STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

In the Matter of:

Application for Acquisition of ) Control of KEY BISCAYNE BANK AND )

TRUST COMPANY, Key Biscayne, ) CASE NO. 93-2234

Florida, by the Trust for the ) Children of Walter Kardonski )

)

REPORT OF PUBLIC HEARING

Pursuant to Section 120.60(5)(d), Florida Statutes, a public hearing was conducted in this case at Room N-423 of the Ruth Rohde Building, 401 Northwest Second Avenue, Miami, Florida, on June 2, 1993, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings.

Appearances for the parties at the hearing were as follows:

APPEARANCES

For the Trust for the Thomas R. Woolsey, Esquire Children of Walter Steel, Hector & Davis Kardonski: 200 South Biscayne Boulevard

Suite 4000

Miami, Florida 33131-2398

For the Department of Albert T. Gimbel, Esquire Banking and Finance: Chief Banking Counsel

Jeffrey D. Jones, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350 PRELIMINARY STATEMENT

The public hearing conducted in this case is required by Section 120.60(5)(d), Florida Statutes, which reads as follows, in pertinent part:

(d) In the case of every application for license to establish a new bank, trust company, or capital stock savings association in which a foreign national proposes to own or control 10 percent or more of any class of voting securities, and 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). The failure of any such foreign national to appear personally at the hearing shall be grounds for denial of the application.

As required by the foregoing statutory provision, Mr. Mark Kardonski was present at the public hearing on June 2, 1993. Also present were two members of the public, one of whom made a few unsolicited (and unsworn) comments in support of the Kardonski family.

At the hearing the Applicant presented the testimony of the following witnesses: Mr. Lawrence M. Simoneaux, Mr. L. Frank Chopin, and Mr. Mark Kardonski. The applicant also offered one exhibit consisting of the certification of publication in the Miami Herald of May 18, 1993, of notice concerning the hearing. The Department did not call any witnesses, but it did offer two exhibits, one of which comprised the public part of the application and the other of which was the confidential part of the application.

At the conclusion of the public hearing, the parties were allowed three weeks from that day within which to file their written proposals with the Hearing Officer. A transcript of the proceedings at the public hearing was filed with the Division of Administrative Hearings on June 21, 1993, along with a proposed "Findings of Fact and Report" submitted on behalf of both the Applicant and the Department. The proposal submitted by the parties has been carefully considered during the preparation of this Report of Public Hearing and the Findings of Fact which follow contain the substance of all of the findings of fact proposed by the Applicant and the Department.

FINDINGS OF FACT

The Applicant

1. The Applicant is a Trust (the "Trust") to be formed by settlors Sara Kardonski de Nahmad and Raquel Kardonski de Gilinski. Mark Kardonski is to be designated as the trustee pursuant to the proposed trust agreement.

   
   

2. The sole beneficiaries of the trust are Sara Kardonski de Nahmad, Raquel Kardonski de Gilinski, Henry Kardonski and Mark Kardonski. All of the beneficiaries are brothers and sisters.

   
   

3. The Trust will acquire 100 percent of the stock of Towerbank Corporation. Towerbank Corporation owns 100 percent of the stock of Key Biscayne Bank and Trust Company, Key Biscayne, Florida.

   
   

4. Thirty-three percent (33 percent) of the shares of stock to be acquired by the Trust (33,333 shares) will be transferred to the Trust by an existing trust known as the Walter Kardonski Family Trust.

   
   

5. The current trustee of the Walter Kardonski Family Trust is also Mark Kardonski and the beneficiaries are the same as under the Trust; Sara Kardonski de Nahmad, Raquel Kardonski de Gilinski, Henry Kardonski and Mark Kardonski.

   
   

6. The terms and provisions of the Trust as they relate to voting control of stock held by the Trust and disposition of the stock of Towerbank Corporation are identical to the terms of the existing trust known as the Walter Kardonski Family Trust.

   The Trustee

   
   

7. Mark Kardonski is a Panamanian citizen who is a resident of the United States. He lives at 3 Grove Isle Drive, Apartment 1005, Miami, Florida. He is

   35 years old and not married.

   
   

8. Mark Kardonski has a Bachelor's Degree in Business Administration from Boston University and a Master of Arts from the University of Lancaster, Lancaster, England, in International Relations.

