Paragon Financial : 2022 Annual Meeting of Shareholders

5400 Poplar, Suite 350

Memphis, Tennessee 38119

March 24, 2022

Dear Fellow Shareholders:

On behalf of the Board of Directors, it is my pleasure to invite you to Paragon Financial Solutions' 2022

Annual Meeting of Shareholders. The meeting will be held at our main office located at 5400 Poplar Avenue, Memphis, Tennessee 38119, on Thursday, May 19, 2022, at 3:00 p.m., CDT. The Board of Directors and members of the Paragon team look forward to greeting those shareholders able to attend.

We will also livestream the meeting so that those of you that aren't able to attend in person can attend the meeting virtually. To access the livestream of the annual meeting, please contact Lewis W. Perkins III at

[e-mail]. Several days prior to the meeting, a link will be emailed to those participants desiring to access the livestream of the meeting who have contacted Mr. Perkins.

The attached notice of the annual meeting and proxy statement describes the formal business to be transacted at the meeting. We will also report on Paragon's progress during 2021 and the first quarter of 2022.

If you received this letter for shares held in your name, and you own additional shares, which are held by your broker, you should be receiving another proxy package from the institution that holds your shares. Please follow the instructions provided by your broker to vote those shares held by your broker.

Your attention is directed to the proxy statement accompanying the attached notice for a more complete statement regarding the matters proposed to be acted upon at the meeting.

Your vote is very important. All shareholders are requested to be present in person or by proxy. For the convenience of those shareholders who do not expect to attend the meeting in person and desire to have their shares voted, please mark, date, and sign the enclosed proxy card, and return it to us in the envelope provided as soon as possible. This will help to secure a quorum and avoid added solicitation costs. If you decide later to attend the meeting in person, you may withdraw your proxy and vote your shares at the meeting. In addition, submitting your proxy card will not prevent you from changing your vote. If you submit your proxy and later decide to change your vote, you may revoke your proxy at any time as provided in the accompanying proxy statement. Whether or not you plan to attend the annual meeting, I urge you to complete the accompanying proxy card and return it promptly.

Thank you for your interest and participation in the affairs of Paragon Financial Solutions.

Sincerely,

Robert S. Shaw, Jr.

Chief Executive Officer

5400 Poplar, Suite 350

Memphis, Tennessee 38119

NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS

You are invited to attend the Paragon Financial Solutions 2022 Annual Meeting of Shareholders:

WHEN:

Thursday, May 19, 2022 at 3:00 p.m. (Central time).

WHERE:

Paragon Bank, 5400 Poplar Avenue, Memphis, Tennessee 38119. We will also livestream the meeting virtually through the internet. Please contact Lewis Perkins [e-mail] for additional information and details regarding the livestream. Several days prior to the meeting, a link will be emailed to those individuals desiring to access the livestream of the meeting who have contacted Mr. Perkins.

ITEMS OF BUSINESS:

• • To elect three persons to serve as Class B directors for a three-year term and until their respective successors are duly elected and qualified (Proposal 1);

• • To Approve the Paragon Financial Solutions, Inc. 2022 Equity Incentive Plan (Proposal 2);

• • To ratify the appointment of Reynolds, Bone & Griesbeck PLC as Paragon's independent auditor for the fiscal year ending December 31, 2022 (Proposal 3); and

• • To conduct such other business as may properly come before the meeting or any adjournment or postponement thereof.

RECORD DATE:

You are entitled to vote if you were a shareholder of record at the close of business on March 17, 2022.

VOTING BY PROXY:

Your Board of Directors is soliciting your proxy to assure that a quorum is present and that your shares are represented and properly voted. Please see the attached Proxy Statement and enclosed proxy card for information on submitting your proxy. If you later decide to attend the meeting in person and vote at the meeting or otherwise change your vote in advance of the meeting, information on withdrawal or revocation of proxies prior to the meeting is also provided. You may receive more than one set of proxy materials and proxy cards. Please promptly submit your proxy for each proxy card you receive in order to assure that all shares are represented.

RECOMMENDATION:

Your Board of Directors recommends that you vote "FOR" Proposals 1, 2, and 3.

Your vote is important. Whether or not you expect to attend the meeting, please submit your proxy promptly in order to assure that a quorum is present. Thank you for your attention to this important matter.

By Order of the Board of Directors,

Lewis W. Perkins

March 24, 2022

Corporate Secretary

PARAGON FINANCIAL SOLUTIONS

5400 Poplar, Suite 350

Memphis, Tennessee 38119

PROXY STATEMENT

The enclosed proxy is being solicited by the Board of Directors of Paragon Financial Solutions, Inc.

("Paragon," "the Company", "we," "us," or "our") in connection with the 2022 Annual Meeting of Shareholders, scheduled to be held on May 19, 2022, at the main office of Paragon Bank, 5400 Poplar Avenue, Memphis, Tennessee 38119, at 3:00 p.m., CDT, and any adjournment thereof (the "Annual Meeting"). Each of the persons designated as a proxy is either a director or officer of Paragon. This Proxy Statement and the enclosed form of proxy are first being mailed on or about March 24, 2022, to shareholders of record at the close of business on March 17, 2022 (the "Record Date"). To assure adequate representation at the Annual Meeting, shareholders are requested to sign, date and return promptly the enclosed form of proxy card.

IMPORTANT INFORMATION ABOUT ATTENDING THE ANNUAL MEETING

We intend to hold the Annual Meeting in person, but will offer a livestream option for those shareholders that would like to attend the meeting virtually. To access the livestream, please contact Lewis [e-mail]. Several days prior to the Annual Meeting, a link will be emailed to those individuals desiring to access the livestream of the Annual Meeting who have contacted Mr. Perkins.

BUSINESS TO BE CONSIDERED AT THE 2022 ANNUAL MEETING OF SHAREHOLDERS

The purpose of the Annual Meeting is to elect three persons to serve as Class B directors for a three-year term, and until his or her successor is duly elected and qualified (Proposal 1); to approve the Paragon Financial

Solutions , Inc. 2022 Equity Incentive Plan (the "Equity Incentive Plan") (Proposal 2); to ratify the appointment of

Reynolds, Bone & Griesbeck PLC as Paragon's independent auditor for the fiscal year ending December 31, 2022 (Proposal 3); and to conduct such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

VOTING

Only shareholders of record of Paragon's common stock, par value $5.00 per share ("Common Stock"), at the close of business on the Record Date are eligible to vote at the Annual Meeting. On the Record Date, a total of 4,388,005 shares of Paragon's Common Stock were outstanding.

On any matters properly presented for the Annual Meeting, each share of Common Stock is entitled to one vote. With respect to Proposal 1, those director nominees receiving a plurality of the votes cast will be elected. With respect to Proposal 2 and Proposal 3, these proposals will be approved if more shares are voted in favor of the proposal than against the proposal.

All proxies that are properly executed and returned will be voted at the Annual Meeting in accordance with the instructions contained in the proxy, unless the proxy is revoked prior to the vote. If you return a signed and dated proxy card without marking any voting selections, your shares will be voted "FOR" the election of each of the three nominees named herein to serve on the Board of Directors; "FOR" the approval of the Equity Incentive Plan and "FOR" the ratification of the appointment of Reynolds, Bone & Griesbeck PLC as Paragon's independent auditor for the fiscal year ending December 31, 2022.

If any other matter is properly presented at the Annual Meeting, your proxy (one of the individuals named on your proxy card) will vote your shares as recommended by the Board of Directors or, if no recommendation is given, will vote your shares using his or her best judgment. If you abstain from voting on any of the proposals atthe Annual Meeting, there will be no practical effect on whether the proposal are approved as directors are elected by a plurality voting standard and approval of the Equity Incentive Plan and the ratification of our auditors will be approved if more votes are cast in favor of the proposal than against it. Shares represented by such abstentions will, however, be counted in determining whether there is a quorum.

If your shares are held by your broker as your nominee (that is, in "street name"), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. In the event that a broker, bank, custodian, nominee or other record holder of our Common Stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, then those shares will be treated as broker non-votes with respect to that matter and will not be voted. Your broker does not have discretionary authority to vote on Proposal 1 (the election of directors) or Proposal 2 (approval of the Equity Incentive Plan) but does have authority to vote on Proposal 3 (the ratification of the appointment of Reynolds, Bone & Griesbeck PLC as the Company's independent auditor for 2022). Shares represented by such broker non-votes will, however, be counted in determining whether there is a quorum.

Voting results will be announced at the Annual Meeting.

