STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

In the Matter of: )

)

Application for Acquisition )

of Control of Key Biscayne ) CASE NO. 89-5703 Bank and Trust Company, Key )

Biscayne, Florida, by the )

Kardonski Family Trusts, )

)

REPORT OF PUBLIC HEARING

Pursuant to Section 120.60(5)(d), Florida Statutes, a public hearing was conducted by Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on November 30, 1989, in Miami, Florida.

APPEARANCES

For the Kardonski Joseph P. Klock, Jr., Esquire Family Trusts: Thomas R. McGuigan, Esquire,

200 South Biscayne Boulevard Suite 4000 Miami, Florida 33131

For the Department Albert T. Gimbel

of Banking and Chief Banking Counsel Finance: Office of the Comptroller

The Capitol, Suite 1302 Tallahassee, Florida 32399-0350

PRELIMINARY STATEMENT

Section 658.28(1), Florida Statutes, provides, in pertinent part, the following:

(1) In any case in which a person or a group of persons, directly or indirectly or acting by or through one or more persons, proposes to purchase or acquire a control- ling interest in any state bank or state trust company, and thereby to change the control of the bank or trust company, each person or group of persons shall first make application to the department for a certi- ficate of approval of such proposed change of control of the bank or trust

company. . . . The department shall issue a certificate of approval only after it has made an investigation and determined that the proposed new owner or owners of the interest are qualified by reputation, character, experience, and financial responsibility to control and operate the

bank or trust company in a legal and proper manner and that the interest of the other stockholders, if any, and the depositors and creditors of the bank or trust company and the interests of the public generally will not be jeopardized by the proposed change in ownership, controlling interest, or management.

Pursuant to this Section the responsibility and authority for determining whether to approve an application for the purchase or acquisition of a state bank or state trust company is vested with the Department.

The time during which the Department must apply Section 658.28(1), Florida Statutes, is governed by Section 120.60, Florida Statutes. In proceedings involving the issuance of state banking licenses, Section 120.60(5)(d), Florida Statutes, provides in pertinent part:

(d) . . . in the case of every application by a foreign national for approval to acquire control of a bank, trust company, or capital stock savings association, the Department of Banking and Finance shall request that a public hearing be conducted pursuant to s.

120.57. Notice of such hearing shall be published by the applicant as provided in paragraph (b). . . . Notwithstanding the provisions of subsection (2) and paragraph (c), every application involving a foreign national shall be approved or denied within 1 year

after receipt of the original application or any timely requested additional information or the correction of any errors or omissions, or within 30 days after the conclusion of the public hearing on the application, whichever is later.

In August, 1989, the Abraham Kardonski Trust, the Walter Kardonski Trust and the Sam Kardonski Trust (hereinafter collectively referred to as the "Applicants") filed an Application to the Florida Department of Banking and Finance (hereinafter referred to as the "Application") seeking approval of their proposed acquisition of the Key Biscayne Bank and Trust Company (hereinafter referred to as the "Bank"), pursuant to Section 658.28, Florida Statutes.

On October 19, 1989, the Department of Banking and Finance, Division of Banking (hereinafter referred to as the "Department"), referred the matter to the Division of Administrative Hearings (hereinafter referred to as the "Division"), by letter from counsel for the Department. Accompanying the letter was a copy of an Administrative Notice of Public Hearing issued by the Department on September 21, 1989, and a portion of the Application filed by the Applicants with the Department. The Administrative Notice of Public Hearing purports to be a notice of public hearing pursuant to Section 120.60(5)(a), Florida Statutes (1987), and Rule 3C-9.004, Florida Administrative Code, concerning the Applicants' proposed acquisition of the Bank.

Subsequent to the referral of the matter to the Division, the matter was assigned to the undersigned to conduct a public hearing pursuant to Section 120.60(5)(d), Florida Statutes, and to issue a Report consistent with Section 120.57(b)(13), Florida Statutes. Toward this end a telephone conference was held with the parties to determine the date and place of the public hearing. It was agreed that the public hearing would be conducted on November 30, 1989, in Miami, Florida. Notice of the public hearing, as required by Section 120.60(5)(d), Florida Statutes, was provided by the Applicants. During the telephone conference the Applicants indicated that their agreement to acquire the Bank had to be completed before an unspecified date. The Department indicated that it did not know when it could complete its investigation and, therefore, it would need additional time before it could determine whether it would present any evidence at the public hearing. Therefore, the parties agreed that the public hearing would proceed as soon as possible but that the hearing would not be concluded until some undetermined date in the future in order to give the Department an opportunity to conclude its investigation.

The public hearing convened on November 30, 1989. The Applicants presented the testimony of Frederick C. Brenner, Nicholas Barletta, Franklin Kardonski, Fred Kardonski, Mark Kardonski and George Reeves during the hearing. The Department did not call any witnesses. Although notice of the public hearing was provided pursuant to Section 120.60(5)(d), Florida Statutes, no member of the public indicated any desire to present evidence during the public hearing.

The Applicants also presented four exhibits which were accepted into evidence without objection by the Department.

At the close of the public hearing on November 30, 1989, it was ordered that the parties report the status of the matter to the undersigned every 60 days. The parties were informed that no action would be taken by the undersigned in this matter until the Department informed the undersigned that it was requesting that the hearing be reconvened or that the Department did not desire to present any evidence, or until the Applicants requested some action on the matter. An Order of Continuance to this effect was entered on December 1, 1989.

The parties did not report the status of this matter within 60 days after November 30, 1989. Therefore, an Order to Show Cause was entered on January 31, 1990. A Response to Order to Show Cause was filed by the Department on February 3, 1990, indicating that the Department needed additional time to complete its investigation. The Applicants did not oppose the Department's request.

On February 12, 1990, a Second Order of Continuance was entered. The continuance of the public hearing was extended and the parties were given until March 16, 1990, to report the status of the case.

On February 22, 1990, the parties filed a Joint Motion for Entry of Protective Order and Order. The Order was entered by the undersigned on February 23, 1990. On February 26, 1990, the Department filed the various confidential documents subject to the Order with the Division.

In response to the Second Order of Continuance, a letter dated March 14, 1990, was filed by the Department, on behalf of both parties, indicating that the Department had nearly completed its investigation. The Department also informed the undersigned of the following:

The Department has had notice from an indi- vidual member of the general public of the

fact that he would like to attend a public hearing in this matter. He has not indicated whether he was [in] attendance at, or why he did not attend, the public hearing previously held.

Although the existence of the "individual member of the general public" mentioned in the Department's letter (hereinafter referred to as the "Informant"), was mentioned in the confidential documents filed on February 26, 1990, those documents were not opened by the undersigned until April 2, 1990.

Therefore, the undersigned was not aware of the Informant until receipt of the Department's March 14, 1990, letter.

The Department went on to state in its letter the following:

The Department is currently of the mind that no further testimony need be taken of the Kardonski's; however, the Department must move its Report of Investigation into the record so that your Honor has all the information before you when issuing the Report of Findings of Fact. . . .

On March 21, 1990, counsel for the Department spoke to the undersigned by telephone, with permission of the Applicants, concerning reconvening the public hearing. Counsel for the Department indicated that reconvening the public hearing would allow the Informant an opportunity to appear at the public hearing. Counsel for the Department indicated that the Department did not know whether the Informant would attend the public hearing if reconvened or, if the Informant did attend, whether he would present any evidence. Counsel for the Department also indicated that the Department did not intend to presenting any evidence other than its investigative report at the public hearing if it was reconvened.

As a result of the Department's representations on March 21, 1990, a Notice of Continuation of Public Hearing was entered. The public hearing was set to reconvene on April 4, 1990, in Tallahassee, Florida.

During the afternoon of March 21, 1990, a telephone conference was held with counsel for both parties. During this conference the Applicants informed the undersigned for the first time that the acquisition of the Bank had to be completed by April 2, 1990, in order to avoid a possible termination of the acquisition contract. Therefore, the Applicants requested that the public hearing of this matter be closed and that a report of the public hearing be issued by the undersigned by March 28, 1990.

