The more assets a bank holds, the more fee income it makes, according to a new survey.

Bauer Financial Reports Inc., Coral Gables, Fla., divided service charge income by transaction and savings deposits. Bauer Financial found service charges equaled .927% of deposits at banks with less than $300 million of assets.

At banks with more than $300 million of assets, fee income totaled 1.043% of deposits.

Both groups of banks boosted fee income this year, Bauer Financial reported, but larger banks increased fees faster-by 17%, compared with 1% at smaller banks.

In 1996, fees equaled .917% of deposits at banks with less than $300 million of assets and .890% at larger banks.

Large bank fee income increased this year because "they are charging for everything," said Paul A. Bauer, president of Bauer Financial. He cited fees for automated teller machines, on-line banking, and live teller contact.

In contrast, the smaller banks appear to have "held the line" on service fees, Mr. Bauer said. One reason is that smaller banks typically do not offer as many services.

A NationsBank Corp. official questioned Bauer Financial's methodology.

Organizational differences make it impossible to compare fee income at banks of disparate sizes, said Fred Hannon, a spokesman for the Charlotte, N.C.-based bank.

Mr. Hannon said it would be more revealing to compare prices for specific services at different banks, or to compare the service charge revenue at institutions of similar sizes.

He also said that many charges, such as ATM fees, are applied only to noncustomers. And because smaller banks tend to have fewer ATMs, customers withdrawing money outside that bank's location could end up paying more in ATM surcharges than would a customer of a bank with many ATM locations.

Gene Graham, executive vice president of the Community Bank League of New England, said large banks are using ATM surcharges to steal community bank customers.

"A lot of these banks are charging the fee while at the same time there is a message on the wall at the ATM pointing out the customer can avoid these fees by switching banks," Mr. Graham said.

Few national studies have compared fee income at different-size banks.

However, the Federal Reserve Board presents an annual report to Congress comparing fees charged by banks operating in multiple states with those doing business in just one state.

In its most recent survey, released in July, the Fed found that multistate banks charged 97 cents more per month for non-interest-bearing checking accounts and 45 cents more per month for statement savings accounts. Multistate banks also charged 62 cents more per month for passbook savings accounts, the Fed found.

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