STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
THE FIRST BANK OF PORT )
RICHEY (proprosed new bank), )
)
Petitioner, )
)
vs. ) CASE NO. 76-086
)
STATE OF FLORIDA, DIVISION )
OF BANKING )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, in Room
103 of the Collins Building, Tallahassee, Florida, commencing at 10:00 a.m. on April 15, 1976, and continuing on April 16th and April 28, 1976.
APPEARANCES
For Petitioner: Mr. Wilbur E. Brewton and
Mr. Clyde M. Taylor
Taylor, Brion, Buker and Greene, P.A. Post Office Box 1796
Tallahassee, Florida 32302
Mr. John D. Kiernan
307 West Coast Title Building
Sixth Street and First Avenue North St. Petersburg, Florida 33701
For Respondent: Mr. James M. Barclay
Assistant General Counsel Office of the Comptroller The Capitol
Tallahassee, Florida
Mr. George E. Lewis, II
Director, Division of Banking and Finance Office of the Comptroller
The Capitol Tallahassee, Florida
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, the following pertinent facts are found:
In the latter part of 1973, petitioner submitted to respondent its application for authority to organize a corporation for the purpose of conducting a general banking business to be located on the west side of U.S. Highway 19 at the intersection of Ridge Road in the City of Port Richie. An investigation of the application was conducted by State Supervising Examiner Bruce L. Hieronymus in April of 1974. The application received conditional approval from the former Comptroller of the State of Florida in December of 1974. In January of 1975, such conditional approval was revoked by the present Comptroller. Mr. Hieronymus conducted an update investigation of petitioner's application in mid-March, 1975, noting in his report that additional field examination time should have been allowed and that his recommendation and report was made without audit or verification of some points that could have a definite bearing on the Comptroller's decision. On April 16, 1975, a Comptroller's Conference was held.
On October 15, 1975, Comptroller Gerald A. Lewis notified petitioner that he had denied the application for authority to organize the First Bank of Port Richie. The reasons for denial were set forth in a Statement attached to the Order of denial. While the Comptroller found that petitioner's establishment would promote, to some degree, the public convenience in the area, it was further found that:
"Growth in the area has been significant. However, there is nothing in the record to indicate that past growth trends will continue. While four of the seven banks in the western area of Pasco County have recorded impressive gains in deposits from June 1974 through June 1975, the increases have been reflected overwhelmingly in time deposits and the savings and loan offices in the area compete heavily for these deposits. The three banks closest to the proposed bank site have not enjoyed significant deposit growth. While Ellis Security Bank reported a total deposit increase of $3.1 million during the period June 1974 through June 1975, Ellis First National Bank of New Port Richey and Peoples State Bank reported decreases in total deposits for the same period of $1.4 million and $7.5 million, respectively. It appears that local conditions do not assure reasonable promise of successful operation of the proposed bank and the existing banks.
On the basis of the foregoing, the Comptroller has concluded that, while the first criterion is met in this case, the second criterion is not met. Therefore, the application is denied. Since this conclusion renders the other four criteria moot, the Comptroller
has not reached any conclusions with respect to those other four criteria."
Subsequent to the denial, petitioner requested a hearing in accordance with Chapter 120 of the Florida Statutes. Receiving no response from the
Comptroller, petitioner filed for a writ of mandamus in the Leon County Circuit Court. That Court found that the parties had agreed to proceed in accordance with the new Administrative Procedure Act and ordered respondent to grant petitioner a formal hearing. The office of the Comptroller forwarded the petition to the Division of Administrative Hearings and the undersigned Hearing Officer was designated to conduct the proceedings.
This being a fact-finding adversary hearing under F.S. Sec. 120.57(1) to determine the issue of whether petitioner should be granted authority to organize and operate a general banking business at the proposed location; and considering the long delay between the Comptroller's conference, the Comptroller's order of denial and the date of the present hearing, as well as the fact that the Comptroller declined to reach any conclusion as to four of the six criteria required to be met for a charter, the parties were permitted to present all relevant evidence to date concerning the issues in dispute.
As noted above, the proposed bank is to be located on a corner of the Port Richie Shopping Village, a large shopping center at the intersection of Ridge Road and U.S Highway 19, the latter of which is often described as "murderer's row due to its extremely heavy traffic congestion. This is a signal-controlled intersection with turn lanes and turn arrows, and is the only intersection with a traffic control light for several miles along Highway 19. Large residential areas surround the proposed site and a junior college is being built two miles east of the site.
The site provides easy ingress and egress and adequate parking space. While the owners of the shopping center are experiencing financial difficulties in connection therewith, the center enjoys an occupancy rate of approximately 93 percent. County, state and federal offices are also located in or near the shopping center. There are two or three savings and loan institutions located in the immediate area of the proposed site. However, the nearest bank to the south of the proposed site is about 2.3 miles and the nearest bank to the north is 3.5 miles. The seven existing banks in the area are closer together than petitioner would be to any other bank, with the possible exception of the second and third banks to the south of petitioner in New Port Richie.
The name of the proposed bank is First Bank of Port Richie. While numerous state and national banks and clearing houses utilize the word "first" in their nomenclature, petitioner's name should cause no conflict or confusion with the name of an existing bank.
For its housing quarters, petitioner proposes to construct a permanent two-story building containing some 14,000 square feet, the second floor to be only partially finished. The size and layout of the building allow for growth, flexibility and convenience, and necessary security equipment is planned. Estimated construction costs are reasonable. Petitioner intends to temporarily operate in a modular unit located adjacent to the site of the permanent building so as to allow for construction of the building without interference. The temporary unit will be leased and will comply with federal security and bonding requirements.
There is nothing in the record to indicate that petitioner's proposed capital structure is less than adequate. State examiner Hieronymus found this factor to be favorable in both his original and updated reports and no witness testified to the contrary.
The examiner's original and updated investigations report as unfavorable the general character of management of petitioner. This conclusion appears to be based primarily upon the examiner's opinion at the time he prepared his reports that the petitioner's proposed president and chief executive officer, Mr. Raymond O. MacDonald, Jr., lacked both directorate experience and experience as the head of a bank. However, the evidence Illustrates, and Mr. Hieronymus admits, that at the time he prepared those reports he was unfamiliar with MacDonald's extensive banking experience, both as an executive vice president of a Tampa bank and as a director of a Lakeland bank. Testimony on this point from other witnesses indicates that the proposed officers and directors represent a cross-section of the community, each with prior business experience and three with prior operative banking experience with both new and established banks.
The trade area of the proposed bank consists of approximately fourteen square miles. Since the early 1970's, the Pasco County area has been one of the fastest growing areas in the State of Florida. In mid-1973, the estimated population of the trade area was 9,200 residents. Present estimated population of the trade area is over 16,000, using figures obtained from statistics of the
U.S. Post Office. The state average is 12,000 people per bank. In the past five years, the area has experienced an increase in deposits of 123 percent.
As in most other areas across the nation, the area in question suffered in 1973/74 from the deleterious effects of inflation and recession, with attendant declines in construction and increases in the percentage of unemployed persons.
While one opponent of petitioner's new bank charter testified that the banks in Pasco County had had a "rough go of it" in the past few years, this is not borne out by the evidence relating to the deposit growth and net income experienced by the seven existing banks. This same witness further stated that economic conditions in the area were now beginnings to pick up. Also, the two opponents to petitioner's application, both affiliated with banks in Pasco County, are each considering placing a remote facility or a branch office within the petitioner's proposed trade area.
All but one of the seven banks in the area experienced a growth in deposits from the 1974 to the 1975 year end. The one bank which reported a decrease in deposits made a profit of some $77,000.00 in 1975, in spite of a loan write-off of about $700,000.00 in 1974 and problems with poor management. The two newest banks in the community, one of which is the closest bank to the north of petitioner, show excellent growth in deposits from 1974 to 1975.
The two opponents who appeared at the hearing each testified that, other than normal competition factors, the proposed bank will have no adverse effect upon the successful operation of their existing banks. When Mr. Hieronymus conducted his investigations concerning the petitioner's proposed bank, he did not get the impression that other bankers in the area were concerned & that petitioner's operation would adversely affect their existing operations.
The February, 1976, Comparative Figures Report published by the Florida Bankers Association, which is relied upon in part by respondent in determining whether to grant banking charters, shows Pasco County to have an 8.1 percent increase in deposits from 1974 to 1975 year ends. Since January of 1975, respondent has granted bank charters to banks located in Duval County with a deposit growth of minus .1 percent; in Polk County with a deposit growth of
1.5 percent; and in Hillsborough County with a deposit growth of minus 1.5 percent.
Newly chartered banks frequently lose money in their first year of operation. Although the petitioner projected earnings indicating a substantial profit in each of the first three years of operation; Mr. Hieronymus concluded in his report that the opportunity for an acceptable return on investment was less than probable and reported the factor of "future earings prospects," to be "unfavorable." Using the approach of a percentage of average total assets rather than percentage of total capital (as used by petitioner in its projections) and taking into account the petitioner's purchase of the land and changes in the sources and costs of money, Mr. Hieronymus projected a net operating income of minus $14,091.00 the first year, plus $28,976.00 the second year and plus $37,023.00the third year. Deposit growth would increase from $2.5 million to $6.5 million to $9.0 million over the first three years, according to the projections of Mr. Hieronymus. These figures would be higher were petitioner located in its permanent facility during its first year. On cross- examination at the hearing, Mr. Hieronymus stated that these projected figures illustrate that local conditions assure reasonable promise of a profit.
CONCLUSIONS OF LAW
When an application for authority to organize and operate a State banking facility is filed, it is the applicant's responsibility to prove that statutory factors warranting the grant of authority are met. It is the respondent's duty to make an investigation of the five matters listed in subsection (1) of F.S. Sec. 659.03 and then to approve or disapprove the application in its discretion. This discretion is not absolute or unqualified, but is instead conditioned by a consideration of the factors listed in Sec.
Section 659.03(2) provides that:
"The department shall approve or disapprove the application, in its discretion, but it shall not approve such application until, in its opinion:
Public convenience and advantage will be promoted by the establishment of the proposed bank or trust company.
Local conditions assure reasonable promise of successful operation for the proposed bank or the principal office of the proposed trust company and those banks or trust companies already established in the community.
The proposed capital structure is adequate.
The proposed officers and directors have sufficient banking or trust experience, ability and standing to assure reasonable promise of successful operation.
The name of the proposed bank or trust company is not so similar as to cause confusion with the name of an existing bank.
Provision has been made for suitable banking house quarters in the area specified in the application."
Thus, the inquiry determinative of the issue of whether petitioner should be granted authority to organize and operate a State banking business is whether petitioner meets each and all of the six criteria enumerated above. The oral and documentary evidence adduced at the hearing leads the undersigned to conclude that the six criteria set forth in Sec. 659.03(2) have been sufficiently met by petitioner.
In order to establish a new bank in an area, it must be shown that public convenience and advantage will be promoted. The evidence in this case, as specifically set forth in paragraph 5 of the findings of fact, clearly demonstrates that the establishment of petitioner's bank at the proposed site would promote public convenience and advantage.
Subsection (b) of Sec. 659.03(2), requires that a charter application not be approved until "local conditions assure reasonable promise of successful operation for the proposed bank . . . and those banks . . . already established in the community." The uncontradicted evidence adduced at the hearing is that no existing bank in the area will be adversely affected by the establishment of petitioner's proposed bank. The two opponents appearing at the hearing each testified that while they may lose a few accounts to petitioner, petitioner's establishment would have no significant effect on their banking operations. Their concern in this regard was that the economy in the area would not support a new full service bank and hence the risk to petitioner's officers and shareholders would be great. While every new business operation presents some risk to its officers and shareholders, the concern of the opponents regarding the poor economy of the area is simply not borne out by the record. The evidence illustrates that in spite of the effects of inflation and/or recession affecting the area over the past few years, all but one of the existing seven banks experienced an increase in deposits from 1974 to 1975 year ends. The one bank which did not have an increase in deposits was experiencing problems with poor management. Even this bank made a profit in net income in 1975 in spite of a large write-off in loans in 1974. None of the seven existing banks in the area experienced a negative net operating income in 1975, and the call reports of three banks show increases in net income of approximately $34,000.00,
$42,000.00 and $77,000.00. This is hardly the picture of an area so depressed in economic conditions that it could not possibly support a new full service banking facility, especially in a site which will promote public convenience and advantage. The two newest banks in the area experienced excellent deposit growths between 1974 and 1975. Further, one of the opponents testified that the area was now beginning to recover. Both opponents have plans to open a branch or remote facility in petitioner's proposed trade area. Witnesses differed as to their interpretation of "reasonable promise of successful operation." However, even the figures as projected by respondent's investigator demonstrates a profit for petitioner of over $51,000.00 by the third year of operation.
