One question some local banking officials are pondering as the economy begins to recover is when to repay the federal government for the capital infusion they received last year.

Both Lancaster-based Fulton Financial Corp. and Lititz-based Susquehanna Bancshares opted a year ago to participate in the government's capital purchase program, a part of the bank bailout designed to stimulate lending by healthy, medium-size banks.

Fulton received $376.5 million from the program in exchange for shares of preferred stock; Susquehanna received $300 million.

"We took it out of an abundance of caution," said William J. Reuter, Susquehanna's chairman and CEO. "At some point in time, we will be repaying it."

Many banks already have.

The Wall Street Journal reported last week that more than 40 of the 690 financial institutions that received a combined $204.68 billion in bank bailout money have repaid about $70.88 billion.

"The Fed and the Treasury have done a good job of stabilizing [the financial system,]" said R. Scott Smith Jr., Fulton's chairman and CEO. "The majority of the credit markets are open again."

Although the money has given the banks a capital cushion, it has been eating into profits.

"We're paying 5 percent interest, and it's not tax-deductible," Smith said.

That's about $18.8 million a year in preferred dividends on Fulton's $376.5 million and $15 million on Susquehanna's $300 million.

"We're talking about 7.2 percent after taxes, and we can't get 8 percent on loans right now," Smith said.

"It's a good deal for the government. ... The return to the taxpayer is going to be significant," he said.

In fact, according to the Journal, the U.S. Treasury has already pocketed $10.1 billion in dividend, interest and fee payments from recipients of the money.

Yet both Smith and Reuter say they're waiting for more indicators — such as the government's new capital guidelines and further signs of declining levels of loan delinquencies — before repaying the money.

They also may look at issuing new shares to avoid depleting their cash reserves when they do repay the money, and they say they would prefer that stock prices rebound before they go down that road.