Paragon Bank posts record earnings, boosts community deposits

Paragon Bank announced financial results for the third quarter of 2025 showing its strongest earnings in recent history. Net income for Q3 was approximately $1.9 million, a 62 percent increase over Q3 2024, and net income through the first three quarters rose 92 percent compared with the same period in 2024. Total revenue through nine months reached $27.2 million, and the bank reported four consecutive quarters of record net interest income with an improved net interest margin of 4.02 percent for the third quarter.

Those results were accompanied by notable balance sheet shifts. Total loans were down $35.4 million year to date, while core deposits grew by $68.6 million, an increase the bank estimates at about 15 percent on an annualized basis. Paragon also highlighted continued community engagement, with team members contributing volunteer hours and participating in nonprofit work within the region.

For Lafayette County residents the mix of stronger earnings and rising deposits carries multiple implications. Higher profitability and improved net interest margins generally strengthen a community bank's ability to absorb losses and support local lending. Growth in core deposits increases liquidity and reduces reliance on wholesale funding, which can make the bank more resilient during periods of market stress.

At the same time, the year to date contraction in total loans of $35.4 million raises questions about current credit demand and lending practices. That decline may reflect customer loan paydowns, fewer new originations, or more selective underwriting, each of which affects homeowners and small businesses differently. Local borrowers tracking rates and credit availability should monitor whether the loan decline is temporary or part of a longer trend that could constrain access to mortgages, commercial real estate financing, or business lines of credit.

The bank's emphasis on community service underscores its local footprint, which helps maintain customer relationships that fuel deposits and future lending. As Paragon closes out 2025, the combination of record revenue, higher margins, and deposit growth positions the institution to consider how best to translate profits into credit for Lafayette County households and businesses, while also managing the risks that come with rapid balance sheet shifts.