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.
Findings Of Fact Primary Service Area (PSA) The proposed association will be located in the Paddock Plaza adjacent to the Paddock Mall Regional Shopping Center, both of which are currently under construction. The site is in the vicinity of the intersection of Southwest 27th Avenue and State Road 200 in the southwest portion of Marion County. The PSA encompasses the southwestern portion of Marion County, including a part of Ocala which is a concentrated residential community. Beyond the city limits, there are schools, recreational areas, an airport, horse farms, a community college, and light industrial type firms in the surburban area. The proposed site is located in the northeastern part of the PSA. The PSA is in a developmental stage with current plans of residential and commercial development which should make the area the fastest growing sector in Marion County. The home offices of Fidelity Federal Savings and Loan Association and Midstate Federal Savings and Loan Association, and a satellite office of the latter association are located near the northeast boundary of the PSA some three miles from the proposed site. The northern and eastern boundaries of the PSA follow well-defined highways. The southern boundary follows the Marion County line, and the western boundary is drawn due north from the intersection of State Road 200 and the Marion County line. (Testimony of Starke, Exhibit 1) Standards (a) Public convenience and advantage. One commercial banking facility, the main office of Citizens First Bank of Ocala, is located in the northeast corner of the PSA approximately two and one-half miles from the proposed site. It provides full banking services to its customers. Two savings and loan associations have received approval to operate in the PSA. One will be a branch of Midstate Federal Savings and Loan Association which will be located at the Paddock Mall adjacent to the proposed site. The other will be a limited facility of the First Federal Savings and Loan Association of Mid-Florida (Volusia County) which will he situated approximately 11.3 miles south of the proposed site in a residential community. Neither of these approved institutions have commenced operations. The proposed site is readily accessible from all sectors of the market area. State Road 200 is a primary artery for northeast/southwest travel. Southwest 27th Avenue is a primary north/south thoroughfare. There are numerous other feeder streets which connect with those two roads to bring traffic to the new mall and plaza area. In addition, Interstate Highway 75 intersects State Road 200 approximately one mile southwest of the proposed site. An extension to Southwest 17th Street is currently proposed which would provide direct access from the northeast to the proposed site. The location of the proposed association at a large regional shopping center will provide an opportunity for residents of the PSA to combine shopping and financial business. This will be facilitated through the utilization of a drive-in facility at the site. Ample parking will be provided in the plaza area, and the network of roads in and around the shopping center will facilitate use of the applicant's services. It will provide a convenient location to conduct savings and loan business for residents and businessmen in the southwestern portion of the county without the necessity of traveling to the more congested downtown area of Ocala. The fact that the proposed association will be a home office rather than a branch office will tend to attract a greater number of individuals within the PSA than a satellite office, and undoubtedly will induce persons outside the PSA to use the institution's services. In 1960, the City of Ocala had a population of 13,598. It increased 66.1 percent to 22,583 by 1970. The 1978 city population was estimated to be 32,652, a 44.6 percent increase over 1970. An April 1, 1979 estimate placed the population at 34,034. In 1960, Marion County had a population of 51,616. It increased 33.7 percent to 69,030 in 1970 and was estimated at 102,722 in 1978, an increase of 48.8 percent over 1970. The population was estimated to be 106,852 in April 1979 and is scheduled to reach 164,400 by 1990. It is estimated that the population of the PSA was about 7,700 in 1960 and increased to 10,500 or 36.4 percent by 1970. It is now estimated to be some 17,000 and projected to reach over 19,000 by 1982. This projection is based on the area's recent growth history, current housing developments in the area, and projected growth within Marion County. The 45 to 64 year group of the population of Marion County has shown a modest increase since 1960 from 21 percent to 22.6 percent in 1978. At that time, the state percentage was 22 percent. Those 65 years of age and over in Marion County increased from 10.6 percent in 1960 to 15.7 percent in 1978. This was lower than the statewide average of 17.5 percent in that category. It is anticipated that those 45 years and older will continue to show a steady increase in the future due to the fact that most of the county increase in population has been due to continuing in-migration of retirees. These individuals normally bring cash assets which are available for deposit in savings and loan associations, and they ordinarily would have no prior connection with other banks or savings and loan associations in the immediate area. The per capita personal income in Marion County in 1969 was $2,646 and increased to $5,157 in 1977. Per capita personal income in Florida in 1977 was $6,697. In 1969 the mean family income of residents of Ocala was $9,775, as compared with $8,062 in Marion County and $10,120 throughout the State of Florida. It is estimated that the current mean family income in Ocala is approximately $17,506, as compared to $14,438 in the county and $18,123 in the state. The unemployment rate in Marion County in January 1980 was 6 percent whereas the rate in the State of Florida was 5.2 percent. Residential building permits issued in the City of Ocala in 1975 rose from 156 units for a total of 3.5 million dollars to 511 permits in 1979 for a total of 10.7 million dollars. For Marion County, 872 permits were issued in 1975 for a total of 14.3 million dollars and 1,706 in 1979 for a total of 44.5 million dollars. It is currently estimated that the median value of owner occupied housing units in Ocala is $32,775 and $26,173 in Marion County. Local Conditions There are seven commercial banks with approval to operate a total of 18 offices in Marion County. In June 1975, the commercial banks headquartered in Marion County held combined time and savings deposits of some 104 million dollars and by mid-1979, such deposits totaled over 176 million dollars, an increase of about 69.5 percent. From December 1978 to December 1979, time and savings deposits in those banks rose from 161.4 million dollars to 199.8 million dollars, an increase of 23.8 percent. Total deposits in all Marion County Banks increased from 204.8 million dollars in 1975 to 304.9 million in 1979, a 48.9 percent increase. There are currently 16 savings and loan association offices approved for operation in Marion County. Three of the associations have their home office in Ocala. These are Fidelity Federal, Mid-State, and United Federal of Ocala. Fidelity Federal operates a total of five offices within the county, one of which is not yet open. Mid-State Federal has seven offices approved within the county and its office in the PSA is not as yet open. United Federal, an association which opened in January 1979, has its only office within the county. Both First Family Federal (Lake County) and First Florida Federal Savings and Loan Association (Alachua County) have recently received approval to operate branch offices within Marion County. First Federal of Mid-Florida (Volusia County) has received approval to operate an office in the southern part of the PSA but has not yet opened. In 1975, savings and loan associations headquartered in Marion County reported combined savings of $162,177,000. By the end of June 1979, their combined savings totaled $312,508,000, an increase of 92.7 percent. The combined savings accounts of the three Marion County associations totaled $312,508,000 in midyear 1979, as compared to June, 1975 savings of $162,177,000, representing an increase of $150,331,000 or 92.7 percent, during the subject four-year interval. Mid-State Federal, with an office approved at the Paddock Mall, held June, 1979 savings of $207,770,000, and those accounts represented an increase of $96,475,000, or 86.7 percent, over its savings reported June, 1975. First Federal of Mid-Florida, a Volusia County association with an office approved in the PSA, had June, 1975 savings of $199,843,000, and those savings increased by $150,637,000, or 75.4 percent, to reach a total of $350,480,000 in June, 1979. The smallest savings and loan association in Marion County is United Federal, which opened in 1975. In June, 1975, it reported savings of $6,881,000, and its midyear 1979 statement showed savings of $27,830,000. United Federal, operating only one office in Ocala, had growth in savings of $20,949,000, or 304.5 percent, during the stated interval. In the opinion of the applicant's economic consultant, approval of the applicant's application would not have an adverse effect on the other financial institutions in the area due to the steady growth of the community and anticipated growth in the future. He further is of the opinion that the proposed savings and loan association will be able to successfully operate in the PSA in view of the presence of the Paddock Mall and the general growth of population and business establishments in the area. He feels that the current national economic situation will not have a great impact on a new institution which will be able to obtain variable interest rates. He further sees an advantage to the fact that the proposed association will be the first state chartered capital stock form of organization in Marion County, and that it will provide an opportunity for public purchase of shares in the association. During the first three years of operations, the applicant projects its net profits at $75,648 for the first year, $88,335 for the second, and $103,340 for the third. These amounts were arrived at by including known cost items and estimating various income and expense amounts. The applicant anticipates acquiring accounts from new residents of the PSA and those current residents who may wish to transfer savings accounts from commercial banks in the Ocala area due to convenience and the higher rate of interest paid by savings and loan associations. The applicant does not anticipate the acquisition of a significant number of customers from existing savings and loan associations in the area. It also will look to employees at the new shopping mall who may utilize the conveniently located new institution for savings transactions. The applicant intends to compete vigorously for new business with these individuals and from those who presently do not have accounts in any existing associations. The applicant estimates that the institution will attain savings of five million dollars at the end of the first year, $9,500,000 at the end of the second year, and $14,500,000 at the end of the third year of operation. In arriving at those estimates, consideration was given to past experience of existing association offices in the Ocala area, and that of established associations in similar competitive situations. The eight organizers of the proposed association will also serve as the directors. They represent a diversity of occupations, including businessmen, attorneys, real estate broker, a physician, and a dentist. All but three reside in the Ocala area. All have been residents of Florida for over a year and none has been adjudicated a bankrupt or convicted of a criminal offense involving dishonesty or breach of trust. Their employment and business histories show responsibility in the handling of financial affairs. One of the proposed directors has served as an attorney to a large savings and loan association in Miami Beach, and is a member of the board of directors of Barnett Bank of Miami. Another serves as legal counsel for a local bank in Ocala. The proposed officers of the association have not been named as yet. The proposed association will be capitalized at $2,000,000. This capital will be divided into common capital of $1,000,000 in surplus and reserves of $1,000,000. The association intends to issue 200,000 shares of stock with a par value of $5.00 and the selling price of $10.25, plus a $.25 share organizational expense fund contribution. The proposed directors of the association have subscribed to 25,000 shares each. This is a preliminary stockholder list and it is the intention of those individuals to redistribute the stock to a minimum of 400 persons in accordance with FSLIC requirements. It is the organizers' intention to acquire pledges from 700 persons for the deposit of $1,000,000 in withdrawable savings accounts. It is intended that the majority of the stock will be sold to persons residing in Marion County, and the organizers anticipate no difficulty in this respect. (Testimony of Starke, Hastings, Bitzer, Berman, Casse, Hicks, Williams (Deposition - Exhibit 5), Broad (Deposition - Exhibit 6), Carter, Exhibits 1-3) Name As heretofore found above, the applicant amended its application to change the proposed name to Allstate Savings and Loan Association. Although the descriptive word "Allstate" is not used in the corporate name of any other savings and loan association in this state, the Office of the Comptroller received a letter, dated February 22, 1980, from Allstate Savings and Loan Association, Glendale, California, an affiliate of Sears Roebuck and Company, objecting to the use of the word "Allstate" in that the public may be misled to believe that the proposed association is in some way affiliated with Sears Roebuck and Company. (Testimony of Starke, Exhibit 1) Site and Quarters. As heretofore found, it is the organizers intention to locate the proposed association in the Paddock Plaza, adjacent to the Paddock Mall, a new shopping center to be constructed in Ocala. The applicant has an option to lease 5,000 square feet of space for a period of fifteen years for a rental price of $12.00 per square foot for 2,000 square feet and $10.00 per square foot for 3,000 square feet, plus common area maintenance. The option provides that on the fifth year of tenancy, the total annual rental will be increased by the cost of living as determined by the consumer price index. The leased area will include a two-car drive-in facility. There will be adequate parking at the site. The applicant plans to sublease 2,000 square feet of the leased premises on a short-term basis to reduce operating costs in the initial years of operation. An appraisal of the proposed association quarters establishes that the proposed leased premises are suitable for a savings and loan association and that the lease price compares favorable to current leasing arrangements for similar business property. (Testimony of Starke, Exhibit 1) Proposed Findings of Fact filed by the parties have been fully considered and those findings which have not been adopted herein are considered to be either unnecessary, or unsupported in fact and are specifically rejected. Some of the proposed findings state conclusions which properly should be considered by the Comptroller. Pursuant to Section 120.57(1)(b)(12), Florida Statutes, this REPORT does not include conclusions of law and recommendations. DONE and ENTERED this 25 day of April, 1980, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301 William L. Lyman, Esquire Assistant General Counsel The Capitol Tallahassee, Florida 32301 Daniel Hicks and Randolph Tucker, Esquires Post Office Drawer 1969 Ocala, Florida 32670 Merritt C. Fore, Esquire Post Office Box 1507 Ocala, Florida 32670
