STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: APPLICATION FOR )

ACQUISITION OF CONTROL OF ) GROVEGATE BANK OF MIAMI, DADE ) COUNTY, FLORIDA, BY INTERBANK ) HOLDING CORPORATION, )

) CASE NO. 91-1587

)

REPORT OF PUBLIC HEARING

Pursuant to Section 120.60(5)(d), Florida Statutes, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a public hearing in the above-styled matter on April 18, 1991, in Miami, Florida.

APPEARANCES

For the Applicant: Gerald B. Ward, Esquire

Rene V. Murai, Esquire

Murai, Wald, Biondo & Moreno, P.A. 900 Ingraham Building

25 Southeast 2nd Avenue Miami, Florida 33131

For the Department: Albert T. Gimbel, Esquire

Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350 PRELIMINARY STATEMENT

In January 1991, the Department of Banking and Finance (Department) received an application to acquire control of Grovegate Bank of Miami by Interbank Holding Corporation. That corporation is controlled by six foreign nationals.

On March 12, 1991, the Department referred the matter to the Division of Administrative Hearings by letter from counsel for the Department. Accompanying the letter was a copy of the

administrative notice of public hearing issued by the Department on March 12, 1991, and a copy of the public portion of the application.

The matter was directed to the undersigned to conduct a public hearing pursuant to Section 120.60(5)(d), Florida Statutes. Such hearing was held on April 18, 1991, in Miami, Florida, but no member of the public appeared `or otherwise indicated any desire to present evidence, or otherwise comment on, the pending application.

The applicant presented the testimony of Jorge Ortega Trujillo, Jaime Ortega Trujillo, Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Leonidas Ortega Trujillo, Luis Alberto Ortega Trujillo, Rafael Guerrero, Frederick

Brenner, and Oscar Bustillo, and its Exhibit 1 was received into evidence. The Department did not call any witnesses, but its Exhibits 1 and 2, the public and confidential portions of the application, respectively, were received into evidence.

The transcript of hearing was filed April 29, 1991. As reflected by such transcript, all parties were afforded the opportunity to file a proposed report, but "waived such opportunity.

FINDINGS OF FACT

1. On January 18, 1991, the Department of Banking and Finance (Department) received an application to acquire control of Grovegate Bank of Miami by Interbank Holding Corporation, a Florida corporation, whose principals are, for purposes of these proceedings, Jorge Ortega Trujillo, Jaime Ortega Trujillo, Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Leonidas Ortega Trujillo, and Luis Alberto Ortega Trujillo, each of whom is a citizen of Ecuador.

   
   

2. By notice published February 1, 1991, and correction published February 8, 1991, in the Florida Administrative Weekly, the Department complied with the provisions of Section 120.60)(5)(a), Florida Statutes, by giving notice of the filing of the subject application and according any person the right to request a hearing by filing a petition with the Department within 21 days of publication of the notice. No request for such a hearing was filed with the Department; however, since the subject application involved the acquisition of control of a bank by foreign nationals, the Department did, on March 12, 1991, forward the matter to the Division of Administrative Hearings to conduct a public hearing as mandated by Section 120.60(5)(d), Florida Statutes.

   
   

3. On April 4, 1991, the applicant duly published notice in The Miami Herald, a newspaper of general circulation in Dade County, Florida (the community in which the applicant purposes to engage in business), that a public hearing would be held on the subject application on April 18, 1991. The hearing was held as scheduled, but no member of the public appeared or otherwise indicated any desire to present evidence or to otherwise comment on the pending application.

   
   

   The Public Hearing

   
   

4. Each of the principals in `the proposed acquisition, Jorge Ortega Trujillo, Jaime Ortega Trujillo, Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Leonidas Ortega Trujillo, and Luis Alberto Ortega Trujillo, appeared at the public hearing.

   
   

5. The principals are brothers and members of the Ortega Trujillo family of Guayaquil, Ecuador, and each is an attorney. Through their family holding company, the brothers and their mother, with each holding an equal interest, own Banco Continental, S.A., one of the largest banks in Ecuador.

   
   

6. Banco Continental was founded by the family in 1975, and initially licensed as a savings and loan bank. Approximately two years later, desiring to expand the activities of the bank, the family was successful in securing licensure of Banco Continental as a commercial bank. Initial start-up capital for Banco Continental was derived from family resources, and its current capitalization is a product of retained earnings through years of successful operations.

7. Currently, Banco Continental is ones of the two largest banks in Ecuador when measured in terms of capital or net worth, and sixth in size when measured in terms of assets. Its current assets total approximately 100 million dollars, and its current capital approximately 11 million dollars. The bank maintains its main office in Guayaquil, with 39 branches in nine other cities, and serves the commercial and private needs of the community. Overall, through the family's successful operation of the bank, it has come to enjoy an excellent reputation as a sound and well-managed institution, both locally and within the international banking community.

   
   

8. Leonidas Ortega Trujillo (Leonidas) is presently the chief executive officer of Banco Continental and previously served, until attaining such position last year, as its general manager. Leonidas enjoys an excellent reputation as an ethical and knowledgeable banker, and has, through the operation of his own bank, as well as his past service as president of the Ecuadorian Association of Banks and the Federation of Latin American Banks, been active in national and regional banking affairs.

   
   

9. Luis Alberto Ortega Trujillo (Luis) is presently the manager/director of Banco Continental's overseas operations, and will assume a position as one of the directors of Grovegate Bank of Miami if the subject application is approved. Luis has demonstrated, through his education and experience, that he is a responsible businessman, who can be reasonably expected to provide a positive influence on Grovegate Bank's operations. But for the addition of Luis as a director of Grovegate Bank, no immediate changes in the management of that bank are contemplated.