This, according to said investigator, constitutes a reasonable promise of profit. The undersigned concludes that the most recent competent evidence concerning the economic condition of the area demonstrates that local conditions assure a reasonable promise of successful operation of the proposed bank and the existing banks.
The petitioner has carried its burden of proof relating to the adequacy of the proposed capital structure, the qualifications of the proposed officers and directors, the lack of confusion between the name of the proposed bank and any existing bank and the suitability of its housing quarters. Petitioner presented evidence showing that it meets these four criteria, and no evidence was presented to the contrary, with the exception of that relating to the proposed chief executive officer. It was illustrated that objections to him
were based upon inaccurate and insufficient information relating to his background and experience. The undersigned concludes that the evidence relating to the proposed chief executive officer, as well as the other proposed officers and directors, illustrate that they collectively have sufficient banking or trust experience, ability and standing to assure petitioner's reasonable promise of successful operation.
Based upon the findings of fact and conclusions of law recited above, it is recommended that respondent grant to petitioner authority to organize and operate a general banking business at 800 U.S. Highway 19 North, Port Richie, Florida.
Respectfully submitted and entered this 8th day of June, 1976, in Tallahassee, Florida.
DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
(904) 488-9675
COPIES FURNISHED:
Honorable Gerald A. Lewis Comptroller
The Capitol
Tallahassee, Florida 32304
Mr. James M. Barclay Assistant General Counsel Office of the Comptroller The Capitol
Tallahassee, Florida
Mr. Wilbur E. Brewton and Mr. Clyde M. Taylor
Taylor, Brion, Buker and Greene, P.A.
P.O. Box 1796
Tallahassee, Florida 32302
Mr. John D. Kiernan
307 West Coast Title Building
Sixth Street and First Avenue North St. Petersburg, Florida 33701
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF BANKING
THE FIRST BANK OF PORT RICHEY
(proposed new bank) Petitioner,
vs. CASE NO. 76-086
STATE OF FLORIDA, DIVISION OF BANKING
Respondent.
/
FINAL ORDER
* NOTE: Page 1 of this Agency Final Order is unavailable at the Division & therefore not a part of this ACCESS document.
For purposes of the ACCESS Index, the Agency Final Order issue date is being used as the Division's filing date.
U.S. Highway 19 at the intersection of Ridge Road in the City of Port Richey. An investigation of the application was conducted in April of 1974 by State Supervising Examiner Bruce L. Hieronymus, an expert in the field of state bank application investigations. The application received conditional approval from State Comptroller Dickinson in December of 1974. In January of 1975, such conditional approval was revoked. Hieronymus conducted an update investigation of the application in mid-March of 1975. On April 16, 1975, a Comptroller's Conference was held.
On October 15, 1975, applicants were notified that the application for authority to organize the First Bank of Port Richey had been denied. The reasons for denial were set forth in a statement attached to the order of denial. While applicants' proposed bank would promote, to some degree, the public convenience in the area, it was found, however, that local conditions did not assure reasonable promise of successful operation of the proposed bank and the existing banks. No conclusions were reached with respect to the other four criteria set forth in 659.03(2), F.S.
Applicants requested and were granted an administrative hearing under F.S. Section 120.57(1) to determine the issue of whether they should be granted authority to organize and operate a general banking business at the proposed location. The hearing officer recommended that the application be granted.
The hearing officer was led to conclude that the six criteria set forth in Section 659.03(2) had been "sufficiently" met by the applicants and recommended that the applicants be granted authority to organize and operate a general banking business. I have reviewed the complete record and upon consideration thereof have determined that some of the conclusions of law in the recommended order are to be rejected. Further, upon first having determined from a review
of the complete record that some findings of fact were not based upon competent substantial evidence, certain findings of fact are rejected as stated with particularity in this order.
Two witnesses testified in support of the application. One was the person paid by applicants to conduct an economic feasibility study and who prepares bank applications for a living; the other would be the cashier and vice president of the bank if the application were granted. Although the former was declared by the hearing officer as an "expert witness in preparing applications which involved economic feasibility studies: much of his testimony exceeded that sphere of expertise, as will be evident from the following.
As noted previously, the proposed bank is to be located at the intersection of Ridge Road and U.S. Highway 19, in Port Richey, Florida, and if granted, would fill a "gap" of some five miles along a 12 mile corridor along U.S. 19 in western Pasco County and would thus compete with some 18 other financial institutions in that area for financial business. Further elaboration about applicants' proposed operations is not possible because the details of the application were neither fully discussed at the hearing, nor did anyone describe how applicants intended to conduct their banking operations.
Subsection (2) of section 659.03, F.S., lists six factors which must be met before a bank charter application can be granted: public convenience and advantage, local conditions, capital structure, mangement, name and banking house. These factors will be dealt with in that order. Even though no member of the public testified about the subject, the proposed bank would probably be convenient and advantageous to some of the people in the Port Richey area if chartered at its proposed location, given the locations of existing banks, traffic on U.S. 19, and a nearby intersection that now has a traffic signal. In the statement of October 15, 1975, denying this application, it appeared that the establishment of the proposed bank would promote, to some degree, the public convenience in the area. The hearing officer concluded likewise and that finding is approved and adopted. Local conditions, the second factor is another matter, however.
Much was said by the applicants regarding the local conditions of western Pasco County, the second of six factors to be considered before a bank application can be granted. In an effort to quantify their contention that local conditions would support a new state bank in the area, the applicants presented various types and kinds of economic data and statistics and a magazine article to "prove" that their bank would be successful.
One witness--the expert in preparing applications--said that he thought that local conditions assured a successful new bank. This opinion was contradicted by presidents of two banks who live and work in the very area where the new bank would be located, by the Director of the Division of Banking and by the state bank examiner supervisor, the latter being an expert in the field of bank application examination. One bank president has been in banking since September of 1936. He stated that the chances of success for applicant at their location were extremely marginal due to the local conditions of western Pasco County. According to this banking executive, demand for service is simply not there, the economy is not there, and the area is in a terribly depressed economy with little demand for loans.
Both banks presidents testified that, other than from normal competition factors, the proposed bank would have no "adverse effect" upon the successful operation of existing banks but such testimony must be considered with testimony
given by the same two bankers to the effect that local conditions would not support the entry of this proposed bank in the community.
There is no dispute that most of the seven banks in the area experienced some growth in deposits from the 1974 to the 1975 year end. One reporting a decrease in depositions did manage to show a profit in 1975, in spite of a loan write-off of about $700,000.00 in 1974 and problems with poor management. The two newest banks in the community, one of which is the closet bank to the north of petitioner, had a deposit growth from 1974 to 1975.
