Editor’s Note: Bankers are often the canaries in the coal mine, knowing whether companies are keeping up to date with their loans.
We asked seven prominent OC bankers their perspectives on the coming year’s economy, both locally and nationally.
Jennifer Gallagher
Global Commercial Banking Executive,
Southern California
Bank of America
2025 marks 100 years that Bank of America has served Orange County’s banking and finance needs, and we expect this year to be exceptionally busy given the many positive economic indicators – ranging from a pro-business environment, possible corporate tax cuts and steady GDP growth to relatively low unemployment rate – all which bode well for Orange County’s diverse business sector this year.
We’re seeing positive sentiment across all our various Orange County business client segments, especially with those companies that are growing while managing their profit margins through cost and expense efficiencies. Successful businesses are those that became more financially savvy and nimble having navigated headwinds like inflation, supply chain and the volatile interest rate environment in recent years.
More Orange County businesses are seeking our guidance to manage commodity and currency risk in today’s global economy – such needs as international expansion, managing currency exposure, foreign bank services and overseas counterparty risk. Local companies are also planning to raise capital. They’re focused on defending against fraud, and they’re looking for more ways to retain top talent.
Finally, Orange County can expect significant M&A activity this year, and we’ve already been advising businesses that are ready to sell or buy. Other notable areas of growth we’re seeing include the aerospace and defense sector, with our local team of specialty A&D bankers having a robust pipeline in Orange County; businesses associated with AI-data centers; and healthcare-related fields.
Aaron Olson
Orange County Regional Manager
Middle Market Banking
Fifth Third Bank
As we step into 2025, Orange County’s economy stands at a pivotal juncture. Business executives should brace for a year marked by both challenges and opportunities. With the uncertainty about the Federal Reserve’s interest rate policy, businesses may reassess their strategies and priorities.
Despite the headwinds, Orange County’s economy remains resilient. The region’s diverse economic base, encompassing sectors such as healthcare, technology and real estate, continues to provide a solid foundation. However, rising costs and labor shortages are pressing concerns that require strategic management.
For businesses, leveraging asset-based lending (ABL) will be a crucial tool. ABL allows companies to leverage their assets to enhance liquidity and support growth initiatives. Regular stress testing and scenario planning will be essential in navigating economic uncertainties and ensuring business viability.
The increasing adoption of digital technologies is another key trend. Companies that invest in digitization and automation will likely gain a competitive edge, enhancing efficiency and productivity. Cybersecurity remains paramount as businesses strive to protect their assets in an increasingly digital world.
The real estate market, particularly residential, continues to be a bright spot. Limited supply and strong demand have kept prices robust, attracting both domestic and international buyers. However, affordability remains a challenge, potentially impacting workforce availability.
Overall, 2025 presents a landscape of cautious optimism. By staying proactive, focusing on core strengths and embracing innovation, Orange County businesses can not only weather the storm but also seize growth opportunities.
Ethan Morgan
Managing Director
Market Manager for Orange County
J.P. Morgan Private Bank
There’s a lot on the horizon for Orange County this year. With strategic investments and easing of global policy, it is poised for growth. However, uncertainties remain. Tariffs and questions around free trade are still in play, and they could impact the landscape.
That said, businesses are optimistic. Potential changes in tax policy and the possibility of interest rate cuts still on the table will create opportunities that will benefit sectors especially real estate, tech and healthcare. Being on the West Coast always gives us an advantage over other markets when doing business with Asia and positions us for investment in emerging areas like AI, power infrastructure and security.
Our business at J.P. Morgan Private Bank is supporting this momentum, and we plan to grow our team in Orange County from over 80 to 150 professionals in the next five years, offering tailored financial solutions to this market.
The key here is adaptability. By staying informed and working together, Orange County can navigate these uncertainties and seize the opportunities for growth and prosperity.
Edward Mora
President
SVP, Orange County Market Leader
US Bank
We are seeing encouraging reports from our investment banking partners in the community that mid-market M&A activity is picking up, especially in the trade industries, and with the pro-growth administration, there is a strong expectation of a more robust year for acquisitions. The most recent Consumer Price Index showed that inflation remained stubborn in January. With the economy remaining strong, Fed Chair Jerome Powell told lawmakers in mid-February that they are not in a hurry to cut interest rates. With rates still far from the Fed’s 2% target, we believe they will have no reason to cut rates until at least summer.
With interest rates remaining elevated, consumers continue to have options to achieve favorable yields on various savings instruments. Competitive rate savings accounts offer flexibility and liquidity, with the opportunity to earn higher rates on your savings balance.
For those willing to lock in their funds for a set period, CDs provide fixed interest rates for more certainty around your investment.
It’s advisable to act promptly to secure favorable rates, as financial institutions may adjust their offerings in response to changing economic conditions. When selecting a savings vehicle, consider factors such as liquidity needs, investment horizon and risk tolerance to ensure alignment with your financial goals.
Head of Corporate Banking
Orange County and Inland Empire
PNC Bank
Jarrod Ingle
President, Orange County & Inland Empire
PNC Bank
Orange County is set to remain one of California’s strongest economies in 2025, keeping pace with national trends. With the Federal Reserve cutting interest rates and signaling more reductions before the year ends, businesses should expect a boost in activity, particularly in sectors that rely on borrowing. Real estate and tech are likely to see notable growth as capital improves. For tech, in particular, the easing of monetary policy could solidify its position as a major drive of the local economy.
Tourism will continue to be a major economic driver for the region, providing steady employment and fueling consumer spending. Thanks to a strong labor market, industries like hospitality, retail and entertainment should remain stable, though staying competitive will require focusing on enhancing the customer experience. For small and mid-sized businesses, rate cuts will offer opportunities to invest in growth, whether that is expanding operations, adopting new technologies or improving efficiencies. We can expect to see more businesses embracing tech-driven solutions, like AI, to stay ahead. The tech industry itself is likely to strengthen, playing a significant role in shaping the local economy.
However, business leaders should keep an eye on inflation as increased demand could bring some pricing pressures.
While Orange County’s economic performance will largely mirror the national outlook, its diverse industries and strong workforce give it a solid foundation to weather any challenges. For business leaders, 2025 is the time to lean into strategic investments, stay agile and look for ways to collaborate with others in the region. Following this approach will allow businesses to make the most of a dynamic year.
Craig Takeshige
SVP Orange County Market Leader
Umpqua Bank
The potential impact of increased tariffs is top of mind this year for many business leaders. The Orange County economy’s reliance on international trade, tech manufacturing and tourism makes it particularly sensitive to tariff-related disruptions. However, barring any major shocks, a well-diversified and resilient economy, coupled with a strong culture of innovation, positions the region for moderate growth in 2025.
The technology sector remains a bright spot, with venture capital (VC) funding expected to fuel the startup ecosystem (see VC list, page 37). Business leaders are advancing innovation, optimizing supply chains and integrating emerging technologies. Notably, the 2024 Umpqua Bank Business Barometer found that 45% of Orange County business leaders are early adopters of AI—signaling a rapid shift toward digital transformation.
Meanwhile, the tourism and hospitality industries are maintaining steady demand, driven by Orange County’s status as a top resort destination anchored by Disneyland Resort and other beach attractions. Data shows visitor spending has increased an average of 7.8% annually since 2013 and totaled $15.8 billion in 2023.
As companies navigate 2025, it is crucial that business operators embrace automation, data analytics, AI and cloud technologies to further streamline operations. A focus on talent development and retention and strengthening customer relationships is also advised. A loyal customer base, in turn, can help businesses mitigate challenges such as rising import costs.
The start of 2025 was a challenging one for our northern neighbors. It is still too early to tell the full impact of the Los Angeles wildfires on Orange County. There is an influx of displaced families moving to the area, which is weighing on an already limited housing inventory and will further drive up housing prices in our region.
Despite the potential challenges ahead, Orange County’s economy remains resilient. We anticipate cautious expansion in the months ahead, driven by innovation, strategic investment and a dynamic business environment.
Michael Bennett
Managing Director, Head
Southern California Commercial Banking
BMO
The topics that concern Orange County businesses are the same concerns on the minds of business leaders across the country—inflation, interest rates and trade. While any combination of these matters will impact companies in the region in different ways, the strength of Orange County is the diversity of its economy.
The biggest issue right now is uncertainty. Will President Donald Trump move forward with wide-reaching tariffs on the country’s biggest trading partners? How long will inflation continue to be a concern? And how will these factors affect the Federal Reserve’s decision on interest rates?
The current environment makes accurate forecasting a challenge. Take the engineering and construction sector, which has seen a significant boost with the 2026 FIFA World Cup, the 2027 Super Bowl and the 2028 Summer Olympics all taking place in Southern California.
These events require large-scale infrastructure projects. But it’s clear the industry is facing an unpredictable situation regarding the cost of building materials and labor force availability. Many of our conversations with business owners in this sector are about how to navigate such a fluid environment.
Despite the evolving economic policy environment, the balanced nature of Orange County’s business community is its strength. While it’s difficult to predict the impacts of economic, trade monetary policy, it’s a fair bet that Orange County’s economy will fare better than regions that are dependent on one or two sectors.
This region has been known for its resilience and its ability to adapt and evolve, positioning itself as a key player in California’s economy and the broader national landscape. Orange County business leaders can continue to remain confident even through this period of uncertainty.
