Slide 1: Ally Financial Inc. 4Q Earnings Review
Ally Financial Inc. 4 Q Earnings Review Contact Ally Investor Relations at (866) 710 - 4623 or investor.relations@ally.com February 6, 2014
Slide 2: Forward-Looking Statements and Additional Information
2 4Q 2013 Preliminary Results Forward - Looking Statements and Additional Information The following should be read in conjunction with the financial statements, notes and other information contained in the Compa ny’ s Annual Reports on Form 10 - K, Quarterly Reports on Form 10 - Q, and Current Repor
Slide 3: Significant Achievements in 2013
3 4Q 2013 Preliminary Results Significant Achievements in 2013 x Increased auto earning assets by 8% x Annual retail deposit growth of $8.1 billion with balances up 23% x Received confirmation of ResCap’s bankruptcy plan, including Ally’s $2.1 billion settlement x Raised $1.3 billion in additional c
Slide 4: TARP Repayment
4 4Q 2013 Preliminary Results TARP Repayment • The U.S. Treasury has received approximately $ 15.3 billion, or 89% of the initial investment in the company • Remaining cash basis of $1.9 billion • Remaining investment in the form of 37% of Ally’s common equity Common Equity Ownership U.S. Treasury I
Slide 5: Key Metrics
5 4Q 2013 Preliminary Results (full year average) 3.1% 2.9% 2.5% 2011 2012 2013 ($ billions) $2.0 $2.2 $3.0 2011 2012 2013 Key Metrics Net Financing Revenue (1) Cost of Funds (1) U.S. Auto Earning Assets Ally Bank Retail Deposits ($ billions) $27.7 $35.0 $43.2 2011 2012 2013 ($ billions) $84.8 $100.
Slide 6: Ally Financial Today
6 4Q 2013 Preliminary Results x Pre - eminent domestic a uto f inance f ranchise x Leading direct b ank f ranchise x Legacy mortgage issues have been addressed x Balance sheet consists primarily of low loss auto assets x More stable earnings with significant ROE expansion o pportunities x Strong cap
Slide 7: Outlook and Priorities
7 4Q 2013 Preliminary Results Outlook and Priorities • Auto finance competitive environment continues to be challenging – Leveraging the competitive strengths of our premier auto finance platform – Focused on strong dealer relationships, profitability and asset quality over growth or market share •
Slide 8: Fourth Quarter and Full Year Results
8 4Q 2013 Preliminary Results ($ millions) 4Q 13 3Q 13 4Q 12 FY 2013 FY 2012 Net financing revenue (1) 841$ 801$ 667$ 3,028$ 2,227$ Total other revenue 324 367 629 1,605 2,722 Provision for loan losses 140 141 93 501 329 Controllable expenses (2) 506 488 588 2,049 2,240 Other noninterest expenses 26
Slide 9: Results by Segment
9 4Q 2013 Preliminary Results Pre-Tax Income ($ millions) 4Q 13 3Q 13 4Q 12 Automotive Finance, ex CFPB/DOJ charge 305$ (34)$ (66)$ CFPB/DOJ charge 98 98 98 Automotive Finance 207$ (132)$ (164)$ Insurance (1) 67 (16) 40 Dealer Financial Services 274$ (149)$ (125)$ Mortgage (1) (8) (2) (107) Corporat
Slide 10: Net Interest Margin
10 4Q 2013 Preliminary Results Net Interest Margin • Net Interest Margin (“NIM”) improved 5 bps QoQ and 48 bps YoY – Cost of funds declined 17 bps QoQ and 50 bps YoY driven primarily by the redemption of legacy high - cost callable debt and growth in deposits – Earning asset increase driven by highe
Slide 11: Cost of Funds
11 4Q 2013 Preliminary Results Average Outstanding Balance ($M) Quarterly Interest Expense ($M) (1) Annualized Cost of Funds Average Outstanding Balance ($M) (2) Quarterly Interest Expense ($M) (1) Annualized Cost of Funds Callable at Par 7,740$ 132$ 6.77% 2,987$ 51$ 6.77% Non-Callable/Other 25,747
Slide 12: Ally Financial Liquidity Position
12 4Q 2013 Preliminary Results Ally Financial Liquidity Position ($ billions) $16 $13 4Q 12 4Q 13 $13 $11 Parent Co. Liquidity Unsecured Bond Maturities (next 24 months) MCP • Absolute levels of liquidity decreased as a result of MCP repurchase and liability management transactions – C ontinue to ma
Slide 13: Ally Financial Capital
13 4Q 2013 Preliminary Results Ally Financial Capital $154 $142 $127 $127 $129 14.1% 15.6% 16.5% 16.4% 12.8% 13.1% 14.6% 15.4% 15.4% 11.8% 7.0% 7.9% 8.0% 7.9% 8.8% 9.3% 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 Risk-Weighted Assets ($B) Total Capital Ratio Tier 1 Ratio Tier 1 Common Ratio Pro Forma Tier 1 Commo
Slide 14: Asset Quality
14 4Q 2013 Preliminary Results Consolidated Annualized Net Charge - Offs Reserve C overage of Net Charge - Offs Asset Quality U.S. Retail Auto Annualized Net Charge - Offs U.S. Retail Auto Delinquencies Note: $26 billion of loans were moved as businesses held - for - sale on 12/31/12. Above loans ar
Slide 15: Auto Finance Key Financials
