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 McLaughlin’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 The Applicant, Protestant, and Department submitted Proposed Findings of Fact pursuant to Rule 3C-9.11, Florida Administrative Code. The Applicant's Proposed Findings of Fact are accepted except where they might specifically conflict with the Findings stated in the Hearing Officer's Report or where they may constitute conclusions of law, with the following exceptions: The last sentence of Proposed Finding Number 8 is rejected to the extent that it constitutes a legal argument as opposed to a finding of ultimate fact. Proposed Finding Number 11 is rejected in that it constitutes legal argument as opposed to a finding of ultimate fact. Proposed Finding Number 15 is rejected in that it constitutes a conclusion of law. The Protestant's Proposed Findings of Fact are accepted except where they might specifically conflict with the Findings stated in the Hearing Officer's Report or where they may constitute conclusions of law, with the following exceptions: The first sentence of Proposed Finding Number 6 is rejected in that it is speculative, constitutes legal argument, and is not supported by competent substantial evidence. The last sentence of Proposed Finding Number 6 is rejected in that it constitutes a conclusion of law as to the reason why the Protestant's bank charter was granted. The first, third, fourth and fifth sentences of Proposed Finding Number 10 are rejected, as they constitute legal arguments based upon restatement of testimony, as opposed to findings of ultimate fact. The second sentence of Proposed Finding Number 11 is rejected in that it constitutes a conclusion of law. Proposed Finding Number 14 is rejected in that it consists of argumentative references to testimony and not findings of ultimate fact. Proposed Finding Number 24 is rejected in that it constitutes legal argument and conclusions of law rather than findings of ultimate fact. The first sentence of Proposed Finding Number 26 is rejected in that it constitutes a conclusion of law. The second sentence of Proposed Finding Number 26 is rejected in that it is repetitious and constitutes a conclusion of law. The Fourth sentence of Proposed Finding Number 26 is rejected in that it constitutes a conclusion of law. Proposed Finding Number 27 is rejected in that it constitutes a conclusion of law. Proposed Finding Number 28 is rejected in that it constitutes legal argument rather than a finding of ultimate fact. The last sentence of Proposed Finding Number 31 is rejected in that it constitutes legal argument and a conclusion of law. The Department's Proposed Findings of Fact are accepted except where they might specifically conflict with the Findings of the Hearing Officer's Report or where they may constitute conclusions of law.
Findings Of Fact Respondent was licensed as a real estate salesman in November 1979, and renewed her license as required until some time prior to October 12, 1987. A certified copy of Respondent's license record was admitted into evidence as Exhibit 1. The computer printout dated 10/12/87 shows Respondent's license as delinquent (voluntary inactive). It shows she is licensed as a salesman with license effective 11/19/84. On the same line showing 'delinquent' but several spaces therefrom is "renewal period: 2 FEE $.00". On the same line with "license effective" is "RECOVERY FEE PD $.00." Below these lines is Respondent's name below which appears "INVALID." Below which is a "%FRIEDEL BETTE L." and below this is "HOME ADDRESS," presumably that of Respondent. A review of the other documents in Exhibit 1 shows: Notification of License Change dated 2/28/83. A Request for License or Change of Status, undated, with date stamp "received June 15, 1984, Florida Real Estate Commission". This document does not indicate action by the Real Estate Commission on this request. A copy of a marriage certificate. Notification of License Change dated 6/26/84. No action indicated by the Florida Real Estate Commission. A Request for License or Change of Status dated 7/12/84 apparently notifying the Commission of a change in brokers. This document is stamped "Validated and Effective September 4, 1984." An unreadable photocopy of a computer printout similar to that in Finding No. 2 above dated 11/30/84 showing license effective 09/04/84. Below that is hand printed "Cancellation of Certificate as listed below effective date 11/19/84. Reason MIC (or M/C). Batch 2717." Request for License or Change of Status dated 4/23/86. No action on request is shown by the Commission. An undated Request for License or Change of Status received 12/30/86 by Florida Real Estate Commission. No other evidence (other than hearsay) was presented regarding Respondent's license. No copy of any license issued to Respondent is contained in Exhibit 1, and the only document showing Respondent is unlicensed is that computer printout discussed in Finding No. 2 above. In 1985, Respondent and her husband entered into a contract to purchase realty from Mr. and Mrs. Scalo. OMB Form No. 2502-0059, a Veterans' Administration Request for Verification of Employment