STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MILTON L. COPELAND, ET. AL., AS ) ORGANIZERS AND PROPOSED DIRECTORS ) OF THE CITIZENS FIRST BANK OF ) OCALA (PROPOSED NEW BANK) )

)

Petitioner, )

)

vs. ) CASE NO. 76-1939

) STATE OF FLORIDA, DEPARTMENT OF ) BANKING AND FINANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, held a public hearing in this case on October 17 and 18, 1977, in Ocala, Florida; and on October 19 and 20, 1977, in Tallahassee, Florida.

APPEARANCES

The following appearances were entered: C. Gary Williams, Ausley, McMullen, McGehee, Carothers and Proctor, Tallahassee, Florida, and Randolph Tucker and Daniel Hicks, Tucker, Hicks, Blanchard, Brannen and Stillwell, Ocala, Florida, for the Petitioners, the organizers and proposed new bank; and Craig Kiser, Franklyn Wollett, and Eugene Cella, Tallahassee, Florida, for the Respondent, State of Florida, Department of Banking and Finance, Division of Banking.

The Petitioners filed their original application to organize a new bank with the Respondent on August 15, 1975. Proceedings, including the holding of a public meeting, were conducted by the Respondent, and the application was amended on numerous occasions. On September 27, 1976, the Comptroller of Florida, the Honorable Gerald A. Lewis, acting as the Head of the Respondent, entered an order denying the application. A Petition for Review of Order Denying Authority to Organize a State Bank was thereafter filed with the Division of Administrative Hearings. Extensive, vigorous, and at times frustrating prehearing proceedings ensued. The final hearing was first scheduled to be conducted on February 17, 1977, by notice dated December 8, 1976. The Petitioners subpoenaed the Comptroller and several employees of the Respondent to appear for depositions. The Respondent moved to quash the subpoenas. The primary grounds offered in support of the motion to quash were that the questions which Petitioners would ask at the depositions would be confidential within the meaning of Section 658.10(1), Florida Statutes (1975), and that since the Comptroller would be responsible for entering a final order in this case, it would be inappropriate for him, or his primary advisors, to appear as witnesses in the case for any purpose. An order denying the motion to quash was entered on January 10, 1977. The depositions were then rescheduled,

and the Respondent again moved to quash the subpoenas. An order denying the second motion to quash was entered on January 21, 1977. The Respondent filed a Petition for Immediate Review of the Orders Denying Motions to Quash in the First District Court of Appeal. On January 28, 1977, the First District Court of Appeal entered an order staying further proceedings before the Division of Administrative Hearings pending its disposition of the interlocutory appeal. On May 3, 1977, the Appeal Court denied the petition for review. Lewis v. Citizens First Bank of Ocala, 345 So.2d 390. A petition for rehearing was denied on May 24, 1977. The Respondent filed a Petition for Writ of Certiorari with the Supreme Court. The parties thereafter entered into a stipulation of dismissal of the certiorari proceeding, and requested that a hearing be promptly scheduled to be conducted on August 8, 9, and 10, 1977. On the morning of August 8, the Respondent moved for a continuance of the hearing due to the inadequacy of responses to interrogatories that had been received from the petitioners. The Petitioners acceeded, and the final hearing was rescheduled to be conducted as noted above.

Numerous other motions were filed. The most significant of these was a Motion to Dismiss filed by the Respondent on July 22, 1977. The basis of the Motion was that on July 21, 1977, the Comptroller entered an order dismissing the Petitioners' Application for Bank Charter on the grounds that Petitioners had filed an amendment to their application. By order entered July 26, 1977, the Motion to Dismiss was denied, and the "final order" entered by the Comptroller was stricken. Other motions filed during the course of this proceeding were resolved by orders entered November 29, 1976; July 27; August 1;

August 5; August 8; September 12; September 20; September 28; October 13; October 14; and November 23, 1977. After the hearing, the Sun Bank of Ocala filed a motion to intervene in the proceeding. The motion was denied by order entered December 22, 1977.

