Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q1 2022 Earnings Presentation
40 slides from Ally Financial's earnings presentation, Apr 14, 2022
Slide 1: Ally Financial Inc. 1Q 2022 Earnings Review
1Q 2022 Preliminary Results Ally Financial Inc. 1Q 2022 Earnings Review April 14, 2022 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com 1
Slide 2: Forward-Looking Statements and Additional Information
1Q 2022 Preliminary Results Forward-Looking Statements and Additional Information This presentation and related communications should be read in conjunction with the financial statements, notes, and other information contained in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and C
Slide 3: GAAP & Core Results: Quarterly
1Q 2022 Preliminary Results GAAP & Core Results: Quarterly $ millions, except per share data 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 GAAP net income attributable to common shareholders (NIAC) $ 627 $ 624 $ 683 $ 900 $ 796 Core net income attributable to common shareholders (1)(2) $ 687 $ 705 $ 782 $ 868 $ 790
Slide 4: Ally's Purpose-Driven Culture & Priorities
1Q 2022 Preliminary Results Ally’s Purpose-Driven Culture & Priorities ‘Do It Right’ Culture and Values customers Relentless focus on our dealers, consumers & commercial clients employees digitally Ongoing prioritization of our financially teammates and their well-being personally communities Drivin
Slide 5: 1Q 2022 Highlights
1Q 2022 Preliminary Results 1Q 2022 Highlights Focused Execution Leading, Growing Businesses Durable Returns $2.03 23.6% $2.2B 10.0% Adjusted Core Adjusted Total CET1 EPS(1) ROTCE(1) Net Revenue(1) Capital Ratio • Continued momentum across Ally’s leading Auto, Insurance and Digital Bank platforms •
Slide 6: Leading, Growing, All-Digital Disruptor
1Q 2022 Preliminary Results Leading, Growing, All-Digital Disruptor Diversified, differentiated products serving 10.5 million customers # of (1) Customers Auto Consumer Checking, ~4.0M Auto Loans Savings & & Leases CDs Insurance ~3.0M Commercial Investing Auto Lending & Wealth Mgmt Retail Deposits ~
Slide 7: Ally Data Driven Customer Insights
1Q 2022 Preliminary Results Ally Data Driven Customer Insights Ally Application Volume Ally Savings Account Balance Trends by Income Level Change in average balance vs. 1Q20 level 14.3M 33% 13.1M 12.6M 11.4M 12.1M 1.3 29% 11.2M 0.5 0.5 0.5 0.3 23% 12.6 12.1 13.0 11.2 11.1 11.6 2016 2017 2018 2019 20
Slide 8: Strong Balance Sheet Foundation
1Q 2022 Preliminary Results Strong Balance Sheet Foundation Funding Composition Liquidity Composition $ billions $43.6 7% 6% 7% 5% 10% 4% 6% 13% 13% 2% 1% 15% 10% 6% $30.1 $29.5 11% $25.6 $17.7 87% 88% 70% 75% 64% 1Q 18 1Q 19 1Q 20 1Q 21 1Q 22 1Q 18 1Q 19 1Q 20 1Q 21 1Q 22 (1) Deposits Secured Debt
Slide 9: Financial Results
1Q 2022 Preliminary Results 1Q 2022 Financial Results $ millions, except per share data 1Q 22 4Q 21 1Q21 4Q 21 1Q21 (1) Net financing revenue (ex. Core OID) $ 1,703 $ 1,663 $ 1,382 $ 39 $ 321 (1) Core OID (10) (9) (10) (0) (0) Net financing revenue $ 1,693 $ 1,654 $ 1,372 $ 39 $ 321 (1) Adjusted oth
Slide 10: Balance Sheet & Net Interest Margin
1Q 2022 Preliminary Results Balance Sheet & Net Interest Margin 1Q 22 4Q 21 1Q 21 Average Average Average $ millions Balance Yield Balance Yield Balance Yield Retail Auto Loan $ 78,224 6.61% $ 77,979 6.61% $ 73,500 6.66% Retail Auto Loan (ex. hedge impact) 6.75% 6.81% 6.90% ; Auto Lease (net of depr
