Over the past few years, uncertainty and a healthy serving of cautious optimism have been the reliable takeaways in end-of-the-year economic roundups.
Local banking leader Joseph Lebel this year sounds like he’s trying out a larger portion of optimism than caution at the start of 2025.
Lebel, president of OceanFirst Bank, and a regular prognosticator on year-ahead economic forecasts, said the switch-up is a result of what he saw unfold over the second half of 2024. It was a change that he notes even predated the coming White House overhaul.
“Looking at my own loan pipeline, the later part of the year was markedly higher than earlier in the year,” he said. “That’s a testament that people feel more confident and know the direction of the economic environment as best as they can.”
Confidence returning to the market is something he attributes largely to enough time elapsing since the last time the United States Federal Reserve raised interest rates. Between March 2022 and July 2023, there were 11 of those rate hikes.
“Once we didn’t have that limiting factor on growth, inflation started to calm down, and we were still seeing the consumers spending, we started to see those green shoots of confidence in the business community,” he said.
Getting the uncertainty of the lead-up to the election out of the way was enough to propel more business activity and loans in the closing months of 2024, according to Lebel. The results of the election, he believes, were secondary to that.
Does the new administration offer any prospects for his industry or others in the coming year?
“It probably does,” he said, “but I think some of that is overblown. There’s usually a euphoria around the semblance that a new administration will mark a major shift. … Things always tend to change slower than you think in life.”
Presumably, the opportunities would lie in oversight of his industry – and the costs associated with maintaining compliance in the financial sector – being relaxed to some degree. Lebel said whether that comes to pass, and what difference it would make in an industry such as banking, remains to be seen.
“Do I think maybe some regulatory scrutiny eases a bit? Maybe,” he said. “But I think we’ve all adapted. And when you adapt, you understand things you need to do differently. I think we’ve all been committed to doing that already.”
The picture of the banking market from OceanFirst’s vantage point is respectable single-digit organic growth. The sector’s leaders have a confident optimism about that continuing, even if they’re altogether sure about attaining double-digit numbers.
Any growth at all was hard to come by about two 18 months ago, when a series of bank failures reverberated through the sector, Lebel said.
“With some of those concerns behind the sector, we firmly believe – based on what I mentioned earlier about what we’re hearing from clients and the opportunities as confidence returns – that we’ll be able to grow at the single digit level into 2025,” he said.
