The heads of the some of the country's largest banks said Tuesday that 2010 could be another tough year for lending.

Executives with Wells Fargo & Co., Regions Financial Corp. and Zions Bancorp. said at a Goldman Sachs banking conference in New York that prospects for growth in consumer and commercial lending are mixed because of uncertainties about the economy and business spending.

John Stumpf of Wells Fargo and Harris Simmons of Zions said a favorable pricing environment makes it a great time to book "earning assets," or interest-bearing loans and investments. But demand is soft, they said.

"One of the biggest challenges next year for [the] industry and for our company is expanding quality earning assets," Stumpf said. "Most consumers are deleveraging."

Simmons said he does not expect to "see a whole lot of shrinkage" across his Salt Lake City company's entire loan portfolio next year, although its business book is getting smaller.

"Clearly commercial real estate will continue to shrink, and particularly the construction piece of it will continue to come down," he said.

Most banks' loan portfolios have fallen in the recession, as consumers paid down debt and businesses stopped drawing on credit lines amid weak sales.

Dowd Ritter, the chief executive of Regions, said his Birmingham, Ala., company is "worried" about declining lending to businesses. Regions had $24.5 billion of commercial loan commitments in September, with a tepid utilization rate of 42.8%. Last December, it had $25.5 billion of commercial commitments, with a utilization rate of 48.9%.

Ritter said virtually every commercial client he has visited has inventories that are "almost nonexistent today," including a pipe manufacturer that had "nothing on their yard to deliver."

He said there is an upside to today's low utilization rates: Commercial borrowing should spike sharply when the economy turns around because "almost any company is going to have to borrow money to get back into building inventories and delivering their products."

Still, Stumpf said he expects "pressure on earning assets" to continue until businesses start rehiring and investing in new plants and equipment. That's not to say the San Francisco company is not seeing some opportunities for lending growth next year. He said its loans to car sellers could increase "because many of the providers there are gone."

He said there's an opening to ramp up small-business lending as some of its rivals have capital issues and the so-called shadow-banking system — or alternative investment outfits that some small companies relied on for credit before the recession — has disappeared.

In other news, several executives said their companies planned to repay their federal aid in a way that does not dilute the holdings of existing shareholders. Multiple media reports said this week that Wells Fargo was haggling with the government over how much capital it has to raise before returning its $25 billion in Troubled Asset Relief Program funds.

"Let me reiterate what I said in the past," Stumpf said. "From our perspective, we want to repay Tarp as soon as practical and in a shareholder-friendly way. But as you know, this is a two-party agreement."

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