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M&T Bank executives reduced the amount of money set aside for loans going bad last quarter while also seeing both loans and deposits take a dip.

The Buffalo, New York-headquartered major regional bank’s provision for credit losses decreased from $200 million in the first quarter of 2024 to $130 million in the first quarter of 2025, a 35 percent decrease, the bank said in its quarterly financial statement.

However, the allowance for credit losses as a percentage of outstanding loans increased from 1.61 percent in the fourth quarter of 2024 to 1.63 percent in the first quarter of 2025.

Top bank executives said in Monday morning’s earnings call that they’re watching several possible ways the Trump administration’s see-saw tariff policies could influence the economy and the bank’s business. Several prominent analysts and economists have suggested in the last two weeks that the odds of a recession in America are rising dramatically.

“Our provision probably would have been close to 110 [million dollars] if we did not have tweaks,” CFO Daryl Bible told stock analysts Monday. “We have three scenarios. The scenario that has the downward pressure, we just increase that proportionately more so that you have higher unemployment rates than you have lower GDP rates. We didn’t have it go into a recession, we had it close just above that at 0.1 percent positive [GDP growth]. Obviously, if we do go into a recession, then we probably would continue to add to the reserves appropriately, as needed but we just felt comfortable that was the right thing to do, given everything that’s going on.”

Loans and leases decreased $879 million, and the yield received on those loans and leases declined 11 basis points.

Additionally, average interest-bearing deposits at the bank decreased $3.9 billion, and the yield those deposits received declined 32 basis points. The bank ended the quarter with $19.39 billion in interest-bearing deposits and $161.22 billion in total deposits. Net interest margin ended the quarter at 3.66 percent.

While deposits dropped, revenue and net income increased on a year-over-year basis. Quarterly revenue increased from $2.2 billion to $2.3 billion while net income increased from $531 million to $584 million, a 9.98 percent increase.

“I am pleased with the solid financial results we obtained in the first quarter. M&T’s start to the year reflects the consistency and strength of our diversified banking model, healthy levels of capital and liquidity as well as improved credit results,” Bible said. “We continue to invest in our people, technology and processes to better serve our customers. We remain steadfast in our goal to make a difference in the communities where we work and live.”