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 Caribank, N.A. ("Caribank"), was acquired by J. J. Gonzalez Gorrondona, Jr. ("Gorrondona Jr.") and George Childs, Jr. ("Childs") in May, 1977, and Dania Bank was acquired by these individuals through a tender offer in April, 1978. Caribank Corporation, the Applicant herein, is a bank holding company that now owns more than 99 percent of the stock of Caribank. Gorrondona Jr. owns 90 percent of Caribank Corporation and Childs owns 10 percent. Caribank Corporation was originally named Banconac Shares, Inc. when it was established in November, 1977. Its name was changed to Caribank Corporation on June 5, 1979. Banconac is a name used by many subsidiaries of the Banco National de Descuento ("BND"), a Venezuelan private commercial bank, a majority of the stock of which was formerly owned by Gorrondona Jr. and his father, J. J. Gonzalez Gorrondona, Sr. ("Gorrondona Sr."). It is derived from the name Banco National de Descuento and is used in Venezuela to signify business owned by the BND directly or indirectly. The use of the name Banconac in the Applicant's former name was not explained by the Applicant although Gorrondona Jr.'s testimony established that BND funds were not used to purchase Caribank. Gorrondona Jr. owns approximately 90 percent of Dania Bank and Childs owns approximately 10 percent of the Dania Bank, a state chartered bank. Approximately .3 percent is owned by shareholders who did not surrender their shares. Martin L. Wyneken ("Wyneken") is President and chief executive officer of both the Dania Bank in Broward County and of the Caribank in Coral Gables, Dade County. Childs is Chairman of the Board of the Dania Bank and Caribank, and President, Treasurer and a Director of Caribank Corporation. Policies of Caribank and Dania Bank are established through frequent conferences between Childs and Wyneken. Wyneken has a very close working relationship with Childs. Gorrondona, Jr. has the power to remove Wyneken and Childs. Childs comes to Florida about three times per month to confer with Wyneken. In these above-mentioned discussions, Childs is the spokesman for the "capital." Owning 90 percent of the stock of the Dania Bank provides Gorrondona, Jr. with authority concerning the management and policies of the bank. Directors of the Dania Bank are selected by the shareholders. Gorrondona, Jr. and Childs have not taken any dividends as shareholders of Dania Bank or Caribank, despite the substantial earnings of these banks. Dania Bank and Caribank centralize their operations as much as possible with two separate corporations. Dania Bank and Caribank trade employees back and forth and bill each other through an elaborate accounting system. Thad R. Chamberlain, a director of Caribank Corporation, is executive director of the Banco Suramericano de Desarollo, a Panamanian bank in which Gorrondona, Jr. owns a controlling interest. This is an application pursuant to the Florida Banking Code, Section 658.28, Florida Statutes, for permission to acquire control of Dania Bank by Caribank Corporation. This change in control is sought in order to facilitate a merger of Caribank and Dania Bank. The merger is desired to facilitate the expansion of branch banking, the development of an international department and the development of subsidiaries in such areas as leasing, mortgage financing, and small business investment (S.B.I.C.). The combined capital of Caribank, of approximately $4 million, and the Dania Bank, of $16 million, is expected to facilitate the establishment of subsidiaries. Dania and Caribank are, according to their Chief Executive Officer, Wyneken, "aggressive" banks and there exists a policy of increasing total assets from $265 million at the end of June, 1982, to $500 million by the end of 1985; there is also an aggressive program for subsidiaries. The merged bank plans to spend more on advertising in Dade County. Caribank at its present size cannot justify an increase in advertising expenditures. If this application is approved and a merger subsequently occurs, management expects that there will be benefit on the deposit side since assertedly better use will be able to be made of the money deposited. The Caribank/Dania Bank management has an ambitious program of branch banking. Gorrondona, Jr. and Childs have asked that Dania and Caribank branch into the counties as quickly as possible. Management would like to concentrate branching efforts in Dade County, but their capital at Caribank is so much smaller that it must rely on the Dania Bank for all kinds of assistance. Denial of this application and the failure to merge would restrict expansion in Dade County. The Caribank/Dania Bank management hope that the merged bank will become a large chain bank. The Chief Executive Officer of the two banks testified that to become a large chain bank "[W]e need every bit of help we can get, and that is why we need this consolidation." According to Childs, merger is expected to allow a "substantial increase in the capital base of all the subsidiaries which we have established or intend in the future to establish." A merger is expected to follow immediately upon the granting of the application. If the application were approved and for some reason the merger did not occur, Applicant would seek to change the name of the Dania Bank to Caribank to get the maximum effect out of their advertising dollars. It is further expected that if the application for change in control is granted, the two banks could file a consolidated tax return with an annual tax saving of approximately $64,000. From the above findings, it can reasonably be inferred that this application is made to facilitate a program of rapid expansion and establishment of subsidiaries, and if the application is granted, it can be expected that rapid expansion and development of subsidiaries will be more likely to occur. George Childs, Jr., started Banac Management, Inc. ("Banac") for Gorrondona, Jr. seven and a half years ago and was president of the corporation at the time of the intervention of the BND (discussed below). Banca is a BND subsidiary located in New York City. At the time of the intervention it was acting as a representative of the BND and its subsidiaries to obtain credit lines. Prior to the intervention, Gorrondona, Jr. was involved in the affairs of Banac. He visited Banac in New York six to seven times per year. He was a member of the Banac Board of Directors from 1975 to 1979. The BND was founded in 1954 by Dr. Jose Joaquin Gonzalez Gorrondona, Sr., who is the father of Gonzalez Gorrondona, Jr., the ninety percent (90 percent) owner of the Petitioner, Caribank Corporation, and the subject bank, The Dania Bank. Dr. Gonzalez Gorrondona, Sr. does not now, nor has he ever had any interest in, nor involvement with, Caribank Corporation, The Dania Bank or Caribank, N.A. Since its beginning, the BND had a steady growth until, at the time of the intervention of the bank by the government on December 7, 1978, it was the largest privately owned (nongovernmental) bank in Venezuela with the largest amount of private deposits, 6.3 billion Bolivars (1 Bolivar equals about 0.25 in U.S currency). Gorrondona, Jr. began working at the bank in 1958, worked throughout his early years, and continued to work full-time for the bank after receiving his doctoral degree in economics from the Catholic University in Venezuela with a doctoral thesis in economic planning. During his education, Gorrondona, Jr. studied such subjects as Monetary Theory, History of Financial Institutions, Operation of Financial Institutions, and Public Finance. His interest in economics began early in his life because Dr. Gonzalez Gorrondona, Sr. was the founder of the School of Economics in Venezuela, having been the founder of the Venezuelan Economic Council and the representative of Venezuela at the Bretton Woods meeting in 1943 at which the International Monetary Fund was founded. After graduation, Gorrondona, Jr. continued to study, taking courses in management such as Management by Objective, Computer Science, Systems Analysis, and other courses which would enable him to perform as a manager of a financial institution. Gorrondona, Jr. worked in many phases of the management of the bank, until in 1974, he became president in charge, which means that he was the chief executive officer in the absence of his father. He never drew a salary. By the time of the BND intervention, the stock interest of Gorrondona, Jr. was worth between $350 and $700 million dollars. As an outcome of the intervention, Gorrondona, Jr. lost between $150 and $200 million dollars in the worth of the BND stock which was owned by him. By the time of the intervention, the BND had grown to a bank which included approximately 60 branches, primarily in urban areas of Venezuela. The BND also owned several profitable subsidiaries, including Crenca, a financial society which was able to engage in financial transactions forbidden for commercial banks; Credimatico, which was the owner of a Master Charge franchise in Venezuela which had a market share of twenty-five percent of the credit card sales in the country; Arrendarca, a leasing and factoring company; and Almacendadora Caracas, a bonded warehouse company owning bonded warehouses in several cities in Venezuela. The BND also owned Servimatico, which dealt mainly with consumer credit and financed appliance and other small consumer purchases. Each of these subsidiaries was profitable to the bank and assisted the bank in paying dividends which had been declared each year, since 1973. Beginning prior to 1977, the BND was required to send its minutes of Board meetings to the Superintendent of Banks because there had been detected, as a result of special inspection, a tendency toward concentration of credit. In 1978, BND was the only bank required to send minutes of Board meetings to the Superintendent. At a majority of the meetings of the Board of the Central Bank of Venezuela ("CBV") during the last six months of 1978, there was an agenda item entitled "BND." During this time, employees of the Superintendent and the CBV were at the BND carrying out studies to see in what way or ways the BND's financial soundness could be improved. In August of 1978, the Superintendent of Banks wrote to the Minister of Finance about the situation of the BND. The letter notes that credits of Bs. 2,553.8 million were concentrated in 130 companies, that directors of these companies were in turn, directors of the bank, that there was a disproportion between the amount of these credits and the net worth of the borrower, that renewals were made even after delay in payment and that the credits were extended without analysis of the balance sheet. In September, 1973, the BND was prohibited from distributing dividends by the Superintendent of Banks because it would have adversely affected the liquidity of the BND. In November of 1978, the BND asked the Venezuelan Government for special financial aid in the amount of Bs. 600 million. The BND proposed that it be made the subject of a "private intervention" during the period of time such advance was outstanding. On December 6, 1978, the CBV excluded the BND from the Clearing House effective December 7, 1978, by vote of its Board. The CBV, the equivalent of the U.S. Federal Reserve, is a public institution of the Republic of Venezuela, but is considered independent. Eight members of its Board of Directors and its President are appointed by the government. Six members are appointed on recommendation of the private sector. The CBV, through its credit functions, provides credit assistance to banks and credit institutions in Venezuela. Through its operations, it seeks to safeguard the solvency and liquidity of Venezuela's banking system. A Clearing House to settle accounts between banks is operated by the CBV. When bank customers draw and deposit checks, credits and debits between banks are created that have to be reconciled on a daily basis. Venezuelan banks are required by law to maintain a deposit account at the CBV in order to settle such accounts. If after reconciliation, a bank owes money to other banks, its CBV account is debited to cover the debt. If after reconciliation, a bank is owed money, its account is credited. If a bank does not have enough on deposit to cover its debts, it can present to the CBV cash or checks or payment orders against other banks in sufficient amount. It can also present funds obtained outside the country. Finally, it can obtain funds by rediscounting commercial paper at the CBV. Rediscount consists of endorsing eligible commercial paper to the CBV in return for payment. Eligible paper, for example, must mature within 360 days and be adequately secured so that there is assurance as to its liquidity or self-liquidating nature. Thus, medium or long-term loans do not normally give rise to eligible paper. The decision to exclude the BND from the Clearing House was reached on December 5 and 6, 1978. Prior to this time, BND had had repeated difficulties converting its debts at the Clearing House. On December 5, the CBV Board authorized the exclusion of the BND in principle subject to discussion with the Venezuelan Government. At the time, the BND did not have commercial paper considered eligible by the CBV to receive credit assistance from the CBV. The situation was examined again on December 6 by the CBV to see if there were new elements or new alternatives. On December 6, 1978, the BND was overdrawn at the Clearing House to the extent of being unable to make good in its negative balance of approximately Bs. 100 million. It was decided there were no new elements or alternatives, and accordingly, the President of the CBV wrote to the Venezuelan Minister of Finance to let him know (1) that the BND had a deficit in its legal reserve requirement (see below); and (2) that the CBV Board had decided to exclude the BND from the Clearing House effective December 7, 1978. Prior to the exclusion of the BND from the Clearing House, the CBV Board considered the possibility of extending extraordinary credit assistance to the BND. The Board concluded that such assistance would be in violation of Article 45 of the law governing the CBV. That article provides: "Article 45. - In exceptional cases and with the favorable vote of the six members of its Board of Directors, the Banco Central de Venezuela may, in order to insure the due liquidity of a bank or credit institution in transitory difficulties, provide it with funds for a period not to exceed ninety days, which may be extended for an equal term at the Bank's discretion, secured by other assets of said bank or credit institution, different from those listed in the previous article. "Loans may in no event be made to a bank or credit institution if the trans- itory difficulties it faces are due, in the Board's opinion, after having consulted with the Bank Regulatory Commission, to the poor management or inadequate investment of its resources." In the case of the BND, the CBV Board concluded extraordinary credit assistance would be illegal because BND's liquidity problems were not "transitory" but rather structural, permanent and progressive, because the liquidity problems of the BND were due to improper investment of its resources, and because its funds were invested in operations that were insecure or lacking in guarantees, which reflected bad banking management. Under the rules and regulations of the Clearing House, the exclusion of the BND was mandatory. On the evening of December 6, 1978, a meeting was held at the Presidential Palace attended by the President of Venezuela, the Minister of Finance, other ministers involved in the financial sector, some of the board members of the CBV and the Superintendent of Banks. The stated purpose of the meeting was to inform the President of the Republic about the BND situation. The meeting lasted three hours. There was a discussion as to whether there was any alternative to the one proposed by the CBV. It was concluded that there was no alternative. The President of the Republic instructed the Minister of Finance and the President of CBV to hold a meeting the following morning to inform the banking community that the BND had been excluded from the Clearing House and that the government had decided to intervene the BND. The decision to intervene was unanimous. Two major events which contributed to the liquidity crisis which allowed the government to intervene the BND, were the result of actions by the government itself. The first of these actions was the substantial withdrawal of public funds from the BND. Between November 30 and December 6, over 100 million dollars was withdrawn by the government agencies from the BND. Withdrawals averaged 20 million dollars per day with a high of 30 million dollars on December 6. These daily balances were reported by the Comptroller of the bank to Gorrondona, Jr. on a twice daily basis during these days. No testimony, either from a witness or in the form of an exhibit, was ever introduced to contradict Gorrondona, Jr.'s testimony concerning these substantial withdrawals during the week prior to the intervention. The second action which was taken by the government injurious to the BND was the refusal to accept commercial paper for rediscount. Gorrondona, Jr.'s unrebutted testimony established that the same paper which was denied rediscount by the Central Bank on December 6 was granted rediscount on December 30 and during the period of time after the intervention. Gorrondona, Jr.'s testimony established that it would have been impossible to change the loan portfolio within such a short period of time and therefore of necessity it was the same loan portfolio which was granted rediscount after the intervention which had been denied rediscount during the week prior to the intervention. Gorrondona, Jr. further testified that the December 7, 1978, hand- written balance sheet, contained in Petitioner's Exhibit 70, the Intervenor's January 12, 1979, report, was a consolidated balance sheet including all 60 of the BND's branches. Therefore, the balance sheet was prepared by employees of the intervenor during the period between December 7, 1978 and January 12, 1979. On the issue of loans eligible for rediscount on December 7, Mr. Gabledone, Respondent's witness, using Respondent's Exhibit 70, stated that if the figures in Exhibit 70 were correct, the BND had 3.663 billion Bolivars eligible for rediscount on December 7, and that "the BND would have been able to obtain a large amount of rediscounts, or large amounts that would be eligible for rediscounts." In part, a result of the withdrawal of government funds, the failure of the government to repay its loans and overdrafts, and the denial of rediscount by the Central Bank of BND commercial paper, the BND had a deficit at the Central Clearing House on December 6 of 100 million Bolivars. Article 166 of the General Banking Law of Venezuela provides: "Whenever a bank or credit institute, subject to the Provisions of this Act, faces a preca- rious situation which might entail an eventual detriment to its depositors or creditors, or endanger the banking system in general, or when infringing repeatedly (the provisions of) this Act, or those of the Central Bank of Venezuela Statute or the Regulations of either or both, or any Resolution adopted by the Executive Branch, the Superintendent of Banks or of the Central Bank of Venezuela, then the Executive Branch shall empower the Superintendent of Banks or any other individual it may deem com- petent to place the Bank or Credit Institute in Receivership. The Receiver may agree with the Central Bank of Venezuela on the course of action to be taken for the respective bank's or credit institute's redress, its eventual reorganization or liquidation, which shall become mandatory for the respective financial house. But he shall, without exception, pre- pare, within a period not exceeding thirty days as from the date or resolution decreeing the receivership, a complete and itemized report concerning the legitimacy of the respective intervention and submit it to the Executive Branch. By Resolution 2296 issued December 7, 1978, the Minister of Finance of Venezuela intervened the BND. Intervention is an uncommon occurrence and the law contemplates it will occur only when a financial institution is in danger. The decision to intervene the BND could have been appealed to the Supreme Court of Venezuela. No appeal was taken. Neither Gorrondona, Sr. or Jr. or any other shareholder filed suit to block or overturn the intervention, although they had lawyers in Venezuela and Gorrondona, Sr. was in Venezuela. The BND is still under intervention. On march 31, 1979, the Superintendent of Banks of Venezuela issued its Annual Report for the year 1978 ("Superintendent's Report"). The Report contains an extensive discussion of the BND and the reasons for its intervention. The Superintendent's Report states the following: In 1977 and 1978, a decrease in the rate of growth of the Venezuelan economy together with unbalanced financial management at the BND whose key feature was credit over- expansion, especially as regarded credits to companies connected to the bank, placed the BND in a non-liquidity crisis to be- come increasingly notorious. The BND was the object of special attention by the Bank Regulatory Commission because over the 5 years preceding the intervention several violations of the General Law on Banks and other Credit Institutions had been detected. The BND had repeated insufficiency of the reserve requirement, a problem from which the bank chronically suffered. The BND was twice fined the maximum amount for illegal credits extended (1) to the Banco Suramericano de Desarollo ("BSD"), a Panamanian bank in which Gorrondona Jr. owns 80 percent of the shares, and (2) Crenca, a BND subsidiary, in violation of Article 153 of the Banking Law. Certain credits regarded by the BND as agricultural were not properly classified as agricultural. As of March 31, 1978, Bs. 2,553.8 million of bank loans were concentrated in 130 customers (the "Specially Classified Companies"). Directors of these companies were also bank directors. Credits were granted to these companies easily, then were renewed frequently and even when over- due, balance sheets for some of these credits did not exist and most of the credits were unsecured. The minutes provided by the BND to the Superintendent of Banks were not identical to those recorded in the BND's minute book, including that innumerable credit operations with subsidiaries had been omitted from the provided minutes. BND employees failed to cooperate with the Superintendency in providing requested in- formation. An official memorandum was sent to the BND president about this matter, ordering him to rectify this situation. Irregularities in the BND's legal reserve led to numerous notices to the BND president as well as to the levying of several fines. Until December 12, 1978, the BND received 224 memoranda concerning shortages in the legal reserve requirement and was fined 32 times for such legal reserve requirement deficiencies. The average weekly shortage in the legal reserve requirement through- out 1978 was Bs. 124 million. An audit conducted as of September 30, 1978, showed that the estimated loss on the loans to the Specially Classified Companies was Bs. 632.9 million. The estimated loss on other credits in the bank Portfolio was 35.7 million. The reserve for Portfolio Contin- gencies was Bs. 12 million. On January 12, 1979, the BND Intervenor, Tinco, made a report 1/ to the Minister of Finance pursuant to Article 166 of the General Banking Law of Venezuela. The Report describes the reasons for intervention. The Intervenor's Report states the following: During the first eleven months of 1978 the BND increased its Invested Assets by Bs. 1.0789 billion while in that same period deposits increased only Bs. 183 million. The imbalance was partially covered by rediscounts. By November 30, 1978, the BND had rediscounts of Bs. 485.4 million, which is 32.7 percent of all commercial bank re- discounts for that period. Many of the documents submitted to the Central Bank for rediscounts were rejected by it since they did not comply with the requirements for eligible paper. Credit restrictions were imposed on the BND by other banks. The BND's failure to make timely remittance of funds to correspondents resulted in their not honoring checks and refusing to open let- ters of credit. In 1975-78 the BND had a chronic shortage in its legal reserve requirement. The BND had a shortage in the legal reserve in 38 of 48 weeks during the first 11 months of 1978. The BND's reserve shortage stabilized during the months of September 1978 through November 1978 at over Bs. 100 million and reached Bs. 169 million in the last week of November. Prior to the intervention the BND was twice fined Bs. 30,000 for having granted illegal credits to the BSD, the Panamanian bank owned by Gorrondona Jr., and to Crenca. Even after the fines, the illegality was not corrected. In the case of the BSD the credit at the time of the fine through a time deposit was Bs. 657 million. At the time the BND was inter- vened, this deposit had not been reduced at all. In late November and early December of 1978 the situation grew more serious as the BND's negative balances at the Clearing House in- creased, and the BND had difficulty sub- mitting documents eligible for rediscount by the CBV. Questions from abroad about the BND's situation became more insistent. When the BND was unable to make good on its negative balance at the Clearing House on December 6, the BND was expelled as of December 7 in compliance with Article 11 of the pertinent Rules and Regulations. Thereupon the BND was intervened pursuant to Article 166. There were large withdrawals after the intervention and instructions were given that teller windows would not close as long as there were clients present. As of December 7, 1978 loans placed with affiliates (companies owned totally or partially by the BND) totaled more than Bs. 1.302 billion. Loans placed in 93 companies with which important shareholders, directors or executive officers of either the BND or its affiliates were directly or indirectly associated totaled Bs. 1.739 billion. Other credits were as of the date of the Intervenor's Report are still under study. On October 14, 1976, five vice-presidents of the BND, including the vice-president of Credit, the First Vice- President-Treasurer, the Vice- President-Comptroller, the Vice- President of Branches and Agencies, and Jaime Benitez ("Benitez") Vice-President for Banking Services, wrote a confidential memorandum to Gorrondona, Sr. and Gorrondona, Jr. in order to emphasize deficiencies and problems within the BND and to present recommendations. As summarized by Benitez, who testified at the hearing in this matter on July 16, 1982, the principal problem was a high concentration of credits in a group of businesses. These credits were not paid as they matured. This created a deficiency in cash flow and caused liquidity problems. There were also deficits in the legal reserve requirement. Accounting procedures were not being correctly applied and there was a problem of overdrafts. The memorandum recommended: (1) a change in credit policy even though this would limit the expansion program; (2) affiliated and related companies should start paying their debts; (3) concentration of credit should be eliminated; and (4) internal controls aid internal procedures should be improved. Benitez' testimony established that as a whole, recommedations were not carried out and deficiencies were not eliminated. The Memorandum of October 14, 1976, stated that: "The Office of the First Vice-President for the Treasury has repeatedly voiced to the highest authorities in the institution its opinion regarding the excessive placements with Group Companies and has gone as far as to file a written report with the President and the Acting President. In spite of the fact that, on account of its position, it must authorize almost all of the overdrafts and/or charges to the accounts of Group companies, it acknowledges the need to put an end to this practice. This question has been the subject of repeated discussions with the President and the Acting President, who are the only authorities empowered to put an end to this situation. The Memorandum of October 14, 1976, identified a number of problems then existing at the BND. It stated that there existed problems of: "1. High credit concentration (approximately 60 percent of the entire credit portfolio is placed with 1.4 percent of the total number of clients) in Group companies or companies directly or in- directly tied and/or related to it. We mean by this those companies or natural persons in the organization created by the highest ex- ecutive level or under instructions from it, who are organized with high Group officials, Bank officers or trusted persons, both as regards the holding and representation of their shares and their administrative or Director offices. These companies were expedited by said high levels or under orders from them, given through high Bank officers." "2. Non-payment by said companies due to con- stant renewals, without partial [the translation of "abonos parciales" should be "partial pay- ment" in the sense of "amortization"] or in- terest payments." "3. Credits to Group companies, above the legal limits, which are authorized or ordered by the highest officials." "4. Interest documented as promissory notes that accumulates above and beyond the credits originally granted." "5. Excessive number of permanent overdrafts with the National Government, governmental de- pendencies and especially and in an increasing fashion, with Group companies or companies directly tied or related thereto." "6. Overdrafts and collateral obligations in overseas banks due to the financing com- mitment and ever increasing requirements of Group companies or companies directly or indirectly tied or related thereto, which render the institution vulnerable to possible changes in the financial market." "7. Constant use of the Bank's own credit resources for the financing of Group companies directly or indirectly tied or associated there- to, whether they be already in existence or some of the ones that are constantly being created for expanionist purposes and whose activities represent a medium or long-term investment, at loggerheads with the soundness of commercial banking (Treasury Commission: see the material submitted at the meetings and on the minutes)" "8. Exclusion from the List ratified by the Board of Directors of certain operations of Group's companies and of companies directly or indirectly tied or related thereto, following longstanding instructions from high officers, who, in turn, received them from the highest levels." "9. Credits to companies whose balance sheets do not justify the amounts of said loans, mainly Group companies, and which credits are authorized or ordered by the highest levels." "10. Accounting omission of operations-especially guarantees and bonds-conducted from the Group com- panies under order from the highest levels." "11. Excessive financial burden due to the payment of surtaxes and commissions on deposits." "12. Increase in expenses through outlays that are not compatible with the normal management of the Bank." "13. Insufficient income generation, In relation to portfolio volume, which causes the interest account to be affected by amounts equal to the yield said portfolio should generate. Therefore, an insufficient amount in the account Interest Collected in Advance due to the drain it has been withstanding." "14. Inconsistency in the Reserve Requirements position due to a weak treasury and the continuous negative balances at the Clearing House." "15. Unbridled personnel growth at all levels, which has brought about an evident bueaucratization of Bank functions." "16. Ignorance of normal communication channels and of approved bonus norms and procedures." One of the signers of the memorandum of October 14, 1976, Santiago Rodriquez Marcano, was made an Assistant to the President of BND after the memorandum was sent, but he left after a few months saying that he did not receive the necessary cooperation in his new position. Gorrondona, Jr. testified that in 1978, BND was facing a "serious . . . liquidity crisis" and "had very little liquidity." Gorrondona, Jr.'s testimony established that he made his fortune in real estate. Gonzalez' testimony indicated that in 1978 the BND faced liquidity problems, a "liquidity crisis" which even with government assistance would have continued until the end of 1979. Benitez' testimony indicated that the BND was in serious trouble at the time of intervention and that the primary cause was credit concentration and the lack of payment upon maturity. Romero's testimony indicated that at the time of intervention the BND had the following problems in the area of credits or loans: A substantial part was concentrated in real estate activities. A lot of the business that had received credits from the bank was related indirectly with directors and executives of the bank. Some businesses received credits for amounts that went over what the law allows. The credits were not sufficiently col- lateralized or guaranteed. Some of these credits had a maturity of more than one year which is illegal for a commercial bank. Gabaldon's testimony established that while he has been President of the BND many adjustments had to be made to correct the accounts of the BND as they existed at the time of intervention; that the BND Board had decided to make an appropriate footnote reservation in the BND financial statements calling attention to the possibility of future adjustments which might result from investigations and analyses of the BND's accounts prior to the intervention. Gabaldon's testimony, based on his study of BND records, established that at the time of intervention is some cases the loans to subsidiary companies were paying interest but in a majority of the cases they were not doing so but rather the BND would increase