Bank revenue will benefit when loan growth returns, said Christopher Kotowski, an analyst at Oppenheimer & Co. in New York. In the savings and loan crisis of the 1990s, average annual loan volume didn't grow until two years after the amount of new troubled assets peaked, he wrote in a July note to investors.

Consumer and commercial loans at U.S. banks climbed 0.6% in September to $6.8 trillion from a year earlier, the first rise in 15 months, according to data from the Federal Reserve Bank of St. Louis. That compares with an annual growth rate of 11% from 2005 through 2007 during the height of the housing boom. Loan volumes peaked at $7.29 trillion in 2008.

"Loan growth and job growth are always the last things to come back," Kotowski said. "I know people are impatient because there's a lot of pain out there, but I don't think there's a way to jumpstart the process. It needs to run its course."

Appetites For Risk

William Rogers Jr., president of Atlanta-based SunTrust Banks Inc., told analysts Oct. 21 that large corporate customers are using about 17% of their loan capacity, compared with an average of "mid to high 20s." For mid-size companies, the rate is in the "low 30s," compared with an historic average in the low to mid 40s, he said. The rate of decline has abated this year, he said.

"I would hope that we'd start to see some kind of increase depending on some type of economic recovery," he said.

Betsy Graseck, an analyst for Morgan Stanley in New York, said bank revenue will likely shrink this year and next before rebounding in 2012. Consumer loan growth and investor appetites for risk will begin to rise again late next year, she said.

"We've got two more years of slog and workout," Graseck said. "We see the light at the end of the tunnel. It's a faint glimmer, and it's growing brighter over the course of the next two years."

Operating Margins

Bank revenue in the first quarter surged in part because of two government programs designed to revive the U.S. housing market -- the Fed's $1.25 trillion mortgage-bond purchase program that ended in March and a homebuyer tax credit that expired in April. Revenue has been weak since.

Expenses aren't falling as fast as revenue at the six largest banks, which is squeezing their operating margins. Non- interest expenses, including compensation and rent, fell 3% in the third quarter from a year earlier. The overhead ratio for the six banks -- non-interest expenses divided by revenue -- climbed to more than 60% for the first time since the height of the financial crisis in 2008.