The Issue The ultimate issue in this case is whether an application to organize Petitioner, BBU Bank, should be approved by Respondent, the Office of Financial Regulation, Division of Financial Institutions.
Findings Of Fact On March 12, 2004, the Office of Financial Regulation (hereinafter referred to as the "Office") received an Application for Authority to Organize a Bank, a Savings Bank or Association Pursuant to Chapters 658 and 665, Florida Statutes (hereinafter referred to as the "Application"). The new bank is to be known as BBU Bank and is to be located at 150 Alhambra Circle, Coral Gables, Miami-Dade County, Florida. The Application listed three individuals who would own an interest in BBU Bank who were nationals of a country other than the United States: Juan Carlos Escotet, Luis Xavier Lujan, and Jorge Carraballo Rodriguez. Mr. Escotet and Mr. Jujan, but not Mr. Rodriguez, were determined to be proposed "major shareholders" of BBU Bank. A major shareholder is defined in Florida Administrative Code Rule 3C-105.001(7) as "any person subscribing to 10 percent or more of the voting stock or nonvoting stock which is convertible into voting stock of the proposed state financial institution." Mr. Rodriguez will not own ten percent of the stock of BBU Bank nor will he be a director or executive officer of BBU Bank. The Office caused notice of its receipt of the Application to be published in the March 26, 2004, edition of the Florida Administrative Weekly. That notice was made consistent with the requirements of Section 120.80(3)(a)1.a., Florida Statutes, and Florida Administrative Code Rule 3C- 105.103(1). By letter dated March 22, 2004, the Office acknowledged receipt of the Application and deposit of the filing fee, reported that notice of receipt of the Application had been published in the Florida Administrative Weekly, and requested additional information, including documentation of BBU Bank's source of cash and/or a copy of a loan commitment to fund the purchase of bank stock by each of the proposed directors, the qualifications of the proposed directors, and information concerning whether an application had been filed with the Federal Deposit Insurance Corporation (hereinafter referred to as the "FDIC"). By letter dated July 2, 2004, the Office notified the applicants that documents addressing the information requested in previous correspondence had been received and reviewed. The Office, therefore, informed the applicants that it had "now [found] your application substantially complete." The Office also notified the applicants that a public hearing was required, due to the proposed role of Mr. Escotet and Mr. Lujan in BBU Bank. On August 5, 2004, Don Saxon, Commissioner of the Office, issued an Order Granting Office's Petition for Public Hearing, ordering the public hearing on the Application required by Section 120.80(3)(a)4, Florida Statutes. The Order was filed with the Division of Administrative Hearings on August 10, 2004, with a letter requesting the assignment of an administrative law judge to conduct the public hearing. The public hearing was scheduled to commence at 1:00 p.m., on September 21, 2004. Notice of the hearing was caused to be published in The Miami Herald on August 31, 2004, in compliance with Florida Administrative Code Rule 3C-105.105(1). The public hearing was conducted as scheduled. No member of the public appeared at the hearing. No opposition to the Application was expressed by anyone appearing at the hearing. Mr. Escotet, a proposed director and holder of 62 percent of the common stock of BBU Bank, appeared and testified at the public hearing. Based upon that testimony, it is found that Mr. Escotet: Is a citizen of Venezuela; Is currently President of Banesco Banco Universal, Caracas, Venezuela; Has extensive banking experience and serves on the board for several other banks in Venezuela; and Possess sufficient financial institution experience, ability, standing, and reputation to enable him to perform his duties as a director for BBU Bank in a manner that can reasonably be expected to result in the successful operation of the bank. Mr. Lujan, a proposed director and holder of 31 percent of the common stock of BBU Bank, appeared and testified at the public hearing. Based upon that testimony, it is found that Mr. Escotet: Is a citizen of Venezuela; Is currently the Executive President of Banesco Bank Universal, Caracas, Venezuela; Has more than 20 years of educational, managerial, and executive experience in the banking business; and Possess sufficient financial institution experience, ability, standing, and reputation to enable him to perform his duties as a director for BBU Bank in a manner that can reasonably be expected to result in the successful operation of the bank. The other proposed directors, Jose R. Gutierrez, Martha S. Pantin, Raul Robau, Santiago D. Morales, and Raul J. Valdes-Fauli, are all citizens of the United States. They have sufficient business institution experience, ability, standing, and reputation to enable them to perform their duties as a director for BBU Bank in a manner that can reasonably be expected to result in the successful operation of the bank. Mr. Gutierrez is the proposed President and Chief Executive Office for BBU Bank. Mr. Gutierrez is currently a director for, and chairman of the Audit Committee of, Eastern National Bank, Miami, Florida. Mr. Gutierrez has 24 years of banking experience, including serving as president of three banks, in Miami-Dade County. Mr. Gutierrez has sufficient financial institution experience, ability, standing, and reputation to enable him to perform his duties as BBU