Ohio-based regional banks KeyCorp (KEY: sentiment, chart, options) and Huntington Bancshares (HBAN: sentiment, chart, options) are among the financial institutions which reported today that they will sell stock and warrants to the federal government in order to raise capital. KeyCorp will sell assets valued at $2.5 billion, while Huntington has agreed to receive $1.4 billion.

HBAN reported that the federal investment will "immediately add about 3 percentage points to our regulatory capital ratios." KEY noted that its capital levels were already substantially above "well-capitalized" regulatory benchmarks, but added that the cash infusion will "further elevate our position of strength."

Other firms that are joining in the government's stock-purchase program include Capital One Financial (COF), which is selling $3.55 billion in preferred stock and warrants, while SunTrust Banks (STI) is selling $3.5 billion in assets.

In early trading, HBAN is up nearly 16% at $9.28. News of the bank's participation in the Treasury program has effectively offset today's downgrade from "neutral" to "underperform" at Hilliard Lyons. Meanwhile, KEY is up about 7% at $10.81.