Citi Eyes Smaller Fish in Deposit Quest

Citigroup (C Quote) is setting its sight on smaller fish, after its quest to build its deposit base suffered a setback in its failed effort to buy Wachovia (WB Quote).

The Wall Street Journal on Thursday reported that the New York banking titan is in acquisition talks with privately held Chevy Chase Bank, which has 285 branches in the mid-Atlantic and roughly $11 billion in deposits and $15 billion in assets.

Citi has also may have had discussions with Valley National Bank (VLY Quote), according to Gary Townsend, the CEO and president of private equity firm Hill-Townsend Capital. Townsend says he had no firsthand knowledge of the talks, but had heard the rumor from "market sources." ...