The parent company of Raleigh-based Paragon Bank reported a slight decrease in second quarter earnings due to an increase in its loan loss reserves.
Paragon Commercial Corp. reported net income $3.3 million, or 61 cents per share, down 6 percent compared to $3.5 million, or 75 cents per share, for the same period in 2016. The results were below analyst expectations of 71 cents per share.
The decrease was primarily driven by a $650,000 loan loss provision increased its allowance for loan losses commensurate with loan growth. There were no loan loss provisions recorded during the same period in 2016. In addition, the Paragon incurred $368,000 in costs directly attributable to its pending acquisition by TowneBank.
“Paragon’s loan growth continues to be outstanding,” said CEO Robert C. Hatley in a statement. “A major driver in the pending merger with TowneBank is our ability to generate growth in our loan portfolio to take advantage of our dynamic markets.”
Loans outstanding increased by $108.9 million during the second quarter to $1.34 billion.
Paragon has assets totaling $1.4 billion and offices in Raleigh, Cary and Charlotte. In April, Virginia-based TowneBank agreed to acquire Paragon in a deal valued at $323.7 million.
The company’s shares were trading at $52.08, up 24 cents, in Thursday morning trading.
The earnings release can be found here.
