KBRA Assigns Ratings to BancPlus Corporation

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 for Ridgeland, Mississippi-based BancPlus Corporation (BancPlus or the company). In addition, KBRA assigns deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 for BankPlus, the lead subsidiary. The Outlook for all long-term ratings is Stable.

BancPlus’ ratings are supported by the transformative acquisition of State Capital Corp. and its subsidiary bank, State Bank & Trust, which provides increased scale, market focus, and diversification opportunities to expand into new geographic markets. In addition, the company’s favorable liquidity profile and solid core organic funding helps to support an above peer NIM. The consistent above peer noninterest income as a percentage of operating revenue, driven by fee income from wealth management, service charge fee income, and to a lesser degree mortgage origination income, also helps to enhance the company’s profitability measures. Constraints to the ratings include the company’s commercially focused (66%) loan portfolio, specifically acutely impacted COVID-19 exposures including hospitality, retail, entertainment and energy sectors. In this regard, BancPlus’ credit performance after the 2008 financial crisis was somewhat challenged, though the company has implemented changes in the credit process since the crisis that should provide some benefits in the current economic environment negatively impacted by COVID-19.

KBRA continues to monitor the potential direct and indirect effects of the coronavirus on the banking and other sectors. Please refer to our publication Coronavirus (COVID-19): U.S. Banks Stable Despite Uncertainties.

The ratings are based on KBRA’s Bank & Bank Holding Company Global Rating Methodology published on October 16, 2019.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical
Brian Ropp, Senior Director (Lead Analyst)
+1 (301) 969-3244
bropp@kbra.com

M. Scott Durant, Senior Director
+1 (301) 969-3248
sdurant@kbra.com

Joe Scott, Managing Director (Rating Committee Chair)
+1 (646) 731-2438
jscott@kbra.com

Business Development
Kai Chan, Senior Director
+1 (646) 731-2303
kai@kbra.com

Contacts

Analytical
Brian Ropp, Senior Director (Lead Analyst)
+1 (301) 969-3244
bropp@kbra.com

M. Scott Durant, Senior Director
+1 (301) 969-3248
sdurant@kbra.com

Joe Scott, Managing Director (Rating Committee Chair)
+1 (646) 731-2438
jscott@kbra.com

Business Development
Kai Chan, Senior Director
+1 (646) 731-2303
kai@kbra.com