Paragon Commercial Corporation Reports 31% Increase in Earnings for the Second Quarter of 2016
(firmenpresse) - RALEIGH, NC -- (Marketwired) -- 07/20/16 -- Paragon Commercial Corporation (NASDAQ: PBNC)
Listing on Nasdaq in conjunction with a $28.7 million initial public offering of common stock
Fully diluted earnings per share of $0.75 versus $0.59 for second quarter of 2015
Second quarter 2016 net income of $3.5 million, a 31% increase over the prior year
Loan growth of $60.4 million in the second quarter
Credit quality remains strong with nonperforming loans at only 0.11% of total loans
Nonperforming assets decreased to 0.44% of total assets at June 30, 2016 compared to 1.10% for the same period in 2015
Second quarter ROAA of 1.00% and ROAE of 13.41%
Book value increased to $24.17 at June 30, 2016
Paragon Commercial Corporation (NASDAQ: PBNC), parent company of , today reported unaudited financial results for the three- and six-month periods ended June 30, 2016. Net income during the three-month period increased 31% to $3.5 million compared to $2.7 million for the same period in 2015. The increase in earnings was primarily driven by an increase in net interest income as a result of continued loan growth as non-interest income and expense were relatively unchanged from the prior year. Fully diluted earnings per share for the period was $0.75, a 27% increase over the same period last year. For the six-month period ending June 30, 2016, the company reported net income of $6.3 million, an increase of 27% over the $5.0 million of net income for the same period in 2015.
, President and CEO, stated, "The second quarter was extremely meaningful for Paragon in a number of ways. We completed our IPO and subsequent listing on Nasdaq. The IPO provided growth capital, brought new institutional ownership to the company and provided additional liquidity for our shareholders. We had an outstanding quarter in every component of our financials. Our exceptional loan and deposit growth in a very competitive environment is in line with our expectations and due to our extraordinary staff in our key markets of Raleigh and Charlotte. That growth coupled with negligible non-interest expense growth contributed to our 1.00% return on average assets for the quarter. Management continues to concentrate our efforts in core deposit growth from our local markets. This effort has paid off in reduction of funding costs. Our credit quality continues to be among the best in North Carolina and the Southeast."
The return on average assets for the second quarter of 2016 was 1.00% and the return on average equity was 13.41% compared to 0.83% and 11.70%, respectively, for the same ratios in the second quarter of 2015.
Total consolidated assets on June 30, 2016 were $1.45 billion compared to $1.31 billion as of December 31, 2015. Assets increased during the quarter by $113.2 million as a result of loan demand and short term cash investments generated from core deposit growth.
Loans outstanding increased by $60.4 million during the second quarter from $1.05 billion at March 31, 2016 to $1.11 billion at June 30, 2016. The company continues to see strong loan growth throughout the Raleigh, Charlotte and Cary markets.
Total deposits increased by $53.1 million during the second quarter as the company experienced strong local funding growth while simultaneously making an effort to reduce its noncore deposit percentage. The deposit portfolio mix continues to experience a shift from time deposits to core transactional accounts. During the quarter, demand account balances increased by $12.5 million while money market and interest checking accounts increased by $30.8 million, increases of 8% and 5%, respectively. During the same period, time deposits increased by only $9.8 million or 4% as the company continued to implement its strategic initiative to reduce its reliance on time deposits.
The company recorded no loan loss provisions for the second quarter of 2016 due to net recoveries of past losses totaling $56,000 funding the allowance for loan losses for loan growth, as well as continued credit quality improvement. The provision for loan losses for the quarter ended June 30, 2015 was $179,000. The allowance for loan losses as a percentage of total loans at June 30, 2016 was 0.72%, down from 0.76% in the previous quarter.
Nonperforming loans were 0.11% and 0.05% of total loans at June 30, 2016 and March 31, 2016, respectively. Loans past due 30 days or greater at quarter end were 0.07% and 0.01% of total loans for those same periods. The ratio of total nonperforming assets to total assets including foreclosed real estate was 0.44% compared to 0.43% in the previous quarter.
