Paragon Bank Announces History Making Second Quarter

*Article Provided by our friends at Paragon Bank

Memphis, Tenn., August 25, 2020 – Paragon Bank (OTCBB: PGNN.OB) today announced its quarter two results for 2020. This marks another historic quarter for Paragon Bank, making this the highest-earning second quarter in its history. Year-to-date earnings for the first six months of 2020 were 18% higher than the first six months of 2019. “We are excited to share that the first half of 2020 showed our continued success with more record-breaking results despite the difficult operating environment,” said Robert Shaw, chief executive officer at Paragon Bank. “In an extraordinary team effort, we feel Paragon is entering this next cycle in a position of strength.”

Highlights from the second quarter of 2020 include the following:

• Loans increased by $82 million, or 25%, during the second quarter. The $94 million in PPP loans made during the quarter were the reason for the increase.

• Total assets increased by $84.9 million, or 21%, during the quarter driven by the increase in PPP loans.

• As a result of the pandemic, Paragon’s deposits have increased $68 million, or approximately 20%, during the second quarter.

• Paragon’s capital levels remain strong, with the total risk-based capital, tier-one and leverage ratios of 16.01%, 14.76% and 9.84% respectively.

• Tangible book value per share increased 20 cents per share during the second quarter from $10.56 to $10.76 as of June 30, 2020.

• Net interest income for the second quarter of 2020 increased $171 thousand over the first quarter of 2020. However, the net interest margin decreased from 3.41% of the first quarter of 2020 to 3.20% during the second quarter. Without the PPP loans, which yield 1%, the net interest margin for the second quarter would have been 3.28%.

• Noninterest income decreased $221 thousand from the second quarter of 2019 to the second quarter of 2020. Year-to-date noninterest income has increased by less than 1%.

• During the second quarter, Paragon’s mortgage team closed the second highest quarterly volume of mortgage loans in the bank’s history. Mortgage banking noninterest increased $251 thousand, or 209%, more than the first quarter of 2020 and $255 thousand, or 220%, more than the second quarter of 2019.

• For the second quarter, noninterest expense decreased $296 thousand, or 8.6%, from the first quarter of this year and decreased $471 thousand, or 13.1%, from the second quarter of 2019.

• Nonperforming assets decreased slightly to approximately $694 thousand. The ratio of nonperforming assets to total assets decreases from .17% to .14%, which is well below the healthy benchmark of 1% and the lowest it has been since the first quarter of 2007.

• During the second quarter, a $452 thousand provision for loan losses was made compared to $248 thousand made during the second quarter of 2019.

• Due to the large increase in loans, the ratio of the allowances for loan losses to gross loans decreased from 1.20% at March 31, 2020, to 1.08% at June 30, 2020. Excluding government-guaranteed loans, the allowance for loan losses increased from 1.30% at March 31, 2020, to 1.52% at June 30, 2020. In addition to a positive second quarter of 2020, Paragon remains socially distant during this pandemic. The bank has numerous tools that give customers the capability of banking when and where they choose during this time. 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 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 deliverscutting 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.