Findings Of Fact On July 6, 1981, the Applicant submitted to the Department of Banking and Finance (Department) an application pursuant to Section 658.19, Florida Statutes (Supp. 1980), for authority to organize a corporation for the purpose of conducting a general banking business to be located at 1000 Massey Boulevard, unincorporated Palm City, Martin County, Florida. Notice of receipt of the application was published in the Florida Administrative Weekly on December 11, 1981. Protests and requests for hearing were filed by American Bank of Martin County (American), Central Savings and Loan Association (Central), Florida National Bank of Martin County (Florida National), and First National Bank and Trust Company of Stuart (First National) on or before December 30, 1981. On September 27, 1982, Florida National withdrew its protest. Publication of the Notice of Hearing in this cause appeared in The Stuart News on October 1, 1982. A hearing was held in this cause on October 19 through 20, 1982, in Stuart, Martin County, Florida. The pronosed bank will occupy 3,300 square feet of an existing single- story structure located at the west end of the Villa Plaza Shopping Center fronting on Massey Boulevard, also known as Martin Downs Building. The proposed bank will have visibility and access to Massey Boulevard and also to First Street along the rear (south side) of the Villa Plaza Shopping Center, through use of the ingress and egress facilities of the shopping center. (View by Hearing Officer) The site has facilities for three drive-in lanes. The plan of the proposed bank will include a teller line, lobby area, private offices, teller work area, coupon booth area, vault, restrooms and an employee lounge. Adequate parking facilities already exist and there is room for expansion. (T. 48-50; View by Hearing Officer) The facility is adequate to handle the projected business of the bank for a reasonable period of time and is of such a nature to warrant customer confidence in the security, stability and permanence of the bank. The Applicant intends to lease the facilities from R&S Equities, a Florida partnership whose partners are John C. Robinson and Woodrow J. Smoak. The lease terms include a five year term with annual rent of $36,000 payable in monthly installments of $3,000. The lease also provides for renewal options every five years for a maximum of thirty (30) years with specified annual rental payments to be used during each of the five year terms. Applicant anticipates an investment of $174,500 in fixed assets, including $49,500 for leasehold improvements and $125,000 for furniture, fixtures and bank machinery. Temporary quarters for the bank are not anticipated as the existing structure is ready and the planned improvements can be completed quickly. Applicant has no plans to purchase or lease any land, buildings, improvements to be made thereon, or equipment, furniture, or fixtures to be installed therein, from a director, officer or stockholder who owns 5 percent or more of the capital stock of the Applicant or any controlled company of any officer, director or stockholder. The Applicant's primary service area incorporates portions of the City of Stuart, unincorporated Martin County and a portion of unincorporated Martin County known as Palm City. The PSA is a "bedroom community" with shopping, recreational and public school facilities. Included within the PSA are U.S. Census Enumeration Districts 11, 12, 32, 33, 61, 65, 66, 67 and a portion of 10. The PSA's northern, eastern, southern and western boundaries are the St. Lucie County/Martin County Line (along with the St. Lucie River and Frazier Creek), Colorado Avenue (State Road 76), Indian Street, extended to Florida's Turnpike, and Florida's Turnpike respectively, and are located 2.4 road miles, 0.9 miles, 1.8 miles and 2.5 miles respectively from the proposed site. The south fork of the St. Lucie River runs north and south through the eastern protion of the PSA. The Palm City Bridge, a modern fixed span bridge, crosses the river and connects the larger portion of the PSA west of the river with the eastern portion and the City of Stuart. The bridge's western end is approximately 0.2 miles from the Applicant's proposed site. The delineation of the boundaries of the PSA took into consideration the locations of the offices of existing financial institutions, along with the other economic and demographic factors. The ability of PSA residents to reach the proposed site in a convenient and timely manner was likewise a factor considered in delineating the boundaries of the PSA. The northern boundary of the PSA, consisting primarily of the St. Lucie County/Martin County Line, presents a logical and political northern boundary. The eastern boundary, Colorado Avenue, is a major north/south thoroughfare chosen primarily because of its proximity to existing financial institutions. The southern boundary, Indian Street, extended to the Florida Turnpike and the western boundary, the Florida Turnpike, were chosen because they are areas beyond which population concentrations are limited. Also, Florida's Turnpike is a significant man-made barrier. There are no other significant natural or man-made barriers which would restrict the flow of traffic within the PSA. The PSA's major north/south arteries are 18th Avenue, Mapp Road, Palm City Avenue and Colorado Avenue. The PSA's primary east/west arteries are Highway 714, Massey Boulevard, a/k/a Martin Downs Boulevard and Murphy Road. The 1970-1980 population trends for the City of Stuart, Martin County, the State of Florida, and the Applicant's designated PSA were considered. This data was provided by the Applicant and the Department from census data and from data published by the University of Florida's Bureau of Economic and Business Research (BEBR). The PSA population grew from 3,300 in 1970 to 6,350 in 1980 for an average annual increase of 9.2 percent. The City of Stuart grew from 4,820 in 1970 to 9,467 in 1980 for an average annual increase of 9.6 percent. The population of Martin County went from 28,035 in 1970 to 64,014 in 1980 for an average annual increase of 12.8 percent. Over the same ten year period, Florida's population increased an average of 4.4 percent annually from 6,791,418 to 9,746,324. The BEBR projected 1983 Martin County population at 70,600 by its low projection, at 74,600 by its medium projection and at 75,300 by its high projection. For Florida's 1983 population, the BEBR estimated 10,352,200 as its low projection, 10,595,100 as its medium projection and 10,757,200 as its high projection. The average annual 1980-1983 population growth rate projections for Martin County are 3.43 percent, 5.20 percent and 5.88 percent as calculated from the low, medium and high 1983 projections respectively. For Florida, tide average annual 1980-1983 population growth rate projections are 2.07 percent, 2.90 percent and 3.46 percent as calculated for the low, medium and high projections respectively. See "Data Source Packet" of Department's Official File (DSP). One hundred percent of the County's 1970-1980 population growth resulted from immigration, a proportion above the state's 91.97 percent. (DPS) Over the 1970-1979 period, the Martin County population aged somewhat, with the population proportion below age 15 having decreased from 23.8 percent to 18.6 percent; the population proportion within the working age group (15 to 64) increased from 54.9 percent to 56.3 percent; and the population aged 65 years and above increased from 21.3 percent to 25.1 percent. Florida population during the same period decreased from 25.8 percent to 20.4 percent for the group below age 15; increased from 59.6 percent to 61.9 percent in the working age group and increased from 14.6 percent to 17.7 percent for those 65 and over. (DPS) In April, 1980, the Martin County population was older than the Florida population. Martin County's population under age 15 was 16.4 percent; with 59.1 percent in the working age group; and 24.5 percent over age 65. In April, 1980, 19.3 percent of Florida's population was below age 15; 63.4 percent were in the working age group; and 17.3 percent were aged 65 or over. With a higher percentage of people over age 15, there is a relatively higher number of people in Martin County of an age to utilize banking services than exists on the average statewide. The rate of growth in the number of households in Martin County exceeded the rate of growth in the State of Florida during the 1970-1980 period. The BEBR estimated the number of Martin County households in 1980 at 25,863, having reflected at 155.5 percent increase above the 1970 level of 10,122 households. The number of state households increased 63.8 percent during the same period from 2,284,786 to 3,841,356. County and state average household sizes declined 11.8 percent and 12.1 percent, respectively, over the 1970-1980 period with the Martin County average household size having declined from 2.72 to 2.40 persons, and the state average declined from 2.90 to 2.55 persons. Statewide unemployment rates have significantly exceeded those of Martin County for all periods since 1974. During 1975, Florida's 10.7 percent unemployed rate exceeded Martin County's 8.7 percent rate. In 1976, Florida's 9 percent unemployment rate exceeded the 7.7 percent rate in Martin County. Florida's 8.2 percent unemployment rate exceeded the Martin County 6.9 percent rate in 1977. In 1978, Florida's unemployment rate was 6.6 percent which was also well above the 5.5 percent rate in Martin County. In 1979, the margin was even larger with Florida's unemployment rate at 6 percent and Martin County's unemployment rate at 4.8 percent. The margin continued to grow in 1980 with the Florida unemployment rate still at 6 percent but the Martin County unemployment rate having dropped to 4.4 percent. In 1981, Florida and Martin County's unemployment rates were 6.8 percent and 5.6 percent respectively. In 1981, the Florida unemployment rate remained well above the unemployment rate in Martin County. (T. 181) Between 1979 and 1981, average household effective buying income (HEBI) in Martin County grew from $16,339 to $20,119. In 1979, Florida HEBI was $18,613 and in 1981, was $21,301. The increase between 1979 and 1981 was much more significant in Martin County than in the State of Florida overall. HEBI increased 23.1 percent or $3,780 in Martin County while increasing only 14.4 percent or $2,688 in Florida between 1979 and 1981. Net income figures show an even more significant increase in Martin County. Between 1979 and 1981, net income in Martin County increased 73.3 percent from $336,574,000 to $583,448,00. During the same period, net income in Florida increased by only 34.2 percent from $63,889,652,000 to $85,768,756,000. Per capita personal income data (PPI) formulated for the state and county by the United States Department of Commerce, and reprinted by the University of Florida, was in evidence and considered. This data appears in the following table: YEAR 1970 1971 1972 1973 1974 Martin Co. 3861 4258 4773 5246 5363 Florida 3693 4007 4461 4988 5341 YEAR 1975 1976 1977 1978 1979 Martin Co. 5834 6437 7215 8094 9178 Florida 5634 6094 6733 7591 8521 PPI level in Martin County exceeded Florida PPI levels throughout the 1970-1979 period. Between 1975 and 1979, PPI in Martin County increased by $3,344 or 57.3 percent while per capita income in the State of Florida increased by only $2,887 or 51.2 percent. In addition, PPI in Martin County in 1979 exceeded the statewide figure by 7.7 percent. The Applicant submitted data on estimated retail sales in Martin County and Florida for 1975 through 1981. At the time the application was filed, the latest available figures were for 1979. Between 1979 and 1981, estimated retail sales increased 32.3 percent in Martin County while the State of Florida increased by only 28 percent. Five operating commercial bank offices are located in or within one mile of the PSA. Florida National operates a branch office 0.8 miles northeast of the proposed opened 0.2 miles west of the proposed site. The two branches are the only bank offices in the PSA. The following three bank offices are located within one mile of the PSA: Florida National's main office, operating 2.7 miles northeast of the proposed site; First National's main office, operating 2.1 miles northeast of the proposed site; and First National's branch office, operating 1.8 miles northeast of the proposed site. These five bank offices are operated by only two bank institutions, neither of which is a state chartered institution nor has its main office in the PSA. Florida National, the only bank operating in the PSA, withdrew its protest to this application. Seven savings and loan association (association) facilities were cited as operating in or within one mile of the PSA. These seven association facilities include two main offices in operation and five association branch offices. Two offices operate within the PSA: Harbor Federal Savings and Loan Association (formerly First Federal Savings and Loan Association of Ft. Pierce) operates a branch office 0.9 miles northeast of the proposed site. First Federal Savings and Loan Association of Martin County operates a branch office 0.9 miles northeast of the pronosed site.. The following facilities are within one mile of the PSA: Citizens Federal Savings and Loan Association operates a branch office 2.2 miles northeast of the proposed site; Community Federal Savings and Loan Association operates a branch office 2.7 miles northeast of the proposed site; First Federal Savings and Loan Association of Martin County has its home office 2.2 miles northeast of the proposed