Long Island Financial Briefs: April 21, 2006

Citigroup, Chase, keep eye out for growth

For Citigroup, the news couldn't have been better: The Federal Reserve Bank let the financial giant back into the expansion game after a little more than a year in the penalty box.

The Fed had restricted Citigroup from making acquisitions

Citigroup paid billions of dollars in fines, and on April 3 Federal Reserve Executive Vice President William L. Rutledge wrote to Citigroup that it has made significant progress in implementing its new compliance risk management program. Thus, the ban to expand through acquisitions was lifted.

So now the rumor mill starts to churn. Will Citigroup buy another bank? Will it be a bank in the New York area? Will it be New York Community Bank? Will it be a West Coast bank, where Citigroup hasn't seriously expanded? Maybe an overseas bank?

There are plenty of rumors, that's for sure, said Art Loomis, president of Albany-based investment bank Northeast Capital. They're out there and they'll have interest in acquisitions. But I'm not sure it's clear where or what they'll do.

Citigroup Chief Executive Charles Prince hailed the Federal Reserve's decision. He also said in a company memo that we are fully focused on our strategic initiatives, which emphasize our organic growth opportunities and build on our capabilities in attractive businesses and geographies.

Richard X. Bove, an analyst for Punk Ziegel & Co., stated in a research note that he didn't expect to see Citigroup jump right into the buying game.

Loomis was more non-committal in his predictions.

It's very difficult to tell, but both Citigroup and Chase will be out there looking, he said. Chase has made it fairly clear that there will be other acquisitions.

Earlier this month, JPMorgan Chase agreed to take Bank of New York's branch network in a trade valued at $2.3 billion.

For the 338 branches, Chase agreed to send Bank of New York its corporate trust business.

Marketing muscle

Accountant J.H. Cohn has turned to the second best baseball team in New York to find its new pitchman: Joe Torre, manager of the New York Yankees. The ads are running in what J.H. Cohn calls national business and key trade publications. The first ad ran in the Wall Street Journal.

Blown deadline?

So you couldn't get your taxes done on time.

You don't have to go directly to jail, according to the Internal Revenue Service. The agency said individual taxpayers could have requested an automatic six-month filing extension, which grants extra time for filing the tax return - but doesn't include not paying for any taxes due.

Taxpayers will owe interest on any past-due tax and may be subject to a late payment penalty if payment is not made by the original due date of the return.

This year, the IRS simplified the process to file for an extension. The IRS also said that extension filers can electronically file their returns until Oct. 16. Last year, nearly 1.8 million taxpayers filed electronically after the April deadline.

Separately, taxpayers affected by Hurricane Katrina can request an extension until Feb. 28, 2007.

Good Commerce

Cherry Hill, N.J.-based Commerce Bancorp said its first quarter net income inched up to $77.3 million from $77.1 million for the same period in 2005.

Revenue for the quarter ended March 31 rose 15 percent to $438.9 million from $382.6 million a year ago.

Net interest income rose 10 percent to $307.9 million.

Commerce plans to open 65 branches this year. The bank is breaking into the Lehigh Valley, Pa., market and is also filling its branch network in the Baltimore-Washington, D.C. area.