Form, forwarded to Coldwell Banker Real State office, was signed by the Assistant Manager 11/29/85 certifying that Respondent was employed by Coldwell Banker (Exhibit 6). In the VA Financial Statement (Exhibit 7) submitted by Respondent and her husband, she shows under "employment record" that she worked as a real estate salesman for Coldwell Banker from 3/85 to 11/15/85, the date on Exhibit 7. In purchasing the residence from Scalo, Respondent represented that she was employed as a real estate salesman by Coldwell Banker. In this purchase, Respondent assumed the first mortgage from Scalo, as well as executing a second and third mortgage held by Scalo. To protect himself from Respondent and her husband failing to pay the first mortgage, Scalo provided in the contract that Respondent and her husband would verify payment of the first mortgage when they made the monthly payment on the mortgages held by Scalo. Respondent failed to provide such assurance the first month after the transaction cleared and was reminded of the requirement by Scalo. Thereafter for the next four months, Respondent notified Scalo that the first mortgage payments had been made. This was false and known by Respondent to be false. The fraud on Scalo was discovered when he was notified by the bank holding the first mortgage that the Jones were delinquent in the mortgage payments from February through July, and that payment in excess of $5900.00 was needed to stop the bank from initiating foreclosure proceedings. One of the checks payable to the bank holding the mortgage signed by Respondent (Exhibit 4) was dishonored by the payor for insufficient funds and was not made good by Respondent. Michael Good, Chief Operations Officer at Coldwell Banker, testified without contradiction that Respondent worked as a sales associate at Coldwell Banker from May 24, 1985 until April 23, 1986. On October 2, 1985, Ronald Pike submitted an offer to purchase property in Brandon, and Respondent signed the offer as broker. She also signed the earnest money release agreement dated February 26, 1986, as broker. On another transaction involving Pike, a $5,000.00 earnest money deposit was given by Pike to Respondent. The transaction failed to close, and Respondent did not return the deposit after demand was made by Pike.
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 Carmine Amato is a real estate broker holding license number 0110690, and is the broker for Wise Realty in Broward County, Florida, which he wholly owns. Amerigo DiPietro is a real estate salesman holding license number 0326813. At all times in question, DiPietro was employed by Wise Realty, and Amato was his supervising broker. In August, 1980, DiPietro took a sales contract from Charles and Jennie Conroy for the sale of their home in Broward County, Florida, described as Lot 3, Block 5 of Margate Estates, Section 3. DiPietro suggested to the Conroys that they could afford a larger home by selling their present house and using the equity to put a down payment on a new house. The Conroys subsequently contracted to buy a larger and more expensive house in Broward County from the Hocenics, said house described as Lot 13, Block 8 of Kimberly Forrest. DiPietro found buyers, the Meads, for the Conroys' house; however, the Meads were unable to qualify, and the contract did not close. The Conroys were anxious to close on the Hocenics' house and, as a result, sought a loan from Security Pacific Finance Company, said loan being referred to as a "swing" loan. The Conroys used this swing loan to close on the Hocenics' house, and this loan was secured by a security interest in their old home and the Hocenics' home. The Conroys were not induced in any manner by the Respondents to seek this swing loan. Having obtained the loan, the Conroys closed on the Hocenics' house, moved out of their old house and into the Hocenics' house, and assumed financial responsibility for both homes. Because the Conroys were short $2400, DiPietro took a note from the Conroys payable from the proceeds of the sale of their house. This represented money due DiPietro, which the Conroys could not pay at closing. DiPietro continued to attempt to sell the Conroys' old home and found another buyer, the La Serras. The La Serras qualified, but the Conroys could not raise $3400 needed to pay off their obligation at the closing of the sale of their old home. Because of this, the La Serra transaction did not close. In an effort to save the deal and close the La Serra contract, DiPietro made every effort, even agreeing to take a note for the commissions due to Wise's sales people, who represented both buyer and seller. The Conroys refused to close. With the swing loan almost due, Mrs. Conroy asked DiPietro if he and Amato would buy their old house outright. Eventually, DiPietro and Amato agreed to buy the house and accept financial responsibility for the first mortgage if the Conroys would agree to certain conditions. DiPietro indicated from the outset that neither he nor Amato had sufficient cash to purchase the house outright, and that financing would have to be arranged. DiPietro also advised the Conroys that, if this financing could