site; Home Federal Savings and Loan Association has a branch office 2.1 miles northeast of the proposed site; and the recently opened main office of Central Savings and Loan Association is one mile northeast of the proposed site. A period's inflation is most commonly estimated by the period's corresponding change in the consumer price index, which is the only method of record in this proceeding. Each month, changes in the consumer price index from the previous month and for the previous 12 months are published by the United States Department of Labor, Bureau of Labor Statistics. For the year ending September 30, 1981, the rate of inflation was 11.0 percent. For the year ending December 31, 1981, the rate of inflation was 8.9 percent. For the year ending March 31, 1982, the rate of inflation was 6.8 percent. (DSP) Only one bank office (a branch office) was in operation within the PSA in March, 1982. During the year ending March 31, 1982, the Florida National Bank of Martin County branch office within the PSA increased its total deposits from $12,638,000 to $16,307,000 or an increase of 29 percent, a rate more than four times that of the 6.8 percent rate of inflation that existed during the year ending March, 1982. Data is also available for the bank offices operating within one mile of the PSA. The main office of First National increased its total deposits during the period of March, 1981, to March, 1982, from $149,296,000 to $153,845,000 for a yearly increase of 3.0 percent. The branch office of First National close to the PSA increased deposits during the same period from $3,144,000 to $3,587,000 or an increase of 14.1 percent. The Florida National main office had a decrease in deposits from $89,806,000 to $3,587,000 or a loss of 2.0 percent during the year ending March 31, 1982. Total Martin County deposits for the period increased from $402,666,000 to $423,762,000 or a 5.2 percent increase. During the period from March 31, 1981, to March 31, 1982, bank deposits within the State of Florida increased from $41,478,327,000 to $43,933,129,000 or an increase of approximately 5.9 percent. In summation, the rate of growth in deposits within the PSA exceeded the rate of growth in deposits in Martin County and the rate of deposit growth was bore than four times greater than the rate of inflation for the same period. For the period between September 30, 1980, and September 30, 1981, the savings and loan association offices operating in the PSA showed increases in the volume of savings accounts as follows: Harbor Federal increased from $12,287,000 to $14,997,000 or a yearly increase of 22.1 percent; First Federal of Martin County (opened in March, 1980) increased from $2,194,000 to $6,033,000 or a total increase of 175.0 percent in one year. Thus, the increase in the two savings and loan offices in the PSA showed a combined one year gain of $6,549,000 or 45.2 percent. In Martin County as a whole, savings increased from September 30, 1980, to September 30, 1981, from $352,735,000 to $381,625,000 or a yearly increase of 8.2 percent. In the State of Florida as a whole, savings during the same period went from $42,560,303,000 to $45,332,969,000 or a yearly increase of only 6.5 percent. In summary, association deposits at offices in the PSA increased at a rate far in excess of those in Martin County as a whole, and in the State of Florida. In addition, the 45.2 percent increase of association deposits in the PSA during the reporting period was more than four times the 11 percent rate of inflation for the year ending September 30, 1981. The Applicant proposes to offer the full range of banking service offered by full-service commercial banks. No deficiencies in the proposed services were established by any Protestant. However, it should also be noted that there are, at present, only two branches of one multi-bank holding company (Florida National) located within the PSA. No other bank is presently represented in the PSA. No bank is headquartered in the PSA, nor is there a facility of a state chartered bank in the PSA. Also, only Florida National Bank and one other banking organization maintain bank offices in or within one mile of the PSA. Consequently, alternative or competitive choices are limited in the PSA and within one mile of its boundaries at the present time. Applicant projected total deposits of $5,000,000, $9,000,000 and $13,000,000 at the end of the proposed banks' first three years of operation respectively. It also projected a $22,381 net operating loss during the proposed bank's first operating year, and pre-tax net operating income levels of $257,715 and $466,208 during the bank's second and third operating years respectively. These deposit and increase projections were formulated under the assumption that the proposed bank would have: $2,750,000 in total time and savings deposits and $2,250,000 in total demand deposits at the end of the first operating year; $5,400,000 in total time and savings deposits and $3,600,000 in total demand deposits at the end of the second operating year; and $8,450,000 in total time and savings deposits and $4,550,000 in total demand deposits at the end of the third operating year. Applicant's projections are conservative, were unrefuted by the Protestants and are likely achievable. The Applicant's testimony and evidence established that there are nine active residential subdivisions in the PSA totaling 6,576 units of which 416 or 6.3 percent were cited as completed. Home prices range from between $65,500 and $580,000. Five areas are planned for single family units accounting for 95 percent of the total units planned. Prices for the single family units range between $75,000 and $580,000, while prices for condominium units range between $65,500 and $87,900. The single family subdivisions are Canoe Creek, Martin Downs, Mid-Rivers, Pipers Landing and Westgate. Utilities are being installed for 70 new lots in the PSA and there are 15 new rental units recently opened and under construction. Extensive testimony was presented about the Martin Downs project located within the PSA. Martin Downs is a 2,400 acre planned residential development which will contain 5,500 residential units. It will also contain two golf courses, racquet club, resort center, retail shopping center, office park, industrial park, government service center, schools, yacht club, parks and a utility plant. Road improvements have already been made in and around Martin Downs. Further, during 1983, major improvements will be made to Martin Downs Boulevard, the major east/west artery through the PSA. These improvements include widening that portion of Martin Downs Boulevard that runs past the proposed site of the Applicant bank. (T. 23-26) Martin Downs will be built in phases with a final population of 12,000 to 13,000 people. (T. 23) The builders of Martin Downs already have approximately $20 million invested in the project. The Crane Creek area of Martin Downs is one of the most exclusive residential sections in the PSA. (View by Hearing Officer) It consists of 346 lots of which approximately 300 are sold and approximately 150 lots are occupied or have homes under construction. The lots sell for $35,000 to $60,000. Homes sell from around $150,000 to $400,000. Crane Creek also contains a championship golf course, clubhouse and racquet club with thirteen tennis courts. (T. 15) Four condominium projects are presently under construction: Country Meadows, Mapletree Villas, The Crossings, and The Townhomes at Poppleton Creek. Prices range between $49,900 and $87,900. These four projects have 306 total units planned of which 60 were completed in October, 1982, and another 72 under construction. Residents living in all of the single family subdivisions cited and at Mapletree Villas and the Crossings must, as a practical matter, pass the Applicant's proposed site on their way to and from the City of Stuart. In addition to the developments cited, there are a large number of existing residences within the PSA. Many of these are located west of the South Fork of the St. Lucie River and these residents must also pass the Applicant's proposed site when going to and from Stuart. (View by Hearing Officer) Commercial activity in the PSA is primarily centered along Massey Boulevard and Mapo Road in close proximity to the subject site. Downtown Stuart lies approximately 2.5 miles northeast of the proposed site. As of May, 1981, 35 businesses were established within one-half mile of the proposed site. In addition, the Monterey Plaza, a large, modern shopping center within one mile of the proposed site, contained 44 businesses in August, 1981. There are 43 businesses within one-half mile of the site. Manufacturing is limited in Martin County. However, the county's largest manufacturer, Grumman Aerospace Corporation, is located at Witham Field, approximately 2.7 miles east of the proposed site. In addition, there are two areas established for industrial development in the PSA itself. One is a planned industrial park to be located in Martin Downs. The other is a ten acre industrial park known as Heritage Square, located at Palm City School Road and State Road 714, approximately 1.7 miles southwest of the proposed site. There are approximately three acres currently developed in the park which opened in 1978. At the time the application was filed, it had 12 tenants, 11 of which are small manufacturing firms. The proposed bank will be capitalized with a total of $1,500,000. The capital will be divided into common capital of $1,000,000, surplus of $300,000, and undivided profits of $200,000. The bank will issue 100,000 shares of stock, with a par value of $10 and a selling price of $15 plus $.50 per share assessed for the Organizational Expense Fund. All 100,000 shares have been subscribed to. The proposed directors have personally subscribed to 30,000 shares as follows: Herbert-Biggs, 5,000 shares; Stephen Frasier, 5,000 shares; Richard Jemison, 5,000 shares; Charles Pope, 5,000 shares; Donald Ricci, 5,000 shares; and Roy Talmo, 5,000 shares. The proposed Board of Directors is composed of six members with diverse business backgrounds, some of whom have had prior banking experience. Herbert Biggs is an 11 year Florida resident living in Jupiter, Florida. Mr. Biggs has a B.S. degree from Mississippi State University and a J.D. from the University of Mississippi. After a short period as a professional basketball player, Mr. Biggs came to Martin County to practice law. He has since left the practice of law to pursue a career as a general contractor and developer. He is currently the president of Suncastle Homes, Inc., a construction and development corporation. Mr. Biggs holds professional licenses as a realtor, general contractor and attorney. Mr. Biggs is a U.S. citizen. Mr. Biggs has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Stephen Frasier is a 12 year resident of Martin County. He holds a B.S. degree from Florida State University and J.D. from the University of Florida. Mr. Frasier served in the Navy as a Flight Officer and is presently a Lieutenant in the Naval Reserve. He served as the Assistant City and County Attorney in Martin County and is presently engaged in the private practice of law in Martin County as a partner in the firm of Frasier and Bateman, P.A. Mr. Frasier is a member of the Civitan Club, the Masonic Temple, the Elks Club, Martin County Bar Association, on the Board of Directors of the Visiting Nurses Association, Florida Bar, on the Board of Directors for the Paradise Ranch for Boys, and is the Chairman of the Board for the Sailfish District of the Boy Scouts of America. (T. 122) Mr. Frasier is a U.S. citizen. (T. 121) Mr. Frasier has a reputation evidencing honesty demonstrating his responsibility in financial affairs. (T. 80, 113; Exs. 1, 5) Richard Jemison has been a Florida resident since 1939, and presently lives in Stuart, Florida. (T. 102; Ex. 1) He has a B.S. degree in Civil Engineering from the University of Florida. (T. 103) Mr. Jemison was in the printing business in St. Petersburg, Florida, for 13 years and is now the president of Seabridge Associates, Inc. (T. 104) He holds licenses as a real estate broker, mortgage broker, and contractor. (T. 103) Mr. Jemison is a member of the Palm City Chamber of Commerce, Stuart Chamber of Commerce and Kiwanis Club. Mr. Jemison has substantial banking experience in that he served on the Board of Directors of the First State Charter Bank in St. Petersburg from 1968 through 1974. (T. 106; Ex. 1) He is a U.S. Citizen. (T. 102) Mr. Jemison has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. (T. 83, 115-116; Exs. 1, 4) Charles Pope has lived in Florida since 1951 and presently lives within the PSA of the proposed bank. He received a B.S. degree from the University of Florida and has completed all of the course work for an M.B.A at the Florida Institute of Technology. Mr. Pope has direct banking experience from his past employment with First National Bank and Trust Company of Stuart, Atlantic Bank Corporation, and First American Bank and Trust Company (formerly First American Bank of Palm Beach) Mr. Pope is the president of Charles Pope & Associates, Inc., an investment banking firm. He holds a mortgage brokers license from the State of Florida, is a Certified Commercial Lender and a Certified Review Appraiser. He is a member of the American Bankers Association, American Institute of Banking and the Chamber of Commerce. Mr. Pope is a citizen of the United States. He has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Donald Ricci has lived in Florida since 1975, and in Martin County for the past five years. After being honorably discharged from the U.S. Air