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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Paragon Commercial Corp. (delisted) | NASDAQ:PBNC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 53.83 | 53.85 | 60.39 | 0 | 01:00:00 |
☒
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|
North Carolina
|
56-2278662
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
3535 Glenwood Avenue
Raleigh, North Carolina
|
27612
|
(Address of principal executive offices)
|
(Zip Code)
|
Large Accelerated Filer
|
☐
|
Accelerated Filer
|
☐
|
Non-accelerated
Filer
(Do not check if
smaller reporting company)
|
☑
|
Smaller Reporting Company
|
☐
|
Emerging
Growth Company
|
☑
|
|
|
|
|
|
Page
No.
|
|
|
|
|
Part I.
FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Item
1.
Financial
Statements
|
|
3
|
|
|
|
|
|
Consolidated
Balance Sheets (Unaudited) as of September
30, 2017 and
December 31, 2016
|
|
3
|
|
|
|
|
|
Consolidated
Statements of Income (Unaudited) for the Three and Nine Months
Ended September 30, 2017 and 2016
|
|
4
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income (Unaudited) for the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
5
|
|
|
|
|
|
Consolidated
Statements of Changes in Stockholders' Equity (Unaudited) for the
Nine Months Ended September 30, 2017 and 2016
|
|
6
|
|
|
|
|
|
Consolidated
Statements of Cash Flows (Unaudited) for the Nine Months Ended
September 30, 2017 and 2016
|
|
7
|
|
|
|
|
|
Notes
to Consolidated Financial Statements (Unaudited)
|
|
8
|
|
|
|
|
|
Item
2.
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
|
33
|
|
|
|
|
|
Item
3.
Quantitative and
Qualitative Disclosures About Market Risk
|
|
59
|
|
|
|
|
|
Item
4.
Controls and
Procedures
|
|
60
|
|
|
|
|
|
PART
II.
OTHER
INFORMATION
|
|
|
|
|
|
|
|
Item
1.
Legal
Proceedings
|
|
61
|
|
|
|
|
|
Item
1A.
Risk
Factors
|
|
61
|
|
|
|
|
|
Item
2.
Unregistered Sales
of Equity Securities and Use of Proceeds
|
|
63
|
|
|
|
|
|
Item
3.
Defaults Upon
Senior Securities
|
|
63
|
|
|
|
|
|
Item
4.
Mine Safety
Disclosures
|
|
63
|
|
|
|
|
|
Item
5.
Other
Information
|
|
63
|
|
|
|
|
|
Item
6.
Exhibits
|
|
63
|
|
|
|
|
|
SIGNATURES
|
|
64
|
(In thousands, except share data)
|
2017
|
2016
|
Assets
|
|
|
Cash and due from
banks:
|
|
|
Interest-earning
|
$
79,445
|
$
38,384
|
Noninterest-earning
|
3,983
|
4,621
|
Investment
securities - available-for-sale, at fair value
|
197,159
|
197,441
|
Federal Home Loan
Bank stock, at cost
|
12,403
|
8,400
|
Loans - net of
unearned income and deferred fees
|
1,389,987
|
1,191,280
|
Allowance for loan
losses
|
(9,402
)
|
(7,909
)
|
Net
loans
|
1,380,585
|
1,183,371
|
Accrued interest
receivable
|
4,840
|
4,368
|
Bank premises and
equipment, net
|
15,296
|
15,642
|
Bank owned life
insurance
|
34,961
|
34,190
|
Other real estate
owned
|
3,399
|
4,740
|
Deferred tax
assets
|
4,270
|
4,841
|
Other
assets
|
7,584
|
7,769
|
Total
assets
|
$
1,743,925
|
$
1,503,767
|
|
|
|
Liabilities
and stockholders' equity
|
|
|
Deposits:
|
|
|
Noninterest-bearing
demand
|
$
253,511
|
$
211,202
|
Interest-bearing
checking and money market
|
865,355
|
742,046
|
Time
deposits
|
169,277
|
219,007
|
Total
deposits
|
1,288,143
|
1,172,255
|
Repurchase
agreements and federal funds purchased
|
21,064
|
20,174
|
Federal Home Loan
Bank advances
|
260,000
|
150,000
|
Subordinated
debentures
|
18,558
|
18,558
|
Other
liabilities
|
7,107
|
6,679
|
Total
liabilities
|
1,594,872
|
1,367,666
|
Stockholders'
equity:
|
|
|
Common stock,
$0.008 par value; 20,000,000 shares
|
44
|
44
|
authorized;
5,459,982 and 5,450,713 issued and
|
|
|
outstanding as of
September 30, 2017 and December 31, 2016
|
|
|
Additional
paid-in-capital
|
80,822
|
80,147
|
Accumulated other
comprehensive loss
|
(1,372
)
|
(2,840
)
|
Retained
earnings
|
69,559
|
58,750
|
Total stockholders'
equity
|
149,053
|
136,101
|
Total liabilities
and stockholders' equity
|
$
1,743,925
|
$
1,503,767
|
|
Three
months
|
Nine
months
|
||
|
ended September
30,
|
ended September
