Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q1 2014 Earnings Presentation
25 slides from Ally Financial's earnings presentation, May 1, 2014
Slide 1: Ally Financial Inc. 1Q Earnings Review
Ally Financial Inc. 1 Q Earnings Review Contact Ally Investor Relations at (866) 710 - 4623 or investor.relations@ally.com May 1, 2014
Slide 2: Forward-Looking Statements and Additional Information
2 1Q 2014 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: First Quarter Highlights
3 1Q 2014 Preliminary Results First Quarter Highlights • Net income of $227 million and EPS of $0.33 – Core pretax income excluding repositioning items (1) of $ 339 million, up 111% QoQ and 64% YoY • Auto originations of $9.2 billion, up from $ 8.2 billion in 4Q13 – Non - GM/Chrysler originations up
Slide 4: TARP Repayment
4 1Q 2014 Preliminary Results TARP Repayment • U.S. Treasury ownership significantly reduced in 2014 as a result of multiple transactions – $3.0 billion private p lacement in January – $2.4 billion IPO in April • In total, Ally has returned $17.7 billion to the U.S. Treasury, approximately $500 mill
Slide 5: First Quarter Financial Results
5 1Q 2014 Preliminary Results First Quarter Financial Results (1) Excludes OID (2) Core pre - tax income as presented excludes the impact of repositioning items, OID amortization expense, taxes and discontinued op erations. See slide 24 for details (3) Represents a non - GAAP financial measure . Cor
Slide 6: Results by Segment: Pre-Tax Income
6 1Q 2014 Preliminary Results Pre-Tax Income ($ millions) 1Q 14 4Q 13 1Q 13 Automotive Finance 339$ 132$ (4)$ Insurance (1) 74 7 13 Dealer Financial Services 413$ 139$ 9$ Mortgage (1) 17 25 23 Corporate and Other (1) (91) 14 100 Core pre-tax income, ex. repositioning (2) 339$ 178$ 132$ Increase/(Dec
Slide 7: Net Interest Margin
7 1Q 2014 Preliminary Results Net Interest Margin • Net Interest Margin (“NIM”) improved 14 bps QoQ and 46 bps YoY – Cost of funds declined 15 bps QoQ and 55 bps YoY driven primarily by the redemption of legacy high - cost callable debt and continued growth in deposits ▪ Completed $9.7 billion legac
Slide 8: Expenses
8 1Q 2014 Preliminary Results ($ millions) 1Q 14 4Q 13 1Q 13 4Q 13 1Q 13 Compensation and benefits 254$ 237$ 277$ 17$ (24)$ Technology and communications 85 95 68 (11) 16 Professional services 28 36 36 (8) (8) Servicing expenses (1) 46 49 95 (3) (48) Advertising and marketing 29 40 35 (11) (5) Other
Slide 9: Funding and Liquidity
9 1Q 2014 Preliminary Results • Consolidated available liquidity of $19.1 billion (1) – $10.2 billion at the parent and $8.9 billion at Ally Bank – Maintaining robust coverage of unsecured debt maturities • Diversified funding strategy with focus on maximizing value of Ally Bank – 66% of total asset
Slide 10: Capital
10 1Q 2014 Preliminary Results Ally Financial Capital $142 $127 $127 $129 $128 15.6% 16.5% 16.4% 12.8% 13.0% 14.6% 15.4% 15.4% 11.8% 12.1% 7.9% 8.0% 7.9% 8.8% 9.1% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Risk-Weighted Assets ($B) Total Capital Ratio Tier 1 Ratio Tier 1 Common Ratio Capital • Capital ratios in
Slide 11: Asset Quality
11 1Q 2014 Preliminary Results Consolidated Net Charge - Offs U.S. Commercial Auto Net Charge - Offs Asset Quality U.S. Retail Auto Net Charge - Offs U.S. Retail Auto Delinquencies Note: Above loans are classified as held - for - investment and recorded at historical cost. See slide 25 for details N
Slide 12: Automotive Finance: Originations by Dealer Channel and Key Financials
12 1Q 2014 Preliminary Results U.S. Consumer Auto Originations by Dealer Channel (% of $ originations) 65% 60% 65% 66% 26% 27% 20% 15% 9% 13% 15% 19% 0% 50% 100% FY11 FY12 FY13 1Q14 GM Chrysler Other Key Financials ($ millions) 1Q 14 4Q 13 1Q 13 Net financing revenue 820$ 11$ 47$ Total other revenue
