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 After having considered the facts and information contained in the application to acquire Key Biscayne Bank and Trust Co., Key Biscayne, Florida, by the Kardonski Family Trusts, the Report of Public Hearing issued by Hearing Officer Larry J. Sartin, dated April 5, 1990, and the record of those proceedings with exhibits, the Comptroller of the State of Florida as head of the Department of Banking and Finance, hereby renders this Final Order.
Findings Of Fact The Department rules on the Proposed Findings of Facts submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS Applicant's proposed finding as to the net profit to asset ratio is accepted. Applicant's proposed finding as to the adjusted capital to asset ratio is accepted. Applicant's proposed finding as to the boundaries of the PSA are accepted. Applicant's proposed findings as to the population estimates of the PSA and the communities located within the PSA are accepted to the extent they are not inconsistent with the Department's findings adopted herein. Applicant's proposed finding as to net migration into Pinellas County and the age distribution characteristics of Pinellas County are accepted to the extent they are not inconsistent with the Department's findings adopted herein. Applicant's proposed finding that the Bank of Indian Rocks is the only full service bank with its main office operating in the PSA is accepted. Applicant's proposed finding that the Bank of Indian Rocks experienced a 23.3 percent rate of growth for loans and a relatively modest rate of growth for deposits during the last reporting year is accepted. Applicant's proposed findings as to the nature of the proposed branch site are accepted. Applicant's proposed finding as to the banks servicing the PSA is accepted to the extent that said banks have branch offices located in the PSA, but is rejected to the extent that said finding excludes other banks which may service customers in the PSA. Applicant's proposed finding that the PSA community is heavily dominated in terms of bank operations by the Bank of Indian Rocks is rejected as being unsupported by competent substantive evidence in the record. The record indicates that based on a telephone sample survey of 399 persons, 49 percent of the households in the PSA have their primary checking account at the Bank of Indian Rocks. The Applicant's proposed finding does not necessarily follow from the survey. Applicant's proposed finding as to the percentage of people located in the PSA that have a primary checking account in the PSA and bank with the Bank of Indian Rocks is rejected for the reasons previously stated in paragraph 10. Applicant's proposed finding as to the need for an additional full service bank based on the statistical data presented is rejected as constituting a conclusion of law. Applicant's proposed finding as to the savings and loan associations serving the PSA is accepted to the extent that said savings and loan associations have offices located in the PSA, but is rejected to the extent that said finding excludes other savings and loan association offices which may serve customers in the PSA. Applicant's proposed findings as to the nature of the primary service area is accepted, with the exception of the finding as to the amount of land available for future development which is rejected as being unsupported by competent substantial evidence in the record. Applicant's proposed findings that the Applicant's economic capacity will be enhanced by the branch; that the Applicant can support the proposed branch and statements with regard thereto, are rejected as constituting conclusions of law and legal argument, rather than findings of fact. Applicant's proposed findings as to the range of services that will be offered at the proposed branch are accepted. Applicant's proposed finding as to the need for additional banking facilities and the convenience of the proposed bank are rejected as constituting conclusions of law. Applicant's proposed findings as to the substantial experience of the bank staff, and significant assets are accepted; however, Applicant's proposed findings to the capability of the bank to support the branch facilities is rejected as constituting a conclusion of law. Applicant's proposed findings as to the Applicant's return on assets on 1977, 19978 and year to date are accepted. Applicant's proposed findings as to the liquid assets as a percent of total liabilities; condition of assets; classified assets and loan loss ratio are accepted. Applicant's proposed findings as to increased earnings, increased average balances and reduced chargeoffs are accepted. Applicant's proposed finding that there has been no cash operating loss of the Applicant is rejected as being unsupported by competent substantial evidence in the record. Applicant's other statements with regard thereto are rejected as constituting legal argument rather than findings of facts. Applicant's proposed finding that the review of the branch by management of the Applicant and the Atlantic Bancorporation is significant is accepted; however, Applicant's proposed finding as to the judgment of the management as to the success of the proposed branch constitutes a conclusion of law. Applicant's proposed finding that there was no insider transaction involved in the purchase of the land is rejected as being irrelevant and immaterial. Applicant's proposed finding that there was no showing that the lease transaction constitutes an insider transaction is rejected as being unsupported by competent substantial evidence in the record. Applicant's proposed finding that the lease sum represents approximately a 12 percent return on assets is accepted; however, the Applicant's proposed finding that the lease arrangement was not controverted as being unfair or unreasonable is rejected as being irrelevant and immaterial. Applicant's proposed finding that the depth of management is sufficient to operate the branch is rejected as constituting a conclusion of law. Applicant's proposed findings as to the number of years of experience of various officers of the bank is accepted. Applicant's proposed finding as to whether the name of the proposed branch was confusing is rejected as constituting a conclusion of law. Applicant's proposed finding that the Applicant does not have more than four pending branch applications is accepted. Applicant's proposed findings that there was no evidence presented which would indicate that the bank was not in compliance with federal and state regulations and statements of bank offices thereto are accepted. PROTESTANT'S PROPOSED FINDINGS Protestant's proposed findings in Section 1 are accepted, with the exception of the last sentence which is rejected as being a conclusory statement not supported by competent substantial evidence in the record. Protestant's proposed findings in Section 2 are accepted. Protestant's proposed findings in Section 3 are accepted, with the exception that the record reflects that the proposed site is located in the vicinity of the northwest quadrant of the intersection of Indian Rocks Road and Walsingham, and does not specify the number of fees west of the intersection. Protestant's proposed findings as to the PSA's boundaries as delineated by the Applicant in Section 4 are accepted. The second and third sentences in Section 4 are rejected as being unsupported by competent substantial evidence in the record. The first sentence in the second paragraph of Section 4 is accepted. The second sentence in the second paragraph of Section 4 is rejected as constituting legal argument rather than a finding of fact. The remaining proposed findings in Section 4 relating to the boundaries of the PSA of the First Bank of Treasure Island are irrelevant for the reason that said PSA is not necessarily applicable to subsequent applications. Protestant's proposed finding in Section 4 as to the population of the PSA is accepted and the proposed findings relating to the population of First Bank of Treasure Island's PSA is rejected as being irrelevant. Protestant's proposed finding in Section 4 as to the residential nature of the PSA is accepted. Protestant's proposed finding as to the limited nature of commercial activity is rejected as being unsupported by competent substantial evidence. The record reflects that although commercial activity in the PSA is in the form of small retail, professional, and service type establishments, these establishments are numerous in number. Protestant's proposed finding as to the considerable greenbelt lands which cannot be used for development is rejected as being unsupported by competent substantial evidence. The record reflects that there are greenbelt areas which cannot be used for development, but does not reflect that the amount of these lands is considerable. Protestant's proposed findings in the first and second sentences in Section 5 are accepted. The third sentence in Section 5 is accepted to the extent that traffic coming from west to east cannot enter the proposed site directly. The remaining findings in the first paragraph of Section 5 are accepted, with the exception of the last phrase of the last sentence which is rejected as speculation and not supported by competent substantial evidence in the record. Protestant's proposed finding in the second paragraph of Section 5 as to the number of Applicant's existing customers in the PSA is accepted, however, the remaining findings in that paragraph are rejected as unsupported by competent substantial evidence in the record. Protestant's proposed finding in the last paragraph of Section 5 is rejected as constituting a conclusion of law. Protestant's proposed finding in the first paragraph of Section 6 are accepted to the extent that said finding represents the number of offices of financial institutions serving the PSA and not the number of financial institutions. Protestant's proposed finding in the first sentence of the second paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that the Applicant offers automatic transfer from savings to checking and not that they contend this service is unique. Protestant's proposed finding in the second sentence of the second paragraph of Section 6 is accepted with the exception that the record does not support the finding that the Bank of Indian