STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
NAPLES FEDERAL SAVINGS & LOAN ) ASSOCIATION, )
)
Petitioner, )
)
vs. ) CASE NO. 79-1332
) MARINE SAVINGS & LOAN ASS'N, )
proposed new association, and ) OFFICE OF THE COMPTROLLER, )
)
Respondents. )
)
RECOMMENDED ORDER
On May 22, 1979, respondent Marine Savings & Loan Association, proposed new association (Marine) filed with the Office of the Comptroller (DBF) an application for authority to organize a stock savings and loan association in Naples, Florida) pursuant to Chapter 665, Florida Statutes, and Chapters 3C-9 and 3C-20, Florida Administrative Code. Petitioner, Naples Federal Savings & Loan Association (Naples Federal) timely requested a public hearing on the application.
After publication of notice on October 23, 1979, Marine's exhibit No. 1, this matter came on for hearing in Naples, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on November 6, 1979. At the hearing, the parties were represented by counsel:
APPEARANCES
For Petitioner: Edwin B. Browning, Jr., Esquire
Post Office Drawer 652 Madison, Florida 32340
For Respondent: Clyde M. Taylor, Jr., Esquire Marine Savings 346 Barnett Bank Building
& Loan Ass'n Tallahassee, Florida 32301 (proposed)
For Respondent, Michael A. Gross, Esquire Office of the Office of the Comptroller Comptroller. The Capitol
Tallahassee, Florida 32301
Various exhibits were received in evidence at the hearing, without objection, but no testimony was adduced. Received in evidence were DBF's exhibits one through four, Marine's exhibits one and two, and Naples Federal's exhibits one through four. Marine joined in offering Naples Federal's exhibit
No. 4. No revised pro forma budget was received as such, nor did the hearing officer discover a "Branch Directory and Summary of Deposits with Market Indicators" among the evidence. The deposition of Robert E. Talley, DBF's exhibit No. 4, was received in evidence, but has not been considered on the issues whether Marine's proposed officers and directors have good character or sufficient financial standing, pursuant to paragraph four of the prehearing order entered August 30, 1979.
The Division of Administrative Hearings received a transcript of these proceedings on November 14, 1979. All parties have submitted proposed findings of fact which have been used in the preparation of these findings of fact. To the extent proposed findings have not been incorporated herein, they have been rejected as not established by the evidence, as contrary to the evidence or as irrelevant.
The idea of establishing another savings and loan association in Naples originated with Robert E. Talley, a banker, and Allan L. McPeak, a lawyer. The name proposed for the new association is Marine Savings and Loan Association. No financial institution operating in Collier County at the time of the hearing had the word "Marine" in its name. All of the savings and loan associations in operation in Collier County at the time of the hearing had the word "federal" in their names.
Marine proposes to establish an office in downtown Naples, within a few blocks of several other financial institutions. Marine has entered into a lease for the proposed facility, at an annual rental of $50,000.00, renewable for two three-month periods, during the pendency of Marine's application. The lease provides for a ten-year term at an annual rental of $50,000.00, if the application is approved, with the option to renew for two additional five-year terms. The lease also contains an option to purchase which must be exercised within thirty-six months of opening or no later than March, 1983, whichever first occurs, at a purchase price of $600,000.00.
In support of its application, Marine caused an MAI appraisal to be prepared. According to the appraisal, the leased premises have a fair market value, as of March 14, 1979, of $433,000.00. According to a second, CCIM appraisal, also prepared at Marine's instance, the property will be worth
$632,400.00 as of February 26, 1982.
Initially, Marine plans to occupy the northern 4,285 square feet of the 6,700 square foot, single-story building it is leasing. Subleases with two tenants who are to occupy the southern portion of the building will be structured so as to provide additional space for expansion by Marine. The leased premises include 43 parking spaces. Additional parking is available on adjacent streets. The site is easily accessible. Traffic conditions appear to pose no problems.
The proposed savings and loan association would be a full service financial institution and expects to be competitive with the existing savings and loan offices in the PSA with respect to interest rates and breadth of services. Some of the services that the proposed savings and loan association plans are a drive-in teller window, a night depository, safety deposit boxes, a walk-up window, extended hours on week days (from 9:00 a.m. to 6:00 pm.), evening hours on Fridays (from 9:00 a.m. to 7:00 p.m.), Saturday hours (from 9:00 a.m. to Noon), and safekeeping facilities. Most of the existing savings and loan associations in the PSA do not offer extended hours, drive-in teller windows, or safekeeping facilities.
The proposed primary service area (PSA) includes the populated portion of the city of Naples and segments of unincorporated Collier County to the north and east of the city. It is bounded on the north by Pine Ridge Road, 4,7 miles away; on the east by County Barn Road, 4.2 miles away; on the south by Gordon Pass and Holly Avenue, 3 miles away; and on the west by the Gulf of Mexico, .7 miles away. The PSA is roughly rectangular except for an indentation in the northeastern corner.
Twelve savings and loan association offices now operate within the PSA. One savings and loan association has headquarters within the PSA. Four of the eleven branch offices in the PSA are limited facilities. The main office of Naples Federal is located 0.2 miles southeast of the premises Marine has leased. Naples Federal has filed an application to relocate its main office to a site in unincorporated Collier County, 4.8 miles north of the applicant's proposed site and to make its present main office a branch office. One branch office is now located 0.2 miles southwest from the proposed site; three-are between 1.3 miles and 2.0 miles from it; and one is 8.7 miles to the north. Except for Naples Federal no savings and loan association now operating in Collier County has headquarters in Collier County.
There are 14 commercial bank offices, including five main banking offices and nine branch offices in operation within the PSA. Three of the five main bank offices are located within 0.3 miles from the proposed site; one is
2.6 miles away and another is 7.5 miles away. Of the branch offices, one is located one mile southwest of the proposed site; three are 1.3 to 2.0 miles from it; four are between 2.2 and 4.0 miles from it and one is 8 miles away. In addition, there are three approved but unopened branch offices which are, to be located between 3.1 and 5.3 miles from Marine's proposed site. The main office of Security Trust Company of Naples, a non-deposit trust company, is located 0.3 miles southwest of Marine's proposed site.
Marine proposed five million dollars as the initial capitalization for the savings and loan association. The capital accounts would initially consist of $1,500,000.00 common stock and $3,500,000.00 paid-in surplus. Eighteen percent of the stock of the proposed savings and loan association has been subscribed to by nine organizers. The remaining 82 percent has been subscribed to by more than 400 members of the general public, mostly from the Collier County area.
Marine has estimated the permanent 1979 population of the PSA at 47,000. This represents an average annual rate of growth of 11.6 percent from the PSA's 1970 population of 23,000. Marine estimates the county's 1979 permanent population at 77,900, the seasonal population of the PSA at between 12,000 and 14,000, and the seasonal county population at between 15,000 and 20,000. Marine estimated the combined permanent and seasonal populations of the county at between 92,900 and 97,900 and that of the PSA at between 59,000 and 61,000. Marine projects for the 1982 permanent population of the PSA a figure of 53,000, representing an average annual growth rate of 4.3 percent from estimated 1979 population. Marine projects 88,800 as the county's population in 1982, representing a 4.7 percent average annual growth rate from 1979.
According to data compiled by the Bureau of Economic and Business Research, Division of Population Studies, at the University of Florida, the population of Collier County on April 1, 1970, was 38,040; on July 1, 1976, 64,761; on July 1, 1977, 68,900; on July 1, 1978, 74,572. According to the same source, the population of Naples on April 1, 1970, was 12,042; on July 1, 1976,
17,425; on July 1, 1977, 17,437; and on July 1, 1978, 17,462. The population of unincorporated areas of Collier County, including Everglade City, according to the same source, was 25,998, on April 1, 1970; 47,336, on July 1, 1976; 51,463
on July 1, 1977; and on July 1, 1978, 57,110.
The population of Collier County grew at an average annual rate of approximately 11.7 percent between 1970 and 1976. Between 1976 and 1977, the county's population grew at a slower rate, viz., approximately 6.4 percent. The rate of growth increased to approximately 8.2 percent between 1977 and 1978. Between 1970 and 1976, the population of Naples grew at an annual average rate of approximately 7.5 percent. In the years 1976, 1977, and 1978, the population of Naples did not increase significantly. The population of the unincorporated areas of Collier County grew at an average annual rate of approximately 13.7 percent between 1970 and 1976, at a rate of approximately 8.7 percent between 1976 and 1977, and at a rate of approximately 11 percent between 1977 and 1978. Almost all (94.14 percent) of the population growth in the County between 1970 and 1978, was the result of immigration. Between 1970 and 1978, the proportion of Collier County's population older than 65 years of age increased from 14 percent in 1970, to approximately 17.5 percent in 1978.
Recent unemployment data for Collier County show an unemployment rate of 10.2 percent for July, 1979 (revised), and of 9.8 percent for August, 1979 (preliminary), in the County as compared to the State averages of 6.6 percent and 6.1 percent for the same months, respectively.
The per capita personal income for Collier County was $6,905.00 in 1976, and $7,663.00 in 1977. The 11 percent increase from 1976 to 1977, is higher than the 9,8 percent increase in the State average for the same period. Collier County's averages were above the State averages of $6,101.00 in 1976, and $6,697.00 in 1977.
The proposed board of directors would be composed of nine members, at least seven of whom are full-time Florida residents and at least eight of whom are United States citizens. Robert E. Talley, the proposed President and Chief Executive Officer, has had extensive commercial banking experience. From 1964 to 1972, he served as vice-president and loan officer for the Manatee National Bank; from 1972 through 1973, he was senior vice-president of the National Bank of St. Petersburg; from 1973 through 1977, he was president, chief executive officer, and a director of the Community Bank of Homestead; and from 1977 to 1978, he was executive vice-president and branch manager of the National Bank of Collier County. Proposed director Roland Erickson served as president and director of the Guaranty Bank and Trust Company, Worcester, Massachusetts, from 1947 to 1964. Proposed director Harold S. Smith served as a director and member of the executive committee of the Bank of Everglades from 1948 through 1951. Proposed director Hendry P. Albrecht is president of Gale-Realty, Inc., which is involved in investments, including rental property. Although most of the proposed board of directors appear to be successful businessmen, none of them has had direct savings and loan association experience.
On June 30, 1975, commercial banks in Collier County had total deposits of $245,086,000.00 of which $152,499,000.00 were time and savings deposits. On June 30, 1976, commercial banks in Collier County had total deposits of $301,664,000.00, of which $193,488,000.00 were time and savings deposits. On June 30, 1978, commercial banks in Collier County had total deposits of $369,928,000.00 of which $224,982,000.00 were time and savings deposits. On June 30, 1979, commercial banks in Collier County had total
deposits of $423,365,000.00, of which $226,668,000.00 were time and savings deposits.
In March of 1979, Naples Federal held more than three quarters of all moneys on deposit with savings and loan associations in Collier County. At that time, $141,996,000.00 was on deposit at the Naples Federal home office;
$10,890,000.00 at its Tamiami North branch, even though this office first opened in September of 1977; $26,989,000.00 at its Lely branch; $4,728,000.00 at its Tamiami South Satellite; and $5,537,000.00 at its Golden Gate facility. In March of 1979, Coast Federal's Tamiami North branch held $56,667,000.00. On deposit at First City Federal's Tamiami North branch was $6,855,000.00 in March of 1979. At the same time, Gulf Federal's Fifth Avenue branch had deposits of $7,018,000.00. In March of 1979, First Federal of Fort Myers had $10,256,000.00 on deposit at its Tamiami North branch and $235,000.00 at its Olde Naples facility, which opened in February of 1979.
Time and savings deposits in savings and loan associations and commercial banks in Collier County amounted to $552,839,000.00 in 1978, up 55.62 percent from 1976. At the time of the hearing, there was commercial activity in Naples, and residential development, particularly to the north of the PSA, was ongoing. Some thirteen financial institutions were in operation in the western part of Collier County, north of Marine's proposed site, at the time of the hearing.
Marine has projected savings deposits at the end of the first, second and third years of operation to be $10,000,000.00, $15,000,000.00 and
$20,000,000.00, respectively. The applicant also presented a pro forma budget which projected net profit for the first three years to be $191,700.00,
$256,000.00, and $319,100.00, respectively.
DONE and ENTERED this 6th day of December, 1979, in Tallahassee, Florida.
ROBERT T. BENTON, II
Hearing Officer
Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301
(904) 488-9675
COPIES FURNISHED:
Edwin B. Browning, Jr., Esquire Post Office Drawer 652
Madison, Florida 32340
Clyde M. Taylor, Jr., Esquire
346 Barnett Bank Building Tallahassee, Florida 32301
Michael A. Gross, Esquire Office of the Comptroller The Capitol.
Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF BANKING
NAPLES FEDERAL SAVINGS & LOAN ASSOCIATION,
Petitioner,
vs. CASE NO. 79-1332
MARINE SAVINGS & LOAN ASS'N,
proposed new association, and OFFICE OF THE COMPTROLLER,
Respondents.
/
FINDINGS OF FACT, CONCLUSIONS A OF LAW AND FINAL ORDER
On May 22, 1979, Respondent, Marine Savings & Loan Association, proposed new association (hereinafter Applicant) filed with the Office of the Comptroller (hereinafter Department) an application for authority to organize a stock savings and loan association in Naples, Florida, pursuant to Chapter 665, Florida Statutes, and Chapters 3C-9 and 3C-20, Florida Administrative Code.
Petitioner, Naples Federal Savings & Loan Association (hereinafter Protestant) timely requested a public hearing on the application.
After publication of notice on October 23, 1979, Applicant's Exhibit No. 1, this matter came on for hearing in Naples, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on November 6, 1979. At the hearing, the parties were represented by counsel:
For Protestant Edwin B. Browning, Jr., Esquire Naples Federal Savings Post Office Drawer 652
& Loan Association: Madison, Florida 32340
For Applicant Clyde M. Taylor, Jr., Esquire Marine Savings & Loan 346 Barnett Bank Building Ass'n: Tallahassee, Florida 32301
For Department Michael A. Gross, Esquire Office of the Comptroller Office of the Comptroller
The Capitol
Tallahassee, Florida 32301
Various exhibits were received in evidence at the hearing, without objection, but no testimony was adduced. Received in evidence were Department's exhibits one through four, Applicant's exhibits one and two, and Protestant's exhibits one through four. Applicant joined in offering Protestant's Exhibit No.
No revised pro forma budget was received as such, nor did the Hearing Officer discover a "branch Directory and Summary of Deposits with Market Indicators" among the evidence. The deposition of Robert E. Talley, Department's Exhibit No. 4, was received in evidence, but has not been considered on the issue as to whether the Applicant's proposed officers and directors have good character or sufficient financial standing, pursuant to paragraph four of the Prehearing Order entered August 30, 1979. The Division of Administrative Hearings received a transcript of these proceedings on November 14, 1979.
At the time of final hearing, the Protestant waived its right to present direct testimony and to cross-examine opposing witnesses. It also waived its right to object to the hearsay content of the Applicant's documentary evidence and stipulated to its admissibility. Furthermore, the Protestant introduced only nominal evidence and argument in support of its protest. Such a stipulation could have been accomplished at the Pre-Hearing Conference and may have saved the Division of Administrative Hearings, the Applicant, and the Department unnecessary delay and expense.
The Comptroller of the State of Florida, as head of the Department of Banking and Finance, having fully considered the facts and information contained in the record relating to the application for authority to organize Marine Savings and Loan Association, a proposed new savings and loan association to be located in Naples, Collier County, Florida, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER in the above-styled cause.
RULINGS ON PROPOSED FINDINGS OF FACT
The Department hereby adopts and incorporates the hearing officer's rulings on proposed findings of fact.
All parties have submitted proposed findings of fact which have been used in the preparation of these findings of fact. To the extent proposed findings have not been incorporated herein, they have been rejected as not established by the evidence, as contrary to the evidence or as irrelevant.
FINDINGS OF FACT
Upon consideration of the evidence adduced at the hearing, the Report of the hearing officer submitted on December 6, 1979, is hereby adopted and incorporated herein. It should be noted, however, that the total time and savings deposits for commercial banks in Collier County as of June 30, 1979, was
$266,668,000 rather than $226,668,000 as indicated in the hearing officer's Report.
The idea of establishing another savings and loan association in Naples originated with Robert E. Talley, a banker, and Allan L. McPeak, a lawyer. The name proposed for the new association is Marine Savings and Loan Association. No financial institution operating in Collier County at the time of the hearing had the word "Marine" in its name. All of the savings and loan associations in operation in Collier County at the time of the hearing had the word "federal" in their names.
Applicant proposes to establish an office in downtown Naples, within a few blocks of several other financial institutions. Applicant has entered into a lease for the proposed facility, at an annual rental of $50,000, renewable for two three-month periods, during the pendency of Applicant's application. The lease provides for a ten-year term at an annual rental of $50,000, if the application is approved, with the option to renew for two additional five-year terms. The lease also contains an option to purchase which must be exercised within thirty-six months of opening or no later than March, 1983, whichever first occurs, at a purchase price of $600,000.
In support of its application, Applicant caused an MAI appraisal to be prepared. According to the appraisal, the leased premises have a fair market value, as of March 14, 1979, of $433,000. According to a second, CCIM appraisal, also prepared at Applicant's instance, the property will be worth $632,400 as of February 26, 1982.
Initially, Applicant plans to occupy the northern 4,285 square feet of the 6,700 square foot, single-story building it is leasing. Subleases with two tenants who are to occupy the southern portion of the building will be structured so as to provide additional space for expansion by Applicant. The leased premises include 43 parking spaces. Additional parking is available on adjacent streets. The site is easily accessible. Traffic conditions appear to pose no problems.
The proposed savings and loan association would be a full service financial institution and expects to be competitive with the existing savings and loan offices in the primary service area (hereinafter PSA) with respect to interest rates and breadth of services. Some of the services that the proposed savings and loan association plans are a drive-in teller window, a night depository, safety deposit boxes, a walk-up window, extended hours on week days (from 9:00 a.m. to 6:00 p.m.), evening hours on Fridays (from 9:00 a.m. to 7:00 pm.), Saturday hours (from 9:00 a.m. to Noon), and safekeeping facilities. Most of the existing savings and loan associations in the PSA do not offer extended hours, drive-in teller windows or safekeeping facilities.
The proposed PSA includes the populated portion of the city of Naples and segments of unincorporated Collier County to the north and east of the city. It is bounded on the north by Pine Ridge Road, 4.7 miles away; on the east by County Barn Road, 4.2 miles away; on the south by Gordon Pass and Holly Avenue,
3 miles away; and on the west by the Gulf of Mexico, .7 miles away. The PSA is roughly rectangular except for an indentation in the northeastern corner.
Twelve savings and loan association offices now operate within the PSA. One savings and loan association has headquarters within the PSA. Four of the eleven branch offices in the PSA are limited facilities. The Protestant's main office is located 0.2 miles southeast of the premises Applicant has leased. Protestant has filed an application to relocate its main office to a site in unincorporated Collier County, 4.8 miles north of Applicant's proposed site and to make its present main office a branch office. One branch office is now located 0.2 miles southwest of the proposed site; three are between 1.3 miles and 2.0 miles from it; and one is 8.7 miles to the north. Except for the Protestant, no savings and loan association now operating in Collier County has headquarters in Collier County.
There are 14 commercial bank offices, including five main banking offices and nine branch offices in operation within the PSA. Three of the five main bank offices are located within 0.3 miles of the proposed site; one is 2.6
miles away and another is 7.5 miles away. Of the branch offices, one is located one mile southwest of the proposed site; three are 1.3 to 2.0 miles from it; four are between 2.2 and 4.0 miles from it and one is 8 miles away. In addition, there are three approved but unopened branch offices which are to be located between 3.1 and 5.3 miles-from Applicant's proposed site. The main office of Security Trust of Naples, a non-deposit trust company, is located 0.3 miles southwest of Applicant's proposed site.
Applicant proposed five million dollars as the initial capitalization for the savings and loan association. The capital accounts would initially consist of $1,500,000 common stock and $3,500,000 paid-in surplus. Eighteen percent of the stock of the proposed savings and loan association has been subscribed to by nine organizers. The remaining 82 percent has been subscribed to by more-than 400 members of the general public, mostly from the Collier County area.
Applicant has estimated the permanent 1979 population of the PSA at 47,000. This represents an average annual rate of growth of 11.6 percent from the PSA's 1970 population of 23,000. Applicant estimates the County's 1979 permanent population at 77,900, the seasonal population of the PSA at between 12,000 and 14,000, and the seasonal County population at between 15,000 and 20,000. The Applicant estimated the combined permanent and seasonal populations of the County at between 92,900 and 97,900 and that of the PSA at between 59,000 and 61,000. The Applicant projects for the 1982 permanent population of the PSA a figure of 53,000, representing an average annual growth rate of 4.3 percent from 1979.
