The Issue The issue in this case is whether Petitioner, Wesley T. Small's, appointment as executive vice-president and chief operating officer for Petitioner, First Commercial Bank of Tampa Bay, should be approved by Respondent; and, more specifically, whether Respondent properly issued the Notice of Disapproval concerning that appointment.
Findings Of Fact Petitioner, Wesley T. Small, has approximately 40 years in the banking industry, including experience in director and executive officer positions. He has never been charged with any regulatory violations or mismanagement concerning his professional activities. Small has applied to become the executive vice-president and COO of the Bank. Petitioner, First Commercial Bank of Tampa Bay, is a Florida state-chartered bank subject to the Florida Financial Institutions Code, Subsection 655.005(1)(j), Florida Statutes. Respondent is the state agency responsible for, inter alia, approval of appointment or employment by a banking institution of an individual as executive officer or equivalent position. Respondent is responsible for providing general regulatory oversight through the Florida Financial Institutions Code, which applies to all state-authorized or state-chartered financial institutions and to enforce all related laws. On November 21, 2007 the Bank, in accordance with Section 655.0385, Florida Statutes, notified Respondent of its intent to appoint Small as its executive vice-president and COO. Respondent requested of Small an authorization for release of confidential information so that it might commence the obligatory investigation. Small immediately complied with the request. The Bank submitted supplemental information concerning its intent to appoint Small on at least two occasions, December 3 and 7, 2007. On the latter date, the Bank also requested that Small be appointed on an interim basis for the COO position pending completion of Respondent's investigation. By telephone call on December 14, 2007, Respondent notified the Bank that the request for interim appointment was being denied. During that telephone call, Alcorn told Petitioners' correspondent, Igler, that his superiors at the Office of Financial Regulation were also disinclined to approve Small's permanent appointment as well. (The reasons for the disapproval will be discussed more fully below.) When talking to Igler, Alcorn was relying upon a draft letter (from another person in his office) which stated Respondent's intent to deny the application filed by the Bank and Small. Alcorn told Igler that once Small's issues with the IRS were resolved and Small had repaid his debt, Respondent would consider an application for Small. However, as of the date of the telephone conversation, Small was not approvable, and Alcorn is certain he made that fact clear to Igler. During the telephone conversation, Alcorn used the following language: "My superiors [or, possibly, 'higher-ups' in the office] are not inclined to approve Mr. Small's application." At that time, Linda Charity had not issued or caused to be issued a final statement as to Respondent's position regarding Small, but the intent of the office had been firmly established, i.e., that Small was not approvable until his debt to the IRS had been paid in full, and Small had taken appropriate steps to indicate rehabilitation. Alcorn was in a position to be very aware of Respondent's intentions. It appears the Bank then commenced a search for a new COO, starting, according to its then-serving CEO, in "late December, 2007, after receiving preliminary information from counsel that the OFR had indicated it may not approve Small." The Bank, by letter dated January 14, 2008, then submitted additional information concerning the proposed appointment of Small. None of the information submitted in the January 14 letter was new information. Respondent was already aware of the facts set forth in that letter, so it was not considered to change Respondent's position. Respondent did not respond to the January 14 letter because (1) the Bank's counsel was already aware of the impending disapproval, and (2) the letter did not address any new information which needed to be discussed. Small has been in the banking business since graduating from high school in 1961. He started out as a teller and worked his way up to branch manager, then supervisor, then vice-president, executive vice-president, and, finally, president and chief executive officer in 1984. Small's experience has been in Florida since 1979, where he has worked for a number of banks, including: Madison Bank in Palm Harbor, First Federal Savings Bank of Citrus County, and First Federal Savings and Loan Association of Lake Wales. Small was employed as the president of Peoples State Bank, Lake City, Florida, from November 1999 through August 2005. Small resigned his position with Peoples State Bank effective August 9, 2005. Small resigned because of the following issue (which is the primary reason for Respondent's refusal to approve Small's application to become executive vice- president and COO of the Bank). As stated in paragraph 12 of the Notice of Disapproval: Small filed or authorized to be filed on his behalf federal tax returns with the Internal Revenue Service (IRS) for tax years 1999, 2000, 2001, 2002, 2003 and 2004 which reported zero income and zero taxes due. Peoples State Bank apparently felt that Small's continued service at the financial institution would be viewed negatively by the local community, a fairly small city in North Florida. The reason Small failed to claim taxable income for those tax years is both simple and complicated. The simple reason is that Small heeded the advice of a seemingly legitimate organization that a loophole existed in federal law that, if relied upon, would not require a person to pay federal income tax. The loophole was essentially this: That by claiming to be an "American" citizen on your tax return (as opposed to a United States citizen), your income was not taxable. The organization called Administrative Educational Services for American Citizens Regarding the Federal Income Tax (the "Tax Advisors"), operated out of Las Vegas, Nevada. Small was made aware of this group by members of his church and agreed to attend seminars to listen to their tax advice. Once Small accepted the advice of the Tax Advisors, he ceased paying taxes to the IRS for a period of six consecutive years (1999-2004).2 Small believed at that time that the nonpayment of taxes was legitimate and legal. He did not consider any negative ramifications to government revenue collection or the on-going ability of the government to function if he, and others, did not pay taxes. At some point after or around the time of his resignation from Peoples State Bank, Small contacted the IRS to admit his error and negotiate a resolution. The IRS filed tax liens against Small totaling approximately $110,000 (although it is unclear from the record what the exact amount was or how much of that amount was unpaid taxes and how much constituted fines or penalties). The IRS seized $27,132.02 from Small's deposit accounts in October 2005 as partial payment for some of the back taxes. In March 2006, the IRS seized $48,040.04 from the proceeds of the sale of Small's house. In September 2007, Small entered into an installment payment agreement with the IRS, agreeing to make payments of $1,361 per month to the IRS. Small has made each of the payments when it became due and owing.3 The balance owed to the IRS as of September 2008 (the latest Monthly Statement introduced into evidence) appears to be approximately $83,000, i.e., $18,592.84 from the 2003 tax year; $40,185.73 for the 2004 tax year; $2,753.60 from the 2001 tax year; and $22,495.47 for "liabilities not shown." Small has continued to reduce that debt each month by paying $1,361 to the IRS. Small's failure to pay income taxes and his outstanding debt to the IRS create issues of integrity, credibility, and character for Respondent. Additionally, there has been, in Respondent's estimation, insufficient time for or evidence of rehabilitation. For example, Respondent wonders how Small would be able to review the tax return information of an applicant for a loan at the Bank in light of his cavalier attitude about his own tax returns for six consecutive years. And, Respondent worries that Small's admittedly "bone-headed" mistake in not paying taxes may be indicative of his judgment in business decisions for the Bank. Respondent is also concerned about Small's failure to list one of his places of employment, Apex Lending, Inc. (hereinafter "Apex"), on the resume he submitted to Respondent. Small was indeed employed by Apex from September 2005 until September 2006 in a mortgage broker position and as a branch manager of an Apex branch office. However, the resume Small submitted with his application to become COO at the Bank did not include the Apex employment. Small said that the omission was because Apex was not a "banking" job, and he had never produced a mortgage or made any money at Apex as of the date of his application. At some point Small did close two loans for Apex for which he was paid a commission and compensation (a percentage of the origination fees). While it is clear Small did not include Apex in his application resume, there is no evidence of intent to hide the position or to mislead Respondent. Rather, the brevity of the employment and its non-banking nature made the position irrelevant in Small's mind.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Office of Financial Regulation, finding that the Notice of Disapproval was properly entered and should be upheld. Whether Respondent wishes to allow Petitioners, Wesley T. Small and First Commercial Bank of Tampa Bay, to retroactively withdraw its Interagency Notice of Change in Director or Senior Executive Officer is within the sole discretion of Respondent. DONE AND ENTERED this 20th day of March, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 2009.
The Issue The ultimate issue to be determined in this matter is whether the application filed by Boulevard Bank to establish a branch at Islamorada, Florida, should be approved or denied. The Applicant contends that all of the requirements set out at Section 658.26, Florida Statutes, and Rule 3C-13, Florida Administrative Code, have been met, and that the application should be approved. The Protestant contends that the Applicant has failed to demonstrate that the public convenience and necessity would be served by the proposed branch.
Findings Of Fact The Applicant, Boulevard Bank, is a full-service, commercial banking institution licensed by the Florida Department of Banking and Finance. Its principal offices are located in Key West, Monroe County, Florida. Boulevard Bank has filed an application with the Department of Banking and Finance to establish a branch banking facility at Islamorada, Monroe County, Florida. Boulevard Bank has acquired property for the facility. The property is located on "Old State Road" and is bounded on the north by Matecumbie Street and on the south by Jerome Street. Boulevard Bank has obtained zoning variances that would allow it to construct a branch banking facility on the property. The primary service area of the proposed branch banking facility would be from Mile Marker 87, northeast of the proposed facility, to Channel 5, southwest of the facility. This area is approximately 15 miles long. In keeping with the geography of the Florida Keys, the service area is quite narrow, approximately 0.3 miles at the widest. The service area is characterized by mixed residential and commercial uses. There are approximately 3,000 full-time residents within the service area. There are many people who live in the area on a part-time basis. During the winter months, the population increases dramatically. There are more than 90 stable businesses located within the service area. There are currently two banking institutions located within the service area of the proposed Boulevard Bank branch. The main office of The Islamorada Bank and a branch of the First Federal Savings and Loan Association of the Florida Keys are located within close proximity to the location of the proposed branch. The Islamorada Bank is the only full-service, commercial banking institution in the service area. The public convenience and necessity would be served by the opening of an additional full-service banking facility within the service area in that the public would be the beneficiary of the favorable impacts of competition. The Applicant proposes to provide a full range of banking services at the proposed branch. Applicant proposes to stay open at hours and on days that The Islamorada Bank remains closed. Competition can have a favorable impact upon interest that is paid to the bank's depositors and interest rates that are charged by the bank on loans. There is no evidence from which it could be concluded that the opening of the proposed branch would in any way damage the fiscal integrity of banking facilities already located within the service area. While the public convenience and necessity would be served by the increased number of facilities and by competition, it does not appear that there has been a dramatic increase in the need for banking services within the service area in recent years. The main office of The Islamorada Bank has not experienced an increase in deposits since 1979. It does not appear that existing banking facilities within the service area are providing inadequate service to residential and business customers. The Applicant is proposing to invest $470,000 in fixed assets, including the cost of land, building, and furniture and equipment to support the proposed branch. The building, which has not yet been constructed, would have dimensions of approximately 30 by 50 feet. The facility would include drive-in banking windows and an automatic teller machine. The Applicant has sufficient capital accounts to support the proposed branch. The Applicant's percentage of capital to total assets exceeds 7.5 percent. The ratio was 7.8 percent on December 31, 1981, and 8.6 percent on June 30, 1982. The operation of the proposed branch would pose no threat to depositors, creditors, or shareholders of the Applicant. Even if the branch operated without a single depositor, the losses to Applicant would not be such as to pose a risk to the integrity of the Applicant, nor to substantially reduce the stockholders' dividends. It is extremely unlikely that the branch would operate without any depositors, and it appears that there is a favorable prospect that the branch would be profitable. The Applicant has sufficient earnings and prospects for earnings to support the expenses of the proposed branch. The Applicant's net profits to assets ratio exceeded 0.5 percent during the past calendar year. For 1981, the Applicant's net profit to total assets ratio was 2.5 percent prior to the payment of federal income taxes, and 1.5 percent after taxes were paid. The Applicant's loans to deposits ratio was 63 percent on December 31, 1981. The Applicant appears to have sufficient management depth to operate the proposed branch without affecting its present services. Applicant proposes to assign Rudy D. Aud as chief operations officer. Mr. Aud is a vice president of the Applicant. He assisted in the establishment of the Applicant's Big Pine Key branch and has operated that facility. The name of the proposed branch would be "Islamorada Branch of Boulevard Bank, Islamorada, Florida." The name would reasonably identify the facility as a branch of the Applicant. The proposed name would not confuse the public either as to the nature of the facility or in relation to other banking facilities. The files of the Department of Banking and Finance, including the Department's confidential file, establish that the Applicant has operated in substantial compliance with applicable laws governing its operations. ENTERED this 17th day of December, 1982, in Tallahassee, Florida. G. STEVEN PFEIFFER Assistant Director Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1982. COPIES FURNISHED: Robert T. Feldman, Esquire 417 Eaton Street Key West, Florida 33040 Gustave W. Larson, Esquire 9999 Northeast Second Avenue Suite 307, Shoreview Bldg. Miami Shores, Florida 33138 Elsa Lopez Whitehurst, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING IN RE: BOULEVARD BANK--Application for authority to establish a branch CASE NO. 82-2623 at Mile Marker 81.4, U.S. Highway 1, Islamorada, Monroe County, Florida. / FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER Pursuant to notice, a formal administrative hearing was conducted in this matter on November 5, 1982, before G. Steven Pfeiffer, with the Division of Administrative Hearings, in Islamorada, Monroe County, Florida. The purpose of the hearing was to receive evidence concerning the application of Boulevard Bank for authority to open a branch at mile marker 81.4, U.S. Highway 1, Islamorada, Florida. At the hearing, the following appearances were entered: Robert T. Felman, Key West, appeared on behalf of the Applicant, Boulevard Bank; Gustave Larson, Miami Shores, Florida, appeared on behalf of the Protestant, the Islamorada Bank; Elsa Lopez Whitehurst, Tallahassee, Florida, appeared on behalf of the Florida Department of Banking and Finance. No exceptions were filed in this case. Having fully considered the facts and information contained in the record relating to the application of Boulevard Bank for authority to open a branch office at mile marker 81.4, U.S. Highway 1, Islamorada, Monroe County, Florida, The Comptroller of the State of Florida, as Head of the Department of Banking and Finance, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER in the above-styled cause.
