In its latest Beige Book report, named for the color of the cover, Federal Reserve Board officials said economic activity continues to expand at a “modest or moderate pace across the 12 Federal Reserve Districts” while many employers still struggle to find skilled workers. In the banking sector, contacts reported solid commercial and consumer loan growth, painting a bright picture for the prospect of future growth. For a look at what this means for Flagler County, Garry Lubi, senior vice president at CenterState Bank in Palm Coast, offers the local spin.
Fed officials reported increased borrowing activity nationally. What are borrowing conditions here in Flagler and is it significant that more people are seeking loans?
I would say it’s very important because what we’re seeing differently now from four or five years ago, and even two and three years ago, is not as much refinancing of existing debt because interest rates are lower but financing for new projects. So that’s the encouraging piece. This is going to build new buildings or improve existing buildings or facilities for the future.
One of the highlights of the recent earnings season was a strong showing by the banking sector. What does this mean for banks?
You just dropped your corporate tax rate 40 percent so that in and of itself, because we work off of, relatively speaking, thin margins and so having that type of impact on the corporate tax rate is very big for the banking industry as a whole.
Are concerns about tariffs and possible trade wars likely to have an impact here?
I definitely think it can have an effect. To what extent, because we don’t have a large manufacturing base here yet, I don’t know how much of an effect it will have. But psychologically, if it impacts other things like people's 401(K) or retirement investments, then it could impact things.
What is your outlook for the economy moving forward?
I definitely see things improving here. We can always point to the residential construction permits, the increased commercial activity that is going on and I think we have some additional opportunities for growth in the city and in the county.