Rocks offers automatic transfer accounts. The finding in the last sentence of the second paragraph of Section 6 is rejected as being irrelevant. Protestant's proposed finding in the third paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that some of the questions asked in the Burke survey may have been based on the assumption that automatic transfer accounts were not presently offered in the PSA, however, the entire survey was not based on that assumption. Protestant's proposed finding in the fourth paragraph of Section 6 is accepted. Protestant's proposed finding in the fifth paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record, said finding is based on hearsay evidence which is uncorroborated. Protestant's proposed finding in the sixth paragraph as to the number of businesses that the Applicant listed in its application which were not in its PSA is accepted, however, the remaining finding in that paragraph is rejected as irrelevant. Protestant's proposed finding in the last paragraph of Section 6 is rejected as constituting a conclusion of law. Protestant's proposed finding as to the provisions of Rule 3C- 13.041(2)(a), F.A.C. in the first paragraph of Section 7 are accepted. Protestant's proposed finding as to the Applicant's capital to asset ratio in the second paragraph of Section 7 is accepted. Protestant's remaining finding in that paragraph is rejected as constituting legal argument and opinion, rather than a finding of fact. Protestant's proposed findings in the first paragraph of Section 7 are accepted. Protestant's proposed finding in the fourth paragraph of Section 7 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that Mr. Maurer stated that the Applicant probably would not be able to add to capital through earnings based on the projected losses of the unopened branches. Protestant's proposed findings as to the projected deposits of the Applicant's branches in the fifth paragraph of Section 7 are accepted, however, Protestant's proposed finding as to the need for additional capital is rejected as constituting a conclusion of law, opinion and legal argument. The remaining findings in that paragraph and the first sentence of the sixth paragraph are rejected as being legal argument rather than findings of facts based on competent substantial evidence in the record. The finding in the second sentence of the sixth paragraph is accepted. Protestant's proposed finding in the seventh paragraph of Section 7 that the applicant does not have sufficient personnel to staff and manage its new branches is accepted. Protestant's proposed finding that no manager for the proposed branch has been selected is rejected as being unsupported by competent substantial evidence in the record. Although there appears to be conflicting testimony as to this fact, the application contained in the record states that James Arntz had been selected as the branch manager, in addition to testimony on direct examination that Mr. Arntz had been selected as the branch manager and the record supports said finding. Protestant's proposed finding as to the managerial capacity of the Applicant and its impact on the adequacy of capital to asset ratio is rejected as constituting a conclusion of law. Protestant's proposed findings contained in the first two sentences of the eighth paragraph of Section 7 are accepted. Protestant's proposed finding contained in the last sentence is rejected as constituting a conclusion of law. Protestant's proposed finding in the last paragraph of Section 7 is rejected as constituting a conclusion of law. Protestant's proposed finding in the first sentence of the first paragraph of Section 8 is accepted. The remaining findings in that paragraph are rejected as constituting conclusions of law. Protestant's proposed finding in the first sentence of the second paragraph of Section 8 is accepted, and the remaining finding in that paragraph is rejected as constituting a conclusion of law. Protestant's proposed findings in Section 9 are accepted. Protestant's proposed findings in Section 10 are accepted. Protestant's proposed findings in the first two paragraphs and the first, second and fourth sentence of the third paragraph of Section 11 are accepted. The proposed findings in the third and fifth sentences of the third paragraph are rejected as constituting conclusions of law. Protestant's proposed findings in the first two sentences of the fourth paragraph of Section 11 are accepted, the remaining sentence in that paragraph is rejected as constituting a conclusion of law. Protestant's proposed findings in Section 12 are accepted, with the exception that (1) 9 percent represents an average cost of time deposits and to a minimum and (2) the proposed finding in the last sentence constitutes a conclusion of law. Protestant's proposed findings in the first two paragraphs of Section 13 are accepted. The remaining findings of the last paragraph are rejected as constituting conclusions of law. Protestant's proposed findings in the first paragraph of Section 14 are accepted, with the exception that the record reflects that the purchase price of the proposed site was $240,000 and not $200,000. Protestant's proposed findings in the first two sentences of the second paragraph of Section 14 are rejected as being irrelevant. The proposed findings in the third sentence is accepted. The proposed findings in the remaining sentences of that paragraph are rejected as constituting legal argument and conclusions of law. Protestant's proposed findings in Section 15 as to the provisions of Rule 3C-13.041(3) are accepted. The remaining proposed findings are rejected as being irrelevant. Protestant's proposed findings in Section 16 as to the provisions of rule 3c-13.041(2)(c) are accepted. The proposed finding in the second sentence of that section is accepted. The proposed finding in the third sentence is rejected as being unsupported by competent substantial evidence in the record for the reasons stated above in paragraph 53 of this Order. The proposed finding in the last sentence is rejected as constituting a conclusion of law. DEPARTMENT'S PROPOSED FINDINGS The Department's proposed findings contained in paragraph 1, 3, 4 through 10, 12 through 19,22 and 23 are accepted. The Department's proposed findings contained in paragraph 2 are accepted with the exception of the third sentence which is rejected as being unsupported by competent substantial evidence in record for the reasons stated above in paragraph 53 of this Order. The Department's proposed findings contained in paragraph 11 are accepted, with the exception of the figure for the projected deposits for the first year based on 2.2 persons per household which is rejected as being unsupported by competent substantial evidence in the record. The record reflects that this figure is $2,487,000 and not $2,700,000. The Department's proposed findings contained in paragraph 20 are accepted, with the exception of the number of deposit and loan customers residing in the PSA which is rejected as being unsupported by competent substantial evidence. The record reflects that there was conflicting testimony as to the number of existing deposit customers, however, the hearing officer found the number to be 140, and 65 loan customers. The Department's proposed findings contained in paragraph 21 are accepted, with the exception of the amount of square feet of the building to house the proposed branch, which is rejected as being unsupported by competent substantial evidence. Although the application contained in the record stated that the building would contain 3,640 square feet (including the drive-in canopy), the hearing officer found that the building would contain 2,000 square feet. PROTESTANT'S EXCEPTIONS TO THE REPORT AND FINDINGS OF FACT OF HEARING OFFICER The Protestant's exception contained in Section 1, with regard to the Hearing Officer's ruling's on the proposed findings, is accepted to the extent that the better practice would be for the Hearing Officer to specify which proposed findings are rejected as not supported by the evidence, which are irrelevant and which constitute conclusions of law. However, it has been recognized that the hearing officer is not required to make explicit rulings on subordinate. commulative, immaterial or unnecessary proposed facts. Forrester v. Career Service Commission, 361 So.2d 220 (1st DCA Fla. 1978). Notwithstanding, the Department has expressly ruled on each proposed finding and stated the reasons therefore. Protestant's exception contained in Section 2 is rejected for the reason that some of the proposed findings contained in Protestant's Proposed Findings of Fact were not based on competent substantial evidence, were irrelevant or constituted conclusions of law, as more fully set forth above in paragraphs 31 through 70. Therefore, it would be improper for either the Hearing Officer or the Department to adopt each and every proposed finding contained in Protestant's Proposed Findings of Fact as requested in the exception. Protestant's exception contained in Section 3 is rejected for the reason that the Hearing Officer's finding that the proposed branch manager is James Arntz is supported by competent substantial evidence in the record. The testimony contained in pages 497 and 498 of the transcript, cited by Protestant in its exception, refers to the Applicant's application for a branch office in northeast St. Petersburg. Although there was conflicting testimony as to this fact (see TR-465 and TR-540), the application contained in the record also identified James Arntz as the proposed branch manager. As such, there was competent substantial evidence in the record to support the Hearing Officer's finding. Protestant's exception contained in Section 4 is accepted for the reason that the Hearing Officer found that the "the greater weight of the evidence indicates that average number of persons per household in Pinellas County is 2.2". As such, Applicant's revised figures based on 2.2 percent per household are accepted which indicate that the proposed branch will not show a profit until the fourth year. The Department's findings of fact have modified the Hearing Officer's findings accordingly. Protestant's exception contained in Section 5 is rejected for the reason that the Hearing Officer's finding is supported by competent substantial