Standard & Poor's Ratings Services lowered its credit ratings on Bank of America Corp. and its banking units based on the ratings firm's expectations that economic weakness will continue, pressuring earnings more than expected.

The credit rater said Bank of America's creditworthiness has deteriorated based on its exposure to consumer credit and warned further writedowns associated with the Countrywide and Merrill Lynch acquisitions are also a possibility.

The downgrade comes less than two months after the U.S. government agreed to provide Bank of America with an additional $20 billion in capital and backstop losses on up to $118 billion of its assets. The company already has received $25 billion in funding from the $700 billion Troubled Asset Relief Program, but needed another capital injection to help it digest Merrill Lynch-related losses.

If earnings continue to decline, S&P said additional government assistance could be required. The ratings firm lowered its long-term counterparty credit rating on the banking giant by one notch to A, which denotes satisfactory credit quality and is about halfway between AAA and junk territory.

The ratings outlook is negative, meaning further downgrades aren't out of the question, particularly, S&P said, if losses continue to pressure common-equity levels. The credit rater last lowered its ratings on the company and its units in December; the banking units' ratings are now at A+.

The downgrade puts S&P's ratings on Bank of America a notch lower than Moody's Investors Services and Fitch Ratings, which both cut their ratings on the company last month after the company posted a $1.79 billion fourth-quarter loss amid increased credit woes.

S&P also lowered the hybrid capital rating by four notches into junk territory at BB, saying the risk that Bank of America could defer dividend payments has increased.

Looking to shore up its balance sheet, Bank of America has slashed its dividend twice since October, as the deepening woes of consumers have weighed on the retail bank as it grapples with rising delinquencies in everything from mortgages to credit cards to small business loans. The latest cut in January to a nominal 1 cent a share will save the company some $6 billion a year.

Shares were up 4 cents at $3.67 in recent trading and are off 74% this year.

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