According to one bank president, the banks in Pasco County had a "rough go of it" in the past few years. The other bank president viewed Pasco County's population growth as modest when compared with the deposit growth of banks. The area has not yet recovered sufficiently from economic setbacks because each opposing bank rejected the idea of locating a remote facility or a branch within the applicants' proposed trade areas because existing banks concluded that neither a branch nor a remote facility would be feasible and the area would support neither a branch nor a remote facility, much less a new full service bank.
One bank did consider locating a "mini-branch" in the applicants proposed trade area but this would involve only a temporary structure (a trailer that it already owns) and would need only two new tellers to commence such an operation.
Applications for bank charters should show more than a chance of success. The statute (659.03(2)(b), F.S.), requires a reasonable promise of successful operation which would not be the case if this application were granted. This application proposed use of temporary quarters which substantially increases the expenses to the bank at a time when state-wide deposit growth was relatively flat. In 1974, for example, population in Florida grew 3.2 percent but there was no true real growth in state bank deposits as they increased only 5.0 percent. At the same time, the consumer price index by the United States Bureau of Labor Statistics showed an inflation rate of 10.97 percent. Figures for 1975 were no better as population grew 4.4 percent, state bank deposits grew but 3.3 percent and the inflation rate was an additional 9.14 percent. Furthermore, employment, or the lack of it, is one indicator of the probability of successful operation. In 1974 and 1975 the state-wide unemployment rates were 6.2 and 7.1 respectively but Paso County's rates were higher: 7.1 percent for 1974 and 12.7 percent for 1975. These figures were quite high compared with similar data contained in other bank applications.
To ensure a reasonable promise of successful operation, the total state banking picture must be taken into consideration in considering a bank application. Consideration of a charter for a new state bank cannot exclude the economic health of the state-wide banking system because once chartered the new bank becomes a part of that system and assumes some of the characteristics of the larger body. State bank examiner supervisor Hieronymus, was correct when he stated that no bank would have a reasonable promise of successful operation at that location. The profitability of existing banks also needs consideration.
One way to strengthen capital ratios of existing banks is by regulating entry of new banks in an area. Petitioners propose to locate in western Pasco County where there are already some 18 financial institutions along a 12 mile stretch of highway. Even viewed from a different perspective, consideration of local conditions do not lead to the conclusion that this bank would be successful.
Small new banks cannot make large construction loans without participating out and that ability is a direct function of the cash positions of banks and other financial institutions in the state and in the nation. If those banks do not
have funds to lend, a bank that needs to get a correspondence relationship to satisfy a customer's need for money is not going to be able to satisfy that need, hence another factor appears that makes chartering this bank appear imprudent. From the foregoing figures, it can be readily seen that state-wide banking trends at the time were hardly conducive to added competition from new state banks, especially in the west Pasco County area.
During the pendency of this application, past due and delinquent loan lists at banks in western Pasco County grew. Likewise, the returns on loans and investments were dropping while loan interst rates, prime interest rate increased, and banks reduced their staffs. This bank, if it gained entry into the banking market of western Pasco County, would have been saddled with these factors together with competing against established banks who evinced a conservative loan policy. This latter consideration becomes important when one realizes that borrowers unable to obtain at banks which insist on relatively risk-free transactions will turn to the less conservative ending institution and thus the probabilities of risky loans and resultant losses become manifestly evident. Moreover, newly chartered banks frequently lose money in their first year of operation. Applicants projected earnings indicating a substantial profit in each of the first three years of operation. Although state bank examiner supervisor Hieronymus stated that applicants' projected figures illustrated that local conditions could produce a reasonable promise of profit, it does not follow that the proposed bank would be assured a reasonable promise of successful operation.
Local conditions, then will not support the proposed bank at this time. When the application was filed, the nation and state were in the throes of a recession. Inflation rates were in the double digits. Bankruptcies increased, construction declined and employment declined. And Port Richey, according to one bank president who protested this application, is the least affluent of the whole west Pasco area.
From the foregoing, it can be seen that the hearing officer's finding that local conditions assured the applicants a reasonable promise of successful operation was not based on substantial competent evidence but on the opinions of an "expert" who was talking about subjects far afield from his area of special knowledge. Furthermore, the hearing officer relied upon and considered evidence not contained in the original application or its up-date. Such is not relevant to the merits of a bank application. See Rule 3C-20.02(3), F.A.C. Accordingly, the hearing officer's finding in this regard is rejected and the other factors can now be discussed.
The next factor to be considered with regard to bank charter applications is capital structure. Applicants' proposed capital structure is adequate as noted by state examiner Hieronymus. The hearing officer's finding and conclusion with regard to this factor is approved. Management is the next item of consideration.
No officer or director of the proposed bank testified at the hearing other than the proposed cashier and vice-president. The latter appears qualified to perform those tasks but there is no substantial competent evidence that the other officers and directors are qualified because they did not testify at the hearing and those who lauded their qualifications had not performed any background investigation other than to accept as true the information about the directors and officers supplied by each such director and officer. It should be noted that one bank president was of the opinion that the management of the proposed bank did not have sufficient experience, ability and standing to assure
reasonable promise of a successful operation. In fact, one proposed officer had not done a satisfactory job in running the bank now headed by one of the bank presidents who protested this application. Accordingly, the finding and conclusion by the hearing officer that management was acceptable and qualified must be rejected as not supported by substantial competent evidence.
The fifth factor in subsection (2) of Section 659.03, F.S., is the name of the proposed bank.
The hearing officer found that "while numerous state and national banks and clearing houses utilize the work 'first' in their nomenclature, applicants' name should cause no conflict or confusion with the name of an existing bank."
The only witness testifying for the applicants with regard to the name of the proposed bank was the person whose expertise did not include the area of bank names. He did not know the number of banks currently existing in Pasco County or the names of all the banks even in one county and did not know all of the names of the banks in Florida. Nevertheless, he did say that the name of the proposed bank would not create "confusion" or "conflict" as to the other existing banks in that particular western half of Pasco County. The Director of the Division of Banking, however, directly contradicted that opinion by listing some 27 existing state banks and one holding company in Florida whose names start with or include the words "First Bank" or "First State Bank." Consideration of a name, however, must extend beyond the confines of the "western part" of a single county because of the effect of bank advertising and because of interstate and intrastate processing and clearing of checks. Bank advertisers often utilize a "logo" or symbol or other catch-name to identify a bank. In that process, the location of the bank is downplayed or even eliminated from the advertising. The Division has received questions about bank identification from people that clear checks, merchants, and in regard to getting checks into the Federal Reserve system. The hearing officer stated that "no evidence was presented to the contrary" with regard to this criterion. That statement is refuted by the record. Accordingly, I am unable to agree with the hearing officer's conclusion that the applicants carried their burden of proof relating to the lack of confusion between the name of the proposed bank and any existing bank for the reason that the hearing officer's conclusion on this point is not supported by substantial competent evidence.
