Paragon Wins “Best Places to Work” Competition

Volume 2 Issue 2

the Shieldof excellence

December 2006 1

At a luncheon held on October 20 at the University of Memphis Holiday Inn, the Memphis Business Journal named Paragon National Bank the winner of the 2006 “Best Places to Work” competition in the medium-sized company category. Paragon was one of fi ve other companies in the 51-150 employee category previously named as fi nalists. Paragon was also a fi nalist in the 2005 competition.

“It is an honor to be selected as one of the area’s best places to work,” said Robert Shaw, President of Paragon National Bank. “While we pride our bank on superior customer service, winning this competition is very rewarding because it lets us know that Paragon employees think very highly of their work environment, company leadership, and colleagues. Paragon’s employees are our most important asset.”

An article about Paragon in the Memphis Business Journal discussed Paragon’s “work hard, play hard” atmosphere. While developing a new bank is hard work, Paragon takes time to celebrate milestones in the bank’s growth. There is a friendly environment at the bank where management and employees communicate openly. “Happy people have happy customers,” said Kim Hall, Senior Vice President of Treasury Management and Business Development. Some 90% of Paragon employees are stockholders, meaning they have a vested interest in seeing the bank do well.

PARAGON NATIONAL BANK

Saddle Creek Banking CenterReady for Business

Construction of Paragon's Saddle Creek Center is complete. We will open our doors to bank customers as soon as the City of Germantown permits. Located at 7600 Poplar Avenue, this is Paragon’s fourth location and third location along the Poplar corridor. Construction of the building began in June.

The Saddle Creek location is a full-service banking center with two drive-thru lanes, and a drive-up ATM.

Paragon welcomes Karen Coward as Assistant Vice President and Saddle Creek Manager, and Christy Enoch as Financial Services Associate. There will also be a familiar face in Germantown as Paragon Place’s Diane Roten joins the Saddle Creek team.

“Opening the Saddle Creek branch will allow us to start the new year off in a very exciting way,” said Robert Shaw President and CEO. “We are excited to be part of the Germantown community.”

Saddle Creek’s interior should have a familiar feeling to customers. Inside, customers will see Paragon’s signature curved wood wall and marble fl oor. Consistent with Paragon’s other locations, our new banking center will feature original art by local artists. Paragon also has plans to partner with local schools to display students’ artwork periodically during the school year.

A grand opening celebration and ribbon cutting will be held January 18.

Karen Coward, Diane Roten, and Christy Enoch

HappyNew Year!

Best wishes for a happy and prosperous

2007~

from the Employeesand Directors of

Paragon National Bank

Paragon Community Involvement

The Shield of Excellence

The beginning of the fall semester brought students back to school and Paragon back to its adopted class at Hawkins Mill Elementary. During 2005, Paragon adopted Ms. Kimberly Martin’s second grade class. This year we have followed Ms. Martin to a third grade class. We have been able to work with several of the students we met last year and to meet some bright new faces.

During the fall semester, Kim Hall and Lisa Barden taught the third grade Junior Achievement curriculum to the class over a period of five weeks. During each session, students learned about different aspects of their community. Activities centered on how cities are planned. In addition, they learned how to prepare bank deposits and write checks.

Various Paragon team members made visits to kick off the new school year and to celebrate Thanksgiving and Christmas. On each visit, Paragon bankers take an activity and a snack for each child.

The children who were in Ms. Martin’s 2005 class remembered those staff members who visited the class last year. Janie Day, Vice President of Private Banking said, “It is special to see the children’s eyes light up when they remember us from last year. Being able to see these children grow and continue our relationship with them is such a reward!”

The Shield of Excellence2

Paragon Goes Back to School

Kim Hall and Lisa Barden with Ms. Martin's third grade class. The students are holding up the buildings they made while learning about city planning.

Kim Hall, Janie Day, and Steve Maury help the children create colorful turkeys.