At the final hearing the Petitioners called the following witnesses: William R. Kidd, one of the Petitioners; Ralph Murphy, one of the Petitioners; Dick A. Greco, Jr., a vice president of the Edward J. DeBartolo Corporation; Milton L. Copeland, one of the Petitioners; James F. Gilligan, the Dean of Students at Central Florida Community College; James Cunningham, one of the Petitioners; Jack Matthews, the sales manager of Nobility Homes; Marjorie Renfroe, one of the Petitioners; Van E. Staton, one of the Petitioners; Owen C. Shelton, one of the Petitioners; Paul W. Ferguson, the Editor of the Marion Gazette; Charles Edward Bryant, a builder and developer who resides in Marion County; James Dean Mims, the Director of Planning for the Withlacoochee Regional Planning Council; Ronald H. Miller, the Planning Director for the Marion County Planning Department; David Starke, an economist, and president of Economics Consultants, Inc.; Richard K. Lewis, the Planning Director of the City of Ocala; Seymour H. Roland, Jr., the City Attorney for the City of Ocala; Roy Alfred Kennedy, the owner of a horse farm in Marion County; Gerald Lewis, the Comptroller of Florida, and the Head of the Division of Banking of the Department of Banking and Finance; and Edward P. Mahoney, the Deputy Comptroller of Florida. Mr. Starke was accepted as an expert witness in the fields of economics and banking. The Respondent called the following witnesses: Johnnie Hollingsworth, the Chief of the License and Chartering Bureau of the Division of Banking; Donald C. Dotzler, the Chief of Examinations of the Division of Banking; and Adina Simmons, a management systems and planning supervisor employed by the Respondent. Ms. Simmons was accepted as an expert witness in the field of economics. The testimony of several other witnesses was introduced in the form of depositions which were received into evidence as exhibits.

Hearing Officer's Exhibit 1; Petitioners' Exhibits 1 through 18, band 20

through 36; and Respondent's Exhibits 1 through 6, and 8, were offered into evidence at the final hearing and were received. Petitioners' Exhibit 19, and Respondent's Exhibit 7 were offered into evidence and were rejected. Official notice was taken of the Rules of the Respondent, Chapters 3C-9, and 3C-10, Florida Administrative Code; an emergency rule promulgated by the Respondent, 3ER77-16; and the Rules of the Federal Reserve System respecting minimum security devices and procedures for Federal Reserve Banks and State Member Banks 12CFR Section 216. During the course of the hearing the undersigned, together with counsel for the parties, conducted an inspection of the proposed banking facility, and of other banks in the Ocala area. The parties have submitted

post-hearing legal memoranda and proposed findings of fact, conclusions of law, and recommended orders.

FINDINGS OF FACT

1. The Petitioners have filed an application with the Respondent to organize a new bank in Ocala, Marion County, Florida. The name of the proposed bank would be the Citizens First Bank of Ocala. The Petitioners are the organizers and proposed directors of the bank. Each of the Petitioners is of good moral character, and each enjoys an outstanding reputation. None of the Petitioners have been convicted of any crimes involving breach of trust, and none have filed for bankruptcy, or have any history of being bad credit risks. Together the Petitioners constitute a diverse group with very broad and successful business experiences.

   
   

2. The Petitioner William R. Kidd is a registered professional engineer and realtor who has lived and worked in Ocala since 1950. Mr. Kidd has broad experience in evaluating various aspects of real estate transactions, and he has extensive experience in arranging financing of construction projects. Mr. Kidd owns a pollution control company which has a net worth of approximately $25,000 and a real estate business with sales since 1975 in excess of $10,000,000. He also manages and operates a successful consulting engineering firm. Mr. Kidd plans to invest $40,000 in the new bank, and he has sufficient funds readily availably to make that investment. Mr. Kidd is willing to invest more money in the enterprise if additional capitalization is required. Mr. Kidd is interested in working with the bank, particularly in relation to financing of real estate transactions, and construction projects.

   
   

3. The Petitioner Ralph Murphy was born in Marion County and has spent most of his life there. Mr. Murphy owns a linen service company which does approximately $18,500 to $19,000 in business weekly. The linen service, which Mr. Murphy has managed since it was a small entity doing less than $2,500 in business weekly, has a net worth of approximately $900,000. Mr. Murphy serves on the Boards of Directors of several other corporations. Mr. Murphy intends to purchase $40,000 of stock in the proposed new bank, and he has funds readily available with which he can do that. Mr. Murphy is willing to devote as much time as is necessary to organize the bank.