REVOKING A PROXY

Any shareholder giving a proxy has the power to revoke it at any time before the proxy is voted. A proxy may be revoked at any time before it is exercised by:

• (1) Delivering to Lewis W. Perkins III, our Executive Vice President and Chief Financial Officer, or to the officer presiding at the Annual Meeting, either a written notice of revocation or a properly executed proxy bearing a subsequent date, or

• (2) Voting during the Annual Meeting. You must notify the election officials that you wish to revoke your proxy and vote in person.

If your shares are held by your broker as a nominee or agent, you should follow the instructions provided by your broker to revoke your voting instructions.

QUORUM

A quorum of shareholders is necessary to hold a valid meeting. The presence, in person at the Annual Meeting or by proxy, of the holders of at least a majority of the shares of our Common Stock outstanding and entitled to vote as of the Record Date will constitute a quorum for the transaction of business at the Annual Meeting. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker or other nominee) or if you vote during the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, either the Chairman of the Annual Meeting or a majority of the votes present in person or represented by proxy at the Annual Meeting may adjourn the meeting to another date.

ADDITIONAL INFORMATION

If you have any questions about the Annual Meeting (including accessing the livestream of the Annual Meeting), these proxy materials or your ownership of our Common Stock, please contact Lewis W. Perkins III, 5400 Poplar, Suite 350, Memphis, Tennessee 38119, Telephone [phone].

PROPOSAL NO. 1:

ELECTION OF DIRECTORS

Paragon's Bylaws provide that the Board shall consist of not less than four (4) and not more than twenty-

five (25) directors, and shall be divided into three classes (Class A, Class B and Class C) with each class having a three year term.

There are three (3) Class B directors standing for re-election at the Annual Meeting. If elected, Mary H.

McDaniel, Anita S. Vaugh, and Craig L. Weiss will serve until the 2025 Annual Meeting and until their successors are duly elected and qualified.

Directors are elected by a plurality of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting, which means the nominees who receive the largest number of properly cast votes will be elected as directors. A vote to "withhold authority" for the election of one or more director nominees will be

counted for quorum purposes, but because the vote required to elect directors is a plurality vote, a vote to "withhold authority" will not affect the outcome of the election under Tennessee law. Similarly, a "broker non- vote" will be counted for quorum purposes but will have no effect on the approval of the nominees to the

Company's Board.

In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board of Directors may propose or a vacancy will occur, which if not eliminated by the directors by reducing the size of the Board, may be filled later by action of the Board. Ms. McDaniel, Ms. Vaughn, and Mr. Weiss have each agreed to serve if elected.

NOMINEES FOR ELECTION TO THE BOARD

The following is a brief biography of each nominee standing for election to the Board of Directors at the Annual Meeting.

Class B Director Nominees for Election for a Three-Year Term Expiring at the 2025 Annual Meeting:

MARY H. MCDANIEL has served as a director since September 2012 and currently serves on the Audit &

Compliance Committee, Directors' Loan Committee, and the Compensation Committee. Ms. McDaniel retired as

Vice President - Air Operations Material and Corporate sourcing of FedEx, in 2010, where she worked for nearly 31 years. She is currently the president and owner of MHM Consultants, LLC. Ms. McDaniel is an active community member and is involved with organizations such as International Aviation Women Association, and is the President of The Philanthropic Black Women of Memphis. She also serves as Board Chair of The Women's Foundation for a

Greater Memphis. She is the former Chair of the board of the Tennessee Alcohol and Beverage Commission and was the West TN Commissioner. Ms. McDaniel is a graduate of Southwest Tennessee Community College, attended Christian Brothers University and has a Bachelor's of Science Degree from Bethel University.

ANITA S. VAUGHN has served as a director since March 2016 and currently serves on the Audit & Compliance Committee and the Asset-Liability Committee. From 1974 to 2016, Ms. Vaughn was employed by Baptist Memorial Health Care Corporation where she served in a variety of positions including Director of Practice

Management, Administrator of Managed Health & Wellness and Assistant Vice-President. From 1998 until her retirement, Ms. Vaughn served as CEO/Administrator of Baptist Memorial Hospital for Women. She is involved in the local community as she serves on the Women's Foundation for a Greater Memphis Board, Baptist College of

Health Sciences Governing Board, and the University of Memphis College of Arts and Sciences Alumni Advisory

Board and the University of Memphis National Alumni Board. Ms. Vaughn holds a degree in Nursing from Baptist

Memorial Hospital School of Nursing, a Bachelor's degree in Sociology from Memphis State University (now the

University of Memphis), and a Masters of Public Administration with a concentration in Health Services