evidence in the record. The testimony contained on pages 511 and 512 of the transcript, which is cited by the Protestant, merely states that the Applicant probably would not be able to add to capital through earnings based on the assumption of the projected losses of the Applicant's new branches. As such, the Hearing Officer's finding is accurate. Protestant's exception contained in Section 6 is accepted for the reason that the record reflects that the Applicant's president stated that the branch will probably have Saturday banking hours, but that the exact hours had not been determined. The Department's Findings of Facts have modified the Hearing Officer's findings accordingly. Protestant's exception contained in Section 7 is rejected for the reason that the Hearing Officer's finding is supported by competent substantial evidence in the record. On pages 328 and 329 of the transcript, the witness for the Applicant testified that there was a stacking lane which functionally is in front of the site for traffic hearing west. Protestant's exception contained in Section 8 is rejected for the reasons that the Hearing Officer's finding based on the study was limited and for a limited purpose, and the questions asked in the survey and the procedure appear reasonable. In addition, the Hearing Officer's and Department's reliance on the study is minimal, if at all. Protestant's exception contained in Section 9 is rejected for the reason that the adverse impact of the establishment of a branch on other banks is irrelevant, because it is not a consideration under the statutory and regulatory criteria applicable to branch bank applications. Protestant's exceptions contained in Sections 10 and 19, 21 and 23 are rejected for the reasons that the requested findings are conclusions of law which are not properly included in the Hearing Officer's report pursuant to Section 120.60(3), Florida Statutes. Protestant's exception contained in Section 20 is rejected for the reason that the requested finding as to an appraisal of land and improvements is irrelevant where, as in this case, there is no insider transaction involved in the purchase of the land. Protestant's exception contained in Section 22 is rejected for the reason that the revisions referred to by the Protestant were updated figures based on data unavailable at the time of the application and figures relating to the lease arrangement. Although at the time of the application, the Applicant intended to purchase the proposed site, it later decided to lease the proposed site. The Department does not view this as a material change in the application and fails to see how the Protestant was prejudiced by this change. As to the updated figures, in McDonald v. Department of Banking and Finance, 346 So.2d 569, 584 (Fla. 1st DCA), the court stated that the hearing officer may freely consider relevant evidence of changing economic conditions and other current circumstances external to the application. It should also be noted that the revisions referred to by the Protestant were testified to at the hearing in June, thus giving the Protestant a month's notice to make any changes necessary in the preparation of its case which was later presented at the continuation of the hearing in July. Protestant's exception contained in Section 24 is rejected for the reason that the requested findings are not material to the statutory and regulatory criteria applicable to branch applications.
Recommendation In light of the foregoing, it is hereby RECOMMENDED that the Department issue a final order dismissing Petitioner’s amended petition on the grounds that Petitioner lacks standing to administratively challenge the Department’s decision not to disapprove Hensler’s proposed appointment to Sunniland’s board of directors and that the Department, having failed to act within the time frame prescribed by Rule 3C-100.0385, Florida Administrative Code, does not have the authority to reconsider its decision and issue a letter of disapproval, as requested by Petitioner.16 DONE AND ENTERED this 11th day of April, 1997, in Tallahassee, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 11th day of April 1997
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 Based upon the parties' factual stipulations, the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: On August 28, 1992, Petitioner submitted to the Department its application for licensure as a mortgage lender. 1/ On October 28, 1992, the Department sent Petitioner a letter announcing its intent to deny Petitioner's application for licensure as a mortgage lender. The text of the letter read as follows: This is to inform you that your Application for Licensure as a Mortgage Lender for Citifirst Mortgage Corp. is hereby denied. The denial is based on Section 494.0072(2)(k), Florida Statutes. Section 494.0072(2), Florida Statutes, "Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection may be taken: . . . (k) Acting as a mortgage lender or correspondent mortgage lender without a current active license issued under ss. 494.006-494.0077." The Department's investigation revealed Citifirst Mortgage Corp. has acted as a mortgage lender without a current, active license. Please be advised that you may request a hearing concerning this denial to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. Requests for such a hearing must comply with the provisions of Rule 3-7.002, Florida Administrative Code (attached hereto) and must be filed in duplicate with: Clerk Division of Finance Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 (904) 487-2583 within twenty-one (21) days after receipt of this notice. Failure to respond within twenty-one days of receipt of this notice shall be deemed to be a waiver of all rights to a hearing. Should you request such a hearing, you are further advised that at such a hearing, you will have the right to be represented by counsel or other qualified representative; to offer testimony, either oral or written; to call and cross examine witnesses; and to have subpoenas and subpoenas duces tecum issued on your behalf. Petitioner timely requested a formal hearing on the proposed denial of its application. The matter was referred to the Division of Administrative Hearings, where it is still pending.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The applicant's proposed banking facility is to be located at the intersection of Southeast First Street and Federal Highway in Boca Raton, Palm Beach County, Florida. The designated primary service area (hereinafter referred to as PSA) encompasses the southern portion of Palm Beach County, including all of the City of Boca Raton, a portion of the town of Highland Beach and unincorporated areas west of Boca Raton. The applicant's PSA was determined and identified by considering traffic patterns, shopping, retail, professional services, business industries, geographical barriers and competitive financial institutions. The PSA is bounded on the north by the C-15 Canal, on the south by the Palm Beach/Broward County line, on the east by the Atlantic Ocean and on the west by the Florida Turnpike. The east/west boundaries are located 6.2 air miles apart, and the north/south boundaries are 7.1 air miles apart. The proposed site is located 5.2 air miles from the northern boundary of the designated PSA, 1.9 air miles from the southern boundary, 1.1 air miles from the eastern boundary and 5.1 air miles from the western boundary. According to one source, the entire PSA is within an average twelve minute driving time distance. One witness conducted a survey travelling on main traffic arteries from different points within the PSA to the proposed site. This experiment was conducted on February 4, 1980, during the winter tourist season, and involved some lunch time traffic. The driving times from nine different sites ranged from four minutes to nineteen minutes. The center of the downtown Boca Raton area is located approximately two blocks from the applicant's proposed site. The PSA contains six north/south traffic arteries and six east/west traffic arteries. Interstate 95 (I-95) separates the PSA approximately in half. The area east of I-95 is densely populated with limited vacant land available for development. The area west of I-95 is significantly less populated than the area east of I-95, with substantial vacant land available for future growth. Most new construction is taking place in the area west of I-95. This includes several large residential developments, a regional mall and office plazas. According to the applicant, there are 334 commercial establishments within one- half mile of the proposed site. The largest of the 86 light industries in Boca Raton is IBM, with approximately 3,600 employees. The IBM plant is located approximately 4 1/2 miles from the applicant's proposed site. According to data obtained from the Area Planning Board of Palm Beach County, the applicant estimates the 1979 population of the PSA to be 56,178. It is projected that this figure will be increased by 77.9 percent over the next seven-year period and that the population of the PSA will reach almost 94,000 by the year 1985. In mid-1978, there were 18 residential projects underway within the PSA with plans to add 30,662 new dwelling units to the area. As of September, 1979, according to the applicant, 4,967 single-family dwellings and condominium units had been completed and another 2,187 were presently under construction. The majority of the units are located west of I-95. Gulfstream's economic expert was of the opinion that I-95 would be a barrier beyond which persons residing or working west of I-95 would not cross to do their banking business. Two of the protesting banks located very close to the proposed site of the applicant have the same southern and eastern PSA boundaries, but smaller northern and western boundaries. These PSAs were designated in 1959 and 1971, at a time when there was little activity west of I- 95. According to data compiled by the Bureau of Economics and Business Research, Division of Population Studies at the University of Florida, the population of Palm Beach County as of April 1, 1979, was 564,447. This represents an annual average growth rate of 6.6 percent between 1970 and 1976, 3.6 percent between 1976 and 1977, 5.7 percent between 1977 and 1978, and 5.6 percent between 