—				—		—		—		303		346
Classified	—		92		10				1,003		1,017		14		325		2,461
Total construction & land development	$	18,762	$	73,222	$	18,277			$	7,841	$	8,261	$	6,905	$	676,122	$	809,390
Current period gross write offs	$	—	$	—	$	—			$	—	$	—	$	7	$	—	$	7

Farmland:
Pass	$	11,112	$	89,609	$	34,157			$	30,038	$	16,483	$	28,177	$	76,107	$	285,683
Special mention	—		—		—				—		—		—		—		—
Classified	22		314		690				—		65		1,944		252		3,287
Total farmland	$	11,134	$	89,923	$	34,847			$	30,038	$	16,548	$	30,121	$	76,359	$	288,970
Current period gross write offs	$	—	$	—	$	2	$	—	$	—	$	—	$	3	$	3	$	8

Other commercial real estate:
Pass	$	55,882	$	519,426	$	425,974			$	270,587	$	133,264	$	253,147	$	856,811	$	2,515,091
Special mention	—		—		—				—		—		—		—		—
Classified	23		1,719		2,332				560		1,130		3,835		1,197		10,796
Total other commercial real estate	$	55,905	$	521,145	$	428,306			$	271,147	$	134,394	$	256,982	$	858,008	$	2,525,887
Current period gross write offs	$	—	$	—	$	56			$	—	$	—	$	—	$	—	$	56

Commercial & industrial loans:
Pass	$	42,206	$	183,885	$	105,343			$	50,827	$	31,986	$	12,928	$	278,751	$	705,926
Special mention	—		—		—				—		—		—		—		—
Classified	10		866		107				639		159		10,688		345		12,814
Total commercial & industrial loans	$	42,216	$	184,751	$	105,450			$	51,466	$	32,145	$	23,616	$	279,096	$	718,740
Current period gross write offs	$	—	$	62	$	30			$	2	$	15	$	7	$	172	$	288

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	Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural production & other loans to farmers:
Pass	$	8,449	$	11,311	$	5,898	$	4,476	$	1,793	$	844	$	42,652	$	75,423
Special mention	—		—		—		—		—		—		—		—
Classified	—		7		—		54		12		13		—		86
Total agricultural production & other loans to farmers	$	8,449	$	11,318	$	5,898	$	4,530	$	1,805	$	857	$	42,652	$	75,509
Current period gross write offs	$	—	$	5	$	—	$	—	$	—	$	—	$	8	$	13


Consumer & other loans:
Pass	$	11,498	$	32,852	$	9,569	$	6,439	$	1,441	$	4,291	$	36,596	$	102,686
Special mention	—		—		—		—		—		—		—		—
Classified	—		1,311		14		9		1		—		18		1,353
Total agricultural production & other loans to farmers	$	11,498	$	34,163	$	9,583	$	6,448	$	1,442	$	4,291	$	36,614	$	104,039
Current period gross write offs	$	810	$	63	$	23	$	31	$	7	$	—	$	9	$	943

The following table summarizes the credit quality of the Company’s loan portfolio by loan class at December 31, 2022:


	Risk Grades		Risk Grade		Risk Grade		Risk Grade
(In thousands)	1-6		7		8		9		Total
December 31, 2022
Secured by real estate:
Residential properties	$	1,391,039	$	—	$	12,852	$	83	$	1,403,974
Construction and land development	768,699		303		3,355		—		772,357
Farmland	280,522		—		3,310		—		283,832
Other commercial	2,456,708		—		10,384		124		2,467,216
Total real estate	4,896,968		303		29,901		207		4,927,379
Commercial and industrial	693,963		—		12,503		—		706,466
Agricultural production and other loans to farmers	80,524		—		246		—		80,770
Consumer and other loans	108,279		—		1,255		—		109,534

Total	$	5,779,734	$	303	$	43,905	$	207	$	5,824,149

The allowance for credit loss represents the ~~period indicated:~~estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The lifetime estimate also considers economic conditions. During the first quarter of 2023, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of supply chain disruptions, labor shortages, and the conflict in Ukraine. Although management strives to

2022

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Risk Grades Risk Grade Risk Grade Risk Grade
(In thousands) 1-6 7 8 9 Total
September 30, 2022
Secured by real estate:
Residential properties $ 1,298,704 $ 26 $ 12,899 $ 43 $ 1,311,672
Construction and land development 939,982 4,107 1,550 — 945,639
Farmland 270,512 — 3,063 — 273,575
Other commercial 2,134,357 116 11,312 — 2,145,785
Total real estate 4,643,555 4,249 28,824 43 4,676,671
Commercial and industrial 651,158 — 13,274 7 664,439
Agricultural production and other loans to farmers 90,192 — 368 87 90,647
Consumer and other loans 117,798 — 213 — 118,011
Total $ 5,502,703 $ 4,249 $ 42,679 $ 137 $ 5,549,768

Risk Grades Risk Grade Risk Grade Risk Grade
(In thousands) 1-6 7 8 9 Total
December 31, 2021
Secured by real estate:
Residential properties $ 763,116 $ — $ 11,583 $ — $ 774,699
Construction and land development 537,573 4,097 2,093 — 543,763
Farmland 208,318 — 3,185 — 211,503
Other commercial 1,386,240 — 9,845 — 1,396,085
Total real estate 2,895,247 4,097 26,706 — 2,926,050
Commercial and industrial 503,603 — 23,496 3 527,102
Agricultural production and other loans to farmers 86,292 — 228 — 86,520
Consumer and other loans 79,176 — 306 18 79,500
Total $ 3,564,318 $ 4,097 $ 50,736 $ 21 $ 3,619,172
maintain an allowance it deems adequate, future economic changes, deterioration of borrowers' creditworthiness, and the impact of examinations by regulatory agencies all could cause changes to BancPlus' allowance for credit losses.

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

~~Table of Contents~~

(In thousands) Commercial
and Industrial Commercial
Real Estate Residential Consumer
and other Total
Three Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance $ 4,126 $ 27,957 $ 9,274 $ 1,996 $ 43,353
Provision for loan losses 1,331 (1,169) 193 134 489
Recoveries on loans 34 272 49 486 841
Loans charged off (774) (240) (3) (1,133) (2,150)
Ending balance $ 4,717 $ 26,820 $ 9,513 $ 1,483 $ 42,533
Nine Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance $ 6,556 $ 27,133 $ 9,488 $ 1,823 $ 45,000
Provision for loan losses (200) (459) 650 949 940
Recoveries on loans 114 826 158 2,047 3,145
Loans charged off (1,753) (680) (783) (3,336) (6,552)
Ending balance $ 4,717 $ 26,820 $ 9,513 $ 1,483 $ 42,533
Period End Allowance Balance Allocated To:
Individually evaluated for impairment $ — $ — $ 7 $ — $ 7
Collectively evaluated for impairment 4,717 26,820 9,506 1,483 42,526
Ending balance $ 4,717 $ 26,820 $ 9,513 $ 1,483 $ 42,533

(In thousands) Commercial and Industrial Commercial Real Estate Residential Consumer and other Total
Three Months Ended September 30, 2021
Allowance for loan losses:
Beginning balance $ 6,493 $ 23,051 $ 10,234 $ 2,226 $ 42,004
Provision for loan losses (565) 616 352 1,066 1,469
Recoveries on loans 175 1,625 59 449 2,308
Loans charged off (37) (349) (122) (1,272) (1,780)
Balance, end of year $ 6,066 $ 24,943 $ 10,523 $ 2,469 $ 44,001
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:
Individually evaluated for impairment $ 991 $ 276 $ 9 $ — $ 1,276
Collectively evaluated for impairment 5,075 24,667 10,514 2,469 42,725
Ending balance $ 6,066 $ 24,943 $ 10,523 $ 2,469 $ 44,001

~~Table of Contents~~


(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential		Consumer and other		Total
Three Months Ended March 31, 2023
Allowance for credit losses:
Beginning balance	$	4,750	$	26,701	$	9,958	$	1,466	$	42,875
Impact of adopting ASU 2016-13	2,166		12,770		6,464		(656)		20,744
Provision for credit losses	(312)		979		113		640		1,420
Recoveries on loans	88		115		58		591		852
Loans charged off	(288)		(71)		(173)		(956)		(1,488)
Ending balance	$	6,404	$	40,494	$	16,420	$	1,085	$	64,403










Period End Allowance Balance Allocated To:
Individually evaluated	$	—	$	—	$	—	$	—	$	—
Collectively evaluated	6,404		40,494		16,420		1,085		64,403
Ending balance	$	6,404	$	40,494	$	16,420	$	1,085	$	64,403

The ~~following table provides~~allowance for credit losses increased for the ~~recorded investment in~~three months ended March 31, 2023 primarily as a result of the adoption of ASU 2016-13. Accrued interest receivable on loans, ~~net~~reported as a component of ~~unearned income, based~~accrued interest receivable on the ~~Company’s impairment methodology as~~balance sheet, totaled approximately $20.3 million for the period ended March 31, 2023 and is excluded from the estimate of ~~the dates presented:~~credit losses.


(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
September 30, 2022

Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Allowance for loan losses:												Allowance for loan losses:
Beginning balance												Beginning balance	$	6,556	$	27,133	$	9,488	$	1,823	$	45,000
Provision for loan losses												Provision for loan losses	(468)		75		311		299		217
Recoveries on loans												Recoveries on loans	22		141		54		791		1,008
Loans charged off												Loans charged off	(58)		(437)		(250)		(1,242)		(1,987)
Ending balance												Ending balance	$	6,052	$	26,912	$	9,603	$	1,671	$	44,238

Period End Allowance Balance Allocated To:												Period End Allowance Balance Allocated To:
Individually evaluated for impairment	Individually evaluated for impairment	$	10,952	$	4,811	$	1,603	$	—	$	17,366	Individually evaluated for impairment	$	1,723	$	308	$	7	$	—	$	2,038
Collectively evaluated for impairment	Collectively evaluated for impairment	653,487		3,360,188		1,310,069		208,658		5,532,402		Collectively evaluated for impairment	4,329		26,604		9,596		1,671		42,200
Ending balance	Ending balance	$	664,439	$	3,364,999	$	1,311,672	$	208,658	$	5,549,768	Ending balance	$	6,052	$	26,912	$	9,603	$	1,671	$	44,238

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 is 2.50%, is included in the minimum capital requirements relative to risk-weighted assets in the following table.

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framework was effective on January 1, 2020, and the Company and the Bank elected to adopt the optional CBLR framework in the third quarter of 2022, as an alternative to the ~~Basel III risk-based~~generally applicable capital ~~framework. Management believes as of September 30, 2022 and December 31, 2021, the Company and the Bank met the minimum leverage ratio or capital requirements to which they are subject.~~rules.

The Bank is also subject to capital requirements under the prompt corrective action regime. ~~As of September 30, 2022, the Bank maintained each of the capital ratios required to be categorized as well capitalized under the regulatory framework for prompt corrective action.~~ The prompt corrective action framework applies only to insured depository institutions, such as the Bank, and not to their holding companies, such as the Company. ~~For~~As of March 31, 2023, the ~~period ended September 30, 2022, the Company~~Bank maintained a leverage ratio of more than 9.0% and, ~~the Bank~~as an institution has elected to adopt the CBLR framework, ~~which provides for the Company and the Bank to be categorized as well capitalized based~~

~~Table of Contents~~

~~on a single capital ratio, the CBLR.~~ ~~Prior to the adoption of the CBLR framework, including at December 31, 2021,~~ the Bank was required to 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 to be categorized as well capitalized. There are no conditions or events since September 30, 2022 that management believes have changed the Bank’s category. The amounts of the Bank’s capital relative to the standards fortherefore well capitalized ~~status are set forth in~~under the ~~following table.~~

At December 31, 2021, 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.

Tier 1 capital includes CET1 capital and additional Tier 1 capital. For the Company, additional Tier 1 capital at December 31, 2021 included $51.0 million of trust preferred securities issued by the trusts (net of investment in the trusts). The Bank did not have any additional Tier 1 capital beyond CET1 capital as of December 31, 2021.

~~Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital~~regulatory framework for both the Company and the Bank includes a permissible portion of the allowance for loan losses. In addition, Tier 2 capital at December 31, 2021 for the Company includes $58.8 million of subordinated debentures. Capital levels required to be considered well capitalized are based upon prompt corrective ~~action regulations.~~

action. ~~Table of Contents~~

The following table presents actual and required capital ratios for the Company and the ~~Bank.~~Bank under the CBLR and prompt corrective action regulations for the relevant periods.


	Actual				Minimum Requirement to be Well Capitalized
(In thousands)	Capital Amount		Ratio		Capital Amount		Ratio
March 31, 2023:
Company:




Community Bank Leverage Ratio	$	727,972	10.27	%	$	637,810	9.00	%

Bank:




Community Bank Leverage Ratio	$	672,902	9.50	%	$	637,283	9.00	%

Actual Minimum Requirement to be Well Capitalized
(In thousands) Capital Amount Ratio Capital Amount Ratio
September 30, 2022:
Company:
Community Bank Leverage Ratio 708,028 10.69 % 595,970 9.00 %
Bank:
Community Bank Leverage Ratio 622,789 9.41 % 595,436 9.00 %

Actual Minimum Requirement Required to be
Well Capitalized
(In thousands) Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio
December 31, 2021:
Company:
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 433,754 10.65 % 346,166 8.50 % 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 433,754 8.46 % 205,072 4.00 % N/A N/A
Bank:
CET1 Capital to Risk-Weighted Assets $ 428,602 10.55 % $ 284,509 7.00 % $ 264,187 6.50 %
Tier 1 Capital to Risk-Weighted Assets 428,602 10.55 % 345,475 8.50 % 325,153 8.00 %
Total Capital to Risk-Weighted Assets 473,602 11.65 % 426,763 10.50 % 406,441 10.00 %
Tier 1 Capital to Average Assets 428,602 8.37 % 204,714 4.00 % 255,893 5.00 %


	Actual				Minimum Requirement to be Well Capitalized
(In thousands)	Capital Amount		Ratio		Capital Amount		Ratio
December 31, 2022:
Company:




Community Bank Leverage Ratio	$	721,001	10.54	%	$	615,566	9.00	%

Bank:




Community Bank Leverage Ratio	$	636,007	9.31	%	$	614,973	9.00	%

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

Note 8: Fair Value

Financial Instruments Measured at Fair Value

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

Level 1

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

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Level 2

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

Level 3

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

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

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

Securities – The Company utilizes an independent pricing service to advise it on the value of the securities portfolio. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one, or a combination of several, observable inputs such as benchmark yields, reported trades, benchmark securities, bids, offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. For Level 3 securities, in addition to the inputs noted above, inputs used by the pricing service to determine fair value may also include estimated duration, municipal bond interest rate curve, and tax effected yield. There were no Level 3 securities as of ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022. The Company’s treasury department and Asset Liability Management Committee review the aggregate fair values of the securities portfolio.

~~Impaired loans~~Individually Evaluated Loans with Credit Losses – Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured ~~for impairment~~to determine if any credit loss exists on a non-recurring basis. Allowable methods for determining the amount of ~~impairment~~the credit loss include estimating fair value using the fair value of the collateral for collateral-dependent loans. Specific allowances for ~~impaired~~these 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~~collateral-dependent. Loans that are primarily collateral dependent loans ~~and~~ are assessed using a fair value approach. Fair value estimates for ~~collateral dependent~~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~~Loans that have experienced a credit loss are classified within Level 3 of the fair value hierarchy. ~~Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.~~

Other Real Estate Owned – Other real estate owned is initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated cost to sell. Fair value estimates begin with obtaining a current independent appraisal or internal evaluation of the collateral value. Subsequent 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~~collateral-dependent loans and other real estate owned are primarily based on appraisals, observable market conditions, and other factors which may affect collectability. The appraisals use marketability and comparability discounts, which generally range from 5% to 15%. Assessment of the significance of a specific input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. It is reasonably possible that a change in the estimated fair value for assets measured using Level 3 inputs could occur in the future.