Slide 11: Capital
1Q 2022 Preliminary Results Capital • 1Q 2022 CET1 ratio of 10.0% Capital Ratios and Risk-Weighted Assets 14.6% 14.8% 14.6% – Strong earnings generation supporting growth across loan portfolios 13.5% 12.8% 13.1% 12.8% 13.1% 11.9% 11.5% 11.1% 11.3% 11.2% • Disciplined, efficient capital management 10
Slide 12: Asset Quality: Key Metrics
1Q 2022 Preliminary Results Asset Quality: Key Metrics Consolidated Net Charge-Offs (NCOs) Net Charge-Off Activity $ millions 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Allowance as % of Annualized NCOs Annualized NCO Rate Retail Auto $ 97 $ (5) $ 51 $ 94 $ 113 Commercial Auto - - - - (1) Mortgage Finance 1 1 -
Slide 13: Asset Quality: Coverage & Reserves
1Q 2022 Preliminary Results Asset Quality: Coverage & Reserves Consolidated Coverage Retail Auto Coverage $ billions $ billions Reserve - $ Reserve - % Inc. Fair Square Reserve - $ Reserve - % Day 1 Build $3.0 $3.0 $2.9 $3.4 $3.4 $3.3 $2.8 $2.8 $2.8 $2.8 $2.8 $2.8 $3.2 $3.3 $3.3 $3.2 $3.1 $3.1 2.85%
Slide 14: Ally Bank: Deposit & Customer Trends
1Q 2022 Preliminary Results Ally Bank: Deposit & Customer Trends • Retail Deposits of $136.0 billion grew $1.3 billion QoQ and Total Deposits: Retail & Brokered $7.6 billion YoY $ billions, EoP Retail Brokered / Other Customer Retention Rate Avg. Retail Portfolio Interest Rate – Total deposits of $1
Slide 15: Retail Deposits by Vintage
1Q 2022 Preliminary Results Retail Deposits by Vintage 13+ years of stable and growing deposit vintages Ally Retail Deposits by Vintage ($ billions) $140 $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Pre-2009 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2011 201
Slide 16: Ally Bank: Leading, Accelerating & Diversified
1Q 2022 Preliminary Results Ally Bank: Leading, Accelerating & Diversified #1 2.5M 52 $136B 13+ Largest All-Digital, Ally Bank Consecutive Quarters Retail Deposit Consecutive Years of Direct U.S. Bank(1) Deposit Customers of Customer Growth Balances Retail Deposit Growth Mortgage: Ally Home Brokerag
Slide 17: Auto Finance
1Q 2022 Preliminary Results Auto Finance Inc / (Dec) v. • Auto pre-tax income of $725 million in 1Q 2022, reflecting industry leading capabilities and adaptable platform Key Financials ($ millions) 1Q 22 4Q 21 1Q 21 Net financing revenue $ 1,295 $ (46) $ 89 – Net financing revenue driven by strong r
Slide 18: Auto Finance: Agile Market Leader
1Q 2022 Preliminary Results Auto Finance: Agile Market Leader #1 #1 #1 #1 Leading Prime Auto Bank Floorplan Bank Retail Auto Dealer Satisfaction Insurance Provider Lender(1) Lender(2) Loan Outstandings(3) J.D. Power Award(4) (F&I, P&C Products) Dealer Relationships & Consumer Applications Auto Balan
Slide 19: Insurance
1Q 2022 Preliminary Results Insurance • Insurance pre-tax income of $13 million and core pre-tax Inc / (Dec) v. income of $74 million, excluding the change in fair value Key Financials ($ millions) 1Q 22 4Q 21 1Q 21 of equities of ($61) million in 1Q 2022 Premiums, service revenue earned and other $
Slide 20: Corporate Finance