30,
|
||
(In thousands)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Net
income
|
$
4,172
|
$
3,455
|
$
10,809
|
$
9,768
|
|
|
|
|
|
Other comprehensive
income items:
|
|
|
|
|
Securities
available for sale:
|
|
|
|
|
Unrealized gains
(losses)
|
(1,123
)
|
(1,058
)
|
1,766
|
2,856
|
Reclassification of
gains recognized in net income
|
-
|
-
|
-
|
(85
)
|
Other comprehensive
income (loss)
|
(1,123
)
|
(1,058
)
|
1,766
|
2,771
|
Deferred tax
expense (benefit)
|
(427
)
|
(405
)
|
685
|
1,057
|
Other comprehensive
income (loss), net of tax
|
(696
)
|
(653
)
|
1,081
|
1,714
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
Unrealized gains
(losses)
|
287
|
544
|
638
|
(1,592
)
|
Other comprehensive
income (loss)
|
287
|
544
|
638
|
(1,592
)
|
Deferred tax
(benefit) expense
|
104
|
204
|
251
|
(599
)
|
Other comprehensive
income (loss), net of tax
|
183
|
340
|
387
|
(993
)
|
|
|
|
|
|
Total other
comprehensive income (loss), net of tax
|
(513
)
|
(313
)
|
1,468
|
721
|
|
|
|
|
|
Comprehensive
income
|
$
3,659
|
$
3,142
|
$
12,277
|
$
10,489
|
|
|
|
|
Accumulated
|
|
|
|
|
|
Additional
|
Other
|
|
Total
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Retained
|
Stockholders'
|
|
(In thousands, except share data)
|
Shares
|
Amount
|
Capital
|
Income
(Loss)
|
Earnings
|
Equity
|
Balance
at December 31, 2016
|
5,450,713
|
$
44
|
$
80,147
|
$
(2,840
)
|
$
58,750
|
$
136,101
|
|
|
|
|
|
|
|
Net
income
|
-
|
-
|
-
|
-
|
10,809
|
10,809
|
Unrealized gain on
securities, net of
|
|
|
|
|
|
|
tax expense of
$685
|
-
|
-
|
-
|
1,081
|
-
|
1,081
|
Unrealized
gain on cash flow hedges,
|
|
|
|
|
|
|
net of tax expense
of $251
|
-
|
-
|
-
|
387
|
-
|
387
|
Restricted stock
expense recognized
|
-
|
-
|
341
|
-
|
-
|
341
|
Stock options
exercised
|
6,313
|
-
|
270
|
-
|
-
|
270
|
Issuance
of stock for employee stock
|
|
|
|
|
|
|
purchase
plan
|
2,956
|
-
|
64
|
-
|
-
|
64
|
Balance
at September 30, 2017
|
5,459,982
|
$
44
|
$
80,822
|
$
(1,372
)
|
$
69,559
|
$
149,053
|
|
|
|
|
Accumulated
|
|
|
|
|
|
Additional
|
Other
|
|
Total
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Retained
|
Stockholders'
|
|
(In thousands, except share data)
|
Shares
|
Amount
|
Capital
|
Income
(Loss)
|
Earnings
|
Equity
|
Balance
at December 31, 2015
|
4,581,334
|
$
37
|
$
53,147
|
$
(886
)
|
$
45,360
|
$
97,658
|
|
|
|
|
|
|
|
Net
income
|
-
|
-
|
-
|
-
|
9,768
|
9,768
|
Unrealized gain on
securities, net of
|
|
|
|
|
|
|
tax expense of
$1,057
|
-
|
-
|
-
|
1,714
|
-
|
1,714
|
Unrealized
loss on cash flow hedges,
|
|
|
|
|
|
|
net of tax benefit
of $599
|
-
|
-
|
-
|
(993
)
|
-
|
(993
)
|
Restricted stock
expense recognized
|
-
|
-
|
319
|
-
|
-
|
319
|
Issuance of stock
for public offering
|
845,588
|
6
|
26,392
|
-
|
-
|
26,398
|
Issuance of
restricted stock awards
|
17,793
|
1
|
-
|
-
|
-
|
1
|
Issuance
of stock for employee stock
|
|
|
|
|
|
|
purchase
plan
|
5,327
|
-
|
157
|
-
|
-
|
157
|
Balance
at September 30, 2016
|
5,450,042
|
$
44
|
$
80,015
|
$
(165
)
|
$
55,128
|
$
135,022
|
(In thousands)
|
2017
|
2016
|
Cash flows from
operating activities:
|
|
|
Net
income
|
$
10,809
|
$
9,768
|
Adjustments to
reconcile net income to net cash provided by
|
|
|
operating
activities:
|
|
|
Depreciation and
amortization
|
1,008
|
1,072
|
Provision for loan
losses
|
1,214
|
391
|
Net loss on sale or
impairment of foreclosed assets
|
311
|
257
|
Increase in cash
surrender value of life insurance
|
(771
)
|
(669
)
|
Accretion of
premiums/discounts on securities, net
|
858
|
567
|
Net gain on sale of
securities
|
-
|
(85
)
|
Gain on disposal of
property and equipment
|
(1
)
|
-
|
Deferred tax
expense (benefit)
|
(365
)
|
299
|
Restricted stock
expense
|
341
|
319
|
Changes in assets
and liabilities:
|
|
|
Accrued interest
receivable and other assets
|
351
|
(1,317
)
|
Accrued interest
payable and other liabilities
|
428
|
(70
)
|
Net cash provided
by operating activities
|
14,183
|
10,532
|
Cash flows from
investing activities:
|
|
|
Net (increase)