1978 and 1979. The same source shows Boca Raton's population of 49,744 to represent average annual growth rates of 8.5 percent between 1970 and 1976, 4.7 percent between 1976 and 1977, 4.2 percent between 1977 and 1978, and 2.4 percent between 1978 and 1979. The population of the unincorporated areas of the county showed similar patterns of growth rates -- a high growth rate between 1970 and 1976, a drop to almost half between 1976 and 1977, an upward trend between 1977 and 1978 and another drop between 1978 and 1979. The average annual growth rates in the population of Highland Beach for the same four periods of time were 34.2, 26.4, 9.8 and 2.2 percent. The growth in the County's population results almost exclusively from net migration, which is favorable to a new banking institution. Net migration accounted for 99.08 percent of the population growth in 1978, and for 99.21 percent in 1979, leaving only .79 percent due to natural increase. The labor group (ages 15 through 64) constitutes some 59 percent of the County's population, and retirees (older than 65) comprise some 20 percent of the population. The average annual unemployment rate declined from 9.1 to 7.1 percent between 1977 and 1978. These figures are somewhat higher than the State averages. Since 1969, the per capita personal income figures for West Palm Beach and Boca Raton have been consistently higher than the state averages. The median family incomes for the PSA have, since 1969, exceeded both the county and the state median family income figures. Approximately ten commercial banking facilities presently exist within the applicant's designated PSA with about six more having been approved, but unopened. Three of the existing facilities are main offices and they are the petitioners herein. The main office of Gulfstream is located 0.2 miles northeast of the proposed site. The main office of the Boca Raton National Bank is located 0.5 miles south of the proposed site and the main office of Citizens National Bank is located 1.0 mile northeast of the proposed site. The branch office of the intervenor is located 1.7 miles northeast of the proposed site. There are also over twenty existing and/or approved but unopened savings and loan offices within the applicant's PSA. There are presently no state chartered independent banks within the PSA. The petitioners Citizens National and Boca Raton National Banks are independent national banks affiliated through common ownership of stock. As of June, 1979, the total deposits of all existing commercial banking facilities located within the PSA increased from the previous year. The total deposits of the individual savings and loan institutions within the PSA ranged from $3.5 million to $118.5 million in March of 1978, to $4.7 million to $127 million in March of 1979. Of the 36 reporting banks in Palm Beach County, between June of 1978 and June of 1979, the following increases were noted: a 20.7 percent increase in loans, a 12.7 percent increase in time deposits, a 3.2 percent increase in demand deposits and an 8.5 percent increase in total deposits, which total deposits amounted to $2,253,491,000. The most recently opened full service bank located nearest to the applicant, though outside the applicant's PSA, experienced large increases in loans and total deposits. This bank, the Florida Coast Bank of Palm Beach County, opened in May of 1978 and grew by 286 percent in loans over a year's period and had total deposits in the amount of $11.8 million by November 30, 1979. It is proposed that the new bank will be capitalized with a total of $1.5 million, composed of $750,000.00 common capital, $450,000.00 surplus and $300,000.00 in undivided profits. There will be 150,000 shares of stock sold. As of the date of the application, 117,500 shares had been sold to 45 individual purchasers. Some 83 percent of the subscribers are residents of Palm Beach County. Of this figure, approximately 78 percent are residents of Boca Raton and reside within the PSA. Saul Slossberg, an organizer and proposed director, has subscribed to ten percent of the stock. In addition, he holds the remaining unsubscribed stock as trustee. It is intended that these shares held in trust will be distributed to the public. The proposed board of directors is composed of six members. Only one of the six, Charles A. Heeg, has been a bank officer, and that was in the trust department of another local bank. The applicant does not intend to offer trust services. Two other proposed directors have served as directors of other financial institutions. Norman I. Stone, who is presently in the brokerage business, served as a member of the board of directors of a New York bank for seven or eight years in the 1950's. Sy Reece, a real estate broker and warehouse developer, presently serves as a director of a savings and loan institution in Miami and is on the advisory board of the First American Bank of North Palm Beach. The principal organizer, Saul A. Slossberg, is a developer and general contractor with no prior direct banking experience. The other two proposed directors are Karl Enselberg, a medical doctor, and Melvin Schwartz, an attorney who has been involved in corporate banking matters. The organizers have not yet made a determination as to the identity of any of the key officers of the proposed bank. The chief executive officer will not be anyone from the organizing group. The proposed banking quarters will consist of a 4,000 square foot single-story building with twenty-three parking spaces and drive-in teller facilities. Both the land and the building are owned by Saul Slossberg, a proposed director. Initially, the bank will be housed in 3,000 square feet at an annual rental of $36,000.00. After the first year, the bank will have an option to lease the additional 1,000 square feet for an added annual fee of $12,000.00. Utility costs will be paid by the lessor. The bank will have a ten year lease, with an option to purchase. An appraisal from an MAI appraiser indicates that the market value of the land and the building will be $400,000.00. All of the proposed directors have been informed that Mr. Slossberg is the lessor for the proposed banking quarters, and Mr. Slossberg intends to make a full disclosure of the transaction terms to all subscribers of stock. If the lease or rental terms are unacceptable to the Department, Mr. Slossberg is willing to change it or to sell the property to a third party. While the interior layout has not been determined yet, it is anticipated that there will be four teller stations, with room to expand to eight. Citizens National Bank is presently operating in a 4,000 square foot building and services some $14 million in accounts. Citizens does utilize some off-site services, such as electronic data processing. Mr. Slossberg has also purchased a strip of land containing 6,800 square feet adjacent to the proposed site for the express purpose of making expansion possible, should it be needed. This space could be used to provide 15 to 18 additional parking spaces. The applicant intends to offer the prevailing banking services, prices, interest rates and hours of business as other banks in the area. It intends to be competitive in basic and ancillary services. It will not have a trust department. It is intended that the proposed new bank will offer more personalized services and will cater primarily to individuals and small and medium-sized businesses. The applicant expects to make primarily smaller loans under $50,000.00, for which it feels there is a demand. The loan portfolio of the Boca Raton National Bank indicates that as of September 28, 1979, 1,102 out of its 1,108 loans were loans under $50,000.00. Other banks in the downtown area do not have on-site drive-in teller facilities. The applicant projects total deposits of $4 million, $7 million and $10 million for the first, second and third years of operation. It also projects a loss of $69,834.00 during the first year of operation, a loss of $11,289.00 during the second year and a profit of $78,170.00 during the third year of operation. Due to higher income and expense figures occurring since the date of its application, these loss and profit estimates may need to be adjusted. The name of the proposed new bank is Royal Palm Bank. This name was selected because the words "Royal Palm" appear in a nearby street, a shopping center, a yacht club, and a dinner theatre and it was felt by the organizers that people could easily relate to the proposed name and it tends to express an affiliation with the City of Boca Raton. The applicant did not consult with any expert or studies regarding bank names. No expenses have been incurred with respect to the proposed name, and there would be no economic hardship to the organizers if they are required to select a different name for the bank. The intervenor Royal Trust Bank of Palm Beach, N.A. is a branch office and member of the Royal Trust Bank Corporation. It is located 1.7 miles northeast of the proposed site. The Royal Trust Bank Corporation has a registered service mark which has been in use since 1976, and the intervenor utilizes this trade mark. The service mark contains a palm tree. The Royal Trust Bank Corporation also publishes a periodical entitled the "Royal Palm News." For the years 1977, 1978, and 1979, the statewide advertising campaign of the Royal Trust Banks resulted in an expenditure of $1,080,000.00. Of this figure, $803,005.00 was expended in Dade, Broward and Palm Beach Counties. In Palm Beach County, the intervenor has engaged in television, radio, magazine and newspaper advertising activities. Other advertising materials utilized by the intervenor such as matches, service literature and things of that nature, also include the logo containing the palm tree. The intervenor intends to continue the use of the name Royal Trust Bank and the logo containing a palm tree. It is felt that the palm tree in connection with the registered service mark plays an important part in the identification of the intervenor and Royal Trust Banks. In accordance with the provisions of Florida Statutes, 120.57(1)(a)(12), conclusions of law and a recommendation are not included in this Report. Respectfully submitted and entered this 13th day of March, 1980, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301 Robert I. MacLaren, II, Esquire Osborne and Hankins Suite 200, Weir Plaza Bldg. 855 South Federal Highway Post Office Drawer 40 Boca Raton, Florida 33432 David B. Van Kleeck, Esquire Buchanan, Ingersoll and Van Kleeck Suite C, Plaza II Bldg. 301 West Camino Gardens Blvd. Boca Raton, Florida 33432 Walter A. Engdahl, Esquire 140 East Palmetto Park Road Boca Raton, Florida 33432 Karlyn Ann Loucks Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32301 Robert Paul Paul, Landy and Beiley Penthouse, Peninsula Federal Bldg. 200 South East 1st Street Miami, Florida 33131 Mark E. Pollack and Edward A. Stern Pollot, Stern and Pollock, P.A. 627 South West 27th Avenue - Suite 300 Miami, Florida 33135 =================================================================