According to data compiled by the Bureau of Economic and Business Research, Division of Population Studies, at the University of Florida, the population of Collier County on April 1, 1970, was 38,040; on July 1, 1979, 64,761; on July 1, 1977, 68,900; on July 1, 1978, 74,572. According to the same source, the population of Naples on April 1, 1970, was 12,042; on July 1, 1976, 17,425; on July 1, 1977, 17,437; and on July 1, 1978, 17,462. The population of unincorporated areas of Collier County, including Everglade City, according to the same source, was 25,998, on April 1, 1970; 47,336, on July, 1976; 51,463 on July 1, 1977; and on July 1, 1978,
The population of Collier County grew at an average annual rate of approximately 11.7 percent between 1970 and 1976. Between 1976 and 1977, the County's population grew at a slower rate, viz., approximately 6.4 percent. The rate of growth increased to approximately 8.2 percent between 1977 and 1978. Between 1970 and 1976, the population of Naples grew at an annual average rate of approximately 7.5 percent. During the years 1976, 1977 and 1978, the population of Naples did not increase significantly. The population of the unincorporated areas of Collier County grew at an average annual rate of approximately 13.7 percent between 1970 and 1976, at a rate of approximately 8.7 percent between 1976 and 1977, and at a rate of approximately 11.0 percent between 1977 and 1978. Almost all (94.14 percent) of the population growth in the County between 1970 and 1978, was the result of net migration. Between 1970 and 1978, the proportion of Collier County's population older than 65 years of age increased from 14.0 percent in 1970, to approximately 17.5 percent in 1978.
Recent unemployment data for Collier County show an unemployment rate of 10.2 percent for July, 1979 (revised), and 9.8 percent for August, 1979 (preliminary), in the County as compared to the state averages of 6.6 and 6.1 percent for the same months, respectively.
The per capita personal income for Collier County was $6,905 in 1976, and $7,663 in 1977. The 11.0 percent increase from 1976 to 1977, is higher than the 9.8 percent increase in the state average for the same period. Collier County's averages were above the state averages of $6,101 in 1976, and $6,697 in 1977.
The proposed board of directors would be composed of nine members, at least seven of whom are full-time Florida residents and at least eight of whom are United States citizens. Robert E. Talley, the proposed president and chief executive officer, has had extensive commercial banking experience. From 1964 to 1972, he served as vice-president and loan officer for the Manatee National Bank; from 1972 through 1973, he was senior vice-president of the National Bank of St. Petersburg; from 1973 through 1977, he was president, chief executive officer, and a director of the Community Bank of Homestead; and from 1977 to 1978, he was executive vice-president and branch manager of the National Bank of Collier County. Proposed director, Roland Erickson, served as president and director of the Guaranty Bank and Trust Company, Worcester, Massachusetts, from 1947 to 1964. Proposed director, Harold S. Smith, served as a director and member of the executive committee of the Bank of Everglades from 1948 through 1951. Proposed director, Hendry P. Albrecht, is president of Gale-Realty, Inc., which is involved in investments, including rental property. Although most of the proposed board of directors appear to be successful businessmen, none of them has had direct savings and loan association experience.
On June 30, 1975, commercial banks in Collier County had total deposits of $245,086,000 of which $152,499,000 were time and savings deposits. On June 30, 1976, commercial banks in Collier County had total deposits of
$301,664,000, of which $193,488,000 were time and savings deposits. On June 30, 1978, commercial banks in Collier County had total deposits of $369,928,000 of which $224,982,000 were time and savings deposits. On June 30, 1979, commercial banks in Collier County had total deposits of $423,365,000 of which $266,668,000 were time and savings deposits.
In March of 1979, Protestant held more than three quarters of all moneys on deposit with savings and loan associations in Collier County. At that time, $141,996,000 was on deposit at the Protestant's home office; $10,890,000 at its Tamiami North branch, even though this office first opened in September of 1977; $26,989,000 at its Lely branch; $4,728,000 at its Tamiami South satellite; and $5,537,000 at its Golden Gate facility. In March of 1979, Coast Federal's Tamiami North branch held $56,667,000. On deposit at First City Federal's Tamiami North branch was $6,855,000 in March of 1979. At the same time, Gulf Federal's Fifth Avenue branch had deposits of $7,018,000. In March of 1979, First Federal of Fort Myers had $10,256,000 on deposit at its Tamiami North branch and $235,000 at its Olde Naples facility, which opened in February of 1979.
Time and savings deposits in savings and loan associations and commercial banks in Collier County amounted to $552,839,000 in 1978, up 55.62 percent from 1976. At the time of the hearing, there was commercial activity in Naples and residential development, particularly to the north of the PSA. Some thirteen financial institutions were in operation in the western part of Collier County, north of Applicant's proposed site, at the time of the hearing.
Applicant has projected savings deposits at the end of the first, second and third years of operation to be $10,000,000, $15,000,000 and
$20,000,000, respectively. Applicant also presented a pro forma budget which
projected net profit for the first three years to be $191,700, $256,000 and
$319,100, respectively.
The Deputy Comptroller, Gerri Raines Dolan, and the Director of the Division of Banking, Ryland Terry Rigsby, as advisory staff members to the Comptroller, reviewed the application and the Department's entire file relating to the application. They assisted and concurred with the Comptroller in the ultimate determination of the application.
CONCLUSIONS OF LAW AND REASONS
As set forth in Rule 3C-20.45, Florida Administrative Code, when an application for authority to organize and operate a new state savings and loan association is filed pursuant to Chapter 3C-9, Florida Administrative Code, it is the applicant's responsibility to prove that the statutory criteria warranting the grant of authority are met. The Department shall conduct an investigation pursuant to Subsection 665.031(3), Florida Statutes, which was done in this case, and then approve or disapprove the application in its discretion. This discretion is neither absolute nor unqualified, but is instead conditioned by a consideration of the criteria listed in Subsection 655.031(4), Florida Statutes, wherein it is provided that:
The Department shall approve the application upon such terms and conditions as it determines necessary to protect the public interest or disapprove the application at its discretion, but it shall not approve such application, unless in
its opinion:
Public convenience and advantage will be promoted by the establishment of the proposed thrift institution;
Local conditions assure reasonable promise of successful operation of the proposed thrift institution and those thrift institutions already established in the community;
The proposed officers and directors have good character, sufficient financial standing, and adequate experience and responsibility to assure reasonable promise of successful operation of the thrift institution; and
The proposed savings account capital and organization expense fund or capital stock subscriptions comply with the requirements of this chapter.
and Subsection 665.051(1), Florida Statutes, wherein it is provided that,
The name of every association shall include either the words "savings association" or "savings and loan association."
