NEW YORK ( TheStreet) -- M&T Bank ( MTB) and Regions Financial ( RF) were the winners among the largest U.S. financial companies on Wednesday, with shares of both companies rising 2%. M&T's stock closed at $98.63, while Regions closed at $7.55. The broad indexes all pulled back after Chevron ( CVX) late on Tuesday provided an update on its financial results, saying that "earnings for the third quarter 2012 are expected to be substantially lower than second quarter 2012," as "upstream results are projected to be lower between sequential quarters, reflecting foreign exchange losses and lower liftings and realizations, partially offset by an asset sale gain," while downstream earnings are also expected to decline significantly, "reflecting the impact of negative timing effects, lower realized margins and the negative effects of several smaller unrelated items." Chevron's stock was down over 4% to close at $112.45. The Federal Reserve Wednesday afternoon released its October Beige Book survey, saying that "economic activity generally expanded modestly since the last report" in August, although "the New York District noted a leveling off in economic activity, and Kansas City indicated some slowing in the pace of growth." The KBW Bank Index ( I:BKX) rose slightly to close at 50.91. Leading into Friday's kickoff of earnings season for the largest banks with reports from JPMorgan Chase ( JPM) and Wells Fargo ( WFC), here are some focus points for investors, from Stifel Nicolaus analyst Christopher Mutascio, who has "Hold" ratings on both stocks: While investors and analysts have been focused on JPMorgan's continued unwinding of the hedge positions that led to its $4.4 billion second-quarter trading loss and suspension of its common share buyback program (JPM still earned a cool $5 billion second-quarter profit), Mutascio is concerned about the company's net interest margin, " "During 2Q12 the company's net interest margin compressed 14 basis points to 2.47%, resulting in a 4.2% ($496 million) sequential quarter decrease in net interest income," Mutascio said, and while "management has indicated the 2Q12 margin compression was not driven by the de-risking of the balance sheet in the aftermath of the London trading issues, we would have greater confidence in our 2013 EPS estimate if we were to see the margin stabilize in 3Q12. Without stabilization, we believe the risk to the consensus earnings expectations would be to the downside." A bank's net interest margin is the difference between its average yield on loans and investments and its average cost for deposits and borrowings. Most banks are seeing margins being squeezed, since the Federal Reserve's target federal funds rate has been in a range of between zero and 0.25% since late 2008, while the central bank in September increased its purchases of long-term mortgage-backed securities, in an attempt to push long-term rates down further, or at least keep them at their historically low levels. Some banks that saw assets reprice more quickly during this cycle are better positioned to defend their margins or even see them expand, over the next year. Among Mutascio's other concerns for JPMorgan Chase are the company's credit costs. "Overall, the company has been one of the more prudent banks within our coverage list in building up its loan loss reserve levels and not aggressively releasing them," the analyst said, but "in 2Q12 the company's loan loss provision expense was just 0.12% of average loans versus the 20-year median of approximately 1.00%," which "does not seem sustainable." JPMorgan Chase has already requested Federal Reserve approval to resume its share buybacks before the next round of bank stress tests begin in the first quarter of 2013. Mutascio said that "although we are not overly optimistic that management will provide significant details regarding its expectations for next year's CCAR, we are interested in its body language." For Wells Fargo, investors will be looking for additional comments from management about the federal government's mortgage fraud lawsuit. On the operating front, the company's net interest margin is of major concern to investors, as CFO Tim Sloan said at a conference last month that although the company achieved a "stable" net interest margin during the second quarter, in part because of "a 7 basis point linked quarter benefit from higher variable items," the margin for the third quarter "could be similar to what we experienced in the third quarter of last year when our net interest margin was down 17 basis points." With expectations for another very strong quarter for mortgage loan originations, Mutascio said "we would like to get a sense if the strength in mortgage banking can offset the potential for further net interest margin compression into 2013 - not just in 3Q12." Stifel Nicolaus will also be looking "for any signs of traction in net loan growth (ability of new loan production to more than offset reduction in loan run-off balances) and additional cost saves," with the expectation that "refinance activity eventually slows from its current torrid pace."