Conclusions 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 of Banking and Finance (hereinafter referred to as the Department) shall conduct an investigation pursuant to Subsection 659.03(1), 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 Subsection 659.03(2), Florida Statutes, and wherein it is provided that: The department shall approve or disapprove the application, in its discretion, but it shall not approve such application until, in its opinion: Public convenience and advantage will be promoted by the establishment of the proposed bank or trust company. Local conditions assure reasonable promise of successful operation for the proposed bank or the principal office of the proposed trust company and those banks or trust companies already established in the community. The proposed capital structure is adequate. The proposed officers and directors have sufficient banking and trust experience, ability and standing to assure reasonable promise of successful operation. The name of the proposed bank or trust company is not so similar as to cause confusion with the mane of an existing bank. Provision has been made for suitable banking house quarters in the area specified 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 Subsections 659.03(2)(c), (d), (e), or (f), 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 Subsections 659.03(2)(a) and (b), Florida Statutes, since 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 purposes of applications for authority to organize and operate a new bank, Rule 3C-10.051(1), Florida Administrative Code, defines the primary service area (PSA), as "the smallest area from which the proposed bank expects to draw approximately 75 percent of its deposits. It should be drawn around a natural customer base and should not be unrealistically delineated to exclude competing banks or to include areas of concentrated population." Based upon man-made traffic barriers, population concentrations, commercial activity, traffic patterns and the location of existing offices of financial institutions in the area, the Department concludes that the Applicant's designated PSA is unrealistically delineated. The Applicant extended the western boundary of its designated PSA to the Florida Turnpike to include an area of high growth potential west of Interstate 95 (I-95), a limited-access highway. In conjunction with the residential and commercial development of this area, numerous offices of financial institutions have located or have been approved to be located nearby. It is unrealistic to expect the population living west of I-95 to drive past these financial institutions, cross I-95 (at the limited number of available crossings) and drive to the other side of Boca Raton to bank at the downtown location of the Applicant's proposed site, especially when no new services are being offered by the bank. Likewise, residents north of 40th Street, N.W. (Spanish River Boulevard) generally would not drive past the numerous financial institutions located there, cross two heavily traveled east-west arteries, and travel through Boca Raton to the downtown location of the proposed bank. By including these areas, Applicant's designated PSA is not drawn around a natural customer base which can reasonably be expected to bank at a financial institution located at the Applicant's proposed site. The Department concludes that based on traffic patterns, man-made barriers and location of other financial institutions, the northern and western boundaries of a realistic PSA of the Applicant's proposed site are 40th Street, N.EW. (Spanish River Boulevard), and I-95, respectively. It is the opinion and conclusion of the Department that public convenience and advantage will not be promoted by the establishment of the proposed bank in this case. Therefore, the criterion in Subsection 659.03(2)(a), Florida Statutes, is NOT met. As set forth in Rule 3C-10.51(2)(a), Florida Administrative Code, the location and services offered by existing banking and financial institutions in the service area are considered as 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 are also considered in evaluating this statutory criterion. Because it is recognized that the establishment of a new bank 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. The record indicates that access to the proposed site is inconvenient due to difficult ingress and egress caused by a heavy and continuous flow of traffic on South Federal Highway and the lack of a traffic light to regulate the traffic for the benefit of users of the proposed site; that the proposed site is located in downtown Boca Raton east of I-95, a mature area housing mainly offices and relatively small retail trade establishments; that there is only limited room for growth in its vicinity without major reconstruction and rehabilitation projects; that the Applicant's designated PSA already has ten commercial banking offices and thirteen savings and loan offices serving it; that the more realistic PSA, as delineated by the Department, still has nine banking offices serving it, of which three are main offices, two are branches which were formerly full-service banks, and fourteen savings and loan offices; that five of these banking offices and eight of the savings and loan offices are located in proximity to the proposed site and are more conveniently accessible from the main centers of commercial activity within the realistic PSA; that of the three bank main offices within the realistic PSA two are located within 0.5 of a mile from the proposed site and the third is within one mile from it, and, that in addition, there are three branch offices of three other banks located within a 1.7 mile radius of the proposed site; and that the proposed new bank would not offer any new services or improve on existing services. Due to the number of existing banking and savings and loan offices in or near the realistic PSA, their locational distribution, and the fact that the record does not reflect inadequate or an insufficient variety of financial services, it appears that the banking needs of the PSA's resident and working populations are being conveniently and adequately served at this time and that competition in the realistic PSA would not be significantly enhanced by the establishment of the proposed new bank, which will not offer any new services. Located within the central portion of the realistic PSA, the proposed site could offer some convenience for businesses and residents situated nearby, but the existing banking and savings and loan offices, which are presently serving most of them, are more easily accessible and more conveniently located for most of the PSA residents and businesses. Furthermore, because of the population density within the realistic PSA and the fact that it is a mature area with little room for expansion, rapid population growth is unlikely. In view of the above, the Department concludes that the criterion in Subsection 659.03(2)(a), Florida Statutes, is not met. It is the opinion and conclusion of the Department that local conditions do not assure reasonable promise of successful operation for the proposed bank and those banks already established in the community. Therefore, the criterion in Subsection 659.03(2)(b), Florida Statutes, IS NOT met. As set forth in Rule 3C-10.051(2)(b), Florida Administrative Code, current economic conditions and, to a lesser extent, the growth potential of the area in which the new bank proposes to locate are important considerations in determining the bank's probable success. Essential to the concept of banking opportunity is that there does and will exist a significant volume of business for which the new bank can realistically compete. The growth rate, size, financial strength, and operating characteristics of banks and other financial institutions in the PSA are also import indicators of economic conditions and potential business for a new bank. It is noted that the statutory standard requires that ". . .local conditions ASSURE reasonable PROMISE of successful operation for the proposed bank and those already established in the community. . ." (E.S.), NOT merely that local conditions INDICATE a POSSIBILITY of such success. Banking involves a public trust. Unlike private enterprise establishments generally, banks operate on the public's capital and therefore, the Legislature has vested in the Comptroller the responsibility of protecting that public interest. Furthermore, the failure of a bank, as opposed to 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. 