Citigroup To Buy Regional Bank: No Kidding!

10 Nov 12:09am
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File this under "tell me something I don't know".

Wall St. Newsletters


"Citigroup (C) is in talks to buy a regional bank that operates in areas that overlap with the New York financial-services company's focus in the U.S. Northeast, California and Texas, people familiar with the situation told The Wall Street Journal. The move comes less than a month after Citi walked away from Wachovia (WB), which is trying to close its purchase by Wells Fargo (WFC), the Journal reported. The identity of the target bank couldn't be determined, the paper said. But it said Citi Chief Executive Vikram Pandit wants to deepen the bank's U.S. deposit base, which is a cheap and reliable funding source."

In a post last month after talking to people at Citi in regards to the then Goldman Sachs (GS) / Citi rumors "So, the question then becomes. Where does Goldman fit? Answer? It doesn't. Citi wants deposits and neither Goldman nor Merrill (MER) have any. Sources at Citi indicated to me if it does a deal it will be with a depository institution that has minimal branch over lap with current operations, not a broker."

Citi buying a regional bank isn't news. It just isn't...If this was a secret, then I was the last to know it was a secret...


Disclosure ("none" means no position):Long GS, none
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ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.