STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CENTRAL SAVINGS AND LOAN )

ASSOCIATION OF FLORIDA, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1922

) STATE OF FLORIDA, OFFICE OF THE ) COMPTROLLER; FIRST FEDERAL ) SAVINGS AND LOAN ASSOCIATION OF ) FT. PIERCE; ASSOCIATION OF ST. ) LUCIE COUNTY, and FIRST FEDERAL ) SAVINGS AND LOAN ASSOCIATION OF ) MARTIN COUNTY, )

)

Respondents. )

)

REPORT

Pursuant to notice, an administrative hearing was held before Chris H. Bentley, Hearing Officer with the Division of Administrative Hearings, beginning on March 21, 1979 and concluding on March 28, 1979, in Stuart, Florida. The purpose of the hearing was to receive evidence concerning the application of Central Savings and Loan Association of Florida for authority to organize a savings and loan association at the intersection of Kanner Highway and Monterey Road, Stuart, Martin County, Florida.

APPEARANCES

For Petitioner: Barry E. Chapnick, Esquire

1666 Kennedy Causeway, Suite 700

Miami, Florida 33141

For Respondents:

First Federal Frank Fee III, Esquire Savings and Fee, Parker & Fee

Loan Association 121 Orange Avenue

of Ft. Pierce: Ft. Pierce, Florida 33450

Citizens Federal C. R. McDonald, Jr., Esquire Savings and Loan Suite 200 Citizens Federal Building Association of 1600 South Federal Highway

St. Lucie County: Ft. Pierce, Florida 33450

First Federal Richard J. Dungey, Esquire Savings and Loan 14151 East Ocean Boulevard Association of Stuart, Florida 33494 Martin County:

State of Florida Karlyn Anne Loucks, Esquire Office of the Assistant General Counsel Comptroller: Office of the Comptroller

The Capitol, Room 1302 Tallahassee, Florida 32301

INTRODUCTION AND RULINGS ON EVIDENTIARY MATTERS

On September 5, 1978, the American Savings and Loan Association of Martin County, filed an application with the Division of Banking, Department of Banking and Finance (hereinafter referred to as "Department") pursuant to Sections

1. and 665.704(2), Florida Statutes, for authority to organize a corporation for the purpose of conducting a savings and loan association business. The proposed location of the business is at the intersection of Kanner Highway and Monterey Road, Martin County, Florida. The application was subsequently amended to change the proposed name to Central Savings and Loan Association of Florida (hereinafter referred to as "Applicant"). The following exhibits were admitted into evidence pursuant to the stipulation of the parties: Applicant's Exhibits 1-10; Respondent's, First Federal Savings and Loan Association of Ft. Pierce, Exhibits 1-6; Respondent's, First Federal Savings and Loan Association of Martin County, Exhibits 1-3; Department's Exhibits 1-3; and Hearing Officer's Exhibits 1 and 2.

   
   

   Each of the parties has submitted Proposed Findings of Fact which have been carefully considered. To the extent that said Proposed Findings are not included in the Findings of Fact in this REPORT, they are rejected as either being not supported by competent, substantial evidence, irrelevant or immaterial to the issues for consideration or as being conclusions of law as opposed to findings of fact.

   
   

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

   
   

   1. On September 5, 1978, the Applicant submitted to the Department its application pursuant to Sections 665.031 and 665.704(2), Florida Statutes, for authority to organize a corporation for the purpose of conducting a savings and loan association business to be located at the intersection of Kanner Highway (Colorado Avenue) and Monterey Road, Martin County, Florida. Notice of receipt of the application was published in a Florida Administrative Weekly on September 8, 1978. After receipt of the application, the Department requested additional information after receipt of which the application was deemed complete and assigned a filing date of December 7, 1978. The application as originally filed proposed the name AMERICAN SAVINGS AND LOAN ASSOCIATION OF MARTIN COUNTY for the proposed association. On September 22, 1978, Applicant amended the Petition to change the name of the proposed corporation to CENTRAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA. This change was noticed in the Florida Administrative Weekly on October 6, 1978.

      
      

   2. As set forth above, the site of the proposed savings and loan association is at the intersection of Kanner Highway and Monterey Road, Martin County, Florida. The organizers of the Applicant obtained an option to purchase the property for the proposed site for $175,000. The option to purchase was obtained from Mr. Richard Geisinger, one of the proposed directors, with full disclosure to the other proposed directors. An MAI appraiser appraised the fair

      market value of the property for the proposed site at $210,000. The proposed site is directly on the corner of the subject intersection and represents 175 front feet on Kanner Highway and 300 front feet on Monterey Road. The applicants intend to build a freestanding building of approximately 6,400 square feet with two drive-in teller facilities. The total cost of land and building is projected at approximately $481,000 with an additional $85,514 to be spent for the purchase of fixtures and furniture.