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 in the community are stable and safe. That was the intent of the Legislature in regulating entry into the banking industry. The record indicates that between June 30, 1978 and June 30, 1979 the rates of growth of the total deposits of the existing offices of commercial banks located within the PSA were uneven, ranging between poor to good, although all of them showed increases. These increases ranged between $1.9 million and $23.4 million. There is no evidence in the record that the performance of these banks can be duplicated by the Applicant. As was already pointed out in the discussion of the criterion of convenience and advantage, both the resident and business populations of the realistic PSA are conveniently and adequately served by this PSA's existing offices of financial institutions. Since the Applicant does not plan to offer any new services, no significant transfer of customers, if any, from existing institutions to the proposed new bank can be expected. This is especially true of those customers with loan or other commitments to one or more of the existing institutions. As to new and uncommitted customers, the realistic PSA is a densely populated mature area in downtown Boca Raton and the Applicant is not likely to benefit to any significant degree in the near future from the population growth in other parts of the City or in Palm Beach County. Although the record also shows that the total deposits and loans of Florida Coast Bank of Palm Beach County, N.A., the most recent bank to open in Palm Beach County (May, 1978) but which is located outside of the Applicant's designated PSA, grew significantly during its first 18 months of operation, this bank serves a different PSA. There was no evidence in the record that the rate of growth of that PSA's population and its demographic and economic characteristics, as well as the number, nature, and competitive climate of the offices of financial institutions serving it are analogous to the Applicant's realistic PSA. It cannot, therefore, be reasonably assumed that the Applicant will be able to duplicate its performance. It should also be noted that this bank is more conveniently located to and accessible from that section of the Florida Turnpike which serves the southern portions of Palm Beach County. Based on the above considerations, the Department is of the opinion that the feasibility of materialization of the Applicant's deposit projections remains inconclusive. In view of the fact that the statutory standard requires that ". . .local conditions ASSURE reasonable PROMISE of successful operation for the proposed new bank. . .", the Department concludes that the criterion in Subsection 659.03(2)(b), Florida Statutes, is not met. It is the opinion and conclusion of the Department that the proposed capital structure of the proposed new bank is adequate. Therefore, the criterion in Subsection 659.03(2)(c), Florida Statutes, IS met. Capital should be adequate to enable the new bank to provide the necessary banking services, including loans of sufficient size, to meet the needs of prospective customers. It should be sufficient to purchase, build or lease a suitable permanent banking facility complete with equipment. Generally, the initial capital for a new nonmember bank should not be less than $1.0 million in nonmetropolitan areas and $1.5 million in metropolitan areas. However, greater capital may be required of a new bank which is a member of the Federal Reserve System because of the more restrictive uses of capital imposed by that body. The capital referred to be allocated among capital stock, paid in surplus, and undivided profits in the ratios set forth in Section 659.04(3), Florida Statutes. The Applicant's proposed capital accounts total $1.5 million and are allocated according to the statutory ratios. Therefore, the criterion in Subsection 659.03(2)(c), Florida statutes, is met. It is the opinion and conclusion of the Department that although the proposed directors have good character, have reputations of financial responsibility, ability and good standing in their community, they do not have sufficient direct commercial banking experience to assure reasonable promise of successful operation for the proposed new bank. Therefore, the criteria in Subsection 659.03(2)(d), Florida Statutes, ARE NOT met. As set forth in Rule 3C-10.051(2)(d), Florida Administrative Code, the organizers, proposed directors, and officers as a group shall have reputations evidencing honesty and integrity. They shall all 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 experience. In addition, the organizers, proposed directors, and officers shall meet the requirements of Sections 659.11 and 659.54, 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 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, business experience and responsibility, but the board lacks in-depth experience in commercial banking to assure reasonable promise of successful operation. Were this the only requirement not met, the Department would generally allow the Applicant to correct this deficiency by adding at least one director other than the Chief Executive Officer, with direct commercial 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. In this instance, one of the proposed directors is presently a director of a savings and loan association in Miami which, because of its service area, is not considered a directly competitive financial institution. The Department concludes, therefore, that the interlocking directorship in this instance will not restrict competition or create fiduciary problems. It is the opinion and conclusion of the Department that the name of the proposed new bank, Royal Palm Bank, is so similar as to cause confusion with the name of existing banks. Therefore, the criterion of Subsection 659.03(2)(e), Florida Statutes, IS NOT met. As set forth in Rule 3C-10.051(2)(e), Florida Administrative Code, in determining whether an applicant meets the requirements of this statutory criterion, the Department will consider the names of all existing banks in the state. This provision shall not apply to affiliates of bank holding companies. In addition to the foregoing criterion an applicant shall meet the requirements set forth in Section 607.024, Florida Statutes. The Applicant's proposed name, Royal Palm Bank, begins with the same word as the Royal Trust Bank, which has a branch located 1.7 miles northeast of the proposed site. In addition to the similarity of name, the Royal Trust Bank uses a registered trade mark containing a palm tree in all of its advertising and service literature, which plays an important part in the identification of the Royal Trust Bank. In view of the similarity of the names, the identification of the Royal Trust Bank with a palm tree and the monies expended by the Royal Trust Bank in advertising over the last three years, the Department concludes that the Applicant's proposed name, Royal Palm Bank, is so similar as to cause confusion with the name Royal Trust Bank. It should also be noted that the Applicant did not incur any expenses in the identification and promotion of the proposed name or consult with any expert or perform studies regarding the bank's name. It is the opinion and conclusion of the Department that provision has not been made for suitable banking house quarters in the area specified in the application. Therefore, the criterion of Subsection 659.03(2)(f), Florida Statutes, IS NOT met. As set forth in Rule 3C-l0.051(2)(f), Florida Administrative Code, permission to open in temporary quarters may be granted, generally not to exceed one (1) year. An extension, generally not to exceed six (6) months, may be granted for good cause shown. The permanent structure of a new bank should contain a minimum of 5,000 square feet, unless the applicant satisfactorily shows that smaller quarters are justified due to the performance of certain auxiliary services off the premises. In addition, it shall meet Federal Bank Protection Act requirements and be of a sufficient size to handle the projected business for a reasonable period of time. The facility shall be of a nature to warrant customer confidence in the bank's security, stability, and permanence. Other pertinent factors include availability of adequate parking, an adequate drive-in facility if such is contemplated, and possibilities for expansion. Temporary quarters are not contemplated by the Applicant. The proposed banking quarters consist of a 4,000 square foot single-story building, of which the Applicant intends to initially occupy 3,000 square feet. The record does not indicate that any auxiliary services will be performed off- premises. Therefore, the provisions of Rule 3C-10.051(2)(f), Florida Administrative Code, and the criterion of Subsection 659.03(2)(f), Florida Statutes, are not met. Were this the only requirement that had not been met, the Department would generally allow the Applicant to correct the deficiency. Rule 3C-10.051(3), Florida Administrative Code, relating to stock distribution and financing, provides that To encourage community support, wide distribution of stock ownership is desirable. The majority of the stock should be issued, whenever possible, to local residents of the community, persons with substantial business interests in the community, or others who may reasonably be expected to utilize the services of the bank. Subscribers to 5 percent or more of the stock may not finance more than 50 percent of the purchase price if the extension of credit is predicated in any manner the stock of the new bank, whether or not such stock is pledged. The Department concludes that the initial stock distribution among 45 subscribers, most of whom reside or have businesses in the PSA, is acceptable, although generally a wider distribution is desirable to encourage community support. Rule 3C-10.051(4), Florida Administrative Code, relating to insider transactions requires that Any financial arrangement or transaction involving the proposed bank and its organizers, directors, officers, and shareholders owning 5.0 percent or more of the stock, or their relatives, their associates or interests should ordinarily be avoided. Should there be transactions of this nature they must be fair and reasonable, fully disclosed, and comparable to similar arrangements which could have been made with unrelated parties. The Department concludes that there is an insider transaction involved in the lease of the proposed bank building from Saul Slossberg, a proposed director and subscriber of more than five percent of the stock. The transaction has been disclosed to all of the proposed directors, however, it is not apparent from the record that the transaction has been disclosed to all the subscribers. Information has been submitted to indicate that the terms of the transaction are comparable to similar arrangements which could have been made with unrelated parties. 12. Rule 3C-10.051(5), Florida, Administrative Code, sets forth that In all cases appraisals of land and improvements thereon shall be made by an independent qualified MAI appraiser, and be dated no more than six (6) months prior to the filing date of the application. Based upon comparable information submitted to the Department, the Department concludes that the proposed leasing arrangements are reasonable and competitive.
