David Sokol’s Teton Capital has launched a launching an activist campaign aimed at shaking up the governance and cost structure at Atlantic Union Bank after quietly building a stake approaching 5% in the $4.4bn regional bank, according to a report by Bloomberg.

The report cite unnamed sources familiar with the matter as highlighting that Sokol, the former Berkshire Hathaway executive once seen as a potential successor to Warren Buffett, is pressing the Richmond, Virginia-based lender to streamline operations, cut executive compensation, and reduce its 14-member board – moves he argues are necessary to restore investor confidence after a recent spate of value-destructive M&A.

Central to Teton’s critique is Atlantic Union’s $1.6bn acquisition of Sandy Spring Bancorp, a 2023 deal that Sokol views as an over-priced expansion into unfamiliar territory. While the transaction received overwhelming shareholder approval, performance since the deal has been underwhelming, with Atlantic Union’s stock down nearly 19% year-to-date, underperforming both peers and broader financial benchmarks.

According to people familiar with Teton’s position, Sokol believes the bank must take “urgent steps” to align executive incentives with shareholder returns and conduct a comprehensive review of overhead costs. Trimming the enlarged board — bolstered by five new directors from the Sandy Spring and American National Bankshares transactions — is also a key demand.

Spokespeople for both Atlantic Union and Teton Capital declined to comment.