Paragon Financial Solutions, Inc. (tn) · OTC:PGNN
Paragon Financial Solutions, Inc. (tn) — Paragon Financial Solutions — Shareholder Meeting (May 2023)
103 slides from Paragon Financial Solutions, Inc. (tn)'s shareholder meeting presentation, May 18, 2023
Slide 1: 2023 Shareholder Meeting
2023 Shareholder Meeting May 18, 2023 People you know. Solutions that work.
Slide 2: Call to Order and Welcome
Call to Order and Welcome Craig Weiss, Chairman of the Board People you know. Solutions that work.
Slide 3: Invocation
Invocation Napoleon Cassibry, Board Member People you know. Solutions that work.
Slide 4: Business Meeting
Business Meeting Robert Shaw, President and CEO People you know. Solutions that work.
Slide 5: Paragon's Board of Directors
Paragon’s Board of Directors • Steve Bargiacchi • Christian John (Chris) Saenger • Napoleon L. (Nap) Cassibry, III • Robert S. Shaw, Jr. • James F. Freeman, M.D. • Pete A. Stark • Lawrence (Larry) M. Magdovitz, II • Anita S. Vaughan • Mary H. McDaniel • Craig L. Weiss, Chair • John T. (J.T.) Novares
Slide 6: Paragon's Executive Team
Paragon’s Executive Team • Robert Shaw – President and Chief Executive Officer • Andy Taylor – Executive Vice President, Chief Banking Officer • Marshall Talley – Executive Vice President, Chief Credit Officer • Lewis Perkins – Executive Vice President, Chief Financial Officer People you know. Solut
Slide 7: Business Meeting
Business Meeting • Procedural Details • Proof of Notice of Meeting • Report on Quorum; Proxies • Proposals and Discussions People you know. Solutions that work.
Slide 8: Two Items of Business
Two Items of Business • Election of Directors: The Board recommends the following nominees: Class B Director: • Lawrence (Larry) M. Magdovitz, II Class C Directors: • Steve Bargiacchi • James F. Freeman, M.D. • Christian (Chris) John Saenger • Robert S. Shaw, Jr. • Ratification of Independent Audito
Slide 9: Results of Voting
Results of Voting • Procedural Details • Proof of Notice of Meeting • Report on Quorum; Proxies • Proposals and Discussions Business Meeting Adjournment People you know. Solutions that work.
Slide 10: Executive Officer Remarks
Executive Officer Remarks Robert Shaw, President and CEO Lewis Perkins, Chief Financial Officer People you know. Solutions that work.
Slide 11: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "expect,"
Slide 12: Groundwork for Growth
GROUNDWORK FOR GROWTH People you know. Solutions that work.
Slide 13: Paycheck Protection Program (PPP)
Paycheck Protection Program (PPP) All Loans Forgiven 2020 2021 2022 Total Number of Loans 799 425 0 1,224 Volume of Loans 94,094 42,229 0 136,323 Jobs Impacted 9,696 1,841 0 11,537 Loan Income 644,702 483,692 24,224 1,152,618 Loan Fees 1,665,933 3,159,437 300,562 5,125,932 Interest Expense (230,893)
Slide 14: Wilmington
Wilmington
Slide 15: Wilmington milestones
Devised plans for new offices, selected contractor, and ordered furniture and equipment April 2022: Added an experienced retail team: Kimberly Graham, Elaine Popkin, and Michelle Jacobs Sept. 2022: Completed construction and moved from temporary offices into new space Nov. 2022: Installed Paragon’s
Slide 16: Tupelo
Tyvek ek Tyee Tye
Slide 17: Oxford milestones
April 2022: Groundbreaking ceremony May 2022: Quentin Brewer joined the team as a Private Banker Formed an Oxford Advisory Board of Directors February 2023: Installed an Interactive Teller Machine to be left at current downtown location March 2023: Helean Davis joined the team as the Banking Center
Slide 18: Forecast
Forecast Wilmington ACTUAL 2021 2022 2022 2023 2024 Loans (in 000's) 0 40,726 90,115 81,452 122,178 Oxford ACTUAL 2021 2022 2022 2023 2024 Loans (in 000's) 13,430 24,039 19,841 33,222 42,404 Total ACTUAL 2021 2022 2022 2023 2024 Loans (in 000's) 13,430 64,765 109,956 114,674 164,582 People you know.
Slide 19: Atlanta
Slide 20: Atlanta milestones
Moved Cash Recycler from Oxford and set up retail banking equipment to begin retail banking in Atlanta June 2022: Yolanda Jackson joined Paragon as first retail team member June 2022: Michael Brennan joined the team as a Mortgage Consultant April 2023: Identified and leased a new location in Buckhea
Slide 21: Paragon Bank
®@ Paragon Bank non
Slide 22: Memphis lending team growth
January 2022: Jay Pearson joined the Commercial Lending team February 2022: Greg Wilson joined the Commercial Lending Team April 2022: Will Stockton joined the Commercial Real Estate team October 2022: Added new space to accommodate growth Fountain Place Banking Center will soon be known as Paragon
Slide 23: Deposit Gathering and Bank Convenience Tools
Deposit Gathering and Bank Convenience Tools Nov. 2022: Interactive Teller Machines (ITMs) Feb. 2023: Touchless Cards March 2023: New Website March 2023: Online Account Opening May 2023: Launched Zelle - Enhanced Person-to-Person Payments
Slide 24: Hours spent serving our communities
1,814 hours Team Paragon spent serving our communities (Up 61%) 92.6 percent of Paragon Team Members participated in ACTS 61 Organizations were impacted by Paragon Team Members 18.1 average number of ACTS hours per team member 14,758 hours spent by Paragon Team members since 2008 “It’s a Good Time t
Slide 25: Best Places to Work awards
Trifecta! iS) AMERICAN BANKER, Best Banks MEMPHIS BUSINESS JOURNAL BI) P| ¢ |W 2022 BEST PLACES TO WORK to Work For COMMERCIAL APPEAL 5 years in a row!
Slide 26: American Banker: #4 Bank in the U.S.!
American Banker: #4 Bank in the U.S.! 4th Consecutive Year in Top 10! People you know. Solutions that work.
Slide 27: Memphis
Slide 28: Deposits
DEPOSITS People you know. Solutions that work.
Slide 29: Total Deposits
Total Deposits 20% (end of period in millions) annualized 18% 595 600 13% 566 23% 480 500 424 400 343 346 302 279 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 1Q23 Brokered Deposits 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 3/31/2023 (in millions) 57.7 70.3 41.1 29.6 19.6
Slide 30: Core Deposits
Core Deposits (end of period in millions) 500 PPP1 PPP2 486 469 463 471 461 454 450 418 422 404 398 400 370 373 350 307 295 300 250 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 31: Deposit Mix
Deposit Mix (in thousands) December 31, 2021 December 31, 2022 RETAIL CDS, WHOLESALE CDS, $23,761 $19,624 WHOLESALE CDS, DDA's, DDA's, $100,059 $159,425 MMDA, $165,548 RETAIL CDS, $35,408 $112,320 MMDA, NOW, $129,058 $146,619 NOW, SAV, $131,747 $10,671 SAV, $9,063
Slide 32: Deposit Mix
Deposit Mix (in millions) 596 603 566 700 600 112 119 100 500 35 55 59 129 144 146 400 300 132 126 141 11 9 200 9 159 149 130 100 0 12/31/2022 3/31/2023 4/30/2023 DDA SAV NOW MMDA CDS WHOLESALE
Slide 33: DDAs to Average Total Deposits
DDAs to Average Total Deposits (end of period) 30.00% 28.21% 28.00% 26.68% 26.00% 23.61% 23.43% 24.00% 22.00% 20.75% 20.83% 20.69% 19.98% 20.00% 18.00% 16.00% FDIC Peer at 3-31-2023 14.00% 24.14% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 1Q23
Slide 34: Insured Deposit Ratio
Insured Deposit Ratio 90.00% 81.10% 78.70% 80.20% 80.00% 78.80% 73.40% 70.00% 60.00% 4Q2019 4Q2020 4Q2021 4Q2022 1Q2023
Slide 35: Sources of Liquidity
Sources of Liquidity March 31, 2023 – in millions Federal Funds Sold & Interest-Bearing Bank Deposits 12.1 Federal Home Loan Bank Line of Credit 81.4 Federal Funds Purchased 43.1 Federal Reserve Bank Discount Window 28.9 Purchased Loans/Unpledged USDA/SBA Loans 24.5 SBA/USDA Guaranteed Loans Held 49
Slide 36: Investments
INVESTMENTS People you know. Solutions that work.
