Most lenders expect 2Q2012 to be better than same period last year.
The NMBA 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. Thirty-five percent of the NMBA lender members (loan originators/brokers/ financial service firms, banks, credit unions, and finance companies) responded to the 1st quarter 2012 survey, with the majority having a national presence.
Respondents largely reported business up in four of the last five quarters, with the exception being 3Q2011, and 80% reported increased bookings in the first quarter of 2012 over the same period in 2011. Pre-owned boat sales make up the majority of new loans for NMBA members, as 58% of the lenders indicated loans on new boats accounted for 25% or less of their bookings in the first quarter. Refinance activity picked up as 36% of the lenders surveyed indicated this business represented 26% to 50% of their loan bookings, while for all quarters in 2011 an average of 80% of the lenders reported it accounted for 25% or less of their volume.
The 1st quarter survey shows 100% of respondents feel 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. This is good news since 22% of respondents in the 3rd quarter and 11% in the 4th quarter cited credit standards were more stringent than the prior period. All responding lenders indicate, for the second consecutive quarter, that credit quality of borrowers was the same or better than the previous quarter.
A final high note: 80% of respondents expect the 2nd quarter of 2012 to be up over the same period last year, and 13% predict it to be the same. The list of survey questions follows.
How does dollar volume of loans booked 1Q2012 compare to 1Q2011?
- 80% responded: volume was up
- 13% responded: volume was down
- 7% responded: volume was the same
What percentage of dollar volume of loans booked 1Q2012 is on new boats?
- 58% responded: <26%
- 25% responded: 26-50%
- 17% responded: 51-75%
What percentage of dollar volume of loans booked 1Q2012 is refinance business?
- 57% responded: <26%
- 36% responded: 26-50%
- 7% responded: 51%-75%
What is your outlook for 2Q2012 compared to 2Q2011?
- 80% expect loan business to be up
- 7% expect loan business to be down
- 13% expect loan business to be about the same
How does lending criteria 1Q2012 compare to 4Q2011?
- 14% less stringent
- 86% feel criteria is about the same
How does credit quality 1Q2012 compare to 4Q2011?
- 27% responded they believe credit quality is better
- 73% responded credit quality is about the same
How has your average boat loan amount changed in 2012 from 2011?
- 36% responded: increased
- 29% responded: decreased
- 35% responded: same
How has your average margin on boat loans changed in 2012 from 2011?
- 14% responded: increased
- 29% responded: decreased
- 57% 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.