My guess is that of the banks in a determined tail spin, it wouldn't have mattered if they took TARP money or not, as money doesn't fix everything. Banks on the edge certainly have been helped, but there was a stigma attached to those funds.

As to whether or not the FEDS have purchased non-performing assets, that probably hasn't happened. We sold off some of our non-performing assets to investors, loans and real estate, but we are pretty clean compared to a number of those folks on that list. I have a few crappy deals I'm working out, about 4% of my portfolio. My guess is that these troubled banks have had some luck in selling non-performing loans, as a few are showing improvement over last quarter. While still relatively weak, Anchor has shown some improvement, which is good for them.

Eligibility: Primary credit = Depository institutions in generally sound financial condition; essentially the same as eligibility for daylight credit.

Secondary credit = Depository institutions that do not qualify for primary credit.

I think we pledged a portion of our loan portfolio to get access to those funds if needed, but right now we don't have a need to borrow. $47MM in excess funds at the moment, looking for loans to invest in. I'm just a soldier on the front lines, so while I know the basics, I let the higher ups handle those transaction.

With restrictions on brokered CD's and such, banks in trouble have limited means to attract capital and liquidity. Liquidity is the key today, and 12% is the new 10%. With the regulators focus in increased capital ratios, they have effectively dried up 20% of the lending capacity in the market. Add in lower loan demand (C&I and Owner Occupied RE), and you have a situation where banks in trouble have a hard time raising additional capital, and decreasing earnings as their loan portfolio goes to crap, and no pipeline of new loans to replace the stuff they are charging off.

Also add in increased FDIC premiums, $200M in 2007 and over $1.3MM in 2009, and even relatively healthy banks are seeing hits to their bottom lines.