Carton, Kole and Larner. The opinion of the court was delivered by Kole, J.A.D.
In October 1973 Union Community Bank filed an application with the Department of Banking seeking a new bank charter. Hearings on that application were conducted in March and April 1974. Union Center National Bank and Franklin State Bank appeared in opposition to the grant of the charter.
On September 24, 1974 the hearing officer submitted his report, recommending approval of the charter application subject to certain conditions. Two of these conditions are pertinent for the purposes of this appeal.
The first is that the Borinsky family and business associates divest themselves of sufficient shares of stock in the bank so that their "total participation is not in excess of 10% of the outstanding shares," and in no event should any "spin-off result in any individual, family and/or group of business associates owning in excess of 10% of the bank's stock." The hearing officer found that this procedure would be beneficial to the public as well as those financially interested in the success of the bank, and would accord with the consistent position of the Department that it is unwise "in a new bank
situation for one individual, one family or one group of business associates to own in excess of 10% of the outstanding shares of the bank." The second condition is the resignation, at his option, of Sanford Borinsky, an officer and director of the Bank of Bloomfield, from either that bank or the proposed bank. See N.J.S.A. 17:9A-3 B.
After a careful consideration of the proofs, and detailed findings predicated thereon, the hearing officer concluded that, subject to the recommended conditions for approval, the requirements of N.J.S.A. 17:9A-11 D for the granting of a bank charter to the applicant had been satisfied. Among other things, he determined that (1) the conditions in the locality in which the proposed bank will transact business afford reasonable promise of successful operation (N.J.S.A. 17:9A-11 D(2)); (2) the directors possess the qualifications, experience and character required for the duties and responsibilities with which they will be charged (N.J.S.A. 17:9A-11 D(3)), and (3) the interest of the public will be served to advantage by the establishment of the proposed bank (N.J.S.A. 17:9A-11 D(1)).
With respect to the criterion of whether the interest of the public would be served to advantage, the hearing officer found no substance to a claim that the proposed bank would disserve the public interest because some of the incorporators and/or directors held influential municipal positions in the township. Relying on a prior ruling by the Department, he found that the hypothetical potential conflict of interest in this respect, as opposed to an actual conflict, did not support the claim.
The hearing officer further found that the public interest standard would not be offended by reason of the approximately 31% control by the Borinsky family and business associates, provided approval of the application be conditioned, as indicated, on a divestiture of their stock so that their total participation not exceed 10% of the outstanding shares. Nor, according to the hearing officer, would Sanford Borinsky's relationship to the Bloomfield State Bank violate that
standard, if approval of the application were conditioned on his resignation, as heretofore indicated.
By decision and order of April 17, 1975 the Commissioner denied the application for a charter. The applicant, Union Community Bank, appealed. The objector banks, Union Center National Bank and Franklin State Bank, cross-appealed.*fn1 We granted appellant's motion to stay the appeal pending its motion before the Commissioner for reconsideration of his April 17, 1975 decision and order. On September 5, 1975 the Commissioner denied the motion for reconsideration without a hearing. That denial is also before us for review.
In his decision and order of April 17, 1975 the Commissioner adopted "in toto" the findings and analysis of the hearing officer's report and recommendation relevant to the satisfaction of the requirements of N.J.S.A. 17:9A-11 D(2) and (3). He specifically noted that his later discussion of the public interest issue was not to be considered as a negative reflection upon the character, ...