Slide 13: Auto Finance – Key Metrics
13 1Q 2014 Preliminary Results ($ billions) $8.9 $9.7 $9.8 $9.6 $8.2 $9.2 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Retail - New Retail - Used Lease Auto Finance – Key Metrics See slide 25 for definitions U.S. Consumer Assets U.S. Commercial Assets U.S. Consumer Originations U.S. Origination Mix Note: Ass
Slide 14: Insurance
14 1Q 2014 Preliminary Results Dealer Products & Services Written Premiums ($ millions) $235 $260 $267 $236 $233 $276 $267 $225 $244 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Key Financials ($ millions) 1Q 14 4Q 13 1Q 13 Insurance premiums, service revenue earned and other 244$ (3)$ (18)
Slide 15: Mortgage and Corporate and Other Key Financials
15 1Q 2014 Preliminary Results Key Financials ($ millions) 1Q 14 4Q 13 1Q 13 Net financing revenue 14$ -$ (20)$ Gain on sale of mortgage loans, net - (3) (38) Other revenue (excluding gain on sale) 4 2 (56) Total net revenue 18 (1) (114) Provision for loan losses (23) (22) (43) Noninterest expense 2
Slide 16: Ally Bank Deposit Franchise
16 1Q 2014 Preliminary Results Ally Bank Deposit Levels ($ billions) $38.8 $39.9 $41.7 $43.2 $45.2 $48.6 $49.4 $51.4 $52.8 $54.9 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Ally Bank Retail Ally Bank Brokered Ally Bank Deposit Franchise • Continued franchise momentum with over $45 billion of retail deposits • $2.
Slide 17: Summary
17 1Q 2014 Preliminary Results Summary • Solid performance in leading auto finance and deposit platforms – $9.2 billion of auto originations with growth in non - GM/Chrysler channel – Credit performance and lease gains continue to benefit from strong used car prices – $2.0 billion of retail deposit
Slide 18: Supplemental Charts
Supplemental Charts
Slide 19: First Quarter Financial Results (Supplemental)
19 1Q 2014 Preliminary Results First Quarter Financial Results (1) Excludes OID (2) See slide 25 for definitions (3) Core pre - tax income as presented excludes the impact of repositioning items, OID amortization expense, taxes and discontinued op erations. See slide 24 for details (4) Repositioning
Slide 20: Cost of Funds
20 1Q 2014 Preliminary Results Cost of Funds • Completed higher - cost legacy debt call program in 1Q14 – Called approximately $9.7 billion of callable at par debt between 2Q13 and 1Q14 • Will continue to eliminate or refinance higher - cost legacy debt – $7.7 billion of unsecured debt will mature t
Slide 21: Impact of Discontinued Operations
21 1Q 2014 Preliminary Results Impact of Discontinued Operations ($ millions) 1Q 14 4Q 13 1Q 13 Auto Finance (1) 28$ 177$ (1,009)$ Insurance (0) (0) (28) Corporate and Other (1) (81) 15 Consolidated pre-tax income 27$ 96$ (1,022)$ Tax (benefit) expense (1) 92 (18) Consolidated net income 29$ 4$ (1,0
Slide 22: Deferred Tax Asset Supplemental
22 1Q 2014 Preliminary Results Deferred Tax Asset Supplemental (1) U.S. GAAP does not prescribe a method for calculating individual elements of deferred taxes for interim periods. Therefore, these ba lances are estimated (2) Primarily book / tax timing differences • Utilization of DTA resulted in no
Slide 23: Liquidity Supplemental
23 1Q 2014 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 24: Notes on non-GAAP and other financial measures
24 1Q 2014 Preliminary Results Notes on non - GAAP and other financial measures Supplemental (1) Represents core pre - tax income excluding repositioning items. See slide 25 for definitions $ in millions GAAP OID & Repositioning Items Non-GAAP (1) GAAP OID & Repositioning Items Non-GAAP (1) GAAP OID
Slide 25: Notes on non-GAAP and other financial measures
25 1Q 2014 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