Brady Adams is a community banker and proud of it.

When he walks down the streets of Grants Pass, Ore., and greets his customers -- most of them by name -- he does so secure in the knowledge that he’s not foreclosing on any of their homes.

“We don’t have people coming to us and saying we got them into trouble. We kept them out of trouble,” said Adams, president of Evergreen Federal Bank, which has $300 million in assets.

Adams said he remained faithful to the tenets of good banking -- always balancing the relationship between risk and reward -- even as many of his competitors reaped the profits that ballooned in tandem with the rise of the U.S. housing bubble earlier this decade.

In other words, he didn’t give loans to people who probably couldn’t pay the money back just to make a quick buck by selling those loans to Wall Street.

Now Adams doesn’t have to throw those borrowers out on the street because they can no longer cover the monthly payments on exotic mortgages they could never afford in the first place.

For those reasons and others, Adams feels betrayed by the government’s $700 billion financial rescue plan.

He’s not alone.

Community bankers across the country fear that big banks that participate in the U.S. Treasury Department’s Troubled Asset Relief Program will use their share of bailout money not to make loans but rather to buy up smaller banks.

Should that happen it would further consolidate the banking industry and increase the already considerable leverage held by a handful of the nation’s largest financial institutions.

Independent Community Bankers of America, which speaks for small banks, has been vocal in its opposition to further consolidation.

“The current crisis has made it painfully obvious that the financial system has become too concentrated and – for many institutions -- too loosely regulated,” ICBA member Michael Washburn, chief executive of Red Mountain Bank of Hoover, Ala., said in a recent statement. “The doctrine of too big -- or too interconnected -- to fail, has finally come home to roost, to the detriment of American taxpayers.”

ICBA has vowed to challenge aspects of the plan that favor large banks over their smaller competitors.

The way Adams sees it, his reward for playing by the rules is seeing his biggest competitors -- most of whom decidedly did not play by the rules -- get bailed out to the tune of billions of dollars.

“The frustrating thing is that I did everything I was supposed to do as a banker. But the reward goes to those who did the bad things rather than those who did the right thing,” said Adams.

“How is that sustainable on a long-term basis, and what kind of message does that send out to our larger society as a whole?” he asked rhetorically.

It’s just wrong to use taxpayer money to subsidize a bailout of the same banks that created the problem that made the bailout necessary, he said.

Adding insult to injury is that once the big banks receive their huge bailout payments small bankers like Adams who refused to participate in the subprime frenzy that helped fuel the housing bubble could find it harder than ever to compete.

Adams is proud of some figures that run directly counter to national banking trends.

Evergreen Federal Bank owns no foreclosed properties, has foreclosed on only one home in the past 10 years, and holds merely four delinquent loans out of 2,000 outstanding.

Evergreen Federal, he said, adheres to two primary principles when making mortgage loans: the amount of equity a person can put into the home, and the amount of income a person is generating to pay off the loan.

“This isn’t rocket science. These are real simple principles,” he said.

Principles that have served Brady’s bank well -- Evergreen Federal is making money, its capital has grown, and its liquidity is solid because its borrowers are paying off their loans.

Indeed, during September and October, as investment banking giant Lehman Brothers collapsed in bankruptcy and the country slid deeper into a recession, Evergreen Federal saw its assets climb by $6 million.

“The net result is that we don’t need a bailout, we won’t take a bailout, and if other banks had followed those same principles there wouldn’t be a need for a bailout,” said Adams.

Profitability has allowed Evergreen Federal to participate in a local housing program in which contractors have provided in-kind services to create homes for low-income residents without any help from the government.

In the past year, five families “without hope of ever owning a home” have received homes through the program, said Adams.

His criticism of the government’s handling of the financial crisis runs wide and deep. Rather than strengthen confidence in the U.S. financial system, government officials’ desperate pleas for Congressional approval of the bailout had the exact opposite affect, he said.

The shifting nature of the proposals hasn’t helped either -- the initial concept of purchasing toxic assets has since morphed into injections of capital.

“Every time the plan shifts its further evidence that they never had a plan in the first place,” said Adams.

Finally, where’s the lesson?

All bankers understand “the fundamental relationship between risk and reward,” said Adams. But bankers who took huge risks and lost everything learn nothing if the government stands ready to bail them out.

In which case, Adams warned “there is no relationship between risk and reward and they’ll go out and repeat this over and over again.”