Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q1 2021 Earnings Presentation
36 slides from Ally Financial's earnings presentation, Apr 16, 2021
Slide 1: Ally Financial Inc. 1Q 2021 Earnings Review
1Q 2021 Preliminary Results Ally Financial Inc. 1Q 2021 Earnings Review April 16, 2021 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com 1
Slide 2: Forward-Looking Statements and Additional Information
1Q 2021 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 2021 Preliminary Results GAAP and Core Results: Quarterly ($ millions except per share data) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 GAAP net income (loss) attributable to common shareholders (NIAC) $ 796 $ 687 $ 476 $ 241 $ (319) Core net income (loss) attributable to common shareholders (1)(2) $ 790 $ 60
Slide 4: Ally: Consistent Priorities and Focus
1Q 2021 Preliminary Results Ally: Consistent Priorities and Focus ‘Do It Right’ Culture and Values Customers: Relentless customer-focus | Dealers, consumers & commercial clients Employees: Continuous prioritization of the well-being of our teammates Communities: Driving meaningful and lasting change
Slide 5: 1Q 2021 Highlights
1Q 2021 Preliminary Results 1Q 2021 Highlights Delivering Results | Long-term Focus $2.09 24.1% $1.93B 11.1% Adjusted Core Adjusted Total Preliminary CET1 EPS(1) ROTCE(1) Net Revenue(1) Capital Ratio ▪ Resumed buybacks in 1Q, on track with 2021 share repurchase program of up to $1.6B | Announced 2Q
Slide 6: Quarterly Core Metric Trends
1Q 2021 Preliminary Results Quarterly Core Metric Trends Adjusted Earnings Per Share(1) Adjusted Total Net Revenue(2) ($ millio ns) $2.09 $1,930 $1,879 $1.60 $548 $1,680 $567 $1.25 $1,620 $1,622 $1,606 $1,556 $1,535 $1,557 $1,528 $0.92 $0.97 $1.01 $0.95 $1,521 $471 $0.83 $0.91 $0.80 $1,463 $1,471 $3
Slide 7: Ally Auto & Insurance: Agile Market Leader
1Q 2021 Preliminary Results Ally Auto & Insurance: Agile Market Leader #1 #1 #1 Top-3 Leading Prime Auto Bank Floorplan Retail Auto Loan Used Auto Insurance Provider Lender(1) Lender(2) Outstandings (3) Lender(4) (F&I, P&C Products) Extensive Dealer Reach Enhanced Tech, Data & Digital Skilled, Exper
Slide 8: Ally Bank: Leading, Growing, All-Digital Disruptor
1Q 2021 Preliminary Results Ally Bank: Leading, Growing, All-Digital Disruptor #1 $128B 12 48 Largest All-Digital, Retail Deposit Consecutive Years Consecutive Quarters Direct U.S. Bank (1) Balances of Deposit Growth of Customer Growth Ally Bank Customers Ally Invest Retail Depositors: Consistent, a
Slide 9: 1Q 2021 Financial Results
1Q 2021 Preliminary Results 1Q 2021 Financial Results Inc / (Dec) v. ($ millions; except per share data) 1Q 21 4Q 20 1Q 20 4Q 20 1Q 20 Net financing revenue (ex. Core OID) (1) $ 1,382 $ 1,312 $ 1,154 $ 69 $ 227 Core OID (1) (10) (9) (8) (0) (1) Net financing revenue $ 1,372 $ 1,303 $ 1,146 $ 69 $ 22
Slide 10: Balance Sheet and Net Interest Margin
1Q 2021 Preliminary Results Balance Sheet and Net Interest Margin ($ millions) 1Q 21 4Q 20 1Q 20 Average Average Average Balance Yield Balance Yield Balance Yield Retail Auto Loan $ 73,500 6.66% $ 73,401 6.57% $ 72,550 6.54% Retail Auto Loan (ex. hedge impact) 6.90% 6.83% 6.66% Auto Lease (net of de
Slide 11: Deposits
1Q 2021 Preliminary Results Deposits • Total Deposits of $140 billion, up 14% YoY Retail Deposit Balances ($ billions, EoP) Retail Brokered / Other Customer Retention Rate – Retail deposits of $128 billion, up $4 billion QoQ $135 $137 $140 – Brokered deposits declined $5 billion YoY $131 $122 $13 $1
Slide 12: Capital Ratios and Shareholder Distributions
1Q 2021 Preliminary Results Capital Ratios and Shareholder Distributions • Preliminary 1Q 2021 CET1 ratio of 11.1% Capital Ratios and Risk-Weighted Assets ($ billions) • Ally Board of Directors approved 2Q 2021 common 14.1% 14.6% 14.1% dividend of $0.19 per share 12.8% 13.8% 12.8% 12.1% 12.4% 11.9%
Slide 13: Asset Quality: Key Metrics
1Q 2021 Preliminary Results Asset Quality: Key Metrics Consolidated Net Charge-Offs (NCOs) Net Charge-Off Activity Allowance as % of Annualized NCOs Annualized NCO Rate ($ millions) 900% 0.91% 0.90% Net Charge-Offs 850% 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 800% 0.83% 0.84% 750% 0.80% Retail Auto $ 27
Slide 14: Asset Quality: Coverage and Reserves
1Q 2021 Preliminary Results Asset Quality: Coverage and Reserves Consolidated Coverage Ratio Retail Auto Coverage Ratio ($ billions) Reserve - $ Reserve - % ($ billions) Reserve - $ Reserve - % 2.85% 2.87% 2.78% 2.79% 4.09% 4.06% 2.54% 3.91% 3.95% 3.80% 2.03% 3.34% 0.99% $2.8 $3.0 $3.0 $2.9 $2.8 $3.
