MyState's banking business achieved loan book growth of around two times system in the half-year to December 2018, although net profit declined.Hobart-based MyState reported a net profit of A$14.4 million for the half year ended December 2018. This was a decrease of 9 per cent on the $15.8 million reported in the prior corresponding period in 2017.In the half year to December, MyState's banking business achieved loan book growth of around two times system - that is, $189.3 million during 1H19 compared with growth of $46.1 million in the comparable half in 2017 - although this came at a cost.According to the company's statement to the ASX, the group's result reflected a decline in net interest margin, down 21 basis points on the pcp, and a function of the competitive environment for owner-occupied home loans combined with increased competition for wholesale and retail deposits, as well as a higher bank bill swap rate.MyState continued lending to low risk, owner-occupied lending with a loan-to-valuation ratio of less than 80 per cent, and said that while credit growth slowed nationally, the banking business achieved loan book growth at around two times system. During the reporting period, the banking business continued to grow its customer base across the eastern seaboard of Australia, with the proportion of loans outside Tasmania increasing from 54.5 per cent to 56.3 per cent since 30 June 2018.Notwithstanding this lending growth, the group's capital adequacy ratio at 31 December 2018 was 13.05 per cent, down 34 basis points on the pcp. Repricing of variable rate mortgages, which were increased by between 11 and 16 bps from 29 January 2019, has improved the margin outlook for the banking business for 2H19.The group's wealth management business reported a result in line with the pcp. The banking loan portfolio grew by more than $424 million or 9.8 per cent on the pcp. Customer deposits increased by $331 million, or 10.6 per cent, on 1H18. Non-interest income from banking activities continued a steady decline, in line with market and industry trends, as well as changes in customer behaviour. Increased uptake of digital and preferences for lower cost self-serve products also impacted non-interest income, which declined by $223,000 (2.9 per cent) on pcp.MyState's wealth management business reported NPAT of $2.2 million down (0.94 per cent) on the pcp, while income from funds management increased $100,000 (2.0 per cent) on the pcp, with financial planning and trustee services income slightly down on the pcp.