Ally Financial Inc. · NYSE:ALLY
Ally Financial — Q2 2021 Earnings Presentation
37 slides from Ally Financial's earnings presentation, Jul 20, 2021
Slide 1: Ally Financial Inc. 2Q 2021 Earnings Review
Ally Financial Inc. 2Q 2021 Earnings Review July 20, 2021 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com Exhibit 99.2
Slide 2: Forward-Looking Statements and Additional Information
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 Current Reports on Form 8-K.
Slide 3: GAAP and Core Results: Quarterly
GAAP and Core Results: Quarterly 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: Adjusted earnings per share (Adjusted EPS), Core pre-tax inco
Slide 4: Ally's Culture and Priorities
Ally’s Culture and Priorities Relentless focus on dealers, consumers & commercial clients customers. Continuous prioritization of the well-being of our teammates Driving meaningful and lasting change through ongoing actions & Ally Charitable Foundation employees. communities. Driving long-term, enha
Slide 5: 2Q 2021 Highlights
2Q 2021 Highlights Focused Execution | Delivering Results Auto & Insurance: Leading, Adaptable Partner | Comprehensive Capabilities & Products Ally Bank: Leading, All-Digital Direct Bank | Engaged & Growing Customer Base Consumer auto originations of $12.9B, from a record 3.5M decisioned application
Slide 6: Quarterly Core Metric Trends
Quarterly Core Metric Trends (1), (2) Represents a non-GAAP financial measure. See page 31 and 33 for calculation methodology and details. CECL Day 1 Impact: $2.7/share (3) Represents a non-GAAP financial measure. See page 37 for calculation methodology and details. Adjusted Earnings Per Share & Cor
Slide 7: 2Q 2021 Financial Results
2Q 2021 Financial Results Represents a non-GAAP financial measure. For calculation methodology see page 37. See page 36 for details and calculation methodology. Represents a non-GAAP financial measure. For calculation methodology see pages 31 and 36. 2Q 21 effective tax rate was impacted primarily d
Slide 8: Balance Sheet and Net Interest Margin
Balance Sheet and Net Interest Margin Mortgage includes held-for-investment (HFI) loans from the Mortgage Finance segment and the HFI legacy mortgage portfolio in run-off at the Corporate and Other segment. ‘Consumer Other’ consists of unsecured consumer lending from point-of-sale financing. Include
Slide 9: Capital Ratios and Shareholder Distributions
Note: For more details on the final rules to address the impact of CECL on regulatory capital by allowing BHC’s and banks, including Ally, to delay and subsequently phase-in its impact, see page 28 for details. Capital Ratios and Shareholder Distributions 2Q 2021 CET1 ratio of 11.3% Ally’s Board of
Slide 10: Asset Quality: Key Metrics
Asset Quality: Key Metrics Ratios exclude loans measured at fair value and loans held-for-sale. Note: Includes accruing contracts only. Days-past-due (“DPD”) (1) Corp/Other includes legacy Mortgage HFI portfolio. Note: See page 28 for definition. Retail Auto Net Charge-Offs Retail Auto Delinquencies
Slide 11: Asset Quality: Coverage and Reserves
All Other Incl. Macroeconomic ∆ in Portfolio Size Net Charge-off Activity Asset Quality: Coverage and Reserves 1 2 3 1Q’21 Reserve $3,152 $3,126 $87 ($113) $ - 2Q’21 Reserve ($ millions) 2Q'21 Net Recovery Neutral to Reserve ↑ Retail Auto, ↑ Ally Lending, partly offset by ↓ Floorplan Primarily Favor
Slide 12: Ally Bank: Deposit & Customer Trends
Ally Bank: Deposit & Customer Trends Note: Brokered / Other includes sweep deposits, mortgage escrow and other deposits. See page 28 for Customer Retention Rate definition. Numbers may not foot due to rounding. Total Deposits of $139 billion grew 6% YoY Retail deposits of $129.2 billion, up $0.9 bil
Slide 13: Ally Bank: Leading, Growing, All-Digital Disruptor
Ally Bank: Leading, Growing, All-Digital Disruptor $ Sustained momentum demonstrates Ally’s brand value and strength ~8x FY’17 +267% See page 29 for footnotes. Note: Ally Bank, Member FDIC and Equal Housing Lender, offers mortgage lending, point-of-sale personal lending, and a variety of deposit and
Slide 14: Auto Finance
Auto Finance Pre-tax income of $917 million, up $588 million YoY and up $114 million QoQ Net financing revenue reflects growth in retail revenue and elevated off-lease vehicle gains, offsetting lower floorplan balances Provision expense driven by strong performance, improved economic trends and disc
Slide 15: Auto Finance: Agile Market Leader
Auto Finance: Agile Market Leader Note: Held-for-investment (HFI) asset balances reflect the average daily balance for the quarter. Consumer Originations Consumer Origination Mix Auto Balance Sheet Trends Dealer Relationships & Consumer Applications #1 Prime Auto Lender(1) Top-3 Used Auto Lender(4)
Slide 16: Insurance
Insurance Represents a non-GAAP financial measure. See page 36 for calculation methodology and details. For additional footnotes see page 29. Pre-tax income of $87 million, down $41 million YoY and down $54 million QoQ due to change in fair value of equity securities YoY and elevated realized gains
Slide 17: Corporate Finance
Corporate Finance Pre-tax income of $95 million, up $63 million YoY and up $42 million QoQ Higher total revenues reflecting strong syndication income and investment gains Provision reflects strong credit performance, recovery activity in Q2 and favorable macroeconomic trends $6.2 billion held-for-in
Slide 18: Mortgage Finance
Mortgage Finance Pre-tax income breakeven for the quarter, down $8 million YoY and down $23 million QoQ Net financing revenues trends reflect ongoing elevated prepayment activity mitigated by QoQ asset growth Other revenue down QoQ as gain on sale margins moderated lower and origination mix shifted
Slide 19: Financial Outlook
Financial Outlook Represents a non-GAAP financial measure. See page 34 for details. Assumes statutory U.S. Federal tax rate is unchanged at 21%. Core ROTCE Progression Annual expansion of PPNR and Operating Leverage Expanding NIM (Mid/Hi 3%) and Net Financing Revenue Expanding Other Revenue (Mid-$40
Slide 20: Strategic Priorities
Strategic Priorities Leading, adaptable Auto and Insurance and digitally-based Ally Bank platforms Ongoing customer growth and relationship deepening across scalable platforms Sustainable, organic growth in evolving and expanded product offerings Efficient, disciplined risk management and capital de
Slide 21: Supplemental
Supplemental ally do it right.
Slide 22: Results by Segment
Results by Segment Supplemental Represents a non-GAAP financial measure. See pages 36 and 37 for calculation methodology and details. See page 30 for additional footnotes.
Slide 23: Funding Profile Details
Funding Profile Details Supplemental Excludes retail notes and trust preferred securities; as of 6/30/2021. Reflects notional value of outstanding bond. Excludes total GAAP OID and capitalized transaction costs. Weighted average coupon based on notional value and corresponding coupon for all unsecur
Slide 24: Corporate and Other
Corporate and Other Represents a non-GAAP financial measure. See page 36 and 37 for calculation methodology and details. See page 30 for additional footnotes. Corporate and Other activity reflects: Centralized asset and liability management Corporate allocation activities Legacy mortgage portfolio A
Slide 25: Interest Rate Risk Sensitivities
Interest Rate Risk Sensitivities Supplemental Net financing revenue impacts reflect a rolling 12-month view. See page 28 for additional details. Gradual changes in interest rates are recognized over 12 months. The -100bps shock has been replaced with a -25bps shock, given low interest rate environme
Slide 26: Deferred Tax Asset
GAAP does not prescribe a method for calculating individual elements of deferred taxes for interim periods; therefore, these balances are estimates. Deferred Tax Asset Supplemental Note: 4Q19 to 1Q20 DTA build was significantly impacted by CECL adoption on 1-1-2020. 1Q21 and 2Q21 increase in DTA dri
Slide 27: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures Supplemental Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations by excluding (1) Core OID, and (2) equity fair value adjustments related to ASU 2016-01 which requires change in the fair value of equity secur
Slide 28: Notes on Other Financial Measures
Notes on Other Financial Measures Supplemental Estimated Retail Auto Originated Yield is a forward-looking non-GAAP financial measure determined by calculating the estimated average annualized yield for loans originated during the period. At this time there currently is no comparable GAAP financial
Slide 29: Additional Notes
Additional Notes Supplemental Page – 14 | Auto Finance Interest expense includes corporate allocations of $218 million in 2Q 2021, $211 million in 1Q 2021, and $197 million in 2Q 2020. Dealer relationships include Ally active dealers, excluding RV Commercial & Consumer lines of business exited in 2Q
Slide 30: Additional Notes
Additional Notes Supplemental Page – 24 | Corporate and Other Repositioning and other which are primarily related to the extinguishment of high-cost legacy debt, strategic activities and significant other one-time items, as applicable for respective periods or businesses. Change in fair value of equ
Slide 31: GAAP to Core Results: Adjusted EPS - Quarterly
GAAP to Core Results: Adjusted EPS - Quarterly Supplemental Adjusted earnings per share (Adjusted EPS) is a non-GAAP financial measure that adjusts GAAP EPS for revenue and expense items that are typically strategic in nature or that management otherwise does not view as reflecting the operating per
Slide 32: GAAP to Core Results: Adjusted TBVPS - Quarterly
GAAP to Core Results: Adjusted TBVPS - Quarterly Supplemental 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 the financial statem
Slide 33: GAAP to Core Results: Core ROTCE - Quarterly
GAAP to Core Results: Core ROTCE - Quarterly Supplemental 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 equity base that supports co
Slide 34: GAAP to Core Results: Core ROTCE - Annual
GAAP to Core Results: Core ROTCE - Annual Supplemental 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 equity base that supports core
Slide 35: GAAP to Core Results: Adjusted Efficiency Ratio - Quarterly
GAAP to Core Results: Adjusted Efficiency Ratio - Quarterly Supplemental Adjusted efficiency ratio is a non-GAAP financial measure that management believes is helpful to readers in comparing the efficiency of its core banking and lending businesses with those of its peers. In the numerator of Adjust
Slide 36: Non-GAAP Reconciliation – Core Income
Non-GAAP Reconciliation – Core Income Supplemental Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. See page 27 for definitions. Note: Equity fair value adjustments related to ASU 2016-01 requires change in the fair value of equity securities
Slide 37: Non-GAAP Reconciliations
Supplemental Note: Equity fair value adjustments related to ASU 2016-01 requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/18 in which such adjustments were recognized through other comprehensive income, a componen