From l to r: Gordin & Lisa McMurtry, Melanie Clinton, Carol McConkey, Kim Hall, Janie Day, and Vickie & Robert Shaw at the Memphis Zoo's Safari Soiree.

Kim Hall and Robert Shaw

participate as servers!

From l to r: Hank Word, Gordin & Lisa McMurtry, Jeff Gach, Carol McConkey, and Andy Taylor at the

Memphis Child Advocacy Celebrity Chef Gala.

From l to r: Kim Hall, Charlene Franklin, and Vickie & Robert Shawat the Memphis Zoo's Zoo Rendezvous.

From l to r: Tracey Wilson, Hank & Anna Katherine Word, Jonelle Middlebrook, Cheryl Shackelford, Pam Hibler, Kim Hall, and Lisa Barthol at Race for the Cure.

December 2006 3

Congratulations, Keyonlia & Lester!

Private Banking Associate Keyonlia Narcisse and husband Lester welcomed their first child, Kendall Paulette, on September 25, 2006.

Kim Hall PromotedParagon National Bank announces that Kim Hall, CTP, First Vice President, has been promoted to Senior Vice President of Treasury Management and Business Development.

Congratulations, Kim!

Best Wishes to Our Newlyweds!

On October 28 Paragon employees participated for the third consecutive year in the Susan G. Komen Race for the Cure. The morning began early with a 7 a.m. breakfast at our soon-to-be-completed Saddle Creek Banking Center. Paragon team members wore red t-shirts reading “Helping raise expectations for finding a cure!” with tiny Paragon shields in the shape of a ribbon.

A team of over 30 employees, friends, and family members participated in the event. In addition to participating in the fun walk and race, Paragon hosted a booth where employees and friends distributed over 500 helium balloons that could later be seen throughout the crowd.

Paragon Races for the Cure

Paragon employees and friends in front of the Saddle Creek Banking Center before

heading off for the race.

Chris and Therese PlataniaMay 1

Andy and Leslie Taylor

September 2

Justin and Lisa Barden

October 28

Hank and Anna Katherine Word

December 16

On November 5, 2006, the Peabody Hotel was the setting for the 16th Annual Signature Chef’s Gala benefiting the March of Dimes Birth Defects Foundation. Robert Shaw, Paragon President and CEO, and Laurie Tucker, FedEx Services Senior Vice President of Corporate Marketing, served as honorary co-chairs of the event. They were involved in planning and securing support for the event, which is ranked in the top 5 among similar events sponsored annually in 190 cities.

The 2006 event featured almost two dozen of the city’s most renowned chefs preparing their signature dishes for the guests. Prior to the dinner and live auction, over 600 guests enjoyed a silent auction and wine tasting.

The mission of the March of Dimes is to improve the health of babies by preventing birth defects, premature births and infant mortality. Paragon supports several organizations that work to improve the lives of our children in the Memphis area.

Paragon served as a Silver Sponsor of the event. Members of Paragon’s Board of Directors also purchased four tables to help support the cause.

Over $290,000 was raised during the night’s activities, a record for the event. Shaw stated, “We are pleased to be associated with the March of Dimes efforts to save our babies. We are grateful to all those who purchased tables, donated auction items, and volunteered for the event. I look forward to next year’s event when I will serve as co-chair again.”

Paragon Supports March of Dimes

Carol McConkey, Senior Vice President of Consumer Banking, is part of the Leadership Memphis Class of 2006. McConkey joins Paragon employees Dorothy Cleaves (1995), Gordin McMurtry (2005), and Beth Perry (2002) and Board Members Edith Kelly-Green (1987) and Thomas Boggs (1993) as graduates of Leadership Memphis.

McConkey Part of Leadership Memphis Class of 2006

Laisse Le Bon Temps Rouler!“Laisse le bon temp rouler” - “Let the good times roll” - was the theme of the celebration on July 28 after Paragon exceeded $200 million in assets. Employees celebrated New Orleans style with a catered luncheon of crawfish etouffee, pasta jambalaya, and king cakes in the Fountain Place Chevron Suite, which was decorated in Mardi Gras colors of purple, green, and gold. Paragon continues to experience

strong asset growth as more customers experience our exceptional customer service.

