A relatively flat yield
curve during most of 2007 exerted downward pressure on the net interest margin of the banking industry as a whole as well as Iowa First.
75 percent--while Duncan also predicted the continuation of a flat yield
curve, with the 10-year Treasury remaining at 4.
The drop in net income stems from the flat yield
curve, which has reduced the spread between what banks pay to borrow money and what they earn lending it out, the bank said.
A flat yield
curve is taking away warehouse line gains for some brokers and mortgage bankers.
The credit crisis and flat yield
curve are shrinking lenders' profit margins and increasing the pressure for consolidation, especially in the retail financial services sector," Mr.
83 N/A Federal Reserve data on Treasury rates indicates flat yield
The company said a flat yield
curve has placed stress on its bottom line.
For example, Schroder markets a High-Return Bond with a seven per cent running yield - also known as the flat yield
AF funds its adjustable rate loan portfolio primarily with short-term deposits; however, the flat yield
curve over the last several years has driven many depositors to shorter term maturities, exposing the company to interest rate risk more so than many of AF's peers.
MacDonough said Westborough Financial has encountered unfavorable business conditions in recent years, putting his institution at a competitive disadvantage at a time of industry consolidation and a flat yield
curve that has squeezed industry margins.
During fiscal 2007 and 2008, operating performance had been challenged due to the historically flat yield
curve environment and periods of narrowing spreads.
Very flat yield
curves preceded the previous two, and there have been two notable false positives: an inversion in late 1966 and a very flat curve in late 1998.