Marine lenders continue to see increased volume through 2012
National Marine Bankers Association
January 29, 2013
Filed under News
Despite reports that credit criteria for boat loans has tightened
Marine lenders continue to report increased activity in 2012, with 58 percent of respondents to the NMBA survey for the quarter ending December 31 indicating volume is up year-over year. The remaining 48 percent indicated volume was the same for 2012 as 2011. Similarly, 91 percent of those reporting feel the first quarter of 2013 will produce new volume equal to or better than the same period last year. However, one-third of the lenders reported their margins decreased in 4Q2012 while the balance reported margins were the same as the prior year.
The increase in business could be considered surprising, given these same lenders have reported a steady tightening of credit criteria throughout 2012. Seventeen percent of the survey responses indicate credit criteria were more stringent in the 4th quarter than the previous period. The data reflects three consecutive quarters of tightening, based on the NMBA member survey. To the contrary, lenders overwhelming reported consumer credit quality to be the same or better than the previous quarter, so those with strong credit profiles are leveraging it for a boat purchase.
The 4th quarter reflected a bump in new boat finance activity from the fall shows, with 25% of the reporting lenders saying new boat transactions accounted for over 50% of their business. This is comparable to 3Q2011, when 29% of reporting lenders said new boat transactions made up over 50% of their loan volume for that period.
The NMBA introduced the brief quarterly members’ survey in 1Q 2011 to gauge changes in the lending environment and identify trends that could be used for business planning. This survey has gained significant traction and is now delivering valuable results to the marine industry. Twenty-seven percent of the NMBA lender members (loan originators/brokers/ financial service firms, banks, credit unions, and finance companies) responded to the 4th quarter 2012 survey, with the majority having a national presence.
The list of survey questions follows.
How does dollar volume of loans booked 4Q2012 compare to 4Q2011?
58% responded: volume was up
17% responded: volume was down
25% responded: volume was the same
What percentage of dollar volume of loans booked 4Q2012 is on new boats?
67% responded: <26%
8% responded: 26-50%
8% responded: 51-75%
17% responded: >75%
What percentage of dollar volume of loans booked 4Q2012 is refinance business?
75% responded: <26%
17% responded: 26-50%
8% responded: 51%-75%
What is your outlook for 1Q2013 compared to 1Q2012?
33% expect loan business to be up
8% expect loan business to be down
58% expect loan business to be about the same
How does lending criteria 4Q2012 compare to 3Q2012?
17% more stringent
8% less stringent
75% feel criteria is about the same
How does credit quality 4Q2012 compare to 3Q2012?
8% responded they believe credit quality is better
92% responded credit quality is about the same
How has your average boat loan amount changed in 2012 from 2011?
58% responded: increased
42% responded: same
How has your average margin on boat loans changed in 2012 from 2011?
33% responded: decreased
67% responded: same
Industry reports new boat sales up 10% in 2012; how does that coincide with your increase in retail marine loans?
33% responded: finance up 11%-20%
17% responded: finance up 21%-30%
0% responded: finance up 30%+
42% responded: same
8% responded: finance up 1%-9%
0% responded: finance down