decrease in Federal Home Loan Bank stock
|
(4,003
)
|
2,636
|
Purchase of
securities available for sale
|
(13,526
)
|
(39,434
)
|
Proceeds from
maturities and paydowns of securities available for
sale
|
14,716
|
16,299
|
Proceeds from sales
of securities available for sale
|
-
|
15,714
|
Net increase in
loans
|
(198,428
)
|
(149,296
)
|
Proceeds from sale
of foreclosed real estate
|
1,030
|
13
|
Proceeds from sale
of property and equipment
|
1
|
|
Additions to bank
premises and equipment
|
(662
)
|
(497
)
|
Net cash used in
investing activities
|
(200,872
)
|
(154,565
)
|
Cash flows from
financing activities:
|
|
|
Net increase in
demand and money market deposit accounts
|
165,618
|
292,456
|
Net decrease in
time deposits
|
(49,730
)
|
(76,218
)
|
Net increase
(decrease) in repurchase agreements
|
890
|
(10,784
)
|
Net increase
(decrease) in FHLB and other borrowings
|
110,000
|
(69,800
)
|
Net proceeds from
sale of common stock
|
-
|
26,398
|
Issuance of common
stock for employee stock purchase
|
|
|
plan and exercise
of stock options
|
334
|
157
|
Net cash provided
by financing activities
|
227,112
|
162,209
|
Net change in cash
and cash equivalents
|
40,423
|
18,176
|
Cash and cash
equivalents at beginning of year
|
43,005
|
55,530
|
|
|
|
Cash and cash
equivalents at end of year
|
$
83,428
|
$
73,706
|
|
Three
months
|
Nine
months
|
||
|
ended September
30,
|
ended September
30,
|
||
|
2017
|
2016
|
2017
|
2016
|
Anti-dilutive stock
options
|
-
|
80,500
|
-
|
80,500
|
Unvested restricted
shares
|
36,030
|
38,445
|
36,030
|
38,445
|
|
September
30,
|
December
31,
|
(In thousands)
|
2017
|
2016
|
Unrealized losses
on securities available-for-sale
|
$
(9
)
|
$
(1,775
)
|
Deferred tax
(benefit) expense
|
(7
)
|
678
|
Other comprehensive
loss, net of tax
|
(16
)
|
(1,097
)
|
Unrealized losses
on cash flow hedges
|
(2,154
)
|
(2,792
)
|
Deferred tax
benefit
|
798
|
1,049
|
Other comprehensive
loss, net of tax
|
(1,356
)
|
(1,743
)
|
Total other
comprehensive loss
|
$
(1,372
)
|
$
(2,840
)
|
|
|
Unpaid
|
|
|
Unrealized
|
Unrealized
|
|
|
Gains and
|
Gains and
|
|
|
Losses on
|
Losses on
|
|
|
Available-for
|
Cash Flow
|
|
|
Sale Securities
|
Hedges
|
Total
|
Balance
as of December 31, 2016
|
$
(1,097
)
|
$
(1,743
)
|
$
(2,840
)
|
Other
comprehensive income before reclassification
|
1,081
|
387
|
1,468
|
Net
current-period other comprehensive income
|
1,081
|
387
|
1,468
|
Balance
as of September 30, 2017
|
$
(16
)
|
$
(1,356
)
|
$
(1,372
)
|
|
|
|
|
Balance
as of December 31, 2015
|
$
848
|
$
(1,734
)
|
$
(886
)
|
Other
comprehensive income (loss) before reclassification
|
1,799
|
(993
)
|
806
|
Amounts
reclassified from accumulated other
|
|
|
|
comprehensive
income
|
(85
)
|
-
|
(85
)
|
Net
current-period other comprehensive income (loss)
|
1,714
|
(993
)
|
721
|
Balance
as of September 30, 2016
|
$
2,562
|
$
(2,727
)
|
$
(165
)
|
|
|
Gross
|
Gross
|
Estimated
|
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
(In thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
September 30, 2017
|
|
|
|
|
Available-for-sale:
|
|
|
|
|
U.S. Agency
obligations
|
$
15,153
|
$
125
|
$
58
|
$
15,220
|
Collateralized
mortgage obligations
|
38,729
|
219
|
185
|
38,763
|
Mortgage-backed
securities
|
73,290
|
264
|
925
|
72,629
|
Municipal
bonds
|
66,320
|
1,318
|
67
|
67,571
|
Other
|
3,676
|
50
|
750
|
2,976
|
|
$
197,168
|
$
1,976
|
$
1,985
|
$
197,159
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
Available-for-sale:
|
|
|
|
|
U.S. Agency
obligations
|
$
17,062
|
$
44
|
$
163
|
$
16,943
|
Collateralized
mortgage obligations
|
42,439
|
300
|
242
|
42,497
|
Mortgage-backed
securities
|
75,138
|
213
|
1,478
|
73,873
|
Municipal
bonds
|
60,901
|
474
|
698
|
60,677
|
Other
|
3,676
|
29
|
254
|
3,451
|
|
$
199,216
|
$
1,060
|
$
2,835
|
$
197,441
|
|
|
After
One
|
After
Five
|
|
No
Stated
|
|
|
Within
|
But
Within
|
But
Within
|
After
|
Maturity
|
|
(In thousands)
|
1
Year
|
Five
Years
|
Ten
Years
|
Ten
Years
|
Date
|
Total
|
U.S.
