First Glance 12L provides a quarterly look at banking and economic conditions within the 12th District. District banks’ average 3Q19 net interest margin slipped quarter-over-quarter as declining interest rates and lower loan-to-asset ratios weighed on asset yields. However, on a year-to-date basis, bank profits compared favorably to the same period during 2018, mostly because of wider net interest margins over the cumulative, nine-month period. Districtwide, annual loan growth decelerated further, led by slowing among banks based in California, Washington, and Idaho, in particular. Although lower loan-to-asset ratios contributed to quarterly margin compression, they also benefitted on-balance sheet liquidity and risk-based capital ratios at many banks. Larger institutions were less likely to report year-over-year improvements in capital ratios, in part because of comparatively high dividend payouts. The District economy largely shrugged off trade tensions and slowing global growth. Quarterly job growth cooled from 2Q19 as growth in construction hiring abated, but it remained robust. Additionally, annual home price appreciation rates were steady-to-higher compared with 2Q19 across most District states as lower long-term interest rates boosted housing demand, affordability, and building permits. The report discusses several supervisory hot topics, and wildfire-related risks in California are covered in this quarter’s “Spotlight” feature.