Ameris Bancorp in Atlanta is the latest midsize bank to announce plans to reduce and eliminate certain overdraft fees.
The $23 billion-asset company said in a press release Wednesday that it will eliminate nonsufficient funds and return item fees tied to payments that cannot be processed due to a lack of funds. Ameris will also eliminate extended overdraft fees for maintaining a negative balance.
Customers will be allowed to use their savings or other deposit accounts as overdraft protection without incurring transfer charges. In all other instances, the cap on daily overdraft fees will be lowered from five to three.
The changes will take place on May 31.
“These changes are designed to make banking easier and to recognize that many of our customers are working hard to improve their financial standing,” CEO Palmer Proctor said in the release. “Ameris is exploring new ways to improve our digital channels to help customers move and manage their money.”
Overdraft fees represent about $11.4 million of annual revenue, or 1.1% of total revenue, at Ameris, Christopher Marinac, an analyst at Janney Montgomery Scott, wrote in a note to clients.
Marinac said the company should be able to partially offset the lost revenue with higher spreads as interest rates rise.
Trustmark in Jackson, Miss., recently announced that it would do away with NSF fees by the end of this year. The $17.6 billion-asset company said the move could reduce annual revenue by about $2 million in 2023.
Several larger financial institutions, including Ally Financial, Cullen/Frost Bankers, Huntington Bancshares and PNC Financial Services, have announced programs that will likely reduce revenue from overdraft fees.