Shares in the banks, Capital Bank Financial Corp and National Bank Holdings Corp , both rose around 2 percent above their IPO price in afternoon trade on their first day.

"Banks are boring and it is difficult for investors to get very excited about a given bank," Jay Ritter, a University of Florida IPO expert said, adding it was hard for one bank to differentiate itself from its neighbor.

Capital Bank Financial and National Bank Holdings were among several companies that raised funds after the 2008 financial crisis from investors betting they could buy on the cheap and sell or float them later at a big profit.

But regional banks have struggled to grow profits over the last two years as the U.S. Federal Reserve keeps interest rates low and many American consumers pay down debt.

The larger of the two newly floated banks, Capital Bank Financial, formerly known as North American Financial Holdings, is led by former Bank of America Corp (>> Bank of America Corp) executives Gene Taylor and Chris Marshall. They raised $900 million from investors in 2009 to buy troubled banks.

Capital Bank operates 165 branches in Tennessee, Florida, North Carolina, South Carolina and Virginia with about $7.7 billion in total assets as at June 30.

National Bank Holdings is led by former Bank of America and Regions Financial Corp (>> Regions Financial Corporation) executive Timothy Laney. It has about $5.8 billion in assets as of June 30. It has 101 branches, mostly in the greater Kansas City region and Colorado.

IPOS SUBDUED

Before Thursday, only two U.S. banks had gone public this year.

Private equity-backed EverBank Financial Corp (>> EverBank Financial Corp) raised $192 million in May, after slashing the number of shares it was offering and the offer price.

Seattle-based HomeStreet Inc (>> HomeStreet Inc), which was under regulatory orders to boost capital, raised $79 million in February, after delaying its debut for 2 months and cutting its asking price. It had hoped to raise $210 million.

They've done better since listing. HomeStreet shares have since jumped by two-thirds while EverBank stock has risen 26 percent in its first four months of trading.

Across the financial sector, the number of IPOs has been subdued, with 16 companies raising $4.2 billion on U.S. exchanges this year, market intelligence firm Ipreo says, down from 19 financial IPOs that raised $5.2 billion by the same time last year.

"Investors tend to overweight recent experience... if a sector hasn't done well, it's difficult to generate investor enthusiasm," Ritter said.

Capital Bank shares closed up 1 percent at $18.19 on the Nasdaq on Thursday while National Bank Holdings closed up 2 percent at $19.60 on the New York Stock Exchange.

(Reporting by Jochelle Mendonca and Aman Shah in Bangalore; Editing by Roshni Menon and Sreejiraj Eluvangal)

By Aman Shah