Daniel Griggs, President, Greater Boston Region, OceanFirst Bank
In an interview with Invest:, Daniel Griggs, president of the Greater Boston Region at OceanFirst Bank, discussed the bank’s strategic growth and resilience. Despite industry challenges, OceanFirst successfully expanded its loan and deposit portfolios and leveraged regional expertise with local bankers.
What have been some of OceanFirst Bank’s most significant accomplishments?
Over the last 15-18 months, we’ve faced two major industry events. First, the Fed raised interest rates by 5.25% to intentionally slow the economy and curb inflation. Second, the industry experienced a banking crisis concerning deposits, with several banks failing due to deposit issues, not credit-related ones.
However, these challenges presented opportunities for us. OceanFirst has a very diversified and stable deposit base, which allowed us to stay resilient. While we slowed lending like everyone else in the industry, in 2023, OceanFirst still managed to grow both loans and deposits. This growth applies to our team in Boston as well; we were able to expand our loan and deposit portfolios, albeit at a slower pace than in previous years.
Additionally, the industry’s headwinds created opportunities for expansion. We added another C&I lender, a commercial business lender, to our team last year, and OceanFirst Bank recently added a team in greater Washington D.C. We now cover DC, Baltimore, Philly, New Jersey, New York, and Boston — great markets that have the potential for continued growth.
What gives OceanFIrst Bank the competitive edge?
What applies to Boston applies to all our offices. Although we are New Jersey-based, we have teams serving clients in D.C., Baltimore, New York, Philly, and Boston. All the bankers in these offices are regional bankers with deep local roots. In Boston, our team members have spent almost their entire careers here, with four of us having 25 to 30-plus years of experience. This local expertise is our differentiating factor — Boston bankers serving Boston customers. It’s not New Jersey trying to do business here; it’s Boston-centric banking, which is crucial for our success.
What is your overview of the banking sector in Greater Boston?
As an industry, we’re very solid, and that includes OceanFirst Bank. Customers primarily want to know that their bank is on solid footing. While all banks have slowed a bit and there have been some mergers, these developments create opportunities for us. We continue to do business with experienced sponsors, real estate professionals, and seasoned business people in Commercial & Industrial lending who have weathered various economic cycles. This focus on experienced clients helps us maintain stability and growth.
How was OceanFirst Bank received in Boston?
Our results speak for themselves. We’ve successfully grown both our lending and banking teams, and we’ve expanded our portfolio in terms of loans and deposits. Our success can be attributed to word of mouth, leveraging our networks, and actively engaging with the community and business sectors. Everyone on our Boston team is involved in nonprofit or charitable activities, in addition to their business responsibilities. We have team members who are part of business associations, and we’re active members of the chambers in Boston and in Worcester. Being very active in the community has been tremendously beneficial and we enjoy sharing our time and talents with these organizations.
What type of projects or clients is OceanFirst Bank looking to attract?
We look for good sponsors and strong opportunities. Life science and tech had been robust sectors in Boston. The lab space is currently overbuilt, presenting a headwind and a challenge. After a decade straight of leasing outpacing deliveries, life sciences absorption is poised to come in negative this year. Availability hit a record high of 26.4% in the first half. There are over 47 million square feet sitting empty and another 20+ million square feet under construction. And while the lab space is overbuilt, companies in these sectors continue to perform well. We remain careful about where we lend, always considering what is appropriate for our clients.
Given your experience, what advice would you give someone looking to start a business or invest in Greater Boston?
Boston continues to perform well overall. The general economy is strong despite the interest rate increases. Inflation still needs to come down a bit; it’s hovering around 3.5%, with a target of 2%. GDP growth is around 2.2%, and we are at full employment, with unemployment around 4%. This is forecasted to stay in the low 4% range through 2028.
A tremendous bright spot in Boston is tourism. It declined during the pandemic, with international tourism dipping 82% between 2019 and 2021. However, Meet Boston, the city’s visitor bureau, projects international visitors to reach 2.6 million in 2024, nearly back to the pre-pandemic level of 2.7 million. International traffic at Logan Airport is up 12% through Q1, and our hotel operators and ferry operators, whom we lend to in the tourism industry, have reported that advance reservations are up year over year. This is significant as tourism is the third-largest industry in Boston and Massachusetts overall.
How is OceanFist Bank leveraging technology to better serve its clients?
We leverage advanced technology to provide our customers with full-service commercial banking. This technology enables us to offer comprehensive services without the need for a physical branch. While we may consider establishing a traditional retail branch in the future, our current approach has been successful, with technology being a key driver. Regarding security and fraud, these issues are prevalent throughout the industry. We continue to invest in technology to offer products and services that help our customers minimize and mitigate these risks.
Are there any regulations or legislations that you’re currently monitoring?
The upcoming presidential election this fall is significant. Regardless of who gets into office, the economy remains on strong footing. We are paying close attention to see how things may or may not shift. Additionally, we monitor a lot of things very closely, primarily housing regulation, as it’s a big area of interest for OceanFirst. We are introducing our mortgage loan officers to different potential borrowers in the market. According to Redfin, 90% of homeowners have a mortgage rate less than 6%, 82% less than 5%, and 62% less than 4%. So, existing homeownership is at affordable rates. However, it’s a challenge in Boston — there’s not enough housing, prices are high, and current rates are between 7% and 8% today. This is something we continue to monitor.
What is your outlook on the banking sector in Boston and what are your top priorities for Ocean First Bank?
The outlook is very positive. OceanFirst is strong, and I believe the industry as a whole is stable. Although there were a few outliers last year, overall, banking remains strong. We are proud and happy to be one of the banks in a great position to continue growing and expanding. Our top priority is to maintain the stability and reliability we’ve established over the last three years in Boston, serving as a dependable banking source for our customers and prospects.