not be arranged, the swing loan would have to be extended, and that it would be necessary for the Conroys to work with Amato and him to arrange for the extension of this loan. The specific conditions which the Conroys would have to meet were as follow: (a) the Conroys would give Amato and DiPietro a quit claim deed to their old house; (b) the Conroys would do those things necessary to extend the swing loan another six months; and (c) DiPietro and Amato would assume immediate financial responsibility for the house and, during the six months' period, sell it or arrange for long-term financing. The Conroys concurred in this agreement and executed a quit claim deed to their old house to the Respondents. DiPietro tried three different companies, seeking substitute financing for the house. When he failed in this, DiPietro contacted Mr. Conroy about renewing the swing loan. Mr. Conroy accompanied DiPietro to Security Pacific to renew the swing loan. DiPietro attempted to get Security Pacific to substitute any of a number of pieces of property owned by Amato and him for the Conroys' new house and to release its security interest in said house. Because of Security Pacific's excellent equity position in this new house, Security Pacific was unwilling to release its encumbrance on the Conroys' house. Security Pacific said it would release its interest in the Conroys' house only if the amount of the loan was paid down to an amount that the old house could secure. Neither Amato, DiPietro nor Conroy could afford to do this. Security Pacific said it would renew the loan only upon the Conroys' reapplication. Lastly, Security Pacific made clear that it still looked to the Conroys and to their new house as primary security on the swing loan. During all this time, the Conroys' old home was vacant. It had been vandalized and had suffered significant damage which decreased its value. In addition, no yard maintenance had been performed during the period since the Conroys had moved out. To be salable, substantial repairs and maintenance had to be performed by DiPietro and Amato. The revelation that Security Pacific looked to him and his wife for payment of the loan secured by their new house frightened Mr. Conroy. The Conroys were already financially strapped, having been responsible for the payments on both houses during this time. With the swing loan nearly due, and envisioning the loss of both houses and being left with an unsatisfied $28,000 debt, Conroy went to an attorney. The attorney advised Conroy not to join with DiPietro and Amato in extending the swing loan. When the swing loan was not extended, Security Pacific commenced foreclosure proceedings. Amato and DiPietro kept up the payments on the first mortgage, although Mrs. Conroy had to complain at first when these payments were late. The first three payments (July, August and September) were delayed following transfer from the Conroys to Amato and DiPietro. DiPietro and Amato did not promise to assume sole responsibility for the swing loan. DiPietro's representation was that they would try to refinance the property, and that if they could not refinance it they would assume primary responsibility for payment of the swing loan if the Conroys would join with them in extending the swing loan. Respondent Amato never saw or spoke to the Conroys and never made any promises which he did not fulfill. When the foreclosure action commenced, DiPietro stepped up his effort to sell the Conroys' old house and, approximately six to eight weeks later, sold it after substantial repairs were completed. The sales price was $57,000. At the time of the sale, approximately $32,000 was owed on the house to Security Pacific, and approximately $21,000 was owed to Heritage Mortgage Company on the first mortgage. Respondent Amato had put approximately $2,000 into repairs on the house, and Wise Realty was owed a note of approximately $2400 representing commission on the Hocenic/Conroy sale.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the following is recommended: That the charges against the Respondent, Carmine Amato, be dismissed, it having been found that he had no contact with the Conroys, could not have made any representations to them, and is not guilty of Violating Section 475.25(1)(b), Florida Statutes; and That the charges against the Respondent, Amerigo DiPietro, be dismissed, it having been found that he made no misrepresentations to the Conroys and therefore did not violate Section 475.25(1)(b), Florida Statutes. DONE and RECOMMENDED this 14th day of April, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 14th day of April, 1983. COPIES FURNISHED: Fred Langford, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Lawrence F. Kranert, Jr., Esquire 1000 South Federal Highway, Suite 103 Fort Lauderdale, Florida 33316 David F. Hannan, Esquire 3300 Inverrary Boulevard, Suite 200 Lauderhill, Florida 33319 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 William M. Furlow, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue Whether or not Respondents' registration as real estate brokers should be suspended for an alleged violation of Section 475.25(1)(i), Florida Statutes.
