trending Market Intelligence /marketintelligence/en/news-insights/trending/A_RzGWG_kOjlxCnWh1HU2A2 content esgSubNav
In This List

Monday's Bank Stocks: Middleburg Financial continues rise after activist's letter


Street Talk | Episode 94: Recessionary fears in '22 overblown, Fed could overtighten


Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022


Investment Banking Newsletter April 2022

Monday's Bank Stocks: Middleburg Financial continues rise after activist's letter

Middleburg, Va.-based MiddleburgFinancial Corp.'s stock kept climbing Monday, April 4, finishing at$24.58, up 4.06% on the day.

David Sokol is asking the Middleburg board to establish a specialcommittee of independent directors to initiate a process to explore strategic alternativesto enable Middleburg shareholders to realize the full value of their investmentin the company.

"Following the letter from the company's largest shareholder last week,[Middleburg] shares have continued to rise off of the speculation that the companywill look into strategic alternatives and the presumption that the company wouldfetch a premium in a sale," Sandler O'Neill & Partners analyst Casey Orrsaid.

BB&T Capital Markets analyst Blair Brantley agreed, sayingthere is upside potential in Middleburg's geography and the company's low loan-to-depositratio.

"It's in a very attractive demographic market, even if it'son the outskirts, and not necessarily on the inside of the Beltway, but still technicallyin the D.C. [area]," Brantley said, adding that that was a very affluent marketwith some very high-net-worth individuals.

A potential acquirer could "leverage the balance sheet prettywell because it's a pretty low loan-to-deposit ratio," he said.

"I think the only hang-up would be addressing Sokol's ownershipand how a deal is structured today, depending on who their potential buyer wouldbe [and its size]," Brantley cautioned. "There are some nuances therethat could affect some of the pricing," he said.

And Sandler's Orr noted that it was unclear how — or if — thecompany will respond to Sokol's letter. "We will have to stand by to see howthe situation unfolds," added Orr, who has a "hold" rating on theMiddleburg stock. The stock is up around 13.8% from its $21.60 close on March 31,when Sokol's letter came out.

Overall, the bank group closed the Monday trading session , following .The SNL U.S. Bank Index retreated 0.38% to 382.34, while the SNL U.S. Thrift Indexslipped 0.25% to 786.20.

The broader markets also slid, with the Dow Jones IndustrialAverage reducing 0.31% to 17,737.00, the S&P 500 decreasing 0.32% to 2,066.13and the Nasdaq composite index decreasing 0.46% to 4,891.80.

Large-caps were mostly down, as well. JPMorgan Chase & Co. dropped 1.12% to $59.20, ticked down 0.97% to$42.06, and Bank of America Corp.was 0.37% lower at $13.51.

Wells Fargo &Co. gained 0.10% to $48.50. The U.S. Supreme Court has Wells Fargo's appeal related toa $203 million ruling from back in 2010, Reuters reported.

Banc of CaliforniaInc. added 0.63% to $17.68. The Irvine, Calif.-based company completedthe redemption of all$42 million of its preferred stock issued to the U.S. Treasury Department underthe Small Business Lending Fund program.

BB&T Corp.was up 0.54% to $33.69, after the Winston-Salem, N.C.-based company of , effectiveApril 1.

Among notable movers, Dallas-based Comerica Inc. advanced 1.06% to $38.08; San Juan, PuertoRico-based First BanCorp.dropped 3.81% to $2.78; and Ontario, Calif.-based CVB Financial Corp. fell 0.97% to $17.38.

In the thrift space, Westbury, N.Y.-based New York Community Bancorp Inc. inched down 0.38% to $15.74;Lake Success, N.Y.-based Astoria FinancialCorp. lost 0.70% to $15.61; and Cleveland-based TFS Financial Corp. (MHC) increased 0.11% to $17.45.

San Diego-based BofIFederal Bank, a unit of BofIHolding Inc., said it closed an asset purchase agreement in which itacquired certain assetsand assumed certain operations of Salt Lake City-based Pacific Western EquipmentFinance from Pacific Western Bank,a unit of PacWest Bancorp.

BofI Holding gained 2.85% to $21.63, and PacWest was up 0.11%to $37.11.

Market prices and indexvalues are current as of the time of publication and are subject to change.