STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: )

BOULEVARD BANK--Application for ) authority to establish a branch )

at Mile Marker 81.4, U.S. ) CASE NO. 82-2623

Highway 1, Islamorada, Monroe ) County, Florida. )

)

WRITTEN REPORT

Pursuant to notice, a formal administrative hearing was conducted in this matter on November 5, 1982, in Islamorada, Monroe County, Florida. The following appearances were entered:

APPEARANCES

For Applicant: Robert T. Feldman

Key West, Florida

For Protestant: Gustave W. Larson,

Miami Shores, Florida

For Florida Department of

Banking and Elsa Lopez Whitehurst Finance: Tallahassee, Florida

Boulevard Bank has filed an application with the Division of Banking, Department of Banking and Finance, for authority to establish a branch bank in Islamorada, Monroe County, Florida. The Islamorada Bank opposes the application and has submitted a request for a public hearing. The matter was forwarded by the Department to the Division of Administrative Hearings on September 27, 1982. The final hearing was scheduled as set out above by notice dated October 20, 1982.

The Applicant called the following witnesses at the hearing: John M. Koenig, the chairman of the board and president of the Applicant; Orvis M. Kemp, a certified public accountant who is in private practice; Bruce Z. Riddle, an economic consultant; and Roy Terrell and Walter Barford, residents of the area that would be served by the proposed branch. William K. Meeks, the chairman of the board and president of the Protestant, testified on behalf of the Protestant.

Department Exhibits 1 and 2; and Applicant's Exhibits 1, 2, and 3 were offered into evidence and received. Department Exhibit 2 is the Department's confidential file. The parties have submitted post-hearing legal memoranda which include proposed findings of fact. The proposed findings have been adopted only to the extent that they are expressly set out in the Findings of Fact which follow. They have been otherwise rejected as not supported by the evidence, contrary to the evidence, or irrelevant to the issues.

ISSUE

The ultimate issue to be determined in this matter is whether the application filed by Boulevard Bank to establish a branch at Islamorada, Florida, should be approved or denied. The Applicant contends that all of the requirements set out at Section 658.26, Florida Statutes, and Rule 3C-13, Florida Administrative Code, have been met, and that the application should be approved. The Protestant contends that the Applicant has failed to demonstrate that the public convenience and necessity would be served by the proposed branch.

FINDINGS OF FACT

1. The Applicant, Boulevard Bank, is a full-service, commercial banking institution licensed by the Florida Department of Banking and Finance. Its principal offices are located in Key West, Monroe County, Florida. Boulevard Bank has filed an application with the Department of Banking and Finance to establish a branch banking facility at Islamorada, Monroe County, Florida. Boulevard Bank has acquired property for the facility. The property is located on "Old State Road" and is bounded on the north by Matecumbie Street and on the south by Jerome Street. Boulevard Bank has obtained zoning variances that would allow it to construct a branch banking facility on the property.

   
   

2. The primary service area of the proposed branch banking facility would be from Mile Marker 87, northeast of the proposed facility, to Channel 5, southwest of the facility. This area is approximately 15 miles long. In keeping with the geography of the Florida Keys, the service area is quite narrow, approximately 0.3 miles at the widest. The service area is characterized by mixed residential and commercial uses. There are approximately 3,000 full-time residents within the service area. There are many people who live in the area on a part-time basis. During the winter months, the population increases dramatically. There are more than 90 stable businesses located within the service area.

   
   

3. There are currently two banking institutions located within the service area of the proposed Boulevard Bank branch. The main office of The Islamorada Bank and a branch of the First Federal Savings and Loan Association of the Florida Keys are located within close proximity to the location of the proposed branch. The Islamorada Bank is the only full-service, commercial banking institution in the service area. The public convenience and necessity would be served by the opening of an additional full-service banking facility within the service area in that the public would be the beneficiary of the favorable impacts of competition. The Applicant proposes to provide a full range of banking services at the proposed branch. Applicant proposes to stay open at hours and on days that The Islamorada Bank remains closed. Competition can have a favorable impact upon interest that is paid to the bank's depositors and interest rates that are charged by the bank on loans. There is no evidence from which it could be concluded that the opening of the proposed branch would in any way damage the fiscal integrity of banking facilities already located within the service area. While the public convenience and necessity would be served by the increased number of facilities and by competition, it does not appear that there has been a dramatic increase in the need for banking services within the service area in recent years. The main office of The Islamorada Bank has not experienced an increase in deposits since 1979. It does not appear that existing banking facilities within the service area are providing inadequate service to residential and business customers.