The Department indicated that it was opposed to the Applicants' request. The Department's opposition was based upon the Department's concern that the Informant, who contacted the Department on approximately January 24, 1990, might want to present evidence at the public hearing. The Department did not represent, however, that the Informant had indicated a desire or intent to participate in the public hearing or why the Informant did not participate in the public hearing on November 30, 1989. After the Applicants stated they had no objection to the filing of the Department's investigative report with the undersigned, the Department indicated that it did not need for the public hearing to be reconvened in order to allow it to present any additional evidence.

At the conclusion of the March 21, 1990, telephone conference the Applicants indicated that they would file a Motion to Close Proceedings and the Department indicated that it would file a Response to the Motion to Close Proceedings. The Applicants' Motion was received by the undersigned on March 23, 1990. The Department's Response was received on March 26, 1990.

In the Motion to Close Proceedings, the Applicants correctly pointed out the following: (1) proper notice of the public hearing convened on November 30, 1989, was given and the Informant did not appear; (2) the Department has had an opportunity to investigate the Informant's allegations, and; (3) the Informant has made no effort to contact the undersigned directly or through the Department. The Applicants also pointed out in their Motion that the Department can continue its investigation even if the public hearing is closed.

In the Department's Response, the Department represented that the Informant had been given by the Department until March 30, 1990, to produce any witnesses or documentary evidence concerning this matter. The Department therefore requested that the proceedings remain open until that date.

The Department's position in this matter fails to take into account the role of the Division in this matter. That role is governed by Section 120.60(5)(d), Florida Statutes, which limits the role of the Division to conducting a public hearing to take evidence from the public and the parties concerning proposed acquisitions of state banks. That evidence is then to be considered as a part of the Department's determination, pursuant to Section 658.28(1), Florida Statutes, of whether an application for the acquisition of a state bank should be approved. The public hearing is not a substitute for the exercise of the Department's responsibility pursuant to Section 658.28(1), Florida Statutes. Nor does the conclusion of the public hearing end the Department's determination. Pursuant to Section 120.60(5)(d), Florida Statutes, the Department's investigation does not end until the later of one year after the application is filed or thirty days after the conclusion of the public hearing. In this matter the Department will still have until August, 1990, to complete its investigation. The Department has the right to continue its investigation in this matter until it is satisfied that it can make the determination it is required to make pursuant to Section 658.28(1), Florida Statutes. Therefore, if the Department believes that further investigation of the Informant's claims should be made, it has that opportunity.

In light of the fact that the Applicants waited until just prior to April 2, 1990, to inform the undersigned that that is the date upon which the acquisition agreement may be terminated it was not possible for the undersigned to issue a report of the evidence presented during the November 30, 1989, public hearing prior to March 30, 1990. Therefore, the Department was informed by telephone on March 27, 1990, that the Motion would be granted unless the Informant filed a request in writing with the undersigned prior to the close of business on March 30, 1990, requesting an opportunity to present evidence at a continuation of the public hearing. The Department was also informed that, if such a request was filed, the Informant must indicate why he should be given such an opportunity in light of his failure to participate in the public hearing conducted on November 30, 1989. The Department was ordered to attempt to inform the Informant of this Order. The Department was also ordered to file its investigative report, if it intended to do so, no later that the close of business on March 30, 1990. Counsel for the Applicants was informed of this Order by telephone on March 28, 1990.

On March 21, 1990, the Applicants filed a Notice of Filing FDIC Approval Letter. On March 29, 1990, the Department filed its investigative report. No findings of fact have been made based upon the FDIC Approval Letter or the Department's report.

The Informant did not file any request to present evidence with the Division. Therefore, the public hearing of this matter was closed by Order dated April 2, 1990.

The parties were given an opportunity to file proposed reports for consideration of the undersigned in the preparation of this Report of Public Hearing. The Applicants have filed a proposed report containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Report or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto. The Department did not file a proposed report.

In the Report filed by the Applicants, it has been proposed that the following "Findings" be made:

I have examined the demeanor of all of the witnesses who have testified, and I find them to have been credible candid, and truthful.

