Paragon Financial Solutions, Inc. hosted its annual shareholders’ meeting at the Paragon Bank Fountain Place Banking Center on June 17. During the meeting, CEO Robert Shaw, President and COO Mike Edwards and CFO Lewis Perkins presented the bank’s 2013 achievements and other financials, as well as the strategic priorities for the coming year.
The meeting opened with official shareholder business, including the re-election of Dr. James F. Freeman, Lauren Boggs McHugh, Christian J. Saenger and Robert S. Shaw, Jr. to the Board of Directors. Shaw stated that the 2014 Stock Option Plan was approved. Crowe Horwath was also authorized as Independent Registered Public Accounting Firm for 2014.
Following the completion of official business, Shaw, Edwards and Perkins reviewed the bank’s progress in accomplishing 2013 goals, which included maintenance of strong capital positions, increased loan volume and a significant reduction in Paragon’s nonperforming assets.
Paragon maintained a strong capital position and as of March 31, 2014, the bank’s Tier 1 Leverage Ratio, Tier 1 Risk-Based Capital Ratio and Total Risk-Based Capital Ratio were 10.65%, 14.51% and 15.77% respectively. Furthermore, as of December 31, Paragon’s book value increased to $7.85, with a stock price increase of 50%.
The bank had a solid year in core deposit generation, including an increase in demand deposits, interest-bearing checking deposits, savings account deposits and money market deposits. Overall, core deposits increased 7% for the year.
Paragon successfully reduced its nonperforming assets by 47% in 2013. Additionally, classified assets, which include loans recognized to have weaknesses and bank-owned real estate, have decreased 63% since their peak and decreased 25% during 2013. This accomplishment will not only improve the bank’s net interest margin, which is already trending up after the first quarter of 2014, but it will also reduce non-interest expenses and create a reduction in general expenses for the bank. Since December of 2008, Paragon has disposed of more than $50 million in nonperforming assets, with an 85% recovery rate.
While Paragon focused on reducing its nonperforming assets, it was also able to decrease non-interest expense for 2013. During the year, Paragon experienced an 8% increase in loans and assets, with a growth of $15 million in total loans as of December 31. The bank also garnered an increase in pre-tax income of 61%.
“We’re proud of the efforts our board members and team made in 2013,” said Shaw. “Those efforts are reflected in our sustained profitability and the investment in our customers and the community. In 2014, we’ll continue to maintain asset quality, improve net interest margin and operating efficiency, and focus on our corporate growth plan.”
Other highlights for the year included the launch of Paragon Wealth, a division of Paragon Bank, and the company’s continued commitment to nonprofit and community organizations, including the Make-A-Wish Foundation of the Mid-South, Neighborhood Christian Center, Memphis Child Advocacy Center and Community Lift.