Force, Mr. Ricci was a part owner and general manager of an automobile dealership. Mr. Ricci became interested in the real estate business and worked as the Marketing Director for First Southern Holding Company, the developers of Martin Downs. As Marketing Director, he was in charge of sales and marketing for Martin Downs. Mr. Ricci is a 50 percent partner and manager of Seabridge Associates, Inc., a real estate development firm whose offices are located in the PSA and close to the proposed site of the Applicant bank. Mr. Ricci is a licensed real estate broker and a member of the Palm City Chamber of Commerce and the Stuart/Martin County Chamber of Commerce. Mr. Ricci is a U.S. citizen. He has a reputation evidencing honesty and integrity and has an employment and business history demonstrating his responsibility in financial affairs. Roy W. Talmo has lived in Palm Beach County, Florida, since 1964. He received a B.B.A. and M.B.A from the University of Minnesota. Mr. Talmo has extensive direct banking experience, having been employed as a banker since 1959. Mr. Talmo has been employed by the Continental Bank in Chicago and the First National Bank of St. Petersburg, and is the past Chairman of the Board of Miami National Bank. Mr. Talmo is presently Chairman of the Board of First National Bank and Trust Company in Palm Beach, and has directed its growth from an $11 million bank to its present size of just under $500 million. Mr. Talmo also serves as a Director of First American Bank of Broward County, First City Bank of Dade County, and First State Bank of Broward County. He is a member of the Palm Beach Junior College Foundation, the Palm Beach Festival, and the Tourist Development Committee for Palm Beach County. Mr. Talmo is a U.S. citizen. The Applicant adduced evidence which was not refuted, and which established that Mr. Talmo has a reputation evidencing honesty and integrity and an employment and business history demonstrating his responsibility in financial affairs. As of the date of the final hearing, the Applicant had not selected a President or Chief Executive Officer, nor a Cashier or Operations Officer. The Applicant has selected the name First American Bank of Martin County. There are no Florida financial institutions with a name so similar as to cause confusion with the proposed name. Parenthetically, it should be noted that a cogent discussion and resolution of the issue of "name confusion" is extant in First Bank of Hollywood Beach and Office of the Comptroller vs. American Bank of Hollywood, DOAH Case No. 80-1581, opinion filed May 13, 1981. The Applicant has proven that public convenience and advantage will be served by the approval of the application. The Applicant has proven that local conditions indicate a reasonable promise of successful operation for the new bank. DONE and ENTERED this 4th day of April, 1983, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 1983. COPIES FURNISHED: C. Gary Williams, Esquire Michael J. Glazer, Esquire Post Office Box 391 Tallahassee, Florida 32302 Noel Bobko, Esquire Post Office Drawer 2315 Stuart, Florida 33495 James L. S. Bowdish, Esquire Post Office Drawer 24 Stuart, Florida 33494 Walter W. Wood, Esquire Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32301 The Honorable Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING IN RE: Application of First Administrative Proceeding American Bank of No. 83-5-DOB Martin County DOAH No. 82-034 / FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER Pursuant to Notice, an Administrative Hearing was held before P. Michael Ruff, Hearing Officer, with the Division of Administrative Hearings on October 19 and 20, 1982, in Stuart, Martin County, Florida. The purpose of the hearing was to receive evidence concerning the application of First American Bank of Martin County for authority to open a new bank in Stuart, Martin County, Florida. At the hearing, the parties were represented by counsel: For Applicant, C. Gary Williams, Esquire First American Bank Michael J. Glazer, Esquire of Martin County: Post Office Box 391 Tallahassee, Florida 32302 For Protestant, Noel Bobko, Esquire American Bank of Post Office Drawer 2315 Martin County: Stuart, Florida 33495 For Protestant, James L. S. Bowdish, Esquire First National Bank & Post Office Drawer 24 Trust Co. of Stuart: Stuart, Florida 33494 For the Department of Walter W. Wood, Esquire Banking and Finance: Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 Having fully considered the facts and information contained in the record relating to the application of First American Bank of Martin County for authority to organize a corporation for the purpose of conducting banking business in Stuart, Florida, the Comptroller of the State of Florida, as Head of the Department of Banking and Finance, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER in the above-styled case.
Conclusions The statutory criteria set forth in Chapter 658, Florida Statutes, which were in effect at the time the application was filed, are the standards which govern this application. Chapter 3C-10, Florida Administrative Code, which was in effect at the time the application was filed, contains the rules under which this application was considered. As set forth in Rule 3C-10.051, Florida Administrative Code, when an application for authority to organize and operate a new state bank is filed, it is the applicant's responsibility to prove that the statutory criteria warranting the grant of authority are met. The Department shall conduct an investigation pursuant to Section 658.20, Florida Statutes, which was done in this case, and then approve or deny the application in its discretion. This discretion is neither absolute nor unqualified, but is instead conditioned by a consideration of the criteria listed in Section 658.21, Florida Statutes, wherein it is provided that: The Department shall approve the application if it finds that: Public convenience and advantage will be promoted by the establishment of the proposed state bank or trust company. In determining whether an applicant meets the requirements of this subsection, the department shall consider all materially relevant factors, including: The location and services offered by existing banks, trust companies, trust departments, and trust service offices in the community. The general economic and demographic characteristics of the area. Local conditions indicate reasonable promise of successful operation for the proposed state bank or trust company and those banks, trust companies, trust departments, and trust service offices already established in the primary service area. In determining whether an applicant meets the requirements of this subsection, the department shall consider all materially relevant factors, including: Current economic conditions and the growth potential of the area in which the proposed state bank or trust company intends to locate. The growth rate, size, financial strength, and operating characteristics of banks, trust companies, trust departments, and trust service offices in the service area of the proposed bank. The proposed capital structure is in such amount as the department shall deem adequate, but in no case shall the paid-in capital stock be less than $800,000. In addition to the capital required, every state bank or trust company hereafter organized shall establish: A paid-in surplus equal in amount to not less than 20 percent of its paid-in capital; and A fund to be designated as undivided profits equal in amount to not less than five percent of its paid-in capital. The proposed officers have sufficient banking or trust company experience, ability, and standing, and the proposed directors have sufficient business experience, ability and standing, to indicate reasonable promise of successful operation. The name of the proposed state bank or trust company is not so similar as to cause confusion with the name of an existing financial institution. Provision has been made for suitable quarters at the location in the application. If, in the opinion of the Department, any one of the six foregoing criteria has not been met, and cannot be remedied by the Applicant, it cannot approve the application. An Applicant can, however, take corrective action in most circumstances, to meet the criteria set forth in Sections 658.21(3)(4)(5) or (6), Florida Statutes, if any one of these is found to be lacking. For example, if all other statutory criteria are met, the Applicant may increase capital, or make certain changes in the board of directors, or change the name or alter the provisions for suitable banking house quarters, because these factors are, at least to some degree, within its control. It is the Department's policy to allow applicants to make certain changes to meet these criteria if all other criteria are met; to do otherwise would be to subject applicants to unnecessary red tape. However, it is the Department's position that there is little, if anything, that an applicant can do to alter its ability to meet the criteria set forth in Sections 658.21(1) and (2), Florida Statutes, since the applicants cannot easily change the economic and demographic characteristics of an area. Therefore, if either one or both of these criteria are not met, the Department cannot approve the application. For the purposes of applications for authority to organize and operate a bank, Section 658.12(19), Florida Statutes, defines the primary service area (PSA) as: " . . . the smallest geographical area from which a bank draws, or a proposed bank expects to draw, approximately 75 percent of its deposits; the term also means the smallest geographic area from which a trust company or the trust department of a bank or association draws, or a proposed trust company or a proposed trust department of a bank or association expects to draw, approximately 75 percent of the assets value of its fiduciary accounts." The Applicant's PSA which incorporates portions of the City of Stuart, unincorporated Martin County and a portion of unincorporated Martin County known as Palm City appears to have boundaries delineated around a natural market area. The designated boundaries do not unrealistically exclude competing financial institutions or include areas of concentrated population. The Department concludes that a market exists for the Applicant in the PSA and that the Applicant may reasonably expect approximately 75 percent of its business to arise from the PSA. Consequently, the Department deems that the PSA has been realistically delineated and that the criteria set forth in Section 658.12(19), Florida Statutes, for a realistically delineated PSA has been met. It is the opinion and conclusion of the Department that public convenience and advantage will be promoted by the proposed bank's establishment. Therefore, the criterion in Section 658.21(1), Florida Statutes, is met. As set forth in Rule 3C-10.051(3)(a)(1), Florida Administrative Code, the location and services offered by existing financial institutions in the service area are indicative of the competitive climate of the market. The traffic patterns in the area, as well as the area's general economic and demographic characteristics shall also be considered. Because it is recognized that the establishment of a new bank or trust company anywhere would promote convenience and advantage for at least a few people, substantial convenience and advantage for a significant number of people must be shown; otherwise, a new bank could be justified for every street corner in the state. Clearly such a result was not the legislative intent in regulating entry into the banking industry, nor is it in the public interest. Based upon the facts in the record, the Department has determined that the establishment of the proposed new bank will substantially increase convenience to a significant number of residents and workers of the PSA. The location of the proposed site at a shopping center 0.2 miles from the only bridge from the eastern end of the PSA to the western end makes it convenient to residents, shoppers and commuters. The Department, therefore, concludes that the criteria of public convenience and advantage is met. It is the opinion and conclusion of the Department that local conditions indicate reasonable promise of successful operation for the proposed bank and those already established in the area. Therefore, the criterion in Section 658.21(2) Florida Statutes, is met. As set forth in Section 658.21(2)(a) and (b) , Florida Statutes, and Rule 3C-10.051(3)(b) , Florida Administrative Code, current economic conditions and, to a lesser extent, the growth potential of the area in which the new bank or trust company proposes to locate are important considerations in determining its probable success. Essential to the concept of banking opportunity is that there does and will exist a significant volume of business for which the bank or trust company can realistically compete. The growth rate, size, financial strength, and operating characteristics of financial institutions in the primary service area are also important indicators of economic conditions and potential business. It is noted that the statutory standard requires that: " . . . local conditions indicate reasonable promise of successful operation for the proposed state bank or trust company and those banks . . . already established in the primary service area . . ." Banking involves a public trust. Unlike private enterprise generally, banks operate on the public's capital and therefore, the Legislature has vested in the Comptroller the responsibility of protecting the public interest. Furthermore, the failure of a bank, as opposed to private