From Minnesota to Alabama, battered regional banks are warning that a turnaround from the economic malaise is nowhere in sight.

A series of large regional banks reported Tuesday that rising losses from bad loans plagued first-quarter results. And, that's forced names like U.S. Bancorp (USB), Regions Financial Corp. (RF), and others to put more money aside to fortify against another wave of defaults.

It demonstrates not just massive U.S. institutions like Bank of America Corp. (BAC) are reeling as the industry pays for extending credit to shaky borrowers. Smaller players scattered across the country are also feeling the pain, telling investors a protracted recession means things will get worse before they get better.

"No significant turnaround will occur this year," Huntington Bancshares Inc. (HBAN) Chief Executive Stephen Steinour said after the Columbus, Ohio-based bank posted a $2.43 billion quarterly loss. He announced a nearly $300 million credit loss provision as the bank faces a stream of potential losses from commercial loans.

Huntington is just one example of a bank struggling as a troubled economy and tight credit environment makes it more difficult for consumer and business borrowers to pay their debt. Falling stock markets and rising unemployment also illustrate the breadth and depth of the economic stress, regional bank CEOs said.

Investors have been paying particular attention to regional banks after BofA and Citigroup Inc. (C) reported better-than-expected results through largely one-time gains and accounting changes. Regionals, which typically focus on bread-and-butter operations like lending and deposits, offer a purer snapshot of the industry.

At U.S. Bancorp., the sixth-largest bank by deposits, charge-offs from delinquent accounts spiked 25%. That caused profit to slide for the fourth-consecutive quarter, down 51% to $529 million.

Results still beat Wall Street projections, though CEO Richard Davis sees trouble ahead for areas like construction and development loans. He boosted the provision for future loan losses by $530 million on expectations conditions will deteriorate further.

"There is a slowing down of ... consumer appetite and commercial appetite in the last couple of weeks, maybe the last half of the quarter," he told analysts. "I think there is a reason to believe that as the cycle matures, people are becoming a little more careful."

Regions, based in Birmingham, Ala., reported defaults by developers and other bad loans pushed profit down 77% to $77 million. The bank, whose losses more than doubled from a year earlier, also reported that nonperforming loans increased more than anticipated.

Buffalo, N.Y.-based M&T Bank Corp. (MTB), which counts Warren Buffett among its largest shareholders, said profit plunged 68% to $64.2 million. The bank more than doubled its provision for credit losses to $158 million as charge-offs mount.

KeyCorp (KEY), hit hard by troubled commercial loans, was forced to slash its quarterly dividend to raise an additional $100 million in capital each year. The move came after the Cleveland-based bank lost $536 million during the quarter, and added $857 million to its provision for future loan losses.

Investors were also worried if banks will need more government assistance as loan losses increase in the coming quarters. The Treasury Department said Tuesday that it has about $110 billion left of its $700 billion financial rescue fund, though that amount could grow as bigger banks pay back the aid.

However, shares of regional banks recovered from initial steep losses Tuesday after Treasury Secretary Timothy Geithner said most U.S. banks have adequate capital and that there are signals credit markets are on the mend. He made the comments during testimony before the financial bailout package's congressional oversight panel.

-By Joe Bel Bruno, Dow Jones Newswires; 201-938-4047; joe.belbruno@dowjones.com