Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q1 2024 Earnings Presentation
36 slides from Ally Financial's earnings presentation, Apr 18, 2024
Slide 1: Ally Financial Inc. 1Q 2024 Earnings Review
Ally Financial Inc. 1Q 2024 Earnings Review April 18, 2024 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com
Slide 2: Forward-Looking Statements and Additional Information
1Q 2024 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 and Core Results: Quarterly
1Q 2024 Preliminary Results GAAP and Core Results: Quarterly Quarterly Trend ($ millions, except per share data) 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 GAAP net income attributable to common shareholders (NIAC) $ 129 $ 49 $ 269 $ 301 $ 291 Core net income attributable to common shareholders (1)(2) $ 139 $ 13
Slide 4: Purpose-Driven Culture
1Q 2024 Preliminary Results Purpose-Driven Culture Powered by our “LEAD” core values and “Do it Right” approach L E A D Look Execute with Act with Deliver externally excellence professionalism results Employees Customers Communities Make an impact in the Invest in our people and “Do It Right” cultur
Slide 5: 1Q 2024 Quarterly Highlights
1Q 2024 Preliminary Results 1Q 2024 Quarterly Highlights $0.42 | $0.45 4.5% | 6.5% $2.0B | $2.0B 3.16% | 10.92% GAAP Adjusted Return on Core GAAP Adj. Total NIM Est. Retail EPS EPS(1) Common Equity RoTCE(1) Net Revenue Net Revenue(1) (ex. OID)(2) Originated Yield(3) 1Q Notable Items • Announced Mich
Slide 6: Market Leading Franchises
1Q 2024 Preliminary Results Market Leading Franchises 10 years since IPO | Multi-year transformation into two leading franchises Leading dealer financial services platform Largest, all-digital, direct US bank Auto Finance Deposits 22K Dealer relationships 3.1M Deposit customers 103K net new customer
Slide 7: Financial Results: Consolidated Income Statement
1Q 2024 Preliminary Results 1Q 2024 Financial Results Consolidated Income Statement - Quarterly Results Increase / (Decrease) vs. ($ millions; except per share data) 1Q 24 4Q 23 1Q 23 4Q 23 1Q 23 Net financing revenue $ 1,456 $ 1,493 $ 1,602 $ (37) $ (146) Core OID (1) 13 13 11 1 2 Net financing rev
Slide 8: Balance Sheet and Net Interest Margin
1Q 2024 Preliminary Results Balance Sheet and Net Interest Margin 1Q 24 4Q 23 1Q 23 Average Average Average Yield Yield Yield Balance Balance Balance Retail Auto Loans (ex. hedge) $ 84,056 8.65% $ 84,711 8.43% $ 83,615 7.66% Memo: Impact from hedges 0.42% 0.55% 0.83% Retail Auto Loans (inc. hedge) $
Slide 9: Momentum in Leading Auto Finance Franchise
1Q 2024 Preliminary Results Momentum in Leading Auto Finance Franchise Continued focus on deepening dealer relationships and capital optimization to maximize profitability • Total consumer originations of $9.8 billion sourced from a record 3.8 million applications – Strong dealer engagement enables
Slide 10: Retail Auto Yield Repricing Dynamics
1Q 2024 Preliminary Results Retail Auto Yield Repricing Dynamics • Repricing generates powerful NIM tailwind as newer vintages replace lower yielding vintages%+ – Turnover of the retail auto portfolio expected to contribute meaningfully to NIM expansion through 2024 and beyond – Portfolio yield excl
Slide 11: Momentum in Leading Deposits Franchise