The last factor in considering bank applications is the proposed quarters for the new bank.
The hearing officer found as "fact" the following details about the proposed bank's quarters:
7. For its housing quarters, petitioner proposes to construct a permanent two-story building containing some 14,000 square feet, the second floor to be only partially finished. The size and layout of the building allow for growth, flexibility and convenience, and necessary security equipment is planned. Estimated construction costs are reasonable. Petitioner intends to temporarily operate in a modular unit located
adjacent to the site of the permanent building so as to allow for construction of the building without interference. The temporary
unit will be leased and will comply with federal security and bonding requirements.
These "facts" were gleaned from the applicants' witness who had been declared an "expert" in preparing bank applications, but who is neither a designer of bank buildings, nor an engineer, nor an architect, and who did not even hold himself out as an expert in the design of bank buildings. This finding can hardly be classified as substantial competent testimony and the hearing officer's conclusion that the bank quarters are suitable must therefore be rejected accordingly.
In summary then, the Department has considered each factor set forth in 659.03(2), F.S. The application is disapproved, in the Department's discretion, and can not be approved because, in the Department's opinion, local conditions do not assure reasonable promise of successful operation for the proposed bank or the principal office of the proposed trust company and those banks or trust companies already established in the community.
Furthermore, applicants did not adduce substantial competent evidence to show that the proposed officers and directors have sufficient banking or trust experience, ability and standing to assure reasonable promise of successful operation; or that the name of the proposed bank or trust company is not so similar as to cause confusion with the name of an existing bank; or that provision has been made for suitable banking house quarters in the area specified in the application.
Applicants did, to a certain extent, demonstrate that public convenience and advantage will be promoted by the establishment of the proposed bank or trust company and that the proposed capital structure is adequate.
Based on the foregoing, the application for authority to organize and operate a general banking business at 800 U.S. Highway 19 North, Port Richey, Florida, be and is hereby denied.
DONE AND ORDERED this 7th day of September, 1976, in Tallahassee, Florida.
GERALD A. LEWIS
Comptroller of Florida The Capitol
Tallahassee, Florida 32304
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing Final Order was sent by Regular U.S. Mail to the persons listed below this 9th day of September, 1976.
PATSY B. WORK
Copies to:
James M. Barclay Assistant General Counsel Office of the Comptroller The Capitol
Tallahassee, Florida 32304
Wilbur E. Brewton and Clyde M. Taylor
Taylor, Brion, Buker and Greene, P.A. Post Office Box 1796
Tallahassee, Florida 32302
John D. Kiernan
307 West Coast Title Building Sixth Street and First Avenue St. Petersburg, Florida 33701
Diane D. Tremor Hearing Officer
Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304
=================================================================
AGENCY FINAL ORDER ON REMAND
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF BANKING
THE FIRST BANK OF PORT RICHEY
(proposed new bank) Petitioner,
vs. CASE NO. 76-086
STATE OF FLORIDA, DIVISION OF BANKING
Respondent.
/
FINAL ORDER ON REMAND
Pursuant to notice, a public hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, in Room 103 of the Collins Building, Tallahassee, Florida, commencing at 10:00 a. m. on April 15, 1976, and continuing on April 16th and April 28 1976. A recommended order was
issued on June 8, 1976. Respondent then issued its final order on September 7, 1976.
Petitioner below timely filed a Petition for Review in the First District Court of Appeal seeking judicial review of Respondent's final order denying their application for authority to organize and operate First Bank of Port Richey. The Court rendered its opinion on May 10, 1977, wherein it vacated Respondent's final order and remanded the matter for further proceedings in accordance with said opinion, the rules of court and the laws of the State of Florida. It is in response to that mediate that the following order on remand has been prepared.
FINDINGS OF FACT
In the latter part of 1973, Petitioner submitted to Respondent its application for authority to organize a corporation for the purpose of conducting a general banking business to be located on the went side U.S. Highway 19 at the intersection of Ridge Road the load city of Richey. An investigation of the application was conducted by State Supervising Examiner Bruce L. Hieronymus during April of 1974. Of the five statutory criteria considered, four were determined to be unfavorable at that time and disapproval was recommended. In spite of the negative findings of the investigation report, the application received conditional approval from the former Comptroller of the State of Florida in December of 1974, as did 32 others pending at that time. In January of 1975, all conditional approvals were revoked by the present Comptroller. Mr. Hieronymus conducted an update investigation of Petitioner's application in mid-March, 1975, in preparation for a Comptroller's Conference in order to evaluate anew the pending application. He noted in his second report that additional field examination time should have been allowed and that his recommendation and report were made without audit or verification of some points that could have a definite bearing on the Comptroller's decision. Based on the investigation conducted, however, Mr. Hieronymus concluded that only two of five statutory criteria had been met by the applicants and therefore once again recommended disapproval. On April 16, 1975, a Comptroller's Conference was held.
Based on the findings of that conference, Comptroller Gerald A. Lewis notified Petitioner on October 15, 1975, that he had denied the application for authority to organize and operate the First Bank of Port Richey. The reasons for denial were set forth in a Statement attached to the Order of Denial. While the Comptroller found that Petitioner's establishment would promote, to some degree, the public convenience in the area, it was also found, inter alia, that the criterion of reasonable promise of successful operation was not met:
"Growth in the area has been significant. However, there is nothing in the record to indicate that past growth trends will continue. While four of the seven banks in the western area of Pasco County have recorded impressive gains in deposits from June 1974 through June 1975, the increases have been reflected over- whelmiagly in time deposits and the savings
and loan offices in the area compete heavily for these deposits. The three banks closest to the proposed bank site have not enjoyed significant deposit growth. While Ellis Security Bank reported a total deposit
increase of $3.1 million during the period June 1974 through June 1975, Ellis First National Bank of New Port Richey and Peoples State Bank reported decreases in total deposits for the same period of $1.4 million and $7.5 million, respectively. It appears that local conditions do not assure reasonable promise of successful operation of the pro- posed bank and the existing banks.
