Tuesday, August 30, 2011

Former Berkshire Hathaway Bigwig David Sokol Continues Buying Middleburg Financial (MBRG)

The speculation is that this is going to be a "mini-Berkshire".
I don't know about that, Dave isn't Warren, but he is a good operator.
Via GuruFocus:

David Sokol Keeps Buying Middleburg Financial
If you didn’t lose your respect for David Sokol during the Lubrizol (LZ) scandal then you have a chance to invest alongside him in his latest venture.

Sokol keeps gobbling up shares of Middleburg Financial (MBRG) and according to the filing below, now owns 22% of the small financial institution:


Sokol has a family connection to Middleburg:

“While it’s good to have friends in high places, it’s even better to have family there.

CEO Gary Shook has found both in David Sokol, one of famed investor Warren Buffett’s top lieutenants at Berkshire Hathaway Inc. and a long-rumored candidate to lead Berkshire after Buffett.

Sokol owns some $19.3 million in Middleburg stock, making him the bank’s biggest shareholder. And his holdings may be getting a lot bigger. The company authorized him to increase his ownership stake by 50 percent. ...MORE 
TheStreet wasn't as charitable with their headline:

Berkshire Outcast Loads Up on Bank Stock
David Sokol has backed up the truck to load up on shares of Middleburg Financial (MBRG), continuing to add to a position the investor was holding when he resigned from Warren Buffett's Berkshire Hathaway (BRK-B) in March....
...Middleburg Financial's shares closed at $14.76 Tuesday, up 2% so far in August and up 4.5% year-to-date, bucking the trend for the largest U.S. banks. This performance compares quite favorable to the KBW Bank Index (I:BKX_), which was down 21% month-to-date and down a whopping 30% year-to-date....
...Middleburg Financial had $1.1 billion in total assets as of June 30, and reported second-quarter net income of $1.2 million, or 17 cents a share, compared to $724 thousand, or 10 cents a share, a year earlier.
The company's provision for loan losses declined to $1.1 million during the second quarter, from $1.3 million a year earlier, however, this improvement was more than offset by an increase in expenses on foreclosed properties to $606 thousand in the second quarter, from $295 thousand a year earlier.

The bank's net interest margin -- the difference between its average yield on loans and investments and its average cost of funds -- was 3.78% during the second quarter, expanding from 3.67% a year earlier. Its second-quarter return on average assets was 0.39%, which is way below the combined U.S. bank and thrift industry's 0.85%, reported Tuesday by the Federal Deposit Insurance Corp....MORE 
We had a flurry of posts on Middleburg last March, here are a couple:
March 31
Middleburg Financial Approaching Escape Velocity on Word Sokol Was Buying Within the Last Two Weeks (MBRG; BRK.A)
March 31 
UPDATED: "Sokol: Off to Middleburg Financial? (Its Shares Are Soaring)" MBRG; BRK.B

Here's what the stock has done, from BigCharts: