Paragon Bank Reports Record-Setting Pre-Tax Net Income for 2019



Paragon Bank today announced its 2019 financial earnings, reporting record net income before taxes at $4.3 million. During 2019, the core bank of Paragon, excluding its SBA-related units (Small Business Capital Group and Specialty Lending), had record revenue and record pre-tax income. Pre-tax income for the core bank increased 61%, to $4.4 million, in 2019.

“We are excited to share positive results for the 2019 calendar year, which are a direct reflection of our team and loyal customers,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “We look forward to sustained financial growth as we move further into 2020.”

Additional highlights from the fourth quarter and 2019 overall include:
• During the third and fourth quarters of 2019, Paragon discontinued the Specialty Lending line of business. Excluding Specialty Lending, Paragon would have reported a record net interest income of $13.6 million and pre-tax income of $5.4 million for 2019.
• Core bank loans, which exclude Paragon SBA-related businesses, decreased $4.1 million in the fourth quarter. Despite the decrease in core bank loans during the fourth quarter, core bank loans increased by $12.4 million, or 4.5%, during 2019.
• Demand deposits increased approximately 30% on an annualized basis during the fourth quarter, and 15% for 2019.
• Core deposits increased approximately 19% on an annualized basis during the fourth quarter, and increased 15% for the year.
• Net interest margin dropped from 3.94% for 2018 to 3.62% for 2019 due to a reduction in loan fees and an increase in deposit costs. The largest cause of this drop was the reduction in loan fees due to the winding down of the Specialty Lending line of business.
• For 2019, noninterest income increased slightly over 2018, by 1%. Core-bank, core-noninterest income increased $219,000, or 12%, to $2 million, led by increases in mortgage banking income (31%), service charges and fee income (23%), and Wealth Solutions income (10%).
• Noninterest expense decreased 4%, or $587,000, from 2018 to 2019.
• Nonperforming assets, net of government guarantees, decreased from $1.1 million at September 30, 2019, to $764,000, at December 31, 2019. The ratio of nonperforming assets to total assets decreased from .26% to .19%.
• At December 31, 2019, the ratio of the allowance for loan losses to gross loans was 1.15%, which continues to exceed the ratio of Paragon’s peer group.

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