Huntington Bancshares Inc. (HBAN) said Thursday that it would raise $100 million in common equity by using new accounting rules as part of the firm's plan to raise $675 million in regulatory capital.

Huntington waited to implement the new accounting rules, which were available during the first quarter, in order to make sure they understood how they worked, the bank's executives told investors during a conference call.

The new accounting rule in question relates to long-term losses that banks have suffered from falling values in securities. Huntington has posted about $200 million of such losses.

Under the new rules, firms will be allowed to separate market-related losses in value on securities from credit-related losses embedded in a security's loans.

Shares in Huntington recently traded down 10% to $4.32 in composite trading.

As part of its plan to raise common equity, Huntington said it would sell $350 million in new shares directly into the market, rather than an selling a lump-sum block of shares through an investment bank, as is customary.

In recent days, a number of other banks, including Bank of America Corp. (BAC), Marshall & Ilsley Corp. (MI) and Fifth Third Bancorp (FITB), have decided to raise capital through selling shares directly into the market. Steinour pointed out that Huntington is using the strategy for the second time, having already sold $120 million in new "at-the-market" shares earlier this year.

"Some of those institutions" that are selling shares into the market "have actually called us" to learn about the process, Chief Executive Stephen Steinour said.

The strongest of the large financial firms, including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM), have been racing to announce plans to repay government investments. Starting last October, the U.S. Treasury began investing directly in banks through its Troubled Assets Relief Program.

Huntington accepted $1.4 billion in public support and said the capital plan announced Wednesday would help it make progress toward repaying the government.

As with Bank of America and Citigroup Inc. (C), however, it remains unclear when exactly Huntington will be able to fully repay the government. As some firms clamor to repay the investments quickly, analysts have wondered whether firms who continue to operate with government assistance will suffer a competitive disadvantage.

"I don't spend a lot of time thinking about it," Steinour said. Then-Treasury Secretary Paulson "didn't make it a choice" for large banks to accept government support and instead demanded they all accept the money. Huntington, along with other mid-size regional banks, faced a similar ultimatum, Steinour said.

"I don't think you're going to be branded" for taking longer to re-pay TARP, Steinour said.

Huntington said it decided to raise the $675 million in common equity after it applied forecasts from the U.S. government's so-called stress test to its own books of loans. Earlier this month, federal bank regulators conducted stress tests on 19 large U.S. financial firms and forced some of them to raise capital.

Huntington said Thursday that the bank decided independently to stress test its own loan books. There was "no suggestion" from regulators that the firm run its own stress test, Steinour said.

Some analysts and investors have speculated that the government will undertake subsequent rounds of stress tests by applying its forecasts to regional and small banks.

-By Marshall Eckblad, Dow Jones Newswires; 201-938-4306; marshall.eckblad@dowjones.com