Huntington Bancshares (HBAN) $4.71, -0.11, -2.28%, said late Wednesday, that it is about to undertake a series of steps that will help it raise $675 million in regulatory common equity.
These will include a $350 million discretionary equity issuance program, through which the company will sell shares on the open market at then prevailing prices, the realization of $75 million from a gain on a cash tender for three series of Huntington trust preferred securities and another $250 million to be realized from “liability management initiatives, exchange of other capital instruments, adoption of new accounting standards, and other management initiatives.”
The nations’ banks have been on a capital raising tear the past couple weeks and Fifth Third (FITB) and Regions Financials (RF) also announced new capital raising plans yesterday evening.
The banks are raising the money to meet capital shortfall identified by the Treasury and Federal Reserve’s Supervisory Capital Assessment Program, which is more commonly termed “stress test,” and or to repay bailout money that was provided by the Treasury, under the Troubled Assets Relief Program or TARP.
Because of its small size, only banks with at least $100 billion in assets as of December 31, 2008 underwent the stress test, Huntington Bancshares was not included in the Supervisory Capital Assessment Program and thus is not required to raise additional capital as mandated by that program.
However, the company did receive a bailout of $1.4 billion under the Troubled Assets Relief Program and hopes to raise money to pay back those funds, as most banks that received bailout money have been clamoring to do.