enterprise generally, may have an unsettling effect on the overall economic welfare of the community, and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard. Public interest is best served by having a banking system whereby competition is encouraged, where appropriate, yet at the same time, ensuring that the financial resources of the residents of the community are stable and safe. That was the obvious intent of the Legislature in regulating entry into the banking industry. The facts in the record show a significant and growing number of residential developments that are not centrally served by any main office, commercial bank, and no state-chartered banks at present. Thus, a significant number of PSA businesses and residents, especially on the western side of the PSA from the St. Lucie River, can be expected to patronize the proposed bank, insuring that there is a reasonable promise of successful operation. The facts in the record show that the rate of growth in deposits within the PSA exceeded the rate of growth in deposits in Martin County and the rate of deposit growth was more than four times greater than the rate of inflation for the same period. Based upon the above, the Department concludes that local conditions do indicate a reasonable promise of successful operation for the proposed bank and for those financial institutions already established in the area. It is the opinion and conclusion of the Department that the proposed capital structure of the proposed new bank is adequate. Therefore, the criteria of Section 658.21(3) Florida Statutes, is met. Capital should be adequate to enable the new bank or trust company to provide necessary services . . ., including loans of sufficient size, to meet the needs of prospective customers. Capital should be sufficient to purchase, build, or lease a suitable permanent facility complete with equipment. Generally, the initial capital for a new nonmember bank should not be less than $1.0 million in non-metropolitan areas and $1.5 million in metropolitan areas. The capital referred to in the Findings of Fact shall be allocated among capital stock, paid-in surplus, and undivided profits in the ratios set forth in Subsection (3) of Section 658.21, Florida Statutes. The proposed capital accounts of $1.5 million are allocated according to the statutory ratios. It is the opinion and conclusion of the Department that the criteria of Section 658.21(4), Florida Statutes, are met. As set forth in Rule 3C-10.051(3)(d), Florida Administrative Code, the organizers, proposed directors, and officers shall have reputations evidencing honesty and integrity. They shall have employment and business histories demonstrating their responsibility In financial affairs. At least one member of a proposed board of directors, other than the chief executive officer, shall have direct banking or trust company experience. In addition, the organizers, proposed directors and officers shall meet the requirements of Section 658.33, Florida Statutes. Officers shall have demonstrated abilities and experience commensurate with the position for which proposed. Members of the initial management group, which includes directors and officers shall require prior approval of the department. Changes of directors or chief executive officer during the first year of operation shall also require prior approval of the department. While it is not necessary that the names of the proposed officers be submitted with an application to organize a new state bank, the chief executive officer and operations officer must be named and approved at least sixty (60) days prior to the bank's opening. The Department concludes that the proposed directors have, as a group, good character, sufficient financial standing and business histories demonstrating ability and experience commensurate with the positions for which they are proposed and at least one proposed director (other than the chief executive officer) has direct banking experience. It should be noted that interlocking directorships involving existing financial institutions competitively near the proposed site of a new institution are discouraged. Such interlocking directorships could possibly restrict competition and create fiduciary problems. The Department concludes that there is no interlock problem in this instance. It is the opinion and conclusion of the Department that the name of the proposed new bank, First American Bank of Martin County, would not cause confusion with the name of a Florida financial institution. Therefore, the criterion of Section 658.21(5), Florida Statutes, is met. It is the opinion and conclusion of the Department that provisions has been made for suitable banking house quarters in the application's specified area. Therefore, the criterion of Section 658.21(6), Florida Statutes, is met. As set forth in Rule 3C-10.051(3)(f), Florida Administrative Code, permission to open in temporary quarters may be granted, for good cause shown. Under the rules of the Department, the permanent structure of a new bank should contain a minimum of 2,500 square feet, unless the Applicant satisfactorily shows that smaller quarters are justified due to the performance of certain auxiliary services off-premises. In addition, it shall meet the Federal Bank Protection Act requirements and be of sufficient size to handle the projected business for a reasonable period of time. The banking house . . . facility shall be of a nature to warrant customer confidence in the institution's security, stability and permanence. Other pertinent factors include availability to adequate parking, adequate drive-in facility if such is contemplated, and possibilities for expansion. Temporary quarters are not contemplated and Applicant's permanent quarters meet the above standards. Rule 3C-10.051(5), Florida Administrative Code, relating to insider transactions requires that: Any financial arrangement or transaction involving, directly or indirectly, the organizers, directors, officers and shareholders owning 5 percent or more of the stock, or their relatives, their associates or interests must he fair and reasonable, fully disclosed, and comparable to similar arrangements which could have been made with unrelated parties. Whenever any transaction between the proposed bank or trust company and an insider involves the purchase of real property, appraisals of land and improvement thereon shall be made by an independent qualified appraiser, and be dated no earlier than 6 months from the filing date of the application. The Department has determined that there is no insider transaction involving the leasing of the proposed bank's office space. Therefore, the criterion in Rule 3C-10.051(5) Florida Administrative Code, is met. RULING ON PROTESTANTS' EXCEPTIONS Section 120.57(1)(b)12, Florida Statutes, provides as follows: " . . . The agency shall allow each party at least 10 days in which to submit written exceptions to the report." The Department's procedural Rule 3C-9.11, Florida Administrative Code, Post-Evidentiary Procedures, follows the wording of the statute and provides that "the Department shall allow each party 10 days from the date of the hearing officer's report in which to submit written exceptions thereto pursuant to Section 120.57(1)(h) 12, Florida Statutes." The Department interprets that the word "submit" means that the Department must receive the exceptions by the 10th day in the same manner as when documents are required to be filed by a date certain. See Sonny's Italian Restaurant v. State of Florida, 414 So.2d 1156 at 1157. In Sonny's Italian Restaurant v. State, the Third District Court of Appeal in a per curiam decision affirmed a final agency order upon a holding that: "Any error resulting from the entry of the Final Order on July 2, 1981, prior to receipt of Appellant's exceptions to the recommended order, is not material in light of the fact that the exceptions, dated July 6, 1981, were not filed within the requisite 10-day period of Section 120.57(1)(b)8, Florida Statutes, when measured from either the date the recommended order was entered (June 19), or the date submitted to the agency and parties (June 23)." The wording in Section 120.57(1)(b)8, Florida Statutes, concerning the time for filing of exceptions is identical to that of Section (1)(b)12 concerning the filing of exceptions for applications for a license or merger pursuant to Title XXXVIII. The Report of the Hearing Officer, C. Michael Ruff, in this case was done and entered on April 4, 1983, with a cover letter dated April 5, 1983, and was received by the Department on April 6, 1983. A copy of Protestant American Bank of Martin County's exceptions was received by the Department on April 21, 1983. A copy of Protestant First National Bank and Trust Company of Stuart's exceptions were received by the Department on April 19, 1983. The Department deems that all exceptions were untimely filed since the last day to file exceptions with the Department was April 15, 1983. Nevertheless, it has been determined that the exceptions that were untimely received would not have had any effect on the final outcome of this matter.
The Issue Whether or not Respondents' registration as real estate brokers should be suspended for an alleged violation of Section 475.25(1)(i), Florida Statutes.
Findings Of Fact On or about the middle of March, 1974, Anne Land, a saleswoman for Respondent real estate brokers, met one Timothy B. Howe who had responded to an advertisement in the newspaper concerning the purchase or lease of a home at 185 West Sunrise Avenue, Coral Gable, Florida. After viewing the premises, Mr. Howe decided to lease the property and his attorney prepared a lease in the total sum of $7,200 for one years rent. This proposal was submitted to the owner of the house, Mrs. Joanne Kealy, but upon the advice of counsel, she declined the proposal. Several days later, Howe decided to purchase the home. He signed a standard sales contract, dated March 26, 1974, which provided for a total purchase price of $72,500.00, payable under the following terms: "The sum of $1,800.00 by check hereby deposited in escrow with Magruder Realty, Inc., as escrow agent, in part payment of the purchase price and as a security deposit for the faithful performance of this contract by Purchaser, and the remainder of the purchase price shall be paid as follows: Upon acceptance of this contract the purchaser to deposit with Magruder Realty, Inc., an additional $5,400.00. Purchaser to assume existing mortgage for approx. $38,816.00 with Coral Gables Federal Svgs and Loan Association and the seller to give to the purchaser a second mortgage for balance of approx. $26,500.00 at 8 1/2 percent for 12 years or less with no pre-paid clause penalty..." The contract was signed by Land as witness and also in behalf of the seller and also as an escrow agent of Magruder Realty, Inc. The document was not acknowledged before a notary public (testimony of Lands Petitioner's Exhibit 1). Land contacted the owner who was out of state at the time and asked her to indicate her acceptance of the offer by telegram. The owner did so on March 29, 1974. The evidence is conflicting as to the circumstances surrounding the disposition of the deposit check for $1,800.00. Land testified that she gave the check to Joseph P. Magruder on March 26 or 27 as was her practice in handling deposits, but said nothing about holding the check. Mr. Magruder, on the other hand, testified that at the time she gave him the check, she said Mr. Howe desired the check be held until the total down payment of $7,200.00 was received from a trust account, and that he therefore put the check in the transaction folder and gave the folder back to her to retain. His statement of the reason for not depositing the check in an escrow account immediately is supported by subsequent events and by the fact that the check was not actually deposited until a subsequent date, which was contrary to his normal office practice (testimony of Land, Magruder, O'Brien; Exhibit 2). Subsequent conversations between Land and Howe during the latter part of March and early April were to the effect that Howe's mother was sending funds for the balance of the down payment. On April 4, Land talked to Howe by telephone and he asked for the escrow account number of Magruder Realty, Inc., in order that his mother could send the additional $5,400.00 and/or $7,200.00. Land asked Respondent O'Brien, who was in the office at the time, for the firm's escrow account number and passed it on to Howe. On the same day, Land went on vacation in North Carolina and did not return to the office until April 15th. At that time, Magruder informed her that the additional funds had not been received from Howe and that although he had tried to reach him on the telephone he had been unsuccessful. Because of the difficulty in reaching Howe as to payment of the balance of the down payment, Magruder deposited the $1,800.00 check in his escrow bank account on April 17, 1974. It was not honored by the Howe's bank because Cristina I. Howe, his wife, had issued a stop payment order on the check on April 15. On March 26, 1974, the date the check was drawn, the Howe bank account was overdrawn by 26 (testimony of Land, Magruder, O'Brien, Garcia; Petitioner's Exhibits 2 & 6; Respondent's Exhibit 1). Although Respondents claimed that the Florida Real Estate Commission had disposed of the instant allegation by its letter of censure dated February 10, 1975, which referenced file CD15240, it was determined by the Hearing Officer that this letter involved other transactions and not the one under consideration at the hearing (Petitioner's Composite Exhibit 5).
