UPDATE 1-S&P cuts view on 10 U.S. banks, cites housing

(Adds analyst comments, byline)

By Jonathan Stempel

NEW YORK, Sept 3 (Reuters) - Standard & Poor's cut its ratings or outlooks for 10 U.S. regional banking companies on Wednesday, citing expectations for higher losses tied to the nation's troubled real estate markets.

The rating agency downgraded Cleveland-based National City Corp's NCC.N long-term rating to "A-minus," its fourth-lowest investment grade, from "A," and cut its short-term rating to "A-2" from "A-1." It also downgraded Memphis, Tennessee's First Horizon National Corp's (FHN.N) long-term rating one notch to "BBB," its second-lowest investment grade, from "BBB-plus."

S&P also said it may cut ratings for Cincinnati-based Fifth Third Bancorp (FITB.O) and Flint, Michigan-based Citizens Republic Bancorp Inc (CRBC.O). It said it revised its outlooks to "negative" from "stable" for Colonial BancGroup Inc (CNB.N), Comerica Inc (CMA.N), Regions Financial Corp (RF.N), Synovus Financial Corp (SNV.N), Wilmington Trust Co (WL.N) and Zions Bancorp (ZION.O).

Most of the affected lenders have significant exposure to residential and construction loans in one or more of the nation's hardest-hit housing markets: California, Florida, Michigan and Ohio. Lenders worldwide have suffered close to $500 billion of write-downs and credit losses since the credit and housing crisis began last year.

Wednesday's rating actions targeted "those that either had a profitability weakness or a capital weakness that would not allow them to potentially weather that kind of a perfect storm that we were looking at," S&P analyst Tanya Azarchs said on a conference call. "It's going to be worse than historically."

Downgrades often boost borrowing costs, reviews for downgrades suggest possible cuts within three months, and negative outlooks suggest possible cuts within two years.

Wednesday's rating actions came a day after First Horizon said 2008 net charge-offs might total as much as $100 million above the $385 million to $485 million range it had previously forecast. First Horizon cited "prolonged weakness" in real estate and tough economic conditions for its new forecast.

Rodrigo Quintanilla, another S&P analyst, said nine other regional banks have negative outlooks. He said more downgrades weren't necessary because many lenders have raised capital or set aside large amounts to cover expected loan losses.

"We don't see massive downgrades, despite the cycle," he said.

The latest review did not include the largest U.S. lenders, including Citigroup Inc (C.N), Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N). Washington Mutual Inc WM.N, cut to one notch above "junk" status on July 23, also wasn't included. S&P is a unit of McGraw-Hill Cos (MHP.N). (Editing by Brian Moss and John Wallace)