The Issue Whether the application to organize Plus International Bank should be approved.
Findings Of Fact On March 24, 2000, the Department received an application (Application) from foreign nationals (Applicants) to organize a new bank, Plus International Bank (New Bank), to be located in Miami-Dade County, Florida. The Department published notice of its receipt of the Application in the April 7, 2000, edition of the Florida Administrative Weekly. The notice complied with the requirements Section 120.80(3)(a)1.a., Florida Statutes, and Rule 3C-105.103(1), Florida Administrative Code.5 By letter dated April 11, 2000, the Department requested the Applicants to supplement their Application with additional information, including information concerning their "promise of successful operation" and the New Bank's "capital structure," its "directors and officers," and its "banking quarters." It was not until November 3, 2000, that the Department received all of the additional information it had requested from the Applicants. The Application identifies four individuals associated with the New Bank who are foreign nationals: Manuel Sacal, Harry Sacal, Alex Sacal, and Roberto Barroso. Manuel Sacal (M. Sacal) is a proposed director of the New Bank and holder of 28% of the bank's outstanding shares of common stock. He is currently the Chief Executive Officer and General Director of Casa De Cambio Plus, S.A. de C.V. (Cambio Plus), a foreign exchange house based in Mexico City, Mexico, and the Chief Executive Officer and General Director of Plusder, S.A. de C.V., a futures brokerage house located in Mexico City, Mexico. As the Chief Executive Officer and General Director of Cambio Plus, a position he has held since 1987, M. Sacal has helped Cambio Plus become one of the largest exchange houses in Mexico. Harry Sacal (H. Sacal), like M. Sacal, is a proposed holder of 28% of the New Bank's outstanding shares of common stock. Alex Sacal (A. Sacal) is a proposed holder of 14% of the New Bank's outstanding shares of common stock. M. Sacal, H. Sacal, and A. Sacal are brothers. They each are citizens of Mexico. Roberto Barroso is a proposed director of the New Bank and holder of 0.1% of the New Bank's outstanding shares of common stock. He is a citizen of Brazil. Mr. Barroso has 30 years of banking experience, primarily in the area of international banking. He has, among other things, managed financial institutions and been involved in making trade financing arrangements. From approximately 1998, until his retirement in June of 2000, he was a Vice-President of Citibank. The other proposed directors of the New Bank identified in the Application -- Enrique Cabanilla, Barry Deutsch, Jaime Medina, Ira Weindruch, Deborah Jacobson, and Patrick Fournie -- are all United States citizens. These individuals, along with Mr. Barroso, have sufficient business experience, ability, standing, and reputation to enable them to perform their duties as the New Bank's directors in a manner that can reasonably be expected to result in the successful operation of the bank. Mr. Cabanilla, who is also identified as the proposed chief executive officer of the New Bank, has had over 30 years of banking experience, with particular emphasis in the areas of international banking and trade finance. He has held banking positions which have required him to be directly involved in credit analysis and approval, bank and personnel administration, direction and control of operations, and the application of routine control and audit functions. In addition, he has been responsible for the management of multi- branch banking operations and all phases of commercial lending. Although Mr. Cabanilla has not had at least one year of direct experience as an executive officer, director, or regulator of a financial institution within the last three years, it appears that he possesses sufficient financial institution experience, ability, standing, and reputation to enable him to perform his duties as the New Bank's chief executive officer in a manner that can reasonably be expected to result in the successful operation of the bank. Mr. Deutsch has had over 30 years of banking/bank consulting experience. He has been an employee of, and consultant to, a number of large United States financial institutions, such as Mellon National Bank, Bank One, and Bank of America. In addition, as a consultant, he has assisted a number of community banks in the South Florida area with strategic planning, marketing, and investor relations. He has also served as a consultant to several Latin American financial institutions, including Banco Popular de Puerto Rico and Grupo Financiero BAC, and to Bank Polska Kasa Opieki in Warsaw, Poland. While Mr. Deutsch has had at least one year of direct experience as an executive officer or director of a financial institution, he last served in such a capacity in 1988. Mr. Medina has had almost 20 years of banking experience, primarily in the area of international banking, and has had a least one year of direct experience as an executive officer of a financial institution within three years of the date the Application was filed with the Department. Mr. Weindruch was an owner and director of RockIsland Bank, an Illinois-state chartered bank, from 1985 until 1991. In addition, he served on the bank's loan, facilities, and personnel committees. He has not served as an executive officer or director of a financial institution since his departure from RockIsland Bank. Ms. Jacobson has extensive experience in the exporting and importing business. She has never been an executive officer or director of a financial institution. Mr. Fournie is the Chief Financial Officer for Surfin, Ltd., the Latin American arm of Direct TV. Prior to assuming his current position, he was employed by Citibank, where he gained considerable experience in international banking. Mr. Fournie has never been an executive officer or director of a financial institution. None of the proposed officers, directors, or major shareholders6 of the New Bank has been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes (which is known as the "Florida Control of Money Laundering in Financial Institutions Act"), any offense described Chapter 896, Florida Statutes, or any other crime. At present, the New Bank does not have a proposed president. The New Bank's business plan reflects that the bank will offer trade financing and commercial loans to small and medium-sized United States exporters and importers located primarily in Florida; commercial loans and small business loans to small and medium-sized businesses in the Miami-Dade County community; and private banking services to high net worth individuals, particularly those who are foreign nationals and permanent or part-time residents of the United States. The Application indicates that, at the time of the opening of the New Bank, 5,000,000 shares of common stock will have been sold at $2.00 per share, producing $10,000,000.00 in start-up capital. (According to the Application, the total number of shares of common stock that the New Bank will be authorized to issue is 7,500,000.) Of the $10,000,000.00 in start-up capital that the New Bank will have at opening, $7,000,000.00 will have been contributed by the Sacal brothers (M. Sacal, H. Sacal, and A. Sacal). Approximately $2,500,000.00 of the remaining $3,000,000.00 in start-up capital has already been raised. The Sacal brothers have committed to increasing their investment in the New Bank after its opening, as circumstances warrant. The Application estimates that net organizational expenses will be $446,642.00. Of the amount ($9,553,358.00) of capital remaining following payment of these expenses, $5,000,000 will be allocated as paid-in capital (5,000,000 shares at $1.00 par value). The New Bank's proposed capital structure will also have paid-in surplus in an amount greater than 20 percent of paid-in capital and a fund designated as undivided profits in an amount greater than five percent of paid-in capital. The initial capitalization of the New Bank appears to be adequate in relation to its proposed business activities. Local conditions in Miami-Dade County indicate reasonable promise of successful operation of the New Bank. The bank's financial plan appears to be reasonable and attainable. The parties have stipulated that the corporate name, "Plus International," is not, and cannot, be reserved with the Department of State inasmuch as the Department of State no longer reserves corporate names. The New Bank, which will be located at 200 South Biscayne Boulevard, Miami, Florida, will have suitable quarters. The Applicants have applied to have the New Bank insured by the Bank Insurance Fund (BIF) of the Federal Deposit Insurance Corporation (FDIC). The application was received by the FDIC on July 11, 2000. DONE AND ENTERED this 9th day of February, 2001, in Tallahassee, Leon County, Florida. ___________________________________ STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 2001.
The Issue The issue for consideration herein is whether Respondents should be disciplined as proposed in the Cease and Desist Order And Complaint filed herein because of the alleged misconduct outlined therein.