      
      

   3. The applicant proposes to be capitalized at $1,000,000, with $500,000 of the total capital being held as paid in surplus. The capital will be raised from the issuance of 100,000 shares of common stock with a par value of $5.00 per share, selling at a price of $10.00 per share with a collection of an additional $.50 per share for an organizational expense fund. For the purposes of the application, 100 percent of the stock of the proposed association was subscribed to by the organizers. However, it is their intent to offer for sale approximately 46 percent of the stock of the association to the public prior to the opening of the proposed savings and loan association.

      
      

   4. Applicant's primary service area (PSA) incorporates most of the Northeast section of Martin County and includes the City of Stuart, Town of Sewalls Point and the communities of Palm City and Port Salerno. It is bounded on the north by the Martin-St. Lucie County line, on the west by the Sunshine State Parkway, on the south by the northern boundary of the Gomez Grant, and on the east by the Indian River. The PSA, as proposed, is the most densely populated area of Martin County, having approximately 38,400 residents. The per capita income for the residents of the PSA is above the state average. Both construction and sales of residential units within the PSA are increasing, with adequate room for future development. There is a high level of commercial activity in the PSA and the vacancy rate is low.

      
      

   5. The PSA contains the Monterey Shopping Plaza, which is directly opposite the proposed site, which shopping plaza opened for business in 1972, and which has expanded to over 100,000 square feet of gross leasable space. Within the PSA and directly across the street from the proposed site to the East, a 26 acre shopping mall is being developed. Downtown Stuart is less than one-half mile from the proposed site and in the PSA.

      
      

   6. The population of Martin County and the primary service area is a matter of dispute. The Martin County Planning and Zoning Department estimates the county's population at 61,692 residents. The University of Florida, Bureau of Economic and Business Research estimated the county population at 53,895 as of July 1, 1978. No annual estimates relating to census tracts or parts thereof are available from official U.S. or State of Florida sources in order to determine the population of the PSA. However, the trends of population changes in Martin County, Stuart, Sewalls point, Jupiter Island and Ocean Breeze Park and in the unincorporated areas of the county, which comprise much of the designated PSA should apply to the PSA. Relevant population data of these areas, compiled by the University of Florida, Division of Population Studies, are as follows:

      
      

      Martin	1970 County 28,035	1975 47,726	1976 48,496	1977 50,341	1973 53,895	1980 54,700 to 61,800
      						(projected)
      Stuart		4,280	8,787	8,479	8,520	8,942 NA
      Sewalls Point		298	741	791	829	1,025
      Jupiter Island		295	349	352	353	355

      Ocean Breeze Park 714	813 1,080	1,080 1,065
      Unincorporated 21,908	36,936 37,794	39,559 42,468 NA

      
      

   7. Martin County population has risen dramatically since 1970, and that growth is expected to continue, essentially from in-migration. Since 1970 there has been a negative natural increase in population. The median age of the county population of 1977 was 45 years of age, with 26 percent of its residents

      65 years or older. This is fairly representative of the PSA which includes the majority of the county's population.

      
      

   8. Within five miles of the site, there are four major shopping centers including Stuart Shopping Center with approximately 103,000 square feet, K-Mart Plaza with approximately 100,000 square feet, East Ocean Mall with approximately 100,000 square feet and Monterey Shopping Plaza referred to above.

      
      

   9. From 1971 to 1978, 17,088 housing units were built in Martin County. Permit activity in the county shows that there were $81,726,000 in permits issued in 1978. The proposed site is along a line of travel for a large number of commuters as well as shoppers who come to that area as a destination point.

      
      

   10. The latest unemployment data for Martin County shows an unemployment rate of 5.4 percent for November, 1978 (revised), and a 5.5 percent rate for December, 1978 (preliminary). This compares to a state average of 6.2 percent and 6.4 percent respectively. The per capita personal income for the county increased from $5,735 in 1975 to $6,156 in 1976. This was a 7.3 percent increase which was somewhat slower than the 7.6 percent state average. However, the county's absolute averages remained above the state average of $5,596 and

       $6,021 respectively for the same years. Commercial activity in Martin County is strong.