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


		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, 2022
March 31, 2023										March 31, 2023
U.S. Treasuries	U.S. Treasuries	$	34,351	$	—	$	34,351	$	—	U.S. Treasuries	$	34,992	$	—	$	34,992	$	—
U.S. Government agency obligations	U.S. Government agency obligations	367,683		—		367,683		—		U.S. Government agency obligations	415,064		—		415,064		—
Residential mortgage-backed securities	Residential mortgage-backed securities	97,821		—		97,821		—		Residential mortgage-backed securities	92,266		—		92,266		—
Commercial mortgage-backed securities	Commercial mortgage-backed securities	12,038		—		12,038		—		Commercial mortgage-backed securities	12,238		—		12,238		—
Asset-backed securities	Asset-backed securities	11,087		—		11,087		—		Asset-backed securities	9,391		—		9,391		—
Corporate investments	Corporate investments	44,909		—		44,909		—		Corporate investments	46,979		—		46,979		—
State and political subdivisions	State and political subdivisions	46,769		—		46,769		—		State and political subdivisions	48,651		—		48,651		—
Total securities available for sale	Total securities available for sale	$	614,658	$	—	$	614,658	$	—	Total securities available for sale	$	659,581	$	—	$	659,581	$	—


December 31, 2021
December 31, 2022										December 31, 2022
U.S. Treasuries										U.S. Treasuries	$	34,579	$	—	$	34,579	$	—
U.S. Government agency obligations	U.S. Government agency obligations	$	350,250	$	—	$	350,250	$	—	U.S. Government agency obligations	378,736		—		378,736		—
Residential mortgage-backed securities	Residential mortgage-backed securities	109,787		—		109,787		—		Residential mortgage-backed securities	94,132		—		94,132		—
Commercial mortgage-backed securities	Commercial mortgage-backed securities	14,276		—		14,276		—		Commercial mortgage-backed securities	12,070		—		12,070		—
Asset backed securities	Asset backed securities	13,107		—		13,107		—		Asset backed securities	10,220		—		10,220		—
Corporate investments	Corporate investments	44,510		—		44,510		—		Corporate investments	46,033		—		46,033		—
State and political subdivisions	State and political subdivisions	44,684		—		44,684		—		State and political subdivisions	48,150		—		48,150		—
Total securities available for sale	Total securities available for sale	$	576,614	$	—	$	576,614	$	—	Total securities available for sale	$	623,920	$	—	$	623,920	$	—

Assets measured at fair value on a non-recurring basis are summarized below.
Fair Fair Value Measurements Using
(In thousands) Value Level 1 Level 2 Level 3
Impaired loans, net of allowance for loan losses:
September 30, 2022 $ 26,435 $ — $ — $ 26,435
December 31, 2021 $ 33,570 $ — $ — $ 33,570
Other real estate owned:
September 30, 2022 $ 4,850 $ — $ — $ 4,850
December 31, 2021 $ 5,815 $ — $ — $ 5,815


	Fair		Fair Value Measurements Using
(In thousands)	Value		Level 1		Level 2		Level 3
Individually evaluated loans with credit losses, net of allowance for credit losses:
March 31, 2023	$	—	$	—	$	—	$	—

Impaired loans, net of allowance for loan losses:
December 31, 2022	$	26,071	$	—	$	—	$	26,071

Other real estate owned:
March 31, 2023	$	3,958	$	—	$	—	$	3,958
December 31, 2022	$	4,231	$	—	$	—	$	4,231

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

Qualitative Information about Level 3 Fair Value Measurements

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

(In thousands)

Carrying
Value

Valuation
Methods

Unobservable
Inputs

Range

Weighted Average

September 30, 2022

Impaired loans, net of specific allowance

26,435

Third-party appraisals

Selling costs

5% - 10%

March 31, 2023

Individually evaluated loans with credit losses, net of specific allowance

—

Third-party appraisals

Selling costs

5% - 10%

Other real estate owned

4,850

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

Other real estate owned

3,958

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

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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

December 31, 2021

Impaired loans, net of specific allowance

33,570

Third-party appraisals

Selling costs

5% - 10%

December 31, 2022

Impaired loans, net of allowance for loan losses

26,071

Third-party appraisals

Selling costs

5% - 10%

Other real estate owned

5,815

Third-party appraisals and internal evaluations

Selling costs

5% - 10%

Other real estate owned

4,231

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.

The following table presents estimated fair values of the Company’s financial instruments not previously disclosed:


		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
(In thousands)	(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:	Financial assets:									Financial assets:
Level 1 inputs:	Level 1 inputs:									Level 1 inputs:
Cash and cash equivalents	Cash and cash equivalents	$	172,285	$	172,285	$	664,165	$	664,165	Cash and cash equivalents	$	121,220	$	121,220	$	137,895	$	137,895

Level 2 inputs:	Level 2 inputs:									Level 2 inputs:
Securities held to maturity	Securities held to maturity	65,889		65,505		71,648		72,084		Securities held to maturity	61,262		61,144		62,274		62,068
FHLB stock	FHLB stock	16,759		16,759		2,731		2,731		FHLB stock	20,103		20,103		19,690		19,690
Accrued interest receivable	Accrued interest receivable	20,315		20,315		14,329		14,329		Accrued interest receivable	24,025		24,025		23,156		23,156
Level 3 inputs:	Level 3 inputs:									Level 3 inputs:
Loans held for sale	Loans held for sale	4,199		4,199		10,621		10,621		Loans held for sale	8,357		8,357		5,373		5,373
Loans, net	Loans, net	5,507,235		5,457,342		3,574,172		3,548,595		Loans, net	5,887,464		5,674,683		5,781,274		5,601,070

Financial liabilities:	Financial liabilities:									Financial liabilities:
Level 2 inputs:	Level 2 inputs:									Level 2 inputs:
Deposits	Deposits	5,594,217		5,050,544		4,622,116		4,493,657		Deposits	5,966,656		5,648,644		5,824,904		5,289,138
FHLB and other borrowings	FHLB and other borrowings	310,099		310,205		20,501		21,024		FHLB and other borrowings	310,068		309,927		318,084		318,079
Subordinated debentures	Subordinated debentures	133,430		139,267		111,509		111,509		Subordinated debentures	133,531		138,699		133,478		138,780
Accrued interest payable	Accrued interest payable	2,949		2,949		1,425		1,425		Accrued interest payable	4,407		4,407		2,334		2,334

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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

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of $1.4 million in conjunction with the issuance of the Notes. These issuance costs are netted with the balance of the Notes on the Company’s Consolidated Balance Sheets and will be amortized over the life of the Notes. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the remaining unamortized balance of these issuance costs was ~~$1.1~~$1.0 million and ~~$1.2~~$1.1 million, respectively. The Notes initially bear interest at a rate of 6.000% per annum from and including June 4, 2020, to but excluding June 15, 2025 or the early redemption date, with interest during this period payable semiannually in arrears. From and including June 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 586 basis points, with interest during this period payable quarterly in arrears. The Company used the proceeds of the private placement for general corporate purposes, including improving the Company’s liquidity and capital position.

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

Effective March 1, 2022, in conjunction with the FTC Merger, the Company assumed FTC’s obligations under its Subordinated Note Purchase Agreement, dated as of December 23, 2020, and the several purchasers of the $21.0 million aggregate principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued thereunder (the ~~“Subordinated~~“FTC Subordinated Notes”). The FTC Subordinated Notes will mature on December 30, 2030 and bear interest at an initial fixed rate of 5.50% per annum, payable semi-annually in arrears. From and including December 30, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate (“SOFR”) plus 527 basis points, payable quarterly in arrears. BancPlus will be entitled to redeem the FTC Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the FTC Subordinated Notes in whole upon certain other events. The FTC Subordinated Notes are not subject to redemption at the option of the holder. The FTC Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The FTC Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The FTC Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The FTC Subordinated Notes vary from the amount carried on the Consolidated Balance Sheets at ~~September 30, 2022~~March 31, 2023 due to the remaining purchase premium of ~~$633,000,~~$536,000, which was established upon closing of the FTC Merger and is being amortized over the remaining life of the debentures.

Trust Preferred Securities

The Company also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. Under a grandfathering provision in the Basel III capital rules that applies to bank holding companies with less than $15 billion in total consolidated assets, these preferred capital securities have qualified as Tier 1 capital for the Company, subject to regulatory rules and limits. These trusts used the proceeds from the issuance of the common stock and the preferred capital securities to purchase subordinated debentures issued by the Company. These subordinated debentures are these trusts’ only assets, and quarterly interest payments on these subordinated debentures are the sole source of cash for these trusts to pay quarterly distributions on the common stock and preferred capital securities. The Company has fully and unconditionally guaranteed the trusts’ obligations with respect to the preferred capital securities.

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

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

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(In thousands)	(In thousands)	Year of Maturity	Interest Rate	September 30, 2022		December 31, 2021		(In thousands)	Year of Maturity	Interest Rate	March 31, 2023		December 31, 2022
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 Consolidated Balance Sheets at ~~September 30, 2022~~March 31, 2023 due to the remaining purchase discount of ~~$3.8~~$3.7 million, which was established upon the merger with State Capital Corp. (“SCC”), in which BancPlus acquired SCC, the holding company of State Bank & Trust Company (“State Bank”) by a statutory share exchange and SCC was merged with and into BancPlus and State Bank was merged with and into BankPlus, with BancPlus and BankPlus surviving the mergers, which closed on April 1, 2020, and is being amortized over the remaining life of the debentures.

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

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

Note 10: Employee Benefits

The Company has an Employee Stock Ownership Plan (“ESOP”) that covers all employees of the Bank who are at least 21 years of age and work in a position requiring at least one thousand hours of service annually. The plan also has 401(k) provisions that allow for employee tax deferred contributions. Participants may make contributions to the ESOP in accordance with applicable regulations and the ESOP’s provisions. The Company makes a “safe harbor” matching contribution on the first 3% of an employee’s salary deferral contributions, plus an additional matching contribution equal to 50% of the next 2% of an employee’s salary deferral contributions in excess of 3%. Additional contributions are made to the ESOP at the discretion of the Company’s Board of Directors.

The ESOP owned 1,452,950 ~~and 1,500,732~~ shares of the Company's common stock at ~~September 30, 2022~~both March 31, 2023 and December 31, ~~2021, respectively.~~2022. The ESOP ~~entered~~can enter into loans, collateralized by ESOP shares, with the Company in connection with the repurchase of shares of Company stock that were sold by participants in accordance with diversification provisions of the ESOP. ~~A total of 176,786 shares were repurchased through 2011, an additional 77,000 shares were repurchased under this program in 2012, and 27,594 shares were repurchased under this program in 2019.~~ These unallocated shares ~~were~~would be released to participants proportionately as the loans ~~were~~are repaid. Dividends on allocated shares ~~were~~are recorded as dividends and charged to retained earnings. Dividends on unallocated shares that ~~were~~are used to repay the loan ~~were~~would be treated as compensation expense. As of ~~September 30, 2022,~~March 31, 2023, the ESOP had zero outstanding loans with the Company.

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

(In thousands, except share data) September 30, 2022 December 31, 2021
Allocated shares 1,452,950 1,472,334
Unearned shares — 28,398
Total ESOP shares 1,452,950 1,500,732
Fair value of unearned shares $ — $ 1,938

Distributions of the ESOP may be either in cash or Company common stock. The allocated shares are subject to a put option, whereby the Company will provide a market for a specified period of time for shares distributed to participants. The put price is the appraised value of the stock. The fair value of allocated shares of common stock held by the ESOP are deducted from permanent shareholders’ equity in the Consolidated Balance Sheets and reflected in a line item below liabilities and above shareholders’ equity. This presentation is necessary in order to recognize the put option within the ESOP-owned shares, consistent with U.S. Securities and Exchange Commission guidelines, that is present as long as the Company is not publicly traded. The Company uses a valuation by an external third party to determine the maximum possible cash obligation related to these securities. Increases or decreases in the value of the cash obligation are included in a separate line item in the Consolidated Statements of Shareholders’ Equity. The fair value of allocated shares held by the ESOP at ~~September 30, 2022~~March 31, 2023 was ~~$93.4~~$97.0 million, based on the Company’s previously disclosed appraised value of ~~$64.25~~$66.75 per share of common stock. The fair value at December 31, ~~2021~~2022 was ~~$100.5~~$97.0 million, based on the Company’s previously disclosed appraised value of ~~$68.25~~$66.75 per share of common stock. As previously disclosed, these appraised values were determined solely for purposes of the ESOP’s administration and are therefore subject to certain limitations, qualifications and assumptions and may not reflect the fair value of the Company’s common stock and should not be relied on for any reason. Neither the Company nor the ESOP has any obligation to seek an adjusted valuation, to use these appraised values for any other purpose or, if the Company or the ESOP obtains a new appraised value, to disclose such new appraised value.

Note 11: Equity

Preferred Stock

The Company’s Articles of Incorporation authorize 10,000,000 shares of preferred stock with no par value, which may be issued from time to time and in one or more classes or series upon authorization of the Board of Directors.

On June 22, 2022, the Company entered into a Letter Agreement (including annexes thereto, collectively, the “Purchase Agreement”) with the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell 250,000 shares of the Company’s preferred stock designated as Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP (the “Preferred Stock”) for an aggregate purchase price of $250.0 million in cash. The Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

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

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

statement covering the potential resale of the Preferred Stock as promptly as practicable. Once the Company is eligible to file on Form S-3, the Company agreed to prepare and file such shelf registration statement within 30 days. The Registration Rights Agreement also includes customary “piggyback” registration rights, suspension rights, indemnification, contribution, and assignment provisions.

Common Stock

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

Note 12: Stock Based Compensation

Under the Company’s long-term incentive program, certain officers, employees and directors are eligible to receive equity-based awards under the 2018 Long-Term Incentive Plan (“LTIP”). Restricted stock awards (“RSAs”) granted under the LTIP generally vest over one to five years. Unvested RSAs are included in the Company’s common stock outstanding. Compensation expense for RSAs granted under the LTIP is recognized over the vesting period of the awards based on the fair value of the stock at the grant date, with forfeitures recognized as they occur.

Stock based compensation that has been charged against income was ~~$2.8~~$1.0 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~$1.7~~$0.7 million for the same period of ~~2021.~~2022. There were zero ~~and 1,830~~ shares forfeited during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021, respectively.~~2022. As of ~~September 30, 2022,~~March 31, 2023, there was ~~$9.6~~$6.9 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~~2.8 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, 2022			September 30, 2021				March 31, 2023			March 31, 2022
		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	144,572	$	51.56	91,109	$	50.60	Beginning of period	184,284	$	59.36	144,572	$	51.56
Granted	Granted	98,679	68.13		85,147	51.59		Granted	—	—		21,367	68.25
Vested	Vested	(55,397)	53.38		(33,545)	52.03		Vested	1,396	50.00		(6,077)	50.00
Forfeited	Forfeited	—	—		(1,830)	49.46		Forfeited	—	—		—	—
End of period	End of period	187,854	$	58.73	140,881	$	50.88	End of period	185,680	$	59.43	159,862	$	53.85

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, three former Bank 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. The Court denied that motion. On September 30, 2021, an order was entered to consolidate for purposes of discovery this case (No. 3:19-cv-00196-CWR-FKB) with three other related cases filed by Mills, the Receiver. A Case Management Order (No.: 3:22-cv-36-CWRFKB) was entered on January 31, 2022 for the sole purpose of managing consolidated discovery in the four related cases. Phase one written discovery is still underway. Phases two and three discovery, allowing depositions, will begin at a future date pursuant to a subsequent court order.

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

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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.

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

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

•the effects of the novel coronavirus and variants thereof (“COVID-19”) pandemic, on our business, financial condition and results of operations and on our customers, our employees, our third-party service providers and the economy, and the efficacy of COVID-19 vaccines;

•our ability to adequately measure and limit our credit risk;

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;

•~~possible additional loan losses and impairment of the collectability of loans;~~

•our ability to prudently manage our growth, maintain our historical rate of growth in light of associated risks, and execute our strategy;

•our ability to successfully integrate and fully realize the cost savings and other benefits of our acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition customer acceptance of the Company’s products and services and related customer disintermediation, including our recent acquisition of First Trust Corporation (“FTC”);

•the composition of our management team and our ability to attract and retain key ~~personnel;~~

•~~changes in management~~ personnel;

•geographic concentration of our business within Mississippi, Alabama, Louisiana, and Florida;

•our ability to attract and retain ~~customers;~~

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

•~~further government restrictions on overdraft programs;~~

•failure of our risk management framework;

•systems failures, unauthorized access, cyber-crime and other threats to data security or interruptions involving our information technology and telecommunications systems or third-party ~~servicers;~~servicers;

•difficult market conditions and unfavorable economic trends in the United States generally (including uncertainty regarding the federal government’s debt limit or a prolonged shutdown of the federal government), and particularly in the markets in which we operate and in which our loans are concentrated, including declines in housing markets, an increase in unemployment levels and ~~inflation, and~~ slowdowns in economic growth;

•~~our ability~~the impacts related to ~~maintain our historical rate of growth;~~

•~~our ability~~or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to ~~manage the risks associated with our growth and expansion through de novo branching;~~macroeconomic conditions;

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

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•~~deterioration of our asset quality;~~

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

•~~any impairment of our goodwill or other intangible assets;~~

•~~changes in the value of collateral securing our loans;~~

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

•~~further government intervention in the U.S. financial system, including in response to the COVID-19 pandemic;~~

•~~the effects of regional or national civil unrest (including any resulting branch closures or damage);~~

•compliance with governmental and regulatory requirements, including relating to banking, consumer protection, securities and tax matters;

•operational risks associated with our business;

•volatility and direction of market interest ~~rates, including as a result of the COVID-19 pandemic and continuing worldwide macroeconomic uncertainty;~~rates;

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

•the obligations associated with being a public reporting company;

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

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

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•other factors that are discussed in the sections entitled ~~“Risk~~“Item 1A. Risk Factors” and ~~“Management’s~~“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the annual period ended December 31, ~~2021, our Quarterly Reports on Form 10-Q for the quarters ended March 31,~~ 2022, ~~and June 30, 3022~~ and in this Quarterly Report on Form 10-Q.

New factors emerge from time to time, and it is not possible for us to predict which will arise. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2021, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 and in this Quarterly Report on Form 10-Q.~~2022. 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, 2022,~~March 31, 2023, we operated 94 branch offices across Mississippi, Alabama, Louisiana, ~~Alabama~~ and Florida. Our franchise is built on a community banking approach focused on personalized, relationship-driven service combined with local market management and expertise. We have one reportable segment.

BancPlus’ business strategy is to provide exceptional community banking services and financial solutions within its markets, which enables us to fulfill our core purpose of enriching lives and building stronger communities. We believe our team of local, experienced and relationship-focused bankers, along with strong brand recognition in our communities, differentiate us from our competitors. As a result, we have a granular, stable deposit mix and a diversified loan portfolio. As of ~~September 30, 2022,~~March 31, 2023, BancPlus held ~~$5.594~~$5.967 billion of total deposits, and our deposit base consisted of ~~96.3%~~96.6% core deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000, with a total deposit cost of ~~0.17%~~1.16%. Our loan portfolio was comprised of 74.2% commercial loans and 25.8% 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, 2022, and we believe we are well-positioned for future growth.