In addition, I have fully examined all of the exhibits submitted, the Application materials including the financial exhibits, and the Confidential Section, and the Department report. After careful review and considera- tion and being fully cognizant of the standards set forth in Florida Statutes section 658.28 (1989), I find that the Applicants are qualified by reputation, character, experience and financial responsibility to control and operate the Key Biscayne Bank in a legal and proper manner.

In addition, I find that the interest of the other stockholders, if any, and the depositors and creditors of the Key Biscayne Bank, and the interest of the public generally, will

not be jeopardized by the proposed change in ownership, controlling interest, or management of the Bank by the Applicants.

Although the first sentence of these proposed "Findings" is correct and represents a proper finding in this report, the rest of the proposed "Findings" are not consistent with the role of the Division or the undersigned in this proceeding. As indicated, supra, the role of the undersigned in this matter was to conduct a public hearing for the receipt of evidence and the preparation of a report concerning that public hearing. The initial and ultimate determination of whether the Applicants' proposal meets the requirements of Section 658.28, Florida Statutes, is to be made by the Department and not the undersigned.

All of the substantive exhibits presented to the undersigned were hearsay and no findings of fact based on the exhibits have been made in this Report.

The Application was not filed with the Division.

FINDINGS OF FACT

1. The Applicants.

   
   

   1. During the 1920's, Abraham, Sam, Saul and Walter Kardonski, four brothers, moved from Europe to Curacao. The brothers started a trading company. The brothers' business consisted of the importation of imitations of American and European products manufactured in Japan to Central America.

      
      

   2. Prior to World War II the trading company was relocated to Panama and incorporated as Peikard Zona Libre (hereinafter referred to as "Peikard"). Peikard is one of the largest companies operating in the Panama Free Trade Zone. Peikard has an exclusive distributorship for Latin America and the Caribbean with Sanyo Electric Trading Company.

      
      

   3. Abraham, Sam and Walter all have children. Saul never married.

      
      

   4. The Applicants consist of the Abraham Kardonski Trust, the Sam Kardonski Trust and the Walter Kardonski Trust. Abraham's son, Frank Kardonski, Sam's oldest son, Fred William Kardonski, and Walter's oldest son, Mark Kardonski, are the trustees of the Applicants.

      
      

   5. The beneficiaries of the Abraham Kardonski Trust are Frank Kardonski's children: Giselle, Ana Lorena, Frank Gabriel and Denise Kardonski.

      
      

   6. The beneficiaries of the Sam Kardonski Trust are Fred Kardonski, his sister Sandra C. Mendez and his brother Steven Gary Kardonski. All three live in Panama City, Panama.

      
      

   7. The beneficiaries of the Walter Kardonski Trust are Mark Kardonski, his sisters Sara Kardonski and Raquel Kardonski and his brother Henry Kardonski.

      
      

2. The Trustees.

   
   

   1. Frank Kardonski is a Panamanian citizen. He lives in Coconut Grove, Florida, with his wife and four children.

      
      

   2. Frank started in business with the formation of Malot, a polypropolene bag manufacturing company. The factory was located in Nicaragua. Malot was the largest manufacturer of bags in Central America and Mexico. The Sandinistas seized the factory upon taking power in Nicaragua.

      
      

   3. After the seizure of Malot, Frank began a furniture factory in Panama. It became the largest in Panama. The company specialized mainly in manufacturing of kitchen cabinets for the construction industry. The business was ultimately sold.

      
      

   4. Following the sale of the furniture factory, Frank became the Vice President, and subsequently President, of the Chamber of Industries in Panama, a chamber-of-commerce-type organization for the industrial sector in Panama.

      Frank subsequently also became President of the Chamber of Commerce and the Architects Association in Panama.

      
      

   5. Fred Kardonski is a citizen of Panama and the United States. He lives in Panama City, Panama, with his wife and son.

   6. Fred graduated from Swarthmore College in 1967 with a Bachelor of Arts degree in Sociology and Anthropology.

      
      

   7. Fred worked at one of the banks owned by the Kardonski family. He began as a management trainee. Fred subsequently worked as a junior credit officer and as a senior credit officer. Fred was involved in managing and negotiating bank lines of credit.

