Summit Bancorp's decision to roll back charges on some of its most popular consumer accounts is not winning fans on Wall Street.

Several analysts contend that Summit's moves-which include reducing the minimum balance for free checking from $1,000 to $99-will attract customers who would not make money for the Princeton, N.J., bank.

"You look at this and ask yourself, 'Does this make sense?'" said Lawrence Cohn, an analyst at Ryan, Beck & Co. "You're cutting prices for your least profitable customers in order to attract more of them."

He and other analysts believe large banks that compete with Summit-such as First Union Corp. of Charlotte, N.C., and PNC Bank Corp. of Pittsburgh- would be loath to match Summit's reductions.

"Big banks aren't going to do anything like that," said Thomas McCandless, an analyst with CIBC Oppenheimer. "A lot of those accounts just aren't profitable."

A First Union spokeswoman said "it's not in our plans at this point" to cut the $1,000 minimum balance that its customers in New Jersey must maintain to get free checking in a normal account.

She pointed out, however, that customers who are willing to forgo any direct contact with branches can qualify for a checking account that offers free checking with no minimum balance.

The decision by $33 billion-asset Summit and the analysts' responses are the latest exchanges in the debate about how far banks should go to attract depositors.

In an interview, William J. Wolverton, Summit's senior executive vice president for retail banking, said the lower minimums would help the bank lure customers from large and small competitors.

In addition to the free-checking balance reduction, the bank said Tuesday that it is reducing the minimum balance needed to maintain a free savings account, from $1,000 to $99. A customer who falls below that threshold would be assessed a $9 monthly fee.

The bank also cut the amount needed to open a certificate of deposit, from $1,000 to $500.

The changes take effect today for new and current customers at most branches. Some branches in Connecticut will not introduce the new rates until later this month.

By attracting new customers, Mr. Wolverton said, Summit will have the opportunity to cross-sell an array of more profitable offerings, such as investment products and insurance. He contested the widely held notion that customers who keep small balances tend to be unprofitable.

"We have found that balances being maintained under $1,000 are some of our most profitable customers," he said. "These customers are also bringing other business. And lower-balance customers also have a greater willingness to pay fees when they are overdrawn."

Summit's moves are in keeping with its decision to position itself as a large bank with many of the characteristics of a community bank.

One hallmark of community banks and small regional banks is a willingness to keep fees low on deposit products. Many small banks in New Jersey already have minimum balances for free checking that are comparable to Summit's new levels.

"They have rolled some of their pricing back to the level that we have been charging forever," said Vernon Hill, chief executive officer of Commerce Bancorp, a $4.9 billion-asset bank based in Cherry Hill, N.J. "Imitation is the sincerest form of flattery."

Like Mr. Wolverton, Mr. Hill said banks can make money on depositors who have low, minimum balances, provided that the banks develop the capability to cross-sell these customers an array of products.

"A low-margin account today might be a high-margin account tomorrow," Mr. Hill said.

But others question whether banks can sell enough products to make up for pricing deposits too cheaply.

"The relevant question is: Will any resulting growth for Summit be profitable growth?" said Michael Mayo, an analyst with Credit Suisse First Boston. "The jury is going to remain out on that question."

Mr. Cohn of Ryan Beck, was less restrained.

"People that carry those kinds of low, minimum balances aren't considered your best candidates for selling those higher-margin products," he said. He said his yearly earnings estimate for Summit of $2.85 per share might be too high in light of the bank's latest moves.

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