You'd think millions in cash from one's own vaults combined with a $200 million line of credit from Wells Fargo would be enough to stock plenty of ATMs.
You'd think.
But Palm Desert National Bank, a supplier of vault cash and related services to some 12,000 independent ATMs, needed more cash after a growth spurt which added thousands of new ATMs to its client list.
So PDNB partnered with Banc Investment Group, the broker-dealer unit of Pacific Coast Bankers' Bancshares, to create ATM Cash Advantage, a program which allows independent banks to advance up to $400 million in currency to ATMs managed by PDNB's independent server operator clients.
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"This program offers a great way for banks to come in and grow comfortable with the idea of ATM vault cash," said Sandra Hartfield, president and CEO of PDNB's Electronic Banking division.
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"Just about every bank has some liquidity looking for a home," said Chris Nichols, Banc Investment Group's CEO.
Compared to rates on overnight funds, ATM vault cash can earn fees equivalent to Federal Funds plus a spread of up to 50 basis points. Participants retain title and interest to the cash and may treat it as an asset until it is dispensed from ATMs. Also, they are assigned a group of ATMs, which vary by geography, vendor and type to reduce risk. The program also includes multiple layers of insurance from national carriers.
Banks can monitor their cash daily via PDNB's proprietary Trakker software, with reconciliation of funds dispensed from ATMs generally completed by 2:30 pm PST.
Trakker should boost participants' comfort levels, Hartfield said, because of its detailed data and the controls to manage it. For instance, balances are recorded not only in Trakker but in PDNB's terminal ledger system.
"You want to be very sure you know exactly where your cash is," she said.
