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A former heir apparent to billionaire investor Warren Buffett has resurfaced in an unusual role—as an activist agitating for the sale of a small Virginia bank.

David Sokol, once widely expected to succeed Mr. Buffett as chief executive of Berkshire Hathaway Inc., has kept a fairly low profile since leaving the conglomerate amid a stock-trading controversy five years ago.

In recent weeks, though, Mr. Sokol has aggressively and publicly pushed Middleburg Financial Corp. to put itself up for sale. The former Berkshire executive has been invested in the bank for nearly eight years and holds 30% of its stock. Last week, he wrote the bank's directors and said he believes Middleburg "has more value as part of a larger bank" and urged it to explore a sale.

The letter, released in a regulatory filing, also said the board has "done nothing in hopes that this matter will go away"—adding that Mr. Sokol has hired lawyers and investment bankers to work with him on ways to realize the value of his stake, now worth around $57 million.

In an interview, Mr. Sokol said he believes small and midsize banks are important to local communities and businesses, but banks with less than $2 billion in assets can no longer be competitive given the cost of complying with postcrisis regulations.

"They need to be larger, at least in the $3 to $6 billion size, to be competitive and be able to distribute the cost of banking on a broader basis," he said.

Middleburg spokesman Joseph Berg said, "We have appreciated our long-standing relationship with Mr. Sokol and look forward to maintaining our constructive dialogue." The bank noted it has achieved a shareholder return of 108% in the seven years since March 2009, when Mr. Sokol first disclosed a significant stake. Over the same period, a KBW index of regional bank stocks rose 128%, according to Thomson Reuters.

In addition to becoming a more-vocal investor, Mr. Sokol, 59 years old, is becoming increasingly vocal about politics. He is an avowed fan of "Atlas Shrugged," the 1957 novel by Ayn Rand that made a moral case for capitalism and self interest. In public speeches and columns, Mr. Sokol has drawn comparisons between the dystopian, over-regulated America portrayed in the book and the present day, saying that free enterprise is increasingly under attack.

A Republican who donated to former Massachusetts Governor Mitt Romney's 2012 presidential bid and supported Jeb Bush in the current campaign before the former Florida governor dropped out, Mr. Sokol hasn't decided who he will vote for.

"Out of 315 million people in this country, if those are the five best, there's something wrong," he said of the remaining Republican and Democratic candidates in the presidential race. He also is bothered by what he says is society's "loss of civility," referring in a recent opinion article to insults traded by presidential candidates while issues of national importance are ignored. In that article, published in the Washington Times, he also contended that, given the "incendiary time in American life," little was achieved by airing "Confirmation," the recent HBO movie about the Senate hearings to confirm Clarence Thomas to the Supreme Court. Mr. Thomas, he wrote, is a personal friend.

Middleburg Financial owns a community bank with 13 branches and offers other financial services such as asset management and mortgages. It serves an affluent community not far from Washington and has assets of $1.3 billion.

Over the years, Mr. Sokol attended Middleburg's annual strategy meetings and invited some board members to Jackson Hole, Wyo., where he lives, for activities that included fly fishing and rafting. Eventually, he raised the idea of a sale of the bank.

"They have been trying to grow their way out of the problem," but that strategy hasn't been working, Mr. Sokol said. The bank's return on equity of 6.25% in 2015 is below its cost of capital, and remaining independent isn't going to make the business economical, he said.

Bank mergers hit a postcrisis high last year and are expected to continue. Several small and midsize banks have struck deals in recent months, including National Penn Bancshares Inc., which BB&T Corp. bought this month for $1.8 billion. In January, the Michigan banks Chemical Financial Corp. and Talmer Bancorp Inc. merged in a $1.1 billion deal.

Mr. Sokol's family office, called Teton Capital LLC, holds stakes in private and public companies in a range of industries. The Omaha native resigned from Berkshire in 2011 after disclosures that he had personally bought shares of a chemical company, Lubrizol, not long before recommending that Mr. Buffett buy it for Berkshire.

In 2013, Mr. Sokol's lawyer said the Securities and Exchange Commission had decided not to take action against the former Berkshire executive. Mr. Sokol said he hasn't spoken to Mr. Buffett since he parted ways with Berkshire. Not long after Mr. Sokol resigned, Mr. Buffett publicly said he thought the executive's behavior with regard to the Lubrizol affair was inexplicable and inexcusable and violated the company's code of ethics.

"Why he chose to do that I will never understand," Mr. Sokol said.

Mr. Buffett didn't respond to request for comment.

Write to Serena Ng at serena.ng@wsj.com and Anupreeta Das at anupreeta.das@wsj.com

(END) Dow Jones Newswires

April 25, 2016 00:15 ET (04:15 GMT)

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