STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAROLLWOOD STATE BANK, )

)

Petitioner, )

)

vs. ) CASE NO. 79-0215

)

CITRUS PARK BANK and STATE )

OF FLORIDA, OFFICE OF THE )

COMPTROLLER, )

)

Respondents. )

)

REPORT

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Bearing Officer, James E. Bradwell, held a public hearing in this case on April 20, 1979, at 9:00 a.m., in Rob 250-A, Hillsborough County Courthouse, Tampa, Florida. The purpose of the hearing was to receive evidence concerning the application of the Carrollwood State Bank to open a branch basking facility at the northwest corner of Gunn Highway and Hudson Lane in the northwest section of unincorporated Hillsborough County, Florida.

APPEARANCES

For the Applicant, Citrus Park Bank-Richard B. Collins, Esquire, of Michaels, Sheffield, Perkins, Collins and Vickers, 2007 Apalachee Parkway, Post Office Box 10069, Tallahassee, Florida 32302; for the Protestant/Petitioner, Carrollwood State Bank-J. Riley Davis, Esquire, of Taylor, Brion, Buker and Greene, 320 Barnett Bank Building, Post Office pox 1796, Tallahassee, Florida 32304; for the Department of Banking and Finance-William S. Lyman, Esq., Assistant General Counsel, Office of the Comptroller, The Capitol, Tallahassee, Florida 32301.

On January 2, 1979, Citrus Park Bank, also referred to herein as the "Applicant", filed its application with the Division of Banking, Office of the Comptroller, for authority to open a branch bank at the northwest corner of the intersection of Gunn Highway and Hudson Lane, unincorporated Hillsborough County, Florida. The Petitioner, Carrollwood State Bank, also referred to herein as "Protestant", timely filed its request for a public hearing on the application pursuant to Subsection 120.60(3), Florida Statutes, and Chapter 3C- 9, Florida Administrative Code. Notices of the hearing were filed in accordance with Subsection 120.60(3)(b), Florida Statutes, and Rule 3C-9.05, Florida Administrative Cede.

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

Additionally, at the outset of the hearing, the undersigned Hearing Officer received stipulations concerning the admissibility of certain documentary evidence which was offered during the course of the hearing; the public file

relative to the Applicant's branch bank application was entered into the record and, after examination by counsel for the parties, the confidential portion of the file was made a part of the record.

Motion was made by the Department of Banking and Finance and joined in by the Applicant to seal the confidential portion of the file upon completion of the hearing, which motion was granted.

On behalf of the Department of Banking and Finance, a list of documentary evidence was submitted and stipulated to by counsel for the Applicant and Petitioner. The Department's documentary evidence was marked as "Department's Composite Exhibit A" and was received in lieu of the live testimony of Mrs.

Adena Simons. This documentary evidence consisted of the following:

1. The public portion of the application;

2. The confidential portion of the subject application;

3. Florida estimates of population, July 1, 1978, state, counties and municipalities, prepared for the Florida Department of Administration by the Division of Population Studies, Bureau of Economic and Business Research, University of Florida;

4. 1900 to 2020 projections of Florida population by county;

5. Table I, total and per capita personal income in Florida, its counties and SMSA's 1975 1976;

6. Tampa-St. Petersburg SMSA labor market trends, January, 1979;

7. Consumer price indexes for all urban consumers and urban wage earners and clerical workers;

8. United States Department of Commerce, construction index, November, 1978;

9. Florida Banker's Association comparative figures report; and

10. Curriculum vitae of Mrs. Adena Simmons, Department Economist.

The Applicant/Respondent, Citrus Park Bank, called the following witnesses in support of its application:

Mr. Harold Gibson, Certified Public Accountant; Mr. Robert D. Sellas, President, Citrus Park Bank; and Messrs. Dennis J. Noto and Gerald W. Bobier, Site Selection Consultants, Inc., experts in financial feasibility studies, site location selection for financial institutions and application preparation.