Bank's President and Chief Executive Officer in a manner that can reasonably be expected to result in the successful operation of the bank. Neither Mr. Escotet or Mr. Lujan has been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes, any offense described in Chapter 896, Florida Statutes, or any other crime. The other proposed officers and directors of BBU Bank reported to the Office that they had not been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes, any offense described in Chapter 896, Florida Statutes, or any other crime and no evidence to the contrary was presented at the public hearing. The Office conducted a background investigation of all of the directors and executive officers of BBU and reported no information to preclude them from serving in their proposed capacities for the bank. Respondent's Exhibit 2 at 337-371. Consistent with Section 658.21(4), Florida Statutes, three of the proposed directors, Mr. Escotet, Mr. Lujan, and Mr. Valdes-Fauli, have direct financial institution experience within three years of the date of the Application. The business plan for BBU Bank represents that the bank will offer full-service banking to individuals and businesses located primarily in Miami-Dade County. BBU Bank will seek international businesses originating from Venezuela and other countries in Latin America, relying upon the contacts and experience of its directors and executive officers. BBU Bank will issue 2,000,000 shares of common stock at a price of $7.50 per share. Stock sales will produce $15,000,000.00 in capital. After payment of $350,000.00 of organization expenses, BBU Bank will allocate the remaining $14,650,000.00 capital funds as follows: Paid-in Capital (2,000,000 shares of $5.00 par value): $10,000,000.00 Paid-in Surplus (at least 20% of Paid-in Common Stock): 4,650,000.00 Total Capital Account $14,650,000.00 The initial capitalization of BBU Bank is adequate for its proposed business activities. BBU Bank will have quarters suitable to carry out its business. Conditions in Miami-Dade County indicate reasonable prospects for the successful operation of BBU Bank. The bank's financial plan is reasonable and attainable.
Findings Of Fact The following are the facts which the parties agree should be considered in resolving the legal issues raised in the instant case: The Department is a state government licensing and regulatory agency. Respondent Marsh A. Ferreira is now, and has been since 1990, a licensed real estate broker in the State of Florida. He holds license number 0523079. Since becoming a licensed broker, the only complaint that has been made against him in connection with the practice of his profession is the complaint that is the subject of the instant case. At all times material to the instant case, Respondent Ferreira was licensed and operating as a qualifying broker and officer of Respondent M A F Realty, Inc. (Realty). Realty is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida under license number 0263255. The license reflects that Realty's address is 4143A S.W. 74th Court, Miami, Florida 33155. Like Respondent Ferreira, Realty has an unblemished disciplinary record to date. On or about July 31, 1991, Hector Schwerert, an investigator with the Department, conducted an office inspection/audit of Realty during business hours. The inspection/audit was routine. It was not prompted by any complaint against Respondents. Schwerert gave no advance warning of his visit. Nonetheless, Respondents gave him their full cooperation and did not seek to postpone or delay the inspection/audit. Schwerert's inspection/audit revealed the following: Realty's sales escrow account #20207038305 had an approximate shortage of $8,359.31. Its total trust liability was $8,500.00, but there was only $140.69 in the account. Respondent Ferreira was the sole employee of Respondent. He, and he alone, had access to the escrow account, as well as Realty's operating account. On occasion, he would "unintentionally confuse the checkbooks" of the two accounts and inadvertently use monies in the escrow account for operational purposes and monies in the operating account for escrow purposes. It was this "unintentional confusion" that caused the shortage in the escrow account. During the period from January, 1990, when Realty was incorporated, to the date of the inspection/audit, Respondent Ferreira, on behalf of Realty, prepared and signed written escrow account statements/reconciliations on a monthly basis. On two, and only two, of these statements/reconciliations, the escrow account balance did not equal the amount of Realty's trust liability and there was no explanation given for the discrepancy, nor any indication that corrective action would be taken. On August 1, 1991, immediately upon realizing that he had inadvertently deposited trust funds in Realty's operating account instead of its escrow account, Respondent Ferreira withdrew $10,000.00 from the operating account and deposited it into the escrow account to eliminate the shortage in the escrow account. Since the July 31, 1991, inspection/audit Respondent Ferreira has taken a 30-hour broker's course in which he received an above average score and has met his continuing education requirements. 1/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Respondents guilty of the violations alleged in the Administrative Complaint and imposing upon them, for having committed these violations, the penalties proposed by the Department in its proposed recommended order, which are recited above. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of April, 1993. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1993.
