Michael Daniels runs a small bank in Green Bay, Wis., that recently received $15 million in taxpayer money.
When he got the money, Daniels did something a bit rare in banking circles these days: He lent it out to homebuyers and small businesses.
"We're making loans," Daniels said. "The window is open. It's never been closed."
That's exactly what government leaders want banks to do with money from the Troubled Assets Relief Program, but what apparently not enough of them are doing.
A Federal Reserve study released just this week showed that banks are continuing to make it harder for people to get all types of loans.
But Daniels and a handful of executives -- mostly at smaller banks -- are doing everything possible to help their communities out.
"This bank can only be as good as the community it operates in," said Daniels, president and chief operating officer of the five-branch Nicolet National Bank. "We're very invested in this community."
Daniels did take the TARP money as "a bit of a safety net" in case the economy "totally tanks." But, for the most part, Nicolet National Bank plans to pump that cash back into the local economy.
In fact, Daniels and the bank officers have so much confidence in their loans that they raised another $9.5 million through a private stock offering at the same time they got the TARP funds at the end of December. About 40 percent of that new private capital came from bank directors and insiders.
"We put our own money right alongside it," Daniels said. "You put your money where your mouth is."
Like many other banks, Nicolet has had its fair share of loans go bad. But it still has plenty of capital on hand because its own investments, in Daniels' words, are "chocolate and vanilla."
To date, the government has pumped $387.4 billion of TARP funds into the nation's financial system. Of that, $195.33 billion went to 359 institutions in 45 states and Puerto Rico. (The rest of it went to insurance giant AIG, General Motors, Chrysler and to guarantee other bank loans.)
America's largest banks have not been as willing to spend. The banks have come under intense criticism for refusing to detail how they are spending the taxpayer money.
Citigroup, which has received $45 billion of TARP money and been under criticism for its sponsorship of a New York sports stadium, announced Tuesday that it put $25.7 billion from TARP back into mortgages. Citi also used another $2.5 billion of government funds for personal and business loans, $1 billion for student loans and put $5.8 billion toward credit card loans.
Paul Miller, managing director of FBR Capital Markets, said that banks face a difficult balancing act. If banks loan too much, they throw off their debt ratio and possibly hurt their stock price.
"Banks need to be careful," Miller said. "They have to walk a very fine line."
But if they don't loan enough, politicians and the public will be annoyed that they aren't doing enough.
"That's what the politicians want, they want results. And the results are not going to be as simple as a lending increase," Miller said.
The smaller, community banks are better capitalized than the big banks, Miller added, and, therefore, more willing to make new loans.
"The people that are lending [the TARP money] out didn't really need it," he said.
Central Bancorp, in the Boston metro area, is one of those banks.
The bank has taken out large ads in the Boston Globe announcing "We have money to lend."
"We're vigorously pushing that money," said William Morrissey, the bank's chief operating officer. "We want to make mortgages. We have the money to invest."
It is a similar story in Maryland where three small bank brands owned by Shore Bancshares took TARP money, but didn't need it to shore up its finances. The banks -- Felton Bank of Delaware, The Centreville National Bank of Maryland and The Talbot Bank of Easton -- are all lending as vigorously as they did in the past, according to CEO Moorhead Vermilye.
"We have continued to loan money and support the community," he said.
The loans are going to small businesses and homeowners.
"The residents of Talbot County are looking toward us to keep them viable," Vermilye said. "It indicates to the community that we are the lender of choice in this area.
"We've done exactly what the Treasury wanted us to do," he added. "It is important that we get out the picture that all of this isn't bailout money. It's also not being used inappropriately."
C.R. "Rusty" Cloutier, president and CEO of MidSouth Bancorp, is taking things one step further. He's on a road trip though Louisiana and Texas holding "town hall"-style meetings, telling the public that his bank has money and is loaning it out.
"Most people are unwilling to borrow money right now," Cloutier said. "They are not interested in borrowing. They are very nervous.
"Most of our customers and the new people are very nervous about taking on any new debt," he added.
He said it's almost like getting a 1-year-old to eat his peas. His customers just don't want to take on any new risk.
"We've got plenty of money to lend, we'd love to lend," he said.
There are some large banks that have received TARP funds and increased their lending, but not many.
SunTrust, which received $4.9 billion in TARP funds, is one bank that did increase lending.
"We have said consistently and publicly that we are in business to make good loans to creditworthy borrowers. We are out there every day in the marketplace, in a very difficult economic environment, seeking opportunities to do that; the loan growth reported in our fourth quarter results reflects those efforts," Barry Koling, a spokesman for SunTrust, said in an e-mail.
BB&T has also increased lending.
"In the spirit of TARP, our aim has been to target areas with liquidity and funding challenges that are beyond our banking network," spokesman Bob Denham said in an e-mail. "BB&T has been able to provide commercial and industrial loans, auto finance for consumers, insurance premium finance for small businesses, and commercial and small business equipment finance."