Slide 37: Cash & Cash Equivalents
Cash & Cash Equivalents (end of period in millions) 100 90 80 71 70 60 50 40 35 33 29 25 30 21 20 12 13 8 12 4 6 8 10 0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 38: Total Investments
Total Investments Average Life 4.6 Years (end of period in millions) 100 88 90 80 73 68 71 70 62 60 53 51 47 50 41 37 40 30 20 10 0 4Q07 4Q15 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 1Q23
Slide 39: Historical Fed Funds Rate
Historical Fed Funds Rate 22.00% 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 1960 1970 1980 1990 2000 2010 2020
Slide 40: Fed Officials Have Tightened Policy Aggressively
Fed Officials Have Tightened Policy Aggressively in an Effort to Tame Historic Inflation Change in Fed Funds During Rate-Hike Cycles 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Page 1 Actual through Apr. 2023 Sources: Bloomberg, Stifel 2022-2023 18 eal 24 Months from First Hike 27 30 33 36 39 STIFEL| 42 Fixe
Slide 41: Pre-Tax Unrealized Gain/(Loss) on Investments
Pre-Tax Unrealized Gain/(Loss) on Investments (in thousands) 3,000 1,654 993 606 700 424 1,000 (100) -1,000 (1,118) (1,044) (1,422) (1,846) -3,000 (3,003) -5,000 (5,645) (5,860) -7,000 (6,876) (7,880) -9,000 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 4Q20 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 42: Unrealized Loss to Capital
Unrealized Loss to Capital Local Peers 3-31-2023 Total % of OCI OCI Equity Loss Bank of Bartlett (18,857) 26,361 -41.70% Bank of Fayette County (6,190) 76,354 -7.50% Bank3 (2,352) 38,295 -5.79% BankTN (2,439) 45,681 -5.07% Paragon Bank (5,088) 49,225 -9.37% OCI is Other Comprehensive Income which is
Slide 43: Investment Securities % of Total Assets
Investment Securities % of Total Assets March 31, 2023 100% 80% 60% 40% 24.98% 11.60% 20% 0% Paragon Bank FDIC Peer Group
Slide 44: Asset Trends
ASSET TRENDS People you know. Solutions that work.
Slide 45: Total Assets
Total Assets (end of period in millions) 21% 669 700 654 600 539 484 500 401 404 352 377 400 304 300 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 46: Total Loans
Total Loans (end of period in millions) 572 600 555 500 393 394 400 331 333 289 315 300 246 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 47: Total Loans
Total Loans 2022 Loan Growth: UBPR Peers 13.02% (end of period in millions) Local Peers 15.63% 600 500 393 394 400 9 572 75 555 300 12% annualized 385 200 289 315 331 333 318 246 44% 100 21% 0 2015 2016 2017 2018 2019 2020 2021 2022 1Q23 Bank Loans PPP Loans
Slide 48: Number of Loans Originated
Number of Loans Originated 2019 2020 2021 2022 1Q2023 Regular Loans 566 419 453 921 234 PPP Loans 799 428 0 Total Originated 566 1,218 881 921 234
Slide 49: Mortgage Banking
Mortgage Banking (thousands) 2020 2021 2022 1Q23 Total Loans Closed $88,521 $68,304 $72,769 $13,140 Loans Sold $57,187 $51,098 $28,318 $2,252 % Sold 64.60% 74.81% 38.92% 17.14% Loans Kept $31,334 $17,206 $44,451 $10,889 Mortgage Fee Income $1,112 $1,149 $589 $61 People you know. Solutions that work.