the amount of the debt to cover the amount of the interest due. At the time of intervention, approximately 12 to 15 percent of the BND loan portfolio consisted of loans to these subsidiary companies. Alejandro Guevara Chacin's ("Guevara Chacin") testimony established that the minutes of the BND sent to the Superintendent compared with the minute books of the bank revealed that many operations were omitted. Guevara Chacin supervised the comparison. Juan Ramirez' ("Ramirez"), the present Superintendent of Banks of Venezuela, testimony indicated that there were many reasons for the intervention of the BND and any one of them, if put together with or alongside the others, was enough to support the decision. Benitez' testimony indicated that the basic principle of the banking business is diversification; in other words, to place loans with diverse or different customers. Childs' testimony indicated that renewal of loans without payment of interest is bad banking practice. Childs' testimony indicated that loans to corporations in which directors have an equity interest should be secured and at arms length. Wyneken's testimony indicated that there are reserve requirements in the United States and violation is not a trivial matter. The testimony of Guevara Chacin, Eenitez, Lopez-Romero and Ramirez established that one of the BND's major problems under Gorrondona, Jr. was repeated deficiencies in the BND's legal reserve. After the intervention, there was a run on the BND. Between June 30, 1978, and December 31, 1978, deposits from the public decreased by Bs. 2.1 billion and most of this decrease occurred between December 7, 1978, and December 31, 1978. In the six months following the intervention government deposits at the BND went from Bs. .6 to Bs. 2.7 billion. These deposits permitted the BND to cover withdrawals. Gorrondona, Jr. left Venezuela for a two week period on November 17, 1978, and a detention order was issued on November 24 which would have resulted in arrest had he had been in the country. In Venezuela, the subject of a detention order is immediately arrested and is held without any opportunity for posting bail until the detention order is resolved. The detention order was based upon an allegation that Gorrondona, Jr. had been involved in a company which had committed a security violation more than five years prior to the detention order. Petitioner contends that the charges against him, which resulted in the detention order, were politically motivated. This order kept Gorrondona, Jr. out of the country during the intervention, and was eventually dismissed. The Court, in dismissing the charges, stated: It then follows from the aforesaid, that it would -- clearly result in an injustice to assign any criminal liability to persons who are not even members of the Board when the presumed irregularities may have been committed. The period leading up to the intervention of the BND was also the period immediately prior to the national election which was held on December 3, 1978. In the elections in 1974, Gorrondona, Jr. had contributed 9 million dollars to the unsuccessful opponent of President Perez. In the election of 1978, Gorrondona, Jr. had contributed over 1 million dollars to the opponent of President Perez's party, the Accion Demicratico (AD) party. Venezuelan laws do not restrict the size of campaign contributions. Gorrondona, Jr. returned to Venezuela in June, 1979. At that time Gonzalez recommended to Gorrondona, Jr. that he go to court to prove his innocence. In June, 1979, Gorrondona, Jr. and Sr. initiated a noticia criminis proceeding in a Venezuelan Penal Court of First Instance. There are three ways to initiate a criminal proceeding in Venezuela: denunciation (a person makes a charge that a crime may have been committed), accusation (a person makes a charge that a particular person may have committed a crime), and noticia criminis (the court takes notice that a crime may have been committed). In Venezuela, the courts may call witnesses and thereby take investigative initiative. The noticia criminis proceeding is based on the obligation of a Venezuelan court to investigate a possible crime of which it has notice from whatever source. In the case of the noticia criminis proceeding initiated by Gorrondona, Jr. and Sr., the court was called on to determine if the BND administrators had participated in the commission of any crime while they were serving as such. In other words, the purpose of the noticia criminis proceeding initiated by Gorrondona, Jr. and Sr. was to determine if during the period of time in which they were administering the bank they committed an act that would or could be considered criminal in Venezuela. The word used by Gonzalez in describing the noticia criminis determination was "delito," which the interpreter testified means crime. The decision of the Court of First Instance in the noticia criminis proceeding was to terminate the summary investigation pursuant to Article 206 of the criminal code for criminal trials. The court found there was no evidence of crime. In other words, the determination of the judge in the noticia criminis proceeding was to end the criminal investigation because the facts presented were not of a criminal nature. With regard to the violation of banking laws described in the Superintendent's Report and the Intervenor's Report, the Court said "[a]s is clearly appreciated from these provisions, none establishes penal sanctions and although they constitute a violation of juridical regulations and comprise sanctions, same have no other character than an administrative one. The appellate court said, "this Superior Court considers that lack of maintenance of reserves in such proportion and manner as established in Articles 20, 21, and 163 of the General Act governing Banks and other Credit Institutes, is object of a sanction under Article 170 of the said law consisting of a fine to be applied by the Superintendent of Banks. Efforts to collect the loans made by the BND prior to intervention: On February 28, 1980, the BND entered into an agreement with Gorrondona, Sr. and Gonzalez regarding the loans to certain debtors of the BND ("February 28, 1980 Agreement"). All these loans were made prior to the intervention. The February 28, 1980 Agreement fixed the amount of the debt to the BND of the ap- proximately 180 companies specified therein at Bs. 4.038 billion. It specified that the BND would accept in payment of this debt the amount of Bs. 3.388 billion. It specified that payment would be made within one year. It specified that during that year no actions would be commenced to compel payment of this debt. Gorrondona, Sr. and Gonzalez signed the February 28, 1980 Agreement either as business brokers for the companies specified therein or as representatives of such companies. According to Gorrondona, Jr. all the debtor companies obligated themselves jointly, and any collateral posted by one could be used to satisfy the debts of the other. Paragraph 15 of the February 28, 1980 Agree- ment specifies certain responsibilities assumed by Gorrondona, Sr. and Gonzalez. "We, JOSE JOAQUIN GONZALES GORRONDONA, a Venezuelan citizen, of legal age, of this domicile, the bearer of identity card number 30.580; and DIOGENES Jr. GONZALES HURTADO, a Venezuelan citizen, of legal age, of this domicile, the bearer of identity card number 1.193.753, state that acting as business brokers for THE DEBTORS by virtue of the already noted common interests, personally and jointly and severally in behalf of all of THE DEBTORS undertake to accept and comply with the present agreement in all of its parts. Therefore, and to preserve the fullness of its effects, we undertake to have those debtor companies whose Articles of Incorporation or By-Laws forbid or limit the granting or posting of guarantees or securities, amend them as needed in order to allow for the profferred guarantees; we likewise undertake to have them grant their consent lawfully and execute the present in- strument within the term of thirty (30) days, and to execute any other documents, as re- quired, that may be necessary for the per- formance thereof. As of the present, the loans of the com- panies specified in the February 28, 1980 Agreement have not been paid in full. The amount remaining to be paid, exclusive of interest, is either approximately 2.8 bil- lion B's or 2.1 billion B's depending on whether the loans compromised in the February 28, 1980 Agreement (the difference between Bs. 4.038 billion and Bs. 3.388 billion) are treated as paid. Such unpaid loans as of this time are neither principal nor interest. At this time the BND's total loan portfolio is approximately Bs. 6.2 billion. Whether the figure of Bs. 2.1 or Bs. 2.8 billion is used for the amount of these unpaid loans, these frozen loans from prior to the intervention represent a substantial portion of the BND loan port- folio. These loans to related or Specially Classified Companies are in addition to the approximately Bs. 900 million in loans to subsidiary or affiliated companies that are not paying interest or amortizing principal. There is no evidence that Gorrondona, Sr. or Gonzalez were coerced into signing the February 28, 1980 Agreement. The Agreement was negotiated over an extended period of time. Gonzalez has testified that he signed the February 28, 1980 Agreement in order to assist the rehabilitation of BND and that Gorrondona, Sr. signed in the same spirit. Both men initialed each page when they signed it. Gorrondona, Jr. has testified that it is his position that the agreement is invalid in parts because he did not sign it. The BND has negotiated with Gorrondona, Jr. concerning the performance of the February 28, 1980 Agreement and the debts owed by the Specially Classified Companies. Such negotiations have not been successful. Under the February 28, 1980 Agreement, suits could not be filed for one year. When the agree- ment was not performed, the administration of Borjas pursued negotiations with Gorrondona, Jr. and, when Gabaldon became President of BND in August, 1981, he continued negotiations with Gorrondona, Jr. No suits have been filed against Gorrondona, Sr. or Gonzalez personally on account of the February 28, 1980 Agreement. The BND has very recently started to file suits against some of the debtors. Gorrondona, Sr.'s signing of the Agreement of February 28, 1980, Gorrondona, Jr.'s partici- pation in negotiations with respect to the performance thereof, together with the state- ments made in Memorandum of October 14, 1976 and described above concerning loans made prior to intervention to companies owned directly or indirectly by owners of the BND, corroborates the finding of the Intervenor that prior to intervention a substantial amount of loans were made to companies in which officers and directors of the BND had an interest. The inability to collect these loans corroborates the conclusion of the Superintendent and Intervenor that these loans were not adequately collateralized and were made in amounts in excess of what prudent credit practices would dictate based on the companies' balance sheets. Transfer of ownership of the BND: In the days following the intervention, members of the national government of Venezuela, including the Minister of Finance, met with Gorrondona, Sr. The possible liquidation of the BND and the possible transfer of ownership were discussed. On February 8, 1979, agreements were signed providing for the sale of 65 percent of the BND's shares to the Corporation Venezolana de Fomento ("CVF") . Sixteen shareholders, including Gorrondona, Sr., signed these agreements. They covered the shares owned by both Gorrondona, Sr. and Jr. The February 8, 1979 Agreement set a minimum price of Bs. 1 per share. The Agreement provided that the actual price would be set by the Superintendent of Banks prior to July 31, 1979. The price was to be fixed based on the book value of the BND and its subsidiaries as of December 31, 1978 less the uncollect- ible loans in its portfolio. At the time of intervention the losses on the BND loan portfolio exceeded the capital and reserve of the bank. Under Venezuelan law, when a bank has lost more than 25 per- cent of its capital, the stockholders are required to replace it. Accordingly, had they not sold their shares, the former owners of the BND would have had to make a capital contribution to the BND. As it is, the new owners of the shares have replaced the lost capital of the BND. Gorrondona, Jr., Borjas, the then President of the BND, and the Planning Minister of Venezuela met between June and November, 1979, to discuss the price for the BND shares and repayment of debts owed by the Specially Classified Companies. As a result of this meeting, an agreement was signed on December 21, 1979, regarding the fixing of the price of the stock and the negotiation of the re- payment of loans made to the Specially Clas- sified Companies. In February, 1980, two agreements were signed finalizing the sale of the BND shares to the CVF. One of these agreements (Respondent's Exhibit 82) was with the parties that had signed the February 8, 1979 Agreement. Re- spondent's Exhibit 82 was signed by Gorrondona Sr. and Gonzalez among others. In paragraph First it recites that: "In execution of the agreement reached in the Third clause of the sales contracts for Banco National de Descuento, C.A. shares, sub- scribed between C.V.F. and THE SELLERS and dated February 8, 1979, the Bank Examiner through Official Notices Nos. HSE-200- 3860 and HSE-200-3992, dated July 31 and August 7, 1979, respectively, ad- dressed to the Banco National de Descuento, C.A., determined losses in the Credit Portfolio of said Institution reaching an amount of ONE THOUSAND ONE HUNDRED AND EIGHTY SIX MILLION AND SEVEN [TOS (hundred) omitted in translation] THOUSAND BOLIVARS (Bs. 1,186,700,000.00) and therefore ordered the pertinent adjustments to the BANCO NACIONAL DE DESCUENTO C.A.'s Balance Sheet as of December 31, 1978." In paragraph Second it recites: "Due to the adjustments referred to in the previous Clause, and pursuant to the agree- ment between the parties listed in the con- tracts entered into on February 8, 1979, the Book value of the sold shares resulted in an amount less than One Bolivar (Bs. 1.00) per share, wherefore 'THE SELLERS' have, pursuant to the provisions of the Third Clause of the aforementioned contracts, agreed to accept the amount of One Bolivar (Bs. 1.00) per share, as the sale price for the shares sold." In paragraph Third it recites: "Lastly, 'THE SELLERS' state for the record that what they declare herein completely invalidates any statement or claim made by them, their agents, attorneys or represent- ative regarding any questions on the validity of the agreements executed on February 8, 1979, whose contents they are aware of, and which they execute in a final and definite manner through this document." There is no claim made in the record that the signers of Respondent's Exhibit 82 were coerced in their decision to execute that agreement. The other agreement of February 1980 regard- ing the transfer of shares of the BND (Respon- dent's Exhibit 81) was with shareholders who had not signed the February 8, 1979 Agreement. That agreement also fixed the sales price at 1 B per share. As recited therein, it used as the amount of the losses the Bs. 649 million figure established by the Minister of Finance pursuant to the appeal taken November 30, 1979, rather than the Bs. 1.186 billion figure established by the Superinten- dent of Banks prior to the appeal. This established that whether the Bs. 1.186 bil- lion or the Bs. 649 million figure is used for the amount of the losses, the shares of the BND had at most a nominal value of 1 B on December 31, 1978. Property in Venezuela cannot lawfully be taken by the Government without compensation. If it is taken for less than a fair price, the aggrieved person can go to court to seek a fair price. The judiciary in Venezuela is independent. No lawsuit has yet been filed to obtain ad- ditional compensation for the shares of the BND transferred to the new owners. Recently an "administrative letter" was sent regarding additional compensation for the shares. Nothing in Venezuelan law precluded its being sent earlier. The evidence in the record does not support a finding that the government of Venezuela coerced the owners of the BND to sell their shares or that such shares were sold at less than a fair price. As alleged by Petitioner. SUMMARY FINDINGS The decision to intervene the BND was, in part, politically motivated as evidenced by the timing of the intervention, the withdrawal of substantial government deposits immediately prior to intervention and the decision to refuse