   
   

4. The Petitioner Milton L. Copeland manages an insurance firm which writes commercial insurance policies for businesses in Florida and in Georgia. His company has offices in Ocala and Jacksonville. The Ocala office writes approximately $2,000,000 in insurance policies annually. The Jacksonville office writes approximately $15,000 in policies weekly. Mr. Copeland has a personal net worth of approximately $800,000. Mr. Copeland intends to buy $40,000 worth of stock in the proposed new bank, and he has funds readily available for that purpose. Mr. Copeland wishes to take an active part in soliciting new accounts

   for the bank, and he could devote as much as two full days per week to bank activities. If further capitalization of the proposed bank were considered necessary, Mr. Copeland is willing to increase his investment in the bank.

   
   

5. The Petitioner James Cunningham owns and operates a funeral home business in Ocala. He has lived in Ocala most of his life. The dollar volume of Mr. Cunningham's business during 1976 was approximately $250,000. Mr. Cunningham is a City Councilman in Ocala. He is a black man. It has only been in recent years that blacks have even been employed at local banks, and no blacks presently serve on the Boards of Directors of any banks operating in Ocala or Marion County. Mr. Cunningham intends to purchase $40,000 worth of stock in the new bank. He will need to borrow no more than 25 percent of that amount in order to make the investment. Mr. Cunningham desires to take an active part in soliciting accounts and customers for the new bank, and he is willing to devote whatever time would be required for that purpose.

   
   

6. The Petitioner Marjorie Renfroe owns and operates a boat, motor and trailer sales and service business in Marion County. Her business had gross sales during 1976 of approximately $350,000. Ms. Renfroe serves on the Board of Directors of the United Way in Marion County, and on the Board of Directors of the Central Florida Community College. Ms. Renfroe plans to buy $40,000 worth of stock in the new bank, and if further capitalization were found necessary, she is willing to increase her investment, and is able to do so. Ms. Renfroe is willing to devote as much time as necessary to managing the new bank, and she is particularly interested in providing services to employees and students of the local community college, especially instructional sorts of courses for students. No women presently serve on the Boards of Directors of any banks in Marion County. One woman serves on the Board of Directors of a savings and loan institution in Marion County.

   
   

7. The Petitioner Van G. Staton manages a Belk-Lindsey Department Store in Ocala, Florida. He has lived in Ocala and managed the department store since 1956. The store employs 48 persons and had gross sales during 1976 of approximately $3,000,000. The annual payroll of the store is $400,000 to

   $500,000. The Petitioner serves on the Board of Directors of a local automobile sales and service corporation, and from 1970 through 1975 he served on the Marion County School Board. Mr. Staton plans to purchase $40,000 of stock in the new bank, and he would not need to borrow more than 50 percent of that amount. Mr. Staton would favor additional capitalization, and would be willing to increase his investment. Mr. Staton is particularly interested in having extended business hours in the new bank beyond the hours presently served by banks operating in Marion County, and Saturday openings. He is willing to spend as much time as is necessary with banking activities.

   
   

8. The Petitioner Owen C. Shelton owns and manages two corporations which operate fifteen convenience stores. The total sales for the two corporations was approximately $17,000,000 during 1976. Mr. Shelton has lived in Ocala for

   15 years. His personal net worth is in excess of $1,000,000. Mr. Shelton has been in the grocery business for twenty-five years. He started with one small store. His corporations employ approximately 185 persons. Mr. Shelton plans to purchase $40,000 worth of stock in the new bank, and he is willing to increase his investment if further capitalization is required.

   
   

9. The Petitioner Terry Trexler is President and Chairman of the Board of Nobility Homes, a mobile home manufacturing business. The company does business in 29 states, and does from 5.1 to 5.2 million dollars worth of business on a quarterly basis. Mr. Trexler has lived in Ocala for 15 years. Mr. Trexler

   plans to invest $40,000 in purchasing stock in the new bank, and he intends to be active in soliciting new accounts and customers for the bank.

   
   

10. The Petitioner Sam Kinlaw is a resident of Orlando, Florida. He has a Bachelor's Degree in Business Administration from the University of Florida, and attended the Banking School of the South at Louisiana State University. Mr. Kinlaw has been active in the banking business, or in similar financial businesses since approximately 1958. He has served as the head of installment loan departments and commercial lending departments of banks in Florida. Beginning in 1972, he became the Chief Executive Officer of the Semoran Bank, which was a new Federally chartered bank. He was responsible for setting up the bank, hiring personnel, establishing policies, and carrying on the day-to-day operations of the bank. He served in that capacity from near the end of 1972 until September, 1975. He has not been involved in the banking business since then. Mr. Kinlaw intends to purchase a "qualifying share" of stock in the bank. He intends to serve on the Board of Directors during the time that the bank is being organized, until other persons with direct banking experience are named to the Board of Directors.