Slide 50: Government Guaranteed Loans Retained
Government Guaranteed Loans Retained 2021 2022 Gross Loans Kept 27,223,300 25,351,683 Guaranteed Loan 22,258,370 19,177,778 Fee Given Up 1,944,786 849,292 Interest Income 261,549 347,573 Subtotal 2,206,335 1,196,865 Annual Interest Income 1,435,181 1,435,211 Time to Make Up Fee 1.54 0.83 In Months 1
Slide 51: Loan Mix
Loan Mix as of March 31, 2023 Individuals, 2.54% Other, 0.21% Constr & Land Dev, Farmland, 5.03% 13.16% Comm & Ind, 21.72% Home Equity, 5.78% Nonfarm Nonresid, 12.84% 1-4 Fam Resid, 21.88% Owner Occupied, 14.84% Multifamily, 2.00%
Slide 52: Loan Location
Loan Location as of April 30, 2023 MS, 4.96% Other, 17.31% GA, 6.74% TN, 52.86% NC, 18.13%
Slide 53: Office Loans
Office Loans March 31, 2023 Current Original Balance Amount Size Location LTV DSC Occupied 1 1,942,516 2,250,000 122,653 Memphis, TN 56.00% 1.53 100% 2 932,817 970,485 4,065 Tupelo, MS 71.00% 1.39 100% 3 101,791 135,000 2,900 Memphis, TN 46.00% 1.37 100% 4 353,609 1,100,000 15,800 Memphis, TN 25.00%
Slide 54: Capital
CAPITAL People you know. Solutions that work.
Slide 55: Capital Ratios
Capital Ratios 18.00% 17.20% 15.98% 16.00% 15.37% 15.38% 14.22% 14.19% 14.48% 15.94% 14.00% 14.72% 14.11% 14.19% 12.12% 13.22% 12.03% 12.00% 12.96% 12.94% 10.00% 11.07% 10.87% 10.78% 10.50% 10.51% 10.21% 10.43% 9.87% 9.56% 8.00% 8.53% 8.45% 6.00% 4Q15 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 1Q23 Total RB
Slide 56: Capital Ratios: Memphis-Based Community Banks
Capital Ratios Memphis-Based Community Banks, December 31, 2022 Total Trust Pre Risk-Based Tier 1 Leverage Hld Co Loan Capital Capital Ratio (000's) * Financial Federal N/A N/A 11.35% Bank3 10.67% 9.79% 9.20% 4,920 Paragon Bank 12.12% 10.87% 8.53% ** Bank of Fayette County N/A N/A 9.83% 6,900 Bank o
Slide 57: Credit Quality
CREDIT QUALITY People you know. Solutions that work.
Slide 58: Loan Loss Allowance
Loan Loss Allowance 2020 2021 2022 1Q23 Beginning Allowance 3,837,252 5,706,729 7,095,631 6,911,988 Loan Loss Provision 1,861,000 973,000 0 0 CECL Adjustment 0 0 0 1,500,000 Net (Charge Offs)/Recoveries 8,477 415,902 (183,643) 1,234 ----------- ----------- ----------- ----------- Ending Allowance 5,
Slide 59: Nonperforming Assets
Nonperforming Assets (end of period $000) 16,000 14,675 14,000 12,000 10,000 7,843 8,000 6,000 4,706 4,000 2,087 1,682 1,332 1,447 764 2,000 620 555 699 976 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q2023
Slide 60: Nonperforming Assets as a % of Total Assets
Nonperforming Assets as a % of Total Assets 8.00% 7.35% 7.00% 6.00% 5.00% 4.00% 2.88% 3.00% 1.73% 2.00% 0.69% 0.48% 1.00% 0.35% 0.36% 0.19% 0.13% 0.10% 0.11% 0.15% 0.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 61: Loan Loss Reserve to Gross Loans
Loan Loss Reserve to Gross Loans (end of period) 2.50% 2.00% 1.80% 1.49% 1.47% 1.44% 1.45% 1.39% 1.45% 1.47% 1.50% 1.31% 1.25% 1.17% 1.15% 1.00% 0.50% 0.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 62: Loan Loss Reserve to Gross Loans
Loan Loss Reserve to Gross Loans (end of period – excluding fully government-guaranteed loans) 2.50% 2.26% 1.97% 2.00% 1.70% 1.56% 1.62% 1.58% 1.58% 1.53% 1.43% 1.45% 1.50% 1.29% 1.25% 1.00% 0.50% 0.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 63: Income Statement
INCOME STATEMENT People you know. Solutions that work.
Slide 64: Noninterest Expense
NONINTEREST EXPENSE People you know. Solutions that work.
