Quick Questions with Tim Moriarty
Medina S & L president believes bank has been critical in Main Street renaissance, other local projects
Medina Savings and Loan has been in business for 125 years. It was the only bank in Orleans County to survive the Great Depression. It has stayed locally owned and locally focused in an era on bank consolidations.
Tim Moriarty, 58, grew up in Medina, and worked for Ernst and Winney in Charlotte, N.C., and banks in Rochester (Security Trust and Rochester Community Savings Bank) before returning to his hometown. He has been president of the Savings and Loan for 17 years.
The bank has 15 employees with most of them working out of the bank’s main office on Maple Ridge Road, next to Tops. In 2006, the Medina S & L opened a second office in the Albion Wal-Mart Supercenter.
Moriarty is active in the community as a member of the Medina Lion’s Club, the Medina Sandstone Society and the Shelridge Country Club. He is a past president of the Orleans County Chamber of Commerce and coached Little League for 11 years.
He talked about the bank and is career during an interview last Wednesday at the S & L.
Question: You mentioned you worked at Security Trust and the Rochester Community Savings Bank. Did we have more banks back in the 1980s?
Answer: Yes. I tell people a little story. I used to bowl in a banker’s league when I was in Rochester. There were 16 teams represented by 12 different banks. Not one of those banks exists today. Rochester Savings, Community Savings, Monroe Savings, Columbia Savings, First Federal Savings, First National Central Trust, Lincoln First, Security Trust – They’re all gone.
‘We don’t loan outside our area. We’re here for projects that make economic sense to help build a better community.’
Question: It seems like there continues to be a buying spree, if you look at First Niagara.
Answer: They’re a little different. First Niagara bought to buy, to get big and not for value. That’s the difference.
Question: How unusual is it to have a local Savings and Loan these days?
Answer: It’s less and less in New York. In the country most of the banks are still small community banks. I’m not sure why New York has been getting hit harder than the other states.
Question: Is the small community bank a better model than the bigger banks?
Answer: I think there is a need for both. You need big banks for large commercial customers. But the problem with the big banks is they have a lot of activities that have nothing to do with banking and that puts them at risk of failing like in 2008 and ’09.
The reason it’s an issue is you have FDIC insurance on their deposits. If they fail it puts a major hurt on that.
If you look at community banks, I can go up and down Main Street and you’d be shocked at the projects we’ve done. Right now we’re helping the United Methodist Church get the old Apple Grove done. I can go all over Medina and see the different projects we’ve done. The bigger banks are not interested. We’re small for them.
The big banks just take the deposits and siphon it out of the community. And then they invest it in Hong Kong and their growth areas like Singapore. That’s where they want to focus their attention. They’re siphoning out the money.
In a community bank we reloan it in the community to help with growth in the community and improving the community. We don’t loan outside our area. We’re here for projects that make economic sense to help build a better community.
Question: I really hadn’t thought about that, that a bank has played a part in Medina Main Street revival the past 10 years. People need to borrow money to make some of these projects happen.
Answer: We’ve done a lot of the projects up and down Main Street.
Question: Has the Albion site in Wal-Mart resulted in projects in the Albion area?
Answer: We don’t seem to get the people coming in there for requests like we’d like to. We’re there to do it, but it’s been a little bit more difficult getting that connection. There hasn’t been as many projects as in Medina.
Question: Why did you open the site in Albion?
Answer: We’re trying to broaden our base. We’ve helped a number of small businesses in Albion and Medina. We’d like to see more loan demand in Albion.
Question: People perceive Orleans as being a struggling county. But you might see it differently, working with some of the innovators.
Answer: Retail Medina has done a lot better than a lot of small towns. I wonder if it’s just far enough from the malls that people will think local first before they go out. I like to think that we’re a part of it. There are projects that I know that got done where people initially went to other bigger banks and we ended up doing them and helped make it a better community.
Question: You were the only bank to survive the Great Depression in Orleans County. Why do you think the Medina Savings and Loan has endured all these years?
Answer: It’s a risk business. You have to manage risk.
Question: Has the banking business got harder during your career?
Answer: Oh, definitely. There are a lot more regulations regarding everything, from lending to taking deposits. We can’t take a double-endorsed check anymore. People get mad at us, but we have regulations. We have to know the customer to make sure you’re not a terrorist or a money launderer.
There are many, many ways they have regulated the business.
The other factor: This current economic environment. Anytime you don’t let market forces determine market prices, you create a bubble. You create a distortion. That’s what’s going on right now with the Fed. You’re creating a bubble.
Question: Is that the low-interest rates?
Answer: They force the rates down with their buying program. They’re not letting them be priced according to the risk and what the market should bear.
‘There are projects that I know that got done where people initially went to other bigger banks and we ended up doing them and helped make it a better community.’
Question: It seems that would make it hard for the banks to make money?
Answer: It is. It’s tough on the smaller banks. We rely on taking in money and making loans, earning a differential, managing the credit risk, and managing the interest rate risk.
A lot of the community banks don’t have all of the big brokerage firms, investment banking firms and those other activities where they generate a lot of fees – the credit card business. Some of the smaller banks have got into insurance. There are thousands of smaller community banks like us that haven’t gotten into insurance. We’ve stuck to core banking.
Question: People may wonder if Medina Savings and Loan has been approached by a bigger bank as part of one of these buying sprees?
Answer: We’re not a stock-owned institution. Our ownership is more closely associated to the concept of a credit union. Someone can’t just come in and buy us up. There’s no stock. It’s really a cross between a credit union and the stock-owned banks. The charter was established originally to spur home ownership and savings. That’s why it’s called savings and loan.
Question: So you’re not going to go buy up other places either?
Answer: Right. It’s always a local focus.