    
    

11. The Petitioner Braxton Jones owns and operates several convenience stores and two supermarkets. He has lived in Ocala nearly all of his life. He is prepared to purchase between $20,000 and $30,000 of stock in the new bank, and he is willing to devote whatever time would be necessary to organize and operate the bank.

    
    

12. The Petitioner Clarence Woodrow Hicks has lived in Marion County for approximately 30 years. He formerly owned and operated Hicks News Agency, which was involved in the wholesale distribution of magazines, books, postcards and sundry items. He also owned two retail book stores. Mr. Hicks has sold his business and is now semi-retired. He serves as a consultant to the new owners of his business. During the time that he operated the businesses, they did approximately three million dollars of business per year. Mr. Hicks' net worth is in excess of one million dollars. Mr. Hicks has time available to devote to the new bank.

    
    

13. The proposed Citizens First Bank of Ocala would, if the instant application were granted, be located at the northwest corner of the intersection of State Road 200 and Southwest 16th Avenue in Ocala. The location is approximately one mile west of Pine Street (Federal Highways 441, 27, and 301), which is the primary north/south artery through Ocala. The proposed bank would be located just over three miles east of Interstate Highway 75. State Road 200 is presently a four lane highway which serves as one of the primary routes from the Interstate Highway into Ocala. Southwest 16th Avenue is presently two- laned, but all right of ways have been acquired and construction will shortly commence to four-lane the road. All of the banks and the savings and loans associations which presently operate in the Ocala area are located east of Pine Street. There are no banking facilities in the Ocala area which are located to the west of Pine Street. Location of a banking facility to the west of Pine Street would serve the convenience of persons in Ocala who live or work on the west side of Pine Street. Pine Street is a very busy highway, which has not been properly designed so that it can be easily crossed. Furthermore, a railroad track runs parallel to Pine Street to the West, and presents an additional barrier. While it is not impossible for persons who live or work on the west side of Pine Street to bank on the east side, the testimony is unrebutted that it is inconvenient to do so due to traffic congestion, and the railroad.

14. There are many persons who reside on the west side, of Pine Street. The area to the north of the proposed bank site is a residential area. There are many low income residences, and trailer park type residential facilities in that area. There are also many moderate income residences to the south and the west of the proposed site all on the west side of Pine Street. The total population of the primary service area, which is designated to be west of Pine Street, is estimated to be 14,300, as of July, 1977. This represents more than a 35 percent increase from 1970 population figures. Many more residences are planned in the area. Over 1,200 new homes have recently been completed, and more than 500 are under construction. Larger residential developments are in the planning stages.

    
    

15. There is considerable commercial activity in the areas surrounding the proposed site. The Ocala Industrial Park is located immediately across State Road 200 from the proposed site, and the South 40 Industrial Park is also nearby. Thirty-eight firms presently occupy space in the Ocala Industrial Park, employing more than 1,500 persons and occupying more than one million square feet of building space. Fourteen firms are presently located at the South 40 Industrial Park, employing nearly 350 persons and utilizing more than 300,000 square feet of building space. Both Industrial Parks have experienced steady growth. Many businesses, including several automobile sales and service businesses, have located on State Road 200. Construction is scheduled to begin on a major shopping mall in January, 1978, by the Edward J. DeBartolo Corporation. The mall will be located on State Road 200 just east of Interstate Highway 75. Construction will take approximately 12 months. More than 900 persons will be employed at the mall. In addition, most of the horse farms which surround the Ocala area are located west of Pine Street.

    
    

16. There are six banking institutions located in Marion County. The two banks located out of the Ocala area have no particular relevance to this matter. Four banks are located in Ocala. Only one of these banks is an independent bank. The others are parts of larger bank holding companies which are not centered in Ocala. Total bank deposits in Marion County have increased steadily from a total of $176,586,000 in 1973 to $236,336,000 in June, 1977. Although estimates vary, it is evident that the population of Marion County has increased from a 1970 total of approximately 69,000 to a 1977 total of from 104,000 to 127,000.

