SunTrust made a $4 million investment to Capitol City Bank, of which $1 million has already been funded.
George Andrews, president and CEO of Capitol City, said SunTrust stepped up to the plate as a community partner.
“This investment is an example of one hometown bank providing assistance to another,” Andrews said in a May 3 statement.
Atlanta-based Capitol City Bank, which has a branch on Memorial Drive in Stone Mountain, was founded in 1994. It needed an infusion of cash to stay afloat after being placed on a federal watch list.
William H. Rogers Jr., chairman and CEO of SunTrust Banks, said SunTrust is proud to invest in such “a longstanding and important community partner.”
“A SunTrust alum, George Andrews, shares our commitment to serving Atlantans, and we are pleased to support the institution he leads as it works to meet the financial needs of the urban and minority communities in the area,” Rogers said.
In a statement this week, Capitol City Bank said it has always had an aggressive approach to raising capital to strengthen its balance sheet. It said that efforts were increased in 2011 to satisfy federal regulatory requirements to raise its capital level and to reduce the impact made on the bank from nonperforming assets and customers who were hit with hard times.
While the SunTrust commitment is the largest investment, it is not the only infusion of capital Capitol City has received.
Wells Fargo made a $600,000 equity investment in 2010.
Capitol City Bank also received a major commitment from Fifth Third Bank and the boards of directors of Capitol City Bancshares Inc. and Capitol City Bank & Trust Co. have provided more than $1 million in investments.
Among the community leaders making capital investments are former Georgia Labor Commissioner Michael Thurmond; Kenneth Chestnut, president and CEO of the IntegralGude; and Cameron “Cam” Newton, a professional football player with the Carolina Panthers.
Capitol City Bank was organized to serve metro Atlanta’s minority community, and its customer base is primarily African-American. It lends to churches, small businesses and individuals who have been some of the hardest hit in the economic downturn. These facts make it an attractive investment under the Community Reinvestment Act.
“If Capitol City Bank did not have enough capital to survive, our absence from the marketplace would leave a tremendous void,” Andrews said.