Findings Of Fact Respondent Larry Nathan Booker is presently employed as an office manager for an insurance agent in Jay, Florida. At all times pertinent to this proceeding, he has been licensed by Petitioner as an Ordinary Life including Health agent (Testimony of Respondent, Stipulation). On June 21, 1985, in Case No. 85-00077 in The United States District Court for the Southern District of Alabama, Respondent pleaded guilty and was found guilty to a violation of 18 United States Code, Section 656, as charged in Count One of the information. Count One of the information contained the following allegations: At all times material to this information Larry N. Booker, served in the capacity of manager of the Flomaton Branch, United Bank of Atmore, Flomaton, Alabama. At all times material to this information, the deposits of the United Bank of Atmore were insured by the Federal Deposit Insurance Corporation - charter number 0058-2 dated December 23, 1969. At all times material to this information, Larry N. Booker had open a personal checking account number 02111607 with the United Bank of Atmore. At all times material to this information, Ronald E. Watkins was doing Business as Watkins Cars-Trucks, 726 Highway 90-West, Milton, Florida and Ronald E. Watkins had open a checking account with the United Bank of Atmore. On or about the 17th day of December, 1982, Larry N. Booker, the then manager of the Flomaton Branch, United Bank of Atmore, with the intent to injure and defraud the United Bank of Atmore did knowingly and willfully misapply $2,333.33 of the funds of the United Bank of Atmore. Larry N. Booker did knowingly and wilfully misapply the $2,333.33 by crediting his personal account with a debit from the account of Watkins Cars-Trucks, at the time of debit the Watkins Cars-Trucks account was in an overdrawn status and Larry N. Booker knew that the Watkins Cars-Trucks account was in an overdrawn status; all in violation of 18 United States Code, Section 656. Respondent was placed on probation for a period of five years, and required to make restitution in the amount of $2,333.33, and to pay a personal note that he had with the United Bank of Atmore. (Petitioner's Composite Exhibit 1) In explanation of his conviction, Respondent testified that in order to assist Ronald E. Watkins in keeping his rental business property from being sold by his landlord, Respondent purchased the property in his name with four investors to hold the mortgage to the property. The arrangement was for Watkins to pay Respondent rent on the property and Respondent would subsequently make payment of the rental amount to the investors under a lease-purchase agreement at a monthly payment of $2,333.33. The payment was made on an automatic debit from Watkins' bank account to Respondent's bank account. Respondent further testified that the overdraft occurred due to the fact that Watkins came into the bank between 1:30 and 2:00 p.m., paid off some of his floor plan loans to tellers, and then went directly to Respondent's assistant to work up new additional floor plan loans to offset the checks that he had just given. However, by the time the loans were prepared and signed, it was after 2:00 p.m., which was the cut-off time for bookkeeping transactions. Therefore, the overdraft in question occurred even though it was automatically covered the next day. Respondent testified that such overdrafts are a common occurrence in the banking system and that, at no time did he have an intent to defraud the bank, nor did it lose any money as a result of the overdraft. (Testimony of Respondent)
Findings Of Fact This case involves the consideration of the Respondent's attempt to assess documentary stamp tax, penalty and interest on the document which the Petitioner recorded; said document being entitled Mortgage Consolidation, Modification and Extension Agreement. This document is recorded in Book 6855 and page 73, Broward County, Florida, Official Records. The date of recordation was December 30, 1976. By joint stipulation, a copy of the document in question has been admitted as joint Exhibit No. 1 by the parties. The Notice of Proposed Assessment setting forth the amount claimed is found as an attachment to the petition. The date of the assessment is May 18, 1977. The only change in the claim by the Respondent, is the concession by the Respondent that the 100 percent penalty no longer applies and that a 25 percent penalty is now in effect. This change may be found in the letter of the Respondent's attorney dated December 12, 1977, which is admitted and made a part of the record herein and attached hereto. As demonstrated, there is no factual dispute between the parties on the issue of what document or item is being claimed as taxable. The dispute arises over the question of taxability. The respondent claims that the document is taxable under the authority of Section 201.08, F.S. and Rule 12A-4.53, F.A.C. The latter provision is an adaptation of the authority set forth in State, Department of Revenue v. McCoy Motel, Inc., 304 So.2d 440, (1 DCA, Fla 1974). The Respondent's assertion of taxability under the theory in McCoy supra is correct. The correctness of the Respondent's interpretation may be understood by contrasting the facts in the McCoy case with those in the case of sub judice. In the McCoy case, McCoy Motel, Inc., in a promissory note which is referred to as the "first note," promised to pay the sum of $1,850,000 to Keyes-Penn Mortgage Company together with interest. McCoy then paid documentary stamp tax on the full amount of the note. Keyes-Penn Mortgage Company subsequently assigned an undivided 67.57 percent interest in that note to the Monumental Life Insurance company and made a further assignment of 32.43 percent of the interest to the Volunteer State Life Insurance Company. On a later date, McCoy gave a note, referred to as the "second note," to Alison Mortgage Investment Trust in which it promised to pay $3,500,000 together with interest. Alison in return agreed to pay Monumental Life Insurance company, as payee of the "first note," payments on the "first note" when they became due. This agreement to pay Monumental Life Insurance Company was premised upon the expectation that McCoy not be in default under the terms of the first or second note, or the corresponding mortgages which were in support of those notes. In this situation, the first and second notes were secured by mortgages on the same property. The mortgage note between McCoy and Alison Mortgage Investment Trust was what is commonly known as a "wraparound" mortgage. That is to say, the "second note" represented the total indebtedness of the "first note" and an additional sum. McCoy paid documentary stamp tax on $1,650,000 of the second note which represented the total sum of the loan less the amount that had been loaned on the "first note." The State of Florida disagreed with this approach and contended that the full amount of the "second note" should be subject to documentary stamp taxes. The Trial Court rejected the State's position and held that the amount of $1,850,000 was part of a contractual agreement between McCoy and Alison Mortgage Investment Trust in which certain monies were to be paid through Alison to the holder of the first mortgage and that McCoy was not under obligation to pay money within the meaning of Chapter 2011, F.S., and not subject to tax for the amount of the "first note." The Appellate Court rejected this contention and concluded that the full amount of $3,500,000 plus interest was a loan made to McCoy Motel, Inc., with the understanding that McCoy was obligated to pay back that amount to Alison Mortgage Investment Trust. Therefore, an excise tax was due on the full amount. This conclusion by the Appellate Court was reached on the basis of an examination of the terms and conditions of the second note which set forth the amount of payment, the amount of interest, and the steps to be taken in the event of default on the payments by McCoy. The Appellate Court held that this obligation to pay the $3,500,000 plus interest was not an executory, contingent or conditional agreement between the parties. Further, the Court held that the documentary stamp tax would be due regardless of whether a part or all of the obligation of a renewal note was subjected to the conditions of Chapter 201., F.S., under an original note. The exception to that ruling, the Court stated, would be if it was a renewal within the meaning of Section 201.09, F.S., which would exempt it from taxation. The McCoy "second note" was not found to be one of the exempt categories. It was not found to be exempt because it was felt that it was not a reiteration of the original note, but was an enlargement of the original contract and obligation, thereby precluding any exemption. The underlying theory of the Court in its holding in McCoy, supra, is grounded on the Court's opinion that the liability to pay documentary stamp tax and the amount of the tax to be paid shall be determined by the form and face of the instrument and not by proof of extrinsic facts. In the present case, Lake Taft Village, Inc. was obligated to pay two first mortgages on separate parcels of land. The initial first mortgage holder was Southport American National Bank, to whom Lake Taft Village, Inc. owed $150,000 under the terms of the note and mortgage. The second parcel was mortgaged to a group known as "Curcie Brothers." This group was owed $450,000 under the terms and conditions of the note and mortgage. Lake Taft Village, Inc. decided to sell the property covered by the two first mortgages. The purchaser of that property was the Petitioner, The Lakes of Pembroke Pines, Inc. At the closing, The Lakes of Pembroke Pines, Inc. paid $970,000 by making a $60,000 down payment and assuming the two mortgages in the amount of $150,000 and $450,000. In addition, Lake Taft Village, Inc. took back a second mortgage for $310,000 from The Lakes of Pembroke Pines, Inc. This second mortgage was a purchase money mortgage and was subordinate on the entire property, encumbered by the two first mortgages. However, before this second mortgage was recorded, the seller and Petitioner entered into an agreement whose terms and conditions are found in the Joint Exhibit No. 1, which is the subject of the dispute. As stated before, this document is entitled Mortgage Consolidation, Modification and Extension Agreement. The document is in fact a "wraparound" mortgage. The reason that it is considered to be a "wraparound" mortgage may be found in the examination of the document itself. The document consolidates the preexisting first mortgages, in which Southport American National Bank and "Curcie Brothers" are the mortgagees, with the second mortgage held by Lake Taft Village, Inc. Moreover, it establishes an interest rate for the payment from the Petitioner to Lake Taft Village, Inc., in addition to the schedule of payments of interest and principle. It also establishes the method by which parcels of property which are encumbered by one of the two first mortgages may be released by the holder of the "wraparound" mortgage. The holder of that mortgage initially was Lake Taft Village, Inc. This provision pertains to the amount of the $150,000 mortgage held by Southport American National Bank. The terms of the document call for the Lake Taft Village, Inc. to pay the first mortgage holder "Curcie Brothers" in lieu of payments by the Petitioner who has assumed that mortgage. Other terms of the document pertain to prepayment of the first mortgages by Lake Taft Village, Inc.; matters to be considered in the event of defaults on the terms of the "wraparound" and numerous other clauses agreed to by the parties in the mortgage consolidation. One further significant item within the document, pertains to the satisfaction agreement between the Petitioner and Lake Taft Village, Inc., in which Lake Taft Village, Inc. is allowed to pay off the first mortgages and be entitled to the assignment of those first mortgages instead of a satisfaction. The terms in the the document clearly indicate that Lake Taft Village, Inc. and the Petitioner are agreeing to modify the conditions under which the Petitioner assumed the two first mortgages at the closing with Lake Taft Village, Inc. It also indicates that there is a consolidation of the responsibilities which the Petitioner has under the assumption of two first mortgages, into an integrated arrangement to pay those mortgages and the amount of $310,000 which constitutes the amount of money owed under the second mortgage held by Lake Taft Village, Inc. The terms of the "wraparound" mortgage being separate and apart from the terms of the assumption of the two first mortgages, and the conditions set forth in the second mortgage to Lake Taft Village, Inc.; it is the Petitioner's responsibility to pay documentary stamp tax on these written obligations, in accordance with Section 201.08, F.S. The exception being if the "wraparound" mortgage constitutes a renewal of the existing promissory note within the meaning of Section 201.09, F.S. It does not constitute a renewal for the existing promissory note, because it is an enlargement of the terms and conditions of the assumption of first mortgages and notes, by changing their terms and consolidating them with the second mortgage held by Lake Taft Village, Inc. Therefore, a comparison of the McCoy "wraparound" mortgage and that of the Petitioner shows them to be sufficiently similar in nature to make the authority set forth in McCoy, supra, applicable. Under that statement of authority, the authority of Section 201.08, F.S. and Rule 12A-4.53, F.A.C., the Petitioner owes documentary stamp tax, penalty and interest. The amount of documentary stamp tax is $1,365. The penalty is 25 percent of that amount, in keeping with the concession set forth in the December 12, 1977, letter of the Respondent's attorney and the interpretation of the undersigned, which is to the effect that a 25 percent penalty shall be imposed for all proposed assessments not final on July 1, 1977. This is in keeping with the provisions of Section 201.17, F.S., as amended by Chapter 77-281, Laws of Florida. This penalty is subject to further reduction if a compromise is entered into between the parties. Interest should be charged at 1 percent per month from the beginning date, in keeping with terms and conditions of Section 201.17, F.S.