~~September 30, 2022~~March 31, 2023 Highlights

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•Net income for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$44.9~~$17.1 million, compared with ~~$45.5~~$9.7 million for the same period of ~~2021~~2022

•Diluted earnings per share for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were ~~$4.01,~~$1.49, compared with ~~$4.53~~$0.92 for the same period of ~~2021~~2022

•Net interest income was ~~$157.5~~$58.2 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, compared with ~~$126.8~~$42.8 million for the same period of ~~2021~~2022

•Total loans held for investment were ~~$5.550~~$5.952 billion at ~~September 30, 2022,~~March 31, 2023, compared with ~~$3.619~~$5.824 billion at December 31, ~~2021~~2022

Recent Developments

~~Recent developments at September~~The recent failures of Silicon Valley Bank, Santa Clara, California, Signature Bank, New York, New York, and First Republic Bank, San Francisco, California in March and May, 2023, may lead to regulatory changes and initiatives that could impact BancPlus. For example, the Federal Deposit Insurance Corporation (“FDIC”) has stated that it plans to impose a special deposit insurance assessment on banks in order to recover losses that the FDIC’s Deposit Insurance Fund incurred to support uninsured depositors of these institutions. In addition, President Biden has encouraged the federal banking agencies to adopt various reforms, including the completion of an incentive compensation rule for bank executives pursuant to Section 956 of the Dodd-Frank Act, in response to these bank failures.

Small Business Lending Data Collection Rule

On March 30, ~~2022 did not significantly change from~~2023, the ~~recent developments as~~Consumer Financial Protection Bureau finalized a rule under section 1071 of ~~December 31, 2021, which are disclosed in our Annual Report on Form 10-K for~~ the ~~year ended December 31, 2021,~~Dodd-Frank Act requiring lenders to collect and asreport data regarding small business lending activity. BancPlus is evaluating the impact of ~~March 31, 2022 and June 30, 2022, which are disclosed in our Quarterly Reports on Form 10-Q for~~ the ~~quarters ended March 31, 2022 and June 30, 2022.~~new rule.

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Results of Operations

The following discussion of BancPlus’ results of operations compares the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 2022. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, ~~2022~~2023 or for any other period.

Net Income

Net income for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was ~~$19.1~~$17.1 million and ~~$14.2~~$9.7 million, respectively. BancPlus’ annualized return on average assets for the three months ended ~~September 30,~~March 31, 2023 and 2022 was 0.98% and ~~2021 was 1.14% and 1.11%~~0.69%, respectively. BancPlus’ annualized return on average equity for the three months ended ~~September 30,~~March 31, 2023 and 2022 was 10.15% and ~~2021 was 10.93% and 14.67%~~9.60%, respectively.

The increase in net income and return on average assets and equity for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021~~2022 was primarily the result of increased net interest income from our previously disclosed merger with FTC, in which BancPlus acquired FTC, the holding company of First Bank and Trust (“FBT”) by a statutory share exchange and FTC was merged with and into BancPlus, with BancPlus surviving the merger (the “FTC Holding Company Merger”), and FBT was merged with and into BankPlus, with BankPlus surviving the merger, effective March 1, 2022 (together with the FTC Holding Company Merger, the “FTC Merger”), as well as ~~organic loan growth and~~ the rising interest rate environment seen in recent months. The decrease in return on average equity for the three months ended September 30, 2022 compared to the same period of 2021 was the result of an increase in total equity as a result of the issuance of 250,000 shares of the Company’s preferred stock on June 22, 2022 pursuant to a Letter Agreement (including annexes thereto, collectively, the “Purchase Agreement”) with the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”). For more information about the preferred stock issuance refer to Footnote 11 to our Condensed Notes to Consolidated Financial Statements for the quarter ended September 30, 2022 contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Net income for the nine months ended September 30, 2022 and 2021 was $44.9 million and $45.5 million, respectively. BancPlus’ annualized return on average assets for the nine months ended September 30, 2022 and 2021 was 0.96% and 1.22%, respectively. BancPlus’ annualized return on average equity for the nine months ended September 30, 2022 and 2021 was 11.49% and 16.36%, respectively.

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

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

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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~~credit losses that BancPlus maintains.

For the three months ended ~~September 30, 2022, net~~March 31, 2023, interest income was ~~$61.9~~$80.8 million, an increase of ~~$18.4~~$34.8 million, or ~~42.5%~~75.8%, compared to ~~net~~ interest income of ~~$43.4~~$45.9 million for the three months ended ~~September 30, 2021. For the nine months ended September 30, 2022, net~~March 31, 2022. These increase in interest income was ~~$157.5 million, an increase of $30.7 million, or 24.2%, compared to net interest income of $126.8 million for the nine months ended September 30, 2021. These increases in net interest income were~~ primarily the result of higher interest rates in the current year period as well as increased interest-earning assets as a result of the FTC Merger and organic loan growth.

For the three months ended March 31, 2023, interest expense was $22.6 million, an increase of $19.4 million, or 611.7%, compared to $3.2 million for the three months ended March 31, 2022. The increase in interest expense was primarily the result of higher interest rates in the current year period as well as increased interest-bearing liabilities as a result of the FTC Merger.

For the three months ended March 31, 2023, net interest income was $58.2 million, an increase of $15.4 million, or 36.0%, compared to net interest income of $42.8 million for the three months ended March 31, 2022.

Net interest margin for the three months ended ~~September 30, 2022~~March 31, 2023 increased 3229 basis points to ~~3.98%~~3.51% from ~~3.66%~~3.22% for the same period of ~~2021~~2022 primarily as the result of the rising interest rate environment seen in ~~recent months. Net interest margin for~~ the nine months ended September 30, 2022 decreased 6 basis points to 3.59% from 3.65% for the same period of 2021 as the result of higher fair value amortization and fees from loans made under the Paycheck Protection Program in 2021.current year period.

Our ~~year to date~~ average interest-earning assets at ~~September 30, 2022,~~March 31, 2023 increased ~~$1.22~~$1.32 billion, or ~~26.28%~~24.89%, to ~~$5.86~~$6.64 billion from ~~$4.64~~$5.31 billion at ~~September 30, 2021.~~March 31, 2022. BancPlus’ ~~year to date~~ average interest-bearing liabilities at ~~September 30, 2022~~March 31, 2023 increased ~~$691.8 million,~~$1.09 billion, or ~~21.36%~~29.77%, to ~~$3.93~~$4.74 billion from ~~$3.24~~$3.65 billion at ~~September 30, 2021.~~March 31, 2022. These increases in BancPlus’ average interest-earning assets and interest-bearing liabilities were primarily due to the FTC Merger and organic loan growth. The ratio of BancPlus’ average interest-earning assets to average interest-bearing liabilities was ~~149.0%~~140.1% and ~~143.2%~~145.5% at ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

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BancPlus’ average interest-earning assets produced a tax-equivalent yield of ~~4.36% and 3.89%~~4.87% for the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023, compared to ~~3.93% and 3.94%~~3.46% for the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The average rate paid on interest-bearing liabilities was ~~0.58% and 0.45%~~1.91% for the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023, compared to ~~0.39% and 0.42%~~0.35% for the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The year-over-year changes in yields reflects the ~~low interest rate environment seen earlier in the year combined with the~~ rising interest rate environment seen in ~~recent months.~~the current year period.

Average Balances and Yields

The following tables show, for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the average balances of each principal category of BancPlus’ assets, liabilities and shareholders’ equity, and an analysis of net interest income. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. These tables are presented on a tax-equivalent basis, if applicable.

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Three Months Ended September 30,
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 $ 101,839 $ 421 1.65 % $ 596,624 $ 231 0.15 %
Federal funds sold — — — % — — — %
101,839 421 1.65 % 596,624 231 0.15 %
Investment securities:
Taxable investment securities 629,762 2,658 1.69 % 549,569 2,097 1.53 %
Tax-exempt investment securities 66,681 387 2.32 % 79,118 455 2.30 %
Total securities 696,443 3,045 1.75 % 628,687 2,552 1.62 %
Loans (1)
5,412,216 64,309 4.75 % 3,517,978 43,835 4.98 %
Federal Home Loan Bank (“FHLB”) stock 11,504 42 1.46 % 3,576 11 1.23 %
Total interest-earning assets 6,222,002 67,817 4.36 % 4,746,865 46,629 3.93 %
Noninterest-earning assets 432,668 329,425
Total assets $ 6,654,670 $ 5,076,290
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 1,566,576 $ 1,645 0.42 % $ 1,468,126 $ 717 0.20 %
Savings and money market deposits 1,419,280 700 0.20 % 1,021,448 186 0.07 %
Time deposits 799,445 721 0.36 % 641,501 843 0.53 %
Federal funds purchased 82 — — % — — — %
FHLB advances 162,344 1,093 2.69 % 20,534 78 1.52 %
Other borrowings 609 14 9.20 % 11,223 110 3.92 %
Subordinated debentures 133,387 1,767 5.30 % 111,344 1,261 4.53 %
Total interest-bearing liabilities 4,081,723 5,940 0.58 % 3,274,176 3,195 0.39 %
Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits 1,819,151 1,364,915
Other noninterest-bearing liabilities 58,876 53,245
Total noninterest-bearing liabilities 1,878,027 1,418,160
Shareholders’ equity (6)
694,920 383,954
Total liabilities and shareholders’ equity $ 6,654,670 $ 5,076,290
Net interest income/net interest margin (2)
61,877 3.98 % 43,434 3.66 %
Net interest spread (5)
3.78 % 3.54 %
Taxable equivalent adjustment:
Tax-exempt investment securities (3)
125 146
Net interest income/net interest margin (2)
$ 62,002 3.99 % $ 43,580 3.67 %
~~________________________________~~

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

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

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

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

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

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

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		Nine Months Ended September 30,													Three Months Ended March 31,
		2022						2021							2023						2022
(Dollars in thousands)	(Dollars in thousands)	Average Balance		Interest & Fees		Yield / Rate (4)		Average Balance		Interest & Fees		Yield / Rate (4)		(Dollars in thousands)	Average Balance		Interest & Fees		Yield / Rate (4)		Average Balance		Interest & Fees		Yield / Rate (4)
ASSETS:	ASSETS:													ASSETS:
Interest-earning assets:	Interest-earning assets:													Interest-earning assets:
Cash investments:	Cash investments:													Cash investments:
Interest-bearing cash deposits	Interest-bearing cash deposits	$	349,369	$	1,117	0.43	%	$	559,746	$	465	0.11	%	Interest-bearing cash deposits	$	31,635	$	357	4.51	%	$	578,254	$	227	0.16	%
Federal funds sold	Federal funds sold	—		—		—	%	7,070		11		0.21	%	Federal funds sold	—		—		—	%	—		—		—	%
		349,369		1,117		0.43	%	566,816		476		0.11	%		31,635		357		4.51	%	578,254		227		0.16	%
Investment securities:	Investment securities:													Investment securities:
Taxable investment securities	Taxable investment securities	628,634		7,467		1.58	%	511,923		6,024		1.57	%	Taxable investment securities	635,344		3,066		1.93	%	629,208		2,307		1.47	%
Tax-exempt investment securities	Tax-exempt investment securities	69,222		1,208		2.33	%	84,939		1,473		2.31	%	Tax-exempt investment securities	64,139		380		2.37	%	72,432		420		2.32	%
Total securities	Total securities	697,856		8,675		1.66	%	596,862		7,497		1.67	%	Total securities	699,483		3,446		1.97	%	701,640		2,727		1.55	%
Loans (1)	Loans (1)	4,800,489		161,008		4.47	%	3,469,520		129,066		4.96	%	Loans (1)	5,881,779		76,747		5.22	%	4,029,014		42,987		4.27	%
Federal Home Loan Bank (“FHLB”) stock	Federal Home Loan Bank (“FHLB”) stock	7,549		54		0.95	%	3,509		17		0.65	%	Federal Home Loan Bank (“FHLB”) stock	22,781		221		3.88	%	4,475		4		0.36	%
Total interest-earning assets	Total interest-earning assets	5,855,263		170,854		3.89	%	4,636,707		137,056		3.94	%	Total interest-earning assets	6,635,678		80,771		4.87	%	5,313,383		45,945		3.46	%
Noninterest-earning assets	Noninterest-earning assets	398,041						333,231						Noninterest-earning assets	448,172						345,648
Total assets	Total assets	$	6,253,304					$	4,969,938					Total assets	$	7,083,850					$	5,659,031

LIABILITIES AND SHAREHOLDERS’ EQUITY:	LIABILITIES AND SHAREHOLDERS’ EQUITY:													LIABILITIES AND SHAREHOLDERS’ EQUITY:
Interest-bearing liabilities:	Interest-bearing liabilities:													Interest-bearing liabilities:
Interest-bearing transaction deposits	Interest-bearing transaction deposits	$	1,578,415	$	3,474	0.29	%	$	1,452,965	$	2,278	0.21	%	Interest-bearing transaction deposits	$	1,656,880	$	3,224	0.78	%	$	1,590,153	$	711	0.18	%
Savings and money market deposits	Savings and money market deposits	1,359,333		1,589		0.16	%	982,220		696		0.09	%	Savings and money market deposits	1,860,403		10,579		2.27	%	1,199,908		312		0.10	%
Time deposits	Time deposits	786,818		2,042		0.35	%	659,361		2,899		0.59	%	Time deposits	810,804		3,357		1.66	%	714,438		654		0.37	%
Federal funds purchased	Federal funds purchased	27		—		—	%	—		—		—	%	Federal funds purchased	6,406		79		4.93	%	—		—		—	%
FHLB advances	FHLB advances	68,352		1,246		2.43	%	20,567		233		1.51	%	FHLB advances	269,196		3,215		4.78	%	20,485		76		1.48	%
Other borrowings	Other borrowings	8,620		280		4.33	%	12,087		352		3.88	%	Other borrowings	889		10		4.50	%	7,102		65		3.66	%
Subordinated debentures	Subordinated debentures	128,638		4,734		4.91	%	111,248		3,760		4.51	%	Subordinated debentures	133,485		2,154		6.45	%	119,024		1,360		4.57	%
Total interest-bearing liabilities	Total interest-bearing liabilities	3,930,203		13,365		0.45	%	3,238,448		10,218		0.42	%	Total interest-bearing liabilities	4,738,063		22,618		1.91	%	3,651,110		3,178		0.35	%
Noninterest-bearing liabilities:	Noninterest-bearing liabilities:													Noninterest-bearing liabilities:
Noninterest-bearing transaction deposits	Noninterest-bearing transaction deposits	1,745,151						1,306,105						Noninterest-bearing transaction deposits	1,585,862						1,545,452
Other noninterest-bearing liabilities	Other noninterest-bearing liabilities	54,904						53,169						Other noninterest-bearing liabilities	77,818						53,290
Total noninterest-bearing liabilities	Total noninterest-bearing liabilities	1,800,055						1,359,274						Total noninterest-bearing liabilities	1,663,680						1,598,742
Shareholders’ equity (6)	Shareholders’ equity (6)	523,046						372,216						Shareholders’ equity (6)	682,107						409,179
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	6,253,304					$	4,969,938					Total liabilities and shareholders’ equity	$	7,083,850					$	5,659,031
Net interest income/net interest margin (2)	Net interest income/net interest margin (2)			157,489		3.59	%			126,838		3.65	%	Net interest income/net interest margin (2)			58,153		3.51	%			42,767		3.22	%
Net interest spread (5)	Net interest spread (5)					3.44	%					3.52	%	Net interest spread (5)					2.96	%					3.11	%
Taxable equivalent adjustment:	Taxable equivalent adjustment:													Taxable equivalent adjustment:
Tax-exempt investment securities (3)	Tax-exempt investment securities (3)			389						474				Tax-exempt investment securities (3)			122						135
Net interest income/net interest margin (2)	Net interest income/net interest margin (2)			$	157,878	3.60	%			$	127,312	3.66	%	Net interest income/net interest margin (2)			$	58,275	3.51	%			$	42,902	3.23	%

________________________________

(1)Average loan balances include nonaccrual loans.

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

(3)Interest income and averages rates for tax exempt securities are presented on a tax-equivalent basis, assuming a combined federal and state income tax rate of 25% for ~~2022~~2023 and ~~2021.~~2022.

(4)Yields and rates are annualized.

