Spring has arrived, and so have the pony carwars.

But the big question this year is whetheranybody can catch up with the Chevy Ca-

maro.Last year, Camaro outsold Mustang for the

first time since 1985. Through March, Camarohas sold 19,972 cars to Mustang’s 15,419. TheDodge Challenger is gaining steam but still a dis-tant third, with 9,742 sales.

“The reason we continue to outsell Mustang isthat we are still a very fresh model in the market-place,” said John Fitzpatrick, marketing manag-er for Chevrolet performance cars. “I think cus-tomers are looking at the car and the distinctlook that the Camaro has … as well as the perfor-mance, the efficiency and really the value.”

General Motors said it is increasing the powerof its V6 Camaro by 11to 323 horsepower by sum-mer.

Ford said the limited production 2012 FordMustang Boss 302 — the first to carry the Boss302 designation since 1970 — is on its way to deal-ers across the nation.

At Royal Oak Ford, inquiries about Boss 302are already rolling in, said general sales managerMike McKenzie. “The interest among the enthu-siasts is really high,” he said.

The Boss might be back, but the Camaro —which returned in 2009 after a seven-year ab-sence — is likely to rule 2011. The Mustang hasn’thad a total overhaul since 2004.

“Pent up demand is still propelling Camarosales,” said Jesse Toprak, an industry trend ana-lyst with auto pricing site TrueCar.com.! CAMARO’S NOVELTY LENDS IT AN EDGE. 6A

PONY CARWAR

CHARLES REXARBOGAST/AP

McClatchy-Tribune

ABOVE: Thenew ChevroletCamaro ZL1RIGHT: The2012 Boss 302Ford Mustang

O N G U A R D F O R 1 7 9 Y E A R S

Monday 4.18.2011 www.freep.com

TAX DAYFilersbeware:Post officesnot openlateNo moremidnightpostmarksas metroDetroit postoffices closeon regularscheduletonight.

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MICHIGAN TALK ElizabethBerkley onnew book,ex-classmates NAMES+FACES, 2D

PASSOVERHunger on theSeder menuMETRO, 4A

NEW YEAR’S 2012What’s the costin Royal Oak?Commissionmeeting tonightMETRO, 4A

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Snow? Oh, no!What happened to spring?FORECAST, 2A

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ROAD WORK AHEADFOR RED WINGS

8 PENALTIES A GAME,REALLY?DREW SHARP,1B

Game 3: Detroit at Phoenix, 10:30 tonight

Vol. 180, Number 349! 2011 Detroit Free Press Inc., Printed in the U.S.

More than 21⁄2 years afterthe government began dis-tributing $205 billion to bailout banks during the financialcrisis, most large banks haverepaid the money and the pro-gram has generated a profitfor taxpayers.

But even as U.S. TreasuryDepartment officials tout thebailout as a success, hundredsof small banks around thecountry owed the governmentnearly $11 billion as of March31.

The list includes all 11Michigan-based banks thatreceived a total of $739 millionin 2008 and 2009. More than75% of these funds went to Cit-izens Republic Bancorp ofFlint and Flagstar Bancorp ofTroy. Though they are not indanger of closing, it’s unclearwhen these banks will be ableto pay back the millions theygot. Firstbank Corp. of Alma,Birmingham BloomfieldBancshares of Birmingham,and 1st State Bank of Saginawwere the only banks of the 11 tomake money last year.

In addition, four of the 11Michigan banks have stoppedmaking quarterly dividendpayments to the Treasury De-partment on the preferredstock they issued to the gov-ernment.

The situation is importantbecause billions of taxpayerdollars are at stake. And the fi-nancial health of small banksmatters because they are theeconomic lifeblood of thou-sands of communities, provid-ing loans to millions of smallbusinesses.

Executives at several of the11 Michigan banks say themoney they obtained from thegovernment has providedthem with a financial cushionduring a time when othersources of capital have beenscarce.

“Having $300 million al-lowed us to stay in the lendingbusiness and continue to sup-port our customers,” saidCathleen Nash, CEO and pres-ident of Citizens Republic.“It’s been good for our bank.”! SMALL BANKS STRUGGLE TORAISE MONEY. 6A

Smallbanksstill oweU.S. tab11 in Michiganhaven’t repaidBy KATHERINE YUNGFREE PRESS BUSINESS WRITER

Fluffier. Bigger. Flavorful.And no unpopped or burnt ker-nels.

That’s the goal of scientistsat ConAgra Foods as they seekperfect Orville Redenbacherpopcorn.

For a semester, it was alsothe goal of eight Michigan StateUniversity students enrolled in

what quickly became known asthe “popcorn course.”

You might one day taste theresults of their research. Theclass finale was a visit to Con-Agra headquarters in Omaha,Neb., to present the findings forpossible use in improving theproduct.

