Bank loans appear likely to have slid for the eighth consecutive quarter, according to preliminary data from the Federal Reserve, and signals that the decline might slow are faint. But an almost breakeven reading on commercial and industrial lending supplied a glimmer of light.

According to estimates based on a sample of institutions, loans at domestically chartered commercial banks fell $136 billion, from June 30, to a seasonally adjusted $6.2 trillion at Sept. 22. If that level held for the final week in the month, balances will have fallen at an annual rate of 8.3% during the second quarter, or a almost twice as fast as the 4.3% rate of contraction in the previous quarter.

(The charts for the entire industry have been adjusted to back out the consolidation of $361.3 billion of assets and liabilities under new securitization accounting rules that was reflected in the Fed data on March 31. The charts for the large and small bank groups show the effect of the consolidation, which produced a sudden spike in asset and loan volumes.)

C&I loans stood out as a comparative bright spot, however, shrinking by $1.4 billion, from June 30, to $984 billion, at Sept. 22, or a 0.6% annual rate of decline if the level held until the end of the month.

That would be the smallest decrease since the contraction in bank lending began about two years ago. Corporations have for some time taken advantage of complaisant bond markets and issued large amounts of new securities, and banks have reported intensifying competition for high-quality credits.

Through Sept. 22, C&I loans were actually on pace to grow at an annual rate of 0.7% among a group of banks that excludes the 25 largest by assets, or a bit ahead of the 0.6% rate of expansion for the group in the first quarter. Similarly, the contraction in overall lending is on pace for a 5.2% annual rate among the small-bank group, much lower than the 10.1% rate among the 25 largest.

Deposit trends have remained strong for both groups as banks have continued to anchor themselves more firmly in core sources of funding. Excluding large time accounts, deposits increased about 1.2 percentage points from June 30, and about 12.8 percentage points from the end of 2008, to 68.5% of total liabilities at Sept. 22.

Total assets edged down in the quarter through Sept. 22 as banks came close to filling the hole left by shrinking loans with a sudden jump in securities holdings. (Overall, cash has done more than securities to take up the slack left by poor lending trends since the beginning of the recession.) Portfolios of agency mortgage bonds were on pace for a 32.3% annual rate of increase, to $1 trillion, and overall securities portfolios were on pace for a 26.4% rate of increase, to $2.2 trillion.

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