SOURCE: Pacific Trust Bank

June 30, 2005 12:36 ET

Pacific Trust Bank Introduces the "Green Account" -- A Fully-Transactional Mortgage Account

CHULA VISTA, CA -- (MARKET WIRE) -- June 30, 2005 -- Pacific Trust Bank, a community savings bank headquartered in Chula Vista, California, today announced the offering of its newest mortgage account product, the "Green Account." The Green Account merges the features of mortgage, line of credit, checking and savings account products into one customer account relationship.

Pacific Trust Bank's president and CEO, Hans Ganz, believes that introduction of the Green Account makes Pacific Trust the first bank in America to offer its customers a fully-transactional mortgage account.

The Green Account is a first mortgage line of credit with an associated 'Clearing Account' that allows all types of deposits and withdrawals to be performed, including direct deposit, check or debit card, ATMs transactions, ACH debits and credits, and transactions through the Bank's Internet banking and bill payer service.

In addition to its transactional features and financial management simplicity, the Green Account's primary benefits are:

--  liquidity and accessibility to your equity;
--  cash management flexibility; and
--  the ability to minimize the outstanding loan balance and finance
"Instead of making payments on a traditional mortgage, and keeping separate checking and savings accounts, you can save thousands of dollars in interest rate charges, build equity in your home and payoff your loan faster with a Green Account," said Ganz.

"Because every deposit is a principal loan payment," explained Ganz, "you effectively earn the Green Account mortgage interest rate on funds you would otherwise keep in lower-yielding checking, savings or money market accounts."

Normally, people deposit funds into a low-yielding or non-interest bearing checking account, and the money stays there until it's transferred to other savings accounts, withdrawn or used to pay bills, etc.

By depositing income and other funds into a Green Account mortgage, its loan balance is reduced until the funds are withdrawn, and this results in less interest expense for the borrower. Effectively 'saving' the difference between your mortgage rate and what it might otherwise earn in a checking or savings account (if anything), the Green Account could save you a small fortune over the life of the loan and help cut years off your mortgage.

"This is not the same thing as making bi-weekly or extra payments on a traditional mortgage," Ganz said.

Because it's a line of credit, Green Account deposits increase the borrower's remaining available credit by an equal amount, and funds can be accessed again (up to the credit limit), whenever and as may be needed for any purpose during the full 15-year term of the account.

And, because Green Account interest is calculated daily, based on each day's ending loan balance, borrowers immediately benefit from every deposit with reduced interest expense, unlike traditional mortgage interest calculated on a monthly basis without regard to when the payment is made.

Pacific Trust Bank promotes the Green Account by saying "it's not new, it's revolutionary."

"Similar approach loan programs have been available in England and Australia for years, and became so popular," Ganz said, "that, according to one study, they now account for one-third of all home loans in Australia and one-fourth of all home loans in England."

Asked why it took so long for this type product to become available in America, Ganz said "to address the interrelated system, procedural, legal and regulatory issues for this complex new banking product, Pacific Trust Bank spent over two years in development of the Green Account."

Pacific Trust will be offering a variety of Green Account rate adjustment frequency and Index options, for borrowers to select from, and will offer credit limits up to 80% of the home's value and up to $2.5 million. For now, the Bank is only offering Green Accounts on 1 to 4 family properties in California, and plans on originating and servicing the loans for its own portfolio.

Pacific Trust's new transactional mortgage account was given the Green Account name because, said Ganz, "when it comes to your personal finances -- it's about money, cash flow, and transactions, interest income and interest expense, savings and debt, earnings and costs, equity and net worth -- it's all about the Green. And that's what the Green Account is all about."

The Green Account is just another in a long-line of consumer friendly product and service innovations for Pacific Trust Bank customers, which includes free self-serve Ex-Change coin machines in all of the branches, the Peace Of Mind CD with an adjustable rate that can only go up, never down, and free online banking and bill paying services.

For more information about the Green Account, call Pacific Trust Bank at (877) 441-BANK or visit the Bank's web site at:

About Pacific Trust Bank

Pacific Trust Bank, with total assets of $700 million, has eight branch offices located in Chula Vista, San Diego, Rancho Bernardo, El Cajon, Temecula and Riverside, California, and is the federal savings bank subsidiary of First PacTrust Bancorp, Inc. (NASDAQ: FPTB).

About First PacTrust Bancorp, Inc.

As of March 31, 2005, the Company had consolidated total assets of $700.3 million and stockholders' equity of $80.3 million, with 4,543,500 shares of common stock currently outstanding. The Company's stock is traded on the Nasdaq Stock Market under the symbol "FPTB."

Contact Information

  • Contact:
    Hans Ganz
    President and CEO
    Phone: (619) 691-1519, ext. 4000