Findings Of Fact On or about the middle of March, 1974, Anne Land, a saleswoman for Respondent real estate brokers, met one Timothy B. Howe who had responded to an advertisement in the newspaper concerning the purchase or lease of a home at 185 West Sunrise Avenue, Coral Gable, Florida. After viewing the premises, Mr. Howe decided to lease the property and his attorney prepared a lease in the total sum of $7,200 for one years rent. This proposal was submitted to the owner of the house, Mrs. Joanne Kealy, but upon the advice of counsel, she declined the proposal. Several days later, Howe decided to purchase the home. He signed a standard sales contract, dated March 26, 1974, which provided for a total purchase price of $72,500.00, payable under the following terms: "The sum of $1,800.00 by check hereby deposited in escrow with Magruder Realty, Inc., as escrow agent, in part payment of the purchase price and as a security deposit for the faithful performance of this contract by Purchaser, and the remainder of the purchase price shall be paid as follows: Upon acceptance of this contract the purchaser to deposit with Magruder Realty, Inc., an additional $5,400.00. Purchaser to assume existing mortgage for approx. $38,816.00 with Coral Gables Federal Svgs and Loan Association and the seller to give to the purchaser a second mortgage for balance of approx. $26,500.00 at 8 1/2 percent for 12 years or less with no pre-paid clause penalty..." The contract was signed by Land as witness and also in behalf of the seller and also as an escrow agent of Magruder Realty, Inc. The document was not acknowledged before a notary public (testimony of Lands Petitioner's Exhibit 1). Land contacted the owner who was out of state at the time and asked her to indicate her acceptance of the offer by telegram. The owner did so on March 29, 1974. The evidence is conflicting as to the circumstances surrounding the disposition of the deposit check for $1,800.00. Land testified that she gave the check to Joseph P. Magruder on March 26 or 27 as was her practice in handling deposits, but said nothing about holding the check. Mr. Magruder, on the other hand, testified that at the time she gave him the check, she said Mr. Howe desired the check be held until the total down payment of $7,200.00 was received from a trust account, and that he therefore put the check in the transaction folder and gave the folder back to her to retain. His statement of the reason for not depositing the check in an escrow account immediately is supported by subsequent events and by the fact that the check was not actually deposited until a subsequent date, which was contrary to his normal office practice (testimony of Land, Magruder, O'Brien; Exhibit 2). Subsequent conversations between Land and Howe during the latter part of March and early April were to the effect that Howe's mother was sending funds for the balance of the down payment. On April 4, Land talked to Howe by telephone and he asked for the escrow account number of Magruder Realty, Inc., in order that his mother could send the additional $5,400.00 and/or $7,200.00. Land asked Respondent O'Brien, who was in the office at the time, for the firm's escrow account number and passed it on to Howe. On the same day, Land went on vacation in North Carolina and did not return to the office until April 15th. At that time, Magruder informed her that the additional funds had not been received from Howe and that although he had tried to reach him on the telephone he had been unsuccessful. Because of the difficulty in reaching Howe as to payment of the balance of the down payment, Magruder deposited the $1,800.00 check in his escrow bank account on April 17, 1974. It was not honored by the Howe's bank because Cristina I. Howe, his wife, had issued a stop payment order on the check on April 15. On March 26, 1974, the date the check was drawn, the Howe bank account was overdrawn by 26 (testimony of Land, Magruder, O'Brien, Garcia; Petitioner's Exhibits 2 & 6; Respondent's Exhibit 1). Although Respondents claimed that the Florida Real Estate Commission had disposed of the instant allegation by its letter of censure dated February 10, 1975, which referenced file CD15240, it was determined by the Hearing Officer that this letter involved other transactions and not the one under consideration at the hearing (Petitioner's Composite Exhibit 5).