Slide 15: Auto Finance
1Q 2021 Preliminary Results Auto Finance Inc / (Dec) v. • Pre-tax income of $803 million, up $976 million YoY and up $240 million QoQ Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 1,206 $ 53 $ 166 – Net financing revenue up YoY and QoQ due to higher retail revenue Total other
Slide 16: Auto Finance Key Metrics
1Q 2021 Preliminary Results Auto Finance Key Metrics Consumer Originations Consumer Origination Mix ($ billions; % of $ originations) (% of $ originations) 691 686 685 687 690 685 $9.8 $10.2 $9.1 $9.1 49% 51% $8.1 55% 60% 55% 56% $7.2 50% 51% 50% 48% 44% 14% 50% 13% 13% 12% 14% 13% 29% 26% 29% 29% 2
Slide 17: Insurance
1Q 2021 Preliminary Results Insurance Inc / (Dec) v. • Pre-tax income of $141 million, up $246 million YoY and Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 down $42 million QoQ reflecting change in fair value of equity securities Premiums, service revenue earned and other $ 281 $ (9) $ 2 VSC Losses
Slide 18: Corporate Finance
1Q 2021 Preliminary Results Corporate Finance • Pre-tax income of $53 million, up $121 million YoY and down Inc / (Dec) v. $11 million QoQ Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 71 $ (8) $ 3 – Net financing revenue down QoQ due to prepayment activity Adjusted total oth
Slide 19: Mortgage Finance
1Q 2021 Preliminary Results Mortgage Finance • Pre-tax income of $23 million, up $11 million YoY and up Inc / (Dec) v. $16 million QoQ Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 23 $ 3 $ (15) – Net financing revenue declined YoY reflecting ongoing elevated Total other reve
Slide 20: Financial Outlook
1Q 2021 Preliminary Results Financial Outlook Steady execution, delivering against our long-term strategic objectives (1) Progression of Core ROTCE 1Q’21 Reserve Reduction Sustained, Organic Growth Ongoing Optimization 15%+ ~15% ✓ Positive Operating Leverage ✓ Strong Q1’21 results ✓ Expanding NIM (M
Slide 21: Strategic Priorities
1Q 2021 Preliminary Results Strategic Priorities ‘Do It Right’ Culture | Relentless Customer Focus | Steady, Long-term Execution Leading, adaptable Auto and Insurance Consumer & businesses and digitally-based bank platform Commercial Lender Ongoing customer growth & relationship Savings & deepening
Slide 22: Supplemental
1Q 2021 Preliminary Results Supplemental 22
Slide 23: Results by Segment
Supplemental 1Q 2021 Preliminary Results Results by Segment Inc / (Dec) v. Segment Detail ($ millions) 1Q 21 4Q 20 1Q 20 4Q 20 1Q 20 Automotive Finance $ 803 $ 563 $ (173) $ 240 $ 976 Insurance 141 183 (105) (42) 246 Dealer Financial Services $ 944 $ 746 $ (278) $ 198 $ 1,222 Corporate Finance 53 64
Slide 24: Funding Profile Details
Supplemental 1Q 2021 Preliminary Results Funding Profile Details Funding Mix Ally Financial Rating Details Deposits Secured Debt FHLB / Other Unsecured Debt LT Debt ST Debt Outlook Date 13% 10% 7% 6% 7% Fitch BBB- F3 Stable 3/30/2021 4% 13% 13% 2% 9% 15% Moody's Ba1 Not Prime Stable 5/12/2020 10% 6%
Slide 25: Corporate and Other
Supplemental 1Q 2021 Preliminary Results Corporate and Other Inc / (Dec) v. • Corporate and Other activity reflects: Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 57 $ 14 $ 71 – Centralized asset and liability management Total other revenue 58 (89) (1) Total net revenue $ 115
Slide 26: Interest Rate Risk Sensitivities
