Sun Trust Must Raise Capital to Cover Possible Losses

SunTrust Banks has announced it will sell up to $1.25 billion of common stock and slash its dividend as part of a plan to satisfy the federal government’s order to shore up its capital by $2.2 billion. The Atlanta-based company said it would sell securities and other assets to raise an additional $300 million and may also convert existing debt to common shares. SunTrust has until Nov. 8 to carry out its plan.

FirstCity Bank Shuts Down

FirstCity Bank in Stockbridge is shut down. That makes the 18th bank in the nation the Federal Deposit Insurance Corporation has closed this year.

The FDIC will mail checks to the bank’s depositors for their insured funds Monday morning. Direct deposits from the federal government, such as Social Security and veterans’ benefits payments will be transferred to Sun Trust Bank.

(Associated Press)