On the basis of the foregoing, the Comptroller has concluded that, while the first criterion is met in this case, the second criterion is not met. Therefore, the application is denied. Since this conclusion renders the other four criteria moot, the Comptroller has not reached any conclusions with respect to those other four criteria."
Subsequent to the denial, Petitioner requested a hearing In accordance with Chapter 120 of the Florida Statutes. Receiving no response from the Comptroller, Petitioner filed for a writ of mandamus in the Leon County Circuit Court. That Court found that the parties had agreed to proceed in accordance with the new Administrative Procedure Act and ordered Respondent to grant Petitioner a formal hearing. The Office of the Comptroller forwarded the petition to the Division of Administrative Hearings and a hearing officer was designated to conduct the proceedings.
It being a fact-finding adversary hearing under Florida Statutes 120.57(1) to determine the issue of whether Petitioner should be granted authority to organize and operate a general banking business at the proposed location; and considering the long delay between the Comptroller's Conference, the Comptroller's Order of Denial, and the date of the final hearing, as well as the fact that Respondent declined to reach any conclusion on four of the six statutory criteria which must be met before a charter can be granted by the department, the parties were permitted to present all relevant evidence to date concerning the issues in dispute.
The substantive findings adduced from the final hearing are as follows:
The proposed bank is to be located on a corner of the Port Richey Shopping Village, a large shopping center at the intersection of Ridge Road and
U.S. Highway 19. The intersection is signal-controlled, with turn lanes and turn arrows, and is the only intersection with a traffic control light for several miles along Highway 19. Large residential areas surround the proposed site and a junior college is being built two miles east of the site. The proposed site provides easy ingress and egress and adequate parking space. While the owners of the shopping center are experiencing financial difficulties in connection therewith, the center has had an average occupancy rate of approximately 93 percent. Furthermore, various county, state and federal offices are located in or near the shopping center.
There are 18 existing financial institutions along the 12 mile stretch of highway in the western Pasco County area where Petitioner proposes to locate. Of these 18, 2 or 3 are savings and loan institutions located in the immediate area of the proposed site. However, the nearest bank to the south of the Proposed site is 2.3 miles away and the nearest bank to the north is 3.5
miles away. The seven existing banks in the area are closer to each other than Petitioner would be to any other bank, with the possible exception of the second and third farthest banks located to the south of Petitioner in New Port Richey.
The name of the proposed bank is First Bank of Port Richey. While numerous state and national banks as well as clearing houses utilize the word "first" in their nomenclature, Petitioner's name should cause no conflict or confusion with the name of an existing bank.
Petitioner proposes to construct a permanent two-story building containing some 14,000 square feet, with the second floor to be left partially unfinished. The size and layout of the building provide for convenience and allow for growth and flexibility. Installation of the necessary security equipment is planned. Estimated construction costs are reasonable. Petitioner intends to operate temporarily in a modular unit located adjacent to the site of the permanent building. Petitioner proposes to lease the temporary unit and to comply with federal security and bonding requirements.
There is nothing in the record to indicate that Petitioner's proposed capital structure is less than adequate. State examiner Hieronymus found this factor to be favorable in both his original and updated reports and no witness testified to the contrary.
Both the original and updated examiner's investigations evaluated as unfavorable the qualifications of Petitioner's management. This conclusion appears to be based primarily on the examiner's opinion that Petitioner's proposed president and chief executive officer, Mr. Raymond O. MacDonald, Jr., lacked both directorate experience and experience as the head of a bank. However, the evidence illustrates, and Mr. Hieronymus has since conceded, that when these reports were prepared he was unfamiliar with Mr. MacDonald's extensive banking experience, both as an executive vice president of a Tampa bank and as a director of a Lakeland bank. Testimony on this point from other witnesses indicates that the proposed officers and directors represent a cross- section of the community, each with prior business experience and three with prior operative-banking experience with both new and established banks.
The trade area of the proposed bank consists of approximately fourteen square miles. Since the early 1970's, Pasco County has been one of the fastest growing areas in the State of Florida. In mid-1973, the estimated population of the trade area was 9,200 residents. Present estimated population of the trade area exceeds 16,000, based on statistics of the U.S Post Office. The state average ratio of population to banks is 12,000 to one.
While one opponent of Petitioner's new bank charter testified that the banks in Pasco County had had a "rough go of it" in the past few years, the hearing officer found that this statement was not borne out by the evidence relating to the deposit and net income growth experienced by the seven existing banks. Furthermore, the same witness also stated that economic conditions in the area were now beginning to pick up. As most other counties across the nation, the county in question suffered in 1973/74 from the effects of inflation and recession, with attendant declines in construction and increases in unemployment. In the department's opinion, the hearing officer's finding was not based on competent substantial evidence in the record. In fact, the trade area had not sufficiently recovered from economic setbacks as evidenced by the fact that two of the banks opposing Petitioner's application testified they had decided against locating a remote facility or a full scale branch within the applicant's proposed trade area at that time after concluding that neither would
be economically feasible as the area could support neither of them, much less a new full service bank. One opposing bank was still considering locating a "mini-branch" in the applicant's proposed trade area, however, which would require a small temporary structure (a trailer that it already owns) and would need only two new tellers to commence operation.
No real growth took place in state bank deposits in the past two years. In 1974, for example, the population in Florida grew by 5.2 percent while state bank deposits increased by only 5.08 percent. At the same time, the consumer price index calculated by the Bureau of Labor Statistics (CPI) showed an increase of 10.97 percent. Figures for 1975 do not give a more encouraging picture: the population grew by 4.4 percent, state bank deposits grew by 3.3 percent while the CPI increased by 9.14 percent. Furthermore, in 1974 and 1975, unemployment rates for the state were 6.2 percent and 7.1 percent respectively. The unemployment rates for Pasco County were considerably higher at 7.1 percent in 1974 and 12.7 percent in 1975. These figures are relatively high when compared with unemployment rates shown for areas examined in connection with other bank applications. Consequently, loan delinquencies increased at area banks. All but one of the seven banks in the area experienced some (but not real) growth in deposits from 1974 to 1975. One area bank did report a decrease in deposits, but showed a profit of 877,000 in 1975, in spite of a loan write- off of approximately 5700,000 in 1974 and problems with poor management.
During his two investigations concerning the Petitioner's proposed bank, Mr. Hieronymus did not get the impression that other bankers in the area were concerned that Petitioner's operation would adversely affect their existing operations. Each of the opponents who appeared at the hearing testified that the proposed bank would have no adverse effect, other than normal competition factors, upon the successful operation of their existing banks.