      
      

   8. Fred spent three months during 1978 at Marine Midland Bank in a training program for overseas bankers. During 1980, Fred spent six to eight weeks at Crocker National Bank in San Francisco, California, in a program presented in conjunction with the Stanford Business School concerning overseas correspondents.

      
      

   9. In the early 1980's Fred became Manager of a bank formed by the Kardonski family in the Cayman Islands. He was primarily involved in developing the bank's loan business.

      
      

   10. Mark Kardonski is a citizen of Panama. He lives in Coconut Grove, Florida. Mark is single.

       
       

   11. Mark received a Bachelor of Science degree in Business Administration from Boston University and a Masters degree in Political Economy from Lancaster University in England.

       
       

   12. Mark began work at one of the Kardonski family banks at the lower levels of the bank. Subsequently, Mark worked as a credit officer and a marketing manager until 1987. He became a Director of the bank in 1986. He served on the Executive Committee, the Lending Committee and the Incentive and Bonds program.

       
       

   13. Mark participated in training programs at State Street Bank in Boston and Fidelity National Bank.

       
       

   14. Mark resigned as an officer of the bank in order to assume family responsibility upon his Father's death in 1987.

       
       

3. The Kardonski Family Banks.

   
   

   1. In 1972, the Kardonski family created a finance company and, ultimately, Towerbank International, Inc. (hereinafter referred to as "Towerbank"), a bank in Panama.

      
      

   2. Towerbank was created to serve the trading customers of Peikard by providing short-term financing (letters of credit).

      
      

   3. In 1981, the Kardonski family opened Towerbank, Ltd., a bank in Grand Cayman.

      
      

   4. The Kardonski family also opened Towerbank Overseas, Inc., a Panamanian international bank.

      
      

   5. The evidence presented during the public hearing did not prove exactly who created Towerbank, Towerbank, Ltd., or Towerbank Overseas, Inc., or who now owns those banks.

   6. During 1984, Sam Kardonski disappeared. He was reportedly kidnapped and held for ransom. The ransom was ultimately paid and Sam was released after approximately 20 months. Individuals purportedly involved with the kidnapping were arrested in Switzerland. The Kardonski's did not press charges against the individuals because of fear of retaliation by the kidnappers, which were believed to be from a Chilean revolutionary organization called MIR.

      
      

   7. When Sam disappeared Frank ceased his other business activities to assist in the management of the family businesses. He became Chairman of the Executive Committee of the family businesses.

      
      

   8. Frank served on technological committees, the Credit Committee and the Executive Committee of the Board of Directors of Towerbank. As Chairman of the Executive Committee, Frank communicates almost daily with the President and Chief Executive Officer of Towerbank and travels to Panama almost every month to attend meetings.

      
      

   9. Fred took over as General Manager of Peikard upon his Father's disappearance. Fred served as Chief Executive Officer of Peikard until November 1, 1989, when responsibilities as Chief Executive Officer were turned over to a professional. As of November 1, 1989, Fred became president of the Executive Committee of Peikard.

      
      

   10. Since Sam's disappearance in 1984, the philosophy of the Kardonski family's operation of the banks has been to limit their involvement to setting policies and strategies and delegating responsibility to carry out those policies and strategies to professional managers for the banks. Frank, Fred and Mark serve on the Board of Directors of the banks but do not act in managerial roles.

       
       

   11. During 1988, the political chaos in Panama resulted in extensive withdrawals of funds from Panamanian banks.

       
       

   12. The Kardonski family instituted measures to prevent such withdrawals of deposits from their Panamanian banks.

       
       

   13. The family banks had deposits of approximately $78 million, including

       $15 million of capital, in 1987. At the end of 1989, deposits were approximately $130 million, including $15 million of capital.

       
       

   14. The Kardonski businesses prospered even during Manuel Noriega's control of Panama. Possible reasons for this prosperity include the fact that the family is apolitical, most customers, who are engaged in the import/export business, are not located in Panama, the business community in Panama is well established and it was not in the best interest of Panama to interfere with Panama's business community.

       
       

   15. In an effort to prevent laundering of money, Towerbank deposit slips contain a disclaimer indicating that the bank can disclose any information regarding cash deposits. Bank personnel are also trained to scrutinize new customers.

