Net interest margin

The Dallas company also warned of a decline in net interest income this quarter due to the anticipated impact of Federal Reserve interest rate cuts on loan yields.

Community banks will likely face questions about mortgage lending, deposit gathering and M&A during earnings calls.

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.

Higher net interest income and securities gains boosted quarterly profit to $62.6 billion, which was 4% higher from a year earlier. But potential trouble signs from lower interest rates may emerge.