The students won’t say ex-actly what conclusions theyreached — they signed corpo-rate nondisclosure agreements.

The experience opened stu-dents’ eyes to high-level re-search and nontraditional ca-reer options in food science.

“When you take other clas-

ses, it’s very structured. Youknow where the (experiments)are headed,” said student Fazal-din Moghul. “It really was a dif-ferent way to look at research.”

Officially, the class was theScience of the Foods We Love,but student lab time was spentreaching toward popcorn nirva-na.! NOT A KERNEL LEFT UNPOPPED.4A

MSU GETS POPPIN’

G. L. KOHUTH/Michigan State University

Student Meghan Miotto measurespopcorn during class this month.

Students seek perfect popcorn By DAVID JESSEFREE PRESS STAFF WRITER

Camaro overtakesMustang

Detroit Free Press

Mustangvs. Camaro

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Camaro outsold Mustang in 2010 for the first time in 25 years and has continued to outsell the Ford pony car so far this year.

19,972

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Chevy out-muscles Ford contender in2010, leads the race so far this year

Nation+WorldTODAY IS THE DAY

Super rich seesuper savingson their taxes

Since 1992, the tax rate forthe 400 highest adjusted grossincomes fell from 26% to 17%.During the same period, theaverage federal tax rate fell.6% from 9.9% to 9.3% Mean-while, an estimated 45% ofU.S. households will not payany federal income tax for2010. Taxes are due today. 9A

By BRENT SNAVELYFREE PRESS BUSINESS WRITER

ANDREW H. WALKER/Getty Images

Pavel Datsyuk

6A WWW.FREEP.COM MONDAY, APRIL 18, 2011

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COVER STORIES!

its V6 version.At about $25,000, the V6 is

a relatively low-priced car thatgets 28 miles per gallon on thehighway.

“That actually makes it anaffordable car for most youn-ger buyers,” Wertheim said.“And we are happy, becausethat is a demographic we wereconcerned about.”

At his dealership, Wer-theim said he sells about twiceas many V6 Camaros as hedoes V8s.

Like most Chevrolet andFord dealers, Wertheim close-ly follows the Camaro-Mus-tang sales race. But Wertheimsaid the Camaro owes as much

of its success to new buyerswho previously consideredHondas or Mitsubishis as itdoes to traditional Camaro en-thusiasts.

“We get almost no consum-ers that shop Camaro versusMustang,” he said.

Mustang powerFord also has gone after

younger and cost- and fuel-economy-conscious buyers.

While the Mustang’s bodyhasn’t had a total overhaulsince 2004, Ford introducedall-new powertrains in 2010that improved the car’s fuel ef-ficiency and made its horse-power competitive with theCamaro.

Ford gave the 2011 Mustangnew 3.7-liter V6 and 5.0-literV8 engines that bested Cama-ro’s fuel-economy ratings.

The 2011 model’s V6 gets305 horsepower, 280 pound-feet of torque and 31 m.p.g. onthe highway. The V8 has 412horsepower and 390 pound-feet of torque while getting 26m.p.g.

According to Ford, 51% ofMustang buyers are pickingthe V6 over the V8.

But even with those newpowertrains, the Mustang wasunable to stop the Camarofrom pulling ahead in a closelywatched sales race last year.

In 2010, the Camaro outsoldthe Mustang for the first timesince 1985. Through March,19,972 Camaros have sold to15,419 Mustangs. The DodgeChallenger is gaining steambut still a distant third, with9,742 sales.

Even though it was reintro-duced in 2009, the ChevroletCamaro is still the new kid onthe block, which is helping theiconic pony car edge out theMustang, its long-standing ri-val.

The Camaro was launchedin 1966 to compete with theMustang, introduced in 1964.After ending production of theCamaro in 2002, General Mo-tors revived the car in April2009.

Bill Wertheim, generalmanager of Paddock Chevroletin Kenmore, N.Y., said the se-cret to the Camaro’s success is

“We continue to grow ourcar market share,” said Fordspokesman Said Deep. “Weare not in a sales race.”

Mustang outspendsDuring the first two months

of 2011, GM outspent most oth-er automakers in the industrywith its incentives.

But according to Edmunds.com, the average incentive onthe Camaro fell from $1,016 inJanuary to $410 in March.

The Mustang, meanwhile,

was offering an average of$1,662 in January and in-creased its incentives to $2,081in March.

Those incentives contribut-ed to a 46.8% sales surge inMarch to 8,557 Mustangs. Still,the Camaro finished the monthahead after selling 8,964.

“Right now, we have almostnothing — other than a lowAPR financing” on the Cama-ro, said John Fitzpatrick, mar-keting manager for Chevroletperformance cars.

