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Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2024
Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
As management evaluates the allowance for credit losses, it is categorized based on specific allocations and general allocations for each major loan category for loans not individually evaluated or deemed 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.

Credit Quality Indicators – The Company utilizes a risk grading matrix to assign a grade to each of its commercial and real estate loans. Loans are rated on a scale of 1 to 10. A description of the general characteristics of the 10 risk ratings is as follows:
•Risk Grades 1, 2, 3, 4 and 5 – These grades include loans to borrowers of solid credit quality with no higher than normal risk of loss. Borrowers in these categories have satisfactory financial strength and adequate cash flow coverage to service debt requirements. Collateral type and quality, as well as protection, are adequate. The borrower’s management is strong and capable, financial information is timely and accurate, and guarantor support is strong.
•Risk Grade 6 – Pass and Watch – Loans in this category are currently protected, but risks are emerging that warrant more than normal attention and have above average risk of loss. These factors require a higher level of monitoring and may include emerging balance sheet weaknesses, strained liquidity, increased leverage ratio, and weakening management. Collateral support is less marketable or limited use and, although the protection is sufficient, the loan-to-value ratio may not meet policy guidelines. Guarantors may have a limited ability and willingness to provide intermediate support. Also, considerations surrounding industry deterioration, increased competition and minor policy exceptions concerning structure or amortization may affect the rating of these loans.
•Risk Grade 7 – Special Mention – The Company’s special mention rating is intended to closely align with the regulatory definition. A special mention asset has potential weaknesses that deserve management’s close attention. If left
uncorrected, these weaknesses may result in deterioration of repayment prospects. These weaknesses may include deteriorating balance sheets, strained liquidity and elevated leverage ratios. Cash flow and profitability are marginally sufficient to service debt and collateral is exhibiting signs of decline in value; however, protection is currently sufficient. 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. Special mention loans for the Company include loans in Risk Grade 7. Classified loans for the Company include loans in Risk Grades 8, 9 and 10. Loans may be classified but not considered individually evaluated or collateral-dependent, due to one of the following reasons: (i) the loan falls below the established minimum dollar thresholds for individual evaluation or (ii) the loan was individually evaluated, but not deemed to be collateral-dependent.
The following table reflects loans by credit quality indicator and origination year at June 30, 2024. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at June 30, 2024.
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
Pass$130,529 $248,640 $389,046 $279,535 $114,477 $100,702 $332,322 $1,595,251 
Special mention— — — — — — — — 
Classified518 1,808 4,144 3,272 2,896 7,106 2,524 22,268 
Total residential real estate$131,047 $250,448 $393,190 $282,807 $117,373 $107,808 $334,846 $1,617,519 
Current period gross write offs$— $16 $— $126 $11 $113 $18 $284 
Construction & land development:
Pass$26,648 $42,821 $44,759 $8,197 $3,260 $10,587 $546,069 $682,341 
Special mention— — 246 — — — — 246 
Classified25 — 513 433 896 1,970 1,271 5,108 
Total construction & land development$26,673 $42,821 $45,518 $8,630 $4,156 $12,557 $547,340 $687,695 
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Current period gross write offs$— $— $— $— $— $— $— $— 
Farmland:
Pass$29,954 $36,384 $71,770 $30,019 $25,935 $24,027 $90,597 $308,686 
Special mention— — — — — — — — 
Classified68 1,224 144 181 65 1,192 478 3,352 
Total farmland$30,022 $37,608 $71,914 $30,200 $26,000 $25,219 $91,075 $312,038 
Current period gross write offs$— $— $— $— $— $— $— $— 
Other commercial real estate:
Pass$43,423 $207,333 $494,966 $400,713 $240,856 $275,280 $1,046,763 $2,709,334 
Special mention— — — — — — — — 
Classified20 100 1,128 2,621 1,469 4,463 2,978 12,779 
Total other commercial real estate$43,443 $207,433 $496,094 $403,334 $242,325 $279,743 $1,049,741 $2,722,113 
Current period gross write offs$— $7 $— $194 $— $— $— $201 
Commercial & industrial loans:
Pass$38,738 $81,049 $108,949 $36,754 $24,445 $26,202 $269,252 $585,389 
Special mention— — 5,794 — — — — 5,794 