Findings Of Fact The parties Petitioner, Department of Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Linda B. Schumacher, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0171642 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, c/o Linda B. Schumacher, Inc., 155 Worth Avenue, Palm Beach, Florida 33480. Respondent, Linda B. Schumacher, Inc., is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0237256 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 155 Worth Avenue, Palm Beach, Florida 33480. At all times material hereto, respondent Linda B. Schumacher was licensed and operating as a qualifying broker and officer for Respondent Linda B. Schumacher, Inc. The Brokerage While respondent, Linda B. Schumacher (Schumacher) was a qualifying broker and officer of respondent, Linda B. Schumacher, Inc. (the "Brokerage"), at all times material hereto, the proof also demonstrates that one Marion Jones (Jones), a licensed real estate broker in the State of Florida, was also an officer of the Brokerage and duly licensed to manage its affairs during times pertinent to this proceeding. Regarding Jones' involvement in the Brokerage, the proof demonstrates that in 1988, Schumacher had accepted a proposal of marriage from one Peter Widner, and contemplated moving to Wyoming, the state of Mr. Widner's residence, and selling the Brokerage. Consequently, in or about October 1988, with the mutual expectation that acceptable terms could be negotiated with Jones for the purchase of the Brokerage, Schumacher employed Jones to operate and manage the Brokerage. Incident to such employment, Jones acquired signature authority for the escrow and operating accounts of the Brokerage, and operated the Brokerage on a daily basis from November 1988 until March 13, 1989. From November 1988 to mid-January 1989, Schumacher resided in Wyoming with her finance and from mid-January 1989, to March 13, 1989, following the breach of her engagement, she resided in Miami, Florida. During such periods, Schumacher occasionally visited the Brokerage, but the day-to-day responsibility for its operation was reposed in Jones. On March 13, 1989, Schumacher terminated discussions with Jones concerning the proposed sale of the Brokerage, and also terminated Jones' employment as manager of the Brokerage. The predicate for such action was Schumacher's belief that Jones was diverting staff and customers of the Brokerage to her own business, and the consequent belief that Jones no longer intended to purchase the Brokerage. At the time of Jones' termination, she claimed that Schumacher owed her approximately $4,000.00 for management fees, as well as $4,000.00 for the deposit she paid Schumacher toward the purchase of the Brokerage. Schumacher disputed such sums in light of the matters set forth in paragraph 8, supra. Schumacher, concerned with the possibility that Jones might attempt to access the escrow account of the Brokerage to satisfy her claims against Schumacher, closed the escrow account of the Brokerage at Florida National Bank on March 13, 1989, and contemporaneously opened a new escrow account at that institution, over which she alone had signature authority. All funds that existed in the old escrow account were deposited into the new account. 1/ When Schumacher changed escrow accounts, a number of checks were outstanding on the old account. To address such problem, Schumacher promptly drew replacement checks on the new account, and promptly forwarded such checks to most of the affected persons. Here, there is no persuasive proof that any such person was seriously inconvenienced by the change in escrow accounts or failed to receive the monies due them. 2/ While all outstanding checks were replaced with reasonable promptness, the Department points to the return of three checks drawn on the old account as evidencing some impropriety. In this regard, the proof demonstrates that on March 3, 1989, Jones drew three checks on the old escrow account, two payable to Michael Gretschel (Gretschel) in the sum of $102.50 and $57.84, and one payable to Janet Lebedeker (Lebedeker) in the sum of $341.71. 3/ Lebedeker deposited her check on March 13, 1989, when she knew that escrow account had been closed, and Gretschel deposited his checks on March 15, 1989. These checks were returned by the bank because of the closure of that account. Such checks were, however, replaced with reasonable promptness and, under the circumstances of this case, no impropriety is found in Schumacher's change of escrow accounts, and the consequent return by the bank of these checks. The Department's attempt to audit the Brokerage accounts On Friday, March 24, 1989, the Department's investigator, Sharon Thayer (Thayer) contacted Schumacher to schedule an audit of the Brokerage's escrow accounts. At that time, Schumacher agreed to make her books and records available during regular business hours on Monday, March 27, 1989. Later, on March 24, 1989, Schumacher, apparently uneasy least the escrow records not be in order following Jones' departure, contacted her attorney, G. Michael Keenan (Keenan). Keenan telephoned Thayer and told her that she had no authority to inspect the subject records. In response, Thayer directed Keenan to the legal authority for such inspection, and Keenan thereupon accused her of practicing law without a license, threatened to report her to the Bar Association, told her that she had no authority to review such records on Monday, and that she could see such records "when we're ready to let you see them." 4/ Notwithstanding the advice given the previous Friday by Schumacher's attorney that the records would not be produced, Thayer, along with another investigator, presented herself at the Brokerage at approximately 9:00 a.m. and again at 2:30 p.m., March 27, 1989, to conduct the audit. On each occasion the office was locked, and the person in attendance denied admission. On April 5, 1989, the Department, having been denied access to the records of the Brokerage, issued a Subpoena Duces Tecum to Florida National Bank to obtain copies of any trust account records that it might possess. Such subpoena was served by Thayer on April 10, 1989. 