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Paragon Bank Announces Most Profitable First Quarter in Bank’s History

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June 03, 2021
Contact: Aisling Mäki, inferno
                                                                                                             aisling@creativeinferno.com
  901.278.3773
 
 
Paragon Bank Announces Most Profitable First Quarter in Bank’s History

Memphis, Tenn., June 3, 2021 – Paragon Bank (OTCBB:PGNN.OB) today announced that its first quarter of 2021 was the most profitable first quarter in the bank’s 16-year history.  

 “We are pleased to continue in 2021 with the strong growth we saw throughout 2020,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “Despite the financial fallout of the pandemic, we entered this year with a remarkably robust, history-making first quarter.”

This strong first quarter was the bank’s most profitable one yet, despite the addition of $973 thousand to the loan loss reserve. Net income for the first quarter of 2021 was $880,000. Meanwhile, operating income, which excludes the loan loss provision and income taxes, was $2.1 million, which was 110% higher than the first quarter of 2020 and 40% higher than the fourth quarter of 2020.

In December 2020, the Consolidated Appropriations Act, better known as the Coronavirus Relief Package, was passed. The legislation included additional funds for the Paycheck Protection Program (PPP). PPP Second Draw was launched in January of this year. As of March 31, 2021, Paragon had 366 additional loans authorized by the Small Business Administration (SBA). These loans totaled $38.4 million in loan volume and generated $1.9 million in gross fees being paid by the SBA. As of March 31, 2021, 546 of the original 799 PPP loans originated in 2020 had been forgiven. Loan volumes forgiven totaled $62.3 million of the total $94 million original PPP loans made. Paragon had $2.1 million (net of deferred loan costs) in unrecognized deferred first and second draw PPP fees as of March 31, 2021. These fees will be recognized over the life of the loans but are fully recognized when a loan is fully forgiven by the SBA.

Highlights for the first quarter of 2021 include the following:
  • During the first quarter of 2021, gross loans, excluding PPP loans, increased $14.2 million, or 17.72%, on an annualized basis.
  • During 2020 and into the first quarter of 2021, banks have experienced a record surge in deposit balances. Paragon’s core deposits increased 4.91%, or $19.5 million, during the first quarter and were $123.1 million more than on March 31, 2020. Demand deposits increased $45 million, or 58.34%, over the first quarter of 2020.
  • The increase in deposits since March 31, 2020, has allowed Paragon to pay down all our short-term borrowings and reduce our use of brokered deposits by approximately 62%, from $57.5 million to $21.9 million.
  • Paragon Bank’s regulatory capital ratios continued to be very strong at the end of the first quarter. The total risk-based capital, the tier one capital ratio, and the leverage ratio were 17.22%, 15.96%, and 9.99%, respectively.
  • Book value per share was $11.18 as of March 31, 2021, which was an increase of $.09 since the end of 2020. Book value has increased $.62 since March 31, 2020.
  • Total revenue of $5.6 million was the highest revenue total for any quarter in Paragon’s history.
  • First quarter revenue increased 32.5% over the same period in 2020. Included in total revenue was an increase in core non-interest income of $125 thousand over the first quarter of 2020. This increase was led by a 207% increase in mortgage banking revenue.
  • Aided by PPP loans and fees, Paragon’s net interest income was a quarterly record for the second consecutive quarter. Net interest income of $4.55 million during the first quarter was 4% higher than the fourth quarter of 2020 and 37.4% higher than the same period in 2020.
  • Aided by the recognition of fees on forgiven PPP loans, the net interest margin increased from 3.66% during the fourth quarter of 2020 to 3.98% during the first quarter of 2021. Excluding PPP, net interest margin would have been 3.40%.
  • Non-interest expense for the first quarter of 2021 was a nominal increase of 1% over the first quarter of 2020. The stable non-interest expense coupled with record core revenue, produced an efficiency ratio of 62.1% for the first quarter of 2021, which was a quarterly record for Paragon Bank.
  • Nonperforming assets decreased again in the first quarter of 2021 to $407 thousand. The ratio of nonperforming assets to assets declined to 0.08%, which was the lowest ratio of nonperforming assets since the first quarter of 2007.
  • Despite excellent asset quality, Paragon added $973 thousand to the loan loss allowance in the first quarter in case there are losses related to the pandemic. The ratio of the allowance for loan losses to gross loans excluding government guaranteed loans increased to 2.36% on March 31, 2021, compared to 1.97% on December 31, 2020.

When the COVID-19 global pandemic began, bank regulators encouraged banks to work with their customers to get through the difficult time. Many banks, including Paragon, deferred loan payments for customers. Since the pandemic began, Paragon has deferred payments on approximately $61.4 million in loan balances. At the end of the first quarter, more than 96% of the loans deferred were current or had resumed making payments. Only 7 loans, or $2.5 million in loan balances, have had an additional deferral or are past due.

 
About Paragon Bank

Since its founding in 2005, Paragon Bank has maintained a solid focus on the community and customer service and in 2018 opened its full-service Oxford Banking Center. For 16 years, Paragon has delivered innovative products and financial expertise, convenience, and a deep understanding of what both businesses and individuals need from a bank, in order to provide solutions that make a difference. In the areas of business or personal banking, lending options or wealth management, Paragon delivers cutting edge technology, an experienced team and the most service-oriented staff of any community bank.

For more information about Paragon Bank, please call (901) 273-2900, the Oxford Banking Center at (662) 259-8306 or visit us online at www.bankparagon.com.

 
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Contact:
Aisling Maki, Senior Public Relations Account Executive
aisling@creativeinferno.com, (901) 278-3773

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