Classified130 8,930 13,719 1,260 404 1,785 319 26,547 
Total commercial & industrial loans$38,868 $89,979 $128,462 $38,014 $24,849 $27,987 $269,571 $617,730 
Current period gross write offs$— $78 $504 $— $3 $— $397 $982 
Agricultural production & other loans to farmers:
Pass$9,903 $12,487 $5,506 $3,914 $2,730 $726 $75,249 $110,515 
Special mention— — — — — — — — 
Classified29 187 10 — 38 — 643 907 
Total agricultural production & other loans to farmers$9,932 $12,674 $5,516 $3,914 $2,768 $726 $75,892 $111,422 
Current period gross write offs$— $— $— $— $— $— $— $— 
Consumer & other loans:
Pass$21,697 $25,972 $9,980 $2,932 $3,083 $2,707 $36,346 $102,717 
Special mention— — — — — — — — 
Classified13 118 92 6 — — 174 403 
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Total consumer & other loans$21,710 $26,090 $10,072 $2,938 $3,083 $2,707 $36,520 $103,120 
Current period gross write offs$968 $94 $59 $48 $1 $3 $81 $1,254 
The following table reflects loans by credit quality indicator and origination year at December 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 December 31, 2023.
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
Pass$273,190 $417,855 $305,097 $125,236 $51,299 $74,212 $284,488 $1,531,377 
Special mention— — — — — — — — 
Classified1,203 3,473 4,661 2,838 2,509 4,785 931 20,400 
Total residential real estate$274,393 $421,328 $309,758 $128,074 $53,808 $78,997 $285,419 $1,551,777 
Current period gross write offs$— $32 $11 $36 $3 $173 $— $255 
Construction & land development:
Pass$58,243 $57,699 $17,349 $3,802 $6,354 $6,323 $578,723 $728,493 
Special mention— 246 — — — — — 246 
Classified— 416 71 960 1,255 8 — 2,710 
Total construction & land development$58,243 $58,361 $17,420 $4,762 $7,609 $6,331 $578,723 $731,449 
Current period gross write offs$— $68 $— $— $— $60 $— $128 
Farmland:
Pass$41,629 $74,359 $32,270 $27,928 $13,295 $19,374 $98,061 $306,916 
Special mention— — — — — — — — 
Classified425 150 529 116 65 1,300 339 2,924 
Total farmland$42,054 $74,509 $32,799 $28,044 $13,360 $20,674 $98,400 $309,840 
Current period gross write offs$— $— $— $— $— $114 $— $114 
Other commercial real estate:
Pass$200,328 $505,748 $393,612 $245,990 $115,642 $189,852 $1,003,206 $2,654,378 
Special mention— — — — — — — — 
Classified127 74 5,823 456 1,234 3,365 1,499 12,578 
Total other commercial real estate$200,455 $505,822 $399,435 $246,446 $116,876 $193,217 $1,004,705 $2,666,956 
Current period gross write offs$8 $— $193 $— $— $198 $— $399 
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Commercial & industrial loans:
Pass$109,708 $140,536 $41,974 $36,486 $25,063 $8,052 $256,077 $617,896 
Special mention— — — — — — — — 
Classified8,954 666 1,169 458 124 1,722 539 13,632 
Total commercial & industrial loans$118,662 $141,202 $43,143 $36,944 $25,187 $9,774 $256,616 $631,528 
Current period gross write offs$67 $434 $63 $13 $16 $9 $233 $835 
Agricultural production & other loans to farmers:
Pass$16,315 $7,336 $4,342 $3,493 $1,137 $581 $58,689 $91,893 
Special mention— — — — — — — — 
Classified35 — — 44 4 — — 83 
Total agricultural production & other loans to farmers$16,350 $7,336 $4,342 $3,537 $1,141 $581 $58,689 $91,976 
Current period gross write offs$34 $12 $— $— $— $— $7 $53 
Consumer & other loans:
Pass$41,346 $15,080 $4,770 $4,213 $596 $128 $32,199 $98,332 
Special mention— — — — — — — — 
Classified14 69 24 1 — — 45 153 
Total consumer & other loans$41,360 $15,149 $4,794 $4,214 $596 $128 $32,244 $98,485 
Current period gross write offs$2,720 $175 $98 $38 $12 $30 $97 $3,170 
Allowance for Credit Losses on Loans Held for Investment (“LHFI”)
The allowance for credit loss represents the 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. 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 credit losses.
Transactions in the allowance for credit losses and balances in the loan portfolio by loan segment are as follows:
(In thousands)Commercial
and Industrial		Commercial
Real Estate		ResidentialConsumer
and other		Total
Three Months Ended June 30, 2024
Allowance for credit losses:
Beginning balance$8,221 $36,469 $21,129 $1,021 $66,840 
Provision for credit losses490 1,705 1,389 455 4,039 
Recoveries on loans46 147 82 363 638 
Loans charged off(314)(172)(170)(625)(1,281)
Ending balance$8,443 $38,149 $22,430 $1,214 $70,236 
Six Months Ended June 30, 2024
Allowance for loan losses:
Beginning balance$6,556 $37,767 $20,487 $1,062 $65,872 
Provision for credit losses2,800 382 2,086 682 5,950 
Recoveries on loans69 201 141 724 1,135 
Loans charged off(982)(201)(284)(1,254)(2,721)
Ending balance$8,443 $38,149 $22,430 $1,214 $70,236 
Period End Allowance Balance Allocated To:
Individually evaluated$576 $719 $— $— $1,295 
Collectively evaluated7,867 37,430 22,430 1,214 68,941 
Ending balance$8,443 $38,149 $22,430 $1,214 $70,236 

