Slide 1: Ally Financial Inc. 2Q Earnings Review
Ally Financial Inc . 2Q Earnings Review August 2, 2011 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 2010 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. This information
Slide 3: Second Quarter Highlights
Second Quarter Highlights • Core pretax income (1) of $466 million and net income of $113 million – Sixth straight quarter of profitability • Maintained dominant market position as #1 U.S. auto lender – Auto earning asset growth of $16.8 billion year-over-year in North America – Significantly improv
Slide 4: Auto Finance Category Leader
Auto Finance Category Leader TOTAL MARKET: #1 Auto Finance Provider NEW: Market Leader in New Vehicle Financing Total Market Share New Vehicle Market Share 12.0% 5.2% 10.0% 9.3% 4.3% 8.0% 4.0% 6.7% 6.6% 6.4% 3.3% 3.2% 6.0% 5.0% 4.0% 2.0% 0.0% ALLY Toyota Honda Wells Fargo Chase ALLY Honda Toyota For
Slide 5: Second Quarter 2011 Results
Second Quarter 2011 Results Increase/(Decrease) vs. ($ millions) 2Q 11 1Q 11 2Q 10 1Q 11 2Q 10 Net financing revenue (ex. OID) $ 965 $ 833 $ 1,001 $ 132 $ (36) Total other revenue (ex. OID) 1,136 1,100 1,388 36 (252) Provision for loan losses 51 113 218 (62) (167) Controllable expenses (1) 859 874 8
Slide 6: Results by Segment
Results by Segment • Positive credit trends and asset growth in Global Automotive Services – Partially offset by weather losses in Insurance • Mortgage Operations impacted by legacy repurchase expense • Corporate and Other favorable due to lower funding costs and early settlement of a loss holdback
Slide 7: North American Automotive Finance
North American Automotive Finance • North American segment reported pre-tax income of $559 million Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 Net financing revenue $ 878 $ 818 $ 851 • Net financing revenue increase of $60 million QoQ Total other revenue 114 109 186 primarily driven by: Total net
Slide 8: U.S. Auto Originations
U.S. Auto Originations • Strong growth in originations year-over-year U.S. Consumer Originations Inc/(Dec) vs. – Diversified originations up 118% YoY ($ billions) 2Q 11 1Q 11 2Q 10 2Q 10 GM Retail Subvented $ 1.4 $ 1.8 $ 1.6 -13% – Lease originations up 155% YoY GM Retail Standard 2.1 3.3 2.0 6% Chr
Slide 9: International Automotive Finance
International Automotive Finance • International operations earned $71 million of pre-tax income compared to $40 million in 1Q Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 Net financing revenue $ 176 $ 171 $ 173 – Provision expense favorable driven by a Total other revenue 65 75 85 1Q reserve build
Slide 10: Insurance
Insurance • Pre-tax income of $73 million, down from $134 million in 1Q Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 Insurance premiums, service revenue earned and other $ 445 $ 440 $ 487 Insurance losses and loss adjustment expenses 237 173 224 – Record level of weather -related losses in Acquisit
Slide 11: Mortgage Operations – Origination and Servicing
Mortgage Operations – Origination and Servicing • Origination and Servicing earned $47 million of Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 pre-tax income Net financing revenue $ (18) $ (30) $ (18) Gain on sale of mortgage loans, net 62 74 102 • Gain on sale down from 1Q primarily due to Other r
Slide 12: Mortgage Operations – Legacy Portfolio and Other
Mortgage Operations – Legacy Portfolio and Other • Pre-tax loss of $174 million compared to a loss of $39 million in 1Q Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 Net financing revenue $ 78 $ 78 $ 172 – Primarily driven by repurchase expense of Gain on sale of mortgage loans, net 34 18 95 $184 mi
Slide 13: Differentiated Mortgage Servicer
Differentiated Mortgage Servicer • GMAC Mortgage has worked aggressively to keep HAMP Modifications customers in their homes and is a supporter of many home preservation outreach programs HAMP HAMP HAMP Aged Trials Modifications • Since 2008, we have provided relief to over 700,000 Conversion Not Co
Slide 14: Mortgage Repurchase Reserves
Mortgage Repurchase Reserves • Mortgage repurchase reserve expense of $184 million Mortgage Repurchase Reserves – Driven primarily by approximately $150 million in ($ millions) 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 payments to trusts resulting from rescinded Beginning reserve balance $ 890 $ 855 $ 1,128 $ 8
Slide 15: Proactive Approach to Legacy Mortgage Risk
Proactive Approach to Legacy Mortgage Risk • Ally has consistently taken a proactive approach to addressing legacy mortgage risk: – Began substantial repurchase reserve build in 2009 – Marked riskier balance sheet assets to market in December 2009 – Reached comprehensive settlements with Fannie Mae
Slide 16: Ally Bank Franchise
Ally Bank Franchise • Continued growth of Ally’s deposit franchise High CD retention rates reflect franchise strength – Total deposit growth of $1.6 billion in 2Q Retail CD Balance Retention (1) ($ billions) – Number of Ally Bank retail accounts increased over 6% from 1Q to 852k $3.5 88% 85% 86% 88%
Slide 17: Liquidity
Liquidity • Conservative liquidity posture with total parent company available liquidity of $24.7 billion and consolidated unsecured debt maturities of $16.7 billion through 2012 (1) – Additional $12.2 billion of liquidity at Ally Bank • Diverse access to capital markets with $12.2 billion of new fu
Slide 18: Capital
Capital • Capital ratios remain among the highest in the industry – Ratios slightly lower due to increase in risk-weighted assets, driven by strong growth in auto originations • Ally is well positioned to achieve the enhanced Basel III capital requirements in advance of the proposed timelines – Esti
Slide 19: Asset Quality: Summary
Asset Quality: Summary • Positive credit quality trends continue • Continue to maintain strong allowance coverage ratios relative to net charge -offs and non-performing loans – Over 3.5x coverage of net charge -offs • Loan balance continues to grow driven by strong auto originations Ally Financial C
Slide 20: Asset Quality: Global Auto Finance
Asset Quality: Global Auto Finance Global Delinquencies - Managed Retail Contract Amount • Global auto continued to experience strong credit $ Amount of Accruing Contracts Greater than 30 Days Past Due (millions) quality performance $2,500 2.93% $2,000 2.26% – Delinquencies up slightly from 1Q due t
Slide 21: Outlook
Outlook Second Quarter Highlights • Sixth straight profitable quarter • Solid trends in Global Automotive Services • Earning asset base growth • Mortgage balance sheet has stabilized • Ally Bank continues to expand product suite and customer base • Strong capital and liquidity profile Outlook and Pr
Slide 22: Supplemental Charts
Supplemental Charts
Slide 23: Supplemental Corporate and Other
Supplemental Corporate and Other • OID amortization expense of $274 million in 2Q Key Financials ($ millions) 2Q 11 1Q 11 2Q 10 • Commercial Finance pre-tax income of $82 Net financing loss $ (172) $ (226) $ (200) Total other revenue 127 55 36 million in 2Q, up from $51 million in 1Q Total net loss
Slide 24: Supplemental Liquidity and Unsecured Debt Maturity Profile
Supplemental Liquidity and Unsecured Debt Maturity Profile Available Liquidity 6/30/2011 3/31/2011 ($ billions) Parent (1) Ally Bank Parent (1) Ally Bank Cash and Cash Equivalents $ 9.5 $ 3.6 $ 7.6 $ 3.7 Unencumbered Securities (2) 0.9 5.8 1.2 5.1 Current Committed Unused Capacity (3) 12.0 5.1 10.9