Florida bank put TARP funds into loans

MIAMI, Nov. 3 (UPI) -- The Biscayne Bank in Florida reported that, with federal bailout funds in hand, it increased lending in the third quarter.

For the short-term the increased lending may be a mixed-blessing, as the bank also reported it lost money in the third quarter by putting $1.1 million aside to cushion itself against possible loan losses, the South Florida Business Journal reported Tuesday.

The Biscayne Bank earned a profit of $222,000 in the second quarter and lost $287,000 in the third, a Federal Financial Institution Examination Council filing showed.

The bank reported it held $7.2 million in impaired loans, 4.3 percent of its total loans, a sharp rise from end of the second quarter, when 3.9 percent of its loans -- representing $1.2 million -- were late.

In the second quarter, the bank received $6.4 million from the Treasury Department's Troubled Asset Relief Program, known as TARP.

Some of the nation's largest banks have been criticized for paying off debts with TARP funds, rather than increase lending to keep the economy going.