Slide 1: Ally Financial Inc. 3Q 2015 Earnings Review
Ally Financial Inc. 3Q 2015 Earnings Review October 29, 2015 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information The following should be read in conjunction with the financial statements, notes and other information contained in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. This information is pr
Slide 3: Key Messages
Key Messages Diversifying our leading auto finance business • Originations expected to exceed target of high $30s billion for 2015 • Credit continues to perform within expectations • Diversified business is designed to provide consistent returns through cycles Improving shareholder returns • Ally ha
Slide 4: Third Quarter Highlights
Third Quarter Highlights • Net income of $268 million • Core pre-tax income ex. repositioning items(1) of $431 million and Adjusted EPS(2) of $0.51 – Core ROTCE(3) of 9.2% and Adjusted Efficiency Ratio(3) of 44% – Net Interest Margin(4) of 2.67%, up 9 bps QoQ • Auto originations of $11.1 billion in
Slide 5: Third Quarter Financial Results
Third Quarter Financial Results Increase/(Decrease) vs. ($ millions except per share data) 3Q 15 2Q 15 3Q 14 2Q 15 3Q 14 Net financing revenue (1) $ 981 $ 927 $ 936 $ 55 $ 46 (1)(2) Total other revenue 332 368 375 (36) (43) Provision for loan losses 211 140 102 71 109 Controllable expenses (2) 449 4
Slide 6: Results by Segment
Results by Segment • Auto Finance results driven by continued strong originations – Retail loan growth and lower funding costs driving improved net financing revenue – Offset by higher provision expense due to strong loan growth and seasonality • Insurance results largely driven by lower weather-rel
Slide 7: Net Interest Margin
Net Interest Margin • Net Interest Margin(1) up 9 bps QoQ driven by lower cost of funds – Cost of funds(1) down 18 bps YoY and 7 bps QoQ driven by continued reduction of legacy high-cost debt and deposit growth Net Interest Margin ($ millions) 3Q15 2Q15 3Q14 Average Average Average Balance Yield Bal
Slide 8: Interest Rate Sensitivity
Interest Rate Sensitivity • Ally’s balance sheet primarily consists of short duration assets (~2 year weighted average life) funded primarily with deposits and securitizations • Ally’s interest rate sensitivity is dependent on the re-pricing assumptions of the deposit book in a rising rate environme
Slide 9: Deposits
Deposits • $1.8 billion of retail deposit growth in 3Q and $5.5 billion of YTD growth Stable, consistent growth of retail deposits • Surpassed the 1 million customer milestone Ally Bank Deposit Levels ($ billions) – Grew customer base 16% YoY $57.8 $60.5 $61.6 $63.7 $56.4 $10.2 $9.9 $9.9 $9.9 • Cont
Slide 10: Capital
Capital • Capital ratios higher in 3Q driven by consistent Capital Ratios and Risk-Weighted Assets profitability and DTA utilization • Preliminary fully phased-in Basel III Common 13.5% 14.0% 13.2% 12.9% Equity Tier 1 (CET1) ratio of 9.6% 12.7% 12.5% 13.0% 12.6% 11.7% 11.9% 10.4% 9.7% 9.6% – Prelimi
Slide 11: Asset Quality
Asset Quality Consolidated Net Charge-Offs Provision Expense 0.68% ($ millions) 0.60% 0.61% 0.61% 344% Provision Expense 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 Retail Auto $ 97 $ 112 $ 168 $ 158 $ 152 $ 200 0.39% 0.34% Commercial Auto 2 (3) 7 (31) (20) 1 187% Mortgage (25) (7) (14) (5) 3 6 155% 244% 14
Slide 12: Auto Finance – Results
