The biggest U.S. banks are extending less credit amid a faltering economic recovery as regional lenders step in to fill the gap.

Total loans at the four largest U.S. banks — JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. — fell 4.9 percent to $3.04 trillion in the first quarter from the same period in 2010, according to data compiled by Bloomberg. Lending by the 17 smallest of the 24 firms in the KBW Bank Index increased 9.8 percent to $1.27 trillion.

The big banks are trimming assets to satisfy stricter capital rules and regulatory demands to dispose of risky loans, while regional lenders, most less than one-tenth the size of JPMorgan, are picking up customers. That could mean lower earnings and profitability for the largest firms, said David Trone, an analyst at JMP Securities LLC in New York.