Danielle Urschel, Joyce Davis and Deborah Howell enjoy a fun break at lunch.

Paragon Hosts Real Estate SeminarA group of residential builders and mortgage professionals gathered at Paragon’s Fountain Place Chevron Suite on December 5 to hear Edsel Charles, founder of Market Graphics, discuss the Market Graphics’ November 2006 Housing Forecast for the Memphis area. Mr. Charles discussed the state of the housing market in the five-county area and his company’s forecast for next year.

Market Graphics is the third largest housing research organization in the United States. The company provides market research to seven of the top ten builders in the United States. Covering twenty-two states, Market Graphics provides market research to builders of all sizes.

Bob Word and Steve Maury, of Paragon’s Residential Construction Lending Department, use the Market Graphics reports regularly to assist our customers as they assess demand for new construction in the Memphis area. Guests and employees enjoyed Mr. Charles’ presentation and the opportunity to ask him questions regarding the Memphis housing market.

Edsel Charles speaks on housing trends in the Memphis area.

The Shield of Excellence4

A Warm Welcome to the Newest Members of Team Paragon:

On December 4 Paragon granted the wish of 6-year-old Amber Frans. Amber and her family were picked up by a limo and escorted to Paragon’s Fountain Place location where she was surprised by the bank’s staff with a special version of the popular NBC TV series “Deal or No Deal”, her favorite television show. Prince Charming (Patrick O’Hearn) was awaiting her arrival and led her inside the building where her fairy godmother (Dorothy Cleaves) presented Amber with a princess gown. After quickly changing, Amber was ready to play the game!

Combining aspects of the game show and Amber’s love for all things “princess,” Paragon entitled its version “Deal or No Deal: The Princess Edition.” Paragon employees dressed as princesses Cinderella, Snow White, Mulan, and Princess Paragon. Other Disney characters included Shrek, Roger Rabbit, a wicked witch, a fairy godmother, Mickey Mouse, and Minnie Mouse. Prince Charming acted as the host while each character held a briefcase for Amber to choose. The bank stayed true to the game by having a mysterious banker call and offer Amber less than tempting offers.

Audience members comprised of Paragon staff and Amber’s family enthusiastically cheered Amber on by chanting “No deal! No deal!”But there was no losing in this game for Amber, each briefcase she picked contained a prize including a tiara, several princess gowns, and a hand-held video game.

Amber confidently said, “No deal!” each time the banker called until it was revealed that she had the winning briefcase. After her briefcase was

opened, Mickey and Minnie revealed that her wish to go to Walt Disney World had been granted! Amber and her family traveled to Orlando in mid-December.

Paragon’s involvement with Make-A-Wish began in February 2005, during our grand opening celebration. At that time, the bankpledged $10 to for every new deposit account opened. Our first wish was granted in November 2005, and Gabby Rutledge and her family enjoyed a trip to Walt Disney World. Now, with the continued support of our customers, we were able to grant a second wish.

“As always, Paragon employees received more than we gave during our recent wish,” stated Shaw. “In addition, granting the wish is a great team-building exercise for the Paragon employees.”

Paragon had help making this wish a reality. “Thank You!” to the following individuals and companies: Theatre Memphis; Metro Wholesale Florists; Unpainted Furniture Center, Inc.; Mary Jones; Ben & Jerry’s Ice Cream; Deon Murray; All Star Limo, Inc.; Lenny’s; Christ the Rock Church; and Mr. Lincoln’s Costume Shoppe.

Paragon will donate $10 to Make-A-Wish for every new account opened at our new Saddle Creek location as we do at our other locations. We look forward to granting our third wish!

Paragon Grants Second Wish

Amber with Prince Charming (Patrick O'Hearn) and other Disney characters after opening her final case revealing a trip to Disney World!

