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Paragon Bank reported continued growth in revenue in Memphis, with additional investment in the Small Business Capital Group (SBCG) based in Atlanta. Driven by revenue from the SBCG and mortgage lending, core non-interest income increased by 96%, or $310,000.
“Throughout our 10-year history, we have built our success on exceeding customers’ expectations – implementing new products and providing superior customer service – and giving back to the community,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “We stand by those core values as we move into the next 10 years, and look forward to improving on a strong start to the year.”
During the first three months of 2015, revenue from the SBCG increased to $207,000 compared to $38,000 at the end of the fourth quarter of 2014. Despite this improvement, Paragon had a net loss of $153,000 for the quarter. Excluding the results from the SBCG, net income for the Memphis operation increased 26% over the first quarter of 2014 to $201,000. Profits for both divisions are expected during the latter part of 2015.
Further highlights from the first quarter include:
· Non-interest income increased 631%, or $541,000, over the first quarter non-interest income of 2014.
· Mortgage banking income increased 87%, from $88,000 during the first quarter of 2014 to $164,000 during the first quarter of 2015.
· Interest income decreased $327,000 compared to the first quarter of 2014. Interest from loans decreased $228,000, while interest income on investments decreased $95,000. During the first quarter of 2014, Paragon collected interest on a loan that had previously been written off. As a result, the bank had a recovery of interest income of $287,000.
· Gross loans increased 4.3% (17% annualized), from $215.1 million on December 31, 2014 to $224.3 million on March 31, 2015.
· Driven by this loan growth, total assets increased approximately 6%, from $272 million on December 31, 2014 to $287 million on March 31, 2015.
· Total deposits grew 7%, or $16 million, during the first quarter of 2015. Demand deposits increased 9%, almost $5 million, which follows an increase of nearly 12% during 2014.
· Nonperforming assets increased slightly during the first quarter to $5.6 million. The ratio of nonperforming assets to total assets still remains below 2%, at 1.96% as of March 31, 2015.
· Book value per share increased from $7.89 to $7.93.
Additionally, Paragon celebrated its 10th anniversary and kicked off its #PB10for10 campaign during the first quarter. Much attention was placed on the bank-sponsored Assisting the Community Through Service (ACTS) program, in which each employee is given 40 hours of paid time to support nonprofit organizations. On March 24, at its 10th anniversary open house, the company announced it would be participating in a yearlong celebration and performing 10 ACTS of Kindness. These events will be held with nine nonprofit organizations with which Paragon has had 10 years of involvement, and with one new organization, Habitat for Humanity.
Paragon Bank reported solid results from the first quarter of 2014, with a pre-tax earnings increase of 119% over the first quarter of 2013. Adding to this news is Paragon’s announcement earlier this month that it transitioned to a state charter.
“Although the banking environment remains challenging, opportunities exist for a community bank that focuses on the customer’s needs,” said Robert Shaw, Chief Executive Officer at Paragon Bank. “We look forward to building on our strong start to 2014.”
During the first quarter, Paragon introduced iPay Biz 2.0, a new solution designed to streamline the back-office functions for small business. iPay Biz allows small businesses to pay bills online, track company spending and process payroll for employees.
Additional highlights from the first quarter include: