Paragon Commercial Corporation Reports 22% Increase in Earnings for the Fourth Quarter of 2016

Paragon Commercial Corporation (NASDAQ:PBNC), parent company of Paragon Bank, has reported unaudited financial results for the three- and twelve-month periods ended December 31, 2016. Net income during the three-month period increased 22 percent to $3.6 million compared to $3.0 million for the same period in 2015.
As quoted in the press release:

The increase in earnings was primarily driven by an increase in net interest income as a result of continued loan growth. The increase in net interest income was partially offset by a $200,000 loan loss provision as the Company increased its Allowance for Loan Losses commensurate with loan growth. In addition, the fourth quarter of 2016 included $443,000 in loss on write-down of foreclosed properties compared to only $287,000 for the same period in 2015. Fully diluted earnings per share (“EPS”) for the period were $0.67, an increase of $0.02 from the same period in 2015 despite the additional shares issued as a result of the Company’s initial public offering (“IPO”) and listing on Nasdaq during the second quarter of 2016. Despite increasing the share count by approximately 18% as a result of the IPO, the share addition only resulted in EPS dilution for one quarter. For the year ending December 31, 2016, the Company reported net income of $13.4 million, an increase of 19% over the $11.2 million of net income for the same period in 2015. Robert C. Hatley, President and CEO, stated, “We continued our steady growth and performance in the fourth quarter. 2016 proved to be the most successful year in Paragon’s 17-year history. Our performance in loan growth, efficiency, credit quality, profitability, and deposit growth placed Paragon as a high achieving bank. We also completed a successful initial public offering in June. We are extremely pleased with the performance in our stock since our June IPO. This could not be accomplished if it were not for our staff, our unique business model, and the outstanding markets we serve.”
The annualized return on average assets for the fourth quarter of 2016 was 0.97% and the annualized return on average equity was 10.68% compared to 0.89% and 12.26%, respectively, for the same ratios in the fourth quarter of 2015. Those ratios were impacted by the additional capital as a result of the IPO.

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