1Q 2024 Preliminary Results Momentum in Leading Deposits Franchise Serving over 3 million customers and providing stable and efficient funding • High quality retail deposits of $145 billion are 92% FDIC insured(1); deposits comprise 90% of funding profile – Quarterly retail deposit growth of $2.9 bi
Slide 12: Capital
1Q 2024 Preliminary Results Capital • 1Q ‘24 CET1 ratio of 9.4% and TCE / TA ratio of 5.5%(1) Capital Ratios and Risk-Weighted Assets ($ billions) • $3.8B of CET1 capital above FRB requirement of 7.0% (Regulatory Minimum + SCB) 12.5% 12.5% 12.5% 12.4% 12.5% Total Capital Ratio – 9.0% internal operat
Slide 13: Asset Quality: Key Metrics
1Q 2024 Preliminary Results Asset Quality: Key Metrics Consolidated Net Charge-Offs (NCOs)(1) Net Charge-Off Activity(1) ($ millions) 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Retail Auto $ 351 $ 277 $ 393 $ 470 $ 477 1.77% 1.55% Annualized Commercial Auto - 4 - 19 1 NCO Rate 1.31% $623 Mortgage Finance - - - -
Slide 14: Asset Quality: Coverage and Reserves
1Q 2024 Preliminary Results Asset Quality: Coverage and Reserves • Retail Auto and Consolidated coverage rate flat QoQ at 3.65% and 2.57%, respectively – Decrease in consolidated coverage from 3Q ‘23 to 4Q ‘23 driven by Ally Lending’s move to Assets of Operations Held for Sale and specific reserves
Slide 15: Retail Auto Credit Performance
1Q 2024 Preliminary Results Retail Auto Credit Performance 1Q NCOs in-line with guide as 2H ‘22 vintage works through peak loss period • 1Q NCO rate of 2.27% is in-line with expectations – 2022 vintage makes up 41% of 1Q ‘24 loss content while accounting for only 27% of the portfolio – Average used
Slide 16: Auto Finance
1Q 2024 Preliminary Results Auto Finance • Auto pre-tax income of $322 million Increase / (Decrease) vs. – Pre-tax income down YoY, primarily driven by higher net Key Financials ($ millions) 1Q 24 4Q 23 1Q 23 charge-offs and noninterest expense Net financing revenue $ 1,314 $ (16) $ (8) – Provision
Slide 17: Insurance
1Q 2024 Preliminary Results Insurance Increase / (Decrease) vs. • Insurance pre-tax income of $70 million and core Key Financials ($ millions) 1Q 24 4Q 23 1Q 23 pre-tax income of $53 million(1) Premiums, service revenue earned and other income $ 349 $ 10 $ 40 VSC losses 36 - - – $349 million of earn
Slide 18: Corporate Finance
1Q 2024 Preliminary Results Corporate Finance • Corporate Finance pre-tax income of $90 million Increase/(Decrease) vs. Key Financials ($ millions) 1Q 24 4Q 23 1Q 23 – Net financing revenue up YoY reflecting slightly higher Net financing revenue $ 111 $ 6 $ 8 average balances and higher income sprea
Slide 19: Mortgage Finance
1Q 2024 Preliminary Results Mortgage Finance • Mortgage pre-tax income of $25 million Increase/(Decrease) vs. Key Financials ($ millions) 1Q 24 4Q 23 1Q 23 – Noninterest expense down $5 million YoY, reflecting the benefit Net financing revenue $ 52 $ 1 $ (2) of variable cost structure Total other re
Slide 20: Financial Outlook
1Q 2024 Preliminary Results Financial Outlook FY 2024 Net Interest Margin 3.25% - 3.30% Exit rate 3.40% - 3.50% Adj. Other Revenue(1) ↑9% - 12% YoY Adj. Noninterest Expense(1) Controllable(2) ↓>1% YoY Total ↑ less than 2% YoY Retail Auto NCO ~2.0% Consolidated NCO 1.4% - 1.5% Average Earning Assets
Slide 21: Supplemental
Supplemental ally do it right.