Recommendation It is recommended that the proposed assessment of May 18, 1977, be upheld, in that the documentary stamp tax in the amount of $1,365 be upheld and that a penalty in the amount of 25 percent or such lesser amount as compromised by the parties be assessed together with interest. Done and Entered this 6th day of January, 1978, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Norman N. Zipkin, Esquire 225 Northeast 35th Street Miami, Florida 33137 Cecil L. Davis, Jr., Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 John D. Moriarty, Esquire Department of Revenue Room 194, Carlton Building Tallahassee, Florida 32304
Findings Of Fact On July 6, 1981, the Applicant submitted to the Department of Banking and Finance (Department) an application pursuant to Section 658.19, Florida Statutes (Supp. 1980), for authority to organize a corporation for the purpose of conducting a general banking business to be located at 1000 Massey Boulevard, unincorporated Palm City, Martin County, Florida. Notice of receipt of the application was published in the Florida Administrative Weekly on December 11, 1981. Protests and requests for hearing were filed by American Bank of Martin County (American), Central Savings and Loan Association (Central), Florida National Bank of Martin County (Florida National), and First National Bank and Trust Company of Stuart (First National) on or before December 30, 1981. On September 27, 1982, Florida National withdrew its protest. Publication of the Notice of Hearing in this cause appeared in The Stuart News on October 1, 1982. A hearing was held in this cause on October 19 through 20, 1982, in Stuart, Martin County, Florida. The pronosed bank will occupy 3,300 square feet of an existing single- story structure located at the west end of the Villa Plaza Shopping Center fronting on Massey Boulevard, also known as Martin Downs Building. The proposed bank will have visibility and access to Massey Boulevard and also to First Street along the rear (south side) of the Villa Plaza Shopping Center, through use of the ingress and egress facilities of the shopping center. (View by Hearing Officer) The site has facilities for three drive-in lanes. The plan of the proposed bank will include a teller line, lobby area, private offices, teller work area, coupon booth area, vault, restrooms and an employee lounge. Adequate parking facilities already exist and there is room for expansion. (T. 48-50; View by Hearing Officer) The facility is adequate to handle the projected business of the bank for a reasonable period of time and is of such a nature to warrant customer confidence in the security, stability and permanence of the bank. The Applicant intends to lease the facilities from R&S Equities, a Florida partnership whose partners are John C. Robinson and Woodrow J. Smoak. The lease terms include a five year term with annual rent of $36,000 payable in monthly installments of $3,000. The lease also provides for renewal options every five years for a maximum of thirty (30) years with specified annual rental payments to be used during each of the five year terms. Applicant anticipates an investment of $174,500 in fixed assets, including $49,500 for leasehold improvements and $125,000 for furniture, fixtures and bank machinery. Temporary quarters for the bank are not anticipated as the existing structure is ready and the planned improvements can be completed quickly. Applicant has no plans to purchase or lease any land, buildings, improvements to be made thereon, or equipment, furniture, or fixtures to be installed therein, from a director, officer or stockholder who owns 5 percent or more of the capital stock of the Applicant or any controlled company of any officer, director or stockholder. The Applicant's primary service area incorporates portions of the City of Stuart, unincorporated Martin County and a portion of unincorporated Martin County known as Palm City. The PSA is a "bedroom community" with shopping, recreational and public school facilities. Included within the PSA are U.S. Census Enumeration Districts 11, 12, 32, 33, 61, 65, 66, 67 and a portion of 10. The PSA's northern, eastern, southern and western boundaries are the St. Lucie County/Martin County Line (along with the St. Lucie River and Frazier Creek), Colorado Avenue (State Road 76), Indian Street, extended to Florida's Turnpike, and Florida's Turnpike respectively, and are located 2.4 road miles, 0.9 miles, 1.8 miles and 2.5 miles respectively from the proposed site. The south fork of the St. Lucie River runs north and south through the eastern protion of the PSA. The Palm City Bridge, a modern fixed span bridge, crosses the river and connects the larger portion of the PSA west of the river with the eastern portion and the City of Stuart. The bridge's western end is approximately 0.2 miles from the Applicant's proposed site. The delineation of the boundaries of the PSA took into consideration the locations of the offices of existing financial institutions, along with the other economic and demographic factors. The ability of PSA residents to reach the proposed site in a convenient and timely manner was likewise a factor considered in delineating the boundaries of the PSA. The northern boundary of the PSA, consisting primarily of the St. Lucie County/Martin County Line, presents a logical and political northern boundary. The eastern boundary, Colorado Avenue, is a major north/south thoroughfare chosen primarily because of its proximity to existing financial institutions. The southern boundary, Indian Street, extended to the Florida Turnpike and the western boundary, the Florida Turnpike, were chosen because they are areas beyond which population concentrations are limited. Also, Florida's Turnpike is a significant man-made barrier. There are no other significant natural or man-made barriers which would restrict the flow of traffic within the PSA. The PSA's major north/south arteries are 18th Avenue, Mapp Road, Palm City Avenue and Colorado Avenue. The PSA's primary east/west arteries are Highway 714, Massey Boulevard, a/k/a Martin Downs Boulevard and Murphy Road. The 1970-1980 population trends for the City of Stuart, Martin County, the State of Florida, and the Applicant's designated PSA were considered. This data was provided by the Applicant and the Department from census data and from data published by the University of Florida's Bureau of Economic and Business Research (BEBR). The PSA population grew from 3,300 in 1970 to 6,350 in 1980 for an average annual increase of 9.2 percent. The City of Stuart grew from 4,820 in 1970 to 9,467 in 1980 for an average annual increase of 9.6 percent. The population of Martin County went from 28,035 in 1970 to 64,014 in 1980 for an average annual increase of 12.8 percent. Over the same ten year period, Florida's population increased an average of 4.4 percent annually from 6,791,418 to 9,746,324. The BEBR projected 1983 Martin County population at 70,600 by its low projection, at 74,600 by its medium projection and at 75,300 by its high projection. For Florida's 1983 population, the BEBR estimated 10,352,200 as its low projection, 10,595,100 as its medium projection and 10,757,200 as its high projection. The average annual 1980-1983 population growth rate projections for Martin County are 3.43 percent, 5.20 percent and 5.88 percent as calculated from the low, medium and high 1983 projections respectively. For Florida, tide average annual 1980-1983 population growth rate projections are 2.07 percent, 2.90 percent and 3.46 percent as calculated for the low, medium and high projections respectively. See "Data Source Packet" of Department's Official File (DSP). One hundred percent of the County's 1970-1980 population growth resulted from immigration, a proportion above the state's 91.97 percent. (DPS) Over the 1970-1979 period, the Martin County population aged somewhat, with the population proportion below age 15 having decreased from 23.8 percent to 18.6 percent; the population proportion within the working age group (15 to 64) increased from 54.9 percent to 56.3 percent; and the population aged 65 years and above increased from 21.3 percent to 25.1 percent. Florida population during the same period decreased from 25.8 percent to 20.4 percent for the group below age 15; increased from 59.6 percent to 61.9 percent in the working age group and increased from 14.6 percent to 17.7 percent for those 65 and over. (DPS) In April, 1980, the Martin County population was older than the Florida population. Martin County's population under age 15 was 16.4 percent; with 59.1 percent in the working age group; and 24.5 percent over age 65. In April, 1980, 19.3 percent of Florida's population was below age 15; 63.4 percent were in the working age group; and 17.3 percent were aged 65 or over. With a higher percentage of people over age 15, there is a relatively higher number of people in Martin County of an age to utilize banking services than exists on the average statewide. The rate of growth in the number of households in Martin County exceeded the rate of growth in the State of Florida during the 1970-1980 period. The BEBR estimated the number of Martin County households in 1980 at 25,863, having reflected at 155.5 percent increase above the 1970 level of 10,122 households. The number of state households increased 63.8 percent during the same period from 2,284,786 to 3,841,356. County and state average household sizes declined 11.8 percent and 12.1 percent, respectively, over the 1970-1980 period with the Martin County average household size having declined from 2.72 to 2.40 persons, and the state average declined from 2.90 to 2.55 persons. Statewide unemployment rates have significantly exceeded those of Martin County for all periods since 1974. During 1975, Florida's 10.7 percent unemployed rate exceeded Martin County's 8.7 percent rate. In 1976, Florida's 9 percent unemployment rate exceeded the 7.7 percent rate in Martin County. Florida's 8.2 percent unemployment rate exceeded the Martin County 6.9 percent rate in 1977. In 1978, Florida's unemployment rate was 6.6 percent which was also well above the 5.5 percent rate in Martin County. In 1979, the margin was even larger with Florida's unemployment rate at 6 percent and Martin County's unemployment rate at 4.8 percent. The margin continued to grow in 1980 with the Florida unemployment rate still at 6 percent but the Martin County unemployment rate having dropped to 4.4 percent. In 1981, Florida and Martin County's unemployment rates were 6.8 percent and 5.6 percent respectively. In 1981, the Florida unemployment rate remained well above the unemployment rate in Martin County. (T. 181) Between 1979 and 1981, average household effective buying income (HEBI) in Martin County grew from $16,339 to $20,119. In 1979, Florida HEBI was $18,613 and in 1981, was $21,301. The increase between 1979 and 1981 was much more significant in Martin County than in the State of Florida overall. HEBI increased 23.1 percent or $3,780 in Martin County while increasing only 14.4 percent or $2,688 in Florida between 1979 and 1981. Net income figures show an even more significant increase in Martin County. Between 1979 and 1981, net income in Martin County increased 73.3 percent from $336,574,000 to $583,448,00. During the same period, net income in Florida increased by only 34.2 percent from $63,889,652,000 to $85,768,756,000. Per capita personal income data (PPI) formulated for the state and county by the United States Department of Commerce, and reprinted by the University of Florida, was in evidence and considered. This data appears in the following table: YEAR 1970 1971 1972 1973 1974 Martin Co. 3861 4258 4773 5246 5363 Florida 3693 4007 4461 4988 5341 YEAR 1975 1976 1977 1978 1979 Martin Co. 5834 6437 7215 8094 9178 Florida 5634 6094 6733 7591 8521 PPI level in Martin County exceeded Florida PPI levels throughout the 1970-1979 period. Between 1975 and 1979, PPI in Martin County increased by $3,344 or 57.3 percent while per capita income in the State of Florida increased by only $2,887 or 51.2 percent. In addition, PPI in Martin County in 1979 exceeded the statewide figure by 7.7 percent. The Applicant submitted data on estimated retail sales in Martin County and Florida for 1975 through 1981. At the time the application was filed, the latest available figures were for 1979. Between 1979 and 1981, estimated retail sales increased 32.3 percent in Martin County while the State of Florida increased by only 28 percent. Five operating commercial bank offices are located in or within one mile of the PSA. Florida National operates a branch office 0.8 miles northeast of the proposed opened 0.2 miles west of the proposed site. The two branches are the only bank offices in the PSA. The following three bank offices are located within one mile of the PSA: Florida National's main office, operating 2.7 miles northeast of the proposed site; First National's main office, operating 2.1 miles northeast of the proposed site; and First National's branch office, operating 1.8 miles northeast of the proposed site. These five bank offices are operated by only two bank institutions, neither of which is a state chartered institution nor has its main office in the PSA. Florida National, the only bank operating in the PSA, withdrew its protest to this application. Seven savings and loan association (association) facilities were cited as operating in or within one mile of the PSA. These seven association facilities include two main offices in operation and five association branch offices. Two offices operate within the PSA: Harbor Federal Savings and Loan Association (formerly First Federal Savings and Loan Association of Ft. Pierce) operates a branch office 0.9 miles northeast of the proposed site. First Federal Savings and Loan Association of Martin County operates a branch office 0.9 miles northeast of the pronosed site.. The following facilities are within one mile of the PSA: Citizens Federal Savings and Loan Association operates a branch office 2.2 miles northeast of the proposed site; Community Federal Savings and Loan Association operates a branch office 2.7 miles northeast of the proposed site; First Federal Savings and Loan Association