NEW YORK--(BUSINESS WIRE)--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.
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.
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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.
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