recognition of previously accepted commercial paper for rediscount. This is not to conclude, however, that the continuing liquidity problems of the BND were caused by the government. The reasons for the liquidity crisis experienced by the BND in 1978 had existed since at least 1976, and were identified in internal memoranda as well as Superintendent of Banks' and Intervenor's reports. The liquidity crisis experienced by the BND in 1978 and the intervention of the BND by the Venezuelan Government have at the present time a somewhat adverse effect on the reputation of Gorrondona, Jr. with respect to his qualifications as a banker. There is no evidence of any deficiency in his character or integrity. The education and business experience of Gorrondona, Jr. tend to establish his qualifications. However, his role as President-in-Charge of the BND during the liquidity crisis and intervention reflects adversely on those qualifications. No witness was called by the Banking Department or the Applicant on the question whether the practices that gave rise to the intervention constitute unsound banking practices. Those practices have been identified in the findings herein and include concentration of credit in the loans to the Specially Classified Companies, the renewal of loans to subsidiary companies though those loans were not paying interest, repeated violation of legal reserve requirements, failure to comply with the laws relating to agricultural loans, and failure to disclose to regulatory authorities that the minutes submitted for review by those authorities were not the same as the minutes in the books of the bank. LEGAL CONCLUSIONS AND RULINGS Subsection 120.57(1)(b) 12, Florida Statutes, provides: In applications for a license or mergers pursuant to title XXXVIII which are referred by the agency to the division for hearing pursuant to this section, the hearing officer shall complete and submit to the agency and to all parties a written report consisting of findings of fact and rulings on evidentiary matters. The agency shall allow each party at least 10 days in which to submit written exceptions to the report. Subsection 120.52(7), Florida Statutes, defines "license" as [a] franchise, permit, certificate, registration, charter, or similar form of authorization required by law, but it does not include a license required pri- marily for revenue purposes when issuance of the license is merely a ministerial act. Subsection 658.28(1), Florida Statutes, provides in part: (1) In any case in which a person or a group of persons, proposes to purchase or acquire a controlling interest in any state bank or state trust company and thereby to change the control of that bank or trust company, each person shall first make ap- plication to the department for a certificate of approval of such proposed change of control of the bank or trust company. . . The above provisions of Chapter 120 establish the Hearing Officer's report procedure for license applications under Florida banking laws. This is an application for a certificate of approval which is a form of license application within the meaning of that term as used and defined in Chapter 120. Therefore, no recommended order will be issued. Subsection 658.28(1), Florida Statutes, provides in part: [T]he department shall issue a certificate of approval only after it has made an investi- gation and determined that the proposed new owner or owners of the interest are qualified by character, experience, and financial responsibility to control and operate the bank and trust company in a legal and proper manner and that the interests of the other stockholders, if any, and the depositors and creditors of the bank or trust company and the interests of the public generally will not be jeopardized by the proposed change in ownership, controlling interest, or management. The above provision necessitates Respondent's investigation of Gorrondona, Jr.'s banking experience. Thus, the history of the BND and his role in the management of that institution are relevant to Respondent's investigation and to this proceeding. Petitioner's objection to such evidence is hereby overruled. FILED this 28th day of December, 1982, in Tallahassee, Florida. R. T. CARPENTER, 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 28th day of December, 1982.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: On September 5, 1978, the Applicant submitted to the Department its application pursuant to Sections 665.031 and 665.704(2), Florida Statutes, for authority to organize a corporation for the purpose of conducting a savings and loan association business to be located at the intersection of Kanner Highway (Colorado Avenue) and Monterey Road, Martin County, Florida. Notice of receipt of the application was published in a Florida Administrative Weekly on September 8, 1978. After receipt of the application, the Department requested additional information after receipt of which the application was deemed complete and assigned a filing date of December 7, 1978. The application as originally filed proposed the name AMERICAN SAVINGS AND LOAN ASSOCIATION OF MARTIN COUNTY for the proposed association. On September 22, 1978, Applicant amended the Petition to change the name of the proposed corporation to CENTRAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA. This change was noticed in the Florida Administrative Weekly on October 6, 1978. As set forth above, the site of the proposed savings and loan association is at the intersection of Kanner Highway and Monterey Road, Martin County, Florida. The organizers of the Applicant obtained an option to purchase the property for the proposed site for $175,000. The option to purchase was obtained from Mr. Richard Geisinger, one of the proposed directors, with full disclosure to the other proposed directors. An MAI appraiser appraised the fair market value of the property for the proposed site at $210,000. The proposed site is directly on the corner of the subject intersection and represents 175 front feet on Kanner Highway and 300 front feet on Monterey Road. The applicants intend to build a freestanding building of approximately 6,400 square feet with two drive-in teller facilities. The total cost of land and building is projected at approximately $481,000 with an additional $85,514 to be spent for the purchase of fixtures and furniture. The applicant proposes to be capitalized at $1,000,000, with $500,000 of the total capital being held as paid in surplus. The capital will be raised from the issuance of 100,000 shares of common stock with a par value of $5.00 per share, selling at a price of $10.00 per share with a collection of an additional $.50 per share for an organizational expense fund. For the purposes of the application, 100 percent of the stock of the proposed association was subscribed to by the organizers. However, it is their intent to offer for sale approximately 46 percent of the stock of the association to the public prior to the opening of the proposed savings and loan association. Applicant's primary service area (PSA) incorporates most of the Northeast section of Martin County and includes the City of Stuart, Town of Sewalls Point and the communities of Palm City and Port Salerno. It is bounded on the north by the Martin-St. Lucie County line, on the west by the Sunshine State Parkway, on the south by the northern boundary of the Gomez Grant, and on the east by the Indian River. The PSA, as proposed, is the most densely populated area of Martin County, having approximately 38,400 residents. The per capita income for the residents of the PSA is above the state average. Both construction and sales of residential units within the PSA are increasing, with adequate room for future development. There is a high level of commercial activity in the PSA and the vacancy rate is low. The PSA contains the Monterey Shopping Plaza, which is directly opposite the proposed site, which shopping plaza opened for business in 1972, and which has expanded to over 100,000 square feet of gross leasable space. Within the PSA and directly across the street from the proposed site to the East, a 26 acre shopping mall is being developed. Downtown Stuart is less than one-half mile from the proposed site and in the PSA. The population of Martin County and the primary service area is a matter of dispute. The Martin County Planning and Zoning Department estimates the county's population at 61,692 residents. The University of Florida, Bureau of Economic and Business Research estimated the county population at 53,895 as of July 1, 1978. No annual estimates relating to census tracts or parts thereof are available from official U.S. or State of Florida sources in order to determine the population of the PSA. However, the trends of population changes in Martin County, Stuart, Sewalls point, Jupiter Island and Ocean Breeze Park and in the unincorporated areas of the county, which comprise much of the designated PSA should apply to the PSA. Relevant population data of these areas, compiled by the University of Florida, Division of Population Studies, are as follows: Martin 1970 County 28,035 1975 47,726 1976 48,496 1977 50,341 1973 53,895 1980 54,700 to 61,800 (projected) Stuart 4,280 8,787 8,479 8,520 8,942 NA Sewalls Point 298 741 791 829 1,025 Jupiter Island 295 349 352 353 355 Ocean Breeze Park 714 813 1,080 1,080 1,065 Unincorporated 21,908 36,936 37,794 39,559 42,468 NA Martin County population has risen dramatically since 1970, and that growth is expected to continue, essentially from in-migration. Since 1970 there has been a negative natural increase in population. The median age of the county population of 1977 was 45 years of age, with 26 percent of its residents 65 years or older. This is fairly representative of the PSA which includes the majority of the county's population. Within five miles of the site, there are four major shopping centers including Stuart Shopping Center with approximately 103,000 square feet, K-Mart Plaza with approximately 100,000 square feet, East Ocean Mall with approximately 100,000 square feet and Monterey Shopping Plaza referred to above. From 1971 to 1978, 17,088 housing units were built in Martin County. Permit activity in the county shows that there were $81,726,000 in permits issued in 1978. The proposed site is along a line of travel for a large number of commuters as well as shoppers who come to that area as a destination point. The latest unemployment data for Martin County shows an unemployment rate of 5.4 percent for November, 1978 (revised), and a 5.5 percent rate for December, 1978 (preliminary). This compares to a state average of 6.2 percent and 6.4 percent respectively. The per capita personal income for the county increased from $5,735 in 1975 to $6,156 in 1976. This was a 7.3 percent increase which was somewhat slower than the 7.6 percent state average. However, the county's absolute averages remained above the state average of $5,596 and $6,021 respectively for the same years. Commercial activity in Martin County is strong. There are presently eleven existing or approved savings and loan association offices within the proposed PSA. One of these is a main office and ten of these are branches or limited facilities. There are also four additional savings and loan association offices located outside the PSA, but within Martin County. There are nine commercial bank offices, including four main banking offices and five branches, within the PSA and another six hank and branch offices located outside the PSA, but within Martin County. There have been significant increases in savings deposits in Martin County. Significant factors in this increase is the in-migration of new residents and inflation. A continuation of this pattern will maintain the growth experience in recent years. The county summary for nine savings and loan offices indicates an increase of 27.1 percent in deposits between March 31, 1977 and March 31, 1978. This continues a similar growth rate achieved during 1976- 1977. A similar growth trend is being experienced by the commercial banks in the area. Savings and loan associations doing business in Martin County have total aggregate savings as of September 30, 1978 of $235,416,000. Commercial banks doing business in Martin County show total assets of $297,774,000 as of the same date. Only one savings and loan doing business in Martin County is headquartered in Martin County. All other savings and loans in Martin County are branches of institutions with headquarters outside Martin County. The Applicant expects to be competitive with the existing savings and loan offices in the PSA with regard to interest rates and breadth of services. Some of the services that the Applicant intends to offer to the community include the following: a mobile facility to serve the elderly and disabled, direct deposit of Social Security and other government checks, retirement plans such as IRA and KEOUGH, electronic funds transfer, Christmas Club and educational savings programs, certificate plans, and Saturday and extended Friday hours. With the exception of the mobile facility and Saturday hours, these services are currently offered by existing associations. The Applicant has not designated a chief managing officer. An informal offer and acceptance of employment exists with a capable individual having savings and loan experience. This individual did not assist in preparation of the pending application. The proposed Board of Directors is composed of nine members, all of whom are residents of the State of Florida and U.S. citizens. Although all of the proposed directors appear to be successful businessmen, none of them have any savings and loan experience. Six of the nine organizers are presently commercial bank directors and one is a former bank director. Mr. J. M. Brown is Director and Chief Executive Officer of American Bank of Martin County; Mr. Richard K. Carroll is a director of Jensen Beach Bank; Mr. John A. Darlson is a director of the American Bank of Martin County; Mr. Richard Geisinger is Chairman of the Board of Directors of American Bank of Martin County; Mr. Terry N. Keathley is a director of American Bank of Martin County; and Mr. Lawrence J. Timon is a director of American Bank of Martin County. Mr. Brown and Mr. Darlson do not intend to become directors of the proposed savings and loan association but do intend to held their stock in the proposed association. Those remaining proposed directors who also serve the Board of American Bank, Messrs. Geisinger, Keathley and Timen, have indicated their intent to resign their directorates in American Bank to serve on the Board of Directors of the proposed association in keeping with the requirements of the Financial Institutions Regulatory Act. The remaining proposed directors are Mr. Rockford H. Ern, Mr. Armando Farina, and Mr. John M. Fort. Mr. Brown, Mr. Carroll, Mr. Darlson, Mr. Geisinger, Mr. Keathley and Mr. Timon have each subscribed to more than 5 percent of the stock of the proposed savings and loan association and also presently own stock in a commercial bank in the PSA. All intend to retain that stock as well as their stock in the proposed savings and loan association. The Applicant has projected savings deposits at the end of the first, second and third years of operation to be $5,000,000, $10,000,000 end $15,000,000 respectively. The Applicant has presented a revised budget which projected net profit for the first three years of operation to be $55,000, $131,000, and $188,000 respectively. The Applicant has proposed that the new association bear the name CENTRAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA. No evidence was presented to show this name was confusing or misleading to the public. In accordance with the provisions of Section 120.57 (1)(a)(12), Florida Statutes, Conclusions of Law and a Recommendation are not included in this REPORT. Respectfully submitted and entered this 25th day of October, 1979, in Tallahassee, Florida. CHRIS H. BENTLEY, Director Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Karlyn Anne Loucks, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32301 Barry E. Chapnick, Esquire 1666 Kennedy Causeway, Suite 700 Miami, Florida 33141 C. R. McDonald, Jr., Esquire Suite 200, Citizens Federal Bldg. 1600 South Federal Highway Ft. Pierce, Florida 33450 Frank Fee, III, Esquire Post Office Box 100 Ft. Pierce, Florida 33450 Richard J. Dungey, Esquire Post Office Box 288 Stuart, Florida 33494
The Issue The purpose of the mandatory public hearing is to afford the public an opportunity to comment on the application from a foreign national for authority to organize Union Credit Bank, a proposed new bank to be located in Miami, Dade County, Florida.