of Martin County has its home office 2.2 miles northeast of the proposed site; Home Federal Savings and Loan Association has a branch office 2.1 miles northeast of the proposed site; and the recently opened main office of Central Savings and Loan Association is one mile northeast of the proposed site. A period's inflation is most commonly estimated by the period's corresponding change in the consumer price index, which is the only method of record in this proceeding. Each month, changes in the consumer price index from the previous month and for the previous 12 months are published by the United States Department of Labor, Bureau of Labor Statistics. For the year ending September 30, 1981, the rate of inflation was 11.0 percent. For the year ending December 31, 1981, the rate of inflation was 8.9 percent. For the year ending March 31, 1982, the rate of inflation was 6.8 percent. (DSP) Only one bank office (a branch office) was in operation within the PSA in March, 1982. During the year ending March 31, 1982, the Florida National Bank of Martin County branch office within the PSA increased its total deposits from $12,638,000 to $16,307,000 or an increase of 29 percent, a rate more than four times that of the 6.8 percent rate of inflation that existed during the year ending March, 1982. Data is also available for the bank offices operating within one mile of the PSA. The main office of First National increased its total deposits during the period of March, 1981, to March, 1982, from $149,296,000 to $153,845,000 for a yearly increase of 3.0 percent. The branch office of First National close to the PSA increased deposits during the same period from $3,144,000 to $3,587,000 or an increase of 14.1 percent. The Florida National main office had a decrease in deposits from $89,806,000 to $3,587,000 or a loss of 2.0 percent during the year ending March 31, 1982. Total Martin County deposits for the period increased from $402,666,000 to $423,762,000 or a 5.2 percent increase. During the period from March 31, 1981, to March 31, 1982, bank deposits within the State of Florida increased from $41,478,327,000 to $43,933,129,000 or an increase of approximately 5.9 percent. In summation, the rate of growth in deposits within the PSA exceeded the rate of growth in deposits in Martin County and the rate of deposit growth was bore than four times greater than the rate of inflation for the same period. For the period between September 30, 1980, and September 30, 1981, the savings and loan association offices operating in the PSA showed increases in the volume of savings accounts as follows: Harbor Federal increased from $12,287,000 to $14,997,000 or a yearly increase of 22.1 percent; First Federal of Martin County (opened in March, 1980) increased from $2,194,000 to $6,033,000 or a total increase of 175.0 percent in one year. Thus, the increase in the two savings and loan offices in the PSA showed a combined one year gain of $6,549,000 or 45.2 percent. In Martin County as a whole, savings increased from September 30, 1980, to September 30, 1981, from $352,735,000 to $381,625,000 or a yearly increase of 8.2 percent. In the State of Florida as a whole, savings during the same period went from $42,560,303,000 to $45,332,969,000 or a yearly increase of only 6.5 percent. In summary, association deposits at offices in the PSA increased at a rate far in excess of those in Martin County as a whole, and in the State of Florida. In addition, the 45.2 percent increase of association deposits in the PSA during the reporting period was more than four times the 11 percent rate of inflation for the year ending September 30, 1981. The Applicant proposes to offer the full range of banking service offered by full-service commercial banks. No deficiencies in the proposed services were established by any Protestant. However, it should also be noted that there are, at present, only two branches of one multi-bank holding company (Florida National) located within the PSA. No other bank is presently represented in the PSA. No bank is headquartered in the PSA, nor is there a facility of a state chartered bank in the PSA. Also, only Florida National Bank and one other banking organization maintain bank offices in or within one mile of the PSA. Consequently, alternative or competitive choices are limited in the PSA and within one mile of its boundaries at the present time. Applicant projected total deposits of $5,000,000, $9,000,000 and $13,000,000 at the end of the proposed banks' first three years of operation respectively. It also projected a $22,381 net operating loss during the proposed bank's first operating year, and pre-tax net operating income levels of $257,715 and $466,208 during the bank's second and third operating years respectively. These deposit and increase projections were formulated under the assumption that the proposed bank would have: $2,750,000 in total time and savings deposits and $2,250,000 in total demand deposits at the end of the first operating year; $5,400,000 in total time and savings deposits and $3,600,000 in total demand deposits at the end of the second operating year; and $8,450,000 in total time and savings deposits and $4,550,000 in total demand deposits at the end of the third operating year. Applicant's projections are conservative, were unrefuted by the Protestants and are likely achievable. The Applicant's testimony and evidence established that there are nine active residential subdivisions in the PSA totaling 6,576 units of which 416 or 6.3 percent were cited as completed. Home prices range from between $65,500 and $580,000. Five areas are planned for single family units accounting for 95 percent of the total units planned. Prices for the single family units range between $75,000 and $580,000, while prices for condominium units range between $65,500 and $87,900. The single family subdivisions are Canoe Creek, Martin Downs, Mid-Rivers, Pipers Landing and Westgate. Utilities are being installed for 70 new lots in the PSA and there are 15 new rental units recently opened and under construction. Extensive testimony was presented about the Martin Downs project located within the PSA. Martin Downs is a 2,400 acre planned residential development which will contain 5,500 residential units. It will also contain two golf courses, racquet club, resort center, retail shopping center, office park, industrial park, government service center, schools, yacht club, parks and a utility plant. Road improvements have already been made in and around Martin Downs. Further, during 1983, major improvements will be made to Martin Downs Boulevard, the major east/west artery through the PSA. These improvements include widening that portion of Martin Downs Boulevard that runs past the proposed site of the Applicant bank. (T. 23-26) Martin Downs will be built in phases with a final population of 12,000 to 13,000 people. (T. 23) The builders of Martin Downs already have approximately $20 million invested in the project. The Crane Creek area of Martin Downs is one of the most exclusive residential sections in the PSA. (View by Hearing Officer) It consists of 346 lots of which approximately 300 are sold and approximately 150 lots are occupied or have homes under construction. The lots sell for $35,000 to $60,000. Homes sell from around $150,000 to $400,000. Crane Creek also contains a championship golf course, clubhouse and racquet club with thirteen tennis courts. (T. 15) Four condominium projects are presently under construction: Country Meadows, Mapletree Villas, The Crossings, and The Townhomes at Poppleton Creek. Prices range between $49,900 and $87,900. These four projects have 306 total units planned of which 60 were completed in October, 1982, and another 72 under construction. Residents living in all of the single family subdivisions cited and at Mapletree Villas and the Crossings must, as a practical matter, pass the Applicant's proposed site on their way to and from the City of Stuart. In addition to the developments cited, there are a large number of existing residences within the PSA. Many of these are located west of the South Fork of the St. Lucie River and these residents must also pass the Applicant's proposed site when going to and from Stuart. (View by Hearing Officer) Commercial activity in the PSA is primarily centered along Massey Boulevard and Mapo Road in close proximity to the subject site. Downtown Stuart lies approximately 2.5 miles northeast of the proposed site. As of May, 1981, 35 businesses were established within one-half mile of the proposed site. In addition, the Monterey Plaza, a large, modern shopping center within one mile of the proposed site, contained 44 businesses in August, 1981. There are 43 businesses within one-half mile of the site. Manufacturing is limited in Martin County. However, the county's largest manufacturer, Grumman Aerospace Corporation, is located at Witham Field, approximately 2.7 miles east of the proposed site. In addition, there are two areas established for industrial development in the PSA itself. One is a planned industrial park to be located in Martin Downs. The other is a ten acre industrial park known as Heritage Square, located at Palm City School Road and State Road 714, approximately 1.7 miles southwest of the proposed site. There are approximately three acres currently developed in the park which opened in 1978. At the time the application was filed, it had 12 tenants, 11 of which are small manufacturing firms. The proposed bank will be capitalized with a total of $1,500,000. The capital will be divided into common capital of $1,000,000, surplus of $300,000, and undivided profits of $200,000. The bank will issue 100,000 shares of stock, with a par value of $10 and a selling price of $15 plus $.50 per share assessed for the Organizational Expense Fund. All 100,000 shares have been subscribed to. The proposed directors have personally subscribed to 30,000 shares as follows: Herbert-Biggs, 5,000 shares; Stephen Frasier, 5,000 shares; Richard Jemison, 5,000 shares; Charles Pope, 5,000 shares; Donald Ricci, 5,000 shares; and Roy Talmo, 5,000 shares. The proposed Board of Directors is composed of six members with diverse business backgrounds, some of whom have had prior banking experience. Herbert Biggs is an 11 year Florida resident living in Jupiter, Florida. Mr. Biggs has a B.S. degree from Mississippi State University and a J.D. from the University of Mississippi. After a short period as a professional basketball player, Mr. Biggs came to Martin County to practice law. He has since left the practice of law to pursue a career as a general contractor and developer. He is currently the president of Suncastle Homes, Inc., a construction and development corporation. Mr. Biggs holds professional licenses as a realtor, general contractor and attorney. Mr. Biggs is a U.S. citizen. Mr. Biggs has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Stephen Frasier is a 12 year resident of Martin County. He holds a B.S. degree from Florida State University and J.D. from the University of Florida. Mr. Frasier served in the Navy as a Flight Officer and is presently a Lieutenant in the Naval Reserve. He served as the Assistant City and County Attorney in Martin County and is presently engaged in the private practice of law in Martin County as a partner in the firm of Frasier and Bateman, P.A. Mr. Frasier is a member of the Civitan Club, the Masonic Temple, the Elks Club, Martin County Bar Association, on the Board of Directors of the Visiting Nurses Association, Florida Bar, on the Board of Directors for the Paradise Ranch for Boys, and is the Chairman of the Board for the Sailfish District of the Boy Scouts of America. (T. 122) Mr. Frasier is a U.S. citizen. (T. 121) Mr. Frasier has a reputation evidencing honesty demonstrating his responsibility in financial affairs. (T. 80, 113; Exs. 1, 5) Richard Jemison has been a Florida resident since 1939, and presently lives in Stuart, Florida. (T. 102; Ex. 1) He has a B.S. degree in Civil Engineering from the University of Florida. (T. 103) Mr. Jemison was in the printing business in St. Petersburg, Florida, for 13 years and is now the president of Seabridge Associates, Inc. (T. 104) He holds licenses as a real estate broker, mortgage broker, and contractor. (T. 103) Mr. Jemison is a member of the Palm City Chamber of Commerce, Stuart Chamber of Commerce and Kiwanis Club. Mr. Jemison has substantial banking experience in that he served on the Board of Directors of the First State Charter Bank in St. Petersburg from 1968 through 1974. (T. 106; Ex. 1) He is a U.S. Citizen. (T. 102) Mr. Jemison has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. (T. 83, 115-116; Exs. 1, 4) Charles Pope has lived in Florida since 1951 and presently lives within the PSA of the proposed bank. He received a B.S. degree from the University of Florida and has completed all of the course work for an M.B.A at the Florida Institute of Technology. Mr. Pope has direct banking experience from his past employment with First National Bank and Trust Company of Stuart, Atlantic Bank Corporation, and First American Bank and Trust Company (formerly First American Bank of Palm Beach) Mr. Pope is the president of Charles Pope & Associates, Inc., an investment banking firm. He holds a mortgage brokers license from the State of Florida, is a Certified Commercial Lender and a Certified Review Appraiser. He is a member of the American Bankers Association, American Institute of Banking and the Chamber of Commerce. Mr. Pope is a citizen of the United States. He has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Donald Ricci has lived in Florida since 1975, and in Martin County for the past five years. After being honorably discharged from the U.S. Air Force, Mr. Ricci was a part owner and general manager of an automobile dealership. Mr. Ricci became interested in the real estate business and worked as the Marketing Director for First Southern Holding Company, the developers of Martin Downs. As Marketing Director, he was in charge of sales and marketing for Martin Downs. Mr. Ricci is a 50 percent partner and manager of Seabridge Associates, Inc., a real estate development firm whose offices are located in the PSA and