Marine lenders continued to report increased activity in 2012, with 58 percent of respondents to a National Marine Bankers Association survey indicating volume was up year over year for the quarter that ended Dec. 31.
That was despite overall credit criteria tightening, 17 percent of respondents indicated, meaning that “those with strong credit profiles are leveraging it for a boat purchase,” the NMBA announced in a statement.
Similarly, 91 percent of those reporting believe that 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 that their margins decreased in the fourth quarter of 2012 and the balance reported that margins were the same as in the prior year.
The increase in business could be considered surprising because these same lenders have reported a steady tightening of credit criteria throughout 2012.
Seventeen percent of the survey responses indicate that credit criteria were more stringent in the fourth quarter of 2012 than the previous period.
The data reflect three consecutive quarters of tightening, based on the NMBA member survey. To the contrary, lenders overwhelmingly 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 fourth quarter reflected a bump in new-boat finance activity from the fall shows, with 25 percent of the reporting lenders saying new-boat transactions accounted for more than 50 percent of their business.
This is comparable to the third quarter of 2011, when 29 percent of reporting lenders said new-boat transactions made up more than 50 percent of their loan volume for that period.
The NMBA introduced the brief quarterly members’ survey in the first quarter of 2011 to gauge changes in the lending environment and identify trends that could be used for business planning. The survey has gained significant traction and is now delivering valuable results to the marine industry.
Twenty-seven percent of NMBA lender members (loan originators/brokers/ financial service firms, banks, credit unions and finance companies) responded to the fourth-quarter 2012 survey, and the majority have a national presence.