Though government support has buoyed U.S. banking companies, there will likely be more bank failures this year as a result of an overall deterioration in credit quality, according to a report Standard & Poor's Corp. published Tuesday.

Barbara Duberstein, a credit analyst at S&P, said the number of failures will likely rise "from an already high number in 2008," as it has in other downturns in the credit cycle.

The ratings agency said its outlook for the U.S. banking industry is negative through this year, reflecting deteriorating economic conditions and mounting problems with asset quality. Negative rating actions will continue to "sharply exceed" positive ones this year, S&P said.

The agency said it is including the government's support as a credit factor for banking companies that were identified as systemically important, but said government programs "will not serve as a panacea for all U.S. banks, particularly midsize and smaller institutions that the government does not recognize as systemically important."

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