5/ By letter of May 8, 1989, Florida National Bank's counsel notified Thayer that it was customary to advise a customer of a request to produce bank records, and that unless she could provide the bank with legal authority to the contrary, the records could not be produced absent such notification. Apparently not receiving any authority to the contrary, Florida National Bank advised Schumacher of the pending subpoena and by letter of May 12, 1989, her counsel advised Thayer that: By means of this letter, please be advised that Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. hereby object to the service of the Subpoena Duces Tecum on Florida National Bank and to the request that monthly bank statements for September, 1988 through March, 1989 on any and all trust accounts and escrow accounts in the name of Linda B. Schumacher, Inc. and/or Linda B. Schumacher Real Estate, Inc. be produced. Further, the undersigned on behalf of Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. have advised Florida National Bank of their objection and directed Florida National Bank not to produce any said documents to the Department of Professional Regulation. As in the past, Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. remain ready, willing and able to permit the Department of Professional Regulation to review their monthly bank statements for September, 1988 through March, 1989 for any and all trust accounts and escrow accounts upon being provided reasonable notice as to the time and date the Department wishes to make the inspection. In the event you wish to make the necessary arrangements to schedule an inspection, please do not hesitate to contact the undersigned immediately inasmuch as my clients remain willing to cooperate with the Department of Professional Regulation. While her counsel's letter of May 12, 1989, references Schumacher's past willingness to make her records available on "reasonable notice," the proof in this case is to the contrary. Rather, the proof supports the conclusion that Schumacher wanted to delay any audit until she could have the records reviewed to insure that they were in order following Jones' departure. 6/ As to her then willingness to produce the records, the proof supports the conclusion that she was then amenable to producing her records; however, the Department delayed contacting her until after May 31, 1989, when Schumacher withdrew her objection to the subpoena served on First National Bank. The audit The First National Bank records were delivered to Thayer on June 2, 1989. Between June 6 and 20, 1989, Thayer audited, with Schumacher's cooperation, the books and records at the Brokerage. The audit of such escrow accounts identified three transactions which the Department contends were improper: a deposit of $2,000.00 made by Val Gabaldon on November 17, 1988, which the Department asserts was not timely returned; a security deposit of $1,500.00 made by Mr. and Mrs. Marvin Silverman on December 2, 1988, which the Department asserts was not timely returned; and, a withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash. Regarding the Val Gabaldon (Gabaldon) deposit, the proof demonstrates that on November 17, 1988, Gabaldon placed in escrow with the Brokerage a $2,000.00 deposit toward the purchase of a unit at the Palm Beach Hotel. On January 17, 1989, and again on January 25, 1989, Lebedeker, an associate employed by the Brokerage, executed "escrow request forms" seeking the return of the deposit to Gabaldon ostensibly because the contact had been cancelled since financing had not been secured. However, such forms also reflect that on February 2, 1989, Jones, who was then managing the Brokerage, instructed that the deposit not be returned to Gabaldon. At hearing, the Gabaldon purchase agreement was not offered in evidence, Gabaldon did not testify, and no explanation was offered as to why Jones felt it necessary not to disperse the deposit as requested by Lebedeker. Accordingly, there was no competent proof as to the terms of the purchase agreement, when or how it was cancelled, and when the deposit became due to be returned to Gabaldon. The proof does, however, demonstrate that on March 15, 1989, two days after Schumacher regained control of the Brokerage and changed the escrow accounts, that she issued a check to Gabaldon for the return of his deposit, but because the Brokerage had the wrong address for Gabaldon he did not receive his deposit until April 25, 1989. Here, there was no complaint by Gabaldon that his deposit was not returned in accordance with the terms of his purchase agreement, and no impropriety shown regarding Schumacher's handling of this deposit. Regarding the deposit of Mr. and Mrs. Marvin Silverman (Silverman), the proof demonstrates that on or about December 2, 1988, they placed in escrow with the Brokerage a $1,500.00 security deposit under a "memorandum to enter into a lease" of property from Martin and Linda Perlmutter (Perlmutter). That memorandum agreement provided: 7. THIS MEMORANDUM SHALL NOT HAVE THE EFFECT OF A LEASE. THE PARTIES' RIGHTS HEREUNDER ARE CONTINGENT ON (A) FINALIZATION AND EXECUTION OF THE LEASE AGREEMENT WHICH IS CONTEMPLATED BY THIS MEMORANDUM, AND (B) IF APPLICABLE, APPROVAL BY THE CONDOMINIUM BOARD (ASSOCIATION). At hearing, the Department failed to offer the lease agreement ultimately executed by the parties, and consequently the terms of that agreement are not of record. The proof does, however, demonstrate that on March 27, 1989, Perlmutter wrote a letter to Schumacher advising her that the Silvermans had fulfilled their lease agreement, and requesting that their security deposit of $1,500.00 be released to them in full. On May 11, 1989, Schumacher returned the Silvermans' deposit. At hearing, no proof was offered as to when the Perlmutter letter was received by the Brokerage (it was apparently mailed from Nashville, Tennessee), or the reason for the delay, if any, in refunding the deposit. As importantly, neither the Perlmutters nor the Silvermans offered any testimony in these proceedings, and the lease agreement was not offered in evidence. Consequently, there is no competent proof that the deposit was not returned in accordance with the terms of the parties' agreement. Regarding the withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash, the proof demonstrates that such transaction was inadvertent on her part, in that it should have been withdrawn from her operating account, and that upon such transaction being pointed out to her during the audit of June 6, 1989, by Thayer that Schumacher promptly replaced such funds. Previous disciplinary proceedings Here, there was no suggestion or proof that Schumacher or the Brokerage had previously been the subject of any prior disciplinary proceeding.
