STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CARROLLWOOD STATE BANK, )

)

Petitioner, )

)

vs. ) CASE NO. 78-2100

) METROPOLITAN BANK AND TRUST ) COMPANY AND DIVISION OF BANKING, )

)

Respondents. )

)

REPORT

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on February 19, 1979, in the offices of The Florida Bar, Host International Hotel, Tampa, Florida, commencing at 9:00 A.M. The purpose of the hearing was to receive evidence concerning the application of the Metropolitan Bank and Trust Company for authority to open a branch bank on Ehrlich Road and North Dale Mabry Highway in Hillsborough County, Florida.

APPEARANCES

For Petitioner/ J. Riley Davis

Protestant: Taylor, Brion, Buker and Green

Post Office Box 1796 Tallahassee, Florida

For Respondent/ Robert W. Perkins and Applicant: Richard B. Collins

Michaels, Sheffield, Perkins, Collins and Vickers

Post Office Box 10069 Tallahassee, Florida 32302

For Respondent/ William S. Lyman

Division of Assistant General Counsel Banking: Office of Comptroller

The Capitol Tallahassee, Florida

INTRODUCTION AND RULINGS ON EVIDENTIARY MATTERS

The Metropolitan Bank and Trust Company, also referred to herein as the "applicant," filed its application with the Division of Banking in October of 1978 for authority to open a branch banking facility in Hillsborough County, Florida. The petitioner Carrollwood State Bank, also referred to herein as the "protestant," timely filed its petition for a public hearing on the application.

At the beginning of the hearing, it was ruled that the applicant would have the burden of going forward wish its evidence and witnesses and demonstrating that it met the statutory and regulatory criteria for approval of its application.

The attorney for the protestant raised and placed into the record issues concerning the constitutionality of F.S. Sections 659.06(1)(a)(1) and 120.57(1)(a)(12). The undersigned is without authority to rule on the constitutionality of these two statutes. At the beginning of the hearing, the protestant's attorney also orally challenged Florida Administrative Code, Rule 3C-13.041 as being an unlawful exercise of delegated legislative authority. The undersigned Hearing Officer ruled that such a challenge would have to be made pursuant to a proper petition under F.S. Section 120.56 and could not be raised for the first time at the commencement of the public hearing on the applicant's proposal to open a branch banking facility.

The applicant's attorneys have filed a claim for the applicant's costs and attorney's fee should it prevail in this proceeding. This claim is referred to the Office of the Comptroller for disposition.

At the hearing, the Division of Banking presented the testimony of Adina Simmons, who qualified and was accepted as an expert in the field of economics and demographics. The public file was received into evidence as Exhibit A. An in camera inspection of the confidential file was permitted by counsel for the parties. That file was received into evidence as Exhibit B and was sealed.

Economic and demographic data concerning the area and banks in issue was received as Exhibit C.

In support of its application, the applicant introduced into evidence Exhibits 1 through 16 and the testimony of eight witnesses. These witnesses included officers and directors of the applicant, land owners and land developers in the area and experts in the areas of bank financial management and accounting, economic feasibility studies, site selection for financial institutions and bank application preparation.

The protestant offered into evidence two prior orders of the Office of the Comptroller. Objections to these Orders were sustained, but they are included in the Record as Proffered Exhibits AA and BB. If the Office of the Comptroller determines that the protestant's two proffered exhibits should be admitted into evidence, the applicant proffers the final orders listed on Exhibit A attached to its proposed findings of fact. The protestant presented only one witness at the hearing. While tendered as an expert in other fields, the protestant's witness was accepted by the Hearing Officer as an expert only in economic feasibility studies.

The applicant and the Division of Banking filed with the Hearing Officer proposed findings of fact. The protestant submitted no proposed findings.

Those findings of fact submitted by the respondents not specifically included below in this Report are rejected as either being not supported by competent, substantial evidence adduced at the hearing or irrelevant and immaterial to the issues for consideration or as constituting a conclusion of law as opposed to a finding of fact.

