Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q4 2024 Earnings Presentation
41 slides from Ally Financial's earnings presentation, Jan 22, 2025
Slide 1: Ally Financial Inc. 4Q 2024 Earnings Review
Ally Financial Inc. 4Q 2024 Earnings Review January 22, 2025 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com
Slide 2: Forward-Looking Statements and Additional Information
4Q 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: Annual
4Q 2024 Preliminary Results GAAP and Core Results: Annual 2023 - 2024 results are presented under the deferral method of accounting for EV lease tax credits Annual Trend ($ millions, except per share data) 2024 2023 2022 2021 2020 GAAP net income attributable to common shareholders (NIAC) $ 558 $ 84
Slide 4: GAAP and Core Results: Quarterly
4Q 2024 Preliminary Results GAAP and Core Results: Quarterly 2023 - 2024 results are presented under the deferral method of accounting for EV lease tax credits Quarterly Trend ($ millions, except per share data) 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 GAAP net income attributable to common shareholders (NIAC)
Slide 5: 2024 Full-Year Highlights
4Q 2024 Preliminary Results 2024 Full-Year Highlights 2023 - 2024 results are presented under the deferral method of accounting for EV lease tax credits Financial Highlights $1.80 $836M 4.8% $8.2B 3.30% GAAP Net GAAP EPS GAAP Pre-tax Return on Equity NIM ex. OID(2) Revenue Flow-through: $2.72 $723M
Slide 6: 4Q 2024 Notable Items
4Q 2024 Preliminary Results 4Q 2024 Notable Items A more focused Ally that is simplified, streamlined, and that prioritizes our core franchises to drive improved returns Ally Credit Card Reached agreement to sell Credit Card business | $118M partial goodwill impairment excluded from adjusted metrics
Slide 7: Market Leading Franchises
4Q 2024 Preliminary Results Market Leading Franchises Investing in businesses with a competitive advantage, attractive returns, and scale Dealer Financial Services Corporate Finance Auto Finance Insurance $39.2B 14.6M 27% 7% Consumer Consumer 5-year YoY F&I Written 25-year history with deep sponsor
Slide 8: 4Q and Full-Year 2024 Financial Results
4Q 2024 Preliminary Results 4Q and Full-Year 2024 Financial Results Consolidated Income Statement - Quarterly and Annual Results ($ millions; except per share data) 4Q 24 3Q 24 4Q 23 FY 2024 FY 2023 Net financing revenue $ 1,509 $ 1,520 $ 1,502 $ 6,014 $ 6,221 Core OID (1) 15 14 13 56 48 Net financi
Slide 9: Balance Sheet and Net Interest Margin
4Q 2024 Preliminary Results Balance Sheet and Net Interest Margin 4Q '24 3Q '24 4Q '23 2024 2023 Average Average Average Average Average Balance Yield Balance Yield Balance Yield Balance Yield Balance Yield Retail Auto Loans (ex. hedge) $ 83,554 9.09% $ 83,574 8.99% $ 84,711 8.43% $ 83,652 8.90% $ 8
Slide 10: Capital
4Q 2024 Preliminary Results Capital • 4Q‘24 CET1 ratio of 9.8% and TCE / TA ratio of 5.7%(1) Capital Ratios and Risk-Weighted Assets ($ billions) • $4B of CET1 capital above FRB requirement of 7.1% (Regulatory Minimum + SCB) 13.2% TotalRatio Capital 12.5% 12.7% 12.9% 12.4% • Reached agreement to sel
Slide 11: Asset Quality: Key Metrics
4Q 2024 Preliminary Results Asset Quality: Key Metrics Consolidated Net Charge-Offs (NCOs)(1) Net Charge-Off Activity(1) ($ millions) 1.77% 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 Annualized 1.55% 1.59% NCO Rate Retail Auto $ 470 $ 477 $ 378 $ 467 $ 488 1.50% 1.26% Commercial Auto 19 1 (4) - - $623 $539 $543
Slide 12: Retail Auto Vintage Credit Trends