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

(6)Includes BancPlus Corporation Employee Stock ~~Ownership-owned~~Ownership Plan-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, 2022 Compared with Three Months Ended September 30, 2021
Change Due To:
(Dollars in thousands) Volume Rate Interest Variance
Interest-earning assets:
Cash investments $ (2,045) $ 2,235 $ 190
Investment securities:
Taxable investment securities 338 223 561
Tax-exempt investment securities (72) 4 (68)
Total securities 266 227 493
Loans, net 22,508 (2,034) 20,474
Federal Home Loan Bank stock 29 2 31
Total interest-earning assets $ 20,758 $ 430 $ 21,188
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 103 $ 825 $ 928
Savings and money market deposits 196 318 514
Time deposits 142 (264) (122)
FHLB advances 955 60 1,015
Other borrowings (244) 148 (96)
Subordinated debentures 292 214 506
Total interest-bearing liabilities $ 1,444 $ 1,301 $ 2,745
Net interest income $ 19,314 $ (871) $ 18,443


	Three Months Ended March 31, 2023 Compared with Three Months Ended March 31, 2022
	Change Due To:
(Dollars in thousands)	Volume		Rate		Interest Variance
Interest-earning assets:
Cash investments	$	(6,169)	$	6,299	$	130
Investment securities:
Taxable investment securities	30		729		759
Tax-exempt investment securities	(49)		9		(40)
Total securities	(19)		738		719
Loans, net	24,175		9,585		33,760
Federal Home Loan Bank stock	178		39		217
Total interest-earning assets	$	18,165	$	16,661	$	34,826

Interest-bearing liabilities:
Interest-bearing transaction deposits	$	130	$	2,383	$	2,513
Savings and money market deposits	3,756		6,511		10,267
Time deposits	399		2,304		2,703
Federal funds purchased	79		—		79
FHLB advances	2,970		169		3,139
Other borrowings	(70)		15		(55)
Subordinated debentures	233		561		794
Total interest-bearing liabilities	$	7,497	$	11,943	$	19,440
Net interest income	$	10,668	$	4,718	$	15,386

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Nine Months Ended September 30, 2022 Compared with Nine Months Ended September 30, 2021
Change Due To:
(Dollars in thousands) Volume Rate Interest Variance
Interest-earning assets:
Cash investments $ (695) $ 1,336 $ 641
Investment securities:
Taxable investment securities 1,386 57 1,443
Tax-exempt investment securities (274) 9 (265)
Total securities 1,112 66 1,178
Loans, net 44,641 (12,699) 31,942
Federal Home Loan Bank stock 29 8 37
Total interest-earning assets $ 45,087 $ (11,289) $ 33,798
Interest-bearing liabilities:
Interest-bearing transaction deposits $ 276 $ 920 $ 1,196
Savings and money market deposits 441 452 893
Time deposits 331 (1,188) (857)
FHLB advances 871 142 1,013
Other borrowings (113) 41 (72)
Subordinated debentures 640 334 974
Total interest-bearing liabilities $ 2,446 $ 701 $ 3,147
Net interest income $ 42,641 $ (11,990) $ 30,651

Provision for ~~Loan~~Credit Losses

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

For the three months ended ~~September 30, 2022,~~March 31, 2023, the provision for ~~loan~~credit losses was ~~$489,000,~~$523,000, compared to ~~$1.5 million~~$217,000 for the same period of ~~2021, a decrease~~2022, an increase of ~~$1.0 million,~~$306,000, or ~~66.7%. For the nine months ended September 30, 2022, the provision for loan losses was $940,000, compared to $7.4 million for the same period of 2021, a decrease of $6.5 million, or 87.3%~~141.0%. The ~~decreases for these periods are~~increase is primarily attributable to increased loan balances resulting from the impact of the COVID-19 pandemic on the prior year period, including the impact of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance.FTC Merger.

Noninterest Income

Noninterest income consists ~~of, among other things:~~of: (i) service charges on deposit accounts; (ii) mortgage origination income; (iii) debit card interchange fees; (iv) income from fiduciary activities; (v) ATM income; (vi) brokerage and insurance fees and commissions, (vii) life insurance income, (viii) CDFI grants, and (viii) other noninterest income.

BancPlus’ income from service charges on deposit accounts and debit card interchange fees ~~are~~is largely ~~impacted~~affected 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~~include 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~~check cards by our customers. Income from fiduciary activities includes retirement and management fee income from our wealth management group. ATM income is comprised of fees from our ATM network.

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Brokerage and insurance fees and commissions includes stock and mutual fund brokerage fees earned by our wealth management

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group. Life insurance income includes earnings and benefits paid on bank-owned life insurance policies. Other income includes various types of income including gains on sale of other real estate, personalized check sales, and wire transfer fees.

Noninterest income decreased ~~$1.5~~$2.1 million, or ~~7.87%~~11.83%, to ~~$17.6~~$15.8 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$19.1~~$18.0 million for the same period of ~~2021,~~2022, primarily due to decreases in mortgage origination income ~~of $880,000, or 44.0%,~~ and ~~life insurance income of $516,000, or 44.3%, offset by an increase in service charges on deposit accounts of $719,000, or 9.6%.~~other income.

The following table presents the major components of noninterest income for three months ended ~~September 30, 2022,~~March 31, 2023, compared to the three months ended ~~September 30, 2021:~~March 31, 2022:

Three Months Ended September 30,
(Dollars in thousands) 2022 2021 $ Change % Change
Noninterest income:
Service charges on deposit accounts $ 8,203 $ 7,484 $ 719 9.6 %
Mortgage origination income 1,119 1,999 (880) (44.0) %
Debit card interchange 2,393 2,390 3 0.1 %
Income from fiduciary activities 1,794 2,015 (221) (11.0) %
ATM income 1,537 1,566 (29) (1.9) %
Brokerage and insurance fees and commissions 734 648 86 13.3 %
Life insurance income 648 1,164 (516) (44.3) %
CDFI grants 272 645 (373) (57.8) %
Other income 866 1,155 (289) (25.0) %
Total $ 17,566 $ 19,066 $ (1,500) (7.9) %

Service charges on deposit accounts increased $719,000, or 9.6%, to $8.2 million for the three months ended September 30, 2022, compared to $7.5 million for the same period of 2021. The increase was primarily the result of an increase in the number of deposit accounts held and a higher volume of transactions due to the FTC Merger.


	Three Months Ended March 31,
(Dollars in thousands)	2023		2022		$ Change		% Change
Noninterest income:
Service charges on deposit accounts	$	6,666	$	6,792	$	(126)	(1.9)	%
Mortgage origination income	687		2,238		(1,551)		(69.3)	%
Debit card interchange	2,566		2,428		138		5.7	%
Income from fiduciary activities	1,906		2,018		(112)		(5.6)	%
ATM income	1,474		1,476		(2)		(0.1)	%
Brokerage and insurance fees and commissions	637		698		(61)		(8.7)	%
Life insurance income	656		627		29		4.6	%
CDFI grants	—		—		—		—	%
Other income	1,247		1,688		(441)		(26.1)	%
Total	$	15,839	$	17,965	$	(2,126)	(11.8)	%

Mortgage origination income decreased ~~$880,000,~~$1.6 million, or ~~44.0%~~69.3%, to ~~$1.1~~$0.7 million for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$2.0~~$2.2 million for the same period of ~~2021. The decrease was the primarily the result of decreased mortgage origination activity as refinancing activity has slowed in the current higher interest rate environment.~~

Life insurance income decreased $516,000, or 44.3%, to $648,000 for the three months ended September 30, 2022, compared to $1.2 million for the same period of 2021. The decrease is primarily related to death benefits paid in the prior year period on policies held by BancPlus.

Noninterest income was $54.3 million for the nine months ended September 30, 2022, compared to $58.1 million for the same period of 2021, a decrease of $3.8 million, or 6.6%, primarily due to decreases in life insurance income of $3.9 million, or 67.3%,

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~~CDFI grants of $2.0 million, or 82.1%, and mortgage origination income of $1.1 million, or 15.8%; partially offset by an increase in service charges on deposit accounts of $3.5 million, or 18.0%.~~

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

Nine Months Ended September 30,
(Dollars in thousands) 2022 2021 $ Change % Change
Noninterest income:
Service charges on deposit accounts $ 22,696 $ 19,226 $ 3,470 18.0 %
Mortgage origination income 5,661 6,726 (1,065) (15.8) %
Debit card interchange 7,569 7,634 (65) (0.9) %
Income from fiduciary activities 5,844 5,681 163 2.9 %
ATM income 4,593 4,809 (216) (4.5) %
Brokerage and insurance fees and commissions 2,067 1,802 265 14.7 %
Life insurance income 1,913 5,858 (3,945) (67.3) %
CDFI grants 443 2,471 (2,028) (82.1) %
Other income 3,476 3,873 (397) (10.3) %
Total $ 54,262 $ 58,080 $ (3,818) (6.6) %

Service charges on deposit accounts increased $3.5 million, or 18.0%, to $22.7 million for the nine months ended September 30, 2022, compared to $19.2 million for the same period of 2021. The increase was primarily the result of an increase in the number of deposit accounts held and a higher volume of transactions due to the FTC Merger.

~~Mortgage origination income decreased $1.1 million, or 15.8%, to $5.7 million for the nine months ended September 30, 2022, compared to $6.7 million for the same period of 2021.~~2022. The decrease was primarily the result of decreased mortgage origination activity as refinancing activity has slowed in the current higher interest rate environment.

~~Life insurance~~Other income decreased ~~$3.9 million,~~$441,000, or ~~67.3%~~26.1%, to ~~$1.9~~$1.2 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$5.9~~$1.7 million for the same period of ~~2021.~~2022. The decrease iswas primarily ~~related to death benefits paid in the prior year period on policies held by BancPlus.~~

~~CDFI grant income decreased $2.0 million, or 82.1%, to $443,000 for the three months ended September 30, 2022, compared to $2.5 million for the same period of 2021. The decrease was~~ the result of a ~~grant received~~decrease in the ~~prior year period related to the CDFI Rapid Response Program, which was created in 2021 by the U.S. Department~~fair value of ~~the Treasury to provide capital~~mortgage loans held for ~~CDFI designated banks to respond to the economic challenges created by the COVID-19 pandemic.~~sale and a reduced annual rebate for personalized check sales.

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~~include compensation, employee benefits and tax expenses for BancPlus’ personnel. Net occupancy expenses include depreciation expense on BancPlus’ owned properties, lease expense on its leased properties and other occupancy-related expenses. Furniture and equipment expenses include depreciation and maintenance and other expenses related to its furniture, fixtures and equipment. Data processing expenses include costs related to maintenance and monitoring of its systems and expenses paid to its third-party data processing system providers. Marketing and promotional expenses include costs for advertising, promotions and sponsorships. Other real estate expenses and losses include taxes, insurance, maintenance and other expenses related to BancPlus’ foreclosed properties. Professional fees include accounting and auditing, consulting and legal fees. Other expenses include expenses associated with ~~Federal Deposit Insurance Corporation (“FDIC”)~~FDIC assessments, Mississippi Department of Banking and Consumer Finance (“MDBCF”) assessments, communications, travel, meals, training, supplies, ~~postage~~ and ~~other miscellaneous expenses.~~ postage.

Noninterest expense generally increases as BancPlus grows its business. Noninterest expense has increased commensurate with our growth over the past few years as BancPlus has grown organically and through our previously disclosed merger with State Capital Corp. (“SCC”), in which BancPlus acquired SCC, the holding company of State Bank & Trust Company (“State Bank”) by a statutory share exchange and SCC was merged with and into

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BancPlus, with BancPlus surviving the merger (the “SCC Holding Company Merger”), and State Bank was merged with and into BankPlus, with BankPlus surviving the merger (together with the SCC Holding Company Merger, the “SCC Merger”), which closed on April 1, 2020, and the FTC Merger.acquisitions. Additionally, BancPlus has built out and modernized its operational infrastructure and implemented its plan to build an efficient, technology-driven banking operation with capacity for growth. BancPlus continues to focus efforts on supporting growth through sales efforts, product development, marketing and promotion, as well as investing in technology and its branch network, while also seeking to improve productivity and maintain appropriate cost structure and customer service levels.

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For the three months ended ~~September 30, 2022,~~March 31, 2023, noninterest expense totaled ~~$54.7~~$51.6 million, an increase of ~~$11.9~~$3.6 million, or ~~27.7%~~7.4%, from ~~$42.8~~$48.1 million for the three months ended ~~September 30, 2021,~~March 31, 2022, primarily due to increases in salaries and employee benefits expenses ~~of $7.7 million, or 30.5%; furniture, equipment~~ and ~~data processing expenses of $1.4 million, or 22.1%;~~ other expenses, ~~of $1.3 million, or 25.8%;~~partially offset by decreases in professional fees and ~~net occupancy~~other real estate expenses ~~of $1.1 million, or 31.3%.~~and losses.

The following table presents the major components of noninterest expense for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021:~~March 31, 2022:

Three Months Ended September 30,
(Dollars in thousands) 2022 2021 $ Change % Change
Noninterest expense:
Salaries and employee benefits expenses $ 32,909 $ 25,218 $ 7,691 30.5 %
Net occupancy expenses 4,733 3,606 1,127 31.3 %
Furniture, equipment and data processing expenses 7,671 6,282 1,389 22.1 %
Marketing and promotional expenses 2,027 1,154 873 75.6 %
Other real estate expenses and losses 111 292 (181) (62.0) %
Professional fees 915 1,232 (317) (25.7) %
Other expenses 6,338 5,038 1,300 25.8 %
Total $ 54,704 $ 42,822 $ 11,882 27.7 %


	Three Months Ended March 31,
(Dollars in thousands)	2023		2022		$ Change		% Change
Noninterest expense:
Salaries and employee benefits expenses	$	30,991	$	25,845	$	5,146	19.9	%
Net occupancy expenses	4,472		4,116		356		8.6	%
Furniture, equipment and data processing expenses	7,316		6,616		700		10.6	%
Marketing and promotional expenses	1,537		1,108		429		38.7	%
Other real estate expenses and losses	56		733		(677)		(92.4)	%
Professional fees	863		4,659		(3,796)		(81.5)	%
Other expenses	6,407		4,993		1,414		28.3	%
Total	$	51,642	$	48,070	$	3,572	7.4	%

Salaries and employee benefits expenses iswas the largest component of noninterest expense, representing ~~60.2%~~60.0% and ~~58.9%~~53.8% of total noninterest expense for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. During the three months ended ~~September 30, 2022,~~March 31, 2023, salaries and employee benefits expense increased ~~$7.7~~$5.1 million, or ~~30.5%~~19.9%, to ~~$32.9~~$31.0 million, compared to ~~$25.2~~$25.8 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The increase in salaries and employee benefits expense ~~is primarily due the FTC Merger as well as to normal annual salary increases for employees.~~

Net occupancy expenses increased $1.1 million, or 31.3%, to $4.7 million for the three months ended September 30, 2022, compared to $3.6 million for the same period of 2021. The primary reason for the increase is increased depreciation and rent expense as a result of the FTC Merger.

Furniture, fixtures and data processing expenses increased $1.4 million, or 22.1%, to $7.7 million for the three months ended September 30, 2022, compared to $6.3 million for the same period of 2021. The increase is primarily due to increased data processing and equipment maintenance expenses in the current year period resulting from our recent core system upgrade as well as costs associated with conversion of FTC customers to our core system.

Other expenses increased $1.3 million, or 25.8%, to $6.3 million for the three months ended September 30, 2022, compared to $5.0 million for the same period of 2021. The increase is the primarily attributable to increases in FDIC assessments, amortization of intangible assets, and other expenses resulting from the FTC Merger.

For the nine months ended September 30, 2022, noninterest expense totaled $153.8 million, an increase of $32.4 million, or 26.7%, from $121.4 million for the nine months ended September 30, 2021, primarily due to increases in salaries and employee benefits expenses of $16.2 million, or 22.4%; professional fees of $4.2 million, or 166.9%; furniture, equipment and data processing expenses of $3.6 million, or 19.8%; other expenses of $3.1 million, or 21.9%; net occupancy expenses of $3.0 million, or 27.5%; and marketing and promotional expenses of $1.9 million, or 76.2%.

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

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Nine Months Ended September 30,
(Dollars in thousands) 2022 2021 $ Change % Change
Noninterest expense:
Salaries and employee benefits expenses $ 88,559 $ 72,365 $ 16,194 22.4 %
Net occupancy expenses 13,740 10,779 2,961 27.5 %
Furniture, equipment and data processing expenses 21,957 18,322 3,635 19.8 %
Marketing and promotional expenses 4,379 2,485 1,894 76.2 %
Other real estate expenses and losses 1,154 744 410 55.1 %
Professional fees 6,709 2,514 4,195 166.9 %
Other expenses 17,291 14,188 3,103 21.9 %
Total $ 153,789 $ 121,397 $ 32,392 26.7 %

Salaries and employee benefits expenses is the largest component of noninterest expense, representing 57.6% and 59.6% of total noninterest expense for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022, salaries and employee benefits expense increased $16.2 million, or 22.4%, to $88.6 million, compared to $72.4 million for the nine months ended September 30, 2021. The increase in salaries and employee benefits expense iswas primarily due the FTC Merger as well as to normal annual salary increases for employees and increased bonuses.

~~Net occupancy~~Other expenses increased ~~$3.0~~$1.4 million, or ~~27.5%~~28.3%, to ~~$13.7~~$6.4 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$10.8~~$5.0 million for the same period of ~~2021.~~2022. The ~~primary reason for the~~ increase ~~is increased depreciation~~was primarily attributable to increases in amortization of intangible assets and ~~rent expense as a result of~~Louisiana shares tax resulting from the FTC ~~Merger.~~Merger, as well as increases in fees and commissions expense and loss on disposal of fixed assets in the current year period.

~~Furniture, fixtures and data processing expenses increased $3.6~~Professional fees decreased $3.8 million, or ~~19.8%~~81.5%, to ~~$22.0 million~~$863,000 for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$18.3~~$4.7 million for the same period of ~~2021.~~2022. The increase is primarily due to increased data processing and equipment maintenance expenses in the current year period resulting from our recent core system upgrade as well as costs associated with conversion of FTC customers to our core system.

Market and promotional expenses increased $1.9 million, or 76.2%, to $4.4 million for the nine months ended September 30, 2022, compared to $2.5 million for the same period of 2021. The increase was primarily attributable to increased community sponsorship expense in the current year period as a result of the FTC Merger.

~~Professional fees increased $4.2 million, or 166.9%, to $6.7 million for the nine months ended September 30, 2022, compared to $2.5 million for the same period of 2021. The increase~~decrease was primarily the result of advisory fees as well as increased legal and accounting expenses in the prior year in connection with the FTC Merger.