close to the proposed site of the Applicant bank. Mr. Ricci is a licensed real estate broker and a member of the Palm City Chamber of Commerce and the Stuart/Martin County Chamber of Commerce. Mr. Ricci is a U.S. citizen. He has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Roy W. Talmo has lived in Palm Beach County, Florida, since 1964. He received a B.B.A. and M.B.A from the University of Minnesota. Mr. Talmo has extensive direct banking experience, having been employed as a banker since 1959. Mr. Talmo has been employed by the Continental Bank in Chicago and the First National Bank of St. Petersburg, and is the past Chairman of the Board of Miami National Bank. Mr. Talmo is presently Chairman of the Board of First National Bank and Trust Company in Palm Beach, and has directed its growth from an $11 million bank to its present size of just under $500 million. Mr. Talmo also serves as a Director of First American Bank of Broward County, First City Bank of Dade County, and First State Bank of Broward County. He is a member of the Palm Beach Junior College Foundation, the Palm Beach Festival, and the Tourist Development Committee for Palm Beach County. Mr. Talmo is a U.S. citizen. The Applicant adduced evidence which was not refuted, and which established that Mr. Talmo has a reputation evidencing honesty and integrity and an employment and business history demonstrating his responsibility in financial affairs. As of the date of the final hearing, the Applicant had not selected a President or Chief Executive Officer, nor a Cashier or Operations Officer. The Applicant has selected the name First American Bank of Martin County. There are no Florida financial institutions with a name so similar as to cause confusion with the proposed name. Parenthetically, it should be noted that a cogent discussion and resolution of the issue of "name confusion" is extant in First Bank of Hollywood Beach and Office of the Comptroller vs. American Bank of Hollywood, DOAH Case No. 80-1581, opinion filed May 13, 1981. The Applicant has proven that public convenience and advantage will be served by the approval of the application. The Applicant has proven that local conditions indicate a reasonable promise of successful operation for the new bank. DONE and ENTERED this 4th day of April, 1983, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 1983. COPIES FURNISHED: C. Gary Williams, Esquire Michael J. Glazer, Esquire Post Office Box 391 Tallahassee, Florida 32302 Noel Bobko, Esquire Post Office Drawer 2315 Stuart, Florida 33495 James L. S. Bowdish, Esquire Post Office Drawer 24 Stuart, Florida 33494 Walter W. Wood, Esquire Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32301 The Honorable Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING IN RE: Application of First Administrative Proceeding American Bank of No. 83-5-DOB Martin County DOAH No. 82-034 / FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER Pursuant to Notice, an Administrative Hearing was held before P. Michael Ruff, Hearing Officer, with the Division of Administrative Hearings on October 19 and 20, 1982, in Stuart, Martin County, Florida. The purpose of the hearing was to receive evidence concerning the application of First American Bank of Martin County for authority to open a new bank in Stuart, Martin County, Florida. At the hearing, the parties were represented by counsel: For Applicant, C. Gary Williams, Esquire First American Bank Michael J. Glazer, Esquire of Martin County: Post Office Box 391 Tallahassee, Florida 32302 For Protestant, Noel Bobko, Esquire American Bank of Post Office Drawer 2315 Martin County: Stuart, Florida 33495 For Protestant, James L. S. Bowdish, Esquire First National Bank & Post Office Drawer 24 Trust Co. of Stuart: Stuart, Florida 33494 For the Department of Walter W. Wood, Esquire Banking and Finance: Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 Having fully considered the facts and information contained in the record relating to the application of First American Bank of Martin County for authority to organize a corporation for the purpose of conducting banking business in Stuart, Florida, the Comptroller of the State of Florida, as Head of the Department of Banking and Finance, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER in the above-styled case.
Conclusions The statutory criteria set forth in Chapter 658, Florida Statutes, which were in effect at the time the application was filed, are the standards which govern this application. Chapter 3C-10, Florida Administrative Code, which was in effect at the time the application was filed, contains the rules under which this application was considered. As set forth in Rule 3C-10.051, Florida Administrative Code, when an application for authority to organize and operate a new state bank is filed, it is the applicant's responsibility to prove that the statutory criteria warranting the grant of authority are met. The Department shall conduct an investigation pursuant to Section 658.20, Florida Statutes, which was done in this case, and then approve or deny the application in its discretion. This discretion is neither absolute nor unqualified, but is instead conditioned by a consideration of the criteria listed in Section 658.21, Florida Statutes, wherein it is provided that: The Department shall approve the application if it finds that: Public convenience and advantage will be promoted by the establishment of the proposed state bank or trust company. In determining whether an applicant meets the requirements of this subsection, the department shall consider all materially relevant factors, including: The location and services offered by existing banks, trust companies, trust departments, and trust service offices in the community. The general economic and demographic characteristics of the area. Local conditions indicate reasonable promise of successful operation for the proposed state bank or trust company and those banks, trust companies, trust departments, and trust service offices already established in the primary service area. In determining whether an applicant meets the requirements of this subsection, the department shall consider all materially relevant factors, including: Current economic conditions and the growth potential of the area in which the proposed state bank or trust company intends to locate. The growth rate, size, financial strength, and operating characteristics of banks, trust companies, trust departments, and trust service offices in the service area of the proposed bank. The proposed capital structure is in such amount as the department shall deem adequate, but in no case shall the paid-in capital stock be less than $800,000. In addition to the capital required, every state bank or trust company hereafter organized shall establish: A paid-in surplus equal in amount to not less than 20 percent of its paid-in capital; and A fund to be designated as undivided profits equal in amount to not less than five percent of its paid-in capital. The proposed officers have sufficient banking or trust company experience, ability, and standing, and the proposed directors have sufficient business experience, ability and standing, to indicate reasonable promise of successful operation. The name of the proposed state bank or trust company is not so similar as to cause confusion with the name of an existing financial institution. Provision has been made for suitable quarters at the location in the application. If, in the opinion of the Department, any one of the six foregoing criteria has not been met, and cannot be remedied by the Applicant, it cannot approve the application. An Applicant can, however, take corrective action in most circumstances, to meet the criteria set forth in Sections 658.21(3)(4)(5) or (6), Florida Statutes, if any one of these is found to be lacking. For example, if all other statutory criteria are met, the Applicant may increase capital, or make certain changes in the board of directors, or change the name or alter the provisions for suitable banking house quarters, because these factors are, at least to some degree, within its control. It is the Department's policy to allow applicants to make certain changes to meet these criteria if all other criteria are met; to do otherwise would be to subject applicants to unnecessary red tape. However, it is the Department's position that there is little, if anything, that an applicant can do to alter its ability to meet the criteria set forth in Sections 658.21(1) and (2), Florida Statutes, since the applicants cannot easily change the economic and demographic characteristics of an area. Therefore, if either one or both of these criteria are not met, the Department cannot approve the application. For the purposes of applications for authority to organize and operate a bank, Section 658.12(19), Florida Statutes, defines the primary service area (PSA) as: " . . . the smallest geographical area from which a bank draws, or a proposed bank expects to draw, approximately 75 percent of its deposits; the term also means the smallest geographic area from which a trust company or the trust department of a bank or association draws, or a proposed trust company or a proposed trust department of a bank or association expects to draw, approximately 75 percent of the assets value of its fiduciary accounts." The Applicant's PSA which incorporates portions of the City of Stuart, unincorporated Martin County and a portion of unincorporated Martin County known as Palm City appears to have boundaries delineated around a natural market area. The designated boundaries do not unrealistically exclude competing financial institutions or include areas of concentrated population. The Department concludes that a market exists for the Applicant in the PSA and that the Applicant may reasonably expect approximately 75 percent of its business to arise from the PSA. Consequently, the Department deems that the PSA has been realistically delineated and that the criteria set forth in Section 658.12(19), Florida Statutes, for a realistically delineated PSA has been met. It is the opinion and conclusion of the Department that public convenience and advantage will be promoted by the proposed bank's establishment. Therefore, the criterion in Section 658.21(1), Florida Statutes, is met. As set forth in Rule 3C-10.051(3)(a)(1), Florida Administrative Code, the location and services offered by existing financial institutions in the service area are indicative of the competitive climate of the market. The traffic patterns in the area, as well as the area's general economic and demographic characteristics shall also be considered. Because it is recognized that the establishment of a new bank or trust company anywhere would promote convenience and advantage for at least a few people, substantial convenience and advantage for a significant number of people must be shown; otherwise, a new bank could be justified for every street corner in the state. Clearly such a result was not the legislative intent in regulating entry into the banking industry, nor is it in the public interest. Based upon the facts in the record, the Department has determined that the establishment of the proposed new bank will substantially increase convenience to a significant number of residents and workers of the PSA. The location of the proposed site at a shopping center 0.2 miles from the only bridge from the eastern end of the PSA to the western end makes it convenient to residents, shoppers and commuters. The Department, therefore, concludes that the criteria of public convenience and advantage is met. It is the opinion and conclusion of the Department that local conditions indicate reasonable promise of successful operation for the proposed bank and those already established in the area. Therefore, the criterion in Section 658.21(2) Florida Statutes, is met. As set forth in Section 658.21(2)(a) and (b) , Florida Statutes, and Rule 3C-10.051(3)(b) , Florida Administrative Code, current economic conditions and, to a lesser extent, the growth potential of the area in which the new bank or trust company proposes to locate are important considerations in determining its probable success. Essential to the concept of banking opportunity is that there does and will exist a significant volume of business for which the bank or trust company can realistically compete. The growth rate, size, financial strength, and operating characteristics of financial institutions in the primary service area are also important indicators of economic conditions and potential business. It is noted that the statutory standard requires that: " . . . local conditions indicate reasonable promise of successful operation for the proposed state bank or trust company and those banks . . . already established in the primary service area . . ." Banking involves a public trust. Unlike private enterprise generally, banks operate on the public's capital and therefore, the Legislature has vested in the Comptroller the responsibility of protecting the public interest. Furthermore, the failure of a bank, as opposed to private enterprise generally, may have an unsettling effect on the overall economic welfare of the community, and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard. Public interest is best served by having a banking system whereby competition is encouraged, where appropriate, yet at the same time, ensuring that the financial resources of the residents of the community are stable and safe. That was the obvious intent of the Legislature in regulating entry into the banking industry. The facts in the record show a significant and growing number of residential developments that are not centrally served by any main office, commercial bank, and no state-chartered banks at present. Thus, a significant number of PSA businesses and residents, especially on the western side of the PSA from the St. Lucie River, can be expected to patronize the proposed bank, insuring that there is a reasonable promise of successful operation. The facts in the record show that the rate of growth in deposits within the PSA exceeded the rate of growth in deposits in Martin County and the rate of deposit growth was more than four times greater than