The bank previously announced, on May 12, 2006, that it had filed a
registration statement with the Office of the Comptroller of the
Currency to seek permission for the secondary stock offering. The
offering was for sale up to 880,000 shares of its common stock, with an
option to sell an additional 100,000 shares to cover over-allotments,
if any. The 980,000 shares sold at $12.50 will generate net proceeds
of approximately $11.7 million in capital for Paragon. Shares of
Paragon’s stock closed at $13.01 on July 27, 2006.
Investor
meetings were held on July 11 and 13 at the Dixon Gallery and Gardens
to provide details of the offering. Invitations were sent to all
shareholders and others who had expressed an interest in investing in
additional Paragon stock. Both sessions were attended by more than 100
people interested in investing. Robert Shaw, Paragon President and
CEO, explained that the proceeds from the stock sale will be used to
finance additional growth by increasing the bank’s lending limits,
improving capital ratios, and funding operations. Shaw also introduced
Team Paragon members and representatives from Howe Barnes Investments,
Inc, the underwriter of the offering on a best efforts basis. Howe
Barnes makes a market in Paragon’s stock.
Paragon was
launched in 2005 with $23.2 million in capital, a record for de novo
banks in the Memphis, Shelby County area. Since its inception, Paragon
has experienced rapid growth. It was the second fastest growing de
novo in the U.S. formed during 2005. Current assets exceed $210
million.
After the offering was closed, Shaw stated,
“Original shareholders should be happy with the 25% increase in value
from their initial purchase price. We are gratified by the response to
this stock offering. We believe our growth since the bank opened and
the response to this offering are confirmations that the Memphis area
needed a locally-owned bank that provides the broad range of products
and services and high level of customer service that Paragon provides.
We believe this stock offering will allow us to continue to grow and
provide Paragon’s brand of banking to more Memphians.” Shareholders
should find further comfort in their investment because 92% of Paragon
employees own stock in the bank including an additional $1.4 million
invested by the Directors and employees in the recent offering.