If in the opinion of the Department, any one of the above criteria has not been met and cannot be remedied by the applicant, it cannot approve the application. An applicant can, however, take corrective action in most
circumstances to meet the criteria set forth in Subsections 665.031(4)(c), or (d), and 665.051(1), Florida Statutes, if any of these are found to be lacking. For example, if all other statutory criteria are met, the applicant may increase capital, or make certain changes in the board of directors, or change the name, or alter the provisions for suitable quarters, because these factors, at least to some degree, are within its control. It is the Department's policy to allow applicants to make certain changes to meet these criteria if all other criteria are met; to do otherwise would be to subject applicants to unnecessary red tape. However, it is the Department's opinion that there is little, if anything, that an applicant can do to alter its ability to meet the criteria set forth in Subsections 665.031(4)(a) and (b), Florida Statutes, since applicants CANNOT readily change the economic and demographic characteristics of an area.
Therefore, if either one or both of these criteria are not met, the Department cannot approve the application.
For purposes of applications for authority to organize and operate a new state savings and loan association, Rule 3C-20.45(1), Florida Administrative Code, defines PSA as the "smallest area from which the proposed association expects to draw approximately seventy-five percent of its deposits. It should be drawn around a natural customer base, should not be unrealistically delineated to exclude competing financial institutions or to include areas of concentrated population." Based upon, traffic patterns, natural and manmade geographic barriers and the location of other existing offices of financial institutions in the area, the Department concludes that the Applicant's PSA is realistically delineated.
It is the opinion and conclusion of the Department that public convenience and advantage will be promoted by the establishment of the proposed savings and loan association. Therefore, the criterion in Subsection 665.031(4)(a), Florida Statutes, IS met.
As set forth in Rule 3C-20.45(2)(a), Florida Administrative Code, the location and services offered by existing savings and loan association offices in a service area are indicative of the competitive climate of the market and should be considered. Other financial institutions such as banks and credit unions may be considered competing institutions to the extent their services parallel those of a new savings and loan association. Also, the traffic patterns in the area, as well as the general economic and demographic characteristics of the area, must be considered in evaluating this statutory criterion. Because it is recognized that the establishment of a new savings and loan association ANYWHERE would promote the convenience and advantage for at least a few people, SUBSTANTIAL convenience and advantage for a SIGNIFICANT number of people must be shown; otherwise, a new savings and loan association could be justified for every street corner in the state. Clearly, such a result was not the legislative intent in regulating entry into the savings and loan association industry, nor is it in the public interest.
Based upon the facts set forth above, the Department has determined that the establishment of the proposed savings and loan association will substantially increase convenience to a significant number of residents of the PSA. This is particularly true in view of the significant growth of the various financial institutions in the area since 1976, as well as the past and projected population growth in the PSA.
The Protestant, which is the only other savings and loan association with a main office in Collier County, held more than seventy-five percent of all savings and loan deposits in the County in March, 1979. Consequently, the
proposed institution will served as a needed competitive alternative. The site is easily accessible and traffic patterns are favorable. Furthermore, the Applicant intends to offer a variety of new services not generally offered by other financial institutions within the PSA. Therefore, the criterion of public convenience and advantage is met.
It is the opinion and conclusion of the Department that local conditions do assure reasonable promise of successful operation of the proposed thrift institution and those thrift institutions already established in the community. Therefore, the criterion in Subsection 665.031(4)(b), Florida Statutes, IS met.
As set forth in Rule 3C-20.45(2)(b), Florida Administrative Code, current economic conditions and, to a lesser extent, the growth potential of the area in which the new savings and loan association proposes to locate are important considerations in determining the association's probable success. Essential to the concept of thrift institution opportunity is that there does and will exist a significant volume of business for which the new savings and loan association can realistically compete. The growth rate, size, financial strength and operating characteristics of savings and loan associations and other financial institutions in the service area are also important indicators of economic conditions and potential business for a new savings and loan association. It is noted that the statutory standards require that " . . . local conditions ASSURE reasonable PROMISE of successful operation of the proposed thrift institution and those thrift institutions already established in the community . . ." (E.S.), NOT merely that local conditions INDICATE a POSSIBILITY of such success.
Thrift institutions involve a public trust. Unlike private enterprise establishments generally, a savings and loan association operates on the public's capital and therefore, the Legislature has vested in the Comptroller the responsibility to protect that public interest. Furthermore, the failure of a savings and loan association, as opposed to private enterprise establishments generally, may have an unsettling effect on the overall economic welfare of the community and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard.
Public interest is best served by having a thrift institution system whereby new competition is encouraged where appropriate, yet, at the same time, ensuring that the financial resources of the residents in the community are stable and safe. That was the obvious intent of the Legislature in regulating entry into the thrift institution industry.