In support of its application, the Applicant offered the following exhibits which were received and accepted into evidence:

1. Applicant's Exhibit No. 1, Proof of Publication of Notice of Hearing;

2. Applicant's Exhibit No 2, legal description of proposed branch site;

3. Applicant's Exhibit No. 3, resume of applicant bank's officers;

4. Applicant's Exhibit No. 4, chart of Applicant's

   loans to loanable funds ratio;

5. Applicant's Exhibit No. 5, information on new accounts opened between October 15, 1978, through April 18, 1979, within the primary service area of the proposed branch;

6. Applicant's Exhibit No. 6, personal data sheet for Dennis J. Noto;

7. Applicant's Exihibit No. 7, list of regulatory authorities who have accepted Dennis J. Noto's work;

8. Applicant's Exhibit No. 8, Hillsborough population data;

9. Applicant's Exhibit No. 9, data of census tracts in Northeast Hillsborough County, Florida; and

10. Applicant's Exhibit No. 10, blueprint showing exterior and floor plan of proposed branch bank facility.

The Petitioner, Carrolwood State Bank, called as its witness at the hearing: Keith White, of Miami, Florida, an expert in the area of economic feasibility studies and feasibility studies relating to financial institutions. The Petitioner submitted no exhibits and/or documentary evidence supportive of its petition and protest.

FINDINGS OF FACT

1. Based upon consideration of the oral testimony and documentary evidence introduced at the hearing, the following relevant facts are found.

   
   

2. In October, 1978, the Applicant filed with the Department of Banking and Finance an application for authority to open a branch bank at the northwest corner of Gunn Highway and Hudson Lane in the northwest section of unincorporated Hillsborough County, Florida. The Applicant presently does not have any branch bank facilities and, by way of this application, seeks the establishment of its first branch bank.

   
   

3. The applicant bank was established April 11, 1975, as the Citrus Park Bank and is located at Gunn Highway and Hixon Road in the northwest section of unincorporated Hillsborough County, Florida. The site of the proposed branch is approximately 4.5 miles southeast of the main office. As stated, the site for the proposed branch is the northwest corner of Gunn Highway and Hudson Lane, which provides good access to both roads. The proposed branch office will offer the full extent of customer facilities. The branch bank building will contain approximately 1,500 square feet, housing four interior teller windows and two auto tellers. The seller of the land on which the proposed branch facility will be situated, has no connection with the Applicant.

   
   

4. The primary service area for the proposed branch bank is bounded on the north by Erlich Read, on the south by railroad tracks, on the east by a direct line running north from Gunn Highway, Linebaugh Avenue intersection, and on the west by Henderson Road extended to Bellamy Road. Witnesses Bobier and Noto, of Site Selection Consultants, Inc., testified that the primary service area boundaries are realistic, in that they comply with regulatory criteria of being the smallest area within which the proposed bank will garner 75 percent of its deposits.

5. Exhibit 5 of the Applicant's application reveals that there are eight deposit customers within the primary service area with total deposits of

   $178,783, and eight loan customers with total loans of $13,735. Since the date of its initial application with FDIC 1/, October 15, 1978, from that date to April 18, 1979, Citrus Park Bank has acquired eighty-one new deposit customers for total additional deposits of $186,548. (See Applicant's Exhibit No. 5) There are presently no existing banks within the primary service area for this proposed branch.

   
   

6. Within the proposed site for this branch bank, it appears that the population of the primary service area is approximately 6,900 persons. It is projected that by 1985, the population will reach at least 15,000. The people living within the primary service area are of the highest strata when using traditional factors such as income, wealth, housing and occupation. The average population per banking office for the United States as a whole is 4,561, whereas this population figure for-the State of Florida is 8,086 per banking office.

   The Applicant anticipates total deposits at the end of the first year's operation of the proposed branch to be $1.5 million; at the end of the second year, $3.0 million and at the end of the third year, $4.5 million. At the end of the first year of operating, the Applicant anticipates a net loss of approximately $25,900. At the end of the second year, the Applicant projects a net profit of $41,300; and at the end of the third year, a net profit projection of $85,000 is expected.

   
   

7. There are a significant number of new or recently developed subdivisions in the primary service area. There appears to be approximately nine large residential communities within the service area. While there appears to be no large commercial activity and development in the primary service area, current plans for such development appear imminent.

   
   

8. According to the applicant bank, it is entitled to have 50 percent of its unimpaired capital and surplus in direct ownership or leasehold improvements of land and building, which eqnals $545,000. As of December 31, 1978, the bank had invested in such assets a total of $285,000. Thus, the Applicant figures that it has available to invest in bank promises an amount of $260,000. The applicant bank has a net investment in land of $20,000 and anticipates spending

   $150,000 on buildings, which make a total of $170,000 invested in land and buildings.