    
    

17. It appears that existing banks in Marion County are in a healthy financial position and are experiencing steady growth. There are many interlocking relationships on the Boards of Directors of the existing banks. None of the Petitioners presently serve on the Boards of any of the existing banks, and this can only promote more lively competition among the banks. Petitioners have proposed to keep their bank open for longer hours than existing banks, and for additional banking days. Petitioners propose to provide specialized counselling for new business people, and education courses for students who attend the nearby Central Florida Community College. It appears that local banks have frequently acted adversely on loan applications from local developers, who have been able to borrow money at favorable rates outside of Marion County. The presently existing banks have not adequately served the very large and active horse farming industry that is located in Ocala, and several horse farmers have needed to go to Gainesville to obtain adequate farm businesses.

    
    

18. Banks in Marion County have shown a deposit gain of nearly sixteen percent during the year 1976, as compared to a State of Florida average of approximately 7.4 percent. Of the sixteen counties in which new bank charters

    were granted in the period from January, 1975, through March, 1977, only two counties had a total deposit growth greater than was experienced in Marion County. A savings and loan association was chartered and opened in Marion County in January, 1975. The association has achieved very good success, and has not proved harmful to other financial institutions, which have also shown steady growth during this same period.

    
    

19. Petitioners have projected a net profit at the end of the third year of their operation of $163,300 based on deposits of $10,000,000. A more conservative estimate of a net profit of $61,350, based on $8,000,000 in deposits after three years was estimated by Examiner Howze, a bank examiner who conducted an investigation of the instant application for the Respondent. George Lewis, II, the former Director of the Division of Banking, prepared a proposed budget which showed that the bank would be operating at a loss after three years. George Lewis' estimates are not credible. He estimated that the return on commercial loans would be at a rate of from 7 and 1/4 to 8 percent during the first, second and third years. Nine percent is a more realistic figure, and is itself conservative. The Respondent approved the charter of the Shores Bank of Lake Wier in Marion County which indicated a nine percent return on loans. George Lewis furthermore showed a three percent cost on all demand deposits. This cost is not justified by any factors currently accepted in the banking business. George Lewis apparently based the additional cost on his

    feeling that the legislature may pass a law requiring banks to pay such a return on all demand deposits. Such speculation has not been shown to be justifiable, and cannot serve as a reasonable factor to be used in predicting a proposed bank's profits.

    
    

20. Petitioners propose to issue capital stock in the amount of

    $1,000,000, and thus to capitalize the new bank in that amount. This is adequate capital to serve the needs of the proposed bank during the first three years of its operation. George Lewis, II, testified that additional, capitalization would be required, but he gave no reason for his opinion. To the extent that additional capital is required, the Petitioners are in a position to raise it, and are willing to do so.

    
    

21. Only one of the Petitioners who would serve on the first Board of Directors of the proposed bank has any direct banking experience. All of the Petitioners have engaged in considerable banking activities, but only Sam Kinlaw has served in an active capacity with a bank. The Petitioners propose to hire experienced persons to serve as the bank's Chief Executive Officer and Chief Operations Officer. These persons would also serve on the Board of Directors.

    
    

22. The Petitioners do represent a good cross-section of successful business people. Their varied business experiences within Marion County would be very helpful to the new bank. In order to properly operate the bank, however, they will require experienced officers. Consistent with the Respondent's policy, the Petitioners have not yet named their officers. To do so, the Petitioners would place the persons they propose to hire in an untenable position in their present capacities. The Respondent has, in the past, approved bank charter applications for further processing under similar circumstances, so as to allow applicants an opportunity to recruit acceptable, experienced individuals to serve as officers. The Board of the proposed bank, as presently constituted, does not have adequate banking experience so as to assure a reasonable prospect of success. If, however, experienced, competent officers, who will also serve on the Board, are hired, the Board would be such as to assure a reasonable promise of success.

23. The parties have stipulated that the name of the proposed bank, the Citizens First Bank of Ocala, is not so similar to any existing bank as to cause confusion with the name of the existing bank.

    
    

24. The property which the Petitioners have obtained for the proposed bank is an excellent location. Petitioners plan to utilize a structure which is already on the land to commence operations. The structure has approximately 3,000 square feet of floor space, is aesthetically appropriate, and can be fairly easily modified to serve as a banking facility. The structure, when modified to increase the size of the lobby and to provide appropriate security measures, should prove adequate during the first three years of the bank's operation. There is sufficient land for additions to be made, and the structure is physically sound so that a second floor could be added. The Petitioners are prepared to increase the size of the facility as required.