Findings Of Fact The Petitioners have filed an application with the Respondent to organize a new bank in Ocala, Marion County, Florida. The name of the proposed bank would be the Citizens First Bank of Ocala. The Petitioners are the organizers and proposed directors of the bank. Each of the Petitioners is of good moral character, and each enjoys an outstanding reputation. None of the Petitioners have been convicted of any crimes involving breach of trust, and none have filed for bankruptcy, or have any history of being bad credit risks. Together the Petitioners constitute a diverse group with very broad and successful business experiences. The Petitioner William R. Kidd is a registered professional engineer and realtor who has lived and worked in Ocala since 1950. Mr. Kidd has broad experience in evaluating various aspects of real estate transactions, and he has extensive experience in arranging financing of construction projects. Mr. Kidd owns a pollution control company which has a net worth of approximately $25,000 and a real estate business with sales since 1975 in excess of $10,000,000. He also manages and operates a successful consulting engineering firm. Mr. Kidd plans to invest $40,000 in the new bank, and he has sufficient funds readily availably to make that investment. Mr. Kidd is willing to invest more money in the enterprise if additional capitalization is required. Mr. Kidd is interested in working with the bank, particularly in relation to financing of real estate transactions, and construction projects. The Petitioner Ralph Murphy was born in Marion County and has spent most of his life there. Mr. Murphy owns a linen service company which does approximately $18,500 to $19,000 in business weekly. The linen service, which Mr. Murphy has managed since it was a small entity doing less than $2,500 in business weekly, has a net worth of approximately $900,000. Mr. Murphy serves on the Boards of Directors of several other corporations. Mr. Murphy intends to purchase $40,000 of stock in the proposed new bank, and he has funds readily available with which he can do that. Mr. Murphy is willing to devote as much time as is necessary to organize the bank. The Petitioner Milton L. Copeland manages an insurance firm which writes commercial insurance policies for businesses in Florida and in Georgia. His company has offices in Ocala and Jacksonville. The Ocala office writes approximately $2,000,000 in insurance policies annually. The Jacksonville office writes approximately $15,000 in policies weekly. Mr. Copeland has a personal net worth of approximately $800,000. Mr. Copeland intends to buy $40,000 worth of stock in the proposed new bank, and he has funds readily available for that purpose. Mr. Copeland wishes to take an active part in soliciting new accounts for the bank, and he could devote as much as two full days per week to bank activities. If further capitalization of the proposed bank were considered necessary, Mr. Copeland is willing to increase his investment in the bank. The Petitioner James Cunningham owns and operates a funeral home business in Ocala. He has lived in Ocala most of his life. The dollar volume of Mr. Cunningham's business during 1976 was approximately $250,000. Mr. Cunningham is a City Councilman in Ocala. He is a black man. It has only been in recent years that blacks have even been employed at local banks, and no blacks presently serve on the Boards of Directors of any banks operating in Ocala or Marion County. Mr. Cunningham intends to purchase $40,000 worth of stock in the new bank. He will need to borrow no more than 25 percent of that amount in order to make the investment. Mr. Cunningham desires to take an active part in soliciting accounts and customers for the new bank, and he is willing to devote whatever time would be required for that purpose. The Petitioner Marjorie Renfroe owns and operates a boat, motor and trailer sales and service business in Marion County. Her business had gross sales during 1976 of approximately $350,000. Ms. Renfroe serves on the Board of Directors of the United Way in Marion County, and on the Board of Directors of the Central Florida Community College. Ms. Renfroe plans to buy $40,000 worth of stock in the new bank, and if further capitalization were found necessary, she is willing to increase her investment, and is able to do so. Ms. Renfroe is willing to devote as much time as necessary to managing the new bank, and she is particularly interested in providing services to employees and students of the local community college, especially instructional sorts of courses for students. No women presently serve on the Boards of Directors of any banks in Marion County. One woman serves on the Board of Directors of a savings and loan institution in Marion County. The Petitioner Van G. Staton manages a Belk-Lindsey Department Store in Ocala, Florida. He has lived in Ocala and managed the department store since 1956. The store employs 48 persons and had gross sales during 1976 of approximately $3,000,000. The annual payroll of the store is $400,000 to $500,000. The Petitioner serves on the Board of Directors of a local automobile sales and service corporation, and from 1970 through 1975 he served on the Marion County School Board. Mr. Staton plans to purchase $40,000 of stock in the new bank, and he would not need to borrow more than 50 percent of that amount. Mr. Staton would favor additional capitalization, and would be willing to increase his investment. Mr. Staton is particularly interested in having extended business hours in the new bank beyond the hours presently served by banks operating in Marion County, and Saturday openings. He is willing to spend as much time as is necessary with banking activities. The Petitioner Owen C. Shelton owns and manages two corporations which operate fifteen convenience stores. The total sales for the two corporations was approximately $17,000,000 during 1976. Mr. Shelton has lived in Ocala for 15 years. His personal net worth is in excess of $1,000,000. Mr. Shelton has been in the grocery business for twenty-five years. He started with one small store. His corporations employ approximately 185 persons. Mr. Shelton plans to purchase $40,000 worth of stock in the new bank, and he is willing to increase his investment if further capitalization is required. The Petitioner Terry Trexler is President and Chairman of the Board of Nobility Homes, a mobile home manufacturing business. The company does business in 29 states, and does from 5.1 to 5.2 million dollars worth of business on a quarterly basis. Mr. Trexler has lived in Ocala for 15 years. Mr. Trexler plans to invest $40,000 in purchasing stock in the new bank, and he intends to be active in soliciting new accounts and customers for the bank. The Petitioner Sam Kinlaw is a resident of Orlando, Florida. He has a Bachelor's Degree in Business Administration from the University of Florida, and attended the Banking School of the South at Louisiana State University. Mr. Kinlaw has been active in the banking business, or in similar financial businesses since approximately 1958. He has served as the head of installment loan departments and commercial lending departments of banks in Florida. Beginning in 1972, he became the Chief Executive Officer of the Semoran Bank, which was a new Federally chartered bank. He was responsible for setting up the bank, hiring personnel, establishing policies, and carrying on the day-to-day operations of the bank. He served in that capacity from near the end of 1972 until September, 1975. He has not been involved in the banking business since then. Mr. Kinlaw intends to purchase a "qualifying share" of stock in the bank. He intends to serve on the Board of Directors during the time that the bank is being organized, until other persons with direct banking experience are named to the Board of Directors. The Petitioner Braxton Jones owns and operates several convenience stores and two supermarkets. He has lived in Ocala nearly all of his life. He is prepared to purchase between $20,000 and $30,000 of stock in the new bank, and he is willing to devote whatever time would be necessary to organize and operate the bank. The Petitioner Clarence Woodrow Hicks has lived in Marion County for approximately 30 years. He formerly owned and operated Hicks News Agency, which was involved in the wholesale distribution of magazines, books, postcards and sundry items. He also owned two retail book stores. Mr. Hicks has sold his business and is now semi-retired. He serves as a consultant to the new owners of his business. During the time that he operated the businesses, they did approximately three million dollars of business per year. Mr. Hicks' net worth is in excess of one million dollars. Mr. Hicks has time available to devote to the new bank. The proposed Citizens First Bank of Ocala would, if the instant application were granted, be located at the northwest corner of the intersection of State Road 200 and Southwest 16th Avenue in Ocala. The location is approximately one mile west of Pine Street (Federal Highways 441, 27, and 301), which is the primary north/south artery through Ocala. The proposed bank would be located just over three miles east of Interstate Highway 75. State Road 200 is presently a four lane highway which serves as one of the primary routes from the Interstate Highway into Ocala. Southwest 16th Avenue is presently two- laned, but all right of ways have been acquired and construction will shortly commence to four-lane the road. All of the banks and the savings and loans associations which presently operate in the Ocala area are located east of Pine Street. There are no banking facilities in the Ocala area which are located to the west of Pine Street. Location of a banking facility to the west of Pine Street would serve the convenience of persons in Ocala who live or work on the west side of Pine Street. Pine Street is a very busy highway, which has not been properly designed so that it can be easily crossed. Furthermore, a railroad track runs parallel to Pine Street to the West, and presents an additional barrier. While it is not impossible for persons who live or work on the west side of Pine Street to bank on the east side, the testimony is unrebutted that it is inconvenient to do so due to traffic congestion, and the railroad. There are many persons who reside on the west side, of Pine Street. The area to the north of the proposed bank site is a residential area. There are many low income residences, and trailer park type residential facilities in that area. There are also many moderate income residences to the south and the west of the proposed site all on the west side of Pine Street. The total population of the primary service area, which is designated to be west of Pine Street, is estimated to be 14,300, as of July, 1977. This represents more than a 35 percent increase from 1970 population figures. Many more residences are planned in the area. Over 1,200 new homes have recently been completed, and more than 500 are under construction. Larger residential developments are in the planning stages. There is considerable commercial activity in the areas surrounding the proposed site. The Ocala Industrial Park is located immediately across State Road 200 from the proposed site, and the South 40 Industrial Park is also nearby. Thirty-eight firms presently occupy space in the Ocala Industrial Park, employing more than 1,500 persons and occupying more than one million square feet of building space. Fourteen firms are presently located at the South 40 Industrial Park, employing nearly 350 persons and utilizing more than 300,000 square feet of building space. Both Industrial Parks have experienced steady growth. Many businesses, including several automobile sales and service businesses, have located on State Road 200. Construction is scheduled to begin on a major shopping mall in January, 1978, by the Edward J. DeBartolo Corporation. The mall will be located on State Road 200 just east of Interstate Highway 75. Construction will take approximately 12 months. More than 900 persons will be employed at the mall. In addition, most of the horse farms which surround the Ocala area are located west of Pine Street. There are six banking institutions located in Marion County. The two banks located out of the Ocala area have no particular relevance to this matter. Four banks are located in Ocala. Only one of these banks is an independent bank. The others are parts of larger bank holding companies which are not centered in Ocala. Total bank deposits in Marion County have increased steadily from a total of $176,586,000 in 1973 to $236,336,000 in June, 1977. Although estimates vary, it is evident that the population of Marion County has increased from a 1970 total of approximately 69,000 to a 1977 total of from 104,000 to 127,000. It appears that existing banks in Marion County are in a healthy financial position and are experiencing steady growth. There are many interlocking relationships on the Boards of Directors of the existing banks. None of the Petitioners presently serve on the Boards of any of the existing banks, and this can only promote more lively competition among the banks. Petitioners have proposed to keep their bank open for longer hours than existing banks, and for additional banking days. Petitioners propose to provide specialized counselling for new business people, and education courses for students who attend the nearby Central Florida Community College. It appears that local banks have frequently acted adversely on loan applications from local developers, who have been able to borrow money at favorable rates outside of Marion County. The presently existing banks have not adequately served the very large and active horse farming industry that is located in Ocala, and several horse farmers have needed to go to Gainesville to obtain adequate farm businesses. Banks in Marion County have shown a deposit gain of nearly sixteen percent during the year 1976, as compared to a State of Florida average of approximately 7.4 percent. Of the sixteen counties in which new bank charters were granted in the period from January, 1975, through March, 1977, only two counties had a total deposit growth greater than was experienced in Marion County. A savings and loan association was chartered and opened in Marion County in January, 1975. The association has achieved very good success, and has not proved harmful to other financial institutions, which have also shown steady growth during this same period. Petitioners have projected a net profit at the end of the third year of their operation of $163,300 based on deposits of $10,000,000. A more conservative estimate of a net profit of $61,350, based on $8,000,000 in deposits after three years was estimated by Examiner Howze, a bank examiner who conducted an investigation of the instant application for the Respondent. George Lewis, II, the former Director of the Division of Banking, prepared a proposed budget which showed that the bank would be operating at a loss after three years. George Lewis' estimates are not credible. He estimated that the return on commercial loans