DID BOAT SHOW VISITORS TAKE HOME THAT YACHT?
A week after the 2024 Discover Boating Miami International Boat Show ended, David Druey’s work is just starting.
The Florida regional president of Centennial Bank has applications to wade through, credit histories to check and character references to review.
During the boat show, the Fort Lauderdale-based executive told the Miami Herald that he looked at about 15 financing deals and said yes to four of them. But about six months from now, he will have agreed to seven or eight deals, he said.
“A lot of these deals don’t close at the boat show” but afterward, said Druey. And “some people will commit to a boat that’s not finished being built yet.”
Amid the migration to South Florida of dozens of financiers from New York and Chicago in recent years, the regional Centennial Bank may seem an unusual player. Its holding company, Home BancShares Inc., is headquartered in Conway, Arkansas. Centennial, a wholly owned subsidiary, offers commercial and retail banking in Arkansas, Florida and South Alabama.
During the Great Recession, it started buying several failed banks in Florida and in the region over three years. In 2018, it acquired Shore Premier Finance from Union Bank & Trust, based in Richmond, Virginia. Shore Premier Finance offered marine banking, and today it serves as Centennial’s arm for boat financing.
It is a space in which Centennial seeks to grow; Shore Premier Finance now accounts for $1 billion of Centennial’s $45 billion in assets under management.
Belowis an interview with
Druey about what is involved in buying a yacht and getting financing:
DO YOU FINANCE FOR INDIVIDUALS OR COMPANIES?
Very few companies — normally, single-asset entities like an LLC.
A lot of the vessels we finance go for $400,000 to $1 million. And it is an individual or husband and wife who buy those type of boats and finance them over 20 years.
WHAT ARE THE STEPS IN BUYING A YACHT?
Buying a vessel is the same process of buying a car or buying a home. The more money you’re talking about, the more hoops you have to jump through.
You’ve got to have good credit score. You’ve got to have good character. You’ve got to have the ability to repay. You have to have good debt to income. The same things that apply on a mortgage.
WHAT’S YOUR DEBT-TO-INCOME CRITERIA?
The maximum is usually about 40%.
WHAT’S THE TYPICAL BORROWER PROFILE?
I don’t think there’s a typical profile. But I’d say it’s a professional that has disposable income
Salaried typically or business owner — probably could have written a check for it if they really wanted to but they chose to finance it.
Credit score is pretty important because we run everything through an underwriting system. They need to have a credit score of over 700.
We finance boats that start at $400,000 in overall value and go up to $20 million. We normally require at least 20% of equity on smaller vessels and 30% to 35% for larger vessels.
WHAT’S THE LOWEST END OF SALARY SCALE TO QUALIFY?
I don’t see many people that make less than $100,000 that buy a boat that we would even consider financing, just because of the amount of the payment.
WHAT OTHER SIGNS MATTER?
Credit balances — what historically has their credit balance been and where are they now? Are they living on credit cards? The time on job is very important. Historical credit balances and job tenure are two really important things that tip the scale.