4. The Applicant is proposing to invest $470,000 in fixed assets, including the cost of land, building, and furniture and equipment to support the proposed branch. The building, which has not yet been constructed, would have dimensions of approximately 30 by 50 feet. The facility would include drive-in banking windows and an automatic teller machine. The Applicant has sufficient capital accounts to support the proposed branch. The Applicant's percentage of capital to total assets exceeds 7.5 percent. The ratio was 7.8 percent on December 31, 1981, and 8.6 percent on June 30, 1982. The operation of the proposed branch would pose no threat to depositors, creditors, or shareholders of the Applicant. Even if the branch operated without a single depositor, the losses to Applicant would not be such as to pose a risk to the integrity of the Applicant, nor to substantially reduce the stockholders' dividends. It is extremely unlikely that the branch would operate without any depositors, and it appears that there is a favorable prospect that the branch would be profitable.

   
   

5. The Applicant has sufficient earnings and prospects for earnings to support the expenses of the proposed branch. The Applicant's net profits to assets ratio exceeded 0.5 percent during the past calendar year. For 1981, the Applicant's net profit to total assets ratio was 2.5 percent prior to the payment of federal income taxes, and 1.5 percent after taxes were paid. The Applicant's loans to deposits ratio was 63 percent on December 31, 1981.

   
   

6. The Applicant appears to have sufficient management depth to operate the proposed branch without affecting its present services. Applicant proposes to assign Rudy D. Aud as chief operations officer. Mr. Aud is a vice president of the Applicant. He assisted in the establishment of the Applicant's Big Pine Key branch and has operated that facility.

   
   

7. The name of the proposed branch would be "Islamorada Branch of Boulevard Bank, Islamorada, Florida." The name would reasonably identify the facility as a branch of the Applicant. The proposed name would not confuse the public either as to the nature of the facility or in relation to other banking facilities.

   
   

8. The files of the Department of Banking and Finance, including the Department's confidential file, establish that the Applicant has operated in substantial compliance with applicable laws governing its operations.

ENTERED this 17th day of December, 1982, in Tallahassee, Florida.

G. STEVEN PFEIFFER Assistant Director

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1982.

COPIES FURNISHED:

Robert T. Feldman, Esquire

417 Eaton Street

Key West, Florida 33040

Gustave W. Larson, Esquire 9999 Northeast Second Avenue Suite 307, Shoreview Bldg.

Miami Shores, Florida 33138

Elsa Lopez Whitehurst, Esquire Office of the Comptroller

The Capitol, Suite 1302 Tallahassee, Florida 32301

The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol

Tallahassee, Florida 32301

================================================================= AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

DIVISION OF BANKING

IN RE:

BOULEVARD BANK--Application for

authority to establish a branch CASE NO. 82-2623 at Mile Marker 81.4, U.S.

Highway 1, Islamorada, Monroe County, Florida.

/

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER

Pursuant to notice, a formal administrative hearing was conducted in this matter on November 5, 1982, before G. Steven Pfeiffer, with the Division of Administrative Hearings, in Islamorada, Monroe County, Florida. The purpose of the hearing was to receive evidence concerning the application of Boulevard Bank for authority to open a branch at mile marker 81.4, U.S. Highway 1, Islamorada, Florida. At the hearing, the following appearances were entered: Robert T. Felman, Key West, appeared on behalf of the Applicant, Boulevard Bank; Gustave

1. Larson, Miami Shores, Florida, appeared on behalf of the Protestant, the Islamorada Bank; Elsa Lopez Whitehurst, Tallahassee, Florida, appeared on behalf of the Florida Department of Banking and Finance. No exceptions were filed in this case.