The February, 1976, Comparative Figures Report published by the Florida Bankers Association, one of the documents used by Respondent in evaluating applications for bank charters, indicates an 8.1 percent rate of growth in bank deposits in Pasco County from 1974 to 1975. Since January of 1975, Respondent has granted bank charters to banks located in Duval County which showed a deposit growth of minus .1 percent; in Polk County which showed a deposit growth rate of 1.5 percent; and in Hillsborough Count: which showed a bank deposit growth rate of minus 1.5 percent during the same period.
Although newly chartered banks frequently lose money in their first year of operation, Petitioner projected earnings indicating a substantial profit in each of the first three years of operation Mr. Hieronymus, on the other hand, concluded in his second report that the opportunity for an acceptable return on investment was less than probable and evaluated the factor of "future earnings prospects" as "unfavorable". Using the measure of a percentage of average total assets rather than a percentage of total capital which was used by Petitioner in its projections, and taking into consideration Petitioner's purchase of the land as well as changes in the sources and costs of money, Mr. Hieronymus Projected a net operating income of minus $14,091 the first year, $28,976 the second year and $37,023 the third year. He Projected that deposits would grow from $2.5 million to $6.5 million and then to 89.0 million over the first three years. On cross-examination, Mr. Hieronymus stated that these projected figures illustrated that local conditions assured a reasonable promise of profit. Testimony by the Director of the Division of Banking revealed that the department considers a variety of factors in evaluating applications for bank charters. Among these are return on loans, return on investment, deposit growth in the trade area, call reports of banks
within the trade area, the prime interest rate, unemployment statistics sales tax receipts for the area, and the characteristics and composition of the population in the trade area (e.g., education levels, median income, and median age). These and other available indicators are used to form a composite picture of the prospects for the economic success of a proposed new bank. The Director of the Division of Banking testified that Pasco County, with a median age of
53.4 in 1970, had one of the highest median age figures in the state. The average median age for the state in 1970 was 32. The spending patterns of elderly persons differ from those of other age groups. Elderly persons tend to be more rate conscious about their savings and therefore use savings and loan associations more extensively than other age groups. Elderly persons spend less than other age groups on consumer goods and also tend to finance less of their durable goods purchases. He then pointed out that taking all factors into consideration, it was the department's opinion that the overall local conditions did not assure reasonable promise of successful operation to the proposed bank.
CONCLUSIONS OF LAW
When an application for authority to organize and operate a new state bank is filed, it is the applicant's responsibility to prove that the minimum statutory factors which are prerequisite to the granting of authority have been met. It is Respondent's duty to make an investigation of the five factors listed in subsection (1) of F.S. 659.03 and then to approve or disapprove the application in its discretion. Its discretion to approve an application is not absolute or unqualified, but is conditioned upon a consideration of the factors listed in 659.03. Section 659.03(2) provides that:
"The department shall approve or disapprove the application, in its discretion, but it shall not approve such application until, in its opinion:
Public convenience and advantage will he Promoted by the establishment of the proposed bank or trust company.
Local conditions assure reasonable promise of successful operation for the proposed bank or the principal office of the proposed trust company and those banks or trust companies already estab- lished in the community.
The proposed capital structure is adequate.
The proposed officers and directors have sufficient banking or trust experience, ability and standing to assure reasonable promise of successful operation.
The name of the proposed bank or trust company is not so similar as to cause confusion with the name of an existing bank.
Provision has been made for suitable banking house quarters in the area specified in the appli- cation." (E.S.)
An examination of the degree to which Petitioner has met each of the factors listed above will be made in their statutory order.
The evidence presented at the final hearing, as set forth in paragraph 5 of the findings of fact, demonstrates that the proposed bank would probably be convenient and advantageous to at least some of the people in the Port Richey area if chartered its proposed location, given the locations of
existing banks, traffic on U.S. 19, and a nearby intersection that now has a traffic signal. The department's order made on October 15, 1975, denying Petitioner's original application, confirmed that the establishment of the proposed bank would promote, to some degree, public convenience in the area.
The hearing officer concluded likewise and this finding is approved and adopted.
One witness for Petitioner-the expert who prepared their application-stated that in his opinion local conditions did assure success for the new bank. This opinion, however, was contradicted by the presidents of two banks who live and work in the very area where the new bank would be located, by the Director of the Division of Banking and by the state bank examiner supervisor in both of his reports (though not under cross-examination), the latter being an expert in the field of bank application examination. One of the bank presidents who protested the application and who has been in banking since September of 1936, stated that the chances of success for Petitioner at the proposed location were extremely marginal due to the local conditions of western Pasco County. According to this banking executive, "demand for service is simply not there. The economy is not there. We're in a terribly depressed economy in that area. There's very little demand for loans.
In the department's opinion, applications for bank charters should show more than a chance of returning a profit. The statutory requirement relating to this point states specifically that "a reasonable promise of successful operation", should be shown. In Respondent's opinion, based on a scrutiny of both banking factors and general and local market conditions, such would not be the case if the application under review were granted.
In order to show that its prospects for successful operation, of reasonable and continued profitability, meet the standards of this statutory requirement, the applicant for a new full service bank must present satisfactory evidence that its probable net operating income by the end of the third year will be no less than a one percent return on total assets, a banking industry norm of longstanding. In the case under review, such a return would amount to approximately $90,000. Evidence accepted in the findings of fact indicated a projected return at the end of the third year of operation of only $37,023, less than half of the industry norm. Furthermore, this projected return constitutes a return of less than 2.5 percent on the original capital invested, a return considered by the department to be less than the acceptable standard, i.e., less return than "reasonable" in statutory language and a further indicator that the proposed new bank did not show a "reasonable promise of successful operation." Deposit growth in the area has been only marginal, when factors such as population growth rate and the rate of increase of the consumer price index are taken into account. The unemployment rate calculated for the area for 1975 was significantly higher than the state average in the same year. These two indicators of potential local demand for bank services further mitigate against "a reasonable promise of successful operation."
Although newly chartered banks frequently lose money in their first year of operation, the applicant's projected earnings indicate a profit in the second and third years of operation. And although Mr. Hieronymus stated on cross-examination that the applicant's projected figures illustrated that local conditions could possibly produce a "reasonable promise of profit", it does not follow, in the department's opinion, that the proposed bank would be assured a reasonable promise of successful operation, the statutory prerequisite for approval to organize a new bank. The two indicators are not necessarily synonymous. It is quite possible for a bank to operate on marginal profits without assuring an overall successful operation, as shown above in discussing
the measures of successful operation. Respondent must look to the total picture to determine chances for continuous successful operation.
