Each week on Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss a stock on their radar. This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). Here's what investors should know about the recent developments within these two banks.
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This video was recorded on July 8, 2019.
Jason Moser: Okay, Matt, let's wrap up this week here. We've got One to Watch time. What is your one to watch for this coming week?
Matt Frankel: I'm looking at Deutsche Bank, ticker DB. They announced a giant restructuring plan. They're cutting 18,000 jobs over the next few years. If you're curious, that is a big number, but they have 92,000 right now, so they're not cutting 80% of their workforce. They're closing their global equities sales desk and their trading desk. They're creating a so-called bad bank, kind of like Citigroup did at the end of the financial crisis with Citi Holdings. The goal, obviously, is to improve profitability and stability. They say that this plan will cut costs by a quarter. Market's not thrilled with it, the stock was down by 6% this morning when I checked. I'm not saying it's a buy, but it's definitely one to keep an eye on as this progresses. If you are a long-term investor and want to take a risk and think that this is going to be a great institution 10 years from now, it could be worth a look.
Moser: Yeah. Anytime you see companies right-sizing their cost structure, there are lives are impacted by that, but from a business perspective, from the investor's perspective, it's usually a good thing. Always something to keep in mind there.
I'm going to go with Ameris Bancorp, a company that obviously we've talked about a lot before here. They just closed the Fidelity deal. We were talking about the big acquisition of Fidelity Bank in Atlanta. That's good. They finally got that knocked out. A bit of a surprise recently in CEO Dennis Zember -- you may remember that we interviewed Dennis back in February on this show -- Dennis Zember has stepped down according to the company base. There were some personal and some family issues, and he felt he needed to step away. It sounds like Palmer Proctor, who is with Fidelity, he served as the president of Fidelity, will be taking over as the CEO of the newly combined bank there, which will continue to be known as Ameris Bancorp. So, we'll have a new CEO to get to know. This wasn't quite a merger of equals, Ameris was the bigger of the two, but I do like the exposure. It gets to some very lucrative lending markets. Banks need to get bigger in order for investors to benefit from that, and it does seem like Ameris is doing the right stuff here to get bigger. Who knows? We'll reach out to Ameris and see if we can't maybe speak with Palmer Proctor one day. That'd be a nice interview to get on the show here. But again, I think it's good they've got that acquisition all wrapped up there, and now it's onward and upward, hopefully. We'll be keeping an eye on it.