Bancplus 11-KAnnual report of employee stock purchases

The borrowings are collateralized by the unallocated shares of common stock. The lender has no rights against shares once they are allocated under the Plan. Accordingly, the Statements of Net Assets Available for Benefits of the Plan at December 31, 2020 and 2019 present separately the assets and liabilities and the Statement of Changes in Net Assets Available for Benefits for the year 2020 presents separately the changes therein pertaining to:

The Plan is a defined contribution plan covering all full-time employees of the Bank who have completed 1,000 hours of service for the Plan year and are age 21 or older.

Participants are fully vested in their salary reduction and rollover contributions and the Bank’s matching and basic contributions. Participants vest in the Bank’s optional contributions and earnings thereon at a rate of 20% for each year of service greater than two years and become fully vested upon completing six years of service. Participants terminating due to normal retirement, death, or disability will be 100% vested.

Under federal income tax regulations, the employer stock that is held by the Plan and its participants and is not readily tradable on an established market or is subject to trading limitations includes a put right. This put option is a right to demand that the Company buy, within 30 days of the exercise of the put option, any shares of its stock distributed to participants for which there is no market. The put price is representative of the current appraised value of the stock.

Participants are entitled to benefits upon termination of service due to death, disability or retirement. In addition, participants who are 100% vested and have completed five years of service in the Plan may request in-service distributions. A participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or may elect to receive installment payments over a period of not more than the participant’s assumed life expectancy (or assumed life expectancies for the participant and beneficiary). Net assets available for benefits include amounts allocated to the accounts of terminated participants. These accounts had a total balance of $18,498,131 and $20,488,953 and a vested balance of $18,433,730 and $20,420,423 at December 31, 2020 and 2019, respectively.

Distributions relating to the Company’s stock may be made in shares of the Company’s common stock or in cash, at the discretion of the participants.

In April 2020, the Plan Sponsor (Company) implemented Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provisions for coronavirus-related distributions (CRD). Through December 30, 2020, qualified participants are permitted to take a CRD of up to $100,000 from the Plan. Participants who take a CRD have the option to have the distribution taxed over a three-year period, with the ability to recontribute up to the full amount of the distribution within three years and not be subject to federal income tax as a result.

Each participant in the Plan is entitled to direct the Trustee as to the manner in which voting rights on shares of the Company’s common stock, which are allocated to the common stock account of such participant, are to be exercised with respect to any corporate matter which involves the voting of such shares, including the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction. The Trustee is permitted to vote any share for which instructions have not been given by a participant.

Diversification is offered to participants close to retirement so that they may have the opportunity to move part of the value of their investment in Company common stock into other investments. Participants who are at least age 55 with at least 10 years of participation in the Plan may elect to diversify a portion of their account.

The Bank makes (1) annual safe harbor matching contributions in the amount of 100% of the first 3% and 50% of the next 2% of the participant’s compensation contributed, and may make (2) discretionary matching contributions equal to a percentage of the participant’s contributions and/or (3) optional contributions to all eligible participants.

Participants may make (1) salary reduction contributions subject to Internal Revenue Service (“IRS”) and plan limits and (2) rollover contributions.

Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan offers the option to invest in the Company’s common stock, various participant-directed investment allocation options and participant-directed investments in mutual funds.

Each participant’s account is credited with the participant’s contributions and with an allocation of (1) the Company’s contribution, (2) plan earnings and (3) forfeitures of terminated participants’ nonvested accounts. Allocations of basic and optional contributions and forfeitures are based on a participant’s compensation. Company matching contributions are allocated based on a participant’s salary reduction contributions.

Nonparticipant-directed investments are credited to individual participant accounts as of the last day of each plan year, with an allocation of shares of the Company’s common stock released by the Trustee from the unallocated account and forfeitures of terminated participants’ nonvested accounts. Only those participants who are eligible employees of the Company as of the last day of the plan year will receive an allocation. Allocations are based on a participant’s eligible compensation relative to total eligible compensation.

In 2020, $26,656 was forfeited and reallocated to participants.

The Plan Document includes provisions authorizing loans from the Plan to active eligible participants. Participants may borrow from their accounts a minimum of $2,500 up to a maximum of $50,000, or 50% of their account balance, whichever is less. Loans are secured by the balance in the participant’s account and bear interest at commercially reasonable rates as determined by the Plan Administrator. The term shall not exceed five years, except for the purchase or construction of a principal residence, and loans shall be made from the vested portion of a participant’s account.

The Company reserves the right to terminate the Plan at any time, subject to plan provisions. Upon such termination of the Plan, the interest of each participant will be distributed to such participant or his or her beneficiary at the time prescribed by the plan terms and the Code. Upon termination of the Plan, the Administrative Committee, which is composed of individuals appointed by the board of directors, shall direct the Trustee to pay all liabilities and expenses and to sell shares of any financed stock held in the loan suspense account to the extent it determines such sale to be necessary in order to repay any outstanding loan.

The accompanying financial statements are prepared on the accrual basis of accounting, with the exception of the payment of benefits, which is recognized as a reduction in the net assets available for benefits of the Plan as distributions are made to participants.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein at the date of the financial statements. Actual results could differ from those estimates.

Investments are reported at fair value. Quoted market prices, if available, are used to value investments. The Plan’s investment in company common stock is valued at estimated fair value, as determined by an annual independent

appraisal, on December 31, 2020 and 2019. Mutual funds are valued at the net asset value of shares held by the Plan at year-end. The Plan’s interest in common collective trust is valued at net asset value as provided by the issuer. Other marketable investments are stated at fair value based on closing quoted market prices on the last business day of the plan year.

Dividend income is accrued on the ex-dividend date. Purchases and sales of securities are recorded on a trade-date basis. Realized gains and losses from security transactions are reported on the average cost method. Net appreciation includes the Plan's gains and losses on investments bought and sold as well as held during the year.

Dividends paid on shares of the Company’s common stock can be used to fund payments on the Plan’s notes payable or can be credited to participant accounts based on the number of shares allocated to each account as of the dividend record date.

Notes receivable from participants are reported at amortized principal balance plus accrued but unpaid interest. Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan Document.

Benefit payments to participants are recorded upon distribution.

The financial statements of the Plan present separately the assets and liabilities and changes therein pertaining to: (a) the accounts of employees with rights in allocated stock (“allocated”) and (b) stock not yet allocated to employees (“unallocated”), including shares that are committed to be released. Shares are released from collateral and become allocated generally in the period in which debt service is actually paid.

Certain administrative functions are performed by officers or employees of the Bank. No such officer or employee receives compensation from the Plan. Administrative expenses of the Plan may be paid by the Company or the Plan at the Company’s discretion.

The Internal Revenue Service has determined and informed the Company by a letter dated November 1, 2013, that the Plan and related trust are designed in accordance with applicable sections of the Code. Although the Plan has been amended since receiving the determination letter, the Plan Administrator and the Plan’s tax counsel believe that the Plan is designed, and is currently being operated, in compliance with the applicable requirements of the Code and, therefore, believe that the Plan is qualified, and the related trust is tax-exempt.

In 2019, the Plan entered a $1,016,000 unsecured note agreement with the Company. The proceeds of the loan were used for ordinary operating expenses and purposes incidental to the ordinary operation of the Plan. The note is due on demand and does not bear interest. Plan management believes that the loan complies with the requirements of Department of Labor Prohibited Transaction Class Exemption 80-26.

The scheduled amortization of the Plan’s four term notes payable for the next five years and thereafter is as follows:

Parties-in-interest are defined under DOL regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer and certain others. Administrative expenses of the Plan have been paid by the Plan Sponsor. The following is a summary of parties-in-interest balances at December 31, 2020 and 2019.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of

observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

The following table presents the fair value measurements of assets recognized in the accompanying statements of net assets available for benefits measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2020 and 2019.

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying statements of net assets available for benefits, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the years ended December 31, 2020 or 2019. The Plan had no liabilities measured at fair value on a recurring basis. In addition, the Plan had no assets measured at fair value on a nonrecurring basis. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 investments include money market accounts and mutual funds. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or

independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in 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 and include Company common stock whose fair value is determined by an independent appraisal. The independent appraiser considers inputs such as general economic outlook, financial institution industry outlook, company history, company financial condition, the book value of company common stock, company earnings and dividend capacity, sales of company stock, and market prices of stock of other financial institutions whose stock is traded in a free and open market.

The independent appraisal uses the income approach and the market approach. The two approaches are then weighted to derive the fair market value. The valuation utilized a capitalization factor of 13.50 as of December 31, 2020 and a discount rate of 11.76% as of December 31, 2019, both of which are considered to be unobservable inputs.

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying statements of net assets available for benefits using significant unobservable (Level 3) inputs.

Realized and unrealized gains and losses in Company common stock and mutual funds, which are included in net increase in net assets available for benefits for the year ended December 31, 2020, are reported in change in fair value of Company common stock and net appreciation in fair value of mutual funds in the statements of changes in net assets available for benefits.

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term, and that such changes could materially affect the participants’ account balances and the amounts reported in the statements of net assets available for benefits.

The outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies. Economic uncertainties have arisen, which have resulted in significant volatility in the investment markets and may continue to impact the value of Plan assets. The duration of these uncertainties and the ultimate financial effects cannot be reasonably estimated at this time.