EagleBank CEO and Chairman Ron Paul is focused on stabilizing the Bethesda bank's customers and investors after a report by an anonymous firm produced days of bad news for the company.
In an interview with the Washington Business Journal, Paul called the allegations by Aurelius Value "100 percent false" and labeled its executives "scumbags" for what he says is an unfounded attack on a well-run community bank.
"I am not going to let these people affect us at all," Paul told me. "That’s what my goal is and that’s what I am doing every hour of the day."
The report accused bank executives, including Paul, of using their positions at the bank to secure loans and other products in exchange for cheap valuations in prospective investments, notably at MakeOffices and Matchbox Food Group.
The report also cast aspersions on recent sales of EagleBank (NASDAQ: EGBN) stock by Paul, who said proceeds of the sales went to various charitable efforts, including the The Ron & Joy Paul Kidney Center at George Washington University Hospital. Paul, who has had two kidney transplants, set endowed the center last year.
"When you take a pristine bank and pristine people in the bank and you attempt to destroy their reputation strictly for profit and strictly through stock manipulation — to me there is nothing more disgusting than that," Paul said.
Aurelius, a largely secretive and anonymously run organization, does not list a contact address or executives on its website and could not be reached for comment.
Analysts have largely brushed off the Aurelius report and expressed confidence in the bank's underlying fundamentals, rating it a "buy." The stock was trading at $57.40 as of 2:45 p.m. Tuesday, down less than 1 percent from its open but still roughly $10 off its Friday morning open before the report was Aurelius published. Aurelius, which said it had a short position in EagleBank, made money when the price dropped.
Four separate law firms who work to build class-action lawsuits have stated they would investigate the Aurelius claims.
Paul said all of the transactions mentioned in the report were scrutinized by regulators.
But he said the bank's record, and its 500 employees and 11,000 customers, speaks for itself. The bank recently announced another period of record net income, with $29.9 million during the three months of the second quarter, an improved efficiency ratio and substantial growth in loans and deposits. The Urban Land Institute Washington recently honored Paul with a lifetime achievement award.