Most lenders expect 1Q2012 to be same or better than same period last year
The National Marine Bankers Association introduced a brief quarterly members’ survey in 2011 to gauge changes in the lending environment and identify trends that could be used for business planning. Forty-two percent of the NMBA lender members (loan originators/brokers/ financial service firms, banks, credit unions, and finance companies) responded to the 4th quarter survey, with the majority having a national presence.
Respondents largely reported business up in 2011, except in the 3rd quarter, and 76% reported increased bookings in the final quarter over the same period in 2010. Pre-owned boat sales make up the majority of new loans for NMBA members, as a 4-quarter average shows 57% of the lenders indicated loans on new boats accounted for 25% or less of their bookings in 2011. Similarly, a 4-quarter average shows 80% of the lenders surveyed indicated refinance business represented less than 26% of their loan bookings.
The 4th quarter survey shows concerns over credit stringency have waned since 3rd quarter, with 89% of respondents citing lending criteria (credit history, asset/net worth, debt ratio, income, collateral, and other lender requirements) is the same or less stringent than the prior quarter. All responding lenders indicate credit quality of borrowers was the same or better in the 4th quarter compared to the 3rd quarter of 2011.
A final high note: 50% of respondents expect the 1st quarter of 2012 to be up over the same period last year, and 39% predict it to be the same. The list of survey questions follows.
How does dollar volume of loans booked 4Q2011 compare to 4Q2010?
- 76% responded: volume was up
- 12% responded: volume was down
- 12% responded: volume was the same
What percentage of dollar volume of loans booked 4Q2011 is on new boats?
- 61% responded: <26%
- 11% responded: 26-50%
- 17% responded: 51-75%
- 11% responded: >75%
What percentage of dollar volume of loans booked 4Q2011 is refinance business?
- 67% responded: <26%
- 17% responded: 26-50%
- 16% responded: 51%-75%
What is your outlook for 1Q2012 compared to 1Q2011?
- 50% expect loan business to be up
- 11% expect loan business to be down
- 39% expect loan business to be about the same
How does lending criteria 4Q2011 compare to 3Q2011?
- 11% more stringent
- 17% less stringent
- 72% feel criteria is about the same
How does credit quality 4Q2011 compare to 3Q2011?
- 33% responded they believe credit quality is better
- 67% responded credit quality is about the same
How has your average boat loan amount changed in 2011 from 2010?
- 44% responded: increased
- 22% responded: decreased
- 34% responded: same
How has your average margin on boat loans changed in 2011 from 2010?
- 22% responded: increased
- 17% responded: decreased
- 61% responded: same
Membership in the NMBA includes financial institutions such as commercial banks, private financing firms, savings and loan companies, and credit unions. Firms extend or originate credit to consumers, retailers/dealers and manufacturers of recreational boats and equipment. Associate members are those which provide services to the marine lending community. Visit www.marinebankers.org for more information