The Applicant's estimated 1979 PSA population of 47,000 and its projections for the near future seem more than reasonable in view of the latest official estimates by the University of Florida. The population base is healthy, a balanced mixture of residents, local businessmen and commuters, with a steady recent history of growth and projections for significant future growth. Although there are other savings and loan offices already existing in or near the PSA, the Department has concluded that the total savings potential within the PSA will readily support a new institution. The Department further concludes that the extensive deposit and loan growth of the existing financial institutions within the PSA justifies the establishment of another competitive alternative. The increasing population, the high per capita income, and the business and residential mix of the PSA point to an expanding and stimulated economy in the PSA for the present as well as the near future. Clearly, these factors are
conducive to assuring the reasonable promise of success for the proposed savings and loan association and for those thrift institutions already established in the community.
It is the opinion and conclusion of the Department that the proposed directors, as a group, have good character, sufficient financial standing and responsibility, but do not have sufficient experience in the savings and loan field to assure reasonable promise of successful operation of the proposed association. Therefore, one of the criteria of Subsection 665.031(4)(c), Florida Statutes, IS NOT met.
As set forth in Rule 3C-20.45(2)(c), Florida Administrative Code, the organizers, proposed directors and officers shall have reputations evidencing honesty and integrity. They shall have employment and business histories demonstrating their responsibility in financial affairs. At least one member of a proposed board of directors, other than the chief managing officer, shall have experience in the savings and loan field or in a business directly related thereto such as mortgage banking, real estate finance and commercial banking where real property lending has constituted an integral part of such banking experience. The organizers, proposed director's and officers shall meet the requirements of Sections 665.131 and 665.703, Florida Statutes, as applicable. A majority of the organizers and directors of a proposed thrift institution shall be, whenever possible, from the local community and shall represent a diversification of occupation and experience commensurate with the position for which proposed.
Members of the initial management group, which includes directors and officers, shall require prior approval of the Department. Changes of directors or chief managing officer during the first year of operation shall also require prior approval of the Department. While it is not necessary that the names of proposed officers he submitted with an application to organize a new savings and loan association, the chief managing officer and operations officer must be named and their names submitted for departmental approval at least sixty (60) days prior to the association' opening.
In addition, interlocking directorships involving existing financial institutions competitively near the proposed site of a new institution are discouraged. Such interlocking directorships could possibly restrict competition and create fiduciary problems.
Although the proposed directors have, as a group, good character, sufficient financial standing and responsibility, none of the proposed directors has any direct experience in the savings and loan field. Only Robert E. Talley, as a proposed director, has demonstrated that he has the requisite related business experience by virtue of his background in commercial banking, real estate, and mortgage brokerage. Because the selection of directors for a proposed new savings and loan association is generally within an applicant's control, the Department wilt, in this case, allow the Applicant to remedy the above inadequacy in the proposed board of directors by the addition of one director with sufficient experience in the savings and loan field or in a business directly related thereto or by further demonstrating that one of the proposed board members already has the requisite related business experience.
While the department has noted that Robert E. Talley has been proposed as the chief managing officer, the Department does not approve or disapprove an applicant's proposed chief managing officer until the association makes an application for insurance of its accounts.
It is the opinion and conclusion of the Department that the proposed savings account capital and the organization expense fund or capital stock subscriptions comply with the requirements of Chapter 665, Florida Statutes. Therefore, the criteria of Subsection 665.031(4)(d), ARE met.
As set forth in Rule 3C-20.45(2)(d), Florida Administrative Code, capital should be adequate to enable the new savings and loan association to provide the necessary services of promoting thrift and home financing to meet the needs of prospective customers. Capital should be sufficient to purchase, build or lease a suitable permanent facility complete with equipment. Generally, the initial capital (withdrawable savings for a mutual association applicant and total stock and paid-in surplus for a stock association applicant) for a new savings and loan association should not be less than $1.5 million in non- metropolitan areas and $2.0 million in metropolitan areas.
To encourage community support, a wide distribution of stock ownership is desirable. A majority of the stock should be issued wherever possible to local residents of the community, persons with substantial business interests in the community, or others who may reasonably be expected to utilize the services of the association. Subscribers to five (5) percent or more of the stock may not finance more than fifty (50) percent of the purchase price if the extension of credit is predicated in any manner on the stock of the new association, whether or not such stock is pledged. Generally, all proposed stock for-a stock savings and loan association shall be subscribed to at the time the application is submitted to the Department. The organizers may initially subscribe to all proposed stock, but should disclose the anticipated amount of individual stock to be retained.
It is the opinion and conclusion of the Department that the name, Marine Savings and Loan Association, meets the criterion of Subsection 665.051(1), Florida Statutes, and is not so similar as to cause confusion with the name of an existing financial institution.
As set forth in Rule 3C-20.45(4), Florida Administrative Code, the Department will consider the possibility that a name similar to that of another financial institution may cause confusion in the minds of the public or be misleading and may deny the use of such name, with the exception of names specifically authorized under Subsection 665.051(1), Florida Statutes.
The Department concludes that the name Maring Savings and Loan Association is not so similar as to cause confusion with the name of an existing financial institution.
It is the opinion and conclusion of the Department that provision has been made for suitable quarters. Therefore, the provisions of Rule 3C- 20.45(6)(d), Florida Administrative Code, ARE met.
As set forth in Rule 3C-20.45(6)(d), should temporary quarters be contemplated by an applicant until a permanent facility is completed, permission to open in temporary quarters may be granted, generally not to exceed one year. The permanent structure of a new savings and loan association should generally contain a minimum of 5,000 square feet unless the applicant satisfactorily shows that smaller quarters are justified due to the performance of certain auxiliary services off-premises. It shall be of sufficient size to handle the projected business for a reasonable period of time. The facility shall be of a nature to warrant customer confidence in the association's security, stability and
permanence. Other pertinent factors include availability of adequate parking, an adequate drive-in facility if such is contemplated and possibilities for expansion.
