NEW YORK ( TheStreet) -- Heritage Financial Corp ( HFWA)of Olympia, Wash., is more than twice as well-capitalized as JPMorgan Chase ( JPM) was when it repaid the $25 billion it owed the federal government in June, but CEO Brian Vance is in no hurry to pay back the Treasury.

"Additional capital is kind of like an airport runway: you can't have too long of a runway," Vance says, adding he wants what he admits could be considered an "expensive insurance policy" because he is still not convinced the economy has hit bottom. He hopes the Pacific Northwest will recover in the second quarter of next year, which would prompt him to consider returning the money.

Many other small and mid-sized banks appear to have a similar view. According to SNL Financial, more than 300 banks have a Tier One common equity ratio of more than 7.7%, which was JPMorgan's ratio at the end of the third quarter, after it exited the TARP's Capital Purchase Program (CPP). Though the Treasury appears to have quietly raised the capital requirements for exiting the CPP, there are still about 250 banks with a Tier One common equity ratio above the 8.5% level of Bank of America ( BAC), which issued $19.29 billion to pay off its TARP funds last week.

For big companies like Wells Fargo ( WFC)and Citigroup ( C), TARP is a political liability. Bank of America is repaying TARP in part to make it easier for them to find a new CEO, since some outside candidates for the job reportedly balked at the federal pay restrictions that go along with the additional capital.

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