Findings Of Fact On October 18, 1999, the Department received an application (Application) from a foreign national to organize a new bank, Union Credit. The proposed location of Union Credit was Miami, Dade County, Florida. The Department published a notice of receipt of the Application in the October 29, 1999, publication of the Florida Administrative Weekly. The Department has satisfied the notice requirements of Subsection 120.80(3)(a)1.a., Florida Statutes, and Rule 3C-105.103, Florida Administrative Code. By letter dated November 8, 1999, the Department made a timely request for additional information, including additional information from Union Credit's proposed officers and directors (Applicants). The Department did not receive all of the additional information that it had requested from the Applicants until March 1, 2000. On April 3, 2000, the Applicants, as required by federal law, filed a separate application with the Federal Deposit Insurance Corporation ("FDIC"). Identified on the Application are three individuals associated with Union Credit, Oddie Rishmague (O. Rishmague) , Miguel Rishmague (M. Rishmague), and Jorge Luis del Rosal, who are foreign nationals. Mr. O. Rishmague is a proposed director and the proposed sole owner. Mr. M. Rishmague is a proposed director, the proposed chairman of the board of directors, and a proposed officer. Mr. del Rosal is a proposed director. All other proposed officers and directors identified on the Application are citizens of the United States. The other proposed officers and directors are: John H. Blake, Alexander J. Evans, Robert Tamayo, Milton H. Lehr, and Grace V. McGuire. Mr. O. Rishmague, a proposed director and the proposed sole owner of Union Credit has more than 12 years of international banking experience. From 1988 to 1995, he served as Vice-Chairman of Banco Osorno. During his tenure, Banco Osorno grew from a small bank to the second largest bank in Chile. For the past five years, Mr. O. Rishmague has been a member of the board of directors of Corpbanca. In addition to his banking experience, Mr. O. Rishmague served as a director of Provida, a private company that manages $12 billion dollars of pension fund assets. Mr. Tamayo is the proposed president and chief executive officer for Union Credit. He has over 38 years of banking experience in the areas of international and domestic banking. From 1984 to July of 1993, Mr. Tamayo served as a Senior Vice President for Espirito Santos Bank of Florida, a state chartered domestic bank. From July of 1993 to 1999, he served as a Senior Vice President and General Manager of Banco Boliviano Americano’s Miami agency office. Mr. Lehr, a proposed director, has substantial banking experience. From 1976 to 1999 he served as a member of the board of directors of Republic National Bank of Miami. Mr. Blake, a proposed director, has over 13 years of banking experience. From 1986 to 1999 Mr. Blake served as a member of the board of directors of Republic National Bank of Miami. Mr. M. Rishmague, the proposed chairman of the board of directors, served two years as a member of the board of directors of Corpbanca. Ms. McGuire, a proposed director, is a self-employed bank consultant who has worked with numerous domestic and international banks on a variety of complex banking issues. Mr. del Rosal is a retired corporate executive. Mr. Evans is a certified public accountant. No evidence was presented and there is nothing in the record to indicate that the presently identified proposed officers do not have sufficient financial institution experience, ability, standing, and reputation to indicate reasonable promise of successful operation. No evidence was presented and there is nothing in the record to indicate that the proposed directors do not have sufficient business experience, ability, standing, and reputation to indicate reasonable promise of successful operation. None of the proposed officers or directors have been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes, relating to the Florida Control of Money Laundering in Financial Institutions Act; Chapter 896, Florida Statutes, relating to offenses related to financial institutions; or any similar state or federal law. Mr. Blake and Mr. Lehr, proposed directors who are not proposed officers, have had at least one year of direct experience as a director of a financial institution within three years of the date of the Application. Mr. Tamayo, the proposed president and chief executive officer, has had at least one year of direct experience as an executive officer of a financial institution within the last three years. The Applicants seek to organize Union Credit to provide a variety of competitive deposit products and other related banking services, including residential and commercial lending, within the Miami area. Union Credit’s target customers include individual consumers, professionals, and both small and large businesses. The initial gross capital for Union Credit will be $10,000,000.00, and will be classified as follows: $5,000,000.00 of paid-in capital; $4,750,000.00 of paid-in surplus; and $250,000.00 designated as undivided profits. Union Credit is authorized to issue, at opening, 1,000,000 shares of common stock at $10.00 per share. The initial capitalization of Union Credit is adequate in relation to its proposed business activities. However, should Union Credit’s capital fall below $10,000,000.00 within its first three years of operation, Mr. O. Rishmague will immediately contribute, from his own personal assets, the funds necessary to maintain Union Credit’s capital at the level of $10,000,000.00, thus ensuring that Union Credit’s gross capital remains, at a minimum, at $10,000,000.00. Thereafter, Mr. O. Rishmague has committed to infuse additional capital, as may be appropriate, as Union Credit grows in asset size. The local conditions in Miami are favorable to Union Credit’s business plan. Union Credit’s financial plan also appears reasonable and attainable. The Department and Applicants recognize that the corporate name of Union Credit is not, and cannot, be reserved with the Department of State. The Department of State no longer reserves corporate names. Union Credit will have suitable quarters. It will be located at 1150 South Miami Avenue, Miami, Florida. No member of the public appeared at the public hearing or spoke in opposition to the Application. No one testified in opposition to the Application. The Applicants cause notice of the public hearing to be published in the Miami Herald on May 4, 2000. The notice complied with the requirements of Rule 3C-105.106(1), Florida Administrative Code. The Applicants satisfied the notice requirements of Subsection 120.80(3)(a)4, Florida Statutes. DONE AND ENTERED this 3rd day of July, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 3rd day of July, 2000. COPIES FURNISHED: Alcides I. Avila, Esquire Patricia M. Hernandez, Esquire Holland & Knight, LLP 701 Brickell Avenue, Suite 3000 Miami, Florida 33131 Robert Alan Fox, Esquire Department of Banking and Finance 101 East Gaines Street Fletcher Building, Suite 526 Tallahassee, Florida 32399-0350 Honorable Robert F. Milligan Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level 09 Tallahassee, Florida 32399-0350 Harry L. Hooper, General Counsel Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350
The Issue At issue in this proceeding is whether respondent, Swiss Bank Corporation (Swiss Bank) violated job service regulations.
Findings Of Fact The Parties Petitioner, John D. Topley, a native of Great Britain, is a citizen of the United States of America, and a resident of the State of New York. Respondent, Swiss Bank Corporation (Swiss Bank), is one of the three largest banks in Switzerland, and maintains its headquarters in Basel, Switzerland. Currently, Swiss Bank operates eight branches in the United States, including its most recent operation, the "Miami Agency", which commenced operations on December 1, 1987. Respondent, Florida Department of Labor and Employment Security (Department) is the State job service agency charged with the responsibility of administering, inter alia, job service regulations under the provisions of 20 CFR Parts 651-658. Background In or about September 1988, Swiss Bank filed an application with the Department for alien employment certification on behalf of Joseph Zeller (Zeller), a Swiss citizen, to enable it to employ Zeller as vice president and branch manager of its Miami Agency. According to the application, Zeller was the holder of an E-1 visa, which permits a maximum admission to the United States of one year, and had been employed by Swiss Bank as the vice president and branch manager of the Miami Agency since December 1987. According to the application, the full description of the job duties as vice president and branch manager of the Miami Agency were to be as follows: Responsible for overall supervision and management of Foreign Banking Agency with projected first year assets of approximately $100 million. Special emphasis on start-up marketing of services and longterm profitability of the Agency while overseeing the proper performance of the Agency's operations and employees. Specific duties include: Develop, evaluate and implement marketing strategies. Support account officers on marketing calls. Review and approve credit proposals and subsequent offers and agreements. Monitor efficient loan administration while foreseeing future needs of corporate clients. Review all loan proposals before forwarding to U.S. headquarters and overseas parent office Credit Committees. Consult with officers and clients in loan negotiations. Exercise full managerial authority concerning staffing performance appraisals, promotions, salary recommendations, and terminations. Prepare yearly budget utilizing input of all departments. Monitor, on exception basis, all operational and computer activity of the Agency. Make certain that accounting principles and audit procedures are in compliance with banking standards. In addition, must oversee the daily asset funding and foreign exchange activities and oversee deposit and private client activities. The minimum education, training and experience for the position was stated to be 5 years for the job offered or 5 years experience in a position as a "senior manager for a Major International Commercial Bank with management responsibilities for developing and maintaining relationships with banks and commercial clients abroad," a special requirement of "strong oral and written Spanish" was indicated, and the basic rate of pay was stated to be $139,000 per annum. When the application was filed with the Department, Swiss Bank had apparently made no effort to recruit United States workers since Part A, Section 21, of its application evidenced no such efforts, but simply stated that Swiss Bank "will advertise and post notice of job opening upon instructions from Department of Labor." Consistent with the requirements of 20 CFR Part 656.20(c), the application concluded with a certification of conditions of employment by Swiss Bank, under penalty of perjury, that: e. The job opportunity does not involve unlawful discrimination by race, creed, color, national origin, age, sex, religion, handicap, or citizenship; * * * h. The job opportunity has been and is clearly open to any qualified U.S. worker. Swiss Bank's Recruitment Efforts By memorandum of December 12, 1988, the Department instructed Swiss Bank to advertise the aforesaid job opportunity in a professional publication. Notwithstanding, Swiss Bank advertised the job opportunity in The Miami Herald, a newspaper of general circulation, on December 26, 27 and 28, 1989, and posted a notice of such job opportunity at its place of business for the two week period of December 26, 1988 through January 9, 1989. In response to the newspaper advertisement, the Department received seven resumes which it forwarded to Swiss Bank for consideration. No response was gendered by the notice posted at Swiss Bank. By letter of January 25, 1989, Swiss Bank advised the Department that none of the seven applicants met the requirements for the position, purported to delineate the reasons why each applicant failed to qualify, and requested that the Department continue the "expedicious processing" of Swiss Bank's application for alien employment certification on behalf of Mr. Zeller.1 In response, on or about January 30, 1989, the Department advised Swiss Bank that the advertisements it had run were contrary to the Department's memorandum of December 12, 1988, which had advised Swiss Bank to advertise the job opportunity in a professional publication, that such advertisements were unlikely to produce a satisfactory test of the United States work force, and that its application was not likely to be approved as submitted.2 The Department concluded by inquiring of Swiss Bank as to whether it wished to re- advertise or whether it wished the Department to forward the application "AS IS" to the certifying officer. By letter of March 8, 1989, Swiss Bank advised the Department that it had elected to re-advertise the job opportunity, and would do so by running an advertisement in one issue of The Wall Street Journal. The advertisement appeared in The Wall Street Journal on April 19, 1989, under that newspaper's "positions available" section, and provided as follows: VICE PRESIDENT & BRANCH MANAGER: Resp for overall superv & mgmt of Foreign Banking Agency w/projected 1st yr assets of approx $100 mil. Special emph on start-up marketing of services & long term profitability of the Agency while overseeing proper performance of agency's operations & employees. Spec duties incl: Dvlp, eval & implement marketing strategies. Support acct officers on marketing calls. Review & approve credit proposals & subseq offers & agreements. Monitor efficient loan admin while foreseeing future needs of corporate clients. Review all loan proposals before forwarding to U.S. headquarters & overseas parent office Credit Committees. Consult w/officers & clients in loan negotiations. Exerc full managerial authority concerning staff performance appraisals, promotions salary recommendations, & terminations. Prepare yearly budget utilizing input of all depts. Monitor, on exception basis, all operational & computer activity of Agency. Make certain acct principles & audit procedures are in compliance w/banking standards. Oversee daily asset funding & FX activities & oversee deposit & private client activities. Will supervise 10-20 workers. Sal $139,000/yr; M-F, 9-5. Reqmnts: 5 yrs exp performing the above described duties or 5 yrs exp as a Sr. Mgr for a major intern'l comm'l bank w/mgmt respons for developing & maintaining relationships w/banks & comm'l clients abroad. Must have strong oral & written Spanish. RESUME ONLY TO JOB SERVICE OF FLORIDA, 701 S.W. 27 AVENUE-ROOM 15, Miami, FL, 33135. Ref: Job Order #FL0020357. Such advertisement described the job opportunity and minimum job requirements in the same manner as Swiss Bank had described them in its application for alien employment, discussed supra, and was the last advertisement Swiss Bank was to run for the position. In response to The Wall Street Journal advertisement, the Department received 34 resumes which it referred to Swiss Bank for consideration. By letter of June 2, 1989, Swiss Bank advised the Department that, after review of the resumes, it had found 27 applicants unqualified and that it proposed to contact 7 applicants, including Mr. Topley, to personally discuss their banking experience and qualifications for the position. Notably, such letter contained the following introductory paragraph: Our minimum requirements for the position are five years' experience in the job offered or five years' experience as a manager with a major international commercial bank with management responsibilities for developing and maintaining relationships with banks and commercial clients abroad. The position also requires the services of an individual with strong abilities in oral and written Spanish. As our head office is located in Basel, Switzerland and our international correspondent, commercial, and private banking operations are structured so as to be attached to our General Management in Basel, we must also rely on the services of an individual in the position of Vice President & Manager of our Miami office who has European banking experience, providing international banking services to international private and corporate clients, and developing and marketing correspondent and commercial services with European banks and commercial clients. This is essential not only as it relates to the overall structure of the Bank, but is also in conjunction with the marketing plan implemented in 1989 under the newly constituted management and sales organization for the business sector "Correspondent Banking" and the new General Management Division, "Supervision International Organization." (Emphasis added). Pertinent to this case, this was the first occasion that Swiss Bank emphasized European capital market experience as a minimum requirement for the position, and neither The Wall Street Journal advertisement nor Swiss Bank's application for alien employment certification mentioned such requirement. Such "requirement" would, however, be subsequently featured as the primary reason for rejecting the 7 applicants ultimately interviewed. On June 15, 1989, Mr. Topley, at the request of Swiss Bank, appeared for an interview at its New York Branch, located at 4 World Trade Center, New York, New York. The person selected by Swiss Bank to interview Mr. Topley, and apparently the other 6 candidates, was a young personnel officer recently arrived from Switzerland, whose English was poor, and who could not speak intelligently because of an apparent lack of knowledge regarding banking activities in the United States or Latin America. Mr. Topley's "interview" took at most 20 minutes, and he was never interviewed by anyone else for the position including, as would be appropriate considering the nature of the position, a high level officer of the bank with knowledge of the area. Such "interview", for a senior executive position paying $139,000, requiring fluent Spanish, and high level job experience, by a personnel officer with no experience in the area and who could not reasonably evaluate the candidates' qualifications, was a patent sham. By letter of July 27, 1989, Swiss Bank advised Mr. Topley that he had not been selected to fill the position. In