Other real estate expenses ~~increased $3.1 million,~~and losses decreased $677,000, or ~~21.9%~~92.4%, to ~~$17.3 million~~$56,000 for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$14.2 million~~$733,000 for the same period of ~~2021.~~2022. The ~~increase is the~~decrease was primarily ~~attributable~~related to increases in ~~FDIC assessments, amortization of intangible assets, and~~writedowns on other ~~expenses resulting from~~real estate owned in the ~~FTC Merger.~~prior year period.

Income Tax Expense

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

BancPlus recorded income tax expense of ~~$5.1~~$4.7 million for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$4.0~~$2.8 million for the same period of ~~2021,~~2022, an increase of ~~$1.1~~$2.0 million, or ~~27.3%~~72.3%. BancPlus’ effective tax rate for the three months ended ~~September 30, 2022~~March 31, 2023 was ~~21.1%~~21.8%, compared to ~~22.0%~~22.1% for the same period of ~~2021.~~2022.

BancPlus recorded income tax expense of $12.1 million for the nine months ended September 30, 2022, compared to $10.6 million for the same period of 2021, an increase $1.5 million, or 14.0%. BancPlus’ effective tax rate for the nine months ended September 30, 2022 was 21.2%, compared to 18.9% for the same period of 2021.

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The ~~increase~~decrease in the effective tax rate for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared with the same period of ~~2021~~2022 was the result of non-deductible expenses related to the ~~Company taking advantage of tax credits offered by Mississippi and non-taxable life insurance proceeds~~FTC Merger in the prior year period.

The increase in income tax expense for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, compared to the same periods of ~~2021,~~2022, was primarily the result of higher income before taxes in the current year.

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Financial Condition

The following discussion compares BancPlus’ financial condition as of ~~September 30, 2022~~March 31, 2023 to December 31, ~~2021.~~2022.

Assets

Total assets increased ~~$1.58~~$0.14 billion, or ~~30.5%~~2.0%, to ~~$6.78~~$7.17 billion at ~~September 30, 2022 from~~March 31, 2023 over total assets of ~~$5.20~~$7.03 billion at December 31, ~~2021.~~2022. Total cash and cash equivalents decreased ~~$491.9~~$16.7 million, or ~~74.1%~~12.1%, to ~~$172.3~~$121.2 million at ~~September 30, 2022,~~March 31, 2023, compared to ~~$664.2~~$137.9 million at December 31, ~~2021,~~2022, primarily due to an increase in cash outflow for investments and loans made during the period. Total loans held for investment increased ~~$1.93~~$0.13 billion, or ~~53.3%~~2.2%, to ~~$5.55~~$5.95 billion at ~~September 30, 2022,~~March 31, 2023, compared to ~~$3.62~~$5.82 billion at December 31, ~~2021~~2022 as a result of ~~the FTC Merger and~~ organic loan growth. Investment securities increased ~~$32.3~~$34.6 million, or 5.0%, from ~~$648.3~~$686.2 million at December 31, ~~2021~~2022 to ~~$680.5~~$720.8 million at ~~September 30, 2022~~March 31, 2023 primarily as a result of ~~securities acquired~~increases in ~~the FTC Merger.~~BancPlus’ portfolio of U.S. Government agency obligations.

Investment Securities Portfolio

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

As of ~~September 30, 2022, 9.7%~~March 31, 2023, 8.5% of BancPlus’ investment securities portfolio was classified as held to maturity and ~~90.3%~~91.5% was classified as available for sale. As of December 31, ~~2021, 11.1%~~2022, 9.1% of BancPlus’ investment securities portfolio was classified as held to maturity and ~~88.9%~~90.9% was classified as available for sale. Securities available for sale increased ~~$38.0~~$35.7 million, or ~~6.6%~~5.7%, from ~~$576.6~~$623.9 million at December 31, ~~2021~~2022 to ~~$614.7~~$659.6 million at ~~September 30, 2022.~~March 31, 2023 primarily as a result of increases in BancPlus’ portfolio of U.S. Government agency obligations.

At ~~September 30,~~March 31, 2023, U.S. government agency obligations represented 57.6%, mortgage-backed securities represented 14.5%, municipal securities represented 15.2%, corporate investments represented 6.5%, U.S. Treasuries represented 4.9% and asset-backed securities represented 1.3% of BancPlus’ investment securities portfolio. At December 31, 2022, U.S. government agency obligations represented ~~54.0%~~55.2%, mortgage-backed securities represented ~~16.1%~~15.5%, municipal securities represented ~~16.6%~~16.1%, corporate investments represented ~~6.6%, U.S. Treasuries represented 5.0%~~6.7% and asset-backed securities represented ~~1.6%~~1.5% of the investment securities portfolio. At December 31, 2021, U.S. government agency obligations represented 54.0%, mortgage-backed securities represented 19.1%, municipal securities represented 17.9%, corporate investments represented 6.9% and asset-backed securities represented 2.0% of theBancPlus’ investment securities portfolio. Other than the U.S. government and its agencies, BancPlus’ securities portfolio did not contain securities of any single issuer, including any securities issued by a state or political subdivision, that were payable from and secured by the same source of revenue or taxing authority where the aggregate carrying value of such securities exceeded 10% of shareholders’ equity.

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

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		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
(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	$	65,889	9.68	%	$	71,648	11.05	%	Issued by states and political subdivisions	$	61,262	8.50	%	$	62,274	9.08	%

Total held-to-maturity	Total held-to-maturity	65,889		9.68	%	71,648		11.05	%	Total held-to-maturity	61,262		8.50	%	62,274		9.08	%

Available for Sale:	Available for Sale:									Available for Sale:
(At fair value)	(At fair value)									(At fair value)
U.S. Treasuries	U.S. Treasuries	34,351		5.05	%	—		—	%	U.S. Treasuries	34,992		4.85	%	34,579		5.04	%
U.S. Government agency obligations	U.S. Government agency obligations	367,683		54.03	%	350,250		54.03	%	U.S. Government agency obligations	415,064		57.58	%	378,736		55.19	%
Issued by states and political subdivisions	Issued by states and political subdivisions	46,769		6.87	%	44,684		6.89	%	Issued by states and political subdivisions	48,651		6.75	%	48,150		7.02	%
Mortgage-backed securities:	Mortgage-backed securities:									Mortgage-backed securities:
Residential	Residential	97,821		14.37	%	109,787		16.94	%	Residential	92,266		12.80	%	94,132		13.72	%
Commercial	Commercial	12,038		1.77	%	14,276		2.20	%	Commercial	12,238		1.70	%	12,070		1.76	%
Asset-backed securities	Asset-backed securities	11,087		1.63	%	13,107		2.02	%	Asset-backed securities	9,391		1.30	%	10,220		1.49	%
Corporate investments	Corporate investments	44,909		6.60	%	44,510		6.87	%	Corporate investments	46,979		6.52	%	46,033		6.71	%
Total available for sale	Total available for sale	614,658		90.32	%	576,614		88.95	%	Total available for sale	659,581		91.50	%	623,920		90.92	%

Total securities		$	680,547	100.00	%	$	648,262	100.00	%
Total investment securities										Total investment securities	$	720,843	100.00	%	$	686,194	100.00	%

The following tables present the carrying value of BancPlus’ investment securities portfolio by their stated maturities and the weighted average yields for each maturity range as of the dates indicated. Weighted-average yields have been computed on a fully tax equivalent basis using a tax rate of 21%.

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		Maturity as of September 30, 2022																	Maturity as of March 31, 2023
		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	$	7,868	3.18	%	$	47,439	2.48	%	$	8,372	3.69	%	$	2,210	4.27	%	Issued by states and political subdivisions	$	6,974	2.62	%	$	46,198	2.50	%	$	6,450	3.69	%	$	1,640	4.33	%

Total held to maturity	Total held to maturity	7,868		3.18	%	47,439		2.48	%	8,372		3.69	%	2,210		4.27	%	Total held to maturity	6,974		2.62	%	46,198		2.50	%	6,450		3.69	%	1,640		4.33	%

Available for sale:	Available for sale:																	Available for sale:
U.S. Treasuries	U.S. Treasuries	25,120		1.35	%	9,231		1.24	%	—		—	%	—		—	%	U.S. Treasuries	25,591		1.35	%	9,401		1.24	%	—		—	%	—		—	%
U.S. Government agency obligations	U.S. Government agency obligations	4,869		0.80	%	293,432		0.84	%	66,254		1.31	%	3,127		3.30	%	U.S. Government agency obligations	75,321		0.55	%	276,804		1.35	%	60,430		1.61	%	2,509		6.06	%
Issued by states and political subdivisions	Issued by states and political subdivisions	3,750		2.46	%	21,895		2.97	%	16,272		3.21	%	4,852		2.73	%	Issued by states and political subdivisions	3,333		2.79	%	23,348		2.87	%	19,016		3.06	%	2,954		3.71	%
Mortgage-backed securities:	Mortgage-backed securities:																	Mortgage-backed securities:
Residential	Residential	—		—	%	—		—	%	6,162		2.19	%	91,660		2.52	%	Residential	—		—	%	1,843		1.63	%	3,921		2.54	%	86,502		2.55	%
Commercial	Commercial	—		—	%	9,046		1.52	%	2,625		1.58	%	367		2.61	%	Commercial	—		—	%	9,214		1.51	%	2,687		1.57	%	337		2.53	%
Asset-backed securities	Asset-backed securities	—		—	%	—		—	%	—		—	%	11,087		4.13	%	Asset-backed securities	—		—	%	—		—	%	—		—	%	9,391		5.94	%
Corporate investments	Corporate investments	—		—	%	444		2.75	%	43,581		4.12	%	884		4.50	%	Corporate investments	—		—	%	1,400		2.75	%	44,797		4.26	%	782		4.50	%
Total available for sale	Total available for sale	33,739		1.39	%	334,048		1.01	%	134,894		2.49	%	111,977		2.73	%	Total available for sale	104,245		0.82	%	322,010		1.47	%	130,851		2.75	%	102,475		2.99	%

Total securities		$	41,607	1.73	%	$	381,487	1.19	%	$	143,266	2.56	%	$	114,187	2.76	%
Total investment securities																		Total investment securities	$	111,219	0.93	%	$	368,208	1.60	%	$	137,301	2.80	%	$	104,115	3.02	%

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		Maturity as of December 31, 2021																	Maturity as of December 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	$	9,286	3.00	%	$	44,803	2.77	%	$	15,349	2.41	%	$	2,210	4.27	%	Issued by states and political subdivisions	$	6,961	2.71	%	$	47,221	2.53	%	$	6,452	3.77	%	$	1,640	4.39	%

Total held to maturity	Total held to maturity	9,286		3.00	%	44,803		2.77	%	15,349		2.41	%	2,210		4.27	%	Total held to maturity	6,961		2.71	%	47,221		2.53	%	6,452		3.77	%	1,640		4.39	%

Available for sale:	Available for sale:																	Available for sale:
U.S. Treasuries																		U.S. Treasuries	25,302		1.35	%	9,277		1.24	%	—		—	%	—		—	%
U.S. Government agency obligations	U.S. Government agency obligations	5,006		2.60	%	221,071		0.54	%	120,049		1.20	%	4,124		1.77	%	U.S. Government agency obligations	57,051		0.57	%	259,397		1.02	%	59,604		1.38	%	2,684		4.79	%
Issued by states and political subdivisions	Issued by states and political subdivisions	2,202		4.06	%	15,110		2.63	%	21,084		3.09	%	6,288		3.24	%	Issued by states and political subdivisions	3,391		2.72	%	22,436		2.96	%	19,230		3.19	%	3,093		3.62	%
Mortgage-backed securities:	Mortgage-backed securities:																	Mortgage-backed securities:
Residential	Residential	—		—	%	—		—	%	4,211		1.86	%	105,576		2.42	%	Residential	—		—	%	386		1.48	%	5,691		2.29	%	88,056		2.54	%
Commercial	Commercial	—		—	%	—		—	%	13,512		1.54	%	764		2.50	%	Commercial	—		—	%	9,082		1.52	%	2,637		1.58	%	350		2.56	%
Asset-backed securities	Asset-backed securities	—		—	%	—		—	%	—		—	%	13,107		1.83	%	Asset-backed securities	—		—	%	—		—	%	—		—	%	10,220		5.57	%
Corporate investments	Corporate investments	4,004		2.13	%	493		2.75	%	38,953		4.12	%	1,060		4.50	%	Corporate investments	—		—	%	437		2.75	%	42,767		4.12	%	2,829		6.33	%
Total available for sale	Total available for sale	11,212		2.72	%	236,674		0.68	%	197,809		2.01	%	130,919		2.40	%	Total available for sale	85,744		0.89	%	301,015		1.19	%	129,929		2.59	%	107,232		3.02	%

Total securities		$	20,498	2.85	%	$	281,477	1.01	%	$	213,158	2.04	%	$	133,129	2.43	%
Total investment securities																		Total investment securities	$	92,705	1.02	%	$	348,236	1.37	%	$	136,381	2.65	%	$	108,872	3.04	%

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

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Loan Portfolio

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


		As of September 30, 2022				As of December 31, 2021					As of March 31, 2023				As of December 31, 2022
(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	$	1,311,672	23.63	%	$	774,699	21.41	%	Residential properties	$	1,429,332	24.01	%	$	1,403,974	24.11	%
Construction and land development	Construction and land development	945,639		17.04	%	543,763		15.02	%	Construction and land development	809,390		13.60	%	772,357		13.26	%
Farmland	Farmland	273,575		4.93	%	211,503		5.84	%	Farmland	288,970		4.86	%	283,832		4.87	%
Other commercial	Other commercial	2,145,785		38.67	%	1,396,085		38.58	%	Other commercial	2,525,887		42.43	%	2,467,216		42.36	%
Total real estate	Total real estate	4,676,671		84.27	%	2,926,050		80.85	%	Total real estate	5,053,579		84.90	%	4,927,379		84.60	%
Commercial and industrial	Commercial and industrial	664,439		11.97	%	527,102		14.56	%	Commercial and industrial	718,740		12.08	%	706,466		12.13	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	90,647		1.63	%	86,520		2.39	%	Agricultural production and other loans to farmers	75,509		1.27	%	80,770		1.39	%
Consumer and other	Consumer and other	118,011		2.13	%	79,500		2.20	%	Consumer and other	104,039		1.75	%	109,534		1.88	%
Total loans, gross	Total loans, gross	5,549,768		100.00	%	3,619,172		100.00	%	Total loans, gross	5,951,867		100.00	%	5,824,149		100.00	%
Allowance for loan losses		(42,533)				(45,000)
Allowance for credit losses										Allowance for credit losses	(64,403)				(42,875)
Total loans, net	Total loans, net	$	5,507,235			$	3,574,172			Total loans, net	$	5,887,464			$	5,781,274

Our loan portfolio was comprised of 74.2% commercial loans and 25.8% consumer loans as of ~~September 30, 2022,~~March 31, 2023, compared to 76.4% commercial loans and 23.6% consumer loans as of December 31, ~~2021.~~2022. Commercial loans consist of our construction and land development, farmland, other commercial, commercial and industrial, agricultural production and other loans to farmers categories and our consumer loans consist of our residential property and consumer and other categories.

As a general practice, BancPlus originates substantially all of its loans, but BancPlus occasionally participates in syndications and other loan participations. At ~~September 30, 2022,~~March 31, 2023, BancPlus’ loan portfolio included ~~$444.6~~$491.9 million of loan participations purchased, or ~~8.01%~~8.27% of total loans, which ~~includes $276.5~~included $295.5 million of shared national credits. At December 31, ~~2021,~~2022, BancPlus’ loan portfolio included ~~$333.0~~$471.3 million of loan participations purchased, or ~~9.20%~~8.09% of total loans, which ~~includes $177.5~~included $274.4 million of shared national credits.

