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Paragon Bank reported improved profitability during 2014, with a 53% increase in core earnings and the implementation of several initiatives that will contribute to additional growth and continued improvement to the bottom line.
“We are pleased with the continued growth and evolution of the bank, due in large part to our loyal customers and the dedication of our employees,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “We look forward to building on the momentum from a solid year, as we head further into 2015.”
Adding to the success of 2014, Paragon continued its efforts to improve efficiencies through several initiatives. The company converted from a nationally-chartered bank to a Tennessee-chartered bank; formed a holding company, Paragon Financial Solutions; added three experienced Wealth Advisors to its Wealth Solutions team; executed new leases for its Paragon Place and Grove Park banking centers; and formed the Paragon Small Business Capital Group, based in Atlanta, with a geographic footprint to serve the markets of Atlanta, Denver and St. Louis.
Other highlights from the year include:
· Income before taxes for 2014 increased $865,000, or 78%, over 2013, excluding the Small Business Capital Group investment. Total pre-tax income for 2014 was $1.1 million, approximately $36,000 less than 2013.
· Net interest margin increased to 3.73% in 2014, compared to 3.5% in 2013. This increase was aided by a large recovery of a previously charged-off loan. Barring the loan recovery, net interest margin would have increased to 3.62%.
· Net interest income increased $1.2 million, or 14.6%, from 2013 to 2014, due to growth in loan volumes and net interest margin.
· Excluding mortgage banking income, which decreased nationwide due to an increase in long-term interest rates, core non-interest income increased 13.72% from 2013 to 2014. Income from the bank’s Solutions suite of products continued to increase.
· Paragon experienced solid loan growth, with an increase of $17.6 million, or 8.9%. This loan growth is expected to further improve earnings in 2015.
· Continued improvement in asset quality allowed Paragon to record a negative loan loss provision of $475,000 for 2014, compared to a $33,000 loan loss provision during 2013.
· Nonperforming assets decreased 40% during 2014, from $7.8 million to $4.7 million or 1.73% of total assets.
· Demand deposits increased $5.3 million, or 11.6%, during 2014.
Book value per share increased from $7.46 at the end of 2013 to $7.89 at the end of 2014.