Small Banks Say 'No Thanks' to U.S. Bailout Money

Healthy small bankers would like the boost to lend more, but fear regulations and conditions attached to the Treasury Dept.'s rescue program

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NewAlliance Bank (NAL) CEO Peyton R. Patterson didn't even bother to fill out the form. She didn't want to risk restrictions on the bank's share repurchases and dividend payouts. The New Haven bank, which maintained high lending standards during the boom, had the luxury of walking away. Unlike peers dealing with historic losses, NewAlliance's earnings almost doubled to $45.3 million last year, as lending increased 38.5%. Says Patterson: "We quickly understood that the money would not have any benefits to us."


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