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A High-Potential Basket of Small Bank Stocks

The mega banks can make excellent investments, but if you're looking for tons of growth potential, you'll probably have to think smaller. Fortunately, there are some excellent small-cap bank stocks with lots of room to grow. In this Fool Live video clip, recorded on Feb. 22, contributor Matt Frankel, CFP, and Industry Focus host Jason Moser give viewers a basket of exciting small-cap bank stocks to consider.

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Matt Frankel: "How about your best small and regional financials basket with a 10-to-15-year timeline, Jay Mo and Matt?" We don't have any joint baskets yet.

Jason Moser: Joint baskets? You mean like...

Frankel: Where I make two and you make two picks.

Moser: Yeah. But we had talked about that. Remember I fired that tweet off the other day where I said, how about we come up, we could devote a whole month, if we wanted, to putting together the "war on cash" basket part deux. Basically, I've been talking about that "war on cash" basket that we talked about forever, MasterCard (NYSE: MA), Visa (NYSE: V), PayPal (NASDAQ: PYPL), and Square (NYSE: SQ), coming up with a second war on cash basket that consists of other companies, those four companies in the first one can't be in the second one. If we were going to build the second one, who would we put in it? Maybe that would be something, that's a joint basket that we could definitely focused on putting together on war on cash part deux.

Frankel: For small and regional financials, I'd have to imagine that one of yours would be Ameris (NASDAQ: ABCB).

Moser: Yeah, more than likely.

Frankel: What's the other one?

Moser: Probably, Live Oak Bank (NASDAQ: LOB), too.

Frankel: Yeah, I would put that in there, so Ameris, Live Oak Bank. I might include Axos (NYSE: AX) in mine, AX. I would probably put that one in, and as far as the fourth smaller regional financial.

Moser: You know what, I haven't checked on lately. Remember we spoke with the CEO from that bank, Amalgamated.

Frankel: Yeah, that was a good one. I'd have to say Green Dot (NYSE: GDOT) could be included because they're technically a bank, they have a banking charter. I'd put that in a small-bank basket.

Moser: There you go.

Jason Moser owns shares of Ameris Bancorp, Mastercard, PayPal Holdings, Square, and Visa. Matthew Frankel, CFP owns shares of Green Dot and Square and has the following options: short September 2022 $155 calls on Square. The Motley Fool owns shares of and recommends Axos Financial, Live Oak Bancshares, Mastercard, PayPal Holdings, Square, and Visa. The Motley Fool recommends Ameris Bancorp and Green Dot and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.


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