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Member Profile: FRC Advances, Flexibility of Products Help Malaga Bank Manage Its Business
Malaga Bank
Palos Verdes Estates, California
Asset Size: $496 million
Malaga Bank is a full-service community bank located on the Palos Verdes peninsula at the southwest tip of the Los Angeles basin. The bank lends throughout Los Angeles and Orange County. Real estate lending, especially apartment loans and construction loans, is Malaga Bank’s primary business.
Malaga considers the Federal Home Loan Bank of San Francisco a key resource for its business. Since it began using Bank advances seven years ago, Malaga has factored the amount it can borrow from the Bank into its business plan and uses Bank advances to fund a significant portion of its assets. “The Bank gives us an incredible ability to plan and to change our plan, if necessary,” says John Polen, President and Chief Executive Officer of Malaga Bank. “If we need to grow, rather than raise rates and advertise, we can borrow from the Bank. Then we can replace Bank advances later with customer deposits. It is an incredible resource.”
By using the Bank’s Fixed Rate Credit (FRC) product to match fund loans and by using overnight advances to mirror checking account deposits, Malaga is able to use the Bank’s flexibility and variety of products to meet its needs and, in turn, the needs of its customers. Its primary loan product is a 30-year mortgage loan that features a 3-, 5-, or 10-year fixed introductory rate. Malaga manages interest rate risk on these loans by borrowing from the Bank to match the fixed terms. “With the Bank as a borrowing source, we can offer any interest rate product our customer is seeking,” says Mr. Polen. “The Bank offers tools we can use to remain competitive in our market. It gives us the ability to borrow for one day, one week, one month, or 30 years.”
For Malaga Bank, access to the Bank is a tool they use to help them remain competitive in their market. “The Bank is the most reliable, useful, accessible, organized, and stable source of funds available to us,” says Mr. Polen. “It is a customer-service-oriented organization that is as good as it gets when it comes to trying to give its customers what they want. We can’t see any reason why an institution wouldn’t use it.”
June 2005
Back to Member Profiles
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Member Profile: FRC Advances, Flexibility of Products Help Malaga Bank Manage Its Business
Malaga Bank
Palos Verdes Estates,
California
Asset Size: $496 million
Malaga Bank is a full-service community bank located on the Palos Verdes peninsula at the southwest tip of the
Los Angeles basin. The bank lends throughout
Los Angeles and
Orange County. Real estate lending, especially apartment loans and construction loans, is Malaga Bank’s primary business.
Malaga considers the Federal Home Loan Bank of
San Francisco a key resource for its business. Since it began using Bank advances seven years ago, Malaga has factored the amount it can borrow from the Bank into its business plan and uses Bank advances to fund a significant portion of its assets. “The Bank gives us an incredible ability to plan and to change our plan, if necessary,” says John Polen, President and Chief Executive Officer of Malaga Bank. “If we need to grow, rather than raise rates and advertise, we can borrow from the Bank. Then we can replace Bank advances later with customer deposits. It is an incredible resource.”
By using the Bank’s Fixed Rate Credit (FRC) product to match fund loans and by using overnight advances to mirror checking account deposits, Malaga is able to use the Bank’s flexibility and variety of products to meet its needs and, in turn, the needs of its customers. Its primary loan product is a 30-year mortgage loan that features a 3-, 5-, or 10-year fixed introductory rate.
Malaga manages interest rate risk on these loans by borrowing from the Bank to match the fixed terms. “With the Bank as a borrowing source, we can offer any interest rate product our customer is seeking,” says Mr. Polen. “The Bank offers tools we can use to remain competitive in our market. It gives us the ability to borrow for one day, one week, one month, or 30 years.”
For Malaga Bank, access to the Bank is a tool they use to help them remain competitive in their market. “The Bank is the most reliable, useful, accessible, organized, and stable source of funds available to us,” says Mr. Polen. “It is a customer-service-oriented organization that is as good as it gets when it comes to trying to give its customers what they want. We can’t see any reason why an institution wouldn’t use it.”
June 2005
Back to Member Profiles
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