Slide 22: Results By Segment
Supplemental 1Q 2024 Preliminary Results Results By Segment Results by Segment and GAAP to Core Pre-tax income Walk Increase/(Decrease) vs. ($ millions) 1Q 24 4Q 23 1Q 23 4Q 23 1Q 23 Automotive Finance $ 322 $ 294 $ 442 $ 28 $ (120) Insurance 70 129 92 (59) (22) Dealer Financial Services $ 392 $ 423
Slide 23: Corporate and Other
Supplemental 1Q 2024 Preliminary Results Corporate and Other • Sale of Ally Lending closed March 1st Corporate & Other Results ($ millions) Increase/(Decrease) vs. • Pre-tax loss of $336 million and Core pre-tax loss Key Financials 1Q 24 4Q 23 1Q 23 of $307 million(1) Net financing revenue $ (50) $
Slide 24: Funding and Liquidity
Supplemental 1Q 2024 Preliminary Results Funding and Liquidity Core funded with stable deposits and strong liquidity position Funding Composition Total Available Liquidity (End of Period) ($ billions) Unsecured Debt Cash and Equivalents FHLB / Other FHLB Unused Pledged Borrowing Capacity Secured Deb
Slide 25: Interest Rate Risk
Supplemental 1Q 2024 Preliminary Results Interest Rate Risk Net Financing Revenue Sensitivity Analysis(1) ($ millions) 1Q 24 4Q 23 ($ millions) Gradual (2) Instantaneous Gradual (2) Instantaneous -100 bp $ (87) $ (56) $ (96) $ (107) +100 bp $ 71 $ 5 $ 88 $ 3 Stable rate environment n/m $ (22) n/m $
Slide 26: Notes on Non-GAAP Financial Measures
Supplemental 1Q 2024 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: Accelerated issu
Slide 27: Notes on Non-GAAP Financial Measures
Supplemental 1Q 2024 Preliminary Results Notes on Non-GAAP Financial Measures 7) Adjusted tangible book value per share (Adjusted TBVPS) is a non-GAAP financial measure that reflects the book value of equity attributable to shareholders even if Core OID balance were accelerated immediately through t
Slide 28: Notes on Non-GAAP Financial Measures
Supplemental 1Q 2024 Preliminary Results Notes on Non-GAAP Financial Measures 13) Core return on tangible common equity (Core ROTCE) is a non-GAAP financial measure that management believes is helpful for readers to better understand the ongoing ability of the company to generate returns on its equi
Slide 29: Notes on Other Financial Measures
Supplemental 1Q 2024 Preliminary Results Notes on Other Financial Measures 1) Change in fair value of equity securities impacts the Insurance, Corporate Finance and Corporate and Other segments. The change reflects fair value adjustments to equity securities that are reported at fair value. Manageme
Slide 30: Additional Notes
Supplemental 1Q 2024 Preliminary Results Additional Notes Page – 6 | Market Leading Franchises (2) ‘Prime Auto Lender’ - Source: PIN Navigator Data & Analytics, a business division of J.D. Power. The credit scores provided within these reports have been provided by FICO® Risk Score, Auto 08 FICO® is
Slide 31: Additional Notes
Supplemental 1Q 2024 Preliminary Results Additional Notes Page – 22 | Results by Segment (2) Change in fair value of equity securities impacts the Insurance, Corporate Finance and Corporate and Other segments. The change reflects fair value adjustments to equity securities that are reported at fair
Slide 32: GAAP to Core Results: Adjusted EPS
Supplemental 1Q 2024 Preliminary Results GAAP to Core Results: Adjusted EPS Adjusted Earnings per Share ("Adjusted EPS") QUARTERLY TREND 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 Numerator ($ millions) GAAP net income attributable to common shareholders $ 129 $ 49 $ 269 $ 301 $ 291 Discontinued operations, net
Slide 33: GAAP to Core Results: Core ROTCE
Supplemental 1Q 2024 Preliminary Results GAAP to Core Results: Core ROTCE Core Return on Tangible Common Equity ("Core ROTCE") QUARTERLY TREND 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 Numerator ($ millions) GAAP net income attributable to common shareholders $ 129 $ 49 $ 269 $ 301 $ 291 Discontinued operations
Slide 34: GAAP to Core Results: Adjusted TBVPS
Supplemental 1Q 2024 Preliminary Results GAAP to Core Results: Adjusted TBVPS Adjusted Tangible Book Value per Share ("Adjusted TBVPS") QUARTERLY TREND 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 Numerator ($ billions) GAAP shareholder's equity $ 13.7 $ 13.8 $ 12.8 $ 13.5 $ 13.4 less: Preferred equity (2.3) (2.3)
Slide 35: GAAP to Core Results: Adjusted Efficiency Ratio
Supplemental 1Q 2024 Preliminary Results GAAP to Core Results: Adjusted Efficiency Ratio Adjusted Efficiency Ratio QUARTERLY TREND 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 Numerator ($ millions) GAAP noninterest expense $ 1,308 $ 1,416 $ 1,232 $ 1,249 $ 1,266 Insurance expense (343) (321) (338) (358) (315) Rep
Slide 36: Non-GAAP Reconciliations
Supplemental 1Q 2024 Preliminary Results Non-GAAP Reconciliations ($ millions) QUARTERLY TREND Net Financing Revenue (ex. Core OID) 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 GAAP Net Financing Revenue $ 1,456 $ 1,493 $ 1,533 $ 1,573 $ 1,602 Core OID 13 13 12 12 11 Net Financing Revenue (ex. Core OID) [a] $ 1,46