so doing, the bank stated: Although your background and qualifications are impressive, we regret that the position has been filled by an applicant who more fully meets our needs... Such letter was misleading in that none of the applicants had been selected to fill the position. Rather, by letter of August 10, 1989, Swiss Bank would advise the Department that it had found none of the applicants it interviewed met its immediate needs or minimum requirements, and requested that the Department "proceed towards certification of our application on behalf of Mr. Joseph Zeller." In its letter of August 10, 1989, to the Department regarding the results of its interviews with the 7 applicants, Swiss Bank further expanded the minimum job requirements for the position, first alluded to in its letter of June 2, 1989, and relied heavily on such "requirements" as a basis for rejecting the 7 applicants. As a predicate to its evaluation of the applicants, Swiss Bank stated: We are seeking to permanently fill the position of Vice President and Branch Manager of our Miami Agency. Our minimum requirements for the position are five years' experience as a manager with a major international commercial bank, with management responsibilities for developing and maintaining relationships with banks and commercial clients abroad, and strong abilities in oral and written Spanish. As we are a Swiss bank with headquarters in Basel, Switzerland, we must also rely on the services of an individual who has banking experience in the European market, providing international banking services, including capital transactions such as private placements to U.S. and foreign institutional investors, and private banking services, primarily to overseas high net worth individuals and institutions. The actual and targeted activities of our Miami Foreign Banking Agency are concentrated in two areas: private banking services for wealthy overseas individuals and institutions, and the development and marketing of financing and equity placements for U.S. and other North and South American companies in the European financial market. This includes raising capital through bonds, notes, commercial paper and other types of financing vehicles, as distinguished from corporate lending activities. It also includes the structuring of financing such as Eurobond transactions involving underwriting the issue and its placement among non U.S. investors. (Emphasis added). The representations emphasized in the aforesaid letter find no parallel in Swiss Bank's application for alien employment certification or the minimum requirements for the position set forth in The Wall Street Journal. To the contrary, they are repugnant to the representations Swiss Bank made to the Department by letter of December 1, 1988, to justify its special requirement that the position required a person with "strong oral and written Spanish" capabilities. Pertinent to this issue, such letter stated: The banking services provided by our Miami office are geared particularly to a Latin-American and U.S. Hispanic clientele comprised of private and institutional investors. These clients constitute a mix of high net-worth South American investors who regularly travel to the United States to conduct their finances and participate in U.S. investment opportunities, and a domestic Miami clientele, made-up primarily of high net-worth Cuban and other wealthy U.S. Hispanic investors. The complex nature of investments and monetary developments which must be explained to, and understood by, our clients requires a sophisticated command of both oral and written Spanish. Likewise, a comfortable business environment is absolutely essential to the ability to attract clients and maintain client relationships among high net-worth investors. This, in turn, requires our ability to convey trust and a thorough understanding of the intricacies of capital preservation, tax reduction and inflation protection through the mechanics of customized financial planning and problem-solving, including the use of a variety of complicated products such as fixed/call deposits; money market, numbered checking, and custody accounts; credit options; and various other investment services. * * * While our entire promotional campaign is replete with emphasis on our language capabilities (including Spanish-language literature prepared specifically for the Miami Agency that promotes our exceptional ability to provide services in English, Spanish, German and French), the Spanish language requirement for officers posted to Miami is more than a marketing tool for attracting new clientele. As indicated previously, the Miami Agency was opened to expand our private banking services in the United States to high net-worth international investors, and to function as the U.S. center of activity for our Latin America Private Banking II operations, including Venezuela, Mexico, Colombia, and Ecuador. (See New York Branch Organizational Chart that identifies Latin America Private Banking positions reporting to our Vice President & Branch Manager in Miami.) * * * The Vice President & Manager of the Miami Agency must utilize Spanish- language capabilities virtually the entire work-day. He is required to speak Spanish and lend support as the branch's highest authority when representing the Bank on all marketing calls; he must supervise relationships with all borrowing and non-borrowing private clients; he must develop and implement marketing strategy that appeals to a Spanish-speaking clientele; he must supervise a full staff of Spanish-speaking employees; he must consult with officers and clients individually and in tandem in loan negotiations; and he must oversee Latin American private client activities for the Venezuela, Mexico, Colombia, and Ecuador desks as well as private client activities for Miami. Finally, as its rationale for rejecting Mr. Topley as a candidate for the position, Swiss Bank stated in its letter of August 10, 1989, that: Mr. Topley presently works for the Park Avenue Bank, a small bank privately owned by Middle East capital. The bank typically provides personal financial services and manages U.S. expenses for non-resident clients. He left the First American Bank of New York because a new President restructured the bank to build-up the domestic area and cut-back international. Mr. Topley's international experience was primarily focused on the credit side. While he established First American's international division and private banking group, the division was soon cut-back and the international private banking group was negligible, consisting of just two people. Mr. Topley developed a private banking marketing plan, but was relieved of his private banking responsibilities before he was allowed to carry it out. Mr. Topley's experience with Bank of Montreal in merchant and correspondent banking and as a credit and marketing officer were all on the credit side. Furthermore, Mr. Topley's international experience has been limited to Latin America, with some background in Asia and the Middle East. He does not have any European capital market experience. The foregoing justification for the rejection of Mr. Topley's application is not an accurate representation of his experience, as reflected by his resume or otherwise. To the contrary, Mr. Topley has extensive experience as an international banker with major financial institutions, with an emphasis on start-up and management of branches and subsidiaries, over twenty-five years of such experience in Latin America, and speaks fluent Portuguese and Spanish. Contrary to the aforesaid letter, Mr. Topley's international banking experience was not primarily focused on the credit side, and his international experience was not limited to Latin America, assuming such was a legitimate factor, such that he had no European capital market experience. Rather, during his tenure with Libra Bank Limited, London, England, and with Bank of Montreal, New York and Toronto, Mr. Topley had a great deal of European capital market experience. In sum, the rationale advanced by Swiss Bank for the rejection of Mr. Topley is a fabrication, and Mr. Topley has demonstrated that he is qualified by education, training and experience for the position offered by Swiss Bank. Mr. Topley Complains By letter of August 16, 1989, to the Department, Mr. Topley registered a complaint regarding the hiring practices of Swiss Bank. In so doing, Mr. Topley stated: It is my belief and contention that this bank, in order to justify their placing of a Swiss national, namely Mr. J. Zeller, as Vice President and Manager of their de-novo branch in Miami, went through a bogus job search, initiated by an ad in the Wall Street Journal on April 18, 1989 . . . with no intention of hiring any of the numerous applicants, which included myself. The reason for doing this, in my opinion was to conform with the Labour Certification requirements of the State of Florida, which I believe states that 'a foreign national can only be employed in a stated senior position if a qualified American citizen cannot be found.' It should be mentioned here that Mr. Zeller, the Swiss national, was already in place as Vice President and Manager of the Miami Branch of the Swiss Bank Corporation when the ad was placed for that very position on April 18, 1989. Mr. Topley's "belief and contention" is aptly supported by the credible proof in this case. While Mr. Topley's complaint was pending, the Department had transmitted Swiss Bank's application for alien employment certification to the regional certifying officer, U.S. Department of Labor, Atlanta, Georgia. On May 17, 1990, that office advised Swiss Bank that it proposed to deny the request for certification based on Swiss Bank's failure to meet the requirements of 20 CFR Part 656 based on its conclusion, inter alia, that at least one United States worker who applied was qualified for the position. Swiss Bank filed a notice of rebuttal to the findings of the U.S. Department of Labor, but thereafter withdrew its request for certification on behalf of Mr. Zeller, which was confirmed by the Department of Labor on July 10, 1990. The announced rationale for Swiss Bank's withdrawal of such application was "because the person who is now in charge of our Miami Office possesses a green card and does not require an alien labor certificate." Such person, chosen by Swiss Bank to fill the position of Vice President and Manager of the Miami Agency, was Mr. Ruedi Burri, a Swiss citizen.
Findings Of Fact On January 18, 1991, the Department of Banking and Finance (Department) received an application to acquire control of Grovegate Bank of Miami by Interbank Holding Corporation, a Florida corporation, whose principals are, for purposes of these proceedings, Jorge Ortega Trujillo, Jaime Ortega Trujillo, Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Leonidas Ortega Trujillo, and Luis Alberto Ortega Trujillo, each of whom is a citizen of Ecuador. By notice published February 1, 1991, and correction published February 8, 1991, in the Florida Administrative Weekly, the Department complied with the provisions of Section 120.60)(5)(a), Florida Statutes, by giving notice of the filing of the subject application and according any person the right to request a hearing by filing a petition with the Department within 21 days of publication of the notice. No request for such a hearing was filed with the Department; however, since the subject application involved the acquisition of control of a bank by foreign nationals, the Department did, on March 12, 1991, forward the matter to the Division of Administrative Hearings to conduct a public hearing as mandated by Section 120.60(5)(d), Florida Statutes. On April 4, 1991, the applicant duly published notice in The Miami Herald, a newspaper of general circulation in Dade County, Florida (the community in which the applicant purposes to engage in business), that a public hearing would be held on the subject application on April 18, 1991. The hearing was held as scheduled, but no member of the public appeared or otherwise indicated any desire to present evidence or to otherwise comment on the pending application. The Public Hearing Each of the principals in `the proposed acquisition, Jorge Ortega Trujillo, Jaime Ortega Trujillo, Fabian Ortega Trujillo, Gustavo Ortega Trujillo, Leonidas Ortega Trujillo, and Luis Alberto Ortega Trujillo, appeared at the public hearing. The principals are brothers and members of the Ortega Trujillo family of Guayaquil, Ecuador, and each is an attorney. Through their family holding company, the brothers and their mother, with each holding an equal interest, own Banco Continental, S.A., one of the largest banks in Ecuador. Banco Continental was founded by the family in 1975, and initially licensed as a savings and loan bank. Approximately two years later, desiring to expand the activities of the bank, the family was successful in securing licensure of Banco Continental as a commercial bank. Initial start-up capital for Banco Continental was derived from family resources, and its current capitalization is a product of retained earnings through years of successful operations. Currently, Banco Continental is ones of the two largest banks in Ecuador when measured in terms of capital or net worth, and sixth in size when measured in terms of assets. Its current assets total approximately 100 million dollars, and its current capital approximately 11 million dollars. The bank maintains its main office in Guayaquil, with 39 branches in nine other cities, and serves the commercial and private needs of the community. Overall, through the family's successful operation of the bank, it has come to enjoy an excellent reputation as a sound and well-managed institution, both locally and within the international banking community. Leonidas Ortega Trujillo (Leonidas) is presently the chief executive officer of Banco Continental and previously served, until attaining such position last year, as its general manager. Leonidas enjoys an excellent reputation as an ethical and knowledgeable banker, and has, through the operation of his own bank, as well as his past service as president of the Ecuadorian Association of Banks and the Federation of Latin American Banks, been active in national and regional banking affairs. Luis Alberto Ortega Trujillo (Luis) is presently the manager/director of Banco Continental's overseas operations, and will assume a position as one of the directors of Grovegate Bank of Miami if the subject application is approved. Luis has demonstrated, through his education and experience, that he is a responsible businessman, who can be reasonably expected to provide a positive influence on Grovegate Bank's operations. But for the addition of Luis as a director of Grovegate Bank, no immediate changes in the management of that bank are contemplated. In addition to their legal, business, and banking activities, the Ortega Trujillo family has, for generations, been active in their community. In this regard, the proof demonstrates that their father founded the Catholic University of Guayaquil, that Gustavo Ortega Trujillo is currently a director of the University of Guayaquil Law School, that Luis is currently the vice- president of the Red Cross of Guayaquil, and that through their family foundation the Ortega Trujillo family supports five public libraries, four public schools, and one night technological school for the less privileged residents of Guayaquil. In all, the proof demonstrates that all of the applicants enjoy a reputation, among those who know of them, as being impeccably honest, and to possess the requisite experience and financial responsibility to control and manage the affairs of Grovegate Bank in a legal and proper manner. The proof further demonstrates that the interests of other stockholders, as well as the interests of the depositors and creditors of the bank and the interests of the public generally will not be jeopardized by the proposed change in ownership, controlling interest, or management. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 7th day of May 1991. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May 1991. COPIES FURNISHED: Albert T. Gimbel, Esquire Chief Banking Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Rene V. Murai, Esquire 900 Ingraham Building 25 S.E. 2nd Avenue Miami, Florida 33131 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William C. Reeves, Esquire General Counsel Office of the Comptroller The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350 =================================================================
