Banks Announce Government Investments

Updated from 7:25 a.m. EDT

A host of regional banks on Monday said they had agreed to sell preferred equity stakes to the federal government, in an expected expansion of a program to stabilize the U.S. banking system.

KeyCorp (KEY Quote), Huntington Bancshares (HBAN Quote), Fifth Third Bancorp (FITB Quote), SunTrust Bank (STI Quote), Comerica (CMA Quote) Northern Trust (NTRS Quote) and Capital One Financial (COF Quote) all said they had agreed to participate in the program, in which the Treasury Department will invest $250 billion in capital from the Troubled Asset Relief Program, or TARP, into banks to encourage stalled lending.

PNC Financial Group (PNC Quote) on Friday said it had accepted a $7.7 billion investment through the program, as it agreed to a $5.7 billion deal for National City (NCC Quote). The deal was seen as a potential bellwether for how banks will use the capital.

First Horizon (FHM Quote) on Friday said it had received $866 million through the program. Birmingham, Ala.-based Regions Financial (RF Quote) last week also said the government had accepted its application to be part of the program.

In all, almost two dozen regional banks are expected to receive investments. The government had planned to announce the investments Friday or Monday, but held off after fearing that banks that did not receive investments would be seen as weak and further disrupt shaky equities markets.

The regional bank investments by the federal government follow an initial round of investments in the nation's largest banks, including Citigroup (C Quote), JPMorgan Chase (JPM Quote) and Bank of America (BAC Quote).

Capital One and SunTrust announced the two largest investments, with $3.55 billion and $3.5 billion, respectively. Fifth Third accepted a $3.4 billion infusion, KeyCorp took in $2.5 billion, Comerica got $2.25 billion, Northern Trust received $1.5 billion and Huntington garnered $1.4 billion.