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Paragon Bank Announces Record-setting Close to 2020

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February 24, 2021
Memphis, Tenn., February 24, 2021 – Paragon Bank (OTCBBNN.OB) today announced its fourth quarter and year-end results for 2020. Paragon made approximately 800 Paycheck Protection (PPP) loans totaling $94 million to businesses negatively impacted by COVID-19, resulting in a record 2020 net interest income. 
 
“We are pleased to share these results despite being greatly impacted by the global pandemic and the resulting recession throughout the year,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “When the impact began to be felt locally, our attention focused on the well-being of our customers and staff.”
 
Highlights from the fourth quarter and year-end of 2020 include the following:
• Aided by the Paycheck Protection Program (PPP) loans, gross loans increased $59.7 million, or approximately 18%, during 2020. During the fourth quarter of 2020, gross loans decreased by $34.3 million, or 8%. The decrease was a result of $20.2 million in PPP loans forgiven, $11.6 million in other loans paid off, and approximately $4 million in SBA loans sold. 
• Paragon’s net interest margin increased from 3.14% in the third quarter of 2020, to 3.66% during the fourth quarter. The primary reason for the large increase was recognition of deferred loans fees on PPP loans forgiven during the quarter. 
• Nonperforming assets decreased from $676 thousand to $620 thousand during the fourth quarter of 2020. The ratio of nonperforming assets decreased from .14% to .13%.
• Net interest income of $4.4 million during the fourth quarter was 24% higher than the fourth quarter of 2019 and a record for quarterly net interest income. Net interest income for 2020 was $15.2 million, an increase of approximately 8%, and also a record for Paragon. 
• Despite excellent asset quality, the provision for loan losses was $941 thousand for the fourth quarter of 2020 compared to $455 thousand for the fourth quarter of 2019. For the year 2020, the loan loss provision was approximately $1.9 million compared to $800 thousand during 2019.
• During Q4, noninterest income decreased approximately $401 thousand from the third quarter. The largest decrease was in income from Paragon’s Small Business Capital Group, which saw fewer sales of SBA loans. 
• For 2020, mortgage banking was at an all-time high for Paragon. Mortgage banking income increased 90.9%, from $582 thousand in 2019 to $1.1 million in 2020.
• Total deposits increased 22.7%, or $78.4 million, during 2020. Demand deposits increased $28.4 million, or 30.7%, during the year. 
• Noninterest expense for 2020 increased 2% over noninterest expense in 2019.
• The ratio of the loan loss allowance to gross loans at December 31, 2020, was 1.45% compared to 1.15% at the end of 2019. The ratio of the loan loss allowance to gross loans excluding fully guaranteed loans at December 31, 2020, was 1.97%.
• At December 31, 2020, book value per share was $11.09 compared to $10.32 at December 31, 2019.
• Paragon deferred payments on approximately $60.6 million in non-government guaranteed loan balances. At the end of 2020, more than 97% of the loans deferred are current or have resumed making payments. Only $1.6 million have had another deferral or are past due. 
• At year-end, Paragon Bank’s regulatory capital levels were very strong. The total risk-based capital ratio was 17.20%, while the tier one capital ratio was 15.94%. The leverage ratio was 9.87%.
 
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 more than 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:
Kimberly McManis, inferno
kimberly@creativeinferno.com, (901) 278-3773

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