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Checking account fees provide banks with billions of dollars in annual income, and Bankrate's 2009 Checking Study shows that banks continue inflating their bottom line by hiking these fees year after year.
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Bank Fees Take Flight |
CHECKING
Bank fees take flight
By Laura Bruce • Bankrate.com
Checking account fees provide banks with billions of dollars in annual income, and Bankrate's 2009 Checking Study shows that banks continue inflating their bottom line by hiking these fees year after year.
Bankrate's 2009 Checking Study
- Bank fees take flight
- Bounced check fees rise again
- Bank ATM surcharges leap
- Interest account carries hefty price
- Online banking still favorable
- 6 tips to avoid checking account fees
- Video: Are interest accounts worth it?
- Video: Overdraft fees jump in '09
Bounce a check, use an ATM that doesn't belong to your bank, or fail to maintain the stipulated minimum balance in an interest-bearing account and you'll pay a heavy price.
Each fall, Bankrate tries to guide consumers through the numerous fees that encompass the typical checking account. These fees take money out of your account, often unnecessarily. With a little bit of research we can help you can find a checking account that meets your needs and fits your lifestyle without the burden of unnecessary expenses.
Here are highlights of the major findings in this year's checking account study:
- Nonsufficient funds fees, or NSFs, better known as bounced-check fees, rose to another record high. We would hardly have expected anything less since this pattern has held true for the 11 years Bankrate has been doing this survey. This year we're also including data on tiered fee structures -- the practice of charging higher and higher NSF fees with multiple bounced checks.
- It may be inconvenient to hunt for an ATM that belongs to your bank when you're away from home, but you'll do it if you don't want to get socked with a fee that jumped more than 10 percent this year.
- The monthly service charge on interest-bearing checking accounts that fall below the minimum balance requirements rose to a new high, up almost 5 percent from the 2008 Checking Study.
NSF fees have long grabbed the attention of consumer advocates who say the fees are onerous and unfairly levied. A recent development is that major banks, including Bank of America, Wells Fargo, and Chase, are taking steps to change their automatic overdraft policies.
It seems unlikely that banks have gone soft on this issue. These changes, which we'll mention briefly in this report, come as banking institutions have been staring down the barrel of a gun. Congress is considering a bill that will force the industry to make changes and the Federal Reserve has reissued its overdraft protection rules for comment.
Watch a video on the surge in overdraft fees.>
Nevertheless, onerous fees for customers who exhibit bad checking account behavior continue rising and are not going away no matter what legislation passes. Bounced check fees, ATM surcharges and service fees for interest-bearing checking accounts all ramped upward since our 2008 checking study was released last fall.
Readers who subscribe to Bankrate's belief that a free checking account is one of the best deals in the banking world will be happy to know that these accounts are still available and remain pretty much unscathed by banks' seemingly insatiable desire for fee income. But while the accounts certainly aren't on the endangered species list yet, their long-term viability is not assured. Bankrate's definition of a free checking account is one that doesn't have a minimum balance requirement to avoid fees and doesn't tack on "per item" fees such as 25 cents per check when you write more than a stipulated number of checks in a statement cycle.
Methodology
Bankrate.com surveyed the five largest banks and the five largest thrifts, based on deposits, in the top 25 metropolitan markets across the country. We looked at one interest and one noninterest checking account from each institution where available. In all, there were 245 interest accounts and 228 noninterest accounts from 248 institutions. In addition, 16 interest accounts and five noninterest accounts were surveyed from 17 online banks. The surveys were conducted during August 2009.
Most consumers can avoid the fees we've addressed in this report with just a little bit of effort. Read the Bankrate feature "6 tips to avoid checking account fees" and start saving money.