    
    

    CONCLUSIONS OF LAW

    
    

25. The Division of Administrative Hearings has jurisdiction over the parties to this action, and over the subject matter. Section 120.57(1), 120.60, Florida Statutes (1976 Supp.).

    
    

26. A bank charter applicant has the burden of establishing that the Statutory factors which the Respondent must consider in determining whether to approve the application have been met. These factors are set out in Section 659.03(2), Florida Statutes (1975). The Statute provides:

    
    

    1. The department shall approve or disapprove the application, in its discretion, but it shall not approve such application until, in its opinion:

       1. Public convenience and advantage will be promoted by the establishment of the proposed bank or trust company.

       2. Local conditions assure reasonable promise of successful operation for the proposed bank

          or the principal off ice of the proposed trust company and those banks or trust companies already established in the community.

       3. The proposed capital structure is adequate.

       4. The proposed officers and directors have sufficient banking or trust experience, ability and standing to assure reasonable promise of successful operation.

       5. The name of the proposed bank or trust company is not so similar as to cause confusion with the name of an existing bank.

       6. Provision has been made for suitable banking house quarters in the area specified in the application.

          
          

27. The Respondent has promulgated no rules which more clearly delineate the factors which it will consider in determining whether to grant or deny an application. The Respondent considers many factors, and makes decisions on a case-by-case basis.

    
    

28. The Petitioner has established by competent, substantial evidence that the public convenience and advantage would be promoted by the establishment of

    the proposed bank; that local conditions assure a reasonable promise of successful operation for the proposed bank, and for those banks already established in the community; that the bank will be adequately capitalized; that the name of the proposed bank is not such as would cause confusion with the name of any existing bank; and that suitable banking house quarters will be provided.

    
    

29. If persons experienced in the day to day operation of a bank are retained to serve as the bank's officers, and these persons also serve on the Board of Directors of the proposed bank, then the Board of Directors as proposed by the Petitioners would be such as to assure reasonable promise of successful operation. The Petitioners have not yet designated their officers, and approval of their charter application should be conditional upon the Petitioners' retaining acceptable persons in those capacities.

    
    

30. The Petitioners' application for authority to organize and operate the Citizens First Bank of Ocala should be approved for further processing, and should be finally approved when the Petitioners have satisfied the Respondent as to the persons who will be retained as principal officers of the bank, and who will also serve on the Board of Directors.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED:

That the Petitioners' application for authority to organize and operate the Citizens First Bank of Ocala be approved for further processing, and that the application be finally approved when the Petitioners have satisfied the Respondent that they have retained appropriate individuals to serve as the bank's principal officers, and that these persons will also serve on the Board of Directors.

RECOMMENDED this 30th day of December, 1977, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 1977.

COPIES FURNISHED:

C. Gary Williams, Esquire AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR

Post Office Box 391 Tallahassee, Florida 32302

S. Craig Kiser, Esquire Assistant General Counsel Office of the Comptroller Legal Annex

Tallahassee, Florida 32304

Joseph C. Jacobs, Esquire Post Office Box 1170 Tallahassee, Florida 32302

Willard Ayres, Esquire Post Office Box 1148 Ocala, Florida 32670

Appendix

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MILTON L. COPELAND, et al., as )

organizers and proposed directors ) of the CITIZENS FIRST BANK OF )

OCALA (Proposed new bank), )

)

Petitioner, )

)

vs. ) CASE NO. 76-1939

) STATE OF FLORIDA, DEPARTMENT ) OF BANKING AND FINANCE, )

)

Respondent. )

)

APPENDIX TO RECOMMEND ORDER RULINGS IN ACCORDANCE WITH

FLORIDA STATUTES, SECTION 120.59(2)

The parties have submitted post-hearing legal memoranda including proposed Findings of Fact. Rulings upon proposed Findings of Fact are set out herein in accordance with Section 120.59(2), Florida Statutes (1976 Supp.).

