Boat loan amounts up, volumes down

CHICAGO – The average size of boat loans increased in 2006 over the previous years’ total, while the volume of marine loans originated last year was down for the entire 12-month period, according to findings recently released in the National Marine Bankers Association 2007 Annual Report/2006 Marine Finance Market Summary.

Delinquency and charge-off activity also trended slightly downward in 2006, the report found.

Valuable demographic information is likewise revealed in the annual survey. Findings indicate the majority of boat loan customers—more than 80 percent—continue to range in age from 35 to 54 years old. Nearly 40 percent of borrowers in 2006 reported an annual household income between $50,000 and $100,000; only slightly more than 12 percent of borrowers reported earning $500,000 or more.

“While overall boat loan volume was down in 2006 and a few more marine lenders—some of which were significant—exited the business last year, the good news for our industry is that several additional, equally significant financial institutions have either already entered, or expressed a strong desire to enter, the marine finance field in 2007,” said Jim Coburn, NMBA president and first vice president of Flagstar Bank in Troy, Mich. “With the addition of these new lenders, the current field of marine financial institutions active in the business outweighs the list of those who chose to exit over the past decade. This bodes well for the immediate future, as overall availability of credit for boats and yachts remained strong in 2006 and is projected to continue its strength into the end of this year.”

NMBA’s Annual Report collects current information on marine lending performance as well as marine industry trends, and is the only one of its kind in existence. It provides data by which marine lending companies can benchmark themselves against others in the industry.

In 2007, 55 of the 72 active NMBA members that currently offer marine financing supplied data for the Annual Report. Data published is supplied by NMBA members, then collected and analyzed by the Recreational Marine Research Center at Michigan State University. The final document is printed and distributed by the National Marine Bankers Association, an affiliate of the National Marine Manufacturers Association.

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The 2007 NMBA Annual Report, which was formerly divided into three sections, is this year presented in just two. Section One now provides information from banks and those lenders that hold marine loan portfolios, including retail consumer loan activity and floor plan financing data. The final pages of Section One provide retail data with multiple year histories covering such areas as loan yields, portfolio performance, duration and more.

Section Two of the report focuses squarely on the marine finance service company/finance broker industry and provides “stand-alone” statistics for the critically important service company segment.
A copy of the report is available free of charge to survey participants; non-participants may obtain a copy for $249 if they are NMBA members and $325 if they are non-members.

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