the rate of inflation for the same period. Based upon the above, the Department concludes that local conditions do indicate a reasonable promise of successful operation for the proposed bank and for those financial institutions already established in the area. It is the opinion and conclusion of the Department that the proposed capital structure of the proposed new bank is adequate. Therefore, the criteria of Section 658.21(3) Florida Statutes, is met. Capital should be adequate to enable the new bank or trust company to provide necessary services . . ., including loans of sufficient size, to meet the needs of prospective customers. Capital should be sufficient to purchase, build, or lease a suitable permanent facility complete with equipment. Generally, the initial capital for a new nonmember bank should not be less than $1.0 million in non-metropolitan areas and $1.5 million in metropolitan areas. The capital referred to in the Findings of Fact shall be allocated among capital stock, paid-in surplus, and undivided profits in the ratios set forth in Subsection (3) of Section 658.21, Florida Statutes. The proposed capital accounts of $1.5 million are allocated according to the statutory ratios. It is the opinion and conclusion of the Department that the criteria of Section 658.21(4), Florida Statutes, are met. As set forth in Rule 3C-10.051(3)(d), Florida Administrative Code, the organizers, proposed directors, and officers shall have reputations evidencing honesty and integrity. They shall have employment and business histories demonstrating their responsibility In financial affairs. At least one member of a proposed board of directors, other than the chief executive officer, shall have direct banking or trust company experience. In addition, the organizers, proposed directors and officers shall meet the requirements of Section 658.33, Florida Statutes. Officers shall have demonstrated abilities and experience commensurate with the position for which proposed. Members of the initial management group, which includes directors and officers shall require prior approval of the department. Changes of directors or chief executive officer during the first year of operation shall also require prior approval of the department. While it is not necessary that the names of the proposed officers be submitted with an application to organize a new state bank, the chief executive officer and operations officer must be named and approved at least sixty (60) days prior to the bank's opening. The Department concludes that the proposed directors have, as a group, good character, sufficient financial standing and business histories demonstrating ability and experience commensurate with the positions for which they are proposed and at least one proposed director (other than the chief executive officer) has direct banking experience. It should be noted that interlocking directorships involving existing financial institutions competitively near the proposed site of a new institution are discouraged. Such interlocking directorships could possibly restrict competition and create fiduciary problems. The Department concludes that there is no interlock problem in this instance. It is the opinion and conclusion of the Department that the name of the proposed new bank, First American Bank of Martin County, would not cause confusion with the name of a Florida financial institution. Therefore, the criterion of Section 658.21(5), Florida Statutes, is met. It is the opinion and conclusion of the Department that provisions has been made for suitable banking house quarters in the application's specified area. Therefore, the criterion of Section 658.21(6), Florida Statutes, is met. As set forth in Rule 3C-10.051(3)(f), Florida Administrative Code, permission to open in temporary quarters may be granted, for good cause shown. Under the rules of the Department, the permanent structure of a new bank should contain a minimum of 2,500 square feet, unless the Applicant satisfactorily shows that smaller quarters are justified due to the performance of certain auxiliary services off-premises. In addition, it shall meet the Federal Bank Protection Act requirements and be of sufficient size to handle the projected business for a reasonable period of time. The banking house . . . facility shall be of a nature to warrant customer confidence in the institution's security, stability and permanence. Other pertinent factors include availability to adequate parking, adequate drive-in facility if such is contemplated, and possibilities for expansion. Temporary quarters are not contemplated and Applicant's permanent quarters meet the above standards. Rule 3C-10.051(5), Florida Administrative Code, relating to insider transactions requires that: Any financial arrangement or transaction involving, directly or indirectly, the organizers, directors, officers and shareholders owning 5 percent or more of the stock, or their relatives, their associates or interests must he fair and reasonable, fully disclosed, and comparable to similar arrangements which could have been made with unrelated parties. Whenever any transaction between the proposed bank or trust company and an insider involves the purchase of real property, appraisals of land and improvement thereon shall be made by an independent qualified appraiser, and be dated no earlier than 6 months from the filing date of the application. The Department has determined that there is no insider transaction involving the leasing of the proposed bank's office space. Therefore, the criterion in Rule 3C-10.051(5) Florida Administrative Code, is met. RULING ON PROTESTANTS' EXCEPTIONS Section 120.57(1)(b)12, Florida Statutes, provides as follows: " . . . The agency shall allow each party at least 10 days in which to submit written exceptions to the report." The Department's procedural Rule 3C-9.11, Florida Administrative Code, Post-Evidentiary Procedures, follows the wording of the statute and provides that "the Department shall allow each party 10 days from the date of the hearing officer's report in which to submit written exceptions thereto pursuant to Section 120.57(1)(h) 12, Florida Statutes." The Department interprets that the word "submit" means that the Department must receive the exceptions by the 10th day in the same manner as when documents are required to be filed by a date certain. See Sonny's Italian Restaurant v. State of Florida, 414 So.2d 1156 at 1157. In Sonny's Italian Restaurant v. State, the Third District Court of Appeal in a per curiam decision affirmed a final agency order upon a holding that: "Any error resulting from the entry of the Final Order on July 2, 1981, prior to receipt of Appellant's exceptions to the recommended order, is not material in light of the fact that the exceptions, dated July 6, 1981, were not filed within the requisite 10-day period of Section 120.57(1)(b)8, Florida Statutes, when measured from either the date the recommended order was entered (June 19), or the date submitted to the agency and parties (June 23)." The wording in Section 120.57(1)(b)8, Florida Statutes, concerning the time for filing of exceptions is identical to that of Section (1)(b)12 concerning the filing of exceptions for applications for a license or merger pursuant to Title XXXVIII. The Report of the Hearing Officer, C. Michael Ruff, in this case was done and entered on April 4, 1983, with a cover letter dated April 5, 1983, and was received by the Department on April 6, 1983. A copy of Protestant American Bank of Martin County's exceptions was received by the Department on April 21, 1983. A copy of Protestant First National Bank and Trust Company of Stuart's exceptions were received by the Department on April 19, 1983. The Department deems that all exceptions were untimely filed since the last day to file exceptions with the Department was April 15, 1983. Nevertheless, it has been determined that the exceptions that were untimely received would not have had any effect on the final outcome of this matter.
Findings Of Fact (Public Portion) Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found: On December 8, 1978, the applicants filed their application for a Certificate of Approval of a proposal to purchase or acquire a majority of the outstanding capital stock of the Farmers and Merchants Bank of Trenton, located in Gilchrist County, Florida. The pertinent statutory provision which governs the approval of the acquisition of majority stock or control in an existing bank is as follows: [T]he Department shall issue said certificate of approval only after it has become satisfied that the proposed new owner or owners of the controlling stock or interest are qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner, and that the interests of the stockholders, depositors and creditors of the bank or trust company and the interests of the public generally will not be jeopardized by the proposed change in ownership, interest, and management. F.S. Sec. 659.14(1) With the exception of the application form which has been promulgated as a rule, the Department of Banking and Finance does not have any rules regarding the acquisition of majority control of an existing bank. Mr. Fred Brannen, Jr., Assistant Director of the Division of Banking, testified as to the incipient policy of the Division with regard to applications for majority control. In determining whether the applicant is qualified by character, the Division performs background investigations, checking to see whether there has been any criminal convictions or judgments based on fraud against the applicant, and generally looks to see if the individuals maintain reputations of honesty and integrity, are successful in their own affairs and are therefore entitled to public trust and confidence. In determining whether the applicant is qualified by experience, the Department looks to the biographical information supplied by the applicant. Although it is not necessary that the applicant have direct prior banking experience, the Department looks to see whether the applicant has comparable business experience which would illustrate that the applicant possesses sound business judgment which would facilitate his understanding of banking and banking problems. In determining whether the applicant is qualified by financial responsibility, the Department looks to see whether the applicant has the financial capacity to fund the purchase of the stock without jeopardizing the bank. Specifically, the Department looks at the liquid assets, net worth and income. There are no written standards for determining financial responsibility. Such determinations are made on a case by case basis. In determining whether the interest of the stockholders, creditors, depositors or the public generally is affected, the Department reviews any proposed changes in the policy, management or services of the bank. While recognizing that those stockholders who have agreed to sell their stock have made a business decision and are therefore protected, the Department feels that it has a duty to protect minority shareholders by requiring the proposed purchasers of majority stock to tender an offer to buy all of the stock for the same consideration and terms offered to other shareholders. Purchases for majority stock or control are generally made on a cash basis. While a single application was filed with the Department, the two applicants are both purchasing as individuals, with each applicant contributing equally. There is no written agreement between Mr. Freedle and Mr. Koons with respect to the acquisition of the ownership of the bank. Mr. Freedle received an undergraduate degree from the University of North Carolina in 1963, a law degree from the University of North Carolina in 1965 and a masters degree in tax law from New York University in 1967. He has been a member of the North Carolina Bar since 1965 and was employed as a tax attorney by Coopers and Lybrand from 1967 to 1970. Mr. Freedle is presently a joint owner and president of Janus Corporation and subsidiaries. Janus Corporation has no interests in banks. He is presently serving as chairman of the board, chief executive officer and director of a commercial bank in Corinth, Kentucky, known as the Corinth Deposit Bank of which he owns 46 percent. He is also director and a member of the finance committee of the Bank of Flagler Beach, Flagler Beach, Florida, and Farmers and Merchants Bank of Trenton, Trenton, Florida. Mr. Freedle formerly served as a director and chief executive officer of Community National Bank of Mt. Gilead, Ohio, and as a director of the Central Bank of South Daytona, Florida. To the best of his knowledge, all information contained in Mr. Freedle's biographical report filed with the Department is true and correct, with the exception that he no longer has an interest in the Community National Bank in Ohio and an agreement presently exists to sell the Central Bank of South Daytona back to the Directors at their cost. Mr. Koons received a B.S. degree in accounting and economics from Pennsylvania State University in 1959 and a degree in corporate finance from the University of Pennsylvania, Wharton School of Finance, in 1964. He was employed by Goldman-Sachs as vice president of corporate finance from 1966 to 1970, and he has worked as an investment analyst for the First Pennsylvania Bank and Trust Company. He is presently a joint owner and executive vice president of Janus Corporation. Mr. Koons presently serves as a director, chairman of the board, and member of the finance committee of the Bank of Flagler Beach, Flagler Beach, Florida. He owns 46 percent of the Corinth Deposit Bank in Corinth, Kentucky. He serves as a director in the subject Trenton Bank. Mr. Koons formerly served as a director of Community National Bank in Mt. Gilead, Ohio, the Everett Bank in Everett, Pennsylvania, and the Central Bank of South Daytona. To the best of his knowledge, all information contained in Mr. Koons' biographical report is true and correct, with the same exceptions noted above for Mr. Freedle and with the exception that he is now divorced. According to testimony of Mr. Warren Wintaub, a general partner of Coopers and Lybrand who has known the applicants for 13 years and who was