
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, February 11, 1991                   TAG: 9102110340
SECTION: VIRGINIA                    PAGE: A4   EDITION: EVENING 
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE:                                 LENGTH: Short

CITY OFFICIAL SAYS SIGNET GAVE BEST DEAL ON FUNDS

Roanoke Treasurer Gordon Peters deposited $7 million in city funds in Signet Bank - after withdrawing the money last week from CorEast Savings Bank - because it offered the highest interest rate.

Some city residents have questioned why he chose Signet after withdrawing the funds from CorEast as a precautionary measure because federal banking regulators have taken control of the thrift firm.

Peters said today he obtained competitive bids on interest rates before depositing the money in Signet.

He withdrew the money early because he was not sure of the type of collateral CorEast had posted with state treasury officials to secure public deposits. State law requires banks and other financial institutions to provide collateral on deposits by local governments.

Peters said his action was "no reflection on the Federal Deposit Insurance program" that guarantees deposits for CorEast customers. The city's funds were not covered by the FDIC guarantee because they exceeded $100,000.

The move caused the city to lose $30,500 in interest and $11,000 in principal because of the early withdrawal of three certificates of deposit.

The funds had been deposited in CorEast because the firm had offered the highest interest rates. The city divides its money among banks or other financial institutions and seeks competitive bids on investments.

by CNB