Agency obligations
|
$
-
|
$
-
|
$
-
|
$
15,220
|
$
-
|
$
15,220
|
Collateralized
mortgage obligations
|
-
|
-
|
-
|
38,763
|
-
|
38,763
|
Mortgage-backed
securities
|
-
|
7,448
|
7,199
|
57,982
|
-
|
72,629
|
Municipal
bonds
|
-
|
2,893
|
8,810
|
55,868
|
-
|
67,571
|
Other
|
-
|
-
|
1,513
|
-
|
1,463
|
2,976
|
|
$
-
|
$
10,341
|
$
17,522
|
$
167,833
|
$
1,463
|
$
197,159
|
|
September
30,
|
December
31,
|
Available-for-sale:
|
2017
|
2016
|
U.S. Agency
obligations
|
3
|
5
|
Collateralized
mortgage obligations
|
7
|
6
|
Mortgage-backed
securities
|
15
|
13
|
Municipal
bonds
|
15
|
53
|
Other
|
1
|
1
|
|
41
|
78
|
|
September 30,
|
December 31,
|
(In thousands)
|
2017
|
2016
|
Construction
and land development
|
$
75,465
|
$
79,738
|
Commercial
real estate:
|
|
|
Non-farm,
non-residential
|
448,762
|
365,569
|
Owner
occupied
|
221,661
|
186,892
|
Multifamily,
nonresidential and junior liens
|
104,892
|
89,191
|
Total
commercial real estate
|
775,315
|
641,652
|
Consumer
real estate:
|
|
|
Home
equity lines
|
92,285
|
87,489
|
Secured
by 1-4 family residential, secured by first deeds of
trust
|
242,655
|
195,343
|
Secured
by 1-4 family residential, secured by second deeds of
trust
|
4,425
|
4,289
|
Total
consumer real estate
|
339,365
|
287,121
|
Commercial
and industrial loans (except those secured by real
estate)
|
178,765
|
170,709
|
Consumer
and other
|
20,823
|
11,542
|
Total
loans
|
1,389,733
|
1,190,762
|
Deferred
loan costs
|
254
|
518
|
Allowance
for loan losses
|
(9,402
)
|
(7,909
)
|
Net
loans
|
$
1,380,585
|
$
1,183,371
|
|
September 30,
|
December 31,
|
(in thousands)
|
2017
|
2016
|
Construction
and land development:
|
|
|
Land
|
$
9,360
|
$
12,595
|
Residential
|
33,596
|
36,253
|
Commercial
|
32,509
|
30,890
|
Total
construction and land development
|
$
75,465
|
$
79,738
|
|
|
|
Commercial
real estate:
|
|
|
Non-farm,
non-residential:
|
|
|
Office
|
$
141,928
|
$
108,228
|
Industrial
|
31,548
|
36,264
|
Hotel/motel
|
33,305
|
28,453
|
Retail
|
205,059
|
165,434
|
Special
purpose/Other
|
36,922
|
27,190
|
Total
commercial real estate
|
448,762
|
365,569
|
Owner
occupied :
|
|
|
Office
|
77,520
|
60,500
|
Industrial
|
54,809
|
46,876
|
Retail
|
33,035
|
31,085
|
Special
purpose/Other
|
56,297
|
48,431
|
Total
owner occupied
|
221,661
|
186,892
|
|
|
|
Multifamily,
nonresidential and junior liens
|
104,892
|
89,191
|
Total
commercial real estate
|
$
775,315
|
$
641,652
|
|
September 30,
|
December 31,
|
(In thousands)
|
2017
|
2016
|
Performing
TDRs:
|
|
|
Commercial
real estate
|
$
-
|
$
520
|
Consumer
real estate
|
-
|
338
|
Commercial
and industrial loans
|
297
|
297
|
Total
performing TDRs
|
297
|
1,155
|
|
|
|
Nonperforming
TDRs:
|
|
|
Construction
and land development
|
114
|
125
|
Consumer
real estate
|
168
|
58
|
Total
nonperforming TDRs
|
282
|
183
|
Total
TDRs
|
$
579
|
$
1,338
|
|
|
Unpaid
|
|
|
|
Contractual
|
|
|
Recorded
|
Principal
|
Allocated
|
September 30, 2017
|
Investment
|
Balance
|
Allowance
|
Loans
without a specific valuation allowance:
|
|
|
|
Construction
and land development
|
$
114
|
$
163
|
$
-
|
Commercial
real estate
|
303
|
303
|
-
|
Loans
with a specific valuation allowance:
|
|
|
|
Consumer
real estate
|
352
|
419
|
37
|
Commercial
and industrial loans
|
2,020
|
2,051
|
787
|
Total
|
$
2,789
|
$
2,936
|
$
824
|
|
Nonaccrual
|
|
|
September 30,
|
December 31,
|
(In thousands)
|
2017
|
2016
|
Construction
and land development
|
$
114
|
$
125
|
Commercial
real state
|
-
|
783
|
Consumer
real estate
|
352
|
-
|
Commercial
and industrial loans
|
-
|
60
|
Total
|
$
466
|
$
968
|
|
|
|
Greater
|
|
|
|
|
|
30 - 59
|
60 - 89
|
than 90
|
|
|
|
|
|
Days
|
Days
|
Days
|
|
Total
|
|
|
(in thousands)
|
Past
|
Past
|
Past
|
Non-
|
Past
|
|
Total
|
September 30, 2017
|
Due
|
Due
|
Due
|
Accrual
|
Due
|
Current
|
Loans
|
Construction
and land development
|
$
-
|
$
-
|
$
-
|
$
114
|
$
114
|
$
75,351
|
$
75,465
|
Commercial
real estate
|
-
|
-
|
-
|
-
|
-
|
775,315
|
775,315
|
Consumer
real estate
|
-
|
-
|
-
|
352
|
352
|
339,013
|
339,365
|