Recommendation Based on the foregoing findings fact and conclusions of law, it is RECOMMENDED that a final order be entered finding respondents guilty of having violated the provisions of Section 475.25(1)(e), Florida Statutes, for having failed to produce their records as required by Rule 21V-14.12, Florida Administrative Code, that respondents be reprimanded for such failure, and that all other charges be dismissed. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of September 1991. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of September 1991.
Recommendation Based upon the Findings of Fact and Conclusions of Law recited above, it is RECOMMENDED that the specific statutory requirements for the granting of an application for a general banking corporation have been met and that it would, therefore, be within the lawful discretion of the Department of Banking and Finance to grant the application of Petitioner and it is further RECOMMENDED that no facts have been established to show that the department should not so exercise its discretion. In light of the matters discussed in paragraph 18, above, it would not be unreasonable to condition the granting of authority to establish a general banking corporation upon Petitioner's provision for a capitalization of $1,000,000. DONE AND ENTERED this 4th day of March 1977 in Tallahassee, Florida. CHRIS H. BENTLEY Hearing Officer Division of Administrative Hearings Oakland Building Room 430, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John E. Mathews, Jr., Esquire 1500 American Heritage Life Building Jacksonville, Florida 32202 Attorney for Petitioner Ryland T. Rigsby, Esquire Office of the Comptroller Legal Annex Tallahassee, Florida 32304 Attorney for Respondent
The Issue The purpose of the public hearing was to review the application to consolidate New River Bank, Oakland Park, Florida, and 1st United Bank, Boca Raton, Florida, in accordance with Florida law.
Findings Of Fact 1st United Bancorp (Bancorp) is a Florida bank holding company which maintains its principal place of business at 980 North Federal Highway, Boca Raton, Florida. 1st United is a Florida chartered bank and is a wholly-owned subsidiary of Bancorp and operates full service banking facilities at seven locations in Palm Beach and Martin Counties. New River is a Florida chartered bank which maintains its executive offices at 2901 West Oakland Park Boulevard, Oakland Park, Florida, and operates two banking facilities in Broward County, Florida. The Department is the duly designated state agency vested with the responsibility of processing and approving or disapproving a plan of any financial entity to acquire the assets and assume the liabilities of another financial entity pursuant to Section 655.414, Florida Statutes. On July 13, 1993, Bancorp and New River entered into a Sale and Purchase Agreement which provides that Bancorp will cause 1st United to purchase substantially all of the assets and to assume substantially all of the liabilities of New River, after which New River will be liquidated and dissolved. The agreement noted above was duly adopted by majority vote of the respective Boards of Directors of Bancorp, 1st United and New River. In addition, the respective Boards of Directors of Bancorp, 1st United and New River duly adopted by majority vote a Plan of Acquisition of Assets and Assumption of Liabilities which summarized pertinent portions of the agreement and which includes all of the terms and conditions required by Section 655.414 (1), Florida Statutes. On September 7, 1993, 1st United and New River submitted an application to the Department seeking the Department's approval for the purchase of New River's assets and assumption of its liabilities as set forth in the agreement and as summarized by the plan. Submitted with the application were the requisite filing fee and all of the required documents including copies of the agreement, the plan and certified copies of the authorizing resolutions of the respective boards of directors. On September 17, 1993, the Department caused notice of the receipt of the application to be published in the Florida Administrative Weekly. This published notice met the requirements of Rule 3C-9.003(1), Florida Administrative Code. On September 7, 1993, Warren Orlando, in his capacity as president of 1st United, filed a petition for public hearing and notice of intention to appear on behalf of 1st United. On October 27, 1993, the Department referred the matter to the Division of Administrative Hearings for the purpose of conducting a public hearing pursuant to Section 120.60(5), Florida Statutes, and Rule 3C-9.004, Florida Administrative Code. Notice that a public hearing would be held on the application on December 13, 1993, was duly published in conformity with Rule 3C-9.005, Florida Administrative Code, in the Fort Lauderdale Sun-Sentinel, Palm Beach Post, and Stuart News, newspapers of general circulation in the communities in which 1st United and New River do business. The agreement provides that New River will receive a combination of cash and Bancorp common stock equal to the net asset value, as defined in the plan, of the assets and liabilities of New River being purchased or assumed. The agreement further provides that after the closing of the asset acquisition, New River shall cease operations and commence dissolution and liquidation proceedings. Substantially all of the Bancorp common stock and available cash received by New River from Bancorp will be distributed to New River shareholders, other than dissenting shareholders. New River stockholders will receive a pro rata portion of the Bancorp common stock and cash available for distribution. After the acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, 1st United will have adequate capital structure in