May 21--Huntington Bancshares said late yesterday that it plans to raise an additional $675 million in capital by the end of June as part of a continuing effort to improve the bank's finances.

That would push the total capital the Columbus-based bank will have raised since the start of the year to about $1.1 billion.

The latest move "should fully achieve our capital objectives and strengthen our capital to the point where we can weather even a severe economic environment, while better positioning us to eventually repay our $1.4 billion" from the U.S. Treasury Department's Troubled Asset Relief Program, Chief Executive Officer Stephen Steinour said in a statement.

Huntington was not one of the nation's 19 largest banks that were part of the recent federal stress test to determine how much additional capital was needed to survive a further worsening of the economy.

However, several analysts have said that Huntington would have been required to raise more cash if it had been put through the test.

The additional $675 million will push Huntington's tangible common equity to 6.05 percent, Steinour said. That measure stood at 4.04 percent at the end of 2008 and 4.65 percent at the end of the first quarter. A tangible common equity rating of 6 percent or higher was one of the benchmarks for the federal stress test.

Tangible common equity is what a bank would have left for its shareholders after paying all its debts and depositors.

Huntington will raise the new capital through the sale of $350 million in common stock; a tender offer for preferred shares of stock that will result in a $75 million after-tax gain; $250 million from "liability-management initiatives" it has not yet announced; and an accounting change that allows banks to alter the way they account for certain investment securities.

These actions are expected to be completed by the end of the second quarter.

In early May, Huntington raised $120 million through the sale of common stock. An additional $330 million was raised by restructuring exposure to subprime loans, cutting expenses and dividends, and converting preferred shares into common shares.

swartenberg@dispatch.com

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