Conclusions The Office of Financial Regulation ("Office") issued a denial of Petitioner’s application to become licensed as an “associated person”. Petitioner in turn filed a Petition for Administrative Hearing, which the Office referred to the Division of Administrative Hearings ("DOAH"). The assigned Administrative Law Judge ("ALI") held a formal administrative hearing, and entered a Recommended Order thereon. That Recommended Order of November 17, 2604, is attached to this Final Order, and incorporated herein by reference.
The Issue Whether the Respondent violated Section 475.25(1)(a) and (i), Florida Statutes.
Findings Of Fact The admissions by the Respondent, together with the records introduced at the hearing by the Florida Real Estate Commission show that Respondent was a licensed real estate broker holding license no. 0122293. The Respondent admitted his participation in all the transactions referenced in the administrative complaint. The bank records and other evidence introduced at the hearing show that the Respondent's escrow account maintained at Liberty Bank of Cantonment lacked sufficient funds to pay the bills which Respondent admitted were owed Lawyers Title Insurance Co. in the amount of $44.00. The Respondent testified that he had paid these bills only two days before the instant hearing with a check on his personal bank account. From the Respondent's testimony, it is clear that he failed to maintain sufficiently detailed records to permit him to account for monies in his escrow account in the Liberty Bank of Cantonment and in the bank account which he maintained with the First State Bank in Pensacola, Florida. The closing statements relating to the Netzer/Hayes transaction showed that the Respondent received $1,225.00. His records for this transaction showed checks on his escrow account relating to this transaction in the amount of $1,481.60. Respondent testified that the error in this transaction occurred when he erroneously stubbed one check as relating to the Netzer/Hayes transaction, when in actuality it related to a separate transaction. However, under cross examination the Respondent could not identify the transaction to which this check related. The Respondent admitted depositing the money involved in the Netzer/Hayes transaction to his Cantonment Liberty Bank escrow account. He also admitted that he had made no transfer of funds from the Cantonment bank account to his First State Bank account. The Respondent admitted and the evidence indicates that payments were made at closing from the First State Bank account. The Liberty Bank account records show a balance of less thank $731.00 at all times after 9-30-76. Therefore, insufficient funds were maintained by the Respondent in the Liberty Bank escrow account to satisfy the obligations on the account arising from the Nitzer/Hayes transaction. Furthermore, the Respondent's handling of escrow account at the Liberty Bank in Cantonment was as it related to this transaction was improper The admissions of Respondent and the evidence introduced showed that he was the broker involved in the Suttles/ Kamplain transaction. No evidence was introduced that the Respondent failed to advise Suttles that he initially had accepted a $250.00 note in lieu of cash as an earnest money deposit. The evidence is clear that upon receipt of the money, the Respondent deposited this money to his account in the First State Bank of Pensacola. Although this account was not designated an escrow account, it did bear the designation of a management account. It was not established by substantial and competent evidence that a management account was not an escrow account. The Suttles/Kamplain transaction closed without problem; however, there is no explanation of the disbursement of the $250.00 received as an earnest money deposit in the records of this transaction. Regarding the Suttles/Gordon transaction, it was established that the Respondent was the broker who handled this transaction. No substantial and competent evidence was produced that the Respondent failed to disclose to the Gordons that he did not obtain an initial $100.00 deposit on the transaction. The record is clear that the Respondent did receive a check in the amount of $1,500.00 from Mr. Suttles which the Respondent deposited to his account in the First State Bank. The Gordons did testify that the Respondent was authorized to allow the Suttles to occupy the premises prior to closing. After occupying the property, the Suttles were to make rental payments to be credited to the payment of the mortgage. After moving into