At the hearing, the Hearing Officer did allow evidence concerning the existence of pending applications for financial institutions in the applicant's proposed trade area. The protestant has filed a motion to supplement the record so as to include the Final Order of the Comptroller dated February 20, 1979,

granting the application of Sun Bank of Tampa Bay for authority to open a branch at 12650 Dale Mabry Extension. This motion is GRANTED for the purpose of illustrating other financial institutions in the subject area.

FINDINGS OF FACT

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

1. The applicant Metropolitan Bank and Trust Company is located at 4600 West Cypress Street, Tampa, Florida, and was established on May 31, 1974. Excluding its Chief Executive Officer and Executive Vice-President, the applicant has 25 officers with a combined total of 352 years of banking experience. The average age of the officers is 41, with an average of 15 years of banking experience. Six of the management team are past bank presidents.

   
   

2. The applicant presently has two existing branch banking facilities. One is located 0.9 miles Southeast from the main office and one is located 8.6 miles Northwest of the main office. A third facility, acquired by merger, located 19.4 miles Southeast of the main facility, has been approved and was

   expected to open in April, 1979. As a result of the merger between Metropolitan and the American Guarantee Bank, the applicant now has 160 employees,

   
   

3. The applicant has paid regular cash dividends to its stockholders since opening. As of December 31, 1978, the applicant had total assets of over

   $187,000,000.00. Its loans to loanable funds ratio has been maintained at about

   80 percent. That ratio was 76.7 percent as of February 14, 1979. The protestant stipulated at the hearing that the applicant had no problem meeting its liquidity needs. As of December 31, 1978, the applicant had an adjusted capital to assets ratio of 8.2 percent. Its net profit to asset ratio was .836 percent as of December 31, 1978. The establishment of the proposed branch is expected to have no significant effect upon future earnings of the applicant.

   It is anticipated that the slight loss after the first year of operation will not exceed two cents per share and that the branch will contribute significantly to earnings of the applicant after the first year. The applicant presently has approximately $1.4 million in deposits and $2.8 million invested in loans from residents and business people in the primary service area of the proposed branch bank.

   
   

4. The name of the proposed facility is to be Metropolitan Bank and Trust Company, Carrollwood Branch Office. It is to be located on the southwest corner of Dale Mabry Highway and Ehrlich Road, an unincorporated area of Hillsborough County, approximately 8.8 air miles from the main office. The property is presently owned by the applicant. No officer or employee of the applicant has an interest in the land purchased. The total cost of the land, building, furniture and fixtures and other fees is expected to amount to approximately

   $409,500.00. As of December 31, 1978, the applicant had an amount in excess of

   $1,391,500.00 to invest in bank premises. The proposed facility will offer full services, including checking and savings services, certificates of deposits, installment and commercial loans, VISA cards, safe deposit boxes, a 24-hour teller machine and Saturday banking. Additionally, the applicant intends to extend its main office services of international banking and trust services to the proposed branch. The building is to contain some 4,300 square feet and the drive-in area will contain some 1,050 square feet. Forty-three parking spaces will be provided. There will be five interior teller windows and four drive-in teller stations. The facility will also have a community room available for local citizens. The lending authority of the proposed branch manager will be

   $25,000.00 on an unsecured basis and $50,000.00 on a secured basis. Larger loans can be made available through consultation and approval of the parent bank. Long-term mortgage loans and acquisition and development loans will be available through the proposed branch.

   
   

5. The proposed facility will have a branch manager and six staff (non- officer) members. The designated proposed branch manager is A. H. Vermeulen who has 22 years of experience in the banking industry and is currently a vice- president of the applicant. Mr. Vermuelen suffered a heart attack several weeks before the administrative hearing in this cause. It is expected that he will be able to resume his duties with the applicant. However, if he is unable to do so, the applicant has designated Charles Overholt as the proposed branch manager. Mr. Overholt has had 12 years of banking experience, has been an assistant branch manager of the Flagship Bank in St. Petersburg and is currently the applicant's vice-president in charge of the bookkeeping department.