qualified as an expert in finance, both applicants have experience in banking and are highly regarded for their expertise in the area of financial affairs. Both are gentlemen of honor and have a high caliber of financial knowledge. Both applicants have taken an active part in the Board of Director meetings of Farmers and Merchants Bank of Trenton and have brought experience and expertise in financial matters to the Board. There have been no complaints by the public about Mr. Freedle or Mr. Koons. The applicants have brought more stability and a wealth of knowledge in financial affairs to the Board of Directors of the Bank of Flagler Beach. The applicants have never been arrested or indicted for a crime; are not under investigation by an agency, police department or other law enforcement agency; have not had a judgment entered against them in a case involving acts of fraud or dishonesty and have no pending litigation against them. The present capital structure of the Farmers and Merchants Bank of Trenton consists of 20,000 outstanding shares of common stock at a par value of $10.00 per share, for a total par value of $200,000.00. In addition, Farmers and Merchants Bank of Trenton has capital surplus in the amount of $550,000.00, and undivided profits in the amount of $195,000.00. Valuation reserves total $65,000.00. There is no preferred stock and there are no capital reserves or capital notes. Thus the total amount of capital is $1,010,000.00. There is no new capital proposed or contemplated at this time if the acquisition is approved. Recent market sales of the stock of Farmers and Merchants Bank of Trenton are not available. No exchange of corporate stock for bank stock has occurred in the past year. The applicants presently do not own any stock in Farmers and Merchants Bank of Trenton and seek to acquire up to 10,000 shares for which no loan or loan commitment has been secured, according to the application. The total shares proposed to be acquired constitute 50 percent or more of the outstanding capital stock of the bank. The applicants will not utilize securities in connection with the proposed acquisition. The proposed sellers of the stock are as follows: Elizabeth S. Hagan 4,481 shares; Carolyn S. Osteen - 200 shares; H.E. Osteen - 2,450 shares; and Helen D. Scott - 2,896 shares. The applicants have agreed to purchase these shares at 130 percent of the book value of the bank as of December 31, 1978. Under the terms of the purchase agreement, 20 percent of the purchase price shall be payable in cash on the date of the sale with four equal annual payments of 20 percent payable on the four succeeding anniversary dates of the initial payment. Two other stockholders have tendered their shares pursuant to the same offer of purchase. These financial arrangements derive a tax benefit to the sellers. The applicants initially offered to purchase all of the outstanding capital stock of Farmers and Merchants Bank of Trenton at 130 percent of the book value of the bank as of December 31, 1978, pursuant to the same terms and conditions offered to the proposed sellers. Subsequently, applicants authorized their counsel to offer to purchase Petitioners' stock at 130 percent of the book value of the bank as of December 31, 1978, payable in cash within six months of obtaining a certificate of approval from the Comptroller. According to the letter from Halley Lewis to L. Peter Johnson, Petitioners authorized their counsel to accept a purchase price of 130 percent of the book value of the bank as of December 31, 1978 plus compensation (dividends and growth), payable in cash within six months after the issuance of a certificate of approval. The latter offer to petitioners has been withdrawn by the applicant. Petitioner Cola H. Lewis, Petitioner Johnny H. Johnson and Petitioner Betty H. Pittman rejected the original offer because it was not a cash offer. They also felt applicants were not financially responsible or of sufficient character because they sought to purchase the stock on an installment basis rather than pay cash. Petitioner Lewis was also concerned that since the applicants do not live in the immediate area of the Trenton Bank, money would be removed from the community. The acquisition of majority control by Freedle and Koons of the Bank of Flagler Beach has not jeopardized the interests of the stockholders, depositors and creditors of said Bank, according to the president of that Bank. Since 1975, when the applicant's purchased their controlling interest, the financial condition of the Corinth Deposit Bank in Kentucky has improved. In accordance with the provisions of Florida Statutes, Sec. 120.57 (1)(a)(12), conclusions of law and a recommendation are not included in this Report. Respectfully submitted and entered this 19th day of April, 1979, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Comptroller Gerald A. Lewis State of Florida The Capitol Tallahassee, Florida 32301 L. Peter Johnson Post Office Box 59 Jacksonville, Florida 32201 Halley B. Lewis Route 1, Box 337 Bell, Florida 32619 Karlyn Anne Loucks Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING RE: FARMERS AND MERCHANTS BANK OF TRENTON, Application for Authority to purchase or CASE NO. 79-086 Acquire Majority Control by P. Douglas Freedle and Charles R. Koons / FINDINGS OF FACTS, CONCLUSIONS OF LAW AND FINAL ORDER Pursuant to Notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer, with the Division of Administrative Hearings, on March 19, 1979, in Room 106 of the Collins Building, Tallahassee, Florida. The purpose of the hearing was to receive evidence concerning the application of P. Douglas Freedle and Charles R. Koons for a Certificate of Approval to purchase or acquire the majority stock of Farmers and Merchants Bank of Trenton, an existing bank. This Final Order is prepared in two sections, a public section and a confidential section. The confidential section relates to the financial statements of the applicants, and must remain confidential pursuant to Section 658.10, Florida Statutes.
Conclusions When an application for authority to purchase or acquire a majority of the outstanding capital stock of, or controlling interest in any state bank or trust company is filed, it is the applicant's responsibility to prove that the statutory and regulatory factors warranting the grant of authority are met. It is the Department's duty to consider and review the application and then approve or disapprove the application in its discretion. This discretion is neither absolute nor unqualified but is instead conditioned by consideration of the following factors: That the proposed new owner or owners of the controlling stock or interest are qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner (Section 659.14(1), Florida Statutes). That the interests of the stockholders, depositors and creditors of the bank or trust company will not be jeopardized by the proposed change in ownership, interest and management (Section 659.14(1), Florida Statutes). The interest of the public generally will not be jeopardized by the proposed change in ownership, interest and management (Section 659.14(1), Florida Statutes). That the proposed new owner of the controlling stock or interest is not a bank, trust company or holding company, the operations of which are principally conducted outside of the State of Florida, and that each subscriber is purchasing the stock of the said bank in good faith in his own right and not as attorney or agent for any undisclosed person or entity (Section 659.141(1), Florida Statutes). That the proposed new owner or owners of the controlling stock or interest have agreed to purchase all of the outstanding stock of the bank, upon demand at the option of every stockholder thereto, and to pay for same at the same price or consideration paid for any of the stock purchased in connection with the acquisition of the majority interest (Form DBF-C-11, Florida Administrative Code) If, in the opinion of the Department, any of the five foregoing requirements set forth in paragraph one above have not been met, and cannot be remedied by the Applicants, it cannot approve the application. The Department believes that applicants can, at least under certain circumstances, remedy the factors set forth in requirements B, C, and E above, if they are found to be partially inadequate. For example, if all other statutory and regulatory criteria are met, the proposed new owner or owners may be required to enter into an agreement with the Department restricting certain activities of the bank, for the establishment of an escrow fund, for the filing of a bond, for the amendment of the articles of incorporation of the bank or any other restriction that the Department feels necessary to protect the interest of the shareholders, depositors and creditors of the bank as well as the interest of the public in general. Furthermore, it is the Department's policy to allow the applicants to make certain changes to these factors if all other criteria are met; to do otherwise, would be to subject the Applicants to unnecessary red tape. However, it is the Department's position that there is little, if anything, that the applicant or applicants can do to alter the factors set forth in requirement A and D above, since the applicants CANNOT easily change their character, experience and financial responsibility or their status as a foreign bank, trust company or holding company. It is the opinion and conclusion of the Department that, based upon the record, the Applicant is qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner. Therefore, criterion A above IS met. The Applicants have substantial educational qualifications and business experience, and appear to have reputations of honesty and integrity. Both of the Applicants have prior banking experience and extensive backgrounds in financial matters. Their individual net worths indicate that they have the financial capacity to fund the purchase of the stock. In addition,. the record indicates the Applicants are financially responsible in their personal and business dealings. It is the opinion and conclusion of the Department that, based upon the record, the interest of the stockholders, depositors and creditors of the bank or trust company will not be jeopardized by the proposed change in ownership, interest and management. Therefore, criterion B above IS met. The Department of Banking and Finance must look to the current motive and to the future intentions of the proposed owner or owners in taking control of an existing bank. This situation where a few individuals have control over a large amount of assets that belong to others, requires a severe scrutiny by the Department of the proposed takeover. The record indicates that the Applicants have no immediate plans to change the management or the Board of Directors of the Farmers and Merchants Bank of Trenton. The Applicants are presently serving on its Board of Directors and have taken an active part in its meetings, utilizing their experience and expertise in financial affairs. It is the opinion and conclusion of the Department that, based upon the record, the interest of the public in general will not be jeopardized by the proposed change in ownership, interest and management. Therefore, criterion C above IS met. Banking involves a public trust. Unlike private enterprise establishments generally, banks operate on the public's capital and therefore, the legislature has vested with the Comptroller the responsibility to protect that public interest. Furthermore, the failure of a bank, as opposed to the private enterprise establishments generally, may have an unsettling effect on the overall economic welfare of the community, and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard. The Applicants' experience and expertise in banking and financial affairs indicate that they are qualified to continue the operation of the Farmers and Merchants Bank of Trenton in a reasonably successful manner, and thus ensure that the financial resources of the residents in the community will remain stable and safe. It is the opinion and conclusion of the Department that the control of the Farmers and Merchants Bank of Trenton is not being acquired by a bank, trust company or holding company, the operations of which are principally conducted outside of this State and that each subscriber to purchase stock of the said bank is doing so in good faith in his own right and not as attorney or agent for any undisclosed person or entity. Therefore, criterion D above IS met. Section 659.141(1), Florida Statutes, prohibits any bank, trust company or holding company, whose operations are principally conducted out of state, from acquiring or controlling directly or indirectly, all, or substantially all of the assets of a bank in this State. The record shows that the Applicants are purchasing controlling interests in the Farmers and Merchants Bank of Trenton as individuals, each in his own right, and not as agents or attorneys for an undisclosed person or entity. It is the opinion and conclusion of the Department that the proposed new owner or owners have agreed to purchase all of the outstanding stock of the bank, upon demand, and at the option of every stockholder thereof, and to pay for same at the same price or consideration paid for any of the stock purchased in connection with the acquisition of the majority interest. Therefore, criterion E above IS met. It is the duty of the Department of Banking and Finance to protect the interests of the minority stockholders in a bank takeover since they exercise less control in the operations of the bank and are in a position where their interests might not be as equitably represented. Thus, the Department requires that these minority shareholders have the opportunity to sell their interest at the same price and terms as the sellers of the majority control. The Applicants have made an offer to purchase all of the stock of the bank pursuant to the same terms and conditions offered to the proposed sellers.
The Issue The purpose of the public hearing was to review the application to consolidate New River Bank, Oakland Park, Florida, and 1st United Bank, Boca Raton, Florida, in accordance with Florida law.