Slide 65: Noninterest Expense
Noninterest Expense 20,000 24% 18,000 Average Increase 2% 8% 16,000 14,000 12,000 10,000 18,574 8,000 13,693 14,006 14,144 13,557 13,847 14,985 12,557 6,000 4,000 2,000 4,866 0 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 66: Producers
Producers (Relationship Mgrs., Business Dev. Officers, Mortgage Consultants) 26 26 30 24 25 20 18 20 15 10 5 0 12/31/2019 12/31/2020 12/31/2021 12/31/2022 3/31/2023
Slide 67: Noninterest Expense
Noninterest Expense 2020 2021 2022 Salary & Benefits 9,649 9,602 -0.5% 9,952 3.6% Other Expenses 5,087 5,041 -0.9% 5,185 2.9% FDIC Assessment 139 148 6.5% 452 205.4% Deferred Loan Costs (1,028) (1,018) -1.0% (637) -37.4% Wilmington - 311 1,712 450.5% Producers & Support - 901 1,910 112.0% Total 13,8
Slide 68: Revenue
REVENUE People you know. Solutions that work.
Slide 69: Prime Rate
Prime Rate 9.00% 8.25% 8.00% 7.75% 8.00% 7.50% 7.00% 7.00% 6.25% 6.00% 5.50% 5.50% 5.25% 5.25% 5.00% 5.00% 5.00% 4.75% 4.75% 4.75% 4.25% 4.00% 4.00% 3.50% 3.25% 3.00% 2.00% 1.00% 0.00%
Slide 70: Total Revenue
Total Revenue (in 000’s) 6,839* 6,880* 7,000 6,319* 582 809 5,565 5,657* 6,000 5,230 665 5,029 5,231 5,301 5,156 5,014 28 4,729 672 5,000 1,016 131 4,200 855 1,153 1,021 730 1,257 813 998 158 4,000 999 1,277 708 889 702 787 516 565 3,000 6,257 6,071 5,626 4,854 2,000 4,043 3,311 3,215 3,207 3,376 3,
Slide 71: Net Interest Margin
Net Interest Margin 4.50% 4.18% 4.08% 4.10% 3.94% 3.98% 4.01% 3.92% 4.00% 3.66% 3.71% 3.99% 3.62% 3.56% 3.54% 3.50% 3.41% 3.50% 3.33% 3.63% 3.20% 3.26% 3.47% 3.40% 3.39% 3.28% 3.00% 3.14% 3.16% 3.18% 3.05% 2.50% 2.00% 1.50% 1.00% 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
Slide 72: Earning Assets and Cost of Funding
Earning Assets and Cost of Funding 6.00% 5.56% 5.19% 5.00% 4.46% 3.88% 4.00% 3.41% 3.00% 2.00% 1.64% 1.10% 1.00% 0.45% 0.14% 0.17% 0.00% 1Q22 2Q22 3Q22 4Q22 1Q23 -1.00% Earning Assets Cost of Funding
Slide 73: Interest Expense
Interest Expense 4.00% 3.44% 3.50% 3.00% 2.85% 2.42% 2.47% 2.39% 2.50% 2.22% 2.00% 1.82% 2.22% 1.50% 1.01% 1.07% 1.00% 0.84% 1.29% 1.07% 1.11% 1.15% 1.09% 0.98% 0.64% 0.46% 0.53% 0.54% 0.54% 0.54% 0.50% 0.37% 0.60% 0.65% 0.44% 0.39% 0.32% 0.25% 0.25% 0.00% 0.23% 0.21% 0.21% 1Q19 2Q19 3Q19 4Q19 1Q20
Slide 74: Net Interest Income
Net Interest Income (thousands) 25,000 21.7% 21,096 20,000 17,334 14,725 15,189 14,004 14,118 15,000 10,000 5,000 0 2017 2018 2019 2020 2021 2022
Slide 75: Noninterest Income
NONINTEREST INCOME People you know. Solutions that work.