   
   

9. The applicant bank's president, Robert D. Sellas, testified that the Applicant has sufficient capital accounts to support the bank's deposit base and the additional fixed asset proposal for the branch and its operations. Based on the main facility's record of growth, Mr. Sellas testified that the applicant bank has sufficient earnings and earnings prospects to support the anticipated expenses of the proposed branch. The bank's net profit to asset ratio is being maintained at 1.04 percent for the calendar year or better. It has good established earnings and is presently retaining most of its earnings for the branch expansion. As of December 31, 1978, the Applicant's adjusted capital to asset ratio was 13.97 percent. This figure is expected to increase over the following few months.

   
   

10. An examination of the bank's economic figures indicate that the Applicant is enjoying good liquidity. (See Applicant's Exhibit No. 4) This chart which commences in the month of May, 1976, and continues through March, 1979, indicates that at the end of March, 1979, the bank had a ratio of approximately 76 percent of loans to loanable funds. In determining the bank's liquidity, a figure is utilized to determine the amount of funds it is willing

    to commit to loans. According to this formula, 80 percent of total deposits excluding public funds plus capital funds exists in excess of the amount invested in fixed assets and is considered available to fund the loan account. According to this formula, President Sellas testified that the bank has sufficient liquidity to support the branch bank expansion.

    
    

11. The Applicant's main office is staffed with the intention of establishing an additional branch. The Applicant's managerial capacity, asset condition and past performance are good. President Sellas testified that the Applicant has sufficient depth and quality of management to operate the proposed branch without reducing its current level of services or over-extending its managerial or operational capacity. (See Respondent's Exhibit No. 3)

    
    

12. The Applicant has six officers excluding its Chairman of the Board. The average banking experience for the Applicant's officer' is 10.5 years and their average age is 36 years. The individual designated to be the manager for the proposed branch is Dana Chwan. Ms. Chwan has a Bachelor of Science degree from the University of Tampa, has been associated with the Citrus Park Bank since its inception four years ago, and is presently in a loan officers training program. Prior to this program, Ms. Chwan served as the bank's marketing officer. (See Respondent / Applicant's Exhibit No. 3 for personnel data concerning the officers)

    
    

13. Mr. Keith White, an expert for the Petitioner, Carrollwood State Dank, testified that there was total available deposits within the primary service area of approximately $104,200,000. He (White) further testified that it is possible that Citrus Park Bank, through its proposed branch, could garner $1.5 million in deposits during its first year in operation. Additionally, President Sellas testified that in his judgment, the prospect for the viability of the proposed branch is good.

    
    

14. The applicant bank recently underwent an FDIC examination and at that time the financial-asset condition of the bank was in excellent shape, although the bank wrote off a minor amount of loans. Expert witnesses Bobier and Noto, of Site Selection Consultants, Inc., testified that the public convenience and need would be better served by the establishment of the Citrus Park branch bank at the proposed location and both were optimistic about the future growth in and around the proposed location of this branch bank.

    
    

15. The Citrus Park Bank started with an initial capitalization of

    $1,201,500. The bank has had an excellent past performance record and has been profitable. Over the years the bank has taken a conservative approach toward dividends and has paid five cents per share to its stock-holders per quarter, retaining a substantial sum of its earnings for expansion. The bank's president, Robert D. Sellas, testified that the bank projects a continued increase in earnings and feels that the establishment of this branch will not adversely affect the bank's earnings.

    
    

16. The name of the proposed branch is to be "Citrus Park Bank-Gunn Highway Branch Office."

    
    

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

RESPECTFULLY SUBMITTED AND ENTERED this 21st day of May, 1979, in

Tallahassee, Florida.

JAMES E. BRADWELL

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

Richard B. Collins, Esquire Michaels, Sheffield, Perkins, Collins and Vickers

2007 Apalachee Parkway Post Office Box 10069

Tallahassee, Florida 32302

J. Riley Davis, Esquire

Taylor, Brion, Buker and Greene 32G Barnett Bank Building

Post Office Pox 1796 Tallahassee, Florida 32302

Gerald A. Lewis, Comptroller Office of the Comptroller The Capitol

Tallahassee, Florida 32301

William S. Lyman, Esquire Assistant General Counsel Office of the Comptroller The Capitol

Tallahassee, Florida 32301

Docket for Case No: 79-000215

Orders for Case No: 79-000215