Steve Trapnell said...
As the communications manager for Susquehanna Bank, I'd like to clarify that our bank doesn't need a "bailout." We received preliminary approval to participate in the U.S. Treasury Department's Capital Purchase Program, which the government is using to build capital at financially healthy banks. It is not a government give-away. The Treasury Department will invest $300 million and receive preferred shares of Susquehanna, and we will be paying them a 5% annual dividend on this investment. In the future, the government can redeem these shares and recoup its investment. In the meantime, the capital we receive will help to fund loans to local residents and businesses, which drives economic growth. To learn more, feel free to visit our website, www.susquehanna.net, and look under Susquehanna Bank Safety & Soundness.
Let me say a few things about this. I never meant for the posting to sound as if the bank was unstable. Their website and the page we are directed to in the above comment says nothing about accepting TARP money. It is true that the bank is doing its best to help the inject money into the economy by lending more. Is it because they are good citizens wanting to help the little guy???? Of course not.
From New Mexico Business Weekly
Susquehanna Chairman and CEO William J. Reuter said the capital will help the bank “broaden our ability to meet ongoing loan requests from our customers. In addition, it positions us to be able to make strategic investments for the future growth of our regional banking operations.”They want to expand their business with taxpayer money. Before you say that we are getting preferred stock out of this, lets see what the price per share is. If it is at today's close, the government would own 20,026,702 shares. If it is at its 52 week high, we will get 12,484,394. A bit of a difference.
Is this a bailout? I guess not. Is it a nice Christmas present? Damn straight. $300,000,000 raised in one shot and paying 5% interest a year for 5 years so that you can go out and charge 7.5% to 8 +% for a car loan or as low as 16.53% for a personal loan. You are right, it's not a bailout, it's a handout.
Here's the deal, refinance foreclosed mortgages with the money at affordable rates.
