Contact: Russ Kashian
(262) 472-5584
kashianr@uww.edu
WHITEWATER The hypothesis was straightforward. Does the ATM network offered by the Community Bankers of Wisconsin result in higher or lower profits to its participants? The straightforward answer is yes. Further, do small banks that belong to a consortium, such as the Community Bankers of Wisconsin, make more money by charging fees for ATM transactions, or do they make more by not charging fees? The answer, again, is yes – they make more money by not charging fees.
These were the surprising answers found in a recent study conducted by University of Wisconsin-Whitewater¹s Fiscal and Economic Research Center (FERC), ³The Effect of ATM Networks on Community Banks.²
According to UW-Whitewater Assistant Economics Professor Russ Kashian, ³It is more profitable for small town banks to belong to an ATM network rather than standing alone. We found while they may lose ATM fees (one bank was fearful because they collected over $37,000 in ATM fees in a year¹s time), they will more than make up for it in increased deposits.²
FERC¹s research, which was based on financial data obtained through various FDIC databases and included 121 depository institutions, utilized quarterly call reports from March 1998 to March 2005.
For information regarding the study, contact Kashian at (262) 472-5584 or kashianr@uww.edu.