Slide 76: Total Noninterest Income
Total Noninterest Income (in 000’s) 6,000 5,694 4,941 4,648 5,000 4,361 4,006 3,970 4,000 3,488 3,052 3,121 2,841 1,628 1,549 2,783 3,000 2,335 1,096 1,627 893 2,000 1,112 1,150 38 699 939 446 582 530 588 503 1,000 1,290 1,361 1,444 652 1,086 1,257 1,267 1,266 1,271 1,302 202 61 389 0 2014 2015 2016
Slide 77: Mortgage Banking Fees
Mortgage Banking Fees (thousands) 1,112 1,149 1,200 939 1,000 800 699 582 588 600 503 530 446 400 200 61 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 78: Mortgage News Daily: Composite Index vs Yr Fixed
Zoom 1YR |5YR 10YR MAX Composite Index vs 30 Yr Fixed May 4, 2018 May 4, 2023 saqey abe GoW Source: Mortgage News Daily
Slide 79: Mortgage News Daily: Purchase vs Refinance Index
Purchase vs Refinance Index Zoom 1YR SYR 10YR MAX Apr 26,2018 — Apr 26, 2023 Jan"19 Jan "20 Jul'20 Jul'21 Jan'22 Jul ‘22 Jan ‘23 ot ae | ee ee | ~~fo29° ‘ is, — Purchase Index — Refinance Index Source: Mortgage News Daily
Slide 80: Mortgage Banking
Mortgage Banking (thousands) 2020 2021 2022 1Q23 Total Loans Closed $88,521 $68,304 $72,769 $13,140 Loans Sold $57,187 $51,098 $28,318 $2,252 % Sold 64.60% 74.81% 38.92% 17.14% Loans Kept $31,334 $17,206 $44,451 $10,889 Mortgage Fee Income $1,112 $1,149 $589 $61 People you know. Solutions that work.
Slide 81: Small Business Capital Group Revenue
Small Business Capital Group Revenue (thousands) 6,000 5,135 4,866 4,692 4,687 5,000 4,513 3,781 766 4,000 3,581 1,151 123 3,273 2,789 2,722 1,264 385 3,000 1,770 362 2,000 3,796 1,472 168 274 88 166 2,964 152 1,648 1,745 1,849 2,145 49 1,000 1,641 1,113 0 157 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 82: Government Guaranteed Loans Retained
Government Guaranteed Loans Retained 2021 2022 Gross Loans Kept $27,223,300 $25,351,683 Guaranteed Loan $22,258,370 $19,177,778 Fee Given Up $1,944,786 $849,292 Interest Income $261,549 $347,573 Subtotal $2,206,335 $1,196,865 Annual Interest Income $1,435,181 $1,435,211 Time to Make Up Fee 1.54 0.83
Slide 83: Efficiency Ratio
Efficiency Ratio 100.00% 97.10% 90.00% 80.00% 77.85% 75.80% 74.40% 73.60% 73.50% 72.10% 70.43% 70.73% 70.00% 60.00% 50.00% 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 84: Net Income
NET INCOME People you know. Solutions that work.
Slide 85: Net Income
Net Income 3% 4,500 4,086 3,957 4,000 3,500 3,144 3,188 2,757 3,000 2,500 2,135 2,108 2,000 1,504 1,500 1,000 632 500 91 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23
Slide 86: Pre-Tax Net Income
Pre-Tax Net Income 7,000 5,442 5,278 6,000 316 5,000 3,724 2,782 4,000 746 3,000 90% 2,013 4,138 4,275 5,653 4,126 198 2,000 1,068 2,978 2,971 3,421 1,000 132 1,815 0 (311) (691) -1,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23 Core Income PPP Income Wilmington
Slide 87: Quarterly Net Income
Quarterly Net Income 1,504* 1,600 1,400 1,253 * 1,281* 1,174 1,217 1,200 1,000 880 867 815 800 556 600 400 200 0 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 * Record earnings
Slide 88: Return on Equity
Return on Equity 14.00% 12.33% 12.00% 10.00% 8.04% 8.20% 8.15% 7.21% 8.00% 5.65% 5.69% 6.00% 4.00% 2.00% 0.00% 2017 2018 2019 2020 2021 2022 1Q23
Slide 89: Return on Equity Excluding Unrealized G/L
Return on Equity Excluding the Unrealized G/L on Investments 14.00% 11.20% 12.00% 10.00% 8.33% 7.83% 7.61% 7.23% 8.00% 5.65% 5.82% 6.00% 4.00% 2.00% 0.00% 2017 2018 2019 2020 2021 2022 1Q23
Slide 90: Return on Equity Excluding Unrealized G/L
Return on Equity Excluding the Unrealized G/L on Investments 11.20% 12.00% 9.47% 9.43% 10.00% 8.00% 6.80% 6.00% 4.48% 4.00% 2.00% 0.00% 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 91: Stock Trends
STOCK TRENDS People you know. Solutions that work.