Supplemental 1Q 2021 Preliminary Results Interest Rate Risk Sensitivities Net Financing Revenue Sensitivity Analysis (1) 1Q 21 4Q 20 Change in interest rates Gradual (2) Instantaneous Gradual (2) Instantaneous -25 bps (3) $ (44) $ (96) $ (3) $ (40) +100 bps $ (27) $ (9) $ 32 $ 68 Stable rate environ
Slide 27: Deferred Tax Asset
Supplemental 1Q 2021 Preliminary Results Deferred Tax Asset Deferred Tax Asset / (Liability) 1Q 21 4Q 20 ($ millions) Gross DTA/(DTL) Valuation Net DTA/(DTL) Net DTA/(DTL) Balance Allowance Balance Balance Net Operating Loss (Federal) $ 7 $ - $ 7 $ 7 Tax Credit Carryforwards 978 (724) 254 1,052 Stat
Slide 28: Notes on Non-GAAP Financial Measures
Supplemental 1Q 2021 Preliminary Results Notes on Non-GAAP Financial Measures The follow ing are non-GAAP financial m easures w hich Ally believes are im portant to the reader of the Consolidated Financial Stat em ents, but w hich are supplem ental to, and not a substitute for, GAAP m easures: Adjus
Slide 29: GAAP to Core Results: Adjusted EPS - Quarterly
Supplemental 1Q 2021 Preliminary Results GAAP to Core Results: Adjusted EPS - Quarterly Adjusted Earnings per Share ("Adjusted EPS") QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Numerator ($ millions) GAAP net income attributable to common shareholder
Slide 30: GAAP to Core Results: Adjusted TBVPS - Quarterly
Supplemental 1Q 2021 Preliminary Results GAAP to Core Results: Adjusted TBVPS - Quarterly Adjusted Tangible Book Value per Share ("Adjusted TBVPS") QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Numerator ($ billions) GAAP common shareholder's equity $
Slide 31: GAAP to Core Results: Core ROTCE - Quarterly
Supplemental 1Q 2021 Preliminary Results GAAP to Core Results: Core ROTCE - Quarterly Core Return on Tangible Common Equity ("Core ROTCE") QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 Numerator ($ millions) GAAP net income (loss) attributable to common shareholders $ 796 $ 687 $ 476 $ 241 $ (319) D
Slide 32: GAAP to Core Results: Adjusted Efficiency Ratio - Quarterly
Supplemental 1Q 2021 Preliminary Results GAAP to Core Results: Adjusted Efficiency Ratio - Quarterly Adjusted Efficiency Ratio QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 Numerator ($ millions) GAAP noninterest expense $ 943 $ 1,023 $ 905 $ 985 $ 920 Rep and warrant expense - (0) - - - Insurance e
Slide 33: Non-GAAP Reconciliation – Core Income
Supplemental 1Q 2021 Preliminary Results Non-GAAP Reconciliation – Core Income ($ millions) 1Q 21 4Q 20 1Q 20 Change in fair Change in fair Change in fair GAAP Core OID value of equity Non-GAAP (1) GAAP Core OID value of equity Non-GAAP (1) GAAP Core OID value of equity Non-GAAP (1) securities secur
Slide 34: Non-GAAP Reconciliations
Supplemental 1Q 2021 Preliminary Results Non-GAAP Reconciliations Net Financing Revenue (ex. Core OID) QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 GAAP Net Financing Revenue $ 1,372 $ 1,303 $ 1,200 $ 1,054 $ 1,146 $ 1,156 $ 1,188 $ 1,157
Slide 35: Notes on Other Financial Measures
Supplemental 1Q 2021 Preliminary Results Notes on Other Financial Measures 1) Interest rate risk modeling – We prepare our forward-looking baseline forecasts of net financing revenue taking into consideration anticipated future business growth, asset/liability positioning, and interest rates based o
Slide 36: Additional Notes
Supplemental 1Q 2021 Preliminary Results Additional Notes Page – 7 | Ally Auto & Insurance: Leading, Adaptable Partner (1) ‘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