Slide 1: Ally Financial Inc. 2Q Earnings Review
Ally Financial Inc. 2Q Earnings Review Contact Ally Investor Relations at (866) 710 - 4623 or investor.relations@ally.com July 31, 2013
Slide 2: Forward-Looking Statements and Additional Information
2 2Q 2013 Preliminary Results Forward - Looking Statements and Additional Information The following should be read in conjunction with the financial statements, notes and other information contained in the Compa ny’ s Annual Reports on Form 10 - K, Quarterly Reports on Form 10 - Q, and Current Repor
Slide 3: Strong Core Business Trends / Second Quarter Highlights
3 2Q 2013 Preliminary Results Strong Core Business Trends x Comprehensive ResCap settlement approved by Bankruptcy Court x Net financing revenue (2) up 24% YoY x Net interest margin (2) up 37 bps YoY x Redeeming legacy high cost debt to improve cost of funds x Pro Forma Tier 1 Common ratio of 8.9% (
Slide 4: Strategic Update
4 2Q 2013 Preliminary Results Strategic Update • Streamlined company to create a more predictable and transparent earnings profile • Majority of IO sales have been completed, generating $7.7 billion of proceeds (84% of total expected) • Exited mortgage origination and servicing business – Only $9 bi
Slide 5: 2Q Financial Results Summary
5 2Q 2013 Preliminary Results ($ millions) 2Q 13 1Q 13 2Q 12 1Q 13 2Q 12 Net financing revenue (ex. OID) 689$ 697$ 553$ (9)$ 135$ Total other revenue 411 503 714 (92) (303) Provision for loan losses 89 131 33 (42) 56 Controllable expenses (1) 498 555 530 (56) (31) Other noninterest expenses 301 308
Slide 6: Net Interest Margin
6 2Q 2013 Preliminary Results Net Interest Margin • Net Interest Margin (“NIM”) improved 37 bps YoY • Cost of funds declined 18 bps YoY driven primarily by deposit growth and lower unsecured debt levels – QoQ increase driven by pay down of lower cost credit facilities due to excess liquidity from IO
Slide 7: Cost of Funds
7 2Q 2013 Preliminary Results Average Outstanding Balance ($M) 2Q Interest Expense ($M) (1) Annualized Cost of Funds Callable at Par 9,995$ 175$ 7.00% Non-Callable/Other 24,844 341 5.49% LT Unsecured Debt 34,839$ 516$ 5.92% Secured Debt 31,747 130 1.64% Other Borrowings (2) 4,495 12 1.07% Deposits 4
Slide 8: Asset Quality
8 2Q 2013 Preliminary Results $119 $120 $121 $99 $99 $97 0.37% 0.29% 0.42% 0.53% 0.46% 0.42% 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Ending Loan Balance ($B) Net Charge - Off Rate 361% 405% 285% 190% 263% 287% 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 ALLL as % of NCOs Consolidated Annualized Net Charge - Off
Slide 9: Auto Finance Key Financials
9 2Q 2013 Preliminary Results Key Financials ($ millions) 2Q 13 1Q 13 2Q 12 Net financing revenue 777$ 773$ 693$ Total other revenue 60 82 112 Total net revenue 837 855 805 Provision for loan losses 88 112 15 Noninterest expense 367 400 350 Pre-tax income from continuing ops 382$ 343$ 440$ U.S. auto
Slide 10: Auto Finance – Key Metrics
10 2Q 2013 Preliminary Results ($ billions) $31.8 $30.6 $32.5 $32.0 $30.3 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 ($ billions) $73.0 $74.5 $75.3 $76.5 $77.6 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 On Balance Sheet Sold ($ billions) $10.5 $9.6 $8.9 $9.7 $9.8 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Retail - New Retail - Used Lease
Slide 11: Insurance Key Financials
11 2Q 2013 Preliminary Results Key Financials ($ millions) 2Q 13 1Q 13 2Q 12 Insurance premiums, service revenue earned and other 263$ 262$ 278$ Insurance losses and loss adjustment expenses 146 115 149 Acquisition and underwriting expenses 149 144 147 Total underwriting income (32) 3 (18) Investmen
Slide 12: Mortgage Key Financials
12 2Q 2013 Preliminary Results Key Financials ($ millions) 2Q 13 1Q 13 2Q 12 Net financing revenue 15$ 34$ 29$ Gain on sale of mortgage loans, net (1) 38 79 Other revenue (excluding gain on sale) 4 60 241 Total net revenue 18 132 349 Provision for loan losses 6 20 21 Noninterest expense 39 118 226 P
Slide 13: Corporate and Other Key Financials
13 2Q 2013 Preliminary Results Key Financials ($ millions) 2Q 13 1Q 13 2Q 12 Net financing loss (ex. OID) (118)$ (122)$ (185)$ Total other revenue 23 15 (18) Provision for loan losses (5) (1) (3) Noninterest expense 98 85 98 Core pre-tax loss (1) (188)$ (191)$ (297)$ OID amortization expense (2) 61
Slide 14: Ally Bank Deposit Levels and Retail Customers
14 2Q 2013 Preliminary Results Ally Bank Deposit Levels and Retail Customers ($ billions) $30.4 $32.1 $35.0 $38.8 $39.9 $40.3 $42.0 $45.0 $48.6 $49.4 550 579 622 691 722 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Ally Bank Retail Ally Bank Brokered Primary Customers (000s) Ally Bank Quarterly Retail Deposit Grow
Slide 15: Ally Deposit Stability
15 2Q 2013 Preliminary Results Ally Deposit Stability Every vintage has remained steady or grown over the last 2 years Ally Bank Retail Deposit Vintage Data ($B) 8.1 8.2 8.2 8.2 8.2 8.3 8.3 8.3 8.4 8.4 8.4 8.4 8.4 8.5 8.5 8.5 8.6 8.7 8.7 8.9 8.9 9.0 9.0 8.9 8.9 8.9 6.0 6.0 6.1 6.1 6.1 6.1 6.1 6.2 6.