Findings Of Fact 1st United Bancorp (Bancorp) is a Florida bank holding company which maintains its principal place of business at 980 North Federal Highway, Boca Raton, Florida. 1st United is a Florida chartered bank and is a wholly-owned subsidiary of Bancorp and operates full service banking facilities at seven locations in Palm Beach and Martin Counties. New River is a Florida chartered bank which maintains its executive offices at 2901 West Oakland Park Boulevard, Oakland Park, Florida, and operates two banking facilities in Broward County, Florida. The Department is the duly designated state agency vested with the responsibility of processing and approving or disapproving a plan of any financial entity to acquire the assets and assume the liabilities of another financial entity pursuant to Section 655.414, Florida Statutes. On July 13, 1993, Bancorp and New River entered into a Sale and Purchase Agreement which provides that Bancorp will cause 1st United to purchase substantially all of the assets and to assume substantially all of the liabilities of New River, after which New River will be liquidated and dissolved. The agreement noted above was duly adopted by majority vote of the respective Boards of Directors of Bancorp, 1st United and New River. In addition, the respective Boards of Directors of Bancorp, 1st United and New River duly adopted by majority vote a Plan of Acquisition of Assets and Assumption of Liabilities which summarized pertinent portions of the agreement and which includes all of the terms and conditions required by Section 655.414 (1), Florida Statutes. On September 7, 1993, 1st United and New River submitted an application to the Department seeking the Department's approval for the purchase of New River's assets and assumption of its liabilities as set forth in the agreement and as summarized by the plan. Submitted with the application were the requisite filing fee and all of the required documents including copies of the agreement, the plan and certified copies of the authorizing resolutions of the respective boards of directors. On September 17, 1993, the Department caused notice of the receipt of the application to be published in the Florida Administrative Weekly. This published notice met the requirements of Rule 3C-9.003(1), Florida Administrative Code. On September 7, 1993, Warren Orlando, in his capacity as president of 1st United, filed a petition for public hearing and notice of intention to appear on behalf of 1st United. On October 27, 1993, the Department referred the matter to the Division of Administrative Hearings for the purpose of conducting a public hearing pursuant to Section 120.60(5), Florida Statutes, and Rule 3C-9.004, Florida Administrative Code. Notice that a public hearing would be held on the application on December 13, 1993, was duly published in conformity with Rule 3C-9.005, Florida Administrative Code, in the Fort Lauderdale Sun-Sentinel, Palm Beach Post, and Stuart News, newspapers of general circulation in the communities in which 1st United and New River do business. The agreement provides that New River will receive a combination of cash and Bancorp common stock equal to the net asset value, as defined in the plan, of the assets and liabilities of New River being purchased or assumed. The agreement further provides that after the closing of the asset acquisition, New River shall cease operations and commence dissolution and liquidation proceedings. Substantially all of the Bancorp common stock and available cash received by New River from Bancorp will be distributed to New River shareholders, other than dissenting shareholders. New River stockholders will receive a pro rata portion of the Bancorp common stock and cash available for distribution. After the acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, 1st United will have adequate capital structure in relation to its activities and its deposit liabilities. The acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, if consummated, are not contrary to the public interest. The respective boards of directors of Bancorp and New River requested the opinion of Alex Sheshunoff & Co. Investment Banking with regard to the fairness to the respective shareholders of each corporation, from a financial point of view, of the terms and conditions of the agreement. Alex Sheshunoff & Co. Investment Banking is regularly engaged in and is an expert authority in the valuation of bank and bank holding company securities in connection with bank mergers and acquisitions. Thomas Mecredy is an expert in the valuation of bank and bank holding companies in connection with bank mergers and acquisitions. On December 8, 1993, Alex Sheshunoff & Co. Investment Banking through Thomas Mecredy issued its opinion to the respective Boards of Directors of Bancorp and New River that the terms and conditions of the agreement were fair and equitable to the shareholders of each corporation. Pursuant to the agreement, New River's Board of Directors duly adopted a plan of dissolution and complete liquidation for New River. The plan of dissolution provides that after the sale of assets and assumption of liabilities the Board of Directors will reserve a sufficient amount of Bancorp stock and cash for payment of liquidation expenses and payment of liabilities not assumed by 1st United, including contingent liabilities (general reserves). In addition to the general reserves, New River will create a special reserve (special reserve) in an amount which it considers sufficient to defend and satisfy certain potential claims which may be asserted against New River by shareholders of New River in conjunction with the organization and initial offering of common stock of New River. In determining the amounts necessary to establish the general reserves and special reserve, New River's board of directors consulted with the national law firm of Proskauer Rose Goetz and Mendelsohn with respect to both reserves and the Florida law firm of Shutts & Bowen with respect to the special reserve for advice concerning the potential liability on the part of New River in connection with both known claims and potential claims and the amounts, if any, for which New River could be held liable. Shareholder E.D. Hittson noted that the book value of the New River stock is approximately $11.00 per share versus the $4.50 per share value of the 1st United stock. In response, bank officials noted that 1st United has dividend and strong growth potential not available to New River. Shareholder James Weck questioned provisions being made to satisfy outstanding lawsuit liabilities, the future location of the facility, and the effect on New River employees. In response, bank officials stated that the potential lawsuit liability is included in the reserve amounts, that no decision has been made as to the future location of the banking facility but that the needs of the service area will be met, and that it is their intention to draw talent from the New River staff. Shareholder Amine Semaan questioned whether New River would be represented on the Board of Directors at 1st United, whether minority areas would be a priority for the future location of the facility, and whether another buyer would have paid $10.50 per share. In response, bank officials maintained that New River will have one member on the Board of Directors at 1st United, that the needs of the service area will be met, and that no other, more attractive, buyer is available. On January 11, 1994, MaryAnn Cassel, a shareholder who reportedly attended the public hearing on December 13, 1993, filed a motion for leave to become a party. Such motion alleged that the movant, a minority shareholder, will be forced to accept Bancorp common stock in exchange for her New River shares or be forced to accept appraisal rights in lieu of her shares. Further, movant claimed that the plan is not fair to all parties because the shares of New River have been undervalued. Having deemed such motion untimely, and having determined such request does not allege circumstances unknown to movant prior to the December 13, 1993 public hearing, it is denied. DONE AND ENTERED this 24th day of January, 1994, in Tallahassee, Leon County, Florida. Joyous D. 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 January, 1994. COPIES FURNISHED: Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350 Donald E. Thompson, II Proskauer Rose Goetz and Mendelsohn One Boca Place, Suite 340 2155 Glades Road Boca Raton, Florida 37431 Michael W. Ford Phillip T. Ridolfo, Jr. Mershon, Sawyer, Johnston, Dunwody & Cole Phillips Point East Tower 777 South Flagler Drive, Suite 900 West Palm Beach, Florida 33401 Jeffrey D. Jones Department of Banking and Finance Division of Banking The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 David S. Zimble Zimble Formoso-Murias, P.A. 1401 Brickell Avenue, Suite 730 Miami, Florida 33131
Findings Of Fact Stipulated Facts Findings contained in paragraphs 1-28, were stipulated to by the parties. Gary D. Miller and Katherine A. Miller made a note to Southeast Bank (Southeast) dated March 27, 1990, in the stated amount of $80,000 (the Note). Gary D. Miller and Katherine A. Miller (the Millers) executed a Future Advance Note, Modification and Cross-Collateralization Agreement (the Mortgage) in favor of Southeast dated March 27, 1990, and recorded in Volume 4178, page 2981, of the official records of Orange County, Florida. Southeast was doing business and in good standing on March 27, 1990. The Note was consolidated with a promissory note made by the Millers dated June 7, 1988 in the stated amount of $350,000 and replaced by a Consolidated Replacement Note dated April 9, 1991, in the stated amount of $371,250 (the Consolidated Note). The Consolidated Note was defined and secured in a Mortgage Modification Agreement between Southeast and the Millers dated April 9, 1991 and recorded at volume 4278, page 0065 of the official records of Orange County, Florida. Southeast was doing business and in good standing on April 9, 1991. First Union National Bank of Florida (First Union) is the owner and holder of the Note, the Consolidated Note and the Mortgage identified in paragraphs 1,2, and 4 above. The Department timely assessed documentary stamp taxes on the Note. The assessment covers the Consolidated Note. There is no evidence that documentary stamps are attached or affixed to the Note, the Consolidated Note or the Mortgage. No documentary stamp tax were paid on the Note, the Consolidated Note or the Mortgage. The Office of the Comptroller of the currency declared Southeast insolvent and appointed the FDIC as receiver for Southeast on September 19, 1991. The FDIC, as receiver, became the owner and holder of all of the promissory notes and mortgages formerly held by Southeast. The FDIC (as Receiver of Southeast, and corporately) and First Union entered into an Assistance Agreement dated September 19, 1991, under which the FDIC, as Receiver, sold and assigned to First Union the Consolidated Note and the Mortgage. The FDIC, as Receiver, executed an Assignment of Mortgage, subsequently filed in volume 588, page 589, of the official records of Orange County, Florida. First Union is not the same entity as Southeast (by name or otherwise). First Union purchased no portion of the stock ownership of Southeast, rather First Union purchased only those assets and liabilities of Southeast detailed in the Assistance Agreement. Under terms of the Assistance Agreement, First Union expressly assumed only certain specified liabilities. First Union did not expressly assume any liabilities of Southeast relating to payment of taxes under Chapter 201, Florida Statutes. Under the terms of the Assistance Agreement, the FDIC and First Union contractually agreed that the FDIC would indemnify First Union for "costs, losses, liabilities, expenses, judgments, fines and amounts paid in settlement reasonably incurred in connection with claims against" First Union based upon a liability of Southeast that was not expressly assumed by First Union. A claim entitling First Union to indemnification from the FDIC under the terms of the Assistance Agreement is a claim for a liability for "taxes" of Southeast. The definition of "taxes" in the Assistance Agreement includes stamp taxes imposed by states, including interest and penalty. By a Notice dated January 5, 1995, Respondent issued an Official Request for Information to "Southeast Bank, National Association, First Union Bank/Barbara H. Smith." On March 1, 1995, Respondent issued to "Southeast Bank, NA, First Union Bank, N.A." a Notice of Intent to Make Documentary Stamp Tax and Discretionary Surtax Audit (the Notice of Audit). The Notice of Audit was received by First Union on March 22, 1995. First Union timely responded to the Notice of Audit by letter dated May 31, 1995, stating that "any transaction prior to September 19, 1991, which might precipitate liability becomes the responsibility of the FDIC." Respondent treated the May 31, 1995 letter of First Union as a protest of the audit. On June 20, 1995, Respondent issued to "Southeast Bank, N.A.-First Union Bank, N.A." a Notice of Proposed Assessment of $150.00 representing tax and interest on the original $80,000 note of March 27, 1990, or an assessment of tax and interest on the Consolidated Note. Southeast Bank remains under the receivership of the FDIC. Additional Facts FDIC's sale of the Note and Consolidated Note to First Union under terms of the September 19, 1991 Assistance Agreement imbued First Union with ownership rights inclusive of the right to receive payments of principal and interest on the Note and Consolidated Note, as well as the right to foreclose on the makers of the Note and Consolidated Note for nonpayment. Neither the Note or Consolidated Note qualify for exemption from documentary stamp taxes levied pursuant to provisions of Chapter 201, Florida Statutes. Documentary stamp taxes constitute an excise tax on documents, as opposed to a tax on the underlying transaction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered upholding Respondent's full assessment of tax and penalty against Petitioner. DONE and ENTERED in Tallahassee, Florida, this 25th day of June, 1996. DON W. DAVIS, 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 25th day of June, 1996. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made on the proposed findings of fact submitted on behalf of the parties. Petitioner's Proposed Findings Petitioner's proposed findings (other than the 28 paragraphs of stipulated findings of fact) consisted of seven paragraphs denominated by letters A-G. No citation to the record was included in these proposed findings. Accordingly, the proposed findings, while reviewed and addressed to the extent possible by the foregoing findings of fact, are rejected. Respondent's Proposed Findings 1.-28. Stipulated facts adopted. 29.-32. Adopted, although not verbatim. COPIES FURNISHED: William W. Gallogly, Esquire First Union Corporation Legal Division 225 Water Street Jacksonville, Florida 32202 Scott M. Covell, Esquire Dept. of Legal Affairs The Capitol - Tax Section Tallahassee, Florida 32314-6668 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact On or about June 30, 1989, First Union National Bank of Florida submitted a remittance report of unclaimed money items to the Department of Banking and Finance. It listed Gerald N. Capps as the payee for the amount of $400.00. On or about November 7, 1989, the Petitioner filed a claim to the abandoned property. In processing the claim, the Department requested the bank to provide it with a copy of a signature control card for the account; however, First Union Bank could not do so. The subject cashier's check is drawn payable to Gerald M. Capp (in the singular); however, the Petitioner's name is Gerald N. Capps (plural). The Petitioner had a banking relationship with the Bank of South Miami in the 1970's. He believes that bank later became the Merchants Bank of Miami, on which the subject cashier's check is drawn. It is not uncommon for the Petitioner's name to be misspelled by either omission of the final "s" or by substitution of a "k" for the initial "c."
Recommendation On the basis of the foregoing, it is recommended that the Department of Banking and Finance issue a final order in this case denying the Petitioner's claim. RECOMMENDED in Tallahassee, Leon County, Florida, this 6th day of September 1990. 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 6th day of September 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2513 The following are the specific rulings on all proposed findings of fact submitted by all parties. Findings proposed by Petitioner: Paragraphs 1 through 5: Rejected as constituting unnecessary procedural details, statements of position or argument. Paragraph 6: Accepted in substance. Paragraph 7: Rejected as constituting unnecessary procedural details, statements of position, or argument. Paragraph 8: Accepted in substance. Paragraphs 9 and 10: Rejected as constituting argument or ultimate conclusions, rather than findings of fact. Findings proposed by Respondent: Paragraphs 1 through 3: Accepted. Paragraph 4: Rejected as subordinate and unnecessary details. Paragraph 5: Accepted. Paragraphs 6 and 7: Rejected as constituting subordinate and unnecessary details or as argument. COPIES FURNISHED: Gerald N. Capps, Esquire 801 Arthur Godfrey Road Miami Beach, Florida 33140 Randall J. Rubin, Esquire Office of the Comptroller 401 N.W. Second Avenue Suite 708-North Miami, Florida 33128-1796 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