4Q 2024 Preliminary Results Retail Auto Vintage Credit Trends Higher credit quality front book expected to drive lower losses over time as portfolio turns over Vintage Portfolio Mix Composition and Loss Contribution 2026 | 2025 | 2024 | 2023 | 2022 | All Other Historical Vintage Portfolio Compositio
Slide 13: Asset Quality: Coverage and Reserves
4Q 2024 Preliminary Results Asset Quality: Coverage and Reserves Consolidated and portfolio-level reserves remain balanced; U.S. macroeconomic outlook remains stable • Retail auto coverage rate of 3.78% and consolidated coverage of 2.73% – Slight increase in consolidated coverage driven by changes i
Slide 14: Auto Finance
4Q 2024 Preliminary Results Auto Finance • Auto pre-tax income of $397 million Increase / (Decrease) vs. Key Financials ($ millions) 4Q 24 3Q 24 4Q 23 – Pre-tax income down YoY, primarily driven by lower lease Net financing revenue $ 1,344 $ (23) $ (38) gains and earning assets Total other revenue 8
Slide 15: Insurance
4Q 2024 Preliminary Results Insurance Increase / (Decrease) vs. • Insurance pre-tax income of $36 million and core Key Financials ($ millions) 4Q 24 3Q 24 4Q 23 pre-tax income of $84 million(1) Premiums, service revenue earned and other income $ 372 $ 10 $ 33 VSC losses 34 (2) (2) – $372 million of
Slide 16: Corporate Finance
4Q 2024 Preliminary Results Corporate Finance Increase / (Decrease) vs. • Corporate Finance pre-tax income of $120 million Key Financials ($ millions) 4Q 24 3Q 24 4Q 23 – 4Q’24 and FY’24 represent record quarterly and annual earnings Net financing revenue $ 115 $ 6 $ 1 Other revenue 33 (4) 10 – Stro
Slide 17: 2025 Financial Outlook
4Q 2024 Preliminary Results 2025 Financial Outlook 2024 Actuals 2025 Outlook 2025 Pro Forma(3) Net Interest Margin 3.30% 3.55% – 3.65% 3.40% – 3.50% (ex. OID)(1) Adjusted Other $2.17B ↑ Low single digit % Flat YoY Revenue(1) Retail Auto NCO 2.16% 2.00% - 2.25% 2.00% - 2.25% Consolidated NCO 1.48% 1.
Slide 18: CEO Perspectives
4Q 2024 Preliminary Results CEO Perspectives Well-positioned to deliver mid-teens ROTCE over time 10 Years Since IPO… Looking Ahead…the power of focus “Do It Right” culture Fortune’s 100 Best Companies to Work For 2024 Invest in core businesses where we have Time World’s Best Companies 2024 competit
Slide 19: Supplemental
Supplemental ally do it right.
Slide 20: Results By Segment
Supplemental 4Q 2024 Preliminary Results Results By Segment Results by Segment and GAAP to Core Pre-tax income Walk QUARTERLY TREND ANNUAL TREND Increase/(Decrease) vs. ($ millions) 4Q 24 3Q 24 4Q 23 2024 2023 3Q 24 4Q 23 2023 Automotive Finance $ 397 $ 355 $ 466 $ 1,816 $ 2,214 $ 42 $ (69) $ (398)
Slide 21: Corporate and Other
Supplemental 4Q 2024 Preliminary Results Corporate and Other Corporate & Other Results • Corporate and Other results include the impacts of ($ millions) Increase/(Decrease) vs. Key Financials 4Q 24 3Q 24 4Q 23 Ally Invest, Mortgage, Credit Card, and in prior Net financing revenue $ 19 $ 5 $ 42 year
Slide 22: Funding and Liquidity
Supplemental 4Q 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 23: Interest Rate Risk
Supplemental 4Q 2024 Preliminary Results Interest Rate Risk Net Financing Revenue Sensitivity Analysis(1) ($ millions) 4Q 24 3Q 24 Gradual (2) Instantaneous Gradual (2) Instantaneous -100 bp $ (23) $ 4 $ (54) $ (152) +100 bp $ 14 $ (86) $ 47 $ (94) Stable rate environment n/m $ (196) n/m $ 82 (1) Ne
Slide 24: Deferral vs Flow Through Reconciliation
4Q 2024 Preliminary Results Deferral vs Flow Through Reconciliation Net Financing Revenue (ex. OID) 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 FY 24 FY 23 Under Flow-Through Methodology $ 1,477 $ 1,502 $ 1,509 $ 1,469 $ 1,506 $ 1,545 $ 1,585 $ 1,613 $ 5,958 $ 6,249 Deferral Methodology Impact 4
Slide 25: Deferral vs Flow Through Reconciliation (cont.)