The statutory requirement under discussion also mandates that the department ascertain that the profitability of existing banks will not be unduly affected by the applicant's entry into the market. Regulation of entry into the banking system is one of the main statutory tools, devised after the system's collapse during the 1930's, by which government may assist existing banks to strengthen their capital ratios. Petitioner proposes to locate in western Pasco County where there were already in existence some 18 financial institutions along a 12 mile stretch of highway.
During the pendency of this application, past due and delinquent loan lists at the existing banks in western Pasco County grew in spite of their conservative loan policy. As a result and in a parallel trend returns on loans and investments were declining. The banks were forced to reduce their staffs in an effort to maintain a profitable position. Petitioner's proposed bank, if granted entry into the banking market of western Pasco County at that time, would have been faced with these negative factors and burdened with competing against established banks which embraced a conservative loan policy. This latter factor assumes prime importance when one realizes that borrowers unable to obtain loans at banks which ins 1st on relatively sound transactions will usually turn to a less conservative lending institution and thus, increase the probabilities of risky loans and resultant losses for that institution.
In order to properly evaluate the reasonable promise of successful operation, it is the department's opinion that the total state banking picture must be taken into consideration in the evaluation of each application for a new bank. Professional evaluation cannot and should not exclude consideration of the economic health of the banking system statewide, nor the assumption that some of the symptoms of the larger body have a strong bearing on local banking conditions.
Analysis of conditions reviewed from this different and broader perspective, rather than from a limited and restrictive consideration of local conditions, tends to substantiate further the conclusion that the proposed bank would not be successful. Small new banks usually cannot make large construction loans without "participating out" and that ability is a direct function of the cash positions of banks and other financial institutions in the state and in the nation. If those banks do not desire to lend in the Florida market, as was the situation in 1975, a bank that needed to get a correspondent's relationship in order to satisfy a customer's need for money may not have been able to satisfy that need. This inability is another factor that makes chartering the proposed bank appear imprudent. From the foregoing considerations, it can be readily seen that statewide banking conditions were not conducive to added competition from new state banks, especially in west Pasco County, up to and including the time of the final hearing.
In the department's opinion, local conditions have not changed significantly since the application was last reviewed. When the application was originally filed, the nation and the state were in the throes of a recession. At the same time, inflation rates were being expressed in double digits. The number of bankruptcies was increasing while construction starts and employment were declining. As to local conditions, according to one bank president, Port Richey was the least affluent area in west Pasco County. The hearing officer gave weight to the finding that Pasco County reported a higher rate of increase in deposits than the rates reported in three counties where bank charters had
been granted by the departments Respondent duly noted this finding but, while Respondent agrees it should be considered, this finding represents only one of many economic indicators and therefore, cannot and should not be used as the sole basis for charter approval. Furthermore, the finding may be determined to be misleading under close scrutiny. The increases are expressed in percentage rates of growth. Pasco County, with a much smaller population and bank deposit base than Duval, Polk or Hillsborough counties will show a larger percentile increase when actually reporting an identical increase in dollar amounts.
Because the deposit base for the increase is correspondingly smaller in Pasco County, it would take less in the way of deposit growth there to show a larger percentile increase than it would in the more populous counties mentioned above. Another point worth noting is that the comparison on which the finding was based was an intracounty comparison of countywide statistics. The results of such a comparison do not necessarily apply to limited trade areas even within the same county, let alone within different counties.
Good examples of factors affecting the reasonable promise of successful operation in a particular trade area are the composition and characteristics of its population. The trade area under consideration is populated largely by retirees. Those retirees, like other persons in their age bracket, tend to use demand deposits less and time deposits more than does the rest of the population. This factor will affect the time deposit/demand deposit ratio a bank with such a clientele will generate as well as the concomitant expenses which go with a higher ratio of savings to demand deposits.
It Is the department's opinion that the hearing officer's finding that local conditions assured the applicant a reasonable promise of successful operation was not based on sufficiently substantial competent evidence. Accordingly, the hearing officer's finding in this regard is rejected.
(c-f) Petitioner carried its burden of proof relating to the adequacy of the proposed capital structure, the qualifications of the proposed officers and directors, the lack of confusion between the name of the proposed bank and that of any existing bank, and the suitability of its housing quarters. Petitioner presented evidence which in the department's opinion generally met these four criteria. The Court in its opinion noted no substantial competent evidence was presented to the contrary. Respondent does not adopt, however, the method used by Petitioner to evaluate the competency and qualifications of its proposed directors and officers. A proper evaluation must be based on more than the acceptability of a personal financial statement.
The banking code sets forth minimum criteria for approval which must be met before the department reaches the point of exercising its discretion to approve or disapprove the application. In the instant case, disapproval is mandated once the department concludes that in its opinion any of the criteria of 659.03(2), F.S., have not been met.
The application is disapproved, in the department's discretion, after it has considered each factor set forth in 659.03(2), F.S., and cannot be approved because, in the department's opinion, local conditions do not assure reasonable promise of successful operation for the proposed bank and those banks already established in the community.
Based on the foregoing, the application for authority to organize and operate a general banking business at 800 U.S. Highway 19 North, Port Richey, Florida, be and is hereby denied.
DONE AND ORDERED this 1st day of AUGUST, 1977, in Tallahassee, Florida.
GERALD A. LEWIS COMPTROLLER of FLORIDA
The Capitol
Tallahassee, Florida 32304
(904) 488-0370
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing Final Order on Remand was sent by regular U.S. Mail to the persons listed below this 1st day of August, 1977.
RYLAND TERRY RIGSBY
COPIES FURNISHED:
Wilbur E. Brewton, Esquire and Clyde M. Taylor, Esquire
Taylor, Brion, Buker and Greene, P.A Post Office Box 1796
Tallahassee, Florida 32302
John D. Kiernan, Esquire
307 West Coast Title Building
Sixth Street and First Avenue North St. Petersburg, Florida 33701
Diane D. Tremor, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
| Issue Date | Proceedings |
|---|---|
| Sep. 09, 1976 | Final Order filed. |
| Jun. 08, 1976 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 09, 1976 | Agency Final Order | |
| Jun. 08, 1976 | Recommended Order | Petitioner carried its burden of proof in showing adequate capitalization and growth in area to support new bank. Petitioner should be authorized to open the new bank. |
