KBRA Affirms Ratings for BancPlus Corporation

KBRA affirms the senior unsecured debt rating of BBB, the subordinated debt rating of BBB-, and the short-term debt rating of K3 for Ridgeland, MS-based BancPlus Corporation ("BancPlus" or “the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of BBB+, the subordinated debt rating of BBB, and the short-term deposit and debt ratings of K2 for lead subsidiary, BankPlus. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

BancPlus’ ratings remain supported by comparatively favorable operating performance, with ROA tracking above 1%. Earnings improvement over recent periods has been driven by a combination of margin expansion and efficiency gains, and the profile continues to benefit from relatively low credit costs, deposit stability, and material contributions from diverse noninterest income streams. Growth in AUM continues to fuel stability in fee income while mortgage activity is relatively suppressed amidst less favorable market conditions, with Wealth Management and Mortgage contributing 27% of TTM fee income, providing meaningful revenue diversity. While BancPlus has historically demonstrated elevated expenses relative to peers in support of its robust fee income platforms and continued investments in personnel, technology, and growth markets, in recent years, the company has evaluated optimal resource deployment across its target markets, along with technology and process optimization to aid in expense control, and these refinements along with some FTE rationalization have translated into efficiency gains, resulting in expense reduction relative to assets without limiting fee income platform capacity and growth potential.

Overall, we consider the company’s loss absorbing capacity to be appropriate for its risk profile. BancPlus elects the CBLR framework, and reported a CBLR of 10.6% at 2Q26. With regard to risk-based measures, we note that Tier 1 capitalization includes $250 million of non-cumulative, perpetual, below-market coupon preferred stock issued to the U.S. Treasury as part of the Emergency Capital Investment Program (“ECIP”) in 2Q22, which the company was able to access due to its CDFI designation. KBRA views this instrument as quasi-CET1 capital, given certain common equity-like features, and we note a significant potential gain on repurchase and resulting boost to common equity embedded in the 2025 Purchase Option Agreement with the Treasury, primarily sensitive to maintenance of the current 0.5% dividend, with exercise available as early as 2031. We estimate BancPlus' CET1 ratio inclusive of the current estimated embedded benefit of the ECIP purchase to be in excess of 12%, supporting our of view of BancPlus' capitalization. Capitalization has continued to build in recent periods on strong internal capital generation, and there are a number of strategic capital management avenues available to management as the company approaches the $10 billion asset threshold over the medium term and greater scale thereafter.

BancPlus continues to invest in higher-growth markets in AL and LA while maintaining its sizeable Mississippi franchise, and core deposit growth has facilitated a reduction in balance sheet leverage and meaningful runoff of wholesale funding over the last several years. The core deposit base is tenured and granular, with $6.7 billion in core deposits up 13% YoY, representing 90% of total funding at 2Q26, and the loan-to-deposit ratio now sits in line with rated peer levels. Primary and secondary liquidity remain adequate, in our view.

CRE and C&D concentrations have moderated materially over the last several years, and BancPlus' loan portfolio remains well diversified across segments. Nonperforming metrics have ticked up in recent periods (though still compare relatively favorably to rated peer averages), largely driven by some recent episodic credit challenges related to a small number of relationships, which we view as idiosyncratic rather than evidence of broad based deterioration. We note the underlying properties remain adequately cash-flowing and recent appraisals indicate LTVs which would support resolution with minimal realized losses. Elsewhere, agriculture remains an area of monitoring for KBRA across the industry as pressures have emerged on commodity price volatility and elevated input costs, though we note BancPlus' manageable total agriculture exposure at just ~7% of total loans, and management indicates comfort with their longstanding farm operator relationships. Overall, performance across the loan portfolio continues to align with the company’s history of nominal losses, with loss absorption capacity further supported by ACL coverage of 1.12% of total loans at 2Q26.

Rating Sensitivities

KBRA does not anticipate upward rating action over the medium term. Over the longer term, positive rating momentum could be driven by meaningful market share gains in core operating markets while maintaining sound capitalization and asset quality performance. Unexpected deterioration in asset quality or the funding profile, more aggressive capital management, or material erosion in competitive position in core operating markets could pressure the ratings.

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