The Applicant presently plans permanent quarters in a building containing 4,285 square feet, which will have adequate parking and drive-in facilities. No temporary quarters are contemplated. Since adequate provision has been made for expansion up to 6,700 square feet, the Department considers that provision has been made for suitable quarters.
It is the opinion and conclusion of the Department that the proposed acquisition of the association's proposed site has been fully disclosed and does not constitute an insider transaction. Therefore, the provisions of Rule 3C- 20.45(3) ARE met.
Rule 3C-20.45(3), Florida Administrative Code, provides that any financial arrangement or transaction involving the organization of a proposed association and its organizers, directors, officers and shareholders owning five
(5) percent or more of the stock, or their relatives, their associates or interests should ordinarily be avoided. Should there be transactions of this nature, they must be fair and reasonable, fully disclosed and comparable to similar arrangements which could have been made with unrelated parties.
It is the opinion and conclusion of the Department that the provisions of Rule 3C-20.45(6)(e), Florida Administrative Code, have NOT been met.
Pursuant to Rule 3C-20.45(6)(e), Florida Administrative Code, appraisals of land and improvements thereon shall be made by an independent qualified appraiser and be dated no earlier than six months from the filing date of the application. In those instances where the application involves a lease arrangement, the appraisal should be directed to the comparability of the proposed lease with other leasing arrangements for similar business property. The application involves a lease arrangement and, although the Applicant has submitted an acceptable appraisal as to the fair market value of the leased premises, it has not submitted an appraisal directed to the comparability of the proposed lease with other leasing arrangements for similar business property. However, since this is a criterion that is within the control of the Applicant, the Department may approve the application upon the condition that this deficiency is remedied.
FINAL ORDER
Based upon the record, findings of fact and conclusions of law recited above, it is established that the statutory criteria of Sections 665.051(1) and 665.031(4)(a)(b) and (d), Florida Statutes, are met. The criterion of Section 665.031(4)(c), Florida Statutes, relating to the board of directors, and the criterion of Rule 3C-20.45(6)(e), Florida Administrative Code, relating to the lease appraisal, have not been met. However, since these criteria are within the control of the Applicant, the Department, in this case, will allow the Applicant to remedy the deficiencies.
It is thereupon
ORDERED that authority to organize and operate a savings and loan association at 405 Eighth Street South, Naples, Collier County, Florida, is hereby granted to the Applicant upon the following conditions:
Approval of insurance of accounts or a commitment for insurance of accounts by the Federal Savings and Loan Insurance Corporation.
The Articles of Incorporation shall be filed with the Secretary of State within six months after approval or commitment for
insurance of accounts by the Federal Savings and Loan Insurance Corporation.
A director with sufficient experience in the savings and loan field or in a business related thereto shall be added to the board of directors or it shall be demonstrated that one of the proposed board has the requisite experience subject to the Department's approval prior to opening. Any other changes in the composition of the board of directors prior to opening shall
be submitted to the Department for approval. The Department does not approve or disapprove an applicant's proposed chief managing officer until the association makes an application for insurance of its accounts.
The initial capital shall be not less than $5 million. Any further stock subscription or change in stock ownership of
5.0 percent or more shall be submitted to
the Department for approval prior to opening.
The Association shall bear the name MARINE SAVINGS AND LOAN ASSOCIATION.
Drafts of final lease and/or purchase agreements and of property improvement agreements shall be submitted to the Department for review prior to formal execution.
An appraisal by an independent qualified appraiser, directed to the comparability of the proposed lease with other leasing arrangements for similar business
property, shall be submitted to the Department for approval prior to opening.
The Association shall open within twelve months after filing of Articles of Incorporation with the Secretary of State. Further extension may be granted by the Department upon application, for good cause shown.
A certification that all conditions, if any, in the Resolution of Approval of the Federal Home Loan Bank Board have been met shall be submitted to the Department.
Until the conditions herein specified and, other reasonable requirements of the Department 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 Savings and Loan Association, a Certificate of Authority must be issued. The Department shall be informed of the planned opening date before issuing this Certificate. The Department should be advised at least
30 days in advance of the desired opening date.
DONE AND ORDERED this 7th day of January, 1980.
GERALD A. LEWIS
Comptroller of Florida The Capitol
Tallahassee, Florida 32301
CERTIFICATE OF FILING AND SERVICE
I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance, and that a true and correct copy of the foregoing was sent by U.S. Mail to Edwin B. Browning, Jr., Esquire, Post Office Drawer 652, Madison, Florida, 32340; Clyde M. Taylor, Jr., Esquire, 346 Barnett Bank Building, Tallahassee, Florida, 32301, and Robert T. Benton, Esquire, Hearing Officer, Division of Administrative Hearings, Collins Building, Room 101, Tallahassee, Florida, 32301, this 7th day of January, 1980.
MICHAEL A. GROSS
Assistant General Counsel Office of the Comptroller The Capitol
Tallahassee, Florida 32301
(904) 488-9896
| Issue Date | Proceedings |
|---|---|
| Jan. 09, 1980 | Final Order filed. |
| Dec. 06, 1979 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 07, 1980 | Agency Final Order | |
| Dec. 06, 1979 | Recommended Order | Hearing established record for Department of Banking and Finance determination of whether Respondent's proposal for a new Savings and Loan should be granted. |
