ForwardLooking Statements

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Forward-Looking Statements
Certain statements in this presentation include
"forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act
of 1995, which statements generally can be
identified by the use of forward-looking
terminology, such as "may," "will," "expect,"
"estimate," "anticipate," "believe," "target,"
"plan," "project" or "continue" or the negatives
thereof or other variations thereon or similar
terminology, and are made on the basis of
management's plans and current analyses of
Paragon National Bank (the "Company"), its
business and the industry as a whole. These
forward-looking statements are subject to risks
and uncertainties, including, but not limited to,
economic conditions in the Memphis market, the
bank's short operating history, its startup
losses, possible borrower credit problems,
potential loss of key executives and employees,
competition, interest rate sensitivity and
exposure to regulatory and legislative changes.
The above factors, in some cases, have affected,
and in the future could affect, the Company's
financial performance and could cause actual
results for the current fiscal year and beyond to
differ materially from those expressed or implied
in such forward-looking statements. The Company
does not undertake to publicly update or revise
its forward-looking statements even if experience
or future changes make it clear that any
projected results expressed or implied therein
will not be realized.
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Transaction Summary

• Common shares offered Up to 880,000 shares
• Optional share increase Up to 100,000 shares
• Price range 12.50 - 13.50
• Maximum investment 5 of the shares sold
• Exchange / symbol OTC Bulletin Board / PGNN
• Underwriter Howe Barnes Investments, Inc.
• best efforts basis
• Use of proceeds Finance additional growth by
  increasing lending limits, improving capital
  ratios and funding operations and for general
  corporate purposes

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Paragon at a Glance

• Began operations January 19, 2005
• Initial offering proceeds of 23.2 million
• Target small businesses, business professionals
  and consumers in the Memphis MSA
• Operate 3 branches and have acquired property for
  2 future branches
• Rated 2 in 2005 US de novo asset growth
• Estimate profitability in 2nd quarter 2007

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Branch Locations and Income Levels
Income Level 0 to 30,000
30,000 to 50,000 50,000 to
75,000 Greater than 75,000
Current Branches Future Branches
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Investment Highlights

• Located in high growth market
• Opportunities from market consolidation
• Experienced management team
• Excellent asset quality
• Infrastructure largely in place to support future
  growth
• Cutting edge technology

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Paragons Market Niches

• Commercial lending
• Cash management
• Aircraft lending

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Paragons Market Niches

• Commercial lending
• Cash management
• Aircraft lending
• Private banking
• Medical banking
• Residential construction lending
• Mortgage lending
• Sterling banking

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Key Drivers of Our Success

• Experienced Paragon team
• Superior customer service
• Cutting edge technology
• Local knowledge decisions

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Market Consolidation
Paragons entry into the Memphis banking market
occurred after several banks had merged with
out-of-state institutions.
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The Paragon Team
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The Paragon Team

• Our employees average over 15 years of banking
  experience
• Paragon employees own almost 9 of the bank
• 89 of Paragon employees own stock in the bank
• Paragon was named a finalist in Memphis Business
  Journals Best Places to Work

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The Paragon Senior Management Team

• Name (Age) Position Experience
• Robert Shaw (47) President and CEO 18 Years
• Michael Erhardt (35) EVP and CFO 12 Years
• Andy Taylor (38) EVP and Sr. Credit Officer 14
  Years
• Carol McConkey (45) SVP Consumer Banking 25 Years
• Gordin McMurtry (53) SVP Commercial Lending 13
  Years
• Beth Perry (45) SVP Premier Banking 24 Years
• Bob Word (56) SVP Construction Lending 34 Years
• Kim Hall (40) 1st VP Cash Management 12 Years
• Hank Word (31) 1st VP Operations IS 8 Years

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Financial Overview

• Balance Sheet (000) as of March 31, 2006
• Assets 180,690
• Loans 119,461
• Deposits 125,969
• Equity 17,569
• Financial Ratios for the quarter ended March 31,
  2006
• ROAA -0.99
• ROAE -8.81
• Net Interest Margin 3.25
• Per Share Data for the quarter ended March 31,
  2006
• Earnings per Share -0.17
• Book Value per Share 7.58
• Shares Outstanding 2,320,124

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Outstanding Growth (000)
Asset size as of 12/31/05 for denovo banks
formed in 2005
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Asset Growth (000)
2005
2006
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Loan Growth (000)
2005
2006
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Loan Composition
Loans Outstanding as of 3/31/06
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Deposit Growth (000)
2005
2006
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Deposit Composition
Total Deposits as of 3/31/06
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Net Interest Income Growth (000)
2005
2006
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Non-Interest Income Growth (000)
2005
2006
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Net Income (000)
2005
2006
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Asset Quality

• 12-31-05
• No non-accrual loans
• No charge offs
• No OREO
• Past dues 19,399 (subsequently paid off)
• 3-31-06
• No non-accrual loans
• No charge offs
• No OREO
• No past dues

1,548
1,433
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Future Plans

• Open 4th branch in 4th quarter 2006
• Estimate profitability in 2nd quarter 2007
• Open 5th branch in 2008
• We will continue to
• Grow our franchise
• Provide outstanding service
• Take advantage of being local
• Hire exceptional talent
• Raise expectations

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Questions?
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