Proposed Findings of Fact submitted by the Petitioners numbered 1 through 4, and 6 through 8, are hereby adopted except that the proposed Findings are rejected insofar as they conflict with Findings of Fact set out in the Recommended Order. Petitioners' proposed Finding of Fact number 5 is hereby adopted except that insofar as it is intimated in the proposed Finding that the list of factors utilized by the Respondent in determining public convenience and advantage, and reasonable promise of successful operation is exhaustive, the Finding is rejected. The enumerated factors are utilized by the Respondent, but any other factor relevant to those issues would also be considered. Applications

to organize and operate state banks are considered by the Respondent on a case- by-case basis.

Respondent's proposed Findings of Fact numbered 1 through 7, 12, 14 through 19, 22, and 24 are hereby adopted, except that insofar as the proposed Findings conflict with Findings of Fact set out in the Recommended Order, the proposed Findings are rejected. Proposed Finding number 8 submitted by the Respondent is adopted, except that the last sentence of the paragraph should read as follows: "Several branches were approved in the Ocala area since July, 1976, but none are located closer to existing financial institutions than would be the Petitioners' proposed bank." Proposed Finding number 9 submitted by the Respondent is rejected. Proposed Finding number 10 contains an accurate summary of population data that was offered into evidence at the hearing. The population estimates vary, but they do reveal a steady increase in the population of the City of Ocala, and of Marion County. The figures also establish a steady growth in the population of the proposed bank's primary service area, and the testimony amply demonstrates that the area will increase in population in the future.

Respondent's proposed Finding number 11 contains an accurate summary of economic data that was submitted during the course of the hearing. It appears that Marion County has experienced economic growth in recent years, and that such growth is likely to continue. The characterization contained in the proposed Finding that

30 to 40 percent of the population of the primary service area is comprised of persons with low income is rejected. It is apparent that many persons who reside in that area do have a low income, but the evidence does not support any specific conclusion respecting a percentage. Respondent's proposed Finding number 13 is rejected to the extent that it is intimated in the proposed Finding that the regional shopping mall will not shortly be under construction. It is apparent that the mall will be constructed, that a large number of persons will be employed at the mall, and that the mall will enhance the location proposed by the Petitioners. Respondent's proposed Finding number 20 is rejected. The characterizations of testimony set out in proposed Findings number 21 and 25 submitted by the Respondent are accurate. Insofar as-the testimony conflicts with the Findings of Fact set out in the Recommended Order, the testimony has been rejected. The testimony of George E. Lewis, II, respecting the proposed bank's likely financial future, and the adequacy of the proposed banking facility are specifically rejected. proposed Finding number 23 submitted by the Respondent is rejected to the extent that the proposed Finding contains an intimation that Sam Kinlaw does not have sufficient character, financial responsibility, business experience, and standing to serve on the Board of Directors of the proposed bank. The proposed Finding is in all other respects adopted.

ENTERED this 30th day of December, 1977, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

C. Gary Williams, Esquire AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR

Post Office Box 391 Tallahassee, Florida 32302

S. Craig Kiser, Esquire Assistant General Counsel Office of the Comptroller Legal Annex

Tallahassee Florida 32304

Joseph C. Jacobs, Esquire

P.O. BOX 1170

Tallahassee, Florida 32302

Willard Ayres, Esquire

1. Box 1148

   Ocala, Florida 32670

   
   

   =================================================================

   AGENCY FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

   DIVISION OF BANKING

   
   

   MILTON L. COPELAND,et al., as

   organizers and proposed directors of the CITIZENS FIRST BANK OF

   OCALA (Proposed new bank), Petitioner,

   vs. CASE NO. 76-1939

   
   

   STATE OF FLORIDA, DEPARTMENT OF BANKING AND FINANCE,

   
   

   Respondent.

   /

   
   

   FINDINGS OF FACT, CONSLUSIONS OF LAW, AND FINAL ORDER

   
   

   Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, held a public hearing in this case on October 17 and 10, 1977, in Ocala, Florida; and on October 19 and 20, 1977, in Tallahassee, Florida.

   The following appearances were entered: C. Gary Williams, Ausley, McMullen, McGehee, Carothers and Proctor, Tallahassee, Florida, and Randolph Tucker and Daniel Hicks, Tucker, Hicks Blanchard, Brannen and Stillwell, Ocala, Florida, for the Petitioners, the organizers and proposed directors of the Citizens First Bank of Ocala, a proposed new bank; and Craig Kiser, Franklyn Wollett, and Eugene Cella, Tallahassee, Florida, for the Respondent, State of Florida, Department of Banking and Finance, Division of Banking.