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


		As of September 30, 2022											As of March 31, 2023
(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	$	115,435	$	378,567	$	490,262	$	327,408	$	1,311,672	Residential properties	$	140,540	$	410,742	$	508,759	$	369,291	$	1,429,332
Construction and land development	Construction and land development	344,399		462,206		105,599		33,435		945,639		Construction and land development	261,134		408,703		124,540		15,013		809,390
Farmland	Farmland	42,125		122,176		89,927		19,347		273,575		Farmland	41,867		114,118		101,146		31,839		288,970
Other commercial	Other commercial	158,742		1,280,395		482,197		224,451		2,145,785		Other commercial	251,327		1,564,714		493,558		216,288		2,525,887
Total real estate	Total real estate	660,701		2,243,344		1,167,985		604,641		4,676,671		Total real estate	694,868		2,498,277		1,228,003		632,431		5,053,579
Commercial and industrial	Commercial and industrial	131,473		440,969		91,997		—		664,439		Commercial and industrial	128,290		494,835		95,615		—		718,740
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	46,813		43,068		766		—		90,647		Agricultural production and other loans to farmers	18,092		55,839		1,578		—		75,509
Consumer and other loans	Consumer and other loans	51,180		62,144		4,673		14		118,011		Consumer and other loans	29,363		67,404		7,258		14		104,039
Total loans	Total loans	$	890,167	$	2,789,525	$	1,265,421	$	604,655	$	5,549,768	Total loans	$	870,613	$	3,116,355	$	1,332,454	$	632,445	$	5,951,867

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		As of December 31, 2021											As of December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Due in One Year or Less		More Than One Year to Five		More Than Five Years to 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	$	105,854	$	317,073	$	340,436	$	11,336	$	774,699	Residential properties	$	149,146	$	401,119	$	497,926	$	355,783	$	1,403,974
Construction and land development	Construction and land development	217,487		285,923		31,161		9,192		543,763		Construction and land development	272,454		379,245		104,632		16,026		772,357
Farmland	Farmland	38,671		104,034		61,553		7,245		211,503		Farmland	46,925		114,854		96,937		25,116		283,832
Other commercial	Other commercial	172,914		878,887		299,853		44,431		1,396,085		Other commercial	254,430		1,504,253		487,890		220,643		2,467,216
Total real estate	Total real estate	534,926		1,585,917		733,003		72,204		2,926,050		Total real estate	722,955		2,399,471		1,187,385		617,568		4,927,379
Commercial and industrial	Commercial and industrial	98,197		342,243		86,662		—		527,102		Commercial and industrial	151,895		451,261		103,310		—		706,466
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	49,748		36,214		558		—		86,520		Agricultural production and other loans to farmers	40,558		39,665		547		—		80,770
Consumer and other loans	Consumer and other loans	20,686		57,222		1,578		14		79,500		Consumer and other loans	39,667		64,715		5,138		14		109,534
Total loans	Total loans	$	703,557	$	2,021,596	$	821,801	$	72,218	$	3,619,172	Total loans	$	955,075	$	2,955,112	$	1,296,380	$	617,582	$	5,824,149


		As of September 30, 2022							As of March 31, 2023
(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	$	1,052,094	$	259,578	$	1,311,672	Residential properties	$	1,134,271	$	295,061	$	1,429,332
Construction and land development	Construction and land development	406,658		538,981		945,639		Construction and land development	440,404		368,986		809,390
Farmland	Farmland	183,530		90,045		273,575		Farmland	181,777		107,193		288,970
Other commercial	Other commercial	1,598,161		547,624		2,145,785		Other commercial	1,818,832		707,055		2,525,887
Total real estate	Total real estate	3,240,443		1,436,228		4,676,671		Total real estate	3,575,284		1,478,295		5,053,579
Commercial and industrial	Commercial and industrial	300,685		363,754		664,439		Commercial and industrial	323,891		394,849		718,740
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	49,891		40,756		90,647		Agricultural production and other loans to farmers	46,644		28,865		75,509
Consumer and other loans	Consumer and other loans	87,836		30,175		118,011		Consumer and other loans	69,221		34,818		104,039
Total loans	Total loans	$	3,678,855	$	1,870,913	$	5,549,768	Total loans	$	4,015,040	$	1,936,827	$	5,951,867


		As of December 31, 2021							As of December 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	$	644,842	$	129,857	$	774,699	Residential properties	$	1,115,571	$	288,403	$	1,403,974
Construction and land development	Construction and land development	262,573		281,190		543,763		Construction and land development	413,291		359,066		772,357
Farmland	Farmland	154,154		57,349		211,503		Farmland	181,973		101,859		283,832
Other commercial	Other commercial	1,157,465		238,620		1,396,085		Other commercial	1,748,802		718,414		2,467,216
Total real estate	Total real estate	2,219,034		707,016		2,926,050		Total real estate	3,459,637		1,467,742		4,927,379
Commercial and industrial	Commercial and industrial	258,036		269,066		527,102		Commercial and industrial	316,909		389,557		706,466
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	58,206		28,314		86,520		Agricultural production and other loans to farmers	44,941		35,829		80,770
Consumer and other loans	Consumer and other loans	54,923		24,577		79,500		Consumer and other loans	78,411		31,123		109,534
Total loans	Total loans	$	2,590,199	$	1,028,973	$	3,619,172	Total loans	$	3,899,898	$	1,924,251	$	5,824,149

Additionally, BancPlus enters into various other transactions to meet the financing needs of its customers including commitments to extend credit and letters of credit. Commitments to extend credit beyond current funding are agreements to lend to a customer

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as long as there is no violation of any condition established in the contract. Such commitments generally have fixed expiration

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dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. At ~~September 30, 2022,~~March 31, 2023, BancPlus had total off-balance sheet commitments of ~~$1.558~~$1.458 billion. At March 31, 2023, BancPlus had an allowance for credit loss on off-balance sheet commitments of $12.5 million.

Asset Quality

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

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


		As of September 30, 2022									As of March 31, 2023
(Dollars in thousands)	(Dollars in thousands)	Risk Grades 1-7		Substandard		Doubtful		Total		(Dollars in thousands)	Risk Grades 1-6		Special Mention		Substandard		Doubtful		Total
Secured by real estate:	Secured by real estate:									Secured by real estate:
Residential properties	Residential properties	$	1,298,730	$	12,899	$	43	$	1,311,672	Residential properties	$	1,414,477	$	—	$	14,772	$	83	$	1,429,332
Construction and land development	Construction and land development	944,089		1,550		—		945,639		Construction and land development	806,583		346		2,461		—		809,390
Farmland	Farmland	270,512		3,063		—		273,575		Farmland	285,683		—		3,287		—		288,970
Other commercial	Other commercial	2,134,473		11,312		—		2,145,785		Other commercial	2,515,091		—		10,676		120		2,525,887
Total real estate	Total real estate	4,647,804		28,824		43		4,676,671		Total real estate	5,021,834		346		31,196		203		5,053,579
Commercial and industrial	Commercial and industrial	651,158		13,274		7		664,439		Commercial and industrial	705,926		—		12,749		65		718,740
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	90,192		368		87		90,647		Agricultural production and other loans to farmers	75,423		—		86		—		75,509
Consumer and other	Consumer and other	117,798		213		—		118,011		Consumer and other	102,686		—		1,353		—		104,039
Total	Total	$	5,506,952	$	42,679	$	137	$	5,549,768	Total	$	5,905,869	$	346	$	45,384	$	268	$	5,951,867

As of December 31, 2021
(Dollars in thousands) Risk
Grades 1-7 Substandard Doubtful Total
Secured by real estate:
Residential properties $ 763,116 $ 11,583 $ — $ 774,699
Construction and land development 541,670 2,093 — 543,763
Farmland 208,318 3,185 — 211,503
Other commercial 1,386,240 9,845 — 1,396,085
Total real estate 2,899,344 26,706 — 2,926,050
Commercial and industrial 503,603 23,496 3 527,102
Agricultural production and other loans to farmers 86,292 228 — 86,520
Consumer and other 79,176 306 18 79,500
Total $ 3,568,415 $ 50,736 $ 21 $ 3,619,172

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	As of December 31, 2022
(Dollars in thousands)	Risk Grades 1-6		Special Mention		Substandard		Doubtful		Total
Secured by real estate:
Residential properties	$	1,391,039	$	—	$	12,852	$	83	$	1,403,974
Construction and land development	768,699		303		3,355		—		772,357
Farmland	280,522		—		3,310		—		283,832
Other commercial	2,456,708		—		10,384		124		2,467,216
Total real estate	4,896,968		303		29,901		207		4,927,379
Commercial and industrial	693,963		—		12,503		—		706,466
Agricultural production and other loans to farmers	80,524		—		246		—		80,770
Consumer and other	108,279		—		1,255		—		109,534
Total	$	5,779,734	$	303	$	43,905	$	207	$	5,824,149

Nonperforming Assets

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

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


(Dollars in thousands)	(Dollars in thousands)	September 30, 2022			December 31, 2021			(Dollars in thousands)	March 31, 2023			December 31, 2022
Nonaccrual loans:	Nonaccrual loans:							Nonaccrual loans:
Real estate loans:	Real estate loans:							Real estate loans:
Residential properties	Residential properties	$	2,902		$	3,154		Residential properties	$	2,585		$	2,726
Construction and land development	Construction and land development	30			51			Construction and land development	—			24
Farmland	Farmland	960			1,327			Farmland	1,434			960
Other commercial	Other commercial	1,502			1,176			Other commercial	1,795			1,215
Total real estate	Total real estate	5,394			5,708			Total real estate	5,814			4,925
Commercial and industrial	Commercial and industrial	759			20			Commercial and industrial	201			192
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	—			3			Agricultural production and other loans to farmers	—			155
Consumer and other	Consumer and other	26			166			Consumer and other	—			—
Total nonaccrual loans	Total nonaccrual loans	6,179			5,897			Total nonaccrual loans	6,015			5,272

Troubled debt restructuring loans – accruing:
90+ days past due and accruing:								90+ days past due and accruing:
Real estate loans:	Real estate loans:							Real estate loans:
Residential properties	Residential properties	1,603			1,641			Residential properties	1,497			1,079
Construction and land development	Construction and land development	833			1,558			Construction and land development	—			1,578
Farmland	Farmland	—			—			Farmland	158			427
Other commercial	Other commercial	—			—			Other commercial	175			216
Total real estate	Total real estate	2,436			3,199			Total real estate	1,830			3,300
Commercial and industrial	Commercial and industrial	—			381			Commercial and industrial	204			545
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	946			697
Total troubled debt restructuring loans – accruing		2,436			3,580
Total 90+ days past due and accruing								Total 90+ days past due and accruing	2,980			4,542
Total nonperforming loans	Total nonperforming loans	8,615			9,477			Total nonperforming loans	8,995			9,814
Plus: foreclosed assets	Plus: foreclosed assets	4,850			5,815			Plus: foreclosed assets	3,958			4,231
Total nonperforming assets	Total nonperforming assets	$	13,465		$	15,292		Total nonperforming assets	$	12,953		$	14,045

Nonaccrual loans to total loans	Nonaccrual loans to total loans	0.11		%	0.16		%	Nonaccrual loans to total loans	0.10		%	0.09		%
Nonperforming loans to total loans	Nonperforming loans to total loans	0.16		%	0.26		%	Nonperforming loans to total loans	0.15		%	0.17		%
Nonperforming assets to total assets	Nonperforming assets to total assets	0.20		%	0.29		%	Nonperforming assets to total assets	0.18		%	0.20		%
Allowance for loan losses to nonaccrual loans		688.35		%	763.10		%
90+ days past due and accruing		$	1,558		$	2,914
Total troubled debt restructuring loans		$	2,436		$	3,746
Allowance for credit losses to nonaccrual loans								Allowance for credit losses to nonaccrual loans	1070.71		%	813.26		%

Total nonperforming assets decreased by ~~$1.8~~$1.1 million, or ~~11.9%~~7.8%, from ~~$15.3~~$14.0 million at December 31, ~~2021~~2022 to ~~$13.5~~$13.0 million at ~~September 30, 2022,~~March 31, 2023, primarily the result of ~~sales of foreclosed assets and~~ collections ~~on TDR loans~~ in the current ~~year.~~year to date period on loans there were 90+ days past due at December 31, 2022. This decrease in nonperforming loans for the period ended March 31, 2023 resulted in corresponding decreases in the ratios for nonperforming loans to total loans and nonperforming assets to total assets, as well as the increase in the ratio of allowance for credit losses to nonaccrual loans.

The balance of nonperforming assets can fluctuate due to changes in economic conditions. BancPlus has established a policy to discontinue accruing interest on a loan (that is, place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-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~~credit losses. Generally, payments received on nonaccrual loans are applied directly to principal.

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Allowance for ~~Loan~~Credit Losses

The allowance for ~~loan~~credit losses is a reserve established through charges to earnings in the form of a provision for ~~loan~~credit losses. BancPlus maintains an allowance for ~~loan~~credit losses at a level management considers adequate to provide for ~~known and probable incurred~~expected credit losses inon loans over the ~~portfolio.~~life of the loan. The level of the allowance is based on management’s evaluation of estimated losses in the portfolio, after consideration of risk characteristics of the loans and prevailing economic conditions. Loan charge-offs (i.e. loans judged to be uncollectible) are charged against the reserve and any subsequent recovery is credited to the reserve. ~~BancPlus’ officers analyze~~BancPlus made the policy election to exclude accrued interest receivable on loans from the estimate of credit losses. The Company calculates estimated credit loss on its portfolio primarily using quantitative methodologies using relevant available information from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL is evaluated and calculated on a collective basis for those loans which share similar risk characteristics. At each reporting period, the Company evaluates whether the loans in a pool continue to exhibit similar risk characteristics as the other loans and whether it needs to evaluate the allowance on an individual basis. The Company has chosen to segment its portfolio consistent with the manner in which it manages the risk of the type of credit. The Company’s segments for loans include commercial real estate, commercial and industrial, residential and consumer.

Expected credit losses are estimated over the contractual term of each loan taking into consideration expected prepayments. The contractual term excludes expected extensions, renewals, and modifications. Also included in the ~~loan portfolio on an ongoing basis. A risk system, consisting of multiple grading categories~~allowance for ~~each portfolio class, is utilized as an analytical tool~~loans are qualitative reserves to ~~assess risk~~cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative method or the economic assumptions described above. For example, factors that the Company considers include the nature and ~~appropriate reserves. In addition to the risk system, management further evaluates risk characteristics~~size of the ~~loan~~ portfolio, ~~under~~portfolio concentrations, the volume and severity of past due loans and non-accrual loans and current and anticipated economic conditions and considers such factors as the financial condition of the borrower, past and expected loss experience, and other factors which management feels deserve recognition in establishing an appropriate reserve. business conditions.

These estimates are reviewed at least quarterly, and, as adjustments become necessary, they are recognized in the periods in which they become known. During the ~~third~~first quarter of ~~2022,~~2023, the U.S. economy continued to experience volatility and there remains uncertainty surrounding future economic conditions as a result of supply chain disruptions, labor shortages, and the conflict in ~~Ukraine, and the COVID-19 pandemic.~~Ukraine. Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies all could cause changes to BancPlus’ allowance for ~~loan~~credit losses.

The allowance for ~~loan~~credit losses was ~~$42.5~~$64.4 million and ~~$45.0~~$42.9 million, and the allowance for ~~loan~~credit losses as a percentage of loans was ~~0.77%~~1.08% and ~~1.24%~~0.74%, at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Net charge-offs ~~(recoveries)~~ totaled ~~$3.4 million~~$636,000 and ~~$(606,000)~~$979,000 for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The variance iswas primarily the result of current year charge-offs on consumer and other commercial categories.

The allowance for ~~loan~~credit losses ~~decreased~~increased by ~~$2.5~~$21.5 million, or ~~5.5%~~50.2%, to ~~$42.5~~$64.4 million at ~~September 30, 2022,~~March 31, 2023, from ~~$45.0~~$42.9 million at December 31, ~~2021,~~2022, primarily due to ~~an increase in net charge-offs in~~ the ~~current period.~~adoption of ASU 2016-13.

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


(Dollars in thousands)	(Dollars in thousands)	September 30, 2022			September 30, 2021			(Dollars in thousands)	March 31, 2023			March 31, 2022

Balance, beginning of period	Balance, beginning of period	$	45,000		$	36,000		Balance, beginning of period	$	42,875		$	45,000
Impact of adopting ASU 2016-13								Impact of adopting ASU 2016-13	20,744			—
Charge-offs:	Charge-offs:							Charge-offs:
Residential properties	Residential properties	783			298			Residential properties	173			250
Construction and land development	Construction and land development	1			240			Construction and land development	7			—
Farmland	Farmland	120			157			Farmland	8			120
Other commercial	Other commercial	559			581			Other commercial	56			317
Total real estate	Total real estate	1,463			1,276			Total real estate	244			687
Commercial and industrial	Commercial and industrial	1,753			317			Commercial and industrial	288			58
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	2,829			111			Agricultural production and other loans to farmers	13			981
Consumer and other	Consumer and other	507			2,832			Consumer and other	943			261
Total charge-offs	Total charge-offs	6,552			4,536			Total charge-offs	1,488			1,987
Recoveries:	Recoveries:							Recoveries:
Residential properties	Residential properties	158			340			Residential properties	58			54
Construction and land development	Construction and land development	449			143			Construction and land development	3			70
Farmland	Farmland	16			292			Farmland	5			5
Other commercial	Other commercial	361			1,842			Other commercial	107			66
Total real estate	Total real estate	984			2,617			Total real estate	173			195
Commercial and industrial	Commercial and industrial	114			479			Commercial and industrial	88			22
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	1,771			3			Agricultural production and other loans to farmers	3			744
Consumer and other	Consumer and other	276			2,043			Consumer and other	588			47
Total recoveries	Total recoveries	3,145			5,142			Total recoveries	852			1,008
Net charge-offs (recoveries)	Net charge-offs (recoveries)	3,407			(606)			Net charge-offs (recoveries)	636			979
Provision for loan losses		940			7,395
Provision for credit losses								Provision for credit losses	1,420			217
Balance, end of period	Balance, end of period	$	42,533		$	44,001		Balance, end of period	$	64,403		$	44,238

Total loans, end of period (including loans held for sale)	Total loans, end of period (including loans held for sale)	$	5,553,967		$	3,539,990		Total loans, end of period (including loans held for sale)	$	5,960,224		$	4,752,150
Average loans	Average loans	4,800,489			3,469,520			Average loans	5,881,779			4,029,014
Net charge-offs (annualized) to average loans	Net charge-offs (annualized) to average loans	0.09		%	(0.02)		%	Net charge-offs (annualized) to average loans	0.04		%	0.10		%
Allowance for loan losses to total loans		0.77		%	1.24		%
Allowance for credit losses to total loans								Allowance for credit losses to total loans	1.08		%	0.93		%