would be at a rate of from 7 and 1/4 to 8 percent during the first, second and third years. Nine percent is a more realistic figure, and is itself conservative. The Respondent approved the charter of the Shores Bank of Lake Wier in Marion County which indicated a nine percent return on loans. George Lewis furthermore showed a three percent cost on all demand deposits. This cost is not justified by any factors currently accepted in the banking business. George Lewis apparently based the additional cost on his feeling that the legislature may pass a law requiring banks to pay such a return on all demand deposits. Such speculation has not been shown to be justifiable, and cannot serve as a reasonable factor to be used in predicting a proposed bank's profits. Petitioners propose to issue capital stock in the amount of $1,000,000, and thus to capitalize the new bank in that amount. This is adequate capital to serve the needs of the proposed bank during the first three years of its operation. George Lewis, II, testified that additional, capitalization would be required, but he gave no reason for his opinion. To the extent that additional capital is required, the Petitioners are in a position to raise it, and are willing to do so. Only one of the Petitioners who would serve on the first Board of Directors of the proposed bank has any direct banking experience. All of the Petitioners have engaged in considerable banking activities, but only Sam Kinlaw has served in an active capacity with a bank. The Petitioners propose to hire experienced persons to serve as the bank's Chief Executive Officer and Chief Operations Officer. These persons would also serve on the Board of Directors. The Petitioners do represent a good cross-section of successful business people. Their varied business experiences within Marion County would be very helpful to the new bank. In order to properly operate the bank, however, they will require experienced officers. Consistent with the Respondent's policy, the Petitioners have not yet named their officers. To do so, the Petitioners would place the persons they propose to hire in an untenable position in their present capacities. The Respondent has, in the past, approved bank charter applications for further processing under similar circumstances, so as to allow applicants an opportunity to recruit acceptable, experienced individuals to serve as officers. The Board of the proposed bank, as presently constituted, does not have adequate banking experience so as to assure a reasonable prospect of success. If, however, experienced, competent officers, who will also serve on the Board, are hired, the Board would be such as to assure a reasonable promise of success. The parties have stipulated that the name of the proposed bank, the Citizens First Bank of Ocala, is not so similar to any existing bank as to cause confusion with the name of the existing bank. The property which the Petitioners have obtained for the proposed bank is an excellent location. Petitioners plan to utilize a structure which is already on the land to commence operations. The structure has approximately 3,000 square feet of floor space, is aesthetically appropriate, and can be fairly easily modified to serve as a banking facility. The structure, when modified to increase the size of the lobby and to provide appropriate security measures, should prove adequate during the first three years of the bank's operation. There is sufficient land for additions to be made, and the structure is physically sound so that a second floor could be added. The Petitioners are prepared to increase the size of the facility as required.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED: That the Petitioners' application for authority to organize and operate the Citizens First Bank of Ocala be approved for further processing, and that the application be finally approved when the Petitioners have satisfied the Respondent that they have retained appropriate individuals to serve as the bank's principal officers, and that these persons will also serve on the Board of Directors. RECOMMENDED this 30th day of December, 1977, in Tallahassee, Florida. G. STEVEN PFEIFFER 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 30th day of December, 1977. COPIES FURNISHED: C. Gary Williams, Esquire AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR Post Office Box 391 Tallahassee, Florida 32302 S. Craig Kiser, Esquire Assistant General Counsel Office of the Comptroller Legal Annex Tallahassee, Florida 32304 Joseph C. Jacobs, Esquire Post Office Box 1170 Tallahassee, Florida 32302 Willard Ayres, Esquire Post Office Box 1148 Ocala, Florida 32670 Appendix
Findings Of Fact The findings of fact set forth in the Report of Public Hearing, dated January 17, 1991, issued by Hearing Officer Larry J. Sartin, are attached as exhibit "A" and incorporated herein by reference. The Department makes the following additional findings of fact: Transflorida Bank of Palm Beach and Transflorida Bank, Cooper City, while maintaining separate charters, are affiliated through common shareholders and boards of directors. As a part of this proposed change of control, Transflorida Bank, Cooper City, Florida,has submitted applications to the Department and the Federal Deposit Insurance Corporation, for approval to establish the Boynton Beach and Wellington offices of Transflorida Bank of Palm Beach as branches. Those applications were approved on July 16, 1990, and September 6, 1990, respectively. On May 4, 1990, Transflorida Bank of Palm Beach notified the Department of its intent to redesignate the bank's main office with the Boca Raton Branch, located at 190 West Camino Real, Boca Raton, Florida. That redesignation is being considered simultaneously with the proposed change of control. The application indicates that none of the existing management or board of directors of Transflorida Bank of Palm Beach will remain after the acquisition. The new Board will consist of the following individuals: Antonio Marques, Joseph T. Theriaga, Fernando R. Santos, Duane Kujawa, and Andrew S. Ferrera. Mr. Theriaga is proposed as President and Chief Executive Officer; Mr. Santos as Cashier, Executive Vice President, and Chief Operations Officer. The Department's Investigative Unit conducted complete background investigations on these individuals. The acquisition will be accomplished through a sale of stock for cash in the approximate amount of $6.00 per share. Applicant has indicated that approximately $475,000 over and above the stock purchase price will be added to capital.
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. /
Findings Of Fact The Department rules on the Proposed Findings of Facts submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS Applicant's proposed finding as to the net profit to asset ratio is accepted. Applicant's proposed finding as to the adjusted capital to asset ratio is accepted. Applicant's proposed finding as to the boundaries of the PSA are accepted. Applicant's proposed findings as to the population estimates of the PSA and the communities located within the PSA are accepted to the extent they are not inconsistent with the Department's findings adopted herein. Applicant's proposed finding as to net migration into Pinellas County and the age distribution characteristics of Pinellas County are accepted to the extent they are not inconsistent with the Department's findings adopted herein. Applicant's proposed finding that the Bank of Indian Rocks is the only full service bank with its main office operating in the PSA is accepted. Applicant's proposed finding that the Bank of Indian Rocks experienced a 23.3 percent rate of growth for loans and a relatively modest rate of growth for deposits during the last reporting year is accepted. Applicant's proposed findings as to the nature of the proposed branch site are accepted. Applicant's proposed finding as to the banks servicing the PSA is accepted to the extent that said banks have branch offices located in the PSA, but is rejected to the extent that said finding excludes other banks which may service customers in the PSA. Applicant's proposed finding that the PSA community is heavily dominated in terms of bank operations by the Bank of Indian Rocks is rejected as being unsupported by competent substantive evidence in the record. The record indicates that based on a telephone sample survey of 399 persons, 49 percent of the households in the PSA have their primary checking account at the Bank of Indian Rocks. The Applicant's proposed finding does not necessarily follow from the survey. Applicant's proposed finding as to the percentage of people located in the PSA that have a primary checking account in the PSA and bank with the Bank of Indian Rocks is rejected for the reasons previously stated in paragraph 10. Applicant's proposed finding as to the need for an additional full service bank based on the statistical data presented is rejected as constituting a conclusion of law. Applicant's proposed finding as to the savings and loan associations serving the PSA is accepted to the extent that said savings and loan associations have offices located in the PSA, but is rejected to the extent that said finding excludes other savings and loan association offices which may serve customers in the PSA. Applicant's proposed findings as to the nature of the primary service area is accepted, with the exception of the finding as to the amount of land available for future development which is rejected as being unsupported by competent substantial evidence in the record. Applicant's proposed findings that the Applicant's economic capacity will be enhanced by the branch; that the Applicant can support the proposed branch and statements with regard thereto, are rejected as constituting conclusions of law and legal argument, rather than findings of fact. Applicant's proposed findings as to the range of services that will be offered at the proposed branch are accepted. Applicant's proposed finding as to the need for additional banking facilities and the convenience of the proposed bank are rejected as constituting conclusions of law. Applicant's proposed findings as to the substantial experience of the bank staff, and significant assets are accepted; however, Applicant's proposed findings to the capability of the bank to support the branch facilities is rejected as constituting a conclusion of law. Applicant's proposed findings as to the Applicant's return on assets on 1977, 19978 and year to date are accepted. Applicant's proposed findings as to the liquid assets as a percent of total liabilities; condition of assets; classified assets and loan loss ratio are accepted. Applicant's proposed findings as to increased earnings, increased average balances and reduced chargeoffs are accepted. Applicant's proposed finding that there has been no cash operating loss of the Applicant is rejected as being unsupported by competent substantial evidence in the record. Applicant's other statements with regard thereto are rejected as constituting legal argument rather than findings of facts. Applicant's proposed finding that the review of the branch by management of the Applicant and the Atlantic Bancorporation is significant is accepted; however, Applicant's proposed finding as to the judgment of the management as to the success of the proposed branch constitutes a conclusion of law. Applicant's proposed finding that there was no insider transaction involved in the purchase of the land is rejected as being irrelevant and immaterial. Applicant's proposed finding that there was no showing that the lease transaction constitutes an insider transaction is rejected as being unsupported by competent substantial evidence in the record. Applicant's proposed finding that the lease sum represents approximately a 12 percent return on assets is accepted; however, the Applicant's proposed finding that the lease arrangement was not controverted as being unfair or unreasonable is rejected as being irrelevant and immaterial. Applicant's proposed finding that the depth of management is sufficient to operate the branch is rejected as constituting a conclusion of law. Applicant's proposed findings as to the number of years of experience of various officers of the bank is accepted. Applicant's proposed finding as to whether the name of the proposed branch was confusing is rejected as constituting a conclusion of law. Applicant's proposed finding that the Applicant does not have more than four pending branch applications is accepted. Applicant's proposed findings that there was no evidence presented which would indicate that the bank was not in compliance with federal and state regulations and statements of bank offices thereto are accepted. PROTESTANT'S PROPOSED FINDINGS Protestant's proposed findings in Section 1 are accepted, with the exception of the last sentence which is rejected as being a conclusory statement not supported by competent substantial evidence in the record. Protestant's proposed findings in Section 2 are accepted. Protestant's proposed findings in Section 3 are accepted, with the exception that the record reflects that the proposed site is located in the vicinity of the northwest quadrant of the intersection of Indian Rocks Road and Walsingham, and does not specify the number of fees west of the intersection. Protestant's proposed findings as to the PSA's boundaries as delineated by the Applicant in Section 4 are accepted. The second and third sentences in Section 4 are rejected as being unsupported by competent substantial evidence in the record. The first sentence in the second paragraph of Section 4 is accepted. The second sentence in the second paragraph of Section 4 is rejected as constituting legal argument rather than a finding of fact. The remaining proposed findings in Section 4 relating to the boundaries of the PSA of the First Bank of Treasure Island are irrelevant for the reason that said PSA is not necessarily applicable to subsequent applications. Protestant's proposed finding in Section 4 as to the population of the PSA is accepted and the proposed findings relating to the population of First Bank of Treasure Island's PSA is rejected as being irrelevant. Protestant's proposed finding in Section 4 as to the residential nature of the PSA is accepted. Protestant's proposed finding as to the limited nature of commercial activity is rejected as being unsupported by competent substantial evidence. The record reflects that although commercial activity in the PSA is in the form of small retail, professional, and service type establishments, these establishments are numerous in number. Protestant's proposed finding as to the considerable greenbelt lands which cannot be used for development is rejected as being unsupported by competent substantial evidence. The record reflects that there are greenbelt areas which cannot be used for development, but does not reflect that the amount of these lands is considerable. Protestant's proposed findings in the first and second sentences in Section 5 are accepted. The third sentence in Section 5 is accepted to the extent that traffic coming from west to east cannot enter