Findings Of Fact (Public Portion) Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found: On December 8, 1978, the applicants filed their application for a Certificate of Approval of a proposal to purchase or acquire a majority of the outstanding capital stock of the Farmers and Merchants Bank of Trenton, located in Gilchrist County, Florida. The pertinent statutory provision which governs the approval of the acquisition of majority stock or control in an existing bank is as follows: [T]he Department shall issue said certificate of approval only after it has become satisfied that the proposed new owner or owners of the controlling stock or interest are qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner, and that the interests of the stockholders, depositors and creditors of the bank or trust company and the interests of the public generally will not be jeopardized by the proposed change in ownership, interest, and management. F.S. Sec. 659.14(1) With the exception of the application form which has been promulgated as a rule, the Department of Banking and Finance does not have any rules regarding the acquisition of majority control of an existing bank. Mr. Fred Brannen, Jr., Assistant Director of the Division of Banking, testified as to the incipient policy of the Division with regard to applications for majority control. In determining whether the applicant is qualified by character, the Division performs background investigations, checking to see whether there has been any criminal convictions or judgments based on fraud against the applicant, and generally looks to see if the individuals maintain reputations of honesty and integrity, are successful in their own affairs and are therefore entitled to public trust and confidence. In determining whether the applicant is qualified by experience, the Department looks to the biographical information supplied by the applicant. Although it is not necessary that the applicant have direct prior banking experience, the Department looks to see whether the applicant has comparable business experience which would illustrate that the applicant possesses sound business judgment which would facilitate his understanding of banking and banking problems. In determining whether the applicant is qualified by financial responsibility, the Department looks to see whether the applicant has the financial capacity to fund the purchase of the stock without jeopardizing the bank. Specifically, the Department looks at the liquid assets, net worth and income. There are no written standards for determining financial responsibility. Such determinations are made on a case by case basis. In determining whether the interest of the stockholders, creditors, depositors or the public generally is affected, the Department reviews any proposed changes in the policy, management or services of the bank. While recognizing that those stockholders who have agreed to sell their stock have made a business decision and are therefore protected, the Department feels that it has a duty to protect minority shareholders by requiring the proposed purchasers of majority stock to tender an offer to buy all of the stock for the same consideration and terms offered to other shareholders. Purchases for majority stock or control are generally made on a cash basis. While a single application was filed with the Department, the two applicants are both purchasing as individuals, with each applicant contributing equally. There is no written agreement between Mr. Freedle and Mr. Koons with respect to the acquisition of the ownership of the bank. Mr. Freedle received an undergraduate degree from the University of North Carolina in 1963, a law degree from the University of North Carolina in 1965 and a masters degree in tax law from New York University in 1967. He has been a member of the North Carolina Bar since 1965 and was employed as a tax attorney by Coopers and Lybrand from 1967 to 1970. Mr. Freedle is presently a joint owner and president of Janus Corporation and subsidiaries. Janus Corporation has no interests in banks. He is presently serving as chairman of the board, chief executive officer and director of a commercial bank in Corinth, Kentucky, known as the Corinth Deposit Bank of which he owns 46 percent. He is also director and a member of the finance committee of the Bank of Flagler Beach, Flagler Beach, Florida, and Farmers and Merchants Bank of Trenton, Trenton, Florida. Mr. Freedle formerly served as a director and chief executive officer of Community National Bank of Mt. Gilead, Ohio, and as a director of the Central Bank of South Daytona, Florida. To the best of his knowledge, all information contained in Mr. Freedle's biographical report filed with the Department is true and correct, with the exception that he no longer has an interest in the Community National Bank in Ohio and an agreement presently exists to sell the Central Bank of South Daytona back to the Directors at their cost. Mr. Koons received a B.S. degree in accounting and economics from Pennsylvania State University in 1959 and a degree in corporate finance from the University of Pennsylvania, Wharton School of Finance, in 1964. He was employed by Goldman-Sachs as vice president of corporate finance from 1966 to 1970, and he has worked as an investment analyst for the First Pennsylvania Bank and Trust Company. He is presently a joint owner and executive vice president of Janus Corporation. Mr. Koons presently serves as a director, chairman of the board, and member of the finance committee of the Bank of Flagler Beach, Flagler Beach, Florida. He owns 46 percent of the Corinth Deposit Bank in Corinth, Kentucky. He serves as a director in the subject Trenton Bank. Mr. Koons formerly served as a director of Community National Bank in Mt. Gilead, Ohio, the Everett Bank in Everett, Pennsylvania, and the Central Bank of South Daytona. To the best of his knowledge, all information contained in Mr. Koons' biographical report is true and correct, with the same exceptions noted above for Mr. Freedle and with the exception that he is now divorced. According to testimony of Mr. Warren Wintaub, a general partner of Coopers and Lybrand who has known the applicants for 13 years and who was qualified as an expert in finance, both applicants have experience in banking and are highly regarded for their expertise in the area of financial affairs. Both are gentlemen of honor and have a high caliber of financial knowledge. Both applicants have taken an active part in the Board of Director meetings of Farmers and Merchants Bank of Trenton and have brought experience and expertise in financial matters to the Board. There have been no complaints by the public about Mr. Freedle or Mr. Koons. The applicants have brought more stability and a wealth of knowledge in financial affairs to the Board of Directors of the Bank of Flagler Beach. The applicants have never been arrested or indicted for a crime; are not under investigation by an agency, police department or other law enforcement agency; have not had a judgment entered against them in a case involving acts of fraud or dishonesty and have no pending litigation against them. The present capital structure of the Farmers and Merchants Bank of Trenton consists of 20,000 outstanding shares of common stock at a par value of $10.00 per share, for a total par value of $200,000.00. In addition, Farmers and Merchants Bank of Trenton has capital surplus in the amount of $550,000.00, and undivided profits in the amount of $195,000.00. Valuation reserves total $65,000.00. There is no preferred stock and there are no capital reserves or capital notes. Thus the total amount of capital is $1,010,000.00. There is no new capital proposed or contemplated at this time if the acquisition is approved. Recent market sales of the stock of Farmers and Merchants Bank of Trenton are not available. No exchange of corporate stock for bank stock has occurred in the past year. The applicants presently do not own any stock in Farmers and Merchants Bank of Trenton and seek to acquire up to 10,000 shares for which no loan or loan commitment has been secured, according to the application. The total shares proposed to be acquired constitute 50 percent or more of the outstanding capital stock of the bank. The applicants will not utilize securities in connection with the proposed acquisition. The proposed sellers of the stock are as follows: Elizabeth S. Hagan 4,481 shares; Carolyn S. Osteen - 200 shares; H.E. Osteen - 2,450 shares; and Helen D. Scott - 2,896 shares. The applicants have agreed to purchase these shares at 130 percent of the book value of the bank as of December 31, 1978. Under the terms of the purchase agreement, 20 percent of the purchase price shall be payable in cash on the date of the sale with four equal annual payments of 20 percent payable on the four succeeding anniversary dates of the initial payment. Two other stockholders have tendered their shares pursuant to the same offer of purchase. These financial arrangements derive a tax benefit to the sellers. The applicants initially offered to purchase all of the outstanding capital stock of Farmers and Merchants Bank of Trenton at 130 percent of the book value of the bank as of December 31, 1978, pursuant to the same terms and conditions offered to the proposed sellers. Subsequently, applicants authorized their counsel to offer to purchase Petitioners' stock at 130 percent of the book value of the bank as of December 31, 1978, payable in cash within six months of obtaining a certificate of approval from the Comptroller. According to the letter from Halley Lewis to L. Peter Johnson, Petitioners authorized their counsel to accept a purchase price of 130 percent of the book value of the bank as of December 31, 1978 plus compensation (dividends and growth), payable in cash within six months after the issuance of a certificate of approval. The latter offer to petitioners has been withdrawn by the applicant. Petitioner Cola H. Lewis, Petitioner Johnny H. Johnson and Petitioner Betty H. Pittman rejected the original offer because it was not a cash offer. They also felt applicants were not financially responsible or of sufficient character because they sought to purchase the stock on an installment basis rather than pay cash. Petitioner Lewis was also concerned that since the applicants do not live in the immediate area of the Trenton Bank, money would be removed from the community. The acquisition of majority control by Freedle and Koons of the Bank of Flagler Beach has not jeopardized the interests of the stockholders, depositors and creditors of said Bank, according to the president of that Bank. Since 1975, when the applicant's purchased their controlling interest, the financial condition of the Corinth Deposit Bank in Kentucky has improved. In accordance with the provisions of Florida Statutes, Sec. 120.57 (1)(a)(12), conclusions of law and a recommendation are not included in this Report. Respectfully submitted and entered this 19th day of April, 1979, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Comptroller Gerald A. Lewis State of Florida The Capitol Tallahassee, Florida 32301 L. Peter Johnson Post Office Box 59 Jacksonville, Florida 32201 Halley B. Lewis Route 1, Box 337 Bell, Florida 32619 Karlyn Anne Loucks Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING RE: FARMERS AND MERCHANTS BANK OF TRENTON, Application for Authority to purchase or CASE NO. 79-086 Acquire Majority Control by P. Douglas Freedle and Charles R. Koons / FINDINGS OF FACTS, CONCLUSIONS OF LAW AND FINAL ORDER Pursuant to Notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer, with the Division of Administrative Hearings, on March 19, 1979, in Room 106 of the Collins Building, Tallahassee, Florida. The purpose of the hearing was to receive evidence concerning the application of P. Douglas Freedle and Charles R. Koons for a Certificate of Approval to purchase or acquire the majority stock of Farmers and Merchants Bank of Trenton, an existing bank. This Final Order is prepared in two sections, a public section and a confidential section. The confidential section relates to the financial statements of the applicants, and must remain confidential pursuant to Section 658.10, Florida Statutes.
Conclusions When an application for authority to purchase or acquire a majority of the outstanding capital stock of, or controlling interest in any state bank or trust company is filed, it is the applicant's responsibility to prove that the statutory and regulatory factors warranting the grant of authority are met. It is the Department's duty to consider and review the application and then approve or disapprove the application in its discretion. This discretion is neither absolute nor unqualified but is instead conditioned by consideration of the following factors: That the proposed new owner or owners of the controlling stock or interest are qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner (Section 659.14(1), Florida Statutes). That the interests of the stockholders, depositors and creditors of the bank or trust company will not be jeopardized by the proposed change in ownership, interest and management (Section 659.14(1), Florida Statutes). The interest of the public generally will not be jeopardized by the proposed change in ownership, interest and management (Section 659.14(1), Florida Statutes). That the proposed new owner of the controlling stock or interest is not a bank, trust company or holding company, the operations of which are principally conducted outside of the State of Florida, and that each subscriber is purchasing the stock of the said bank in good faith in his own right and not as attorney or agent for any undisclosed person or entity (Section 659.141(1), Florida Statutes). That the proposed new owner or owners of the controlling stock or interest have agreed to purchase all of the outstanding stock of the bank, upon demand at the option of every stockholder thereto, and to pay for same at the same price or consideration paid for any of the stock purchased in connection with the acquisition of the majority interest (Form DBF-C-11, Florida Administrative Code) If, in the opinion of the Department, any of the five foregoing requirements set forth in paragraph one above have not been met, and cannot be remedied by the Applicants, it cannot approve the application. The Department believes that applicants can, at least under certain circumstances, remedy the factors set forth in requirements B, C, and E above, if they are found to be partially inadequate. For example, if all other statutory and regulatory criteria are met, the proposed new owner or owners may be required to enter into an agreement with the Department restricting certain activities of the bank, for the establishment of an escrow fund, for the filing of a bond, for the amendment of the articles of incorporation of the bank or any other restriction that the Department feels necessary to protect the interest of the shareholders, depositors and creditors of the bank as well as the interest of the public in general. Furthermore, it is the Department's policy to allow the applicants to make certain changes to these factors if all other criteria are met; to do otherwise, would be to subject the Applicants to unnecessary red tape. However, it is the Department's position that there is little, if anything, that the applicant or applicants can do to alter the factors set forth in requirement A and D above, since the applicants CANNOT easily change their character, experience and financial responsibility or their status as a foreign bank, trust company or holding company. It is the opinion and conclusion of the Department that, based upon the record, the Applicant is qualified by character, experience and financial responsibility to control and operate the said bank or trust company in a legal and proper manner. Therefore, criterion A above IS met. The Applicants have substantial educational qualifications and business experience, and appear to have reputations of honesty and integrity. Both of the Applicants have prior banking experience and extensive backgrounds in financial matters. Their individual net worths indicate that they have the financial capacity to fund the purchase of the stock. In addition,. the record indicates the Applicants are financially responsible in their personal and business dealings. It is the opinion and conclusion of the Department that, based upon the record, the interest of the stockholders, depositors and creditors of the bank or trust company will not be jeopardized by the proposed change in ownership, interest and management. Therefore, criterion B above IS met. The Department of Banking and Finance must look to the current motive and to the future intentions of the proposed owner or owners in taking control of an existing bank. This situation where a few individuals have control over a large amount of assets that belong to others, requires a severe scrutiny by the Department of the proposed takeover. The record indicates that the Applicants have no immediate plans to change the management or the Board of Directors of the Farmers and Merchants Bank of Trenton. The Applicants are presently serving on its Board of Directors and have taken an active part in its meetings, utilizing their experience and expertise in financial affairs. It is the opinion and conclusion of the Department that, based upon the record, the interest of the public in general will not be jeopardized by the proposed change in ownership, interest and management. Therefore, criterion C above IS met. Banking involves a public trust. Unlike private enterprise establishments generally, banks operate on the public's capital and therefore, the legislature has vested with the Comptroller the responsibility to protect that public interest. Furthermore, the failure of a bank, as opposed to the private enterprise establishments generally, may have an unsettling effect on the overall economic welfare of the community, and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard. The Applicants' experience and expertise in banking and financial affairs indicate that they are qualified to continue the operation of the Farmers and Merchants Bank of Trenton in a reasonably successful manner, and thus ensure that the financial resources of the residents in the community will remain stable and safe. It is the opinion and conclusion of the Department that the control of the Farmers and Merchants Bank of Trenton is not being acquired by a bank, trust company or holding company, the operations of which are principally conducted outside of this State and that each subscriber to purchase stock of the said bank is doing so in good faith in his own right and not as attorney or agent for any undisclosed person or entity. Therefore, criterion D above IS met. Section 659.141(1), Florida Statutes, prohibits any bank, trust company or holding company, whose operations are principally conducted out of state, from acquiring or controlling directly or indirectly, all, or substantially all of the assets of a bank in this State. The record shows that the Applicants are purchasing controlling interests in the Farmers and Merchants Bank of Trenton as individuals, each in his own right, and not as agents or attorneys for an undisclosed person or entity. It is the opinion and conclusion of the Department that the proposed new owner or owners have agreed to purchase all of the outstanding stock of the bank, upon demand, and at the option of every stockholder thereof, and to pay for same at the same price or consideration paid for any of the stock purchased in connection with the acquisition of the majority interest. Therefore, criterion E above IS met. It is the duty of the Department of Banking and Finance to protect the interests of the minority stockholders in a bank takeover since they exercise less control in the operations of the bank and are in a position where their interests might not be as equitably represented. Thus, the Department requires that these minority shareholders have the opportunity to sell their interest at the same price and terms as the sellers of the majority control. The Applicants have made an offer to purchase all of the stock of the bank pursuant to the same terms and conditions offered to the proposed sellers.
The Issue The 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.
