trending Market Intelligence /marketintelligence/en/news-insights/trending/qW_Msc69aCa8b06uC4AHKQ2 content esgSubNav
In This List

First Republic forecasts further NIM compression in Q4

Blog

Insight Weekly: Bank boards lag on gender parity; future of office in doubt; US LNG exports leap

Blog

Insight Weekly: Job growth faces hurdles; shale firms sit on cash pile; Africa's lithium future

Podcast

Street Talk | Episode 99 - Higher rates punish bond portfolios, weigh on bank M&A

Blog

Insight Weekly: Loan growth picks up; US-China PE deals fall; France faces winter energy crunch


First Republic forecasts further NIM compression in Q4

San Francisco-based First Republic Bank said it expects continued compression in its net interest margin, which is forecast to slip to 2.75% in the fourth quarter from 2.80% in the third and 2.85% in the second.

For the full year, the bank expects NIM of 2.82%, compared to 2.95% in 2018.

The NIM guidance anticipates one more Fed rate cut in 2019, management said on the bank's third-quarter earnings call.

"The inverted yield curve continues to have an impact on net interest margin," CFO Michael Roffler said.

The bank has reduced its headcount and is managing expenses, management said, bringing its efficiency ratio to 63.8% from 64.5% in the second quarter.

First Republic has grown its balance sheet through refinancing activity in the low-rate environment, management said.

"The acquisition of new households is very powerful and far outweighs a few points of compression on NIM," Chairman and CEO James Herbert said.