NEW YORK (AP) -- Citigroup, under pressure to increase its lending, says it will spend $36.5 billion to issue mortgages, make credit card loans and buy distressed assets in the tight credit markets in the coming months.

The decision arrives after the bank received $45 billion in capital from the federal government in two installments late last year, and taxpayers' questions mounted about the use of that money.

In a report reviewed by The Associated Press that Citigroup Inc. plans to release Tuesday morning, the bank detailed how it is boosting lending efforts by using funds from the Troubled Assets Relief Program, or TARP.

It's not that the $45 billion in TARP is being doled out by Citigroup directly to borrowers. Rather, having the extra capital allows the bank to borrow more money from various funding sources, and then lend that money out to others. A bank makes money by borrowing cheaply for the short-term and lending at higher rates for the long-term; if a bank has no capital, other institutions and investors won't lend to it.

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Investment banking boutique Revolution Partners will sell itself to Regions Financial, a sign of things to come as financial firms consolidate.

Revolution and its team of 40 investment banking professionals based in San Francisco, Los Angeles and Boston will join Birmingham, Ala.-based Regions’ investment banking arm, Morgan Keegan & Co. Terms of the transaction that closed this week were not disclosed. Revolution’s co-founders, Peter Falvey and David Lavalle, are among those joining Morgan Keegan.

Risk-averse investors have little appetite these days for initial public offerings of fast-growing tech companies. This is likely to prompt other Bay Area investment banks to look for merger partners with deeper pockets to weather the deep freeze in the capital markets.

Prospects for more mergers and closures of investment banks has recent chatter in San Francisco’s investment banking circles echoing the hushed whispers of those walking a hospital ward, speculating on who’s on life support and who might pull through.

However, Rodman & Renshaw Capital Group’s unsolicited $100 million bid for Cowen Group was rejected this week. Cowen, which has an office in San Francisco, said the combination would not create a stronger firm.

As for Morgan Keegan, the firm is likely to continue expanding its talent bench through acquisition.

“We believe the technology industry offers immense opportunity for Morgan Keegan over the long-term,” said John Carson, Morgan Keegan’s CEO.

“Over the past few years, we have successfully expanded our banking practice,” Carson said. “The Revolution Partners team will accelerate our technology practice ahead in the same way.”