BIG DEPOSITORS GET BANK'S HELP COMMUNITY MANAGES INSURED FUNDS.

Byline: Daily News

SANTA CLARITA - Pasadena-based Community Bank, with a branch in Santa Clarita, is taking advantage of a new federal program that enables depositors to obtain federal insurance on amounts of up to $5 million - without having to do any fancy footwork.

Previously the limit was $100,000. The new program is called the Certificate of Deposit Account Registry Service - known as CDARS.

``After only one week of offering CDARS, Community Bank is among the leaders in our national network,'' said Mark Jacobsen, president and chief operating officer of Promontory Interfinancial Network LLC, which operates the program.

The Federal Deposit Insurance Corp. won't insure more than $100,000 of a depositor's funds at any one bank. To get around that limit, depositors have either had to divide their funds among several banks or pay a broker to do the job for them.

Thus to get protection for as much as $5 million, a depositor had to have 50 accounts at 50 separate institutions.

V. Charles Jackson, president and CEO of Community Bank, explained that CDARS allows Community Bank to accept deposits above $100,000 and forward the excess to other banks in the CDARS network. The accounts in other banks are identified by a tracking number only.

Depositors will be paid the same interest rate on all their accounts. The rate is set by Community Bank and will be highly competitive, Jackson said.

Certificates of deposit will be issued by each bank holding a depositor's money and each will be insured by the FDIC. But Community Bank's customers will receive just one account statement and, at year's end, a single 1099 tax statement.

When the CDs mature, they can be redeemed or re-invested at Community Bank, no matter where they had been placed through CDARS.

The program, Jackson said, is ideal for small companies and not-for- profit organizations, such as school boards or homeowners' associations.

``Small companies and not-for-profits don't want to have accounts at banks all over town. It causes confusion and requires extra management time,'' Jackson said. ``But the alternative is to risk having uninsured funds at a single bank. This forces depositors to spend a considerable amount of time and effort placing and monitoring deposits at multiple banks all over town and, in some cases, all over the country. With CDARS, depositors have the convenience of a single account and the protection of multiple accounts.''

During the first month that the new program was offered, Community Bank took in $4 million in CDARS accounts, Jackson said.

``This may not seem like much, but we were told it was the most of any participating bank in the country,'' Jackson added.

Community Bank is a regional bank, founded in 1945, that serves small and mid-market companies. Based in Pasadena, it operates banking centers in that city and in Anaheim, Burbank, Corona, Fontana, Glendale, Huntington Park, Industry, Irvine, Redlands, San Bernardino, Santa Clarita, Gardena and Yucaipa. At the end of 2002, the bank had assets of $1.435 billion and deposits of $1.18 billion. Net income for 2002 was $17 million, up 18 percent from 2001.