the proposed site directly. The remaining findings in the first paragraph of Section 5 are accepted, with the exception of the last phrase of the last sentence which is rejected as speculation and not supported by competent substantial evidence in the record. Protestant's proposed finding in the second paragraph of Section 5 as to the number of Applicant's existing customers in the PSA is accepted, however, the remaining findings in that paragraph are rejected as unsupported by competent substantial evidence in the record. Protestant's proposed finding in the last paragraph of Section 5 is rejected as constituting a conclusion of law. Protestant's proposed finding in the first paragraph of Section 6 are accepted to the extent that said finding represents the number of offices of financial institutions serving the PSA and not the number of financial institutions. Protestant's proposed finding in the first sentence of the second paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that the Applicant offers automatic transfer from savings to checking and not that they contend this service is unique. Protestant's proposed finding in the second sentence of the second paragraph of Section 6 is accepted with the exception that the record does not support the finding that the Bank of Indian Rocks offers automatic transfer accounts. The finding in the last sentence of the second paragraph of Section 6 is rejected as being irrelevant. Protestant's proposed finding in the third paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that some of the questions asked in the Burke survey may have been based on the assumption that automatic transfer accounts were not presently offered in the PSA, however, the entire survey was not based on that assumption. Protestant's proposed finding in the fourth paragraph of Section 6 is accepted. Protestant's proposed finding in the fifth paragraph of Section 6 is rejected as being unsupported by competent substantial evidence in the record, said finding is based on hearsay evidence which is uncorroborated. Protestant's proposed finding in the sixth paragraph as to the number of businesses that the Applicant listed in its application which were not in its PSA is accepted, however, the remaining finding in that paragraph is rejected as irrelevant. Protestant's proposed finding in the last paragraph of Section 6 is rejected as constituting a conclusion of law. Protestant's proposed finding as to the provisions of Rule 3C- 13.041(2)(a), F.A.C. in the first paragraph of Section 7 are accepted. Protestant's proposed finding as to the Applicant's capital to asset ratio in the second paragraph of Section 7 is accepted. Protestant's remaining finding in that paragraph is rejected as constituting legal argument and opinion, rather than a finding of fact. Protestant's proposed findings in the first paragraph of Section 7 are accepted. Protestant's proposed finding in the fourth paragraph of Section 7 is rejected as being unsupported by competent substantial evidence in the record. The record reflects that Mr. Maurer stated that the Applicant probably would not be able to add to capital through earnings based on the projected losses of the unopened branches. Protestant's proposed findings as to the projected deposits of the Applicant's branches in the fifth paragraph of Section 7 are accepted, however, Protestant's proposed finding as to the need for additional capital is rejected as constituting a conclusion of law, opinion and legal argument. The remaining findings in that paragraph and the first sentence of the sixth paragraph are rejected as being legal argument rather than findings of facts based on competent substantial evidence in the record. The finding in the second sentence of the sixth paragraph is accepted. Protestant's proposed finding in the seventh paragraph of Section 7 that the applicant does not have sufficient personnel to staff and manage its new branches is accepted. Protestant's proposed finding that no manager for the proposed branch has been selected is rejected as being unsupported by competent substantial evidence in the record. Although there appears to be conflicting testimony as to this fact, the application contained in the record states that James Arntz had been selected as the branch manager, in addition to testimony on direct examination that Mr. Arntz had been selected as the branch manager and the record supports said finding. Protestant's proposed finding as to the managerial capacity of the Applicant and its impact on the adequacy of capital to asset ratio is rejected as constituting a conclusion of law. Protestant's proposed findings contained in the first two sentences of the eighth paragraph of Section 7 are accepted. Protestant's proposed finding contained in the last sentence is rejected as constituting a conclusion of law. Protestant's proposed finding in the last paragraph of Section 7 is rejected as constituting a conclusion of law. Protestant's proposed finding in the first sentence of the first paragraph of Section 8 is accepted. The remaining findings in that paragraph are rejected as constituting conclusions of law. Protestant's proposed finding in the first sentence of the second paragraph of Section 8 is accepted, and the remaining finding in that paragraph is rejected as constituting a conclusion of law. Protestant's proposed findings in Section 9 are accepted. Protestant's proposed findings in Section 10 are accepted. Protestant's proposed findings in the first two paragraphs and the first, second and fourth sentence of the third paragraph of Section 11 are accepted. The proposed findings in the third and fifth sentences of the third paragraph are rejected as constituting conclusions of law. Protestant's proposed findings in the first two sentences of the fourth paragraph of Section 11 are accepted, the remaining sentence in that paragraph is rejected as constituting a conclusion of law. Protestant's proposed findings in Section 12 are accepted, with the exception that (1) 9 percent represents an average cost of time deposits and to a minimum and (2) the proposed finding in the last sentence constitutes a conclusion of law. Protestant's proposed findings in the first two paragraphs of Section 13 are accepted. The remaining findings of the last paragraph are rejected as constituting conclusions of law. Protestant's proposed findings in the first paragraph of Section 14 are accepted, with the exception that the record reflects that the purchase price of the proposed site was $240,000 and not $200,000. Protestant's proposed findings in the first two sentences of the second paragraph of Section 14 are rejected as being irrelevant. The proposed findings in the third sentence is accepted. The proposed findings in the remaining sentences of that paragraph are rejected as constituting legal argument and conclusions of law. Protestant's proposed findings in Section 15 as to the provisions of Rule 3C-13.041(3) are accepted. The remaining proposed findings are rejected as being irrelevant. Protestant's proposed findings in Section 16 as to the provisions of rule 3c-13.041(2)(c) are accepted. The proposed finding in the second sentence of that section is accepted. The proposed finding in the third sentence is rejected as being unsupported by competent substantial evidence in the record for the reasons stated above in paragraph 53 of this Order. The proposed finding in the last sentence is rejected as constituting a conclusion of law. DEPARTMENT'S PROPOSED FINDINGS The Department's proposed findings contained in paragraph 1, 3, 4 through 10, 12 through 19,22 and 23 are accepted. The Department's proposed findings contained in paragraph 2 are accepted with the exception of the third sentence which is rejected as being unsupported by competent substantial evidence in record for the reasons stated above in paragraph 53 of this Order. The Department's proposed findings contained in paragraph 11 are accepted, with the exception of the figure for the projected deposits for the first year based on 2.2 persons per household which is rejected as being unsupported by competent substantial evidence in the record. The record reflects that this figure is $2,487,000 and not $2,700,000. The Department's proposed findings contained in paragraph 20 are accepted, with the exception of the number of deposit and loan customers residing in the PSA which is rejected as being unsupported by competent substantial evidence. The record reflects that there was conflicting testimony as to the number of existing deposit customers, however, the hearing officer found the number to be 140, and 65 loan customers. The Department's proposed findings contained in paragraph 21 are accepted, with the exception of the amount of square feet of the building to house the proposed branch, which is rejected as being unsupported by competent substantial evidence. Although the application contained in the record stated that the building would contain 3,640 square feet (including the drive-in canopy), the hearing officer found that the building would contain 2,000 square feet. PROTESTANT'S EXCEPTIONS TO THE REPORT AND FINDINGS OF FACT OF HEARING OFFICER The Protestant's exception contained in Section 1, with regard to the Hearing Officer's ruling's on the proposed findings, is accepted to the extent that the better practice would be for the Hearing Officer to specify which proposed findings are rejected as not supported by the evidence, which are irrelevant and which constitute conclusions of law. However, it has been recognized that the hearing officer is not required to make explicit rulings on subordinate. commulative, immaterial or unnecessary proposed facts. Forrester v. Career Service Commission, 361 So.2d 220 (1st DCA Fla. 1978). Notwithstanding, the Department has expressly ruled on each proposed finding and stated the reasons therefore. Protestant's exception contained in Section 2 is rejected for the reason that some of the proposed findings contained in Protestant's Proposed Findings of Fact were not based on competent substantial evidence, were irrelevant or constituted conclusions of law, as more fully set forth above in paragraphs 31 through 70. Therefore, it would be improper for either the Hearing Officer or the Department to adopt each and every proposed finding contained in Protestant's Proposed Findings of Fact as requested in the exception. Protestant's exception contained in Section 3 is rejected for the reason that the Hearing Officer's finding that the proposed branch manager is James Arntz is supported by competent substantial evidence in the record. The testimony contained in pages 497 and 498 of the transcript, cited by Protestant in its exception, refers to the Applicant's application for a branch office in northeast St. Petersburg. Although there was conflicting testimony as to this fact (see TR-465 and TR-540), the application contained in the record also identified James Arntz as the proposed branch manager. As such, there was competent substantial evidence in the record to support the Hearing Officer's finding. Protestant's exception contained in Section 4 is accepted for the reason that the Hearing Officer found that the "the greater weight of the evidence indicates that average number of persons per household in Pinellas County is 2.2". As such, Applicant's revised figures based on 2.2 percent per household are accepted which indicate that the proposed branch will not show a profit until the fourth year. The Department's findings of fact have modified the Hearing Officer's findings accordingly. Protestant's exception contained in Section 5 is rejected for the reason that the Hearing Officer's finding is supported by competent substantial evidence in the record. The testimony contained on pages 511 and 512 of the transcript, which is cited by the Protestant, merely states that the Applicant probably would not be able to add to capital through earnings based on the assumption of the projected losses of the Applicant's new branches. As such, the Hearing Officer's finding is accurate. Protestant's exception contained in Section 6 is accepted for the reason that the record reflects that the Applicant's president stated that the branch will probably have Saturday banking hours, but that the exact hours had not been determined. The Department's Findings of Facts have modified the Hearing Officer's findings accordingly. Protestant's exception contained in Section 7 is rejected for the reason that the Hearing Officer's finding is supported by competent substantial evidence in the record. On pages 328 and 329 of the transcript, the witness for the Applicant testified that there was a stacking lane which functionally is in front of the site for traffic hearing west. Protestant's exception contained in Section 8 is rejected for the reasons that the Hearing Officer's finding based on the study was limited and for a limited purpose, and the questions asked in the survey and the procedure appear reasonable. In addition, the Hearing Officer's and Department's reliance on the study is minimal, if at all. Protestant's exception contained in Section 9 is rejected for the reason that the adverse impact of the establishment of a branch on other banks is irrelevant, because it is not a consideration under the statutory and regulatory criteria applicable to branch bank applications. Protestant's exceptions contained in Sections 10 and 19, 21 and 23 are rejected for the reasons that the requested findings are conclusions of law which are not properly included in the Hearing Officer's report pursuant to Section 120.60(3), Florida Statutes. Protestant's exception contained in Section 20 is rejected for the reason that the requested finding as to an appraisal of land and improvements is irrelevant where, as in this case, there is no insider transaction involved in the purchase of the land. Protestant's exception contained in Section 22 is rejected for the reason that the revisions referred to by the Protestant were updated figures based on data unavailable at the time of the application and figures relating to the lease arrangement. Although at the time of the application, the Applicant intended to purchase the proposed site, it later decided to lease the proposed site. The Department does not view this as a material change in the application and fails to see how the Protestant was prejudiced by this change. As to the updated figures, in McDonald v. Department of Banking and Finance, 346 So.2d 569, 584 (Fla. 1st DCA), the court stated that the hearing officer may freely consider relevant evidence of changing economic conditions and other current circumstances external to the application. It should also be noted that the revisions referred to by the Protestant were testified to at the hearing in June, thus giving the Protestant a month's notice to make any changes necessary in the preparation of its case which was later presented at the continuation of the hearing in July. Protestant's exception contained in Section 24 is rejected for the reason that the requested findings are not material to the statutory and regulatory criteria applicable to branch applications.