15 4Q 2013 Preliminary Results Key Financials ($ millions) 4Q 13 3Q 13 4Q 12 Net financing revenue 809$ 9$ 33$ Total other revenue 61 (4) 3 Total net revenue 870 5 36 Provision for loan losses 144 (6) 85 Noninterest expense (1) 421 45 17 Pre-tax income, ex CFPB/DOJ charge 305$ (34)$ (66)$ CFPB DOJ c
Slide 16: Auto Finance – Key Metrics
16 4Q 2013 Preliminary Results Auto Finance – Key Metrics See slide 29 for definitions U.S. Consumer Assets U.S. Commercial Assets U.S. Consumer Originations U.S. Origination Mix Note: Asset balances reflect the average daily balance for the quarter (% of $ originations) 19% 11% 10% 29% 26% 27% 5% 6
Slide 17: Insurance Key Financials
17 4Q 2013 Preliminary Results Key Financials ($ millions) 4Q 13 3Q 13 4Q 12 Insurance premiums, service revenue earned and other 247$ (7)$ (20)$ Insurance losses and loss adjustment expenses 59 (26) (58) Acquisition and underwriting expenses (1) 158 17 1 Total underwriting income 30 2 37 Investment
Slide 18: Mortgage Key Financials
18 4Q 2013 Preliminary Results Key Financials ($ millions) 4Q 13 3Q 13 4Q 12 Net financing revenue 14$ 1$ (24)$ Gain on sale of mortgage loans, net 3 (12) (128) Other revenue (excluding gain on sale) 2 (0) (123) Total net revenue 19 (11) (275) Provision for loan losses (1) 11 (34) Noninterest expens
Slide 19: Corporate and Other
19 4Q 2013 Preliminary Results Key Financials ($ millions) 4Q 13 3Q 13 4Q 12 Net financing revenue (ex. OID) 4$ 32$ 173$ Total other revenue (12) (3) (47) Provision for loan losses (3) (6) (4) Noninterest expense 100 (5) 52 Core pre-tax loss (1) (105)$ 41$ 78$ OID amortization expense (2) 67 3 11 Pr
Slide 20: Ally Bank Deposit Franchise
20 4Q 2013 Preliminary Results Ally Bank Deposit Levels ($ billions) $35.0 $38.8 $39.9 $41.7 $43.2 $45.0 $48.6 $49.4 $51.4 $52.8 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 Ally Bank Retail Ally Bank Brokered Ally Bank Deposit Franchise • Continued franchise momentum with over $43 billion of retail deposits • $8.
Slide 21: Summary
21 4Q 2013 Preliminary Results Summary • Ally’s multi - year strategic transformation is complete and the company is now focused on the following priorities : – Exit TARP – Achieve double digit ROE ▪ Drive margin expansion through lower cost of funds ▪ Reduce noninterest expense by streamlining cost
Slide 22: Supplemental Charts
Supplemental Charts
Slide 23: International Sale Update
23 4Q 2013 Preliminary Results International Sale Update Supplemental (1) China assets and tangible book value as of 12/31/13 . All other numbers are as of the respective sale dates . (2) Book value on a GAAP basis was approximately $ 7.5 billion, which included approximately $0.5 billion of associa
Slide 24: Impact of Discontinued Operations
24 4Q 2013 Preliminary Results Impact of Discontinued Operations ($ millions) 4Q 13 3Q 13 4Q 12 Auto Finance (1) (149)$ (209)$ (261)$ Insurance 0 (5) (38) Corporate and Other (2) 80 241 55 Consolidated pre-tax income (69)$ 27$ (244)$ Tax (benefit) expense (93) (83) 197 Consolidated net income 25$ 11
Slide 25: Deferred Tax Asset Supplemental
25 4Q 2013 Preliminary Results Deferred Tax Asset Supplemental (1) Primarily book / tax timing differences Deferred Tax Asset - 4Q 2013 ($ millions) Gross DTA/(DTL) Balance Valuation Allowance Net DTA/(DTL) Balance Net Operating Loss (Federal) 1,187$ -$ 1,187$ Capital Loss (Federal) 437 (437) - Tax
Slide 26: Liquidity Supplemental
26 4Q 2013 Preliminary Results Liquidity Supplemental (1) Parent company liquidity is defined as our consolidated operations less Ally Bank and the regulated subsidiaries of Ally Insu ran ce’s holding company (2) Includes the restricted cash accumulation for retained notes maturing within the follow
Slide 27: Notes on non-GAAP and other financial measures
27 4Q 2013 Preliminary Results Notes on non - GAAP and other financial measures Supplemental Core pre - tax income (loss) and controllable expenses are non - GAAP financial measures. See slide 29 for definitions $ in millions GAAP OID & Repositioning Items Proforma GAAP OID & Repositioning Items Pro
Slide 28: Notes on non-GAAP and other financial measures
28 4Q 2013 Preliminary Results Notes on non - GAAP and other financial measures Supplemental Core pre - tax income (loss) and controllable expenses are non - GAAP financial measures. See slide 29 for definitions $ in millions GAAP OID & Repositioning Items Proforma GAAP OID & Repositioning Items Pro
Slide 29: Notes on non-GAAP and other financial measures
29 4Q 2013 Preliminary Results Notes on non - GAAP and other financial measures Supplemental 1) Core pre - tax income (loss) is a non - GAAP financial measure. It is defined as income (loss) from continuing operations before taxes and primarily bond exchange original issue discount ("OID") amortizat