Net interest income increased by $1.1 million during the second quarter of 2016 compared to the second quarter of 2015. Net interest income totaled $11.3 million during the period, representing a net interest margin of 3.55% on a tax equivalent basis, up 0.05% compared to the second quarter of 2015. For the six-month period ended June 30, 2016, net interest income increased $2.2 million compared to the six-month period ended June 30, 2015.
For the second quarter of 2016, non-interest income was $381,000 compared to $324,000 for the same period in 2015. The second quarter of 2015 was impacted by $126,000 in losses on sale or write-down of foreclosed properties compared to $45,000 for the same period in 2016.
Non-interest expense in the second quarter of 2016 was $6.5 million compared to $6.4 million in the second quarter of 2015. Personnel expense increased by $625,000 as the company added lenders and staff to support its strong growth. This expense, however, was offset by declines in several other key categories such as problem loan and unreimbursed loan costs, occupancy costs and professional fees which declined by $156,000, $146,000 and $136,000, respectively in the second quarter of 2016 compared to the second quarter of 2015.
is the parent company of Paragon Bank, which provides a private banking experience to businesses, professionals, executives, entrepreneurs and other individuals. Founded in Raleigh, North Carolina in 1999, Paragon Bank provides banking services through highly responsive professionals, an extensive courier service, online and mobile technologies, free worldwide ATM access, and a select number of strategically placed offices in Raleigh, Cary and Charlotte, NC. For more information, visit .
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include, without limitation: the effects of future economic conditions; governmental fiscal and monetary policies; legislative and regulatory changes; the risks of changes in interest rates; management of growth; fluctuations in our financial results; reliance on key personnel; our ability to compete effectively; privacy, security and other risks associated with our business; and the other factors set forth from time to time in our SEC filings, copies of which are available free of charge within the Investor Relations section of our website at or upon request from our investor relations department. Paragon Commercial Corporation assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Some of the financial measures included in this press release are not measures of financial performance recognized by United States generally accepted accounting principles, or GAAP. These non-GAAP financial measures are "overhead to average assets" and "efficiency ratio". Our management uses these non-GAAP financial measures in its analysis of our performance and because of market expectations of use of these ratios to evaluate the company. Management believes each of these non-GAAP financial measures provides useful information about our financial condition and results of operation.
"Overhead to average assets" reflects the amount of non-interest expenses incurred in comparison to the total size of the company and provides investors with an additional measure of our productivity.
The efficiency ratio shows the amount of revenue generated for each dollar spent and provides investors with a measure of our productivity.
These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption "Reconciliation of Non-GAAP Financial Measures."
"Overhead to average assets" is defined as non-interest expense divided by total average assets. We believe overhead to average assets is an important indicator of the company''s level of non-interest expenses relative to the company''s overall size, which assists in the evaluation of our productivity. While the overhead to average assets ratio is a measure of productivity, its value reflects the attributes of the business model we employ.
"Efficiency ratio" is defined as total non-interest expense divided by adjusted operating revenue. Adjusted operating revenue is equal to net interest income (taxable equivalent) plus non-interest income, adjusted to exclude the impacts of gains and losses on the sale of securities and gains and losses on the sale or write down of foreclosed real estate because we believe the timing of the recognition of those items to be discretionary. We believe the efficiency ratio is important as an indicator of productivity because it shows the amount of revenue generated by our operations for each dollar spent. While the efficiency ratio is a measure of productivity, its value reflects the attributes of the business model we employ.
Blair Kelly
MMI Public Relations
919.233.6600
Kate Feldhouse
Paragon Bank
AVP/Marketing & Public Relations Specialist
919.534.7462
INVESTOR INQUIRIES:
Steve Crouse
Paragon Bank
Chief Financial Officer
919.534.7404
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Datum: 20.07.2016 - 05:30 Uhr
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