The Yankee24 automated teller machine network has extended its reach beyond New England, defusing speculation that the network is being readied for a quick sale.

First Fidelity Bancorp., Lawrenceville, N.J., and Hudson City Savings Bank, Hudson, N.Y., have joined the network, taking advantage of a rule change that allows all U.S. financial institutions to become Yankee24 members.

Before adopting the rule in August, Yankee24 required members to operate at least one full-service office in New England.

Fleet Defection Fueled Talk

The geographic expansion, announced late last week, is the best news in months for Yankee24, which has been considered a likely target for acquisition since one of its largest members, Fleet Financial Group Inc., left the network in March for the New York Cash Exchange.

Electronic banking experts said new members could improve Yankee24's position in the industry. The network now ranks 15th in the nation in interchange transaction volume, according to The Nilson Report, an industry newsletter.

But further changes may be needed if Yankee24 expects to survive. Industry consolidation is likely to reduce the number of regional networks to 10 or 15 over the next five years from about 80 now.

"The recent moves strengthen them, no question," said Liam Carmody, president of Carmody & Bloom, a consulting firm based in Woodcliff Lake, N.J. "But I don't think they can make it through [the impending consolidation period] without a strategic partner."

Though Yankee24 executives said they are open to merger and acquisition talks, they oppose the existing structures of most of the networks that can afford to buy them.

The reason is simple. At many larger networks, policies and strategic moves are decided by a handful of institutions. But all 720 full members of Yankee24 vote on its direction.

Seven institutions, including Fleet, direct NYCE, and only four control Electronic Payment Systems Inc., the owner of the MAC system, the largest regional ATM network.

Richard P. Yanak, president of Wallingford, Conn.-based Yankee24, said the expansion is intended to ensure that his company will be able to structure deals under its own terms.

"Will Yankee24 survive forever? The logical answer is no," Mr. Yanak admitted. "But we are now positioned in a way that protects our membership's concerns about getting lost in one of the larger networks."

Mr. Yanak added that broadening the network will make it easier to persuade large retail stores to accept its debit card at the point of sale and will lead to increased interchange transaction volume for member institutions.

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