Standard & Poor's, the major financial rating firm, has reduced its rating on American Security Corp.'s commercial paper to A-2 from A-1.

Standard & Poor's cited problems in the bank's loan portfolio that it said will weaken the company's historically strong earnings performance for some time to come.

But analysts said the rating, which is still considered a strong one, should not impair American Security's ability to sell commercial paper -- essentially short-term, unsecured corporate IOUs. The rating is near the top one the company accords institutions that sell commercial paper.

American Security has about $200 million of commercial paper outstanding at any one time and uses the proceeds of the sales to make investments in the Eurodollar market.

American Security first reported a sharp increase in its nonperforming loans in the second quarter and said it anticipated the bank's earnings would be below year-earlier levels through the end of the year.

Second-quarter earnings of $4.6 million were 38 percent lower than the $7.4 million American Security earned in the second quarter of 1983, while third-quarter earnings of $4.9 million were 42 percent below third-quarter 1983 profits.

Most of the decline occurred because the bank company sharply boosted its loan-loss reserve to cover problem loans -- which were mainly in the energy and shipping areas.

Jeff Bowman, a ratings specialist at Standard & Poor's, said an A-2 rating is a sound investment-grade rating. He said American Security is a well-managed, well-capitalized banking institution. Bowman said the lowered rating is a recognition that the bank company's high level of nonperforming loans will be reduced slowly and that it will take the bank some time to recover fully.

American Security Chairman W. Jarvis Moody predicted last month that most of the bank's earnings problems would be resolved by the end of the year and that results would be improved in 1985.

Commercial paper cannot be sold by a bank, but only by a bank's parent company. American Security Corp. is the parent company of American Security Bank, the District's second-biggest. It is the only Washington bank company that sells commercial paper.

Many bank companies use the proceeds of commercial paper sales as one source of funds for their bank subsidiaries. American Security Bank, however, does not rely upon commercial paper sold by its parent; it depends mainly upon traditional core deposits -- savings and checking accounts -- and sales of large-denomination certificates of deposit to professional investors.

Bank and money market sources said American Security Bank's ability to sell certificates of deposit also has not been impaired by its lowered earnings or its reduced commercial paper rating. Early this year, Standard & Poor's lowered American Security's commercial paper rating to A-1 from A-1+.

Standard & Poor's noted American Security has made improvements in its credit-review and loan-approval processes.

Paul Wineman, the chairman of the bank company's credit policy committee, left American Security in April. He was replaced by William Ryland, who left Riggs National Bank to rejoin American Security. Ryland, who has headed American Security's national and international divisions, left American Security for Riggs in 1978.