Slide 92: KBW Bank Index
The KBW Bank Index, developed by Keefe, Bruyette and Woods, includes 24 banking stocks. The stocks represent large U.S. national money center banks, regional banks, and thrift institutions. KBW Bank Index is a benchmark stock index for the banking sector. May 5, 2023
Slide 93: PGNN share price vs KBW Bank Index
7.75 0.00 (0.00%) Dp setrade ‘Other OTC- Other OTC Delayed Price. Curencyin USD Ascof May 5 02:56PM EDT. Market open. PGNN Premium Auorvens §— SterTem —WidTom Long Tem Technical vents @ Indicators @ Comparison $ Events @ EV DateRange 1D SD IM 3M GM YTD 4¥ 2¥ SV Max | Pinterval1W~ Line» & Draw @ Sett
Slide 94: PGNN share price chart
Paragon Financial Solutions, Inc.(.. ¥% 7.75 0.00 (0.00%) ‘Ammeritende ‘Other OTC - Othe OTC Delayed Fie. Curencyin USD of a 45% $NYAX Premium @ anotvenss — StorcTom == widTem ong Teo Technical Everts @ @ Indicators @ Comparison $ Events E] DateRange 10 SD 1M 3M GM YTD 1Y 2V SY Max EYinterval 1W~ ww
Slide 95: NASDAQ Bank Index
The NASDAQ Bank Index contains securities of NASDAQ- listed companies classified according to the Industry Classification Benchmark as Banks.
Slide 96: ABA NASDAQ Community Bank Index
HOME > ABAQ~: INDEX ABA NASDAQ Community Bank 25715 +32.58% -124.26 5Y May 9, 3:19:27 PM UTC-4 - INDEXNASDAQ - Disclaimer 1D 5D 1M 6M YTD 1Y SY MAX 0% Cec P, -10% -20% -30% -40% 50% 1 1 1 ' ' 2019 2020 2021 2022 2023 | ABA NASDAQ Com... 257.20 -124.21 32.57% } Paragon Financial S... $7.75 -$3.25 29.
Slide 97: Period-End Book Value
Period-End Book Value $13.00 $12.36 $12.46 $12.00 $11.63 $11.21 $11.48 $11.09 $11.00 $11.55 $10.32 $10.81 $10.00 $9.52 $10.22 $8.91 $9.00 $9.35 $8.40 $7.95 $8.84 $8.00 $8.31 $7.93 $7.00 $6.00 Book Value Excluding Sec G/L $5.00 12/31/2015 12/31/2016 12/31/2017 12/31/18 12/31/19 12/31/20 12/31/2021 12
Slide 98: Summary and Wrap Up
SUMMARY AND WRAP UP People you know. Solutions that work.
Slide 99: 2022 Records
2022 Records Loan Volumes Total Assets Net Interest Income Total Revenue Return on Average Assets (ROA) Return on Average Equity (ROE) People you know. Solutions that work.
Slide 100: 2022 Highlights
2022 Highlights Completed the PPP forgiveness process for all Paragon customers Completed our team and opened Paragon’s full-service banking center in Wilmington, NC Added additional producers in Memphis, Atlanta, and Oxford Began construction on a full-service Banking Center in Oxford, MS and ident
Slide 101: 2023 Strategic Priorities
2023 Strategic Priorities Maintain stability during the current bank crisis • 2023 Trust Where You Bank • 2024 Recession? Grow deposit base Retain liquidity sources Continue to make prudent loan decisions Maintain healthy levels of capital Complete groundwork projects People you know. Solutions that
Slide 102: Questions?
QUESTIONS? People you know. Solutions that work.
Slide 103: 2023 Shareholder Meeting
2023 Shareholder Meeting May 18, 2023
Paragon Financial Solutions — Shareholder Meeting (May 2023) on 6ix