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,
		2022						2021							2023						2022
(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	$	625	$	1,122,955	0.07	%	$	(42)	$	750,238	(0.01)	%	Residential properties	$	115	$	1,407,039	0.03	%	$	196	$	897,909	0.09	%
Construction and land development	Construction and land development	(448)		759,731		(0.08)	%	97		458,968		0.03	%	Construction and land development	4		812,238		—	%	(70)		614,770		(0.05)	%
Farmland	Farmland	104		236,554		0.06	%	(135)		206,878		(0.09)	%	Farmland	3		283,020		—	%	115		216,353		0.21	%
Other commercial	Other commercial	198		1,896,115		0.01	%	(1,261)		1,274,874		(0.13)	%	Other commercial	(51)		2,492,168		(0.01)	%	251		1,592,295		0.06	%
Commercial and industrial	Commercial and industrial	1,639		597,634		0.37	%	(162)		589,070		(0.04)	%	Commercial and industrial	200		714,810		0.11	%	36		550,125		0.03	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	1,058		77,653		1.82	%	108		89,773		0.16	%	Agricultural production and other loans to farmers	10		65,515		0.06	%	237		64,658		1.47	%
Consumer and other	Consumer and other	231		100,806		0.31	%	789		83,432		1.26	%	Consumer and other	355		103,221		1.38	%	214		83,964		1.02	%
Loans held for sale	Loans held for sale	—		9,041		—	%	—		16,287		—	%	Loans held for sale	—		3,768		—	%	—		8,940		—	%
Total	Total	$	3,407	$	4,800,489	0.09	%	$	(606)	$	3,469,520	(0.02)	%	Total	$	636	$	5,881,779	0.04	%	$	979	$	4,029,014	0.10	%

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


		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Amount		Percent		Amount		Percent		(Dollars in thousands)	Amount		Percent		Amount		Percent
Residential properties	Residential properties	$	9,513	22.4	%	$	9,488	21.1	%	Residential properties	$	16,420	25.5	%	$	9,958	23.2	%
Construction and land development	Construction and land development	8,086		19.0	%	6,463		14.4	%	Construction and land development	19,044		29.6	%	6,519		15.2	%
Farmland	Farmland	1,975		4.6	%	2,171		4.8	%	Farmland	1,380		2.1	%	1,963		4.6	%
Other commercial	Other commercial	16,759		39.4	%	18,499		41.1	%	Other commercial	20,070		31.2	%	18,219		42.5	%
Total real estate	Total real estate	36,333		85.4	%	36,621		81.4	%	Total real estate	56,914		88.4	%	36,659		85.5	%
Commercial and industrial	Commercial and industrial	4,717		11.1	%	6,556		14.6	%	Commercial and industrial	6,404		9.9	%	4,750		11.1	%
Agricultural production and other loans to farmers	Agricultural production and other loans to farmers	824		1.9	%	958		2.1	%	Agricultural production and other loans to farmers	452		0.7	%	641		1.5	%
Consumer and other	Consumer and other	659		1.5	%	865		1.9	%	Consumer and other	633		1.0	%	825		1.9	%
Total allowance for loan losses		$	42,533	100.0	%	$	45,000	100.0	%
Total allowance for credit losses										Total allowance for credit losses	$	64,403	100.0	%	$	42,875	100.0	%

Goodwill and Other Intangible Assets

Goodwill was $62.8 million ~~and $2.6 million September 30, 2022~~as of both March 31, 2023 and December 31, ~~2021, respectively.~~2022. Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired by the Company in prior acquisitions. ~~The increase in goodwill is the result of the FTC Merger.~~ Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets ~~consist~~consisted of acquired customer relationships from a 2014 acquisition and core deposit intangibles from the SCC Merger and the FTC Merger. Total other intangible assets at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were ~~$11.9~~$11.1 million and ~~$5.1~~$11.5 million, respectively. Other intangible assets are amortized over their estimated useful life.

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Deposits

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


		September 30, 2022						December 31, 2021							March 31, 2023						December 31, 2022
(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	$	1,745,151	0.00	%	31.91	%	$	1,337,985	0.00	%	30.13	%	Non-interest bearing	$	1,585,862	0.00	%	26.82	%	$	1,740,283	0.00	%	31.61	%
Interest bearing:	Interest bearing:													Interest bearing:
Transaction accounts	Transaction accounts	1,578,415		0.29	%	28.86	%	1,453,493		0.20	%	32.74	%	Transaction accounts	1,656,880		0.78	%	28.02	%	1,574,512		0.35	%	28.60	%
Money market and other savings accounts	Money market and other savings accounts	1,359,333		0.16	%	24.85	%	996,420		0.09	%	22.44	%	Money market and other savings accounts	1,860,403		2.27	%	31.46	%	1,408,355		0.42	%	25.58	%
Certificates of deposit	Certificates of deposit	786,818		0.35	%	14.38	%	652,247		0.56	%	14.69	%	Certificates of deposit	810,804		1.66	%	13.71	%	783,047		0.45	%	14.22	%
Total deposits	Total deposits	$	5,469,717	0.17	%	100.00	%	$	4,440,145	0.17	%	100.00	%	Total deposits	$	5,913,949	1.16	%	100.00	%	$	5,506,197	0.27	%	100.00	%

BancPlus relies on increasing its deposit base to fund loans and other asset growth. BancPlus competes for local deposits by offering a variety of products at competitive rates. The increase in total average deposits of ~~$1,029.6~~$407.8 million, or ~~23.2%~~7.4%, to ~~$5.47~~$5.91 billion at ~~September 30, 2022~~March 31, 2023 from ~~$4.44~~$5.51 billion as of December 31, ~~2021~~2022 primarily resulted from increases in money market and other savings accounts driven by the ~~FTC Merger.~~higher interest rate market. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, BancPlus held non-time deposits in excess of FDIC insurance limits estimated at ~~$1.40~~$1.50 billion and ~~$802.9 million,~~$1.53 billion, respectively.

The following table shows the maturity of certificates of deposit as of ~~September 30, 2022:~~March 31, 2023:


(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	$	68,530	$	122,419	$	190,949	$	44,214	3 months or less	$	14,942	$	80,618	$	95,560	$	4,849
Over 3 months through 6 months	Over 3 months through 6 months	40,798		106,487		147,285		24,048		Over 3 months through 6 months	24,054		65,916		89,970		9,980
Over 6 months through 12 months	Over 6 months through 12 months	39,690		143,849		183,539		13,690		Over 6 months through 12 months	88,186		245,221		333,407		26,567
Over 12 months	Over 12 months	66,822		187,855		254,677		29,573		Over 12 months	101,874		221,269		323,143		44,387
Total certificates of deposit	Total certificates of deposit	$	215,840	$	560,610	$	776,450	$	111,525	Total certificates of deposit	$	229,056	$	613,024	$	842,080	$	85,783

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, 2022~~March 31, 2023 and December 31, ~~2021, we~~2022, BancPlus had no short-term borrowings. The following is a summary of our short-term borrowings during the periods presented.

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(Dollars in thousands)	Balances Outstanding						Weighted Average Rate
March 31, 2023	Maximum Month End		Average Daily		At Period End		During Period		At Period End
Federal funds purchased	$	—	$	6,406	$	—	4.93	%	—	%
Securities sold under agreements to repurchase	—		—		—		—	%	—	%
	$	—	$	—	$	—

December 31, 2022
Federal funds purchased	$	20,003	$	1,136	$	—	4.39	%	—	%
Securities sold under agreements to repurchase	—		—		—		—	%	—	%
	$	20,003	$	1,136	$	—

Advances from Federal Home Loan Bank (“FHLB”) and Other Borrowings. BankPlus is a member of the FHLB, and as a result, is eligible for advances from the FHLB pursuant to the terms of various borrowing agreements, which assist BancPlus in the funding of its loan and investment portfolios. BancPlus’ FHLB advances are collateralized by a blanket lien on first mortgage and other qualifying loans. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, BancPlus had $310.1 million and ~~$20.5~~$318.1 million in FHLB borrowings, at a weighted average interest rate of ~~3.08%~~5.01% and ~~1.49%~~4.52%, respectively.

On February 25, 2022, the Company entered into a $20.0 million revolving line of credit with a correspondent bank. The line of credit is collateralized by 9,000 shares of BankPlus common stock. The line of credit bears interest at a floating rate of Wall Street Journal Prime with 3.25% interest rate floor. Interest only payments are due on a quarterly basis with the principal due at maturity on February 25, 2024. Unused fees on the revolving line of credit are paid quarterly at 0.25%. For the year ended December 31, 2022, the Company paid unused fees of $24,000. The balance outstanding on this revolving line of credit was zero at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

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


(Dollars in thousands)	(Dollars in thousands)	September 30, 2022		December 31, 2021		(Dollars in thousands)	March 31, 2023		December 31, 2022
2022		$	310,019	$	417
2023	2023	25		25		2023	$	310,009	$	318,025
2024	2024	13		13		2024	13		13
2025	2025	13		13		2025	13		13
2026	2026	14		14		2026	14		14
2027						2027	14		14
Thereafter	Thereafter	15		20,019		Thereafter	5		5
Total	Total	$	310,099	$	20,501	Total	$	310,068	$	318,084

Subordinated Debentures. On June 4, 2020, the Company entered into a Subordinated Note Purchase Agreement with certain qualified institutional buyers and institutional accredited investors pursuant to which the Company issued and sold $60.0 million in aggregate principal amount of its 6.000% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030 (the “Notes”). The Company incurred issuance costs of $1.4 million in conjunction with the issuance of the Notes. These issuance costs are netted with the balance of the Notes on the Company’s ~~Consolidated Balance Sheets~~consolidated balance sheet 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 the Three-Month Term Secured Overnight Financing Rate (“SOFR”) plus 586 basis points, with interest during this period payable quarterly in arrears. The notes qualify as Tier 2 capital for regulatory capital purposes. The Company used the proceeds offrom the ~~private placement~~Notes for general corporate purposes, including improving the Company’s liquidity and capital position.

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issue, the Notes are redeemable on any interest payment date at the option of the Company, in whole or in part in integral multiples of $1,000, at an amount equal to 100% of the outstanding principal amount redeemed plus accrued but unpaid interest thereon. Any partial redemption will be made on a pro rata basis as to the holders of the Notes. Any redemption of the Notes is subject to any applicable regulatory requirements and approvals.

Effective March 1, 2022, in conjunction with the FTC Merger, the Company assumed FTC’s obligations under its Subordinated Note Purchase Agreement, dated as of December 23, 2020, and the several purchasers of the $21.0 million aggregate principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued thereunder (the ~~“Subordinated~~“FTC Subordinated Notes”). The FTC Subordinated Notes will mature on December 30, 2030 and bear interest at an initial fixed rate of 5.50% per annum, payable semi-annually in arrears. From and including December 30, 2025, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term ~~Secured Overnight Financing Rate~~SOFR plus 527 basis points, payable quarterly in arrears. BancPlus will be entitled to redeem the FTC Subordinated Notes, in whole or in part, on any interest payment date on or after December 30, 2025, and to redeem the FTC Subordinated Notes in whole upon certain other events. The FTC Subordinated Notes are not subject to redemption at the option of the holder. The FTC Subordinated Notes are unsecured, subordinated obligations of BancPlus only and are not obligations of, and are not guaranteed by, any subsidiary of BancPlus. The FTC Subordinated Notes rank junior in right to payment to BancPlus’ current and future senior indebtedness. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The FTC Subordinated Notes vary from the amount carried on the ~~Consolidated Balance Sheets~~consolidated balance sheet at ~~September 30, 2022~~March 31, 2023 due to the remaining purchase premium of ~~$633,000,~~$536,000, which was established upon closing of the FTC Merger and is being amortized over the remaining life of the debentures.

BancPlus also owns the outstanding common stock of business trusts that have issued preferred capital securities to third parties. ~~Under a grandfathering provision in the Basel III capital rules that applies to bank holding companies with less than $15 billion in total consolidated assets, the~~The preferred capital securities have qualified as Tier 1 capital, subject to regulatory rules and limits. These trusts used the proceeds from the issuance of the common stock and preferred capital securities to purchase subordinated debentures that BancPlus issued. The subordinated debentures are these trusts’ only assets, and quarterly interest payments on these subordinated debentures are the sole source of cash for these trusts to pay quarterly distributions on the common stock and preferred capital securities. BancPlus has fully and unconditionally guaranteed the trusts’ obligations on preferred capital securities.

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

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(Dollars in thousands)	(Dollars in thousands)	Year of Maturity	Interest Rate	September 30, 2022		December 31, 2021		(Dollars in thousands)	Year of Maturity	Interest Rate	March 31, 2023		December 31, 2022
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 ~~Consolidated Balance Sheets~~consolidated balance sheet at ~~September 30, 2022~~March 31, 2023 due to the remaining purchase discount of ~~$3.8~~$3.7 million, which was established upon the SCC Merger and is being amortized over the remaining life of the debentures. At March 31, 2023 and December 31, 2022, the remaining unamortized purchase discount was $3.7 million and $3.7 million, respectively.

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

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.

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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 $292.7~~decreased $6.8 million, or ~~75.0%~~1.0%, to ~~$683.1~~$691.3 million at ~~September 30, 2022~~March 31, 2023 from ~~$390.4~~$698.1 million at December 31, ~~2021,~~2022, primarily due to the ~~issuance~~cumulative change in accounting principle related to the adoption of ~~$250.0 million~~ASU 2016-13 of ~~preferred stock, $56.5 million of equity issued in the FTC Merger, net income of $44.9 million, partially offset by other comprehensive loss of $45.5~~$25.0 million and dividends paid of ~~$13.7~~$5.2 million, partially offset by net income of $17.1 million and other comprehensive income of $5.3 million.

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

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

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~~designations, preferences, limitations and relative rights of the Preferred Stock as described in Item 5.03 of our Current Report on Form 8-K filed with the SEC on June 23, 2022.~~

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

Liquidity and Capital Resources

Bank Liquidity Management

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

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

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


(Dollars in thousands) Primary Liquidity – On-Balance Sheet	(Dollars in thousands) Primary Liquidity – On-Balance Sheet	September 30, 2022			December 31, 2021			(Dollars in thousands) Primary Liquidity – On-Balance Sheet	March 31, 2023			December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	172,285		$	664,165		Cash and cash equivalents	$	121,220		$	137,895
Total securities	Total securities	680,547			648,262			Total securities	720,843			686,194
Less: pledged securities	Less: pledged securities	(429,189)			(489,184)			Less: pledged securities	(608,506)			(487,372)
Total primary liquidity	Total primary liquidity	$	423,643		$	823,243		Total primary liquidity	$	233,557		$	336,717
Ratio of primary liquidity to total deposits	Ratio of primary liquidity to total deposits	7.6		%	17.8		%	Ratio of primary liquidity to total deposits	3.9		%	5.8		%

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Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	September 30, 2022			December 31, 2021			Secondary Liquidity – Off-Balance Sheet Borrowing Capacity	March 31, 2023			December 31, 2022
Net secured borrowing capacity with the FHLB	Net secured borrowing capacity with the FHLB	$	1,811,637		$	1,476,825		Net secured borrowing capacity with the FHLB	$	2,064,771		$	1,880,392
Net secured borrowing capacity with the Federal Reserve Bank	Net secured borrowing capacity with the Federal Reserve Bank	543,213			189,497			Net secured borrowing capacity with the Federal Reserve Bank	593,031			573,588
Unsecured borrowing capacity with correspondent lenders	Unsecured borrowing capacity with correspondent lenders	243,000			223,000			Unsecured borrowing capacity with correspondent lenders	243,000			243,000
Available capacity on revolving line of credit	Available capacity on revolving line of credit	$	20,000		$	—		Available capacity on revolving line of credit	20,000			20,000
Total secondary liquidity	Total secondary liquidity	$	2,617,850		$	1,889,322		Total secondary liquidity	$	2,920,802		$	2,716,980
Ratio of primary and secondary liquidity to total deposits	Ratio of primary and secondary liquidity to total deposits	54.4		%	58.7		%	Ratio of primary and secondary liquidity to total deposits	52.9		%	52.4		%

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, BancPlus’ primary liquidity decreased by ~~$399.6~~$103.2 million to ~~$423.6~~$233.6 million, compared to ~~$823.2~~$336.7 million at December 31, ~~2021,~~2022, primarily due to ~~changes in cash and cash equivalents as a result of organic loan growth and a decrease in money market, negotiable orders of withdrawal, and savings deposits, partially offset by the~~an increase in ~~cash as a result of ECIP.~~pledged securities. Secondary liquidity increased by ~~$728.5~~$203.8 million to ~~$2.62~~$2.92 billion as of ~~September 30, 2022~~March 31, 2023 from ~~$1.89~~$2.72 billion as of December 31, ~~2021.~~2022. This increase was primarily due to an increase in BancPlus’ FHLB borrowing ~~capacity due to the FTC Merger.~~capacity.

In addition to its primary liquidity, BancPlus generates liquidity from cash flows from its loan and securities portfolios and from its large base of core customer deposits, defined as total deposits less brokered deposits and time deposits greater than $250,000. Core deposits totaled ~~$5.39~~$5.76 billion and ~~$4.45~~$5.66 billion and represented ~~96.3%~~96.6% of total deposits as of both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. These core deposits are normally less volatile, often with customer relationships tied to other products, which promote long-standing relationships and stable funding sources. Although BancPlus’ policy allows the use of brokered deposits, BankPlus did not utilize this funding source during the ~~2022~~2023 and ~~2021~~2022 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, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, BancPlus was in compliance with all of its established liquidity guidelines.

Holding Company Liquidity Management

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

Due to state banking laws, BankPlus may not ~~declare~~pay dividends without the prior approval of the MDBCF. BankPlus received permission from the MDBCF to pay dividends of ~~$18.9~~$7.2 million and ~~$16.2~~$6.3 million for the year-to-date periods ended ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021, respectively.~~respectively to BancPlus. These dividends were used by the holding company to pay dividends to the BancPlus shareholders, principal and interest payments on debt and general operating expenses.

