EagleBank Founder, CEO Ron Paul Retires Suddenly, Citing Health Problems
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Eagle Bancorp Inc. announced Paul's retirement Thursday morning, citing "serious health developments" that would interfere with his job leading the bank.
"I am very disappointed to have to make this decision, but I do not believe it would be fair to the Company, its employees, customers and shareholders when my health prevents me from devoting my full attention to helping them develop and prosper," Paul said in a statement.
The bank could not elaborate on the nature of Paul’s health problems, citing privacy concerns. EagleBank Chief Financial Officer Charles Levingston told Bisnow Paul’s health issues have been visible to others at the bank.
“We knew over the course of the year that we could see a deterioration, a little bit of a slowdown, but you’re never prepared when it comes to a head,” Levingston said. “That’s really what we’re facing here.”
Paul has had health issues in the past, being diagnosed with kidney disease when he was 26 and receiving two kidney transplants in later years. Levingston said the company has had a succession plan in place given Paul’s history.
“We haven’t been a stranger to the notion that Ron’s had health concerns in the past, he’s received two kidney transplants, it’s a conversation that we’ve had periodically,” Levingston said.
Paul did not respond to a request for comment.
EagleBank’s board elected Vice Chairman Norman Pozez, formerly chair of Fidelity & Trust Bank, to succeed Paul as chairman. It elected EagleBank Chief Operating Officer Susan Riel to succeed Paul as interim president and CEO.
"On behalf of all of the members of the EagleBank family, I can say we are all personally saddened to hear of Ron's retirement, but we all wish him the very best as he moves forward and in dealing with his health challenges," Pozez said in a statement.
Akridge Chairman Chip Akridge, who has worked with Paul on multiple real estate deals and said he knows him well, did not see his retirement coming.
"I am shocked," Akridge said. "I'm back on my heels to be honest with you. I'm surprised."
EagleBank financed two speculative office projects in Downtown D.C. for Akridge that delivered last month. Akridge praised Paul personally and professionally.
"He's a terrific guy," Akridge said. "I think he's done a terrific job not only in the banking field but in the philanthropic field. He's put a great team together, created a tremendously successful and well-run community bank."
Paul co-founded the bank with Riel and two others in 1998 in Bethesda, Maryland. He will not retain any positions with the bank following his retirement, Levingston confirmed, but he still owns shares in the company.
Two other executives at the company have retired in the last three years, with former Eagle Bancorp Vice Chairman Bob Pincus stepping down in 2016, and former EagleBank general counsel Laurence Bensignor — also citing health reasons — retiring last year.
The company held $8.4B in assets as of Dec. 31, and it brought in a net income of $152.3M last year, a 52% increase over 2017. Following Thursday morning’s announcement, the company’s stock price dropped from $52.34/share to $52.12/share, but it has since recovered to above its opening price.
The company’s stock took a major hit in December 2017, when a short-selling research firm published a report alleging an insider loan scheme involving Paul. EagleBank vehemently denied the allegations at the time, and its stock recovered after dropping by over 16 points upon the report’s release.
Paul was also recently involved in lawsuits related to two D.C.-based companies in which he invested, coworking provider MakeOffices and restaurant chain Matchbox, but the legal issues were resolved last year. Levingston said Paul’s retirement has no relation to any outside issues other than his health.
Paul will be missed at the bank for his entrepreneurial spirit and his relationship building, Levingston said. But he said the bank’s other executives have fostered close relationships with its clients, allowing those relationships to continue uninterrupted following Paul’s departure.
“He would say the best way to lead is to just go lead and get out there and do it; pick an issue and run with it,” Levingston said.
In addition to his role leading the bank, Paul also runs a development company, Ronald D. Paul Cos. The company owns over a dozen properties in D.C. and suburban Maryland, according to its website. In 2017, the Urban Land Institute honored Paul with its Lifetime Achievement Award.
He has also been an active philanthropist. Paul and his wife, Joy, in 2015 opened the Ron and Joy Paul Kidney Center at George Washington University’s hospital, launched with a $2.5M donation from The Ronald and Joy Paul Foundation.
UPDATE, MARCH 21, 5:20 P.M. ET: This story has been updated with comments from Levingston and Akridge.