   
   

10. In addition to their legal, business, and banking activities, the Ortega Trujillo family has, for generations, been active in their community. In this regard, the proof demonstrates that their father founded the Catholic University of Guayaquil, that Gustavo Ortega Trujillo is currently a director of the University of Guayaquil Law School, that Luis is currently the vice- president of the Red Cross of Guayaquil, and that through their family foundation the Ortega Trujillo family supports five public libraries, four public schools, and one night technological school for the less privileged residents of Guayaquil.

    
    

11. In all, the proof demonstrates that all of the applicants enjoy a reputation, among those who know of them, as being impeccably honest, and to possess the requisite experience and financial responsibility to control and manage the affairs of Grovegate Bank in a legal and proper manner. The proof further demonstrates that the interests of other stockholders, as well as the interests of the depositors and creditors of the bank and the interests of the public generally will not be jeopardized by the proposed change in ownership, controlling interest, or management.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 7th day of May 1991.

WILLIAM J. KENDRICK

Hearing Officer

Division of Administrative Hearings The DeSoto

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of May 1991.

COPIES FURNISHED:

Albert T. Gimbel, Esquire Chief Banking Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Rene V. Murai, Esquire 900 Ingraham Building

25 S.E. 2nd Avenue Miami, Florida 33131

The Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350

William C. Reeves, Esquire General Counsel

Office of the Comptroller The Capitol

Plaza Level, Room 1302 Tallahassee, Florida 32399-0350

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AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

DIVISION OF BANKING

IN RE:

Application for Acquisition of Control of GROVEGATE

BANK, Miami, Florida, DOAH Case No.: 91-1587 by INTERBANK HOLDING CORP., Administrative Proceeding Miami, Florida, Number:

Applicant.

/

FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER

After having considered the facts and information contained in the application to acquire Grovegate Bank, Miami, Florida, by Interbank Holding Corp., the Report of Public Hearing issued by Hearing Officer William J. Kendrick, dated May 7, 1991, and the record of those proceedings with exhibits, the Comptroller of the State of Florida as head of the Department of Banking and Finance, (hereinafter "Department"), hereby renders this Final Order.

FINDINGS OF FACT

1. The findings of fact set forth in the Report of Public Hearing, dated May 7, 1991, issued by Hearing Officer William J. Kendrick, are attached as exhibit "A" and incorporated herein by reference.

   
   

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

   
   

   1. Interbank Holding Corp. is a proposed bank holding company which is wholly-owned by Interban Holding Company Limited, which in turn is 100% owned by Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Jaime Ortega Trujillo, Jorge Ortega Trujillo, Leonidas Ortega Trujillo and Luis Alberto Trujillo. Each of these individuals currently reside in Guayaquil, Ecuador.

      
      

   2. The Department's Investigative Unit conducted complete background investigations on these individuals.

      
      

   3. Applicant currently has no immediate plans to replace management or the Board of Directors of Grovegate Bank, except that Dr. Luis Ortega will be added to the Board. Should the decision be made to name additional Board members, Applicant has indicated its understanding that prior regulatory approval must be obtained.

      
      

   4. In an effort to increase the capitalization of the bank, Applicant acquired 23,000 authorized but unissued bank shares in December, 1990.

   5. Applicant proposes to acquire 32,750 shares owned by existing shareholders for a total purchase price of $163,750. In addition, Applicant proposes to acquire shares of authorized but unissued stock sufficient to assure an increase in capital of $2,000,000. It is the present intention of Applicant to give existing shareholders the opportunity to proportionately purchase this additional stock also.

      
      

      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.

   
   

   FINAL ORDER

   
   

5. 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 evidence be submitted to the Department verifying the increase in the Bank's common stock by a minimum of $2,000,000;

      
      

   2. That notice be provided to the Division of Banking when transfer of the shares has been accomplished;

      
      

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

      
      

   4. That the Federal Reserve Bank of Atlanta approves the formation of the holding company and change of control;

      
      

   5. 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 prior to expiration, a request for an extension of time has been requested by the applicant and granted by the Department; and

   6. 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.

   
   

6. 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 such representations and commitments, and the Division of Banking must be advised of the steps being taken to comply with the conditions imposed in this Order.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 10 day of

May , 1991.

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

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one (1) copy of a Notice of Appeal first with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate district where the party resides. The Notice of Appeal must be filed within thirty (30) days of rendition of the order to be reviewed.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Findings of Fact, Conclusions of Law, Final Order and Notice of Rights has been docketed with the Clerk of the Department and served by U. S. Mail, to Gerri Raines Dolan, Deloitte & Touche, 100 Southeast Second Street, #2500, Miami, Florida 33131, this 10 day of May , 1991.

Albert T. Gimbel Chief Banking Counsel Office of Comptroller

The Capitol, Suite 1302 Tallahassee, Florida 32399-0350

(904) 488-9896

cc: Gerri Raines Dolan, Manager Deloitte & Touche

100 Southeast Second Street, #2500 Miami, Florida 33131

Board of Directors, Grovegate Bank

Federal Reserve Bank of Atlanta, Atlanta, Georgia

Bureau of Financial Institutions - District II Bureau of Research, Planning & Staff Development Clerk, Legal Division

Docket for Case No: 91-001587

Orders for Case No: 91-001587