       
       

   11. There are presently eleven existing or approved savings and loan association offices within the proposed PSA. One of these is a main office and ten of these are branches or limited facilities. There are also four additional savings and loan association offices located outside the PSA, but within Martin County. There are nine commercial bank offices, including four main banking offices and five branches, within the PSA and another six hank and branch offices located outside the PSA, but within Martin County.

       
       

   12. There have been significant increases in savings deposits in Martin County. Significant factors in this increase is the in-migration of new residents and inflation. A continuation of this pattern will maintain the growth experience in recent years. The county summary for nine savings and loan offices indicates an increase of 27.1 percent in deposits between March 31, 1977 and March 31, 1978. This continues a similar growth rate achieved during 1976- 1977. A similar growth trend is being experienced by the commercial banks in the area.

       
       

   13. Savings and loan associations doing business in Martin County have total aggregate savings as of September 30, 1978 of $235,416,000. Commercial banks doing business in Martin County show total assets of $297,774,000 as of the same date. Only one savings and loan doing business in Martin County is headquartered in Martin County. All other savings and loans in Martin County are branches of institutions with headquarters outside Martin County.

       
       

   14. The Applicant expects to be competitive with the existing savings and loan offices in the PSA with regard to interest rates and breadth of services. Some of the services that the Applicant intends to offer to the community

       include the following: a mobile facility to serve the elderly and disabled, direct deposit of Social Security and other government checks, retirement plans such as IRA and KEOUGH, electronic funds transfer, Christmas Club and educational savings programs, certificate plans, and Saturday and extended Friday hours. With the exception of the mobile facility and Saturday hours, these services are currently offered by existing associations.

       
       

   15. The Applicant has not designated a chief managing officer. An informal offer and acceptance of employment exists with a capable individual having savings and loan experience. This individual did not assist in preparation of the pending application. The proposed Board of Directors is composed of nine members, all of whom are residents of the State of Florida and

       U.S. citizens. Although all of the proposed directors appear to be successful businessmen, none of them have any savings and loan experience. Six of the nine organizers are presently commercial bank directors and one is a former bank director. Mr. J. M. Brown is Director and Chief Executive Officer of American Bank of Martin County; Mr. Richard K. Carroll is a director of Jensen Beach Bank; Mr. John A. Darlson is a director of the American Bank of Martin County; Mr. Richard Geisinger is Chairman of the Board of Directors of American Bank of Martin County; Mr. Terry N. Keathley is a director of American Bank of Martin County; and Mr. Lawrence J. Timon is a director of American Bank of Martin County. Mr. Brown and Mr. Darlson do not intend to become directors of the proposed savings and loan association but do intend to held their stock in the proposed association. Those remaining proposed directors who also serve the Board of American Bank, Messrs. Geisinger, Keathley and Timen, have indicated their intent to resign their directorates in American Bank to serve on the Board of Directors of the proposed association in keeping with the requirements of the Financial Institutions Regulatory Act. The remaining proposed directors are Mr. Rockford H. Ern, Mr. Armando Farina, and Mr. John M. Fort.

       
       

   16. Mr. Brown, Mr. Carroll, Mr. Darlson, Mr. Geisinger, Mr. Keathley and Mr. Timon have each subscribed to more than 5 percent of the stock of the proposed savings and loan association and also presently own stock in a commercial bank in the PSA. All intend to retain that stock as well as their stock in the proposed savings and loan association.

       
       

   17. The Applicant has projected savings deposits at the end of the first, second and third years of operation to be $5,000,000, $10,000,000 end

       $15,000,000 respectively. The Applicant has presented a revised budget which projected net profit for the first three years of operation to be $55,000,

       $131,000, and $188,000 respectively.

       
       

   18. The Applicant has proposed that the new association bear the name CENTRAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA. No evidence was presented to show this name was confusing or misleading to the public.

       
       

   19. In accordance with the provisions of Section 120.57 (1)(a)(12), Florida Statutes, Conclusions of Law and a Recommendation are not included in this REPORT.

Respectfully submitted and entered this 25th day of October, 1979, in Tallahassee, Florida.

CHRIS H. BENTLEY, Director

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Karlyn Anne Loucks, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32301

Barry E. Chapnick, Esquire

1666 Kennedy Causeway, Suite 700

Miami, Florida 33141

C. R. McDonald, Jr., Esquire Suite 200, Citizens Federal Bldg. 1600 South Federal Highway

Ft. Pierce, Florida 33450

Frank Fee, III, Esquire Post Office Box 100

Ft. Pierce, Florida 33450

Richard J. Dungey, Esquire Post Office Box 288 Stuart, Florida 33494

Docket for Case No: 78-001922

Orders for Case No: 78-001922