4Q 2024 Preliminary Results Deferral vs Flow Through Reconciliation (cont.) Adjusted Earnings per Share 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 FY 24 FY 23 Under Flow-Through Methodology $ 0.91 $ 0.95 $ 0.97 $ 0.45 $ 0.45 $ 0.83 $ 0.96 $ 0.82 $ 3.28 $ 3.05 Deferral Methodology Impact (0.12)
Slide 26: Notes on Non-GAAP Financial Measures
Supplemental 4Q 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 4Q 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 4Q 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 4Q 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 4Q 2024 Preliminary Results Additional Notes Page – 6 | Notable Items (1) During the fourth quarter of 2024 we updated our corporate overhead allocation methodology to eliminate the allocation of costs associated with our deposits business, which will now reside within Corporate and Oth
Slide 31: Additional Notes
Supplemental 4Q 2024 Preliminary Results Additional Notes Page – 16 | Corporate Finance (2) Noninterest expense includes corporate allocations of $10 million in 4Q 2024, $10 million in 3Q 2024, and $9 million in 4Q 2023. These amounts reflect updates to allocation methodology, including recast of pr
Slide 32: GAAP to Core: Adjusted EPS (Annual)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted EPS (Annual) Adjusted Earnings per Share ("Adjusted EPS") ANNUAL TREND FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 Numerator ($ millions) GAAP net income attributable to common shareholders $ 558 $ 847 $ 1,604 $ 3,003 $ 1,085 Discontinued o
Slide 33: GAAP to Core: Adjusted EPS (Quarterly)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted EPS (Quarterly) Adjusted Earnings per Share ("Adjusted EPS") QUARTERLY TREND 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 Numerator ($ millions) GAAP net income attributable to common shareholders $ 81 $ 171 $ 191 $ 115 $ 35 Discontinued operations, n
Slide 34: GAAP to Core: Core ROTCE (Annual)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Core ROTCE (Annual) Core Return on Tangible Common Equity ("Core ROTCE") ANNUAL TREND FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 Numerator ($ millions) GAAP net income attributable to common shareholders $ 558 $ 847 $ 1,604 $ 3,003 $ 1,085 Disconti
Slide 35: GAAP to Core: Core ROTCE (Quarterly)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Core ROTCE (Quarterly) Core Return on Tangible Common Equity ("Core ROTCE") QUARTERLY TREND 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 Numerator ($ millions) GAAP net income attributable to common shareholders $ 81 $ 171 $ 191 $ 115 $ 35 Discontinued operati
Slide 36: GAAP to Core: Adjusted TBVPS (Annual)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted TBVPS (Annual) Adjusted Tangible Book Value per Share ("Adjusted TBVPS") ANNUAL TREND FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 Numerator ($ billions) GAAP shareholder's equity $ 13.9 $ 13.7 $ 12.9 $ 17.1 $ 14.7 less: Preferred equity (2.
Slide 37: GAAP to Core: Adjusted TBVPS (Quarterly)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted TBVPS (Quarterly) Adjusted Tangible Book Value per Share ("Adjusted TBVPS") QUARTERLY TREND 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 Numerator ($ billions) GAAP shareholder's equity $ 13.9 $ 14.4 $ 13.7 $ 13.6 $ 13.7 less: Preferred equity (2.3) (
Slide 38: GAAP to Core: Adjusted Efficiency Ratio (Annual)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted Efficiency Ratio (Annual) Adjusted Efficiency Ratio ANNUAL TREND FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 Numerator ($ millions) GAAP noninterest expense $ 5,179 $ 5,163 $ 4,687 $ 4,110 $ 3,833 Insurance expense (1,453) (1,316) (1,133) (
Slide 39: GAAP to Core: Adjusted Efficiency Ratio (Quarterly)
Supplemental 4Q 2024 Preliminary Results GAAP to Core: Adjusted Efficiency Ratio (Quarterly) Adjusted Efficiency Ratio QUARTERLY TREND 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 Numerator ($ millions) GAAP noninterest expense $ 1,360 $ 1,225 $ 1,286 $ 1,308 $ 1,416 Insurance expense (343) (365) (405) (340) (319)
Slide 40: Non-GAAP Reconciliations (Annual)
Supplemental 4Q 2024 Preliminary Results Non-GAAP Reconciliations (Annual) ($ millions) ANNUAL TREND Net Financing Revenue (ex. Core OID) FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 GAAP Net Financing Revenue $ 6,014 $ 6,221 $ 6,850 $ 6,167 $ 4,703 Core OID 56 48 42 38 36 Net Financing Revenue (ex. Core
Slide 41: Non-GAAP Reconciliations (Quarterly)
Supplemental 4Q 2024 Preliminary Results Non-GAAP Reconciliations (Quarterly) ($ millions) QUARTERLY TREND Net Financing Revenue (ex. Core OID) 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 GAAP Net Financing Revenue $ 1,509 $ 1,520 $ 1,517 $ 1,468 $ 1,502 Core OID 15 14 14 13 13 Net Financing Revenue (ex. Core OID