Model maniaThe Mustang retains the

appearance of an advantagewith the range of its models,however. There are 11 Mustangmodels, ranging in base pricesfrom $22,145 for the MustangV6 to $53,645 for the ShelbyGT500 convertible, accordingto its Web site.

But Camaro is working tocatch up.

This year, Chevrolet has al-ready added a convertible Ca-maro and will introduce a top-of-the-line performance modelto compete with similar offer-ings in Mustang’s lineup.

The 2012 Camaro ZL1 —named after the rare 1969 rac-ing edition — will competewith the Ford Mustang ShelbyGT500. The ZL1 will come witha 6.2-liter supercharged V8 en-gine with an estimated 550horsepower and 550 pound-feet of torque." CONTACT BRENT SNAVELY: 313-222-6512OR BSNAVELY@FREEPRESS.COM

When the federal govern-ment began bailing out banksin fall 2008, most of the scruti-ny was directed at the WallStreet banks that receivedtens of billions of dollars.

It turns out more attentionshould have been paid to MainStreet. Although the nation’sbiggest banks have rushed topay the government back, hun-dreds of the country’s smallbanks, including 11 in Michigan,are holding on to the billions intaxpayer money they received.The disparity illustrates howthe recovery under way in thenation’s banking industry hasa ways to go.

“These (small) banks arestill hurting,” said AmiyatoshPurnanandam, an associate fi-nance professor at the Univer-sity of Michigan.

He and other banking ex-perts said large banks havebeen able to repay the govern-

ment quickly because theyhave other sources of incomebesides making loans to busi-nesses, such as securities trad-ing. These banks have benefit-ed from the rebound in the fi-nancial markets.

In contrast, small banks de-pend solely on their core bank-ing operations. They havestruggled to cope with risingloan defaults and plunging val-ues in the commercial real es-tate market. And those that dohave money to lend say theycan’t find enough credit-wor-thy borrowers.

Unlike their larger breth-ren, small banks also have hada difficult time issuing stock oraccessing other sources ofcapital that would enable themto pay the government back.

“The biggest challenge isthe equity markets and theavailability of capital to small-er commercial banks,” saidRobert Shuster, chief financialofficer for Ionia-based Inde-

pendent Bank.Independent is one of 11

Michigan-based banks that re-ceived a total of $739 millionfrom the government. At theend of March, two of thesebanks — Citizens RepublicBancorp of Flint and Troy-based Flagstar Bancorp —were among the top 20 banksnationwide with the largestgovernment investments thathad not yet been repaid.

The U.S. Treasury Depart-ment declined to comment.But Timothy Massad, its act-ing assistant secretary, told aCongressional Oversight Pan-el last month that the treasuryhad investments in 539 smallbanks and thrifts. “Their trackto recovery is longer becausethese institutions have less ac-cess to the capital markets andgreater exposure to the com-mercial real estate market,” hesaid. “Although these institu-tions continue to face challeng-es, there are signs that the sec-tor is strengthening.”

Under the terms of Trea-sury’s Capital Purchase Pro-gram, part of the govern-ment’s Troubled Asset ReliefProgram, there is no deadlinefor repaying the money.

However, banks must pay5% annual dividends on the se-nior preferred shares that theTreasury Department re-ceived from each bank in ex-change for its investments.That dividend rises to 9% an-nually after five years so mostbanks have an incentive to pay

back the money sooner.Four of the 11 Michigan

banks — Flint-based CitizensRepublic, Independent Bank,Grand Rapids-based Mercan-tile Bank and Monarch Com-munity Bancorp in Coldwater— have stopped paying divi-dends to Treasury, but willhave to pay this money backlater.

Citizens Republic, whichobtained $300 million, hasmissed five dividends. Cath-leen Nash, the bank’s CEO,said the company expects to beprofitable by this year’s thirdquarter, which will enable it topay back the dividends.

Citizens and many of theother Michigan banks saidthey don’t yet know when theywill be able to return the gov-ernment money. Don Mann,

regulatory liaison for theMichigan Association of Com-munity Bankers and a formerstate banking regulator, saidthe industry’s consolidationand the lack of new bankseventually will increase thevalue of these companies.

“These community banksare going to be attractive longterm because it’s going to behard to start a new bank,”Mann said.

During the 2008 financialcrisis, the government gavebanks billions of dollars to re-store the financial system’sstability. Banks with assetsworth $10 billion or more re-ceived 93% of the $205 billion,with about $15 billion going tosmaller banks.

As of the end of March, thegovernment had largely re-

couped its investments in thecountry’s large banks, accord-ing to a treasury departmentreport. These banks still owethe treasury about $12 billionor 6.5% of the $190 billion theyobtained. Small banks are onthe hook for about $11 billion or75% of the $15 billion they re-ceived.