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 The Application involves the proposed organization of a new bank in the State of Florida, Pine Banking Corporation (hereinafter referred to as the "Proposed Bank"). The Applicants, Francisco Jaime Pinheiro, Nelson Pinheiro and Noberto Pinheiro, are citizens of Brazil. Francisco Pinheiro has been in the banking business for 20 year. Francisco Pinheiro has been the president of BMCSA, a wholesale bank in Brazil, for 14 years. Francisco Pinheiro is a vice-president of the Federation of Brazilian Banks. BMCSA has been in operation for 51 years. It has branches in 15 of the most important capitols of Brazil. It has capital equity of approximately 100 million dollars and assets of approximately 700 million dollars. During the past 5 years, BMCSA has been cited by a financial magazine in Brazil as having the best development and performance in Latin America. There are approximately 300 banks in Brazil. BMCSA ranks between the 18th and 22nd largest bank in Brazil. The Applicants desire to form a bank in Florida in order to support small and medium sized export companies. The Applicants have worked in the international market since 1982, mainly through United States' banks in New York. The proposed president and chief executive officer of the Proposed Bank is Alberto Espinosa. Mr. Espinosa has been in the banking business in the United States for approximately 22 years. For the past 17 years Mr. Espinosa has been involved in international banking. Mr. Espinosa was the general manager for the Bank of New England International, the Edge Act Bank of New England. Mr. Espinosa worked in Miami, Florida, from 1976 through 1979, and during the past five years. He is, therefore, familiar with the community that the Proposed Bank will serve. The proposed board of the Proposed Bank will consists of people in the community with a variety of backgrounds: a CPA, a banking attorney, exporters, freight forwarders and bankers. At least six members have banking experience. The head of credit of the Proposed Bank will be Maria Justo, who occupied a similar position at the Bank of New England, the Edge Act Bank of New England. The Proposed Bank will have a credit committee on the board responsible for every credit the bank proposes. One officer will be hired to insure compliance with the Community Reinvestment Act. Initial capital for the Proposed Bank will be $5,000,000.00. The economic study used to determine public convenience and necessity was prepared by David Starke, president of Financial Institution Consultants, Inc. Financial Institution Consultants, Inc., is engaged in activities as a consultant to financial institutions. The company provides services involving banking charters, branching, mergers, acquisitions and regulatory matters. Mr. Starke opined that the primary service area of the Proposed Bank, which consists of all of Dade County, Florida, was drawn in accordance with Chapter 3C-9, Florida Administrative Code, the Proposed Bank will enhance public convenience and advantage, there is a reasonable probability of success without undue injury to any other existing financial institution and the proposed capital is adequate. DONE and ENTERED this 4th day of December, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 4th day of December, 1990. COPIES FURNISHED: Raul J. Valdes-Fauli, Esquire Robert S. Turk, Esquire Suite 3400, One Biscayne Tower 2 South Biscayne Boulevard Miami, Florida 33131-1897 Albert T. Gimbel Chief Banking Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 ================================================================
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.
The Issue The issue in this case is whether Respondent discriminated against Petitioner based on Petitioner's disability.
Findings Of Fact Mr. McMahon was a member of Suncoast beginning in approximately 1986. In 2008 and 2009, Mr. McMahon had a checking account, a VISA card, a savings account, and a loan with Suncoast. Mr. McMahon claims that he is disabled and that he suffers from personality disorders, post-traumatic stress, passive aggression, and obsessive compulsive disorder. No medical evidence was presented to substantiate his claims. He has been receiving benefits from the Social Security Administration based on a personality disorder since approximately 1996. Suncoast perceived Mr. McMahon as having a disability, based on his repeated assertions that he was disabled. In November 2008, Mr. McMahon filed a complaint with the Better Business Bureau of West Florida, Inc. (BBB), alleging that Suncoast was discriminating against him by not accommodating his communication disability. The BBB investigated and found that Suncoast had blocked access to Mr. McMahon's accounts because he was delinquent on a loan. The BBB contacted Suncoast concerning the complaint, and Suncoast provided Mr. McMahon a three-month payment due date extension on the loan, lowered his monthly payments, and unblocked his account. In January 2009, Mr. McMahon was delinquent on his loan. Again Suncoast tried to help Mr. McMahon with his delinquent account. At some point, Mr. McMahon's loan payments were put on automatic payments in order to reduce his delinquencies. Money would automatically be taken out of his account to make the monthly loan payments. Mr. McMahon had a direct deposit for his Social Security benefits payments. After the loan payments began being deducted automatically, Mr. McMahon canceled his direct deposits into the account from which his payments were automatically being deducted. Thus, there was no money in the account to make the monthly payments on his loan, and Mr. McMahon ceased making payments on the loan and again became delinquent on his loan. When one of Suncoast's members becomes overdrawn with regards to either a checking or savings account or credit card, or is delinquent in making payments on any credit card or loan obligation, that member loses access to his or her services, including use of all internet services, ATM cards, ATM machines, credit cards, and debit cards. The member would also be unable to access his or her account balance or make deposits into overdrawn accounts if the member attempted to make a deposit via ATM, as those services are suspended. These restrictions are typically automatically placed upon the accounts of any member with a delinquent loan account after 60 days of delinquency, and within 30 days of any overdrawn share draft account. Any member with a delinquent or overdrawn account, where services were suspended would be prevented from applying for a mortgage loan. If the member contacted Suncoast staff to apply for a mortgage loan or to utilize any other services, the member would be directed to the loss mitigation section of Suncoast, and loss mitigation would attempt to collect the debt or rectify the delinquency. Because Mr. McMahon again became delinquent on his loan payments after stopping the direct deposits, his accounts were restricted, meaning that he could not access the accounts. Mr. McMahon began a campaign of making repeated calls to Suncoast, screaming and yelling at Suncoast representatives, talking over the representatives, making vulgar statements, and using profanity. Mr. McMahon attributes his behavior to his communication disability and requested on numerous occasions that Suncoast accommodate his disability with "patience and understanding." A note was placed in the loss mitigation's note system and in Suncoast's host system, so that all employees of Suncoast who were working with Mr. McMahon could see and accommodate his request for patience and understanding. Suncoast representatives did provide Mr. McMahon with an abundance of patience and understanding. However, nothing seemed to appease Mr. McMahon, and his repeated calls were unproductive. Because of the repeated nature of Mr. McMahon's calls and his behavior during the telephone calls, there were numerous complaints by Suncoast's representatives to management. Jacqueline Gilbert (Ms. Gilbert), vice president of loss mitigation, determined that in order to protect Suncoast's representatives from Mr. McMahon's harassing behavior that all calls should be directed to her; Linda Fales (Ms. Fales), vice president of risk management, cardholder disputes, and DSA compliance for Suncoast; or Ben Felder (Mr. Felder), Suncoast's general counsel. Suncoast's representatives were advised that Mr. McMahon's calls should be transferred to Ms. Gilbert, Ms. Fales, or Mr. Felder. When the representatives would tell Mr. McMahon that they could not help him and that his call would have to be transferred, Mr. McMahon was verbally abusive to the representatives. Many times, if Mr. McMahon was going to be transferred, he would hang up and call right back to speak with a different representative. Sometimes, Mr. McMahon would call and hang up when a representative answered the call. At different times, Ms. Gilbert, Ms. Fales, and Mr. Felder talked with Mr. McMahon to attempt to discuss the reasons that his account was restricted. However, they had little success in communicating with Mr. McMahon because of his behavior. Although Mr. Felder was not able to service Mr. McMahon's account, he decided to handle all Mr. McMahon's requests and assign any work to be done to the appropriate employee because Mr. McMahon's behavior toward Ms. Gilbert and other Suncoast employees was unacceptable. Mr. McMahon did not make any loan payments between May 2009 and August 2009. During this same time period, Mr. McMahon's VISA credit card was well overdrawn. Carolyn Stepp (Ms. Stepp) had cosigned on Mr. McMahon's loan. On or about September 4, 2009, Suncoast exercised its "right of offset" and used funds in both Mr. McMahon's and Ms. Stepp's accounts to pay off the loan. There was still an outstanding balance of $1,046.86 on his VISA credit card. On September 10 and 14, 2009, Mr. McMahon asked to apply for a mortgage loan by telephone. He was not sure that Suncoast would give him a loan because of his delinquent accounts, but he felt that he should have the opportunity to apply because the loan had been satisfied when Suncoast exercised its right of offset. Although the loan was satisfied, Mr. McMahon still had an outstanding balance on his VISA credit card, which he had not been able to use for several months because his accounts had been restricted. He was advised that he would have to contact Mr. Felder to discuss the status of his account. On September 11, 2009, Mr. Felder and Mr. McMahon discussed his account. Part of the discussion concerned Suncoast's writing off Mr. McMahon's loan and VISA credit card balance, returning the offset amounts to Mr. McMahon's and Ms. Stepp's accounts, disbursing the remaining amounts in Mr. McMahon's account to him, and closing Mr. McMahon's accounts. At the conclusion of the conversation, Mr. Felder understood that Mr. McMahon was in favor of this solution and began to take steps to accomplish the tasks. Mr. Felder advised Mr. McMahon by telephone on September 17, 2009, that the tasks had been completed and that Mr. McMahon's accounts with Suncoast were closed, meaning that services at Suncoast were terminated and that Mr. McMahon's access to information was no longer available. Mr. Felder followed up the telephone conversation with a letter dated September 17, 2009, confirming the telephone conversation. Individuals who are not members of Suncoast are not qualified to apply for a mortgage loan with Suncoast. At the time that Mr. McMahon applied for a mortgage loan on September 14, 2009, his accounts at Suncoast were in the process of being closed. Mr. McMahon's requests to apply for a mortgage with Suncoast were not denied because Mr. McMahon was disabled. They were denied because Mr. McMahon had various account delinquencies.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Suncoast did not commit an unlawful housing practice and dismissing Mr. McMahon's Petition. DONE AND ENTERED this 27th day of April, 2011, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2011.
