Paragon reports lower third-quarter profit

The parent company of Paragon Bank on Tuesday reported lower third-quarter profit compared with the same quarter a year ago.

Raleigh-based Paragon Commercial Corp. said it had $1.5 million in profit, or 34 cents per share, down about 30 percent from $2.2 million a year ago.

The company blamed the lower profit primarily on a $480,000 reduction it made in the third quarter of last year to its reserves for loans that go bad. That reduction helped third-quarter 2013 income, Paragon said.

The bank did not add to its reserves in the recent third quarter. That comes as other banks have also been setting aside less money to cover soured loans as the number of problem loans on their books keeps falling.

Paragon said its net interest income rose by about $792,000 in the quarter from a year ago. Its total deposits increased by $126.2 million, or 17 percent. Its loans increased by $73.5 million, or 10 percent, to $820.9 million.

The company's total assets were $1.14 billion at the end of the third quarter, up from $1.04 billion at the end of last year.

“Management and the board are extremely excited about Paragon Bank’s earnings and overall balance sheet growth over the past 12 months,” Paragon President Bob Hatley said in a statement. “We are well positioned for further growth and profitability in 2015.”

Paragon has three offices, all in North Carolina. They are in Raleigh, Charlotte and, as of this month, Cary.

The company said the opening of the Cary office was a factor in its non-interest expenses rising to $5.7 million from $4.8 million in the second quarter of this year.

Paragon employs about 24 people in Charlotte. Earlier this year it open a new Charlotte office at 6337 Morrison Blvd. Prior to that it was in Piedmont Town Center.

Last year, Paragon "refreshed" its brand, rolling out a new logo and website as part of a strategy to draw more attention to its private-banking services. That move came after the bank changed its name last year from Paragon Commercial Bank in an effort to make potential customers think of it as more than just a lender to businesses.