Commercial
and industrial loans
|
149
|
-
|
-
|
-
|
149
|
178,616
|
178,765
|
Consumer
and other
|
-
|
-
|
-
|
-
|
-
|
20,823
|
20,823
|
Total
|
$
149
|
$
-
|
$
-
|
$
466
|
$
615
|
$
1,389,118
|
$
1,389,733
|
|
|
|
Greater
|
|
|
|
|
|
30 - 59
|
60 - 89
|
than 90
|
|
|
|
|
|
Days
|
Days
|
Days
|
|
Total
|
|
|
(in thousands)
|
Past
|
Past
|
Past
|
Non-
|
Past
|
|
Total
|
December 31, 2016
|
Due
|
Due
|
Due
|
Accrual
|
Due
|
Current
|
Loans
|
Construction
and land development
|
$
-
|
$
-
|
$
-
|
$
125
|
$
125
|
$
79,613
|
$
79,738
|
Commercial
real estate
|
-
|
-
|
-
|
-
|
-
|
641,652
|
641,652
|
Consumer
real estate
|
-
|
-
|
-
|
783
|
783
|
286,338
|
287,121
|
Commercial
and industrial loans
|
-
|
-
|
-
|
60
|
60
|
170,649
|
170,709
|
Consumer
and other
|
-
|
-
|
-
|
-
|
-
|
11,542
|
11,542
|
Total
|
$
-
|
$
-
|
$
-
|
$
968
|
$
968
|
$
1,189,794
|
$
1,190,762
|
|
Risk Grade
|
|
||||||
(in thousands)
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
Total
|
September 30, 2017
|
|
|
|
|
|
|
|
|
Construction
and land development
|
$
-
|
$
1,472
|
$
1,227
|
$
30,850
|
$
41,767
|
$
35
|
$
114
|
$
75,465
|
Commercial
real estate
|
-
|
268
|
275,662
|
382,339
|
99,836
|
16,641
|
569
|
775,315
|
Consumer
real estate
|
47
|
32,336
|
154,330
|
113,894
|
37,355
|
1,051
|
352
|
339,365
|
Commercial
and industrial loans
|
1,334
|
1,065
|
24,234
|
113,343
|
35,664
|
218
|
2,907
|
178,765
|
Consumer
and other
|
940
|
3,260
|
2,617
|
12,826
|
1,180
|
-
|
-
|
20,823
|
Total
|
$
2,321
|
$
38,401
|
$
458,070
|
$
653,252
|
$
215,802
|
$
17,945
|
$
3,942
|
$
1,389,733
|
|
Risk Grade
|
|
||||||
(in thousands)
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
Total
|
December 31, 2016
|
|
|
|
|
|
|
|
|
Construction
and land development
|
$
-
|
$
1,005
|
$
911
|
$
22,901
|
$
54,601
|
$
195
|
$
125
|
$
79,738
|
Commercial
real estate
|
-
|
539
|
223,549
|
311,711
|
87,443
|
18,500
|
-
|
641,652
|
Consumer
real estate
|
50
|
19,247
|
130,748
|
102,137
|
33,013
|
1,143
|
783
|
287,121
|
Commercial
and industrial loans
|
2,133
|
1,525
|
32,304
|
104,019
|
29,035
|
556
|
1,137
|
170,709
|
Consumer
and other
|
1,160
|
730
|
1,086
|
7,392
|
1,174
|
-
|
-
|
11,542
|
Total
|
$
3,343
|
$
23,046
|
$
388,598
|
$
548,160
|
$
205,266
|
$
20,394
|
$
2,045
|
$
1,190,762
|
|
September
30,
|
December
31,
|
(In thousands)
|
2017
|
2016
|
Financial
instruments whose contract amounts
|
|
|
represent credit
risk:
|
|
|
Undisbursed lines
of credit
|
$
264,514
|
$
216,769
|
Standby letters of
credit
|
5,337
|
3,904
|
Total
|
$
269,851
|
$
220,673
|
|
September 30,
2017
|
December 31,
2016
|
||
|
Notional
|
Fair
|
Notional
|
Fair
|
(In thousands)
|
Amount
|
Value
|
Amount
|
Value
|
Included in other
assets:
|
|
|
|
|
Cap 1 - maturing
August 2019
|
$
35,000
|
$
794
|
$
35,000
|
$
1,011
|
Cap 2 - maturing
September 2019
|
35,000
|
821
|
35,000
|
1,045
|
Cap 3 - maturing
October 2019
|
30,000
|
737
|
30,000
|
929
|
|
$
100,000
|
$
2,352
|
$
100,000
|
$
2,985
|
(In thousands)
|
|
2017
|
$
508
|
2018
|
2,247
|
2019
|
1,752
|
|
$
4,507
|
(In thousands)
|
|
2017
|
19
|
2018
|
74
|
Thereafter
|
147
|
|
$
240
|
|
Level
3
|
|
Investment
|
(In thousands)
|
Securities
|
Balance at December
31, 2016
|
$
1,500
|
Purchases
|
-
|
Unrealized
gain
|
13
|
Balance at
September 30, 2017
|
$
1,513
|
|
|
Fair Value
Measurements Using
|
||
|
|
Quoted
Prices
|
Significant
|
|
|
|
in
Active
|
Other
|
Significant
|
|
|
Markets
for
|
Observable
|
Unobservable
|
(In thousands)
|
Total
|
Identical
Assets
|
Inputs
|
Inputs
|
September
30, 2017
|
Fair
Value
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
Impaired
loans
|
$
1,965
|
$
-
|
$
-
|
$
1,965
|
Other real estate
owned
|
3,399
|
-
|
-
|
3,399
|
Total
|
$
5,364
|
$
-
|
$
-
|
$
5,364
|
|
|
|
|
|
|
|
Fair Value
Measurements Using
|
||
|
|
Quoted
Prices
|
Significant
|
|
|
|
in
Active
|
Other
|
Significant
|
|
|
Markets
for
|
Observable
|
Unobservable
|
(In thousands)
|
Total
|
Identical
Assets
|
Inputs
|
Inputs
|
December
31, 2016
|
Fair
Value
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
Impaired
loans
|
$
2,712
|
$
-
|
$
-
|
$
2,712
|
Other real estate
owned
|
4,740
|
-
|
-
|
4,740
|
Total
|
$
7,452
|
$
-
|
$
-
|
$
7,452
|
|
September 30,
2017 and December 31, 2016
|
||||
|
Valuation
|
|
Significant
|
|
Significant
|
|
Technique
|
|
Observable
Inputs
|
|
unobservable
Inputs
|
Impaired
loans
|
Appraisal
value
|
|
Appraisals
and/or sales of
|
|
Appraisals
discounted 5% to 10% for
|
|
or
discounted
|
|
comparable
properties
|
|
sales
commissions and other holding costs
|
|
cash
flows
|
|
or
discounted cash flows
|
|
or
discounted cash flows
|
|
|
|
|
|
|
Other
real estate owned
|
Appraisal
value/
|
|
Appraisals
and/or sales of
|
|
Appraisals
discounted 5% to 10% for
|
|
Comparison
sale/
|
|
comparable
properties
|
|
sales
commissions and other holding costs
|
|
Other
estimates
|
|
|
|
|
|
For the nine
months
|
|
|
ended September
30,
|
|
(In thousands)
|
2017
|
2016
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
|
Interest
paid
|
$
7,629
|
$
6,072
|
|
|
|
Income taxes
paid
|
$
5,570
|
$
4,485
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing Activites:
|
|
|
|
|
|
Change in fair
value of securities available-for-sale, net of taxes
|
$
1,081
|
$
1,714
|
|
|
|
Change in fair
value of cash flow hedges, net of taxes
|
$
387
|
$
(993
)
|
|
Three Months Ended
|
||
|
September 30, 2017 vs. 2016
|
||
|
Increase (Decrease) Due to
|
||
(Dollars in thousands)
|
Volume
|
Rate
|
Total
|
Interest
income
|
|
|
|
Loans,
net of allowance
|
$
2,481
|
$
216
|
$
2,697
|
Investment
securities
|
226
|
74
|
300
|
Other
interest-earnings assets
|
(26
)
|
2
|
(24
)
|
Total
interest income (taxable-
|
|
|
|
equivalent
basis)
|
2,681
|
292
|
2,973
|
|
|
|
|
Interest
expense
|
|
|
|
Deposits:
|
|
|
|
Interest-bearing
checking accounts
|
38
|
-
|
38
|
Money
markets
|
91
|
30
|
121
|
Time
deposits less than $100,000
|
-
|
3
|
3
|
Time
deposits greater than or
|
|
|
|
equal
to $100,000
|
(185
)
|
66
|
(119
)
|
Borrowings
|
481
|
361
|
842
|
Total
interest expense
|
425
|
460
|
885
|
|
|
|
|
Net
interest income increase/
|
|
|
|
(decrease)(taxable
equivalent basis)
|
$
2,256
|
$
(168
)
|
2,088
|
|
|
|
|
Less:
|
|
|
|
Taxable-equivalent
adjustment
|
|
|
13
|
Net
interest income increase
|
|
|
$
2,075
|
|
Nine Months Ended
|
||
|
September 30, 2017 vs. 2016
|
||
|
Increase (Decrease) Due to
|
||
(Dollars in thousands)
|
Volume
|
Rate
|
Total
|
Interest
income
|
|
|
|
Loans,
net of allowance
|
$
6,777
|
$
(26
)
|
$
6,751
|
Investment
securities
|
635
|
(30
)
|
605
|
Other
interest-earning assets
|
28
|
57
|
85
|
Total
interest income (taxable-
|
|
|
|
equivalent
basis)
|
7,440
|
1
|
7,441
|
|
|
|
|
Interest
expense
|
|
|
|
Deposits:
|
|
|
|
Interest-bearing
checking accounts
|
188
|
(72
)
|
116
|
Money
markets
|
525
|
26
|
551
|
Time
deposits less than $100,000
|
(2
)
|
5
|
3
|
Time
deposits greater than or
|
|
|
|
equal
to $100,000
|
(476
)
|
203
|
(273
)
|
Borrowings
|
469
|
977
|
1,446
|
Total
interest expense
|
704
|
1,139
|
1,843
|
|
|
|
|
Net
interest income increase/
|
|
|
|
(decrease)(taxable
equivalent basis)
|
$
6,736
|
$
(1,138
)
|
5,598
|
|
|
|
|
Less:
|
|
|
|
Taxable-equivalent
adjustment
|
|
|
38
|
Net
interest income increase/
|
|
|
|
(decrease)
|
|
|
$
5,560
|
|
September 30,
2017
|
December 31,
2016
|
||
|
Amortized
|
Fair
|
Amortized
|
Fair
|
(In thousands)
|
Cost
|
Value
|
Cost
|
Value
|
Available-for-sale:
|
|
|
|
|
U.S. Agency
obligations
|
$
15,153
|
$
15,220
|
$
17,062
|
$
16,943
|
Collateralized
mortgage obligations
|
38,729
|
38,763
|
42,439
|
42,497
|
Mortgage-backed
securities
|
73,290
|
72,629
|
75,138
|
73,873
|
Municipal
bonds
|
66,320
|
67,571
|
60,901
|
60,677
|
Other
|
3,676
|
2,976
|
3,676
|
3,451
|
Total
|
$
197,168
|
$
197,159
|
$
199,216
|
$
197,441
|
|
September 30, 2017
|
December 31, 2016
|
||||
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
Average Tax
|
|
|
Average Tax
|
|
Amortized
|
Fair
|
Equivalent
|
Amortized
|
Fair
|
Equivalent
|
(Dollars in thousands)
|
Cost
|
Value
|
Yield (1)
|
Cost
|
Value
|
Yield (1)
|
U.S.
government agency obligations
|
|
|
|
|
|
|
Due
within one year
|
$
-
|
$
-
|
-
|
$
-
|
$
-
|
-
|
Due
after one but within five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after five but within ten years
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after ten years
|
15,153
|
15,220
|
2.62
%
|
17,062
|
16,943
|
2.61
%
|
|
15,153
|
15,220
|
2.62
%
|
17,062
|
16,943
|
2.61
%
|
Collateralized
mortgage obligations
|
|
|
|
|
|
|
Due
within one year
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after one but within five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after five but within ten years
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after ten years
|
38,729
|
38,763
|
2.37
%
|
42,439
|
42,497
|
2.43
%
|
|
38,729
|
38,763
|
2.37
%
|
42,439
|
42,497
|
2.43
%
|
Mortgage-backed
securities
|
|
|
|
|
|
|
Due
within one year
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after one but within five years
|
7,343
|
7,448
|
2.54
%
|
7,492
|
7,581
|
2.54
%
|
Due
after five but within ten years
|
7,077
|
7,199
|
2.74
%
|
5,237
|
5,341
|
3.07
%
|
Due
after ten years
|
58,870
|
57,982
|
2.31
%
|
62,409
|
60,951
|
2.13
%
|
|
73,290
|
72,629
|
2.37
%
|
75,138
|
73,873
|
2.24
%
|
Municipal
bonds
|
|
|
|
|
|
|
Due
within one year
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after one but within five years
|
2,822
|
2,893
|
2.95
%
|
1,734
|
1,771
|
3.23
%
|
Due
after five but within ten years
|
8,610
|
8,810
|
3.62
%
|
6,078
|
6,087
|
3.22
%
|
Due
after ten years
|
54,888
|
55,868
|
4.05
%
|
53,089
|
52,819
|
4.02
%
|
|
66,320
|
67,571
|
3.94
%
|
60,901
|
60,677
|
3.92
%
|
Other
investments
|
|
|
|
|
|
|
Due
within one year
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after one but within five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after five but within ten years
|
1,500
|
1,513
|
6.64
%
|
1,500
|
1,500
|
6.77
%
|
Due
after ten years (2)
|
2,176
|
1,463
|
0.00
%
|
2,176
|
1,951
|
0.00
%
|
|
3,676
|
2,976
|
2.76
%
|
3,676
|
3,451
|
2.76
%
|
Total
securities available for sale
|
|
|
|
|
|
|
Due
within one year
|
-
|
-
|
-
|
-
|
-
|
-
|
Due
after one but within five years
|
10,165
|
10,341
|
2.65
%
|
9,226
|
9,352
|
2.67
%
|
Due
after five but within ten years
|
17,187
|
17,522
|
3.53
%
|
12,815
|
12,928
|
2.82
%
|
Due
after ten years (2)
|
169,816
|
169,296
|
2.88
%
|
177,175
|
175,161
|
2.91
%
|
|
$
197,168
|
$
197,159
|
2.93
%
|
$
199,216
|
$
197,441
|
2.85
%
|
|
At September 30,
|
At December 31,
|
||
|
2017
|
2016
|
||
|
|
% of
|
|
% of
|
|
|
Total
|
|
Total
|
(Dollars in thousands)
|
Amount
|
Loans
|
Amount
|
Loans
|
Construction
and land development
|
$
75,465
|
5.4
%
|
$
79,738
|
6.7
%
|
Commercial
real estate:
|
|
|
|
|
Non-farm,
non-residential
|
448,762
|
32.4
%
|
365,569
|
30.7
%
|
Owner
occupied
|
221,661
|
15.9
%
|
186,892
|
15.7
%
|
Multifamily,
nonresidential and junior liens
|
104,892
|
7.5
%
|
89,191
|
7.5
%
|
Total
commercial real estate
|
775,315
|
55.8
%
|
641,652
|
53.9
%
|
Consumer
real estate:
|
|
|
|
|
Home
equity lines
|
92,285
|
6.6
%
|
87,489
|
7.3
%
|
Secured by 1-4 family residential, secured by
|
|
|
|
|
first
deeds of trust
|
242,655
|
17.5
%
|
195,343
|
16.4
%
|
Secured by 1-4 family residential, secured by
|
|
|
|
|
second
deeds of trust
|
4,425
|
0.3
%
|
4,289
|
0.4
%
|
Total
consumer real estate
|
339,365
|
24.4
%
|
287,121
|
24.1
%
|
Commercial and industrial loans (except those
|
|
|
|
|
secured
by real estate)
|
178,765
|
12.9
%
|
170,709
|
14.3
%
|
Consumer
and other
|
20,823
|
1.5
%
|
11,542
|
1.0
%
|
Less:
|
|
|
|
|
Deferred
loan origination (fees) costs
|
254
|
0.0
%
|
518
|
0.0
%
|
Total
loans
|
1,389,987
|
100
%
|
1,191,280
|
100
%
|
Allowance
for loan losses
|
(9,402
)
|
|
(7,909
)
|
|
Total
net loans
|
$
1,380,585
|
|
$
1,183,371
|
|
|
|
|
|
|
|
30+
|
Non-
|
Total
|
|
|
|
Days
|
Accrual
|
Past
|
|
Total
|
(in thousands)
|
Past Due
|
Loans
|
Due
|
Current
|
Loans
|
At September 30, 2017
|
|
|
|
|
|
Construction
and land development
|
$
-
|
$
114
|
$
114
|
$
75,351
|
$
75,465
|
Non-farm,
non-residential
|
-
|
-
|
-
|
448,762
|
448,762
|
Owner
occupied
|
-
|
-
|
-
|
221,661
|
221,661
|
Multifamily,
nonresidential and junior liens
|
-
|
-
|
-
|
104,892
|
104,892
|
Home
equity lines
|
-
|
184
|
184
|
92,101
|
92,285
|
Secured
by 1-4 family residential, secured