   
   

9. Mark Kardonski is currently employed in the lending department of the Bank where his daily activities are to visit and contact prospective loan clients, to book quality loans, and to review the performance of the loans. He is also a member of the credit committee and sits in on the meetings of the trust committee of the Bank.

   
   

10. Mark Kardonski has banking experience with banks other than the Bank. First, Mark Kardonski worked from 1980 to 1981 at State Street Bank in Boston in their training program and then worked in their international operations department. In 1984, Mark Kardonski joined Towerbank International as a credit analyst and later became a credit officer. In 1986 he joined the executive committee of Towerbank International in Panama. His employment with Towerbank International continued until 1987, at which time he became a director of Towerbank International. He continued as a director until 1992.

    
    

11. Mark Kardonski also has other business experience outside of banking. In 1981, he worked with the family-owned wholesale electronics business as a marketing manager and designed the marketing strategy for the company and established a distribution system.

    
    

12. For the period from 1987 through 1990, Mark Kardonski was employed by Peikard Miami, Inc. He was responsible for converting a purchasing office for the company in Miami to an export trading company specializing in trade in the Caribbean. He was also responsible for hiring professional management, designing the planning strategy for the company and designing their systems.

    
    

    Mark Kardonski's Reputation

    
    

13. Mr. Simoneaux is the Executive Director of the International Banking Operations Association with 94 member banks in Dade and Broward Counties. Mr. Simoneaux worked in banking and finance for 36 years prior to his recent retirement.

    
    

14. Mr. Simoneaux testified that during the period when Mark Kardonski has owned a controlling interest in Towerbank Corporation as trustee of the Walter Kardonski Family Trust, the impression in the banking community is that the Bank is conservative and that the Bank has received plaudits for outstanding operations, capital and profits. This is also Mr. Simoneaux's opinion.

    
    

15. Mr. Simoneaux described Mark Kardonski as being of good moral character, with "both feet on the ground" in banking, with a great deal of understanding of how the Treasury Department of a bank operates, how the bank's funds must be utilized, and investment rates and income.

    
    

16. Mr. Simoneaux believes that Mark Kardonski is qualified by reputation, character, experience and financial responsibility to control and operate a bank in a legal and proper manner.

17. Mr. Chopin testified that Mark Kardonski is generally regarded as a person of high character and integrity with a reputation for being a man of principle. He is a scrupulously careful, conservative business person.

    
    

18. Mr. Chopin believes that Mark Kardonski is qualified by reputation, character, experience and financial responsibility to control and operate a bank in a legal and proper manner.

    
    

19. Mark Kardonski testified that he has never been convicted or pled guilty or nolo contendere to a violation of Section 655.50, Florida Statutes, relating to Florida Control of Money Laundering in Financial Institutions Act, Chapter 896 relating to offenses relating to financial institutions, or any similar state or federal law.

    
    

    Effect of the Acquisition on the Bank

    
    

20. Mark Kardonski testified that the strategy of the current owners of Towerbank Corporation has been to hire professional management to run the Bank consistent with a philosophy of safe and sound banking, with a conservative approach to lending and investing in high quality, high grade investments.

    
    

21. The strategy of the Bank includes encouraging management to get involved in community affairs of Key Biscayne and Dade County and to participate in cultural events and activities in Key Biscayne.

    
    

22. Mark Kardonski is pleased with the performance of current management in implementing these strategies for the Bank. No changes in the senior management of the Bank, including the chief executive officer are planned at this time. The Applicant plans to continue the current business strategies utilized by the current ownership.

    
    

23. The Applicant plans to continue the approach of focusing its attention on strategy at the Board of Directors level and allowing management to run the day-to-day operations of the Bank.

DONE AND ENTERED this 24th day of June, 1993, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 24th day of June, 1993.

COPIES FURNISHED:

Albert T. Gimbel, Esquire Jeffrey D. Jones, Esquire Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Thomas R. Woolsey, Esquire STEEL, HECTOR & DAVIS

200 South Biscayne Boulevard Suite 4000

Miami, Florida 3313

Gerri Raines Dolan, Esquire DELOITTE, HASKINS & SELLS

100 Southeast 2nd Street Suite 2500

Miami, Florida 33131-2335

Honorable Gerald Lewis Comptroller, State of Florida The Capitol

Tallahassee, Florida 32399-0350

William G. Reeves, Esquire General Counsel

Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 93-002234

Orders for Case No: 93-002234