S&P Global Ratings has downgraded and revised its outlook for multiple US banks, citing "tougher" operating conditions.
The move follows similar action by Moody's, warning funding risks and weaker profitability will likely test the sector's credit strength.
S&P downgraded the ratings of Associated Banc-Corp and Valley National Bancorp on funding risks and a higher reliance on brokered deposits. It also downgraded UMB Financial Corp, Comerica Bank and Keycorp, citing large deposit outflows and prevailing higher interest rates.
Moody's downgrades several regional US banks
Weighing on many US banks' funding and liquidity is the sharp rise in interest rates, the S&P note said.
Deposits held by Federal Deposit Insurance Corp-insured banks will continue to decline as long as the Federal Reserve is "quantitatively tightening", it added.
The rating agency also downgraded the outlook of S&T Bank and River City Bank to negative from stable on high commercial real estate exposure among other factors.
Regulators propose raising capital requirements for largest US banks by 16%
Earlier this month, Moody's downgraded 10 US banks by one rating level, and placed a further six, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial on review for potential downgrades.
The US banking sector is still reeling from the collapse of Silicon Valley Bank and Signature Bank earlier this year, which badly dented confidence and led to a run on deposits at a host of regional banks, despite reassurance from authorities.