       
       

   16. Towerbank analyzes institutional customers' balance sheets to determine whether cash balances are consistent with the business of the customers.

4. Reason for Seeking a United States Bank and Its Initial Operation.

   
   

   1. The Kardonski family decided to acquire a bank in the United States because of the security such a bank offers. United States banks are more extensively regulated than banks in Panama and Cayman. The family believes that the Bank is the type of business that the trustees can manage.

      
      

   2. Initially, no change in management of the Bank will be made.

      
      

   3. Frank and Fred will serve on the board of directors of the Bank along with 5 non-family members. Mark will become a director at some future date.

      
      

5. The Family's Reputation.

1. President Nicholas Antonio Ardito Barletta testified that the Kardonski family is a distinguished, intelligent and highly reputable business family in Panama.

   
   

2. President Barletta is a former President of Panama. He was ousted from power by Manuel Noriega. President Barletta participated in the creation of Panama's banking law. Between 1978 and 1984, President Barletta was Vice President for Latin American World Bank -- International Bank for Construction and Development. President Barletta advises certain investment banks in the United States.

   
   

3. President Barletta serves on the board of directors of Towerbank.

   
   

4. President Barletta indicated that the Kardonski family had successfully managed Towerbank through the economic crises in Panama.

   
   

5. President Barletta indicated that Fred Kardonski is an outstanding businessman in Panama's Free Trade Zone, that he is intelligent, mature, responsible and creative.

   
   

6. President Barletta indicated that Frank Kardonski is a successful businessman, an admirable leader and was involved in managing Towerbank through the economic crises in Panama.

   
   

7. President Barletta indicated that Mark Kardonski is imaginative, creative and dedicated.

   
   

8. President Barletta indicated that the Kardonski family has a reputation of integrity and dedication to its businesses. President Barletta believes that the family is qualified in banking matters and that Frank, Fred and Mark meet the requirements of Section 658.28(1), Florida Statutes.

   
   

9. President Barletta believes that the family has not engaged in money laundering. He indicated that Manuel Noriega was not a client or customer of Towerbank.

RECOMMENDED this 5th day of April, 1990, in Tallahassee, Florida.

LARRY J. SARTIN

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 5th day of April, 1990.

APPENDIX TO REPORT OF PUBLIC HEARING, CASE NO. 89-5703

The Applicants have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Report where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Applicants' Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1 1-4.

2 22-23.

3 24-25.

1. Not supported by the weight of the evidence. Frank, Fred and Mark were referred to as the "second generation."

2. 5 and 8.

6 9.

7 10.

8 11. The last sentence was not proved by the weight of the evidence.

9 12.

1. 4 and 6.

2. 13-16. Fred graduated in 1967. Towerbank was not created until 1972. Therefore, Fred went to work for Towerbank four or five years after graduation.

12 17.

13 4 and 7.

14 18.

15 19-20.

16 Hereby accepted. The evidence, however, only proved that Mark Kardonski had training experience at Peikard and Kardonski Management.

17 21.

18 See 27. The individuals who testified concerning Sam Kardonski's disappearance did not have actual knowledge. Their testimony concerning the reasons for his disappearance was based on hearsay.

19 28.

20 29.

21 30.

22 Hereby accepted.

23 31.

1. Hereby accepted.

2. See 32 and 33.

3. Hereby accepted.

27 34.

28 35.

29 36-37. The weight of the evidence failed to prove the third sentence of this proposed finding of fact.

30 38-39.

31 40.

32-33 Although these proposed findings of fact are generally true, the weight of the evidence failed to prove the period of time that Mr. Brenner's statements were based upon.

34 41-42.

35 44.

36 45-47.

37-38 48.

39-40 49. The last sentence of proposed finding of fact 40 is not supported by the weight of the evidence.

41-44 Although these proposed findings of fact are generally true, the weight of the evidence failed to prove the period of time that Mr. Reeves' statements were based upon.