Amber with Snow White, Princess Paragon, her Fairy Godmother, and Cinderella

Amber Frans arrives to Paragon in style.

Amber and her family after the game.

Dave BiterMortgage

Consultant

Karen CowardAssistant Vice

President,Saddle Creek

Manager

Christy EnochFinancial Services

Associate, Saddle Creek

Teresa HarrisLoan Specialist

Nancy MaxsonLoan Operations

Eleanor StrahlFinancial Services

Associate, Fountain Place

Beverly Timberman

Teller

Mathis YoungBusiness

Development

December 2006 5

Being Kind is Good for Business

Paragon National Bank is committed to the highest standards of security for your account. We use the latest technologies to safeguard the privacy and security of your personal information and will soon be implementing a new procedure, ParaShield, to strengthen the security of our internet banking. ParaShield is multifactor authentication, a regulatory requirement being implemented industry-wide.

Predators often commit fraud and identity theft by exploiting single-factor authentication using one piece of information – such as a password – to validate identity. In response, ParaShield requires multiple pieces of information to validate identity.

ParaShield will strengthen the security of your login by requiring an additional authentication factor beyond username and password. In return, you will have more confidence in confidentiality each time you login to your account online.

Our ParaShield solution will begin collecting a usage profile for you. This profile will include a log of your usual login behaviors to compare with future login activity. Additionally, we will provide you with a selection of challenge questions. You will be prompted to select and answer three

challenge questions. We suggest you choose questions with answers that are easy for you to remember. You should not print, store, save, or share your selected challenge questions and answers with anyone. In the event that unusual activity is detected, you will immediately be asked to verify your identity by answering two of the challenge questions that you previously chose.

Once ParaShield is running, each time you login to Online Banking, we will check your usage profile against the terms of your usual login. Should any terms fall outside of your recognized profile, you will be asked to answer your selected challenge questions. After you successfully answer your challenge questions, you will be logged in to online banking or you will be allowed to proceed with your transaction.

This enhanced security feature does not require new hardware or software on your PC. This subtle but important change to our online banking login will be implemented in the first part of 2007. This is just one more way Paragon is working to help you prevent identity theft.

Protection of your identity, money, accounts, and online transactions is a top priority at Paragon National Bank. If you would like to know more about our proactive initiatives to identify and prevent fraud, our online banking capabilities, or the conveniences available with our online services, please contact one of our customer service associates at 901.273.2900, visit us at bankparagon.com, or come by one of our locations.

Online Security a Top Priority

Protecting your identity,

money, accounts, and online

transactions is a top priority at Paragon.

Paragon National Bank partnered with The Society of Entrepreneurs to host a small business seminar on October 19 at the University of Memphis Holiday Inn.

“I believe that superior c u s t o m e r service is one of the most i m p o r t a n t keys to a

successful business,” said Robert Shaw in his introduction of speaker, Ed Horrell, author of The Kindness Revolution. "Ed says that we should astonish, amaze, and ‘WOW’ our customers. And I agree.”

Speaking to a room full of Memphis business owners, Mr. Horrell discussed how the customer service of many businesses has deteriorated.

Mr. Horrell discussed “values driven” companies and how they are different from other companies. He used several examples of model companies to explain great customer service. Finally, he explained how the business owners in attendance can start a “Kindness Revolution” in their companies.

The employees of Paragon enjoyed working with the Society of Entrepreneurs and its executive director, Pearson Crutcher. Based on the positive feedback from attendees, we look forward to hosting future small business seminars.

Ed Horrell

Steve Voss and Ashley Williams, of Huey's, attend the seminar.

The American Bankers Association awarded Paragon National Bank first place in the “Customer Acquisition Marketing” category among banks with assets under $500 million at the 2006 ABA Marketing Conference held in Chicago on September 11. The Financial Marketing Awards recognize marketing innovations and creative excellence in the financial services industry. Inferno, Paragon’s advertising partner, submitted entries including both print and radio ads that were judged on creativity and excellence in execution.

