Two U.S. banks said Monday they plan to fully repay their federal government bailout loans, in the latest sign that the long-ailing regional lenders are starting to recover from the financial crisis.

Huntington Bancshares said it was issuing stock and bonds to help repay $1.4 billion it received under the U.S. Government's Troubled Asset Relief Program in November 2008.

First Horizon National Corp. also said it is selling debt and equity to pay off $867 million of TARP aid.

Huntington's shares fell after the news, because the bank will be selling so much equity to repay the government, analysts said. First Horizon's shares rose as investors cheered its move to shed government support.

Analysts said these repayment plans could be the first of another wave of TARP repayments, and suggest that the U.S. banking system is continuing to heal after the 2008 crisis.

Banks that have yet to repay the government ought to think about doing it soon, said Jeff Davis, bank analyst at boutique bank Guggenheim Partners.

"If you're a bank that does wait now, the market might be left to assume there are deeper problems," Davis said.

The offerings from Huntington and First Horizon come one year after the largest U.S. banks — including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. — raised tens of billions to repay their government bailout aid. The first wave of banks to repay TARP came in the summer of 2009, and included Goldman Sachs Group Inc. and JPMorgan Chase & Co.

DILUTION

Columbus, Ohio-based Huntington Bancshares said it would raise $920 million in common stock and offer $300 million in debt to repay TARP. Analysts said the move could result in the bank boosting its outstanding shares by 19 percent.

The bank's shares were down nearly 5 percent at $6.51 on Monday afternoon.

Memphis, Tennessee-based First Horizon National Corp. said it would raise $250 million through a common stock offering and issue $400 million in debt to pay off its TARP obligation.

First Horizon's shares were up 3.6 percent at $10.91.

In recent weeks, bank stocks have been surging.

Huntington's price has increased 19 percent in the fourth quarter alone, and is up 87 percent for the year.

Standard and Poor's cut its recommendation to "hold" from "buy" after the stock offering was announced, but noted the TARP payoff would be a positive move for the company.

"Two quarters from now, could (Huntington) have waited and gotten a better deal? Probably," said Morgan Keegan & Co. analyst Bob Patten.

"But the stock has performed well, and this gets them out from under the government and back into being a buyer for small, troubled Midwestern banks."

Both offerings remain subject to regulatory approval.