1Q 2022 Preliminary Results Corporate Finance • Corporate Finance pre-tax income of $64 million and core Inc / (Dec) v. pre-tax income of $68 million, excluding the change in Key Financials ($ millions) 1Q 22 4Q 21 1Q 21 fair value of equities of ($4) million in 1Q 2022 Net financing revenue $ 83 $
Slide 21: Mortgage Finance
1Q 2022 Preliminary Results Mortgage Finance • Mortgage pre-tax income of $11 million in 1Q 2022 Inc / (Dec) v. Key Financials ($ millions) 1Q 22 4Q 21 1Q 21 – Net financing revenue up YoY reflecting growth in asset Net financing revenue $ 53 $ 11 $ 30 balances from DTC origination volume and normal
Slide 22: Financial Outlook
1Q 2022 Preliminary Results Financial Outlook Structurally more profitable company Core ROTCE Progression (1) 24.3% Enhanced, Sustainable, FY’21 Reserve Reduction Return Drivers Fair Square +100-125bps Loan Growth 16-18%+ ✓ Steady, Organic Expansion Operating Discipline ✓ Annual PPNR Expansion 12.3%
Slide 23: Strategic Priorities
1Q 2022 Preliminary Results Strategic Priorities ‘Do It Right’ Purpose-Driven Culture Optimizing leading Auto, Insurance & Ally Bank products & platforms Engaging customers with new products across scalable platforms Differentiating through deep expertise & digital first, One-Ally capabilities Drivi
Slide 24: Supplemental
1Q 2022 Preliminary Results Supplemental 24
Slide 25: Results by Segment
Supplemental 1Q 2022 Preliminary Results Results by Segment Core pre-tax income Walk Inc / (Dec) v. Segment Detail $ millions 1Q 22 4Q 21 1Q 21 4Q 21 1Q 21 Automotive Finance $ 725 $ 839 $ 803 $ (114) $ (78) Insurance 13 91 141 (78) (128) Dealer Financial Services $ 738 $ 930 $ 944 $ (192) $ (206) C
Slide 26: Funding Profile Details
Supplemental 1Q 2022 Preliminary Results Funding Profile Details Funding Mix Deposit Mix Deposits Secured Debt FHLB / Other Unsecured Debt Brokered / Other Retail CD MMA/OSA/Checking 5% 3.00% 10% 7% 6% 7% 6% 4% 13% 13% 2% 1% 2.50% 15% 10% 6% 62% 65% 67% 70% 11% 72% 2.00% 1.50% 87% 88% 70% 75% 1.00%
Slide 27: Corporate and Other
Supplemental 1Q 2022 Preliminary Results Corporate and Other $ millions Inc / (Dec) v. • Pre-tax income of $33 million, Core pre-tax income of Key Financials 1Q 22 4Q 21 1Q 21 $43 million includes: Net financing revenue $ 245 $ 72 $ 188 Total other revenue 66 (7) 8 – Higher YoY net financing revenue
Slide 28: Interest Rate Risk Sensitivities
Supplemental 1Q 2022 Preliminary Results Interest Rate Risk Sensitivities Net Financing Revenue Sensitivity Analysis (1) $ millions 1Q 22 4Q 21 Change in interest rates Gradual (2) Instantaneous Gradual (2) Instantaneous (3) -25 bps $ 8 $ 38 $ (9) $ (23) +100 bps $ (17) $ (135) $ 16 $ (37) Stable ra
Slide 29: Deferred Tax Asset
Supplemental 1Q 2022 Preliminary Results Deferred Tax Asset Deferred Tax Asset 1Q 22(1) 4Q 21 $ millions Gross DTA Valuation Net DTA Net DTA Balance Allowance Balance Balance Net Operating Loss (Federal) $ 660 $ - $ 660 $ 256 Tax Credit Carryforwards 1,071 (721) 350 304 State/Local Tax Carryforwards
Slide 30: Notes on Non-GAAP Financial Measures
Supplemental 1Q 2022 Preliminary Results Notes on Non-GAAP Financial Measures The following are non-GAAP financial measures which Ally believes are important to the reader of the Consolidated Financial Statements, but which are supplemental to, and not a substitute for, GAAP measures: Adjusted Earni
Slide 31: Notes on Non-GAAP Financial Measures