Capital Management and Regulatory Capital Requirements

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

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

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

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~~officers. Minimum capital requirements, including the capital conservation buffer, to which BankPlus and BancPlus are subject are summarized in the tables below.~~

In 2019, the federal bank regulatory agencies finalized a rule that simplifies capital requirements for qualifying community banks by providing an option to use a simple leverage ratio to measure capital adequacy and to not calculate risk-based capital ratios. A qualifying community bank has less than $10 billion in total consolidated assets, limited amounts of off-balance-sheet exposures and trading assets and liabilities, and a leverage ratio greater than ~~9 percent.~~9.0%. The community bank leverage ratio (“CBLR”) framework was effective on January 1, 2020, and the Company and the Bank elected to adopt the optional CBLR framework in the third quarter of 2022, as an alternative to the ~~Basel III risk-based~~generally applicable capital ~~framework.~~rules.

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

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capital measure. As of March 31, 2023, the Bank maintained a leverage ratio of more than 9.0% and, as an institution has elected to adopt the CBLR framework, the Bank was therefore well capitalized under the regulatory framework for prompt corrective action.

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, BancPlus and BankPlus met the minimum ~~leverage ratio or~~CBLR requirement and therefore satisfied the capital adequacy requirements to which they are subject. As a bank holding company, BancPlus is not subject to the prompt corrective action regime that applies to insured depository institutions, including BankPlus.

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


		Actual			Minimum Requirement to be Well Capitalized				Actual				Minimum Requirement to be Well Capitalized
As of September 30, 2022:		Capital Amount	Ratio		Capital Amount	Ratio
As of March 31, 2023:								As of March 31, 2023:	Capital Amount		Ratio		Capital Amount		Ratio
Consolidated:	Consolidated:							Consolidated:

Community Bank Leverage Ratio	Community Bank Leverage Ratio	708,028	10.69	%	595,970	9.00	%	Community Bank Leverage Ratio	$	727,972	10.27	%	$	637,810	9.00	%

Bank:	Bank:							Bank:

Community Bank Leverage Ratio	Community Bank Leverage Ratio	622,789	9.41	%	595,436	9.00	%	Community Bank Leverage Ratio	$	672,902	9.50	%	$	637,283	9.00	%

Actual Minimum For Capital Adequacy Purposes Required to be Well Capitalized
As of December 31, 2021: Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio
Consolidated:
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 433,754 10.65 % 346,166 8.50 % 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 433,754 8.46 % 205,072 4.00 % N/A N/A
Bank:
CET1 Capital to Risk-Weighted Assets $ 428,602 10.55 % $ 284,509 7.00 % $ 264,187 6.50 %
Tier 1 Capital to Risk-Weighted Assets 428,602 10.55 % 345,475 8.50 % 325,153 8.00 %
Total Capital to Risk-Weighted Assets 473,602 11.65 % 426,763 10.50 % 406,441 10.00 %
Tier 1 Capital to Average Assets 428,602 8.37 % 204,714 4.00 % 255,893 5.00 %

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	Actual				Minimum Requirement to be Well Capitalized
As of December 31, 2022:	Capital Amount		Ratio		Capital Amount		Ratio
Consolidated:




Community Bank Leverage Ratio	$	721,001	10.54	%	$	615,566	9.00	%

Bank:




Community Bank Leverage Ratio	$	636,007	9.31	%	$	614,973	9.00	%

Contractual Obligations

Contractual obligations as of ~~September 30, 2022,~~March 31, 2023 totaled ~~$1.27~~$1.33 billion and were primarily comprised of deposits with maturities of ~~$776.5~~$842.1 million, subordinated debentures of ~~$133.4~~$133.5 million and operating lease obligations of ~~$47.7~~$47.9 million. Contractual obligations due within the next twelve months were ~~$837.1~~$833.1 million and were primarily related to time deposits with maturity dates and short-term FHLB advances due in 2022. Contractual obligations due in more than 12 months were ~~$430.6~~$500.5 million and were comprised of ~~$254.7~~$323.1 million of time deposits with maturity dates and ~~$133.4~~$133.5 million of subordinated debentures with maturities ranging from 2030 through 2037. BancPlus expects to have adequate liquidity to meet these short and long-term obligations through profitability, repayments from loans and investment securities, deposit gathering activity and access to borrowing sources.

Recent Accounting Pronouncements

~~Accounting Standards Update 2016-13 (“ASU 2016-13”),~~ “See Note 1 Basis of Presentation in our Condensed Notes to Consolidated Financial ~~Instruments – Credit Losses (Topic 326): Measurement~~Statements elsewhere in this Quarterly Report on Form 10-Q for details of ~~Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board (“FASB”)~~recently issued ~~Accounting Standards Update (“ASU”) 2016-13, which requires earlier measurement of credit losses~~accounting pronouncements and ~~enhances disclosures. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the~~their expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses over the life of the loan. ASU 2016-13 was originally effective for the Company for annual and interim periods beginning on January 1, 2021. Subsequently, FASB approved a deferral of the effective date. ASU 2016-13 will now be effective for the Company for annual and interim periods beginning on January 1, 2023. The Company has a cross functional team that has been working with third-party vendors to build and validate a CECL model which has been running parallel with the Company’s current model while validation of the model is completed. 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~~our 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 does not expect ASU 2020-04 to have a material impact on the Company’s consolidated financial statements.

~~Accounting Standards Update 2022-02 (“ASU 2022-02”), “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.”~~ In March 2022, the FASB issued ASU 2022-02 which eliminates the TDR recognition and measurement guidance and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. ASU 2022-02 also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for the Company for annual and interim periods beginning on January 1, 2023. Implementation of ASU 2022-02 is not expected to materially impact the Company’s consolidated financial statements.

Critical Accounting Policies and Estimates

There have been no material changes to the critical accounting policies and estimates previously disclosed under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, previously filed with the SEC.

~~Recent Supervision and Regulation Developments~~

On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023. The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the Deposit Insurance Fund meets or exceeds 2 percent.

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~~As a result of the new rule, the FDIC insurance costs of insured depository institutions, including BankPlus, will generally increase.~~

~~In the third quarter of 2022, the Company and the Bank elected to adopt the optional CBLR framework as described above.~~

Item 3. Qualitative and Quantitative Disclosures about Market Risk

~~Not applicable.~~Interest Rate Risk

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

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

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

Net Interest Income Simulation and Economic Value Analysis

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

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


	As of March 31, 2023								As of December 31, 2022
(Dollars in thousands)	Change in Net Interest Income				Change in Economic Value of Equity				Change in Net Interest Income				Change in Economic Value of Equity
Parallel Rate Shift (basis points)	$		%		$		%		$		%		$		%
300	$	1,840	0.8	%	$	(55,074)	(8.1)	%	$	(907)	(0.4)	%	$	(28,909)	(2.7)	%
200	$	(5,836)	(2.5)	%	$	(35,481)	(5.2)	%	$	(3,041)	(1.2)	%	$	(19,101)	(1.8)	%
100	$	(3,808)	(1.6)	%	$	(16,431)	(2.4)	%	$	(2,090)	(0.8)	%	$	(9,706)	(0.9)	%
Unchanged	$	—	—	%	$	—	—	%	$	—	—	%	$	—	—	%
-100	$	3,382	1.5	%	$	12,583	1.9	%	$	430	0.2	%	$	13,299	1.2	%
-200	$	5,547	2.4	%	$	17,657	2.6	%	$	(394)	(0.2)	%	$	17,758	1.7	%
-300	$	6,561	2.8	%	$	11,544	1.7	%	$	(9,414)	(3.7)	%	$	6,027	0.6	%

The table above indicates that in the event of an immediate and sustained 300 basis point increase in interest rates, BancPlus would have experienced a 0.8% increase in net interest income and a 8.1% decrease in EVE as of March 31, 2023. At December 31, 2022, in the event of an immediate and sustained 300 basis point increase in interest, BancPlus would have experienced a 0.4% decrease in net interest income and a 2.7% decrease in EVE. In the event of an immediate 100 basis point

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decrease in interest rates, BancPlus would have experienced an increase of 1.5% in net interest income and a 1.9% increase in EVE as of March 31, 2023, and a 0.2% increase in net interest income and a 1.2% increase in EVE as of December 31, 2022.

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

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

Impact of Inflation and Changing Prices

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

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of BancPlus’ ~~Chief~~Principal Executive Officer and ~~Chief~~Principal Financial Officer, of the effectiveness of BancPlus’ disclosure controls and procedures, ~~(as~~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~~Principal Executive Officer and the ~~Chief~~Principal Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, BancPlus’ disclosure controls and procedures were effective to ensure that information required to be disclosed by BancPlus in the reports required to be filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within time periods specified in the SEC’s rules and ~~forms.~~forms and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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

There has been no change in BancPlus’ internal control over financial reporting identified in connection with the evaluation required by 15d-15(d) under the Exchange Act that occurred during the ~~last fiscal quarter~~period covered by this report that has materially affected, or is reasonably likely to materially affect, BancPlus’ internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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For information about our legal proceedings refer to Footnote 13 to our Condensed Notes to Consolidated Financial Statements for the quarter ended ~~September 30, 2022~~March 31, 2023 contained in Part I, Item 1 of this Quarterly Report on Form ~~10-Q~~10-Q.

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

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, previously filed with the ~~SEC.~~SEC, except for the addition of the following risk factor:

A failure or the perceived risk of a failure to raise the statutory debt limit of the United States could have an adverse effect on our business, financial condition and results of operations.

The inability of U.S. lawmakers to pass legislation to raise the U.S. government’s debt limit of $31.4 trillion has increased the possibility of a default by the U.S. government on its debt obligations, which could have an adverse impact on financial markets, interest rates and economic conditions in the United States and worldwide. The U.S. government reached its debt limit of $31.4 trillion in January 2023. Since then, the U.S. Department of Treasury has implemented extraordinary measures to prevent default.

It is unclear if Congress and the President will reach an agreement to increase the U.S. government’s debt limit in a timely manner. The political stalemate over legislation to fund U.S. government operations and raise the U.S. government’s debt limit may increase the possibility of a default by the U.S. government on its debt obligations and related credit-rating downgrades. This creates uncertainty in the U.S. financial markets and domestic political conditions which could have an adverse impact on our business, financial condition and results of operations. If the United States is unable to increase the U.S. government’s debt limit in a timely manner, the U.S. government could shut down for a period of time and the United States could default or delay on payment of its obligations or both, which could have an adverse impact on financial markets and economic conditions in the United States and worldwide and an adverse effect on our business, financial condition and results of operations.

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 Annex A of the Company’s Registration Statement on Form S-4 (File No. 333-261311), as amended, filed on February 11, 2022)
2.2*			~~Agreement and Plan of Share Exchange and Merger, dated September 18, 2019, by and among BancPlus Corporation,BankPlus,StateCapitalCorp.,andStateBank~~&~~TrustCompany(incorporated~~by~~referenceto 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~~Exhibit3.1~~to~~theRegistration Statement on Form S-4, as amended (File No. 333-236022), of theRegistrant, filed on January 31, 2020)~~
3.2			By-laws of BancPlus Corporation (incorporated by reference to Exhibit 3.2 toof the~~RegistrationStatement~~ Annual Report on Form ~~S-4, as amended (File No. 333-236022),~~ 10-K of ~~the~~t he Registrant, filed on ~~February 10, 2020)~~March 9, 2023 )
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 A of Exhibit 4.1 of the Current Report on Form 8-K of the Registrant filed on June 5, 2020)
4.3			Form of 5.50% Fixed-to-Floating Rate Subordinated Note due 2030 (incorporated by reference to Exhibit A of Exhibit 10.3 of the Current Report on Form 8-K of the Registrant filed on March 1, 2022)
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)
4.5			Certificate of Designations of Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of the Registrant filed on June 23, 2022)
~~4.3~~4.6			Form of Certificate for Senior Non-Cumulative Perpetual Preferred Stock, Series ECIP (incorporated by reference to Exhibit ~~4.1~~4.2 of the Current Report on Form 8-K of the Registrant filed on June 23, 2022)
~~10.1~~			~~Second Amendment to Employment Agreement, effective September 20, 2022, by adn between BancPlus Corporation and William A. Ray~~
~~31.1~~31.1+			Certification by ~~Chief~~Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
~~31.2~~31.2+			Certification by ~~Chief~~Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
~~32.1~~32.1++			Certification by ~~Chief~~Principal 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~~32.2++			Certification by ~~Chief~~Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101~~101+			Inline XBRL Interactive Data
~~104~~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.

+ Filed herewith.

++ Furnished herewith.

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SIGNATURES

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

BancPlus Corporation


Date:	~~November 10, 2022~~May 12, 2023	By:	/s/ William A. Ray
			William A. Ray
			Vice Chairman, President and Chief Executive Officer
			(Principal Executive Officer)


Date:	~~November 10, 2022~~May 12, 2023	By:	/s/ Karlen Turbeville
			Karlen Turbeville
			Senior Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

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

July 1, 2022	250,000	$	250,000	11,627,071	$	11,627	$	—	$	122,132	$	331,239	$	(29,744)	$	(97,799)	$	587,455

Net income	—	—		—	—		—		—		19,143		—		—		19,143

Other comprehensive loss, net	—	—		—	—		—		—		—		(15,752)		—		(15,752)
Issuance of restricted stock	—	—		2,911	3		—		(3)		—		—		—		—

Purchase of Company stock	—	—		(28,846)	(29)		—		(1,824)		—		—		—		(1,853)
Stock based compensation	—	—		—	—		—		1,045		—		—		—		1,045
Net change fair value of ESOP shares	—	—		—	—		—		—		—		—		4,447		4,447

Dividends paid ($0.41 per share)	—	—		—	—		—		—		(4,767)		—		—		(4,767)
September 30, 2022	250,000	$	250,000	11,601,136	$	11,601	$	—	$	121,350	$	345,615	$	(45,496)	$	(93,352)	$	589,718

January 1, 2022	—	$	—	10,115,945	$	10,116	$	(1,401)	$	67,380	$	314,357	$	(33)	$	(100,487)	$	289,932

Net income	—	—		—	—		—		—		44,947		—		—		44,947
Issuance of preferred stock	250,000	250,000		—	—		—		—		—		—		—		250,000
Issuance of common stock for acquisition of First Trust Corporation	—	—		1,444,732	1,445		—		55,044		—		—		—		56,489
Other comprehensive loss, net	—	—		—	—		—		—		—		(45,463)		—		(45,463)
Issuance of restricted stock	—	—		98,679	99		—		(99)		—		—		—		—
Shares withheld to satisfy withholding obligation in the vesting of restricted stock	—	—		(10,438)	(11)		—		(701)		—		—		—		(712)
Purchase of Company stock	—	—		(47,782)	(48)				(3,055)								(3,103)
Stock based compensation	—	—		—	—		—		2,781		—		—		—		2,781
Net change fair value of ESOP shares	—	—		—	—		—		—		—		—		7,135		7,135
Common stock released by ESOP	—	—		—	—		1,401		—		—		—		—		1,401
Dividends paid ($1.23 per share)	—	—		—	—		—		—		(13,689)		—		—		(13,689)
September 30, 2022	250,000	$	250,000	11,601,136	$	11,601	$	—	$	121,350	$	345,615	$	(45,496)	$	(93,352)	$	589,718


	September 30, 2022
	Principal		Recorded		Related
(In thousands)	Balance		Balance (1)		Allowance
Impaired loans with no related allowance:
Secured by real estate:
Residential properties	$	7,255	$	4,752	$	—
Construction and land development	2,273		908		—
Farmland	1,387		969		—
Other commercial	8,372		7,250		—
Total real estate	19,287		13,879		—
Commercial and industrial	15,173		11,710		—
Agricultural production and other loans to farmers	36		—		—
Consumer and other loans	276		53		—
Total	$	34,772	$	25,642	$	—

Impaired loans with related allowance:
Secured by real estate:
Residential properties	$	800	$	800	$	7
Construction and land development	—		—		—
Farmland	—		—		—
Other commercial	—		—		—
Total real estate	800		800		7
Commercial and industrial	—		—		—
Agricultural production and other loans to farmers	—		—		—
Consumer and other loans	—		—		—
Total	800		800		7
Total impaired loans	$	35,572	$	26,442	$	7


	Actual				Minimum Requirement				Required to be Well Capitalized
(In thousands)	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
December 31, 2021:
Company:
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	433,754		10.65	%	346,166		8.50	%	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	433,754		8.46	%	205,072		4.00	%	N/A		N/A

Bank:
CET1 Capital to Risk-Weighted Assets	$	428,602	10.55	%	$	284,509	7.00	%	$	264,187	6.50	%
Tier 1 Capital to Risk-Weighted Assets	428,602		10.55	%	345,475		8.50	%	325,153		8.00	%
Total Capital to Risk-Weighted Assets	473,602		11.65	%	426,763		10.50	%	406,441		10.00	%
Tier 1 Capital to Average Assets	428,602		8.37	%	204,714		4.00	%	255,893		5.00	%


(In thousands, except share data)	September 30, 2022		December 31, 2021
Allocated shares	1,452,950		1,472,334
Unearned shares	—		28,398
Total ESOP shares	1,452,950		1,500,732

Fair value of unearned shares	$	—	$	1,938


	Actual				Minimum For Capital Adequacy Purposes				Required to be Well Capitalized
As of December 31, 2021:	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
Consolidated:
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	433,754		10.65	%	346,166		8.50	%	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	433,754		8.46	%	205,072		4.00	%	N/A		N/A

Bank:
CET1 Capital to Risk-Weighted Assets	$	428,602	10.55	%	$	284,509	7.00	%	$	264,187	6.50	%
Tier 1 Capital to Risk-Weighted Assets	428,602		10.55	%	345,475		8.50	%	325,153		8.00	%
Total Capital to Risk-Weighted Assets	473,602		11.65	%	426,763		10.50	%	406,441		10.00	%
Tier 1 Capital to Average Assets	428,602		8.37	%	204,714		4.00	%	255,893		5.00	%