TARP Funding Proves to Preserve and Create 9,000 Jobs

Deptford, NJ – Yesterday, Congressman Rob Andrews joined William J. Reuter, Chairman and CEO of Susquehanna Bancshares, Inc., and Albert Boscov, Chairman and CEO of Boscov's Department Stores, to highlight the economic benefits of the Troubled Asset Recovery Program (TARP). TARP, which is a program under the Emergency Economic Stabilization Act of 2008, is designed to restore liquidity and stability to the financial system of the United States. This legislation directly addresses the economic downturn by restoring confidence in credit markets, making an additional $196.7 billion available for increased lending to individuals and businesses under through TARP’s Capital Purchase Program.

Congressman Andrews voted for TARP funding because it eases the burdens of the credit crisis and helps America work towards lasting economic growth. This funding will allow financial institutions to expand their lending to consumers and businesses, generating employment and preserving jobs that may otherwise be threatened by the recession.

“In many cases, TARP funding will prove to be a strong tool to support lending and economic stability,” said Congressman Andrews after final passage of the Emergency Economic Stabilization Act. “Credit is drying up and it is extremely vital to the American economy that we provide individuals and businesses with the means necessary to withstand these difficult times.”

Susquehanna Bank, a well-capitalized bank with 236 branches in the Mid-Atlantic region, received a $300 million TARP investment through the Capital Purchase Program to help the government's effort to revive the economy. As an example of how lending can fuel the stability and growth of local communities, Susquehanna led a group of banks to put together a bridge loan that helped investors purchase the Boscov's Department Store chain, helping to retain thousands of jobs. Boscov's had faced bankruptcy in 2008, and Albert Boscov put together a group of investors to repurchase the 39-store chain. Some of their funding comes from government loans, and the $46.7 million bridge loan provides temporary financing until the government lending can be approved. Susquehanna contributed $21 million.

“This bridge financing package demonstrates the key role that community banks can play in economic stability, growth and job retention,” said William J. Reuter, Chairman and Chief Executive Officer of the bank’s parent company, Susquehanna Bancshares, Inc. “We are pleased to partner with Boscov’s, which serves as the anchor tenant in numerous malls throughout our bank’s market territory. The department store chain employs thousands of people and has a long history of service to local communities, a value that we share at Susquehanna Bank.”

Susquehanna will be able to use the government's Capital Purchase Program investment to support lending to homebuyers and businesses struggling to withstand the current economic challenges. The bank pays the U.S. Treasury an annual dividend on the investment and will ultimately repay it.

Albert Boscov, Chairman and CEO of Boscov's Department Stores, who came out of retirement to restore the chain, said, “Boscov’s would not have survived without Susquehanna taking a $21 million lead position in a $46 million bridge loan that was required until Federal HUD funds became available. Without this $46 million bridge loan Boscov’s would have been liquidated last December. I am grateful to Susquehanna and the many smaller local banks that joined together to save Boscov’s. This is a great example of Federal TARP funds being used properly to assist a struggling Boscov’s stay alive and preserve 9,000 jobs.”

As our country’s unemployment rate reaches a 25-year high, Congressman Andrews continues to support legislation like the Emergency Economic Stabilization Act that provides businesses with much-needed assistance to put Americans back to work and restore our economy back on the course of long-term growth.

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