1Q 2022 Preliminary Results Notes on Non-GAAP Financial Measures 6) Core outstanding original issue discount balance (Core OID balance) is a non-GAAP financial measure for outstanding OID and is believed by management to help the reader better understand the balance removed from Core ROTCE and Adjus
Slide 32: Notes on Other Financial Measures
Supplemental 1Q 2022 Preliminary Results Notes on Other Financial Measures 1) Estimated Retail Auto Originated Yield is a forward-looking non-GAAP financial measure determined by calculating the estimated average annualized yield for loans originated during the period. At this time there currently i
Slide 33: Additional Notes
Supplemental 1Q 2022 Preliminary Results Additional Notes Page – 6 | Leading, Growing, All-Digital Disruptor (1) Customers include on-balance sheet Auto, U.S. and Canadian Insurance, active Depositors, on-balance sheet Ally Home DTC Mortgage, Ally Lending, Ally Invest, and Ally Credit Card, and do n
Slide 34: Additional Notes
Supplemental 1Q 2022 Preliminary Results Additional Notes Page – 20 | Corporate Finance (2) Noninterest expense includes corporate allocations of $13 million in 1Q 2022, $10 million in 4Q 2021, and $9 million in 1Q 2021. (3) Change in fair value of equity securities impacts the Corporate Finance seg
Slide 35: GAAP to Core Results: Adjusted EPS
Supplemental 1Q 2022 Preliminary Results GAAP to Core Results: Adjusted EPS Adjusted Earnings per Share ("Adjusted EPS") QUARTERLY TREND 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 Numerator ($ millions) GAAP net income attributable to common shareholders $ 627 $ 62
Slide 36: GAAP to Core Results: Adjusted TBVPS
Supplemental 1Q 2022 Preliminary Results GAAP to Core Results: Adjusted TBVPS Adjusted Tangible Book Value per Share ("Adjusted TBVPS") QUARTERLY TREND 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 Numerator ($ billions) GAAP shareholder's equity $ 15.4 $ 17.1 $ 17.3
Slide 37: GAAP to Core Results: Core ROTCE
Supplemental 1Q 2022 Preliminary Results GAAP to Core Results: Core ROTCE Core Return on Tangible Common Equity ("Core ROTCE") QUARTERLY TREND 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 Numerator ($ millions) GAAP net income / (loss) attributable to common sharehol
Slide 38: GAAP to Core Results: Adjusted Efficiency Ratio
Supplemental 1Q 2022 Preliminary Results GAAP to Core Results: Adjusted Efficiency Ratio Adjusted Efficiency Ratio QUARTERLY TREND 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 Numerator ($ millions) GAAP noninterest expense $ 1,122 $ 1,090 $ 1,002 $ 1,075 $ 943 Rep and warrant expense - - - - - Insurance expense (
Slide 39: Non-GAAP Reconciliation: Core Income
Supplemental 1Q 2022 Preliminary Results Non-GAAP Reconciliation: Core Income ($ millions) 1Q 22 4Q 21 1Q 21 Change in fair Change in fair Change in fair (1) (1) GAAP Core OID value of equity Repositioning Non-GAAP GAAP Core OID value of equity Repositioning Non-GAAP GAAP Core OID value of equity Re
Slide 40: Non-GAAP Reconciliations
Supplemental 1Q 2022 Preliminary Results Non-GAAP Reconciliations Net Financing Revenue (ex. Core OID) QUARTERLY TREND ($ millions) 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 GAAP Net Financing Revenue [x] $ 1,693 $ 1,654 $ 1,594 $ 1,547 $ 1,372 $ 1,303 $ 1,200 $ 1