relation to its activities and its deposit liabilities. The acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, if consummated, are not contrary to the public interest. The respective boards of directors of Bancorp and New River requested the opinion of Alex Sheshunoff & Co. Investment Banking with regard to the fairness to the respective shareholders of each corporation, from a financial point of view, of the terms and conditions of the agreement. Alex Sheshunoff & Co. Investment Banking is regularly engaged in and is an expert authority in the valuation of bank and bank holding company securities in connection with bank mergers and acquisitions. Thomas Mecredy is an expert in the valuation of bank and bank holding companies in connection with bank mergers and acquisitions. On December 8, 1993, Alex Sheshunoff & Co. Investment Banking through Thomas Mecredy issued its opinion to the respective Boards of Directors of Bancorp and New River that the terms and conditions of the agreement were fair and equitable to the shareholders of each corporation. Pursuant to the agreement, New River's Board of Directors duly adopted a plan of dissolution and complete liquidation for New River. The plan of dissolution provides that after the sale of assets and assumption of liabilities the Board of Directors will reserve a sufficient amount of Bancorp stock and cash for payment of liquidation expenses and payment of liabilities not assumed by 1st United, including contingent liabilities (general reserves). In addition to the general reserves, New River will create a special reserve (special reserve) in an amount which it considers sufficient to defend and satisfy certain potential claims which may be asserted against New River by shareholders of New River in conjunction with the organization and initial offering of common stock of New River. In determining the amounts necessary to establish the general reserves and special reserve, New River's board of directors consulted with the national law firm of Proskauer Rose Goetz and Mendelsohn with respect to both reserves and the Florida law firm of Shutts & Bowen with respect to the special reserve for advice concerning the potential liability on the part of New River in connection with both known claims and potential claims and the amounts, if any, for which New River could be held liable. Shareholder E.D. Hittson noted that the book value of the New River stock is approximately $11.00 per share versus the $4.50 per share value of the 1st United stock. In response, bank officials noted that 1st United has dividend and strong growth potential not available to New River. Shareholder James Weck questioned provisions being made to satisfy outstanding lawsuit liabilities, the future location of the facility, and the effect on New River employees. In response, bank officials stated that the potential lawsuit liability is included in the reserve amounts, that no decision has been made as to the future location of the banking facility but that the needs of the service area will be met, and that it is their intention to draw talent from the New River staff. Shareholder Amine Semaan questioned whether New River would be represented on the Board of Directors at 1st United, whether minority areas would be a priority for the future location of the facility, and whether another buyer would have paid $10.50 per share. In response, bank officials maintained that New River will have one member on the Board of Directors at 1st United, that the needs of the service area will be met, and that no other, more attractive, buyer is available. On January 11, 1994, MaryAnn Cassel, a shareholder who reportedly attended the public hearing on December 13, 1993, filed a motion for leave to become a party. Such motion alleged that the movant, a minority shareholder, will be forced to accept Bancorp common stock in exchange for her New River shares or be forced to accept appraisal rights in lieu of her shares. Further, movant claimed that the plan is not fair to all parties because the shares of New River have been undervalued. Having deemed such motion untimely, and having determined such request does not allege circumstances unknown to movant prior to the December 13, 1993 public hearing, it is denied. DONE AND ENTERED this 24th day of January, 1994, in Tallahassee, Leon County, Florida. Joyous D. Parrish Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 1994. COPIES FURNISHED: Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350 Donald E. Thompson, II Proskauer Rose Goetz and Mendelsohn One Boca Place, Suite 340 2155 Glades Road Boca Raton, Florida 37431 Michael W. Ford Phillip T. Ridolfo, Jr. Mershon, Sawyer, Johnston, Dunwody & Cole Phillips Point East Tower 777 South Flagler Drive, Suite 900 West Palm Beach, Florida 33401 Jeffrey D. Jones Department of Banking and Finance Division of Banking The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 David S. Zimble Zimble Formoso-Murias, P.A. 1401 Brickell Avenue, Suite 730 Miami, Florida 33131
