More financial institutions are charging consumers higher ATM fees but also offering more free checking accounts than a year ago, a new report says.

        The number of banks and thrifts levying fees on non-customers for using the automated-teller machines rose to about 90 percent, up almost 13 percentage points from last year, according to the Federal Reserve Board's latest yearly report to Congress on bank fees.

        The average ATM surcharge, a fee initiated in 1996 when the nation's two larger ATM operators lifted a ban on such charges, rose 6 cents in 2001 to $1.32. Customers also can be charged a so-callled “foreign fee” by their bank for using another bank's ATM.

        Large banks and thrifts, which increasingly rely more on fee income to make up a larger portion of overall profits, raised ATM surcharges the most. Their average fee rose 8 cents to $1.44, according to the Federal Reserve report in the trade publication American Banker.

        Locally, Greater Cincinnati residents also get hit with the fees. Fifth Third, Firstar, Provident, PNC, Bank One, Huntington and Key now average a $2 surcharge. The fee for those banks averaged $1.57 two years ago.

        The Fed report also said the number of institutions providing free noninterest checking accounts rose to 45.3 percent in 2001 from 30.1 percent in 2000. The trend also is occurring locally with many financial entities in Greater Cincinnati offering free checking.

        But consumers still can be hit with other fees even if they have free checking, depending on where they bank.
       

PNC Bank stock rated a "buy'

        A low stock price and solid fundamentals at the parent of PNC Bank have prompted a banking analyst to recommend the stock. Saying PNC Financial Services Group Inc. has had more bad luck than bad management recently, John Kline of Sandler O'Neil Partners in New York has placed a “buy” rating on the company.

        Mr. Kline told industry publication American Banker that PNC's stock is 24.4 percent off its 52-week high of $70.39 in August. The stock closed at $54.85Tuesday. His new 12-month price target: $67.

        The upgrade comes after PNC earlier this year experienced many unexpected problems, including being forced to restate first-quarter profits because of an accounting error.

        But Mr. Kline said PNC has made several positive moves, including exiting unprofitable businesses and reducing its risk exposure on future commercial loans. He also said PNC “has better than average returns on equity and return on assets.”

        PNC operates Cincinnati's fourth-largest bank with 47 branches.
       

Moody's increases Fifth Third rating

        The senior debt rating for Fifth Third Bancorp has been raised to Aa2 from Aa3 by Moody's Investor Service, a distinction equaled or surpassed by only three other U.S. bank holding companies.

        New York-based Moody's said the ratings upgrade reflects several things about Fifth Third, including sound company structure, solid liquidity and a low-risk balance sheet. It said those factors should help Fifth Third maintain solid and predictable earnings.

        Fifth Third for years has been one of Wall Street's favorite banks, largely because the Cincinnati-based bank regularly outperforms its peers when it comes to profitability and expense control.

        Contact Jeff McKinney at 768-8499; fax 564-6991; or e-mail jmckinney@enquirer.com.

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