Susquehanna buys back $200M of TARP shares from US

Susquehanna Bancshares Inc. on Thursday said it bought back two-thirds of the preferred stock issued to the Treasury Department in exchange for federal bailout aid.

The bank bought back $200 million of the outstanding $300 million of the shares that were issued to the government in December 2008.

"In keeping with our conservative approach to managing the company, we do not expect to redeem the remaining $100 million of preferred stock until we see further evidence of a sustained economic recovery and related improvement in our credit metrics," said Chairman and CEO William J. Reuter in a statement.

Reuter said the money the company received "enhanced our capacity to make loans." During 2009, the bank wrote new loans totaling $2.3 billion.

At the height of the financial crisis in the fall of 2008, the government committed $700 billion of taxpayer funds to help banks under the so-called Troubled Asset Relief Program, or TARP. Hundreds of U.S. banks participated and received cash investments from the Treasury Department in exchange for preferred stock.

The program officially ends in October.

In afternoon trading, Susquehanna shares added 77 cents, or 6.9 percent, to $11.83. The stock earlier hit a new year high of $11.94m eclipsing a prior peak of $11.11 set Wednesday.