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following pertinent facts are found: In the latter part of 1973, petitioner submitted to respondent its application for authority to organize a corporation for the purpose of conducting a general banking business to be located on the west side of U.S. Highway 19 at the intersection of Ridge Road in the City of Port Richie. An investigation of the application was conducted by State Supervising Examiner Bruce L. Hieronymus in April of 1974. The application received conditional approval from the former Comptroller of the State of Florida in December of 1974. In January of 1975, such conditional approval was revoked by the present Comptroller. Mr. Hieronymus conducted an update investigation of petitioner's application in mid-March, 1975, noting in his report that additional field examination time should have been allowed and that his recommendation and report was made without audit or verification of some points that could have a definite bearing on the Comptroller's decision. On April 16, 1975, a Comptroller's Conference was held. On October 15, 1975, Comptroller Gerald A. Lewis notified petitioner that he had denied the application for authority to organize the First Bank of Port Richie. The reasons for denial were set forth in a Statement attached to the Order of denial. While the Comptroller found that petitioner's establishment would promote, to some degree, the public convenience in the area, it was further found that: "Growth in the area has been significant. However, there is nothing in the record to indicate that past growth trends will continue. While four of the seven banks in the western area of Pasco County have recorded impressive gains in deposits from June 1974 through June 1975, the increases have been reflected overwhelmingly in time deposits and the savings and loan offices in the area compete heavily for these deposits. The three banks closest to the proposed bank site have not enjoyed significant deposit growth. While Ellis Security Bank reported a total deposit increase of $3.1 million during the period June 1974 through June 1975, Ellis First National Bank of New Port Richey and Peoples State Bank reported decreases in total deposits for the same period of $1.4 million and $7.5 million, respectively. It appears that local conditions do not assure reasonable promise of successful operation of the proposed bank and the existing banks. On the basis of the foregoing, the Comptroller has concluded that, while the first criterion is met in this case, the second criterion is not met. Therefore, the application is denied. Since this conclusion renders the other four criteria moot, the Comptroller has not reached any conclusions with respect to those other four criteria." Subsequent to the denial, petitioner requested a hearing in accordance with Chapter 120 of the Florida Statutes. Receiving no response from the Comptroller, petitioner filed for a writ of mandamus in the Leon County Circuit Court. That Court found that the parties had agreed to proceed in accordance with the new Administrative Procedure Act and ordered respondent to grant petitioner a formal hearing. The office of the Comptroller forwarded the petition to the Division of Administrative Hearings and the undersigned Hearing Officer was designated to conduct the proceedings. This being a fact-finding adversary hearing under F.S. Sec. 120.57(1) to determine the issue of whether petitioner should be granted authority to organize and operate a general banking business at the proposed location; and considering the long delay between the Comptroller's conference, the Comptroller's order of denial and the date of the present hearing, as well as the fact that the Comptroller declined to reach any conclusion as to four of the six criteria required to be met for a charter, the parties were permitted to present all relevant evidence to date concerning the issues in dispute. As noted above, the proposed bank is to be located on a corner of the Port Richie Shopping Village, a large shopping center at the intersection of Ridge Road and U.S Highway 19, the latter of which is often described as "murderer's row due to its extremely heavy traffic congestion. This is a signal-controlled intersection with turn lanes and turn arrows, and is the only intersection with a traffic control light for several miles along Highway 19. Large residential areas surround the proposed site and a junior college is being built two miles east of the site. The site provides easy ingress and egress and adequate parking space. While the owners of the shopping center are experiencing financial difficulties in connection therewith, the center enjoys an occupancy rate of approximately 93 percent. County, state and federal offices are also located in or near the shopping center. There are two or three savings and loan institutions located in the immediate area of the proposed site. However, the nearest bank to the south of the proposed site is about 2.3 miles and the nearest bank to the north is 3.5 miles. The seven existing banks in the area are closer together than petitioner would be to any other bank, with the possible exception of the second and third banks to the south of petitioner in New Port Richie. The name of the proposed bank is First Bank of Port Richie. While numerous state and national banks and clearing houses utilize the word "first" in their nomenclature, petitioner's name should cause no conflict or confusion with the name of an existing bank. For its housing quarters, petitioner proposes to construct a permanent two-story building containing some 14,000 square feet, the second floor to be only partially finished. The size and layout of the building allow for growth, flexibility and convenience, and necessary security equipment is planned. Estimated construction costs are reasonable. Petitioner intends to temporarily operate in a modular unit located adjacent to the site of the permanent building so as to allow for construction of the building without interference. The temporary unit will be leased and will comply with federal security and bonding requirements. There is nothing in the record to indicate that petitioner's proposed capital structure is less than adequate. State examiner Hieronymus found this factor to be favorable in both his original and updated reports and no witness testified to the contrary. The examiner's original and updated investigations report as unfavorable the general character of management of petitioner. This conclusion appears to be based primarily upon the examiner's opinion at the time