BankAtlantic is a typical of financial institutions its size when it comes to automated teller machine surcharges.

Most such companies oppose them. The $3.8 billion-asset Florida thrift wants to profit from them.

Fort Lauderdale-based BankAtlantic has an outsize network of ATMs-800 of them. Only 21 commercial banks had more as of June 30, according to an American Banker survey.

BankAtlantic Bancorp has tripled its ATM base since August 1997, when Chris Klein joined as senior vice president of ATM systems. Mr. Klein, who had spent much of his career with NCR Corp. spearheaded the deployment of ATMs in retailing locations.

ATMs can be "a huge source of noninterest income," said Mr. Klein, 48. But he added: "You have to be very conscious of your cost structure, because unless you can break even and make money, it can be a huge drain on the bank."

Some banks have had a hard time making money with off-premises machines. Their transaction volumes tend to be low, and store owners have gotten more insistent about sharing in the revenue.

Bank One Corp. scaled back its onetime goal of installing 20,000 ATMs by 2000, and other banks are retreating from the off-premises market.

But BankAtlantic is still making deals. Mr. Klein's approach is to hook up with companies that can service the machines and market them to retailers.

These partner companies-which include some independent sales organizations in the credit card processing field-also help cross-sell BankAtlantic services to merchants. Most of BankAtlantic's ATMs are in stores.

The thrift has 70 full-service branches plus ATMs at 16 Wal-Mart Supercenters. It also has ATMs in 92 Cumberland Farms convenience stores and in movie theaters, gas stations, and shopping malls, and on college campuses. Three cruise lines have BankAtlantic ATMs, and the thrift runs a two-machine van.

The self-service empire helps to promote the BankAtlantic brand not only in its home territory in Florida, but also in Georgia and Alabama. Amid the consolidation of Florida's large banks, BankAtlantic last year became the largest financial institution with headquarters in the state.

"A recognized bank brand is a customer confidence issue," Mr. Klein said. "People we are doing business with like the fact we have the bank brand on it."

He is well aware of the perils of off-site deployment.

When surcharging spread nationwide in 1996, banks rushed into deals with retailers. Though the machines drew less foot traffic than ATMs in bank branches, the $1 to $3 transaction fees lowered the minimum volume needed to break even.

As competition for desirable locations intensified, so did the rental costs for ATM space. And with the proliferation of machines came a decline in per-unit transactions.

BankAtlantic has tried to counteract these trends, partly by sharing profits with retailers and relying on sales agents for legwork and customer service. For upkeep on half of its machines-especially smaller accounts- BankAtlantic relies on Access Cash International Inc. of Arden Hills, Mich.

Mr. Klein has a staff of 12, but he deals personally with the bigger hosts of BankAtlantic's off-premises ATMs, such as Wal-Mart.

Tactics were different in earlier days, when ATM deployers were wont to dictate contract terms to retailers, said Alanna Kellogg, president of Kellogg Group of St. Louis, an electronic banking consulting firm.

She said the BankAtlantic approach is as a model for the future in off- premises deployment.

"BankAtlantic is less constrained by tradition and policy," Ms. Kellogg said. Its executives "seem to be very willing to step out of the ordinary way of doing business, because it works for the retailers-and frankly, it works for them too."

BankAtlantic has had mixed results with other expansion attempts. In December it scaled back earnings estimates and announced layoffs of 185. The moves, it said, were related to losses incurred by its mortgage servicing department and by Ryan, Beck & Co., the Livingston, N.J., brokerage BankAtlantic acquired last June. Fourth-quarter earnings have yet to be announced.

Still, BankAtlantic was on Friedman, Billings, Ramsey & Co.'s "Christmas wish list" of stocks to buy.

"The ATM business is one of the new activities they decided to expand in," said Martin Friedman, director of research for Friedman Billings. "It is a business that will generate significant fee income."

The outsourcer, Access Cash, charges what Mr. Klein describes as "a low monthly fee" and "a few pennies per transaction."

Adam Almich, sales manager for one of Access Cash's distributors, said Mr. Klein was "intrigued by the fact that we were serving as his extended sales force."

"We had people throughout the state looking for locations for him," said Mr. Almich, whose company, Coin, Currency, and Document Systems Inc., is based in Tampa.

With Access Cash working for him, Mr. Klein has been able to avoid the expense of adding more staff to monitor the machines. Lower overhead means that each ATM needs fewer monthly transactions to break even; Mr. Klein says that number has fallen to 375, from 675.

"Access Cash and I have an extremely good relationship," Mr. Klein said. "They have brought me a lot of customers, and they know their business inside out. Rather than fight for the same territory, we partnered on it."

When Access Cash introduces BankAtlantic to a new merchant, the bank views it as a target for cross-selling merchant card processing, checking accounts, and commercial loans.

Other banks have turned to independent sales organizations, or ISOs, for similar help. Last month, First Union Corp. hired Card Capture Services of Portland, Ore., to service 500 machines.

BankAtlantic says its next step is for its ATMs to begin dispensing noncash items such as postage stamps, discount coupons, and movie tickets.

Also on the agenda is selling advertising for the ATM screens. Mr. Klein has signed an agreement with Touch Miami, an ad sales firm that runs kiosks in hotel lobbies.

"They want to take up most of our ATMs and pay us handsomely just to display all these name brands," Mr. Klein said.

Mr. Klein, a graduate of Georgetown University, began his career in the Fort Lauderdale office of NCR, where he sold check encoders and electronic machines for human bank tellers.

In 1977 he was recruited to develop in-store ATMs for Publix Super Markets Inc. of Lakeland, Fla. He ended up creating what was at the time one of the first shared networks.

In 1993, while still at NCR, Mr. Klein helped BankAtlantic-an NCR customer-secure an ATM contract with Wal-Mart. A rollout of 159 machines followed.

"This bank got a real good taste of how you can do something really big," said Mr. Klein, who left NCR in 1995 for consulting work. He was with First Citizens Bank and Trust Co. of Raleigh, N.C., before joining BankAtlantic.

Last year BankAtlantic made a splash at Wal-Mart's annual shareholders meeting: It beat out 50 other providers to win the retailer's first annual award for "best provider of ATM services."

"Chris is really focused on working with us in a professional manner," said Michael Cook, assistant treasurer of Wal-Mart.

Unlike some other ATM owners, BankAtlantic is willing to live with a few low-volume machines. Sometimes, Mr. Cook said, when transaction volumes do not meet expectations, other providers "whine."

This year, Mr. Klein hopes to coax retailers with underperforming machines to move them to more prominent locations.

He also plans to put high-volume machines on dial-up telephone lines, which are cheaper than dedicated leased lines. As leases on older ATMs expire, Mr. Klein said, he will able to reap the benefits of falling ATM prices and favorable lease rates.

"Average transaction volumes are declining and expenses are going up," Mr. Klein said.

"But there are a lot of good alternatives out there that will give you higher quality at a lower cost."

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