|
|
|
|
|
|
by
first deeds of trust
|
-
|
115
|
115
|
242,540
|
242,655
|
Secured
by 1-4 family residential,
|
|
|
|
|
|
secured
by second deeds of trust
|
-
|
53
|
53
|
4,372
|
4,425
|
Commercial
and industrial loans (except
|
|
|
|
|
|
those
secured by real estate)
|
149
|
-
|
149
|
178,616
|
178,765
|
Consumer
and other
|
-
|
-
|
-
|
20,823
|
20,823
|
|
$
149
|
$
466
|
$
615
|
$
1,389,118
|
$
1,389,733
|
|
|
|
|
|
|
At December 31, 2016
|
|
|
|
|
|
Construction
and land development
|
$
-
|
$
125
|
$
125
|
$
79,613
|
$
79,738
|
Non-farm,
non-residential
|
-
|
-
|
-
|
365,569
|
365,569
|
Owner
occupied
|
-
|
-
|
-
|
186,892
|
186,892
|
Multifamily,
nonresidential and junior liens
|
-
|
-
|
-
|
89,191
|
89,191
|
Home
equity lines
|
-
|
194
|
194
|
87,295
|
87,489
|
Secured
by 1-4 family residential, secured
|
|
|
|
|
|
by
first deeds of trust
|
-
|
531
|
531
|
194,812
|
195,343
|
Secured
by 1-4 family residential,
|
|
|
|
|
|
secured
by second deeds of trust
|
-
|
58
|
58
|
4,231
|
4,289
|
Commercial
and industrial loans (except
|
|
|
|
|
|
those
secured by real estate)
|
-
|
60
|
60
|
170,649
|
170,709
|
Consumer
and other
|
-
|
-
|
-
|
11,542
|
11,542
|
|
$
-
|
$
968
|
$
968
|
$
1,189,794
|
$
1,190,762
|
|
At September 30,
|
At December 31,
|
(Dollars in thousands)
|
2017
|
2016
|
Non-accrual
loans
|
$
184
|
$
785
|
Restructured
loans (1)
|
282
|
183
|
Total
nonperforming loans
|
466
|
968
|
Foreclosed
real estate
|
3,399
|
4,740
|
Total
nonperforming assets
|
$
3,865
|
$
5,708
|
|
|
|
Accruing
loans past due 90 days or more
|
$
-
|
$
-
|
Allowance
for loan losses
|
9,402
|
7,909
|
|
|
|
Nonperforming
loans to period end loans
|
0.03
%
|
0.08
%
|
Allowance
for loan losses to period end
|
|
|
loans
|
0.68
%
|
0.66
%
|
Allowance
for loan losses to
|
|
|
nonperforming
loans
|
2017.60
%
|
817.05
%
|
Allowance
for loan losses to
|
|
|
nonperforming
assets
|
243.26
%
|
138.56
%
|
Nonperforming
assets to total assets
|
0.22
%
|
0.38
%
|
|
At September 30,
|
At December 31,
|
||
|
2017
|
2016
|
||
|
|
% of
|
|
% of
|
|
|
Total
|
|
Total
|
(Dollars in thousands)
|
Amount
|
Loans
|
Amount
|
Loans
|
Construction
and land development
|
$
402
|
4.3
%
|
$
486
|
6.7
%
|
Commercial
real estate
|
4,406
|
46.9
%
|
3,719
|
53.9
%
|
Consumer
real estate
|
2,173
|
23.1
%
|
1,900
|
24.1
%
|
Commercial
and industrial loans (except those
|
|
|
|
|
secured
by real estate)
|
2,304
|
24.5
%
|
1,728
|
14.3
%
|
Consumer
and other
|
117
|
1.2
%
|
76
|
1.0
%
|
Total
|
$
9,402
|
100.0
%
|
$
7,909
|
100.0
%
|
Hypothetical
|
Estimated Resulting Theoretical Net Interest Income
|
|||||
shift in interest
|
August 31, 2017
|
May 31, 2017
|
February 28, 2017
|
|||
rates (in bps)
|
Amount
|
% Change
|
Amount
|
% Change
|
Amount
|
% Change
|
(dollars in thousands)
|
|
|
|
|
|
|
200
|
$
52,736
|
-3.21
%
|
$
51,743
|
-3.16
%
|
$
48,570
|
-3.31
%
|
0
|
54,487
|
0.00
%
|
53,429
|
0.00
%
|
50,231
|
0.00
%
|
(100
)
|
54,046
|
-0.81
%
|
52,907
|
-0.98
%
|
49,881
|
-0.70
%
|
|
|
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
|
Certification of
Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of
Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of
Principal Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of
Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
Interactive data
files pursuant to Rule 405 of Regulation S-T: (i) Consolidated
Balance Sheets (Unaudited) as of September 30, 2017 and December
31, 2016; (ii) Consolidated Statements of Income (Unaudited) for
the Three and Nine Months Ended September 30, 2017 and 2016; (iii)
Consolidated Statements of Comprehensive Income (Unaudited) for the
Three and Nine Months Ended September 30, 2017 and 2016; (iv)
Consolidated Statements of Stockholders’ Equity (Unaudited)
for the Nine Months Ended September 30, 2017 and 2016; (v)
Consolidated Statements of Cash Flows (Unaudited) for the Nine
Months Ended September 30, 2017 and 2016; and (vi) Notes to
Consolidated Financial Statements (Unaudited)
|
|
PARAGON
COMMERCIAL CORPORATION
|
|
|
|
|
|
|
Date: November 9,
2017
|
By:
|
/s/
Steven
E. Crouse
|
|
|
|
Steven E. Crouse |
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
|
1 Year Paragon Commercial Corp. Chart |
1 Month Paragon Commercial Corp. Chart |
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