Paragon Bank announces most profitable first quarter in its history

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May 19, 2020
Memphis, Tenn., May 1, 2020 – Paragon Bank (OTCBB: PGNN.OB) today announced that its net income increased 12%, making it the most profitable first quarter in the Memphis-based bank’s 15-year history – a historic increase that comes despite dealing with the onslaught of COVID-19 during the Q1 of 2020. 
“We are grateful to be able to share these positive results, considering how the COVID-19 pandemic has impacted the economy,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “The fiscal implications of the pandemic will become clearer in the coming months, but we feel we are entering this cycle on strong financial footing.” 
Highlights from the first quarter of 2020 include:
• Paragon’s loans increased slightly to $334 million during the first quarter. Draws on existing loans and new loans funded totaled approximately $31 million. Those increases were offset by loans paid off and other payments received on loans.        
• Investment securities increased approximately $7.6 million, or 13% during the first quarter. Excess cash balances were invested in several securities during a time when interest rate spreads were favorable.
• Demand deposits were approximately $77 million, down $51.4 million from December 31, 2019. The decrease was not related to losing any significant depository relationships. At year end, demand deposits were higher due to seasonal and temporary deposits from our customers.
• Core deposits have increased $24.7 million, or 9.15% since March 31, 2019.
• Net interest margin decreased from 3.53% during the fourth quarter of 2019 to 3.41% for the first quarter of 2020. To combat the COVID-19 impact on the economy, the Federal Reserve dropped the prime interest rate twice totaling 1.5% during March. As a result, the rate on earning assets decreased quickly. While the cost of Paragon’s deposits dropped during this time, it will take some months for maturing deposits to mature and decrease the cost of funds further. 
• Non-interest income increased approximately 26% over the first quarter of 2019 due primarily to gains on sales and calls of investment securities. 
• During the first quarter of this year, noninterest expense was relatively flat compared to the first quarter of 2019, increasing less than $13,000 or .37%.
• Nonperforming assets decreased slightly to approximately $719 thousand. The ratio of nonperforming assets to total assets decreased from .19% to .17%, which is well below the healthy benchmark of 1% and the lowest it has been since the first quarter of 2007.
• The ratio of the allowance for loan losses to gross loans increased from 1.15% at December 31, 2019, to 1.20% at March 31, 2020.
In addition to the positive first quarter of 2020, Paragon Bank will host their Annual Shareholders meeting virtually this month. 
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 nearly 15 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
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Kimberly McManis, inferno, (901) 278-3773