   
   

6. The applicant projects that total deposits at the proposed branch bank will be $5,000,00.00 at the end of the first year of operation, and

   $11,000,000.00 and $17,000,000.00 respectively at the end of the second and third years of operation. At the end of the first year of operation, the applicant anticipates a net loss of $22,100.00. Net profits of $211,300.00 and

   $459,500.00 are estimated for the end of the second and third years of operation.

   
   

7. The site for the proposed branch banking facility is located on a main north/south traffic artery (North Dale Mabry Highway) and fronts on a major east/west traffic artery (Ehrlich Road). In selecting this site and designating the primary service area, the factors of residential development, population growth, traffic activity and flow, and existing financial institutions and services in the area were considered. Within the applicant's primary service area, there are presently two existing banks. The protestant Carrollwood is located 2.8 miles south of the applicant's site and the Exchange Bank of Temple Terrace branch is located 2.9 miles south of the proposed site. By an Order dated February 20, 1979, the Office of the Comptroller granted authority to the Sun Bank of Tampa Bay to open a branch bank to be located approximately 1.5 miles south of the site. Other applications for branch banks in the area are pending and there are several savings and loan institutions in the area.

   
   

8. While the population of Tampa has declined in recent years, there have been considerable increases in population in the unincorporated areas of Hillsborough County, including the applicant's primary service area. The largest part (76.63 percent) of the increase in the unincorporated areas have resulted from net migration, as opposed to natural increase. There has been a good balance of growth in both the working or labor age group and the group aged

   65 and above. The per capita personal income figures for Hillsborough County are below the State average and are increasing somewhat slower that the State average. The comparative figures report for June 30, 1977, through June 30, 1978, show that the protestant increased its total deposits by a little over 30 percent, the Exchange Bank of Temple Terrace increased its total deposits by almost 25 percent, and the Sun Bank of Tampa Bay likewise increased deposits by a little over 21 percent. The average for increases in deposits for the County was 16.6 percent.

   
   

9. Official state estimates of population for the primary service area are not available. The applicant estimates the 1978 population of the primary service area to be 20,800. A population of 25,000 is projected for 1980 and a population of 33,000 is projected for 1985. The population of this area has

   grown approximately 105 percent since the year 1970. The two existing banks in the area result in a population per bank of 10,400 persons. The Sun Bank's branch brings this down to 6,933 persons per banking facility. The national average population per banking office is 4,715 and the Florida average is 8,086. The figures above for the primary service area do not take into account savings and loan institutions in the area nor customers served by banks outside the primary service area.

   
   

10. The primary service area is mainly a "bedroom," residential community at the present time, with little commercial or industrial development. There is no significant concentration of employment in the area. The makeup of the populace is primarily upper middle class. Most of the residential development has occurred West of North Dale Mabry Highway. There are between 8,600 and 10,500 new residential units planned in the subdivisions located within the primary service area and, as of the date of the subject application, some 1,900 had been completed. Developers and landowners feel that commercial development in the area will naturally follow the residents development.

    
    

11. At least two land developers in the primary service area have had difficulty obtaining financing in the form of large acquisition and development loans and construction loans from existing banks within the primary service area.

    
    

12. The applicant is in substantial compliance with all state and federal laws affecting its operations.

In accordance with the provisions of Florida Statutes Section 120.57(1)(a)(12), conclusions of law and a recommendation are not included in this Report.

Respectfully submitted and entered this 29th day of March, 1979, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

COPIES FURNISHED:

J. Riley Davis William S. Lyman

Taylor, Brion, Buker and Green Assistant General Counsel

P. O. Box 1796 Office of the Comptroller Tallahassee, Florida 32302 The Capitol

Tallahassee, Florida 32304

Robert W. Perkins and

Richard B. Collins Comptroller Gerald A. Lewis Michaels, Sheffield, Perkins, The Capitol

Collins and Vickers Tallahassee, Florida 32304 Post Office Box 10069

Tallahassee, Florida 32302

Docket for Case No: 78-002100

Orders for Case No: 78-002100