Auto Finance – Results • Auto Finance reported pre-tax income of $347 million Increase/(Decrease) vs. in 3Q, down $68 million YoY and $54 million from the Key Financials ($ millions) 3Q 15 2Q 15 3Q 14 prior quarter Net financing revenue $ 870 $ 20 $ 20 Total other revenue 63 8 (6) – Net financing re
Slide 13: Auto Finance – Key Metrics
Auto Finance – Key Metrics Consumer Originations Origination Mix ($ billions; % of $ originations) (% of $ originations) $11.8 $10.9 $10.8 $11.1 28% 27% 30% 20% $9.8 36% 37% 35% 20% $9.0 32% 32% 16% 22% 28% 17% 29% 26% 9% 9% 27% 17% 18% 20% 24% 24% 12% 12% 8% 10% 8% 8% 63% 63% 24% 36% 37% 60% 52% 45
Slide 14: Insurance
Insurance • Pre-tax income of $40 million, down $20 million YoY Increase/(Decrease) vs. and up $25 million from the prior quarter Key Financials ($ millions) 3Q 15 2Q 15 3Q 14 Premiums, service revenue earned and other $ 240 $ (1) $ (10) – Weather-related losses down both YoY and QoQ Losses and loss
Slide 15: Mortgage and Corporate and Other
Mortgage and Corporate and Other Mortgage Results Corporate and Other Results Increase/(Decrease) vs. Increase/(Decrease) vs. Key Financials ($ millions) 3Q 15 2Q 15 3Q 14 Key Financials ($ millions) 3Q 15 2Q 15 3Q 14 Net financing revenue (ex. OID) $ 75 $ 28 $ 15 Net financing revenue $ 20 $ 5 $ 11
Slide 16: Conclusion
Conclusion • Positioned leading auto finance business for consistent long term results – Business is diversified across dealers, borrowers and geography – Not reliant on manufacturer subvention – Strong deposit base should provide advantage over non-bank competitors over time • Focused on future cap
Slide 17: Supplemental Charts
Supplemental Charts
Slide 18: Third Quarter Financial Results
Supplemental Third Quarter Financial Results Increase/(Decrease) vs. ($ millions) 3Q 15 2Q 15 3Q 14 2Q 15 3Q 14 Net financing revenue (1) $ 981 $ 927 $ 936 $ 55 $ 46 Total other revenue (1)(2) 332 368 375 (36) (43) Provision for loan losses 211 140 102 71 109 (2) Controllable expenses 449 448 469 1
Slide 19: Funding
Supplemental Funding • Diversified funding strategy with opportunities to Total Asset Breakdown lower cost of funds ($ billions) – 69% of total assets reside at Ally Bank $151.8 $153.5 $156.5 $156.1 $149.2 – Deposits represent 47% of Ally’s funding • $2.6 billion of ABS transactions in 3Q, including
Slide 20: Deferred Tax Asset
Supplemental Deferred Tax Asset Deferred Tax Asset 3Q 15 (1) 2Q 15 (1) ($ millions) Gross DTA/(DTL) Valuation Net DTA/(DTL) Net DTA/(DTL) Balance Allowance Balance Balance Net Operating Loss (Federal) $ 697 $ - $ 697 $ 873 Tax Credit Carryforwards 1,935 (474) 1,461 1,444 State/Local Tax Carryforward
Slide 21: Notes on non-GAAP and other financial measures
Supplemental Notes on non-GAAP and other financial measures $ millions 3Q 15 2Q 15 3Q 14 OID & OID & OID & GAAP Repositioning Non-GAAP (1) GAAP Repositioning Non-GAAP (1) GAAP Repositioning Non-GAAP (1) Items Items Items Consolidated Ally Net financing revenue $ 970 $ 11 $ 981 $ 916 $ 11 $ 927 $ 889
Slide 22: Notes on non-GAAP and other financial measures
Supplemental Notes on non-GAAP and other financial measures 1) Core pre-tax income (loss) is a non-GAAP financial measure. It is defined as income (loss) from continuing operations before income tax expense and primarily bond exchange original issue discount ("OID") amortization expense. 2) Repositi