Bank, Thrift and Credit Union Ratings Ratings
Example local bank ratings:
Financial statement
LAWSON BANK
401 NORTH PENNSYLVANIA
LAWSON, Missouri 64062
STAR RATING: 4 Stars
Predictive Indicator neutral
As of June 30, 2009
Federal Reserve System Identifier 652753
Financial summary ($ in Thousands)
|
|
2009 6 months |
2008 Year |
2007 Year |
|
Total Assets |
$107,497 |
$102,311 |
$98,003 |
|
Loans Receivable, Net |
66,359 |
69,908 |
68,905 |
|
Mortgage-Backed Securities |
1,077 |
1,306 |
958 |
|
Investments |
25,888 |
21,927 |
19,568 |
|
Deposits |
97,662 |
87,514 |
84,620 |
|
Borrowings |
0 |
5,000 |
2,794 |
|
Equity |
9,418 |
9,457 |
10,233 |
|
Net Interest Income |
1,989 |
4,019 |
4,316 |
|
Fee Income |
345 |
326 |
681 |
|
Overhead |
1,895 |
4,076 |
3,863 |
|
Net Operating Income |
184 |
47 |
1,124 |
|
Net Income |
171 |
41 |
1,103 |
|
Ratio Analysis Profitability |
% |
% |
% |
|
Return on Assets |
0.17 |
0.04 |
1.09 |
|
Operating Return on Assets |
0.13 |
0.05 |
1.11 |
|
Return on Equity |
1.99 |
0.44 |
11.21 |
|
Net Interest Margin |
4.27 |
4.25 |
4.59 |
|
Fee Income / Assets |
0.24 |
0.32 |
0.67 |
|
Overhead / Assets |
3.65 |
4.01 |
3.82 |
|
Asset Quality |
% |
% |
% |
|
Nonperforming Assets / Assets |
0.79 |
0.76 |
1.54 |
|
Nonperforming Assets / Equity & Loss Reserves |
8.25 |
7.63 |
13.63 |
|
Loss Reserves / Loans |
1.25 |
1.14 |
1.23 |
|
1-4 Fam Mtg + MBS / Assets |
22.96 |
25.51 |
25.11 |
|
Commercial Real Estate Loans / Assets |
20.78 |
21.49 |
24.45 |
|
Construction Loans / Assets |
6.18 |
8.03 |
8.33 |
|
Commercial & Industrial Loans / Assets |
8.38 |
9.12 |
7.52 |
|
Consumer Loans / Assets |
2.30 |
2.98 |
3.57 |
|
Capitalization |
% |
% |
% |
|
Equity / Assets |
8.76 |
9.24 |
10.44 |
|
Tangible Capital / Tangible Assets |
8.76 |
9.24 |
10.44 |
|
Risk-based Capital Ratio |
13.95 |
13.71 |
15.87 |
|
Liquidity |
% |
% |
% |
|
Loans / Deposits |
67.95 |
79.88 |
81.43 |
|
Non-Interest Bearing Deposits / Deposits |
19.52 |
18.23 |
21.38 |
|
Jumbo CDs & Borrowings / Assets |
18.10 |
20.39 |
15.81 |
Financial statement
BankLiberty
16 W Franklin St
Liberty, Missouri 64068
STAR RATING: 4 stars
Predictive Indicator neutral
As of June 30, 2009
Thrift ID 1000005964
Financial summary ($ in Thousands)
|
|
2009 6 months |
2008 Year |
2007 Year |
|
Total Assets |
$384,424 |
$385,262 |
$337,763 |
|
Mortgage Loans, Net |
281,752 |
266,128 |
221,201 |
|
Mortgage-Backed Securities |
10,261 |
14,474 |
18,332 |
|
Investments |
23,436 |
31,139 |
45,891 |
|
Deposits |
280,966 |
266,690 |
247,908 |
|
Borrowings |
59,513 |
76,554 |
51,265 |
|
Equity |
40,977 |
39,837 |
36,960 |
|
Net Interest Income |
6,596 |
10,954 |
9,487 |
|
Fee Income |
1,044 |
2,180 |
1,843 |
|
Overhead |
5,544 |
8,495 |
8,061 |
|
Net Operating Income |
3,141 |
2,809 |
2,519 |
|
Net Income |
1,035 |
2,057 |
1,751 |
|
Ratio Analysis Profitability |
% |
% |
% |
|
Return on Assets |
0.63 |
0.59 |
0.55 |
|
Operating Return on Assets |
1.74 |
0.81 |
0.79 |
|
Return on Equity |
5.70 |
5.36 |
4.84 |
|
Net Interest Margin |
3.68 |
3.51 |
3.22 |
|
