Deposits

CEOs have been telling investors that if the Fed continues to cut interest rates, they will lower rates they are paying on deposits to minimize the hit to net interest margins. The danger is that if they lower rates too quickly or by too much, big depositors could go elsewhere.

M&T has skillfully used hedges, maintained an appropriate loan mix and resisted offering market-leading deposit rates, its chief financial officer said at a financial services conference.

Intense competition for deposits and a growing need for scale are spurring more New Jersey banks to seek out buyers.

The Plano bank, which is being sold to Prosperity Bancshares in one of the industry's biggest M&A deals this year, was also worried about credit quality, a regulatory filing shows.

Competition for deposits is tight, the outlook for loan demand is uncertain, and regulatory relief is slow-moving. Yet community bankers are feeling better about the economy than they have in two years, a Promontory Interfinancial Network survey found.