Paragon’s marketing campaign was also one of four campaigns featured in the September issue of Independent Banker, the magazine of the Independent Community Bankers of America. The article highlighted four campaigns that were designed to catch attention in a very crowded marketplace.

Earlier in the year, Paragon’s marketing campaign was featured in the Financial Advertising Review, a national publication on advertising by banks, savings and loans, and credit unions. The article described Paragon’s campaign as “edgy, irreverent, and hard-hitting.”

“It was nice to receive national recognition of our marketing campaign,” stated Robert Shaw, President and CEO of Paragon National Bank. “But what is more important is the very positive response from the Memphis community. I believe the ads have been a hit because people enjoy the humor and can identify with bad customer service experiences they have had with other banks.”

Paragon’s Marketing Campaign Gains National Recognition

Locations: Paragon Place Poplar at Massey

6300 Poplar Ave., Suite 117

Memphis, TN 38119

Fountain Place Poplar at Valleybrook

5400 Poplar Ave., Suite 150

Memphis, TN 38119

St. Francis 6005 Park Ave., Suite 111

Memphis, TN 38119

Saddle Creek 7600 Poplar Ave.

Germantown, TN 38138

Telephone: 901.273.2900

Branch Hours: 8:30 am – 5:00 pm Mon-Thu

8:30 am – 6:00 pm Fri

ATM: 24 Hours/7 days a week

Paragon Direct: 901.333.0260

24-Hour Voice Response Unit

Online Banking: bankparagon.com

Mailing Address: P.O. Box 2022

Memphis, TN 38101-2022

Equal HousingLender

Local banking from locals.

The Shield of Excellence6

Sterling Customers Preview TravelOn October 13 Sterling customers filled the lobby at Paragon Place as a representative from Collette Vacations reviewed several possible trips for 2007. In addition, Sterling customers had the opportunity to sign up for the one-day trip to Marlsgate Plantation.

As a result of a survey taken, two trips have been chosen as Sterling travel

destinations during 2007: Italy and the Canadian Rockies. Both trips should be exciting adventures filled with beautiful settings and unforgettable sights.

The “Reflections of Italy” tour will include highlights such as Rome, Assisi, Florence, Venice, and much more. Travelers will experience an authentic taste of Italian history and culture on this tour.

Visit the Canadian Rockies by riding on the Rocky Mountaineer railway– viewing coastal forests, roaring river canyons, and lofty mountain peaks, then seeing the glaciers of the Albreda Icefields and the amazing 1,000-foot thick Athabasca Glacier in the Columbia Icefields.

These trips will be added to our calendar of day trips to Tunica and other close locales.

For more information about our Sterling trips contact Rita Fiduccia, Vice President of Sterling Banking, at 901.322.0613.

Diane Roten & Rita Fiduccia talk with Jack Bolton before

the travel presentations.

Paragon is proud to partner with Go Direct – a campaign sponsored by the U.S. Department of the Treasury and the Federal Reserve Banks to inform people who receive federal benefits about the advantages of direct deposit and to help them sign up.

With direct deposit, your money goes straight into your account at the same time each month, thus giving you more control over your money. Direct deposit also provides immediate access to your money from virtually anywhere.

Direct deposit is safer than mailing checks. Surveys show when a problem occurs with a Social Security payment, 98 percent of the time it’s with a paper check, not a direct deposit payment.

Direct deposit is easier than checks because people who get benefits don’t need to go to the bank to deposit checks. Their payments go straight into their account on payment day each month, making the transaction more predictable.

If you or those close to you still receive Social Security or other federal benefits by check, we urge you to look into changing to the safest, easiest option – direct deposit – today! Signing up is quick and easy – call 800.333.1795 or sign up online at www.GoDirect.org. You can also contact Rita Fiduccia at 901.322.0613 if you have questions or would like help signing up.

Direct Deposit – The Safe Choice for Federal Benefits