SunTrust Banks Inc. plans to sell up to $1.25 billion in shares, slash its quarterly dividend 90% to a nominal 1 cent a share and sell up as much as $300 million in securities and other assets as it looks to raise $2.2 billion after the results of the U.S. government's stress tests.

The company was one of the banks told by the government that it needed to bolster its reserves. The Atlanta-based lender has suffered along with other regional banks during the credit crunch thanks to its ties to construction and commercial real-estate loans, as well as longer exposure to the deteriorating housing market.

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