The allowance for credit losses on LHFI increased for the six months ended June 30, 2024 primarily as a result of provision for credit losses on commercial and industrial loans. Accrued interest receivable on loans, reported as a component of accrued interest receivable on the balance sheet, totaled approximately $27.9 million at June 30, 2024 and is excluded from the estimate of credit losses.
(In thousands)Commercial and IndustrialCommercial Real EstateResidentialConsumer and otherTotal
Three Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance$6,404 $40,494 $16,420 $1,085 $64,403 
 Provision for loan losses(80)(175)937 104 786 
 Recoveries on loans115 97 67 558 837 
 Loans charged off(29)(106)(5)(657)(797)
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 
Six Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance$4,750 $26,701 $9,958 $1,466 $42,875 
Impact of adopting ASU 2016-132,166 12,770 6,464 (656)20,744 
Provision for loan losses(392)804 1,050 744 2,206 
Recoveries on loans203 212 125 1,149 1,689 
Loans charged off(317)(177)(178)(1,613)(2,285)
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 
Period End Allowance Balance Allocated To:
Individually evaluated for impairment
$227 $— $— $— $227 
Collectively evaluated for impairment
6,183 40,310 17,419 1,090 65,002 
Ending balance$6,410 $40,310 $17,419 $1,090 $65,229 

Allowance for Credit Losses on Unfunded Loan Commitments

The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in Other liabilities in the Company’s Consolidated Balance Sheets. The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.

Three Months Ended June 30,
(In thousands)20242023
Beginning balance$7,076 $11,608 
(Recovery of) provision for credit losses on unfunded loan commitments(542)130 
Ending Balance$6,534 $11,738 
Six Months Ended June 30,
(In thousands)20242023
Beginning balance$8,951 $— 
Impact of adopting CECL— 12,505 
(Recovery of) provision for credit losses on unfunded loan commitments(2,417)(767)
Ending balance$6,534 $11,738