Noninterest Income / Assets |
0.55 |
0.63 |
0.58 |
|
Overhead / Assets |
2.75 |
2.45 |
2.53 |
|
Asset Quality |
% |
% |
% |
|
Nonperforming Assets / Assets |
1.18 |
3.39 |
1.96 |
|
Nonperforming Assets / Equity & Loss Reserves |
9.73 |
30.73 |
16.60 |
|
1-4 Fam Mtg + MBS / Assets |
20.72 |
19.93 |
20.32 |
|
Commercial Real Estate Loans / Assets |
33.82 |
30.67 |
23.43 |
|
Construction Loans / Assets |
21.43 |
22.22 |
27.32 |
|
Consumer Loans / Assets |
0.57 |
0.61 |
0.41 |
|
Capitalization |
% |
% |
% |
|
Equity / Assets |
10.66 |
10.34 |
10.94 |
|
Tangible Capital / Tangible Assets |
10.12 |
9.78 |
10.90 |
|
Core Capital / Tangible Assets |
10.14 |
9.77 |
10.82 |
|
Risk-based Capital Ratio |
12.55 |
12.62 |
14.72 |
|
Liquidity |
% |
% |
% |
|
Loans / Deposits |
108.36 |
107.55 |
95.68 |
|
Cash + Equivalents / Assets |
3.18 |
3.99 |
2.98 |
|
Jumbo CDs & Borrowings / Assets |
47.10 |
48.38 |
44.10 |
Financial statement
BANK MIDWEST, NATIONAL ASSOCIATION
1111 MAIN STREET , SUITE 1600
KANSAS CITY, Missouri 64105
STAR RATING: 1 star
Predictive Indicator neutral
As of June 30, 2009
Federal Reserve System Identifier 635859
Financial summary ($ in Thousands)
|
|
2009 6 months |
2008 Year |
2007 Year |
|
Total Assets |
$4,042,752 |
$4,421,190 |
$4,197,518 |
|
Loans Receivable, Net |
2,911,480 |
3,183,840 |
3,411,538 |
|
Mortgage-Backed Securities |
86,911 |
71,708 |
18,103 |
|
Investments |
297,398 |
309,207 |
384,058 |
|
Deposits |
3,163,904 |
3,548,878 |
3,306,723 |
|
Borrowings |
426,044 |
427,097 |
448,566 |
|
Equity |
413,995 |
411,926 |
402,554 |
|
Net Interest Income |
32,966 |
110,676 |
137,643 |
|
Fee Income |
18,820 |
42,979 |
38,405 |
|
Overhead |
48,997 |
90,993 |
82,789 |
|
Net Operating Income |
-152,994 |
-26,145 |
91,553 |
|
Net Income |
-124,532 |
-14,220 |
58,706 |
|
Ratio Analysis Profitability |
% |
% |
% |
|
Return on Assets |
-3.49 |
-0.33 |
1.55 |
|
Operating Return on Assets |
-5.30 |
-0.61 |
2.41 |
|
Return on Equity |
-34.19 |
-3.34 |
15.69 |
|
Net Interest Margin |
2.13 |
2.72 |
3.89 |
|
Fee Income / Assets |
0.99 |
1.00 |
1.01 |
|
Overhead / Assets |
2.25 |
2.11 |
2.18 |
|
Asset Quality |
% |
% |
% |
|
Nonperforming Assets / Assets |
11.77 |
5.66 |
0.99 |
|
Nonperforming Assets / Equity & Loss Reserves |
85.03 |
52.20 |
9.23 |
|
Loss Reserves / Loans |
5.01 |
2.11 |
1.44 |
|
1-4 Fam Mtg + MBS / Assets |
13.34 |
12.86 |
12.29 |
|
Commercial Real Estate Loans / Assets |
22.25 |
19.74 |
20.45 |
|
Construction Loans / Assets |
20.84 |
20.90 |
25.24 |
|
Commercial & Industrial Loans / Assets |
15.67 |
16.09 |
18.96 |
|
Consumer Loans / Assets |
0.92 |
0.87 |
0.89 |
|
Capitalization |
% |
% |
% |
|
Equity / Assets |
10.24 |
9.32 |
9.59 |
|
Tangible Capital / Tangible Assets |
9.74 |
8.85 |
9.09 |
|
Risk-based Capital Ratio |
13.79 |
12.61 |
10.82 |
|
Liquidity |
% |
% |
% |
|
Loans / Deposits |
92.02 |
89.71 |
103.17 |
|
Non-Interest Bearing Deposits / Deposits |
8.82 |
7.59 |
8.66 |
|
Jumbo CDs & Borrowings / Assets |
24.60 |
26.15 |
22.79 |
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