Findings Of Fact At all times pertinent to the allegations contained in the Cease and Desist Order and Administrative Complaint, the Petitioner was the state agency responsible for the administration and enforcement of the Florida Consumer Finance Act, Chapter 516, Florida Statutes. Respondents Norman were licensed real estate professionals who also established and operated Bankers Acceptance of America, a credit "repair" agency. Sometime in February, 1989, Steven Fischer who, with his wife was, at the time, substantially in debt, contacted Respondent, Bankers Acceptance of America, (Bankers), because of its advertisement which he had seen in the Bradenton Herald. This ad offered assistance with "credit repair", and, by implication, with securing Visa and Master Card, auto loans and home loans. When he first called the number listed in the ad, Mr. Fischer spoke with Respondent, Dan Norman, and made an appointment to meet with him at Fischer's home, where they discussed his credit situation and how Respondents could help him. As a result of the representations made by Mr. Norman, Mr. Fischer signed a two page contract for Respondents' service. This contract, which bears the signature of Dan Norman for Bankers and that of Mr. and Mrs. Fischer as well, is entitled a "Service Contract Agreement", wherein Bankers is identified as the consultant and the Fischers as the clients. Review of the contract document indicates that it relates solely to the client's credit situation and makes no reference to the credit "repair" service being conditioned upon or related to the purchase or sale of real estate through Respondents, in any fashion whatever. Though the contract is silent on the issue of real estate, Mr. Fischer recalls that at the time of their interview, there was some mention of real estate, but at the time of hearing, he could not recall what it was. He does not recall Mr. Norman telling him that he or Bankers were real estate brokers or that they would be interested in working on credit only with those who would consider buying or selling real estate through them. He does recall, however, that his prime concern at the time was the repair of his credit and he had no interest in either purchasing or selling real estate. Neither the ad in the paper, the contract he signed, nor the "Client Questionnaire" filled out by Mr. Norman regarding him made any reference to real estate except as an asset of the client. Neither did they refer to Respondents as real estate brokers. On his initial visit to the Fischer home, Mr. Norman remained for several hours, talking about the Fischers' credit situation. Ultimately Mr. Fischer paid Mr. Norman $100.00 as a deposit and agreed to pay an additional $300.00 at $100.00 per month for three months, for a total credit repair fee of $400.00. Thereafter, Respondent Juanita Norman was the Fischers' primary contact with their creditors, with Mr. Norman coming in only when creditors had some objection to efforts to arrange some compromise or payment schedule. Whenever such a situation arose, either the Fischers would call her or she would call them. Several of the Fischers' creditors, notably American Express, refused to accept Respondents as a credit repair service. Mr. Fischer did not request a refund because of Respondents' inability to completely accomplish that which was to be done. He admits that he did not always follow Respondent's instructions. He did not file a complaint with the Petitioner herein, but after a complaint was filed by someone unknown, was contacted by Mr. Norman who offered a partial refund of fees paid. None was forthcoming, however. In his testimony at the hearing, Dan Norman claimed that notwithstanding the advertisement in the newspaper, and the terms of the service contract agreement involved herein, neither he, his wife, nor Bankers, agreed to "repair" credit for the Fischers but merely to assist them in their fixing their own credit by helping them to establish new credit over time. He admits his contract provides that with the Fischer's cooperation, he could help them set up a repayment schedule, could work with their creditors, and could set up a budget for them so that they could repair their own credit. He claims this was done. The success of Respondents in repairing the Fischer's credit is not, however, the issue involved in this case. Mr. Norman admits that the Fischers paid him $400.00, and further acknowledges that he signed similar contracts with between 60 and 70 other clients who paid a similar fee or less. Neither the $400.00 received from the Fischers, however, nor the fees paid by the other clients was placed in a trust account maintained by Norman or Bankers for the credit repair service. Mr. Norman claims that he is a real estate broker and that he and his wife operated a real estate brokerage agency under the name, Bankers Acceptance Real Estate Group, under which Bankers Acceptance of America, the credit repair firm, was operated as a part of the real estate operation. Mrs. Norman admits that it was their intention to use the credit repair service as a means to feed customers to the real estate business. Norman had a trust account in the name of the real estate business, but none of the fees received from the credit repair clients were placed into that trust account because they were not deposits placed in a real estate transaction. By the same token, since he did not consider himself to be operating a "credit repair" service, other than incident to his real estate business, he felt he did not need to obtain a surety bond and did not do so. After a complaint was filed with the Department of Banking and Finance by someone not further identified, Lynn D. Chang, a financial administrator with the Comptroller's office, issued a subpoena to Respondents on June 16, 1989, calling for them to provide information regarding the surety bonding company, the location and a copy of their surety bond, the location and account number of this escrow account, proof of said account, and a copy of the information statement and consumer contract. None of the requested information was provided by the Respondents. Instead, by letter to Ms. Chang dated July 7, 1989, Both Dan and Juanita Norman advised her that based on their prior telephone conversation, their evaluation of the law regarding credit repair, and a telephone discussion with Mr. Underwood, a representative of the Comptroller's office, they concluded that their operation fell within the exemption from bonding and escrow requirements afforded real estate brokers, and that no additional information would be provided. Respondents claim that their credit repair operation was incident to their operation of a real estate brokerage firm. It is their contention that by helping to repair their clients' credit, Respondents were getting those clients ready to buy houses and Respondents claim that as of the time the complaint herein was filed, 20 of their 60 to 70 clients were ready to purchase real estate and had qualified for financing. No evidence in support of this claim was presented, however. After the complaint was filed, and an article concerning them was published in the local newspaper, in effect, their business was wiped out and only one of their 20 qualified buyers actually went through with their deal. Mr. Norman claims that a client was never taken on in the credit repair business unless that client indicated that he or she was interested in buying real estate when their credit had been repaired. The Respondent indicates, however, that while in business as a credit repair agency, "incident" to the real estate operation for two years, Respondent's generated $16,000.00 in credit repair income, and only $5,000.00 in real estate commissions as the result of the one previously mentioned sale. Considering the evidence in its totality, it is clear that the Normans, through Bankers Acceptance of America, were operating a classical credit service organization. It may have been in conjunction with a real estate business, but the service was not rendered incident to that business. They failed to obtain the required surety bond; to establish a trust account for the repair service operation; and to submit the required disclosure forms as is called for in the Florida Statutes, and at no time during the operation of the repair service, were those requirements met. However, the Respondents' credit service organization operation was not large scale, and there is substantial evidence that since the complaint was filed in this case and the preliminary Cease and Desist Order entered, the Respondents' business has dried up and no further income has been earned as a result of it. The Normans claim, and there is no evidence to contradict it, that that operation has ceased.
Recommendation Based on the foregoing Findings of Fact and conclusions of Law, it is, therefore: RECOMMENDED that a Final Cease and Desist Order be issued against each of the Respondents, Dan Norman, Juanita Norman, and Bankers Acceptance of America, a Florida General Partnership, as to each of the allegations of misconduct outlined in the initial Cease and Desist Order and Complaint filed herein. RECOMMENDED this 20th day of June, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 20th day of June, 1990. COPIES FURNISHED: Robert K. Good, Esquire Office of the Comptroller 400 West Robinson Street, Suite 501 Orlando, Florida 32801 Dan Norman Juanita Norman Bankers Acceptance of America 3505 34th Avenue Drive West Bradenton, Florida 34205 Hon. 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, Rm. 1302 Tallahassee, Florida 32399-0350
The Issue The Department adopts and incorporates in this Final Order the Statement of the Issue presented in the Recommended Order.
Findings Of Fact The Department adopts and incorporates in this Final Order the Findings of Fact set forth in the Recommended Order.
Conclusions This cause came before the Department of Revenue for the purpose of issuing a final order. The Administrative Law Judge assigned by the Division of Administrative Hearings issued a Recommended Order dated July 5, 2001, sustaining in full the Department’s assessment. Petitioner timely filed exceptions to the Recommended Order, but Petitioner subsequently withdrew its exceptions by way of letter dated September 7, 2001. The Department filed no exceptions to the Recommended Order and there are no proposed substituted orders to consider. A copy of the Recommended Order is attached to this Final Order and is specifically incorporated by reference. The Department has jurisdiction of this cause.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the , Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a Notice of Appeal with the Agency Clerk of the Department of Revenue and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate District where the party resides. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed.