Slide 16: Ally Financial Liquidity Position
16 2Q 2013 Preliminary Results Ally Financial Liquidity Position ($ billions) $19.5 $23.0 $8.6 $11.5 1Q 13 2Q 13 Parent Co. Liquidity Unsecured Bond Maturities (next 24 months) Ally Financial Consolidated Unsecured Long-Term Debt Maturity Profile ($ billions) $0.0 $0.9 $5.6 $5.1 $2.0 $3.7 3Q 13 4Q 1
Slide 17: Capital
17 2Q 2013 Preliminary Results Capital • Capital ratios increased in 2Q driven by International sales – Impact of sales offset charges related to the ResCap settlement – Transactions reduced RWA by approximately $12 billion • Submitted the mid - year DFAST capital plan to the Federal Reserve in July
Slide 18: Conclusion
18 2Q 2013 Preliminary Results Conclusion • Positive core business trends – Solid auto finance performance – Continued emphasis on profitability and asset quality – Steady deposit growth • Strategic transformation nearly complete – Comprehensive settlement agreement with ResCap and its creditors app
Slide 19: Supplemental Charts
Supplemental Charts
Slide 20: Results by Segment
20 2Q 2013 Preliminary Results Results by Segment (1) Mortgage and Corporate and Other results exclude the impact of repositioning items. Corporate and Other excludes OID amortiz ati on expense. See slide 24 for details (2) Core pre - tax income as presented excludes the impact of repositioning item
Slide 21: International Sale Update
21 2Q 2013 Preliminary Results International Sale Update Supplemental (1) Brazil and China assets and tangible book values are as of 6/30/13. All other numbers are as of the respective sale dates . (2) Book value on a GAAP basis was approximately $ 7.5 billion, which included approximately $0.5 bill
Slide 22: Impact of Discontinued Operations
22 2Q 2013 Preliminary Results Impact of Discontinued Operations ($ millions) 2Q 13 1Q 13 2Q 12 Auto Finance (1) (245)$ 1,037$ 164$ Insurance 294 28 (3) Mortgage - 0 (84) Corporate and Other (2) (1,693) (16) (1,121) Consolidated pre-tax (loss) income (1,644)$ 1,049$ (1,044)$ Tax (benefit) expense (6
Slide 23: Liquidity Supplemental
23 2Q 2013 Preliminary Results Liquidity Supplemental (1) Parent company liquidity is defined as our consolidated operations less Ally Bank and the regulated subsidiaries of Ally Insu ran ce’s holding company (2) Includes UST, Agency debt and Agency MBS (3) Includes equal allocation of shared unused
Slide 24: Notes on non-GAAP and other financial measures
24 2Q 2013 Preliminary Results Notes on non - GAAP and other financial measures Supplemental (1) Core pre - tax income (loss) and controllable expenses are non GAAP financial measures. See slide 25 for definitions $ in millions GAAP OID & Repositioning Items Proforma GAAP OID & Repositioning Items P
Slide 25: Notes on non-GAAP and other financial measures
25 2Q 2013 Preliminary Results Notes on non - GAAP and other financial measures Supplemental 1) Core pre - tax income (loss) is a non - GAAP financial measure. It is defined as income (loss) from continuing operations before taxes and primarily bond exchange original issue discount ("OID") amortizat