   
   

   FINDINGS OF FACT

   
   

   1. The Findings of Fact as sot forth in hearing Officer Pfeiffer's Recommended Order dated December 30, 1977, are hereby adopted and incorporated by reference with the following specific exception:

      
      

   2. The proposed operating budget prepared by George E. Lewis, II, former Director of the Division of Banking, is determined to be conservative. The Hearing Officer's finding that such estimate is not credible is rejected, however, as tie courts have determined that correspondingly more weight will be given to the Department's expertise in the area of reasonable promise for successful operation. (See page 13 of Recommended Order)

CONCLUSIONS OF LAW

3 The Conclusions of Law as set forth in Hearing Officer Pfeiffer's Recommended Order dated December 30, 1977, are hereby adopted and incorporated by reference with the following specific exceptions:

1. The proposed facility, containing approximately 3,000 square feet of floor space, is 2,000 square feet smaller than generally recommended by the Department for permanent de novo bank facilities. The existing structure is acceptable for temporary quarters, although it should be modified to allow for adequate lobby space and appropriate security equipment. It is the opinion and conclusion of the Department that provision has been made for suitable temporary banking house quarters. Therefore, the criterion in Subsection 659.03(2)(f), Florida Statutes, is met.

   
   

2. The proposed Board of Directors, as presently constituted, does not have adequate banking experience to assure reasonable promise of success. In addition to the selection of experienced, competent officers who may serve on tee Board, the Department generally requires at least one member of the Board, other Than the Chief Executive Officer, have satisfactory banking experience. It is the opinion and conclusion of the Department that the proposed directors do not have sufficient banking experience, ability, and standing to assure reasonable promise of successful operation. Therefore, the criterion in Subsection (359.03(2)(d), Florida Statutes, is NOT met.

   
   

   FINAL ORDER

   
   

   Based upon tie record, findings of fact, and conclusions, of law recited above and incorporated herein, it is established that five of the six statutory criteria set forth in Subsection 659.03(2), Florida Statutes, are met. The requirement of Subsection 659.03(2)(d), Florida Statutes, is NOT met. Since this criterion can be remedied by the Applicants, however, it is within the lawful discretion of the Department of Banking and Finance to grant the application based upon the condition that this criterion be met. It is thereupon

   ORDERED that authority to organize and operate a bank at the intersection of State Road 200 and Southwest 16th Avenue in Ocala, Florida, is hereby granted to Applicants upon the following conditions:

   
   

   1. Approval for membership by the Federal Reserve System.

   2. The Applicants add to the Board at least one director with banking experience, in addition to the Chief Executive Officer.

   3. The Chief Executive Officer and Operations Officer of the bank must be approved by the Department of Banking and Finance prior to the opening of the bank.

   4. The Applicants shall make such modifications to the structure as specified herein.

   5. Investment in fixed assets shall meet the statutory requirements and other reasonable requirements of the Department of Banking and Finance. Total fixed assets, including furniture, fixtures, and equipment, shall not exceed 50.0 percent

      of all combined capital accounts.

   6. The Articles of Incorporation shall be filed with the Secretary of State within six months after approval by the Board of Governors of the Federal Reserve System.

   7. The bank shall open within six months after filing of the Articles of Incorporation with the Secretary of State.

      This requirement may be subject to one six-month extension upon written request to this office.

   8. Until the conditions herein specified, and other reasonable requirements of the Department of Banking and Finance are met, or if any interim development is deemed by the Comptroller to warrant such action, the Comptroller shall have the right to alter, suspend or withdraw this ORDER.

Prior to the opening of the bank, a Certificate of Authority must be issued. It is necessary that the Department be informed of the planned opening date before issuing this Certificate. The Department should be advised at least

21 days in advance of the desired opening date.

GERALD A. LEWIS

Comptroller of Florida The Capitol

Tallahassee, Florida 32304

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent by regular U.S. Mail to C. Gary Williams, Esquire, P.O. Box 391, Tallahassee, Florida 32302; Joseph

C. Jacobs, Esquire, P.O. Box 1170, Tallahassee, Florida 32302; and G. Steven Pfeiffer, Hearing Officer, Division of Administrative Hearings, Room 530 Carlton Building, Tallahassee, Florida 32304, this 24th day of March, 1978.

EUGENE CELLA ATTORNEY

Docket for Case No: 76-001939

Orders for Case No: 76-001939