Because most large bankshave repaid the government,the bailout program alreadyhas generated profits for tax-payers. At the end of March,only eight of the 707 banks thatparticipated in the programhad failed, none in Michigan.

Many of the Michiganbanks with government in-vestments say it has provenbeneficial, helping them main-tain capital levels and in somecases increase their lending.And unlike the giant banks,they have not been harshlycriticized for getting a govern-ment bailout.

“It’s just been a low-cost,cost-effective way to makesure we have the right amountof capital,” said Samuel Stone,chief financial officer at Alma-based Firstbank Corp., whichgot $33 million.

“It’s been a nice cushion,”said Paul Tobias, CEO andchairman of Manistique-basedMackinac Financial, the hold-ing company for mBank, whichreceived $11million. “There hasbeen no capital for most of thecommunity banks.”" CONTACT KATHERINE YUNG: 313-222-8763OR KYUNG@FREEPRESS.COM

Michigan Banks and TARPHere is a list of Michigan-based banks that received a total of $739 millionfrom the government’s Troubled Asset Relief Program, better known asTARP.Bank Headquarters TARP money receivedCitizens Republic Bancorp Flint $300 millionFlagstar Bancorp Troy $267 millionIndependent Bank Corp. Ionia $72 millionFirstbank Corp. Alma $33 millionMercantile Bank Corp. Grand Rapids $21 millionUnited Bancorp Tecumseh $20.6 millionMackinac Financial Corp. Manistique $11 millionMonarch Community Bancorp Coldwater $6.8 millionBirmingham Bloomfield Bancshares Birmingham $3.4 million*First Independence Corp. Detroit $3.2 million1st State Bank Saginaw $1.3 million*Includes two investments.Source: U.S. Treasury

Unpaid dividendsFour Michigan-based banks have deferred the payment of stock dividendsthey owe the U.S. Treasury Department as part of the government’s bankbailout program. Here are the names of the banks and how much they owe asof the end of March:Bank Headquarters Unpaid dividendsCitizens Republic Bancorp Flint $18,750,000Independent Bank Corp. Ionia $3,090,746Mercantile Bank Corp. Grand Rapids $787,500Monarch Community Bancorp Coldwater $424,063Source: U.S. Treasury

Repaying U.S. tough for small banksThey’re struggling to raise cashBy KATHERINE YUNGFREE PRESS BUSINESS WRITER

A closer look at the Camaro, Mustang and ChallengerCAMAROModels: Five with two more byearly 2012Price range: $22,680-$41,625*Powertrains: 3.6-liter engine V6with 323 horsepower; 6.2-liter V8with 426 horsepower and 420pound-feet of torqueFuel economy: 18 city and 29highway with V6 engine withautomatic transmission; 16 cityand 25 highway with V8 withautomatic transmission

MUSTANGModels: 11Price range: $22,145-$53,645Powertrains: 3.7-liter V6 with305 horsepower and 280 pound-feet of torque, 5.0-liter V8 with412 horsepower and 390 pound-feet of torqueFuel economy: 19 city and 31highway with V6 engine withautomatic transmission; 18 cityand 25 highway with V8 withautomatic transmission

CHALLENGER/CHALLENGERSRT8Models: SixPrice range: $24,670-$43,555Powertrains: 3.6-liter V6 with305 horsepower and 268 pound-feet of torque; 5.7-liter V8 Hemiwith 379 horsepower and 410pound-feet of torqueFuel economy: 18 city and 27highway with V6 with automatictransmission; 16 city and 25highway with V8 with automatictransmission

*Camaro V6 horsepower is for updated engine that goes on sale in June.

Chevrolet

CHEVROLET CAMARO: The Camaro outsold the Ford Mustang in 2010for the first time in 25 years and has maintained its lead this year.

ANDRE J. JACKSON/Detroit Free Press

THE BOSS’ BOSS: Ford Motor’s Executive Chairman Bill Ford with the2011 Ford Mustang Boss 302 during the 2010 Woodward Dream Cruise

SANDRO COMPARDO/Associated Press

DODGE CHALLENGER: The SRT8 392 is displayed last month at theGeneva International Motor Show last month in Switzerland.

Camaro thunders by MustangNew fans put car on top

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Mustang vs. CamaroCamaro outsold Mustang in 2010 for the first time in 25 years and has continued to outsell the Ford pony car so far this year.

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By BRENT SNAVELYFREE PRESS BUSINESS WRITER

General Motors Archive

The 1969 ChevroletCamaro Z28. TheCamaro waslaunched in 1966 tocompete with theFord Mustang,which was intro-duced in 1964. Afterending production ofthe Camaro in 2002,General Motorsrevived the car inApril 2009.