COPIES FURNISHED:

Albert T. Gimbel Chief Banking Counsel

Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Joseph P. Klock, Jr., Esquire Thomas R. McGuigan, Esquire Suite 4000

200 South Biscayne Boulevard Miami, Florida 33131

Honorable Gerald Lewis Comptroller, State of Florida The Capitol

Tallahassee, Florida 32399-0350

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

IN RE:

Application for Acquisition of Control of KEY BISCAYNE

BANK AND TRUST CO., Key DOAH CASE NO. 89-5703

Biscayne, Florida, ADMINISTRATIVE PROCEEDING

by the KARDONSKI FAMILY NO.: 2687-B TRUSTS.

/

FINDINGS OF FACT CONCLUSIONS OF LAW AND FINAL ORDER

After having considered the facts and information contained in the application to acquire Key Biscayne Bank and Trust Co., Key Biscayne, Florida, by the Kardonski Family Trusts, the Report of Public Hearing issued by Hearing Officer Larry J. Sartin, dated April 5, 1990, and the record of those proceedings with exhibits, the Comptroller of the State of Florida as head of the Department of Banking and Finance, hereby renders this Final Order.

FINDINGS OF FACT

1. The findings of fact set forth in the Report of Public Hearing, dated April 5, 1990, issued by Hearing Officer Larry Sartin, are hereby adopted and incorporated by reference as if fully set forth herein.

   
   

2. The Department makes the following additional findings of fact:

   
   

   1. A member of the general public (hereinafter referred to as informant) did contact the --

      Department during the pendency of this application and - advised the Department that said informant had informa- tion which would reflect adversely on the Kardonskis and should be considered by the Department in its deliberation regarding this application.

   2. The Department had several communications with

   this informant and indicated to him that any such inform- ation should be provided to the Department as quickly

   as possible.

   J.C. The Department and the Hearing Officer provided the informant ample opportunity to submit evidence or documentation in support of his allegations.

   1. The informant did not provide any information to the Department or to the Hearing Officer, at any time during these proceedings, to substantiate his claims.

   2. By letter dated February 27, 1990, the Federal Deposit Insurance Corporation (FDIC) notified the applicant of its intent not to disapprove the proposed transaction.

   
   

   CONCLUSIONS OF LAW

   
   

3. The statutory criteria set forth in Chapter 658, Florida Statutes (1989), are the standards which govern this application. When an application for authority to purchase or acquire a controlling interest in any state bank or trust company is filed, it is the applicant's responsibility to prove that the statutory and regulatory criteria warranting - the grant of authority are met. It is the duty of the Department to make an evaluation of the factors listed therein and then to approve or disapprove the application.

   
   

4. Section 658.28(1), Florida Statutes (1989), provides in pertinent part that:

The Department shall issue a certificate of approval only after it has made an investigation and determined that the proposed new owner or owners of the interest are qualified by reputation, character, experience, and financial responsibility to control and operate the bank or trust company in

a legal and proper manner, and that the interests of the other stockholders, if any, and the depositors and the creditors of the bank or trust company and the interests of the public generally will not be jeopardized by the proposed change in ownership, controlling interest, or management.

CONCLUSIONS OF LAW

Based upon the foregoing Record, Findings of Fact, and Conclusions of Law, it is hereby ORDERED that the application referenced herein be APPROVED, subject to the following conditions:

1. That notice be provided to the Division of

   Banking when transfer of the shares is accomplished;

2. That consummation of the acquisition will conform with all the requirements of federal law;

3. This order shall constitute the certificate

   of approval of the Comptroller as head of the Department of Banking and Finance, authorizing the proposed change in control. This certification shall expire six (6) - months from today, unless in the meantime, a request for an extension of time has been requested by the applicant and granted by the Department; and

4. Until the acquisition has been completed, or

if any interim development is deemed by the Department to warrant such action, the Department shall have the right to alter, suspend or withdraw this approval.

In taking this action the Department has relied upon the representations and commitments made by the applicant in this application. Every effort should be made to meet these representations and commitments. Please keep the Division

of Banking advised of the steps being taken to comply with the conditions imposed in this Order.

DONE and ORDERED in Tallahassee, Leon County, Florida, this 20th day of April, 1990.

GERALD LEWIS, Comptroller and Head of the Department of Banking and Finance, Division of Banking

Docket for Case No: 89-005703

Orders for Case No: 89-005703