   Having fully considered the facts and information contained in the record relating to the application of Boulevard Bank for authority to open a branch office at mile marker 81.4, U.S. Highway 1, Islamorada, Monroe County, Florida, The Comptroller of the State of Florida, as Head of the Department of Banking and Finance, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER in the above-styled cause.

   
   

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence produced at the hearing, the report of the hearing officer, containing an introduction and Findings of Fact as Paragraphs 1 through 8, submitted on December 17, 1982, a copy of which is attached hereto as Exhibit A and is incorporated herein by this reference, is adopted in toto, except for the following change:

   
   

   That in Paragraph 3 where it states "there are currently two banking institutions....," the word banking is changed to financial since in fact

   one of the institutions is a branch of a savings and loan as confirmed by the rest of the Hearing Officer's finding in Paragraph 3.

   
   

   CONCLUSIONS OF LAW

   
   

   1. When an application to open a branch bank is filed, it is the Applicant's responsibility to prove that the minimum requirement set forth in Section 658.26, Florida Statutes, and Rule 3C-13.041, Florida Administrative Code, which are prerequisites to the granting of authority, are met. It is the duty of the Department to make an investigation of factors listed therein and then to approve or disapprove the application in its discretion. This discretion is neither absolute nor unqualified, but is conditioned upon a consideration of the criteria listed in Section 658.26(2)(b), Florida Statutes, and Rule 3C-13.041, Florida Administrative Code.

      
      

   2. If, in the opinion of the Department, any of the foregoing criteria have not been met, and cannot be remedied by the Applicant, it cannot approve the application. If the criteria have been met, it is within the discretion of the Department to approve or disapprove the application. In considering a branch application, the Applicant's capacity to support such expansion is of major importance. The closing of a branch does not present the same risk of loss to the public as does the failure of a bank. Therefore, the judgment of the Applicant as to the liability of a proposed branch will ordinarily be respected, provided that in the opinion of the Department, the Applicant's capacity is sufficient or will be enhanced by the new activity. This policy has been formalized in Rule 3C-13.041, Florida Administrative Code.

      
      

   3. It is the opinion and conclusion of the Department that the criteria set forth in Section 655.26, Florida Statutes, and Rule 3C-13.041, Florida Administrative Code, have been met, or can be met by compliance with specific conditions as provided in the Final Order. Therefore, the Department is satisfied that public convenience and necessity will be served by the proposed branch.

FINAL ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is thereupon

ORDERED AND ADJUDGED that the application of Boulevard Bank for authority to establish a branch at mile marker 81.4, U.S. Highway 1, Islamorada, Monroe County, Florida, is hereby granted upon compliance with the following conditions:

1. That the branch bear the name "Boulevard Bank-Islamorada Branch."

   
   

2. That the Federal Deposit Insurance Corporation gives final approval to the branch.

   
   

3. That an exact site designation by street address and number be submitted to the Department prior to formally proposing an opening date for the branch.

   
   

4. Should the branch not be open within twelve months of the date of this Order, this approval shall automatically expire, unless extended by the Department for good cause shown prior to the expiration of the twelfth month.

   
   

5. Subsequent to compliance with conditions imposed in this order, and at least twenty-one (21) days prior to the desired opening date, the Department shall be given notice of the opening date. Upon receipt of such notice, the Department shall issue a Certificate of Authority to open and operate the branch.

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 approval.

DONE AND ORDERED this 30th day of December, 1982, in Tallahassee, Florida.

GERALD LEWIS, Comptroller of the State of Florida

Filed with the Clerk of the Department of Banking and Finance this 30th day of December, 1982.

Copies Furnished To: Robert T. Felman, Esquire

417 Eaton Street

Key West, Florida 33040

Gustave W. Larson, Esquire 9999 Northeast 2d Avenue Suite 307, Shoreview Building Miami Shores, Florida 33138

Steven Pfeiffer, Hearing Officer Division of Administrative Hearings Department of Administration

2009 Apalachee Parkway

Tallahassee, Florida 32301

Docket for Case No: 82-002623

Orders for Case No: 82-002623