NEW YORK — Standard & Poor's Ratings Services lowered its ratings and revised its outlooks on 22 rated U.S. banks.

The actions reflect its belief that operating conditions for the industry will become less favorable than they were in the past, characterized by greater volatility in financial markets during credit cycles, and tighter regulatory supervision. The changes also reflect Standard & Poor’s ongoing broad-ranging reassessment of industry risk for U.S. financial institutions.

Standard & Poor’s overall assessment of the U.S. banking industry incorporates the following key points: The industry is now in a transition and will likely undergo material structural changes; the loss content of loan portfolios should increase, but recent capital rebuilding should help banks defray these losses. The ratings agency said stress tests point to more pain in the future. It doesn’t view regional banks as being highly systemically important; and said potential losses could increase beyond its current expectations.

"We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions," said Standard & Poor's credit analyst Rodrigo Quintanilla. "Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace's new reality. Such a transition period justifies lower ratings as industry players implement changes." Possible changes include increased regulatory oversight and lower profitability.

In addition, Standard & Poor’s reassessed the relative creditworthiness of many institutions based on their abilities to deal with the increased risks during this transition period. "We believe some firms may be better able to weather the risks ahead than others," Quintanilla added. "In the long term, we could foresee ourselves raising ratings if lower earnings and reduced risk are accompanied by stronger risk-adjusted capital and effective governance."

As a result of the downgrades this week, as well as those since mid-2007, the counterparty ratings on U.S. banks (at the operating subsidiary level) have fallen by an average of two notches, to 'BBB+' today from 'A' before the crisis began in June 2007. However, “the high number of firms with negative outlooks suggests that the ratings could still decline if the credit cycle is longer and/or deeper," said Quintanilla.

Associated Banc Corp. (Counterparty credit): BBB+/Watch Neg/A-2 to BBB/Negative/A-2

Astoria Financial Corp.: BBB/Watch Neg/-- to BBB-/Negative/--

BB&T Corp. (Counterparty credit): A+/Watch Neg/A-1 to A/Stable/A-1

Capital One Financial Corp. (Counterparty credit): BBB+/Watch Neg/-- to BBB/Negative/--

Carolina First Bank (Counterparty credit): BBB/Watch Neg/A-2 to BB+/Negative/B

Citizens Republic Bancorp Inc. (Counterparty credit): BBB-/Watch Neg/A-3 to BB-/Negative/B

Comerica Inc. (Counterparty credit): A/Watch Neg/A-1 to A-/Negative/A-2

Fifth Third Bancorp (Counterparty credit): A-/Watch Neg/A-2 to BBB/Negative/A-2

First National Bank of Omaha (Counterparty credit): BBB-/Watch Neg/-- to BBB-/Negative/--

Huntington Bancshares Inc. (Counterparty credit): BBB/Watch Neg/A-2 to BB+/Negative/B

KeyCorp (Counterparty credit): A-/Watch Neg/A-2 to BBB+/Negative/A-2

M&T Bank Corp. (Counterparty credit): A-/Watch Neg/A-2 to A-/Negative/A-2

PNC Financial Services Group (Counterparty credit): A/Watch Neg/A-1 to A/Stable/A-1&

Regions Financial Corp. (Counterparty credit): A/Watch Neg/A-1 to BBB+/Negative/A-2

Susquehanna Bancshares Inc. (Counterparty credit): BBB/Watch Neg/-- to BBB-/Negative/--

Synovus Financial Corp. (Counterparty credit): BBB+/Watch Neg/-- to BB-/Negative/--

U.S. Bancorp (Counterparty credit): AA/Watch Neg/A-1+ to A+/Stable/A-1

Valley National Bancorp (Counterparty credit): A-/Stable/-- to A-/Negative/--

Webster Financial Corp. (Counterparty credit): BBB/Watch Neg/-- to BBB-/Negative/--

Wells Fargo & Co. (Counterparty credit): AA/Watch Neg/A-1+ to AA-/Negative/A-1+

Whitney Holding Corp. (Counterparty credit): BBB/Watch Neg/A-2 to BB+/Negative/B

Wilmington Trust Corp. (Counterparty credit): BBB+/Watch Neg/A-2 to BBB/Negative/A-2