he prepared his reports that the petitioner's proposed president and chief executive officer, Mr. Raymond O. MacDonald, Jr., lacked both directorate experience and experience as the head of a bank. However, the evidence Illustrates, and Mr. Hieronymus admits, that at the time he prepared those reports he was unfamiliar with MacDonald's extensive banking experience, both as an executive vice president of a Tampa bank and as a director of a Lakeland bank. Testimony on this point from other witnesses indicates that the proposed officers and directors represent a cross-section of the community, each with prior business experience and three with prior operative banking experience with both new and established banks. The trade area of the proposed bank consists of approximately fourteen square miles. Since the early 1970's, the Pasco County area has been one of the fastest growing areas in the State of Florida. In mid-1973, the estimated population of the trade area was 9,200 residents. Present estimated population of the trade area is over 16,000, using figures obtained from statistics of the U.S. Post Office. The state average is 12,000 people per bank. In the past five years, the area has experienced an increase in deposits of 123 percent. As in most other areas across the nation, the area in question suffered in 1973/74 from the deleterious effects of inflation and recession, with attendant declines in construction and increases in the percentage of unemployed persons. While one opponent of petitioner's new bank charter testified that the banks in Pasco County had had a "rough go of it" in the past few years, this is not borne out by the evidence relating to the deposit growth and net income experienced by the seven existing banks. This same witness further stated that economic conditions in the area were now beginnings to pick up. Also, the two opponents to petitioner's application, both affiliated with banks in Pasco County, are each considering placing a remote facility or a branch office within the petitioner's proposed trade area. All but one of the seven banks in the area experienced a growth in deposits from the 1974 to the 1975 year end. The one bank which reported a decrease in deposits made a profit of some $77,000.00 in 1975, in spite of a loan write-off of about $700,000.00 in 1974 and problems with poor management. The two newest banks in the community, one of which is the closest bank to the north of petitioner, show excellent growth in deposits from 1974 to 1975. The two opponents who appeared at the hearing each testified that, other than normal competition factors, the proposed bank will have no adverse effect upon the successful operation of their existing banks. When Mr. Hieronymus conducted his investigations concerning the petitioner's proposed bank, he did not get the impression that other bankers in the area were concerned & that petitioner's operation would adversely affect their existing operations. The February, 1976, Comparative Figures Report published by the Florida Bankers Association, which is relied upon in part by respondent in determining whether to grant banking charters, shows Pasco County to have an 8.1 percent increase in deposits from 1974 to 1975 year ends. Since January of 1975, respondent has granted bank charters to banks located in Duval County with a deposit growth of minus .1 percent; in Polk County with a deposit growth of 1.5 percent; and in Hillsborough County with a deposit growth of minus 1.5 percent. Newly chartered banks frequently lose money in their first year of operation. Although the petitioner projected earnings indicating a substantial profit in each of the first three years of operation; Mr. Hieronymus concluded in his report that the opportunity for an acceptable return on investment was less than probable and reported the factor of "future earings prospects," to be "unfavorable." Using the approach of a percentage of average total assets rather than percentage of total capital (as used by petitioner in its projections) and taking into account the petitioner's purchase of the land and changes in the sources and costs of money, Mr. Hieronymus projected a net operating income of minus $14,091.00 the first year, plus $28,976.00 the second year and plus $37,023.00the third year. Deposit growth would increase from $2.5 million to $6.5 million to $9.0 million over the first three years, according to the projections of Mr. Hieronymus. These figures would be higher were petitioner located in its permanent facility during its first year. On cross- examination at the hearing, Mr. Hieronymus stated that these projected figures illustrate that local conditions assure reasonable promise of a profit.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that respondent grant to petitioner authority to organize and operate a general banking business at 800 U.S. Highway 19 North, Port Richie, Florida. Respectfully submitted and entered this 8th day of June, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Honorable Gerald A. Lewis Comptroller The Capitol Tallahassee, Florida 32304 Mr. James M. Barclay Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida Mr. Wilbur E. Brewton and Mr. Clyde M. Taylor Taylor, Brion, Buker and Greene, P.A. P.O. Box 1796 Tallahassee, Florida 32302 Mr. John D. Kiernan 307 West Coast Title Building Sixth Street and First Avenue North St. Petersburg, Florida 33701 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING THE FIRST BANK OF PORT RICHEY (proposed new bank) Petitioner, vs. CASE NO. 76-086 STATE OF FLORIDA, DIVISION OF BANKING Respondent. /
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.
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
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 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.