the house, Mr. Suttles and his wife began to have domestic problems, and he immediately ceased to make all rental payments upon the property. Mr. Suttles did not advise the Respondent that he was not making payments and did not intend to make further payments on the house. Mr. Suttles did avoid all of Respondents efforts to contact him. The Suttles and the Gordons did execute the closing papers but by the time the papers were executed, Mr. Suttles failure to make the rental payments had caused a deficiency in payment of the mortgage. Because the mortgage was in arrears, the transaction could not close. When the Respondent became aware of the Suttles' separation, he began to make arrangements to have them vacate the Gordon house. However, Respondent failed to keep the Gordons fully advised as to the statuts of this transaction. Further, the check given to the Gordons by Respondent was not honored by the First State Bank of Pensacola because of insufficient funds in the Respondent's account to meet this obligation. The Respondent retained and disbursed portions of the $1,500.00 deposited to the account, although the transaction did not close. Money was disbursed to the Gordons and Respondent took out his commission. Whether Respondent was not entitled to disburse the monies under the contract between Respondent and the Gordons cannot be determined upon the evidence presented. However, it is clear that Suttles was a bona fide purchaser, who after he entered into occupancy, determined that he would not complete the transaction; and under the terms of the contract between the Respondent and the Gordons, the Respondent earned his commission when a purchaser was obtained. It is clear that the Respondent did not keep the Gordons properly advised of the situation regarding the sale of their house to the Suttles; and that the Respondent's check to the Gordons on the First State Bank was not honored because the account was impaired. The evidence and testimony taken as a whole at the hearing shows that Respondent did not keep a running balance of the accounts which he maintained at the Liberty Bank of Cantonment or the First State Bank of Pensacola. The evidence further shows that the Respondent failed to withdraw commissions earned in their total amount subsequent to closings on property, did not pay bills which closing statements indicate he was obligated to pay, permitted inter-bank transfers of funds owed him by banking institutions to his escrow or management account, did not take steps to ensure that the First State account was properly and clearly titled as an escrow account, did not properly annotate withdrawals from his escrow accounts, and failed to maintain money in his escrow account until it was disbursed.
Recommendation The record taken as a whole indicates that the violations for which the Respondent is responsible are the result of his culpable negligence as opposed to any dishonest or fraudulent act. However, the Respondent is so devoid of any knowledge of his responsibilities with regard to monies entrusted to him that he may not safely be permitted to function as a real estate broker. Based upon the foregoing-findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the license of Respondent as a registered real estate broker. DONE and ORDERED this 9th day of March, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Robert Pierce, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 O. E. Adams, Esquire Post Office Box 12217 Pensacola, Florida 32002 ================================================================= AGENCY MEMORANDUM ================================================================= Orlando, Florida November 27, 1978 MEMORANDUM TO: Renata Hendrick, Registration Supervisor FROM: Manuel E. Oliver, Staff Attorney RE: PD 3267 (PD 15776) FREC vs. Ralph D. Villeneuve t/a Don's Realty 122293-1 DOAH Case No. 78-091 Please find enclosed copies of the Final Order filed on April 13, 1978, in the reference case together with the opinion filed on November 2, 1978 by the District Court of Appeal, First District of Florida, affirming the Commission's Order, as well as a copy of the mandate issued by said Court on November 20, 1978. By virtue of the foregoing, the order of the Commission revoking defendant's registration has become firm and effective in all respects. Please make the necessary annotations in the records for all effects. Manuel E. Oliver Staff Attorney MEO/km Enclosures:* * NOTE: Enclosures noted in this memorandum are not available at the division and therefore not a part of this ACCESS document.
