Ally Financial Inc 8-K, filed Jan 22, 2020
Ally Financial Inc. (ALLY)
About this 8-K
Ally Financial Inc filed this 8-K on January 22, 2020.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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| Item 2.02 | Results of Operation and Financial Condition. |
On January 22, 2020, Ally Financial Inc. issued a press release announcing preliminary operating results for the fourth quarter and full year ended December 31, 2019. The press release is attached hereto and incorporated by reference as Exhibit 99.1. Charts furnished to securities analysts are attached hereto and incorporated by reference as Exhibit 99.2. In addition, supplemental financial data furnished to securities analysts is attached hereto and incorporated by reference as Exhibit 99.3.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit |
Description | |||
| 99.1 |
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| 99.2 |
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| 99.3 |
Supplemental Financial Data Furnished to Securities Analysts | |||
| 104 |
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ALLY FINANCIAL INC. | ||||||
| (Registrant) | ||||||
| Dated: January 22, 2020 |
/s/ David J. DeBrunner | |||||
| David J. DeBrunner | ||||||
| Vice President, Chief Accounting Officer and Controller |
Exhibit 99.1
News release: IMMEDIATE RELEASE
Ally Financial Reports Full Year and Fourth Quarter 2019 Financial Results
Full Year 2019 Net Income of $1.7 billion, $4.34 EPS, $3.72 Adjusted EPS1
Fourth Quarter Net Income of $378 million, $0.99 EPS, $0.95 Adjusted EPS1
| Full Year Results | ||||
| PRE-TAX INCOME | RETURN ON EQUITY | CORE ROTCE1 | ||
| $2.0 billion | 12.4% | 12.0% | ||
| Fourth Quarter Results | ||||
| PRE-TAX INCOME | RETURN ON EQUITY | COMMON SHAREHOLDER EQUITY | ||
| $487 million | 10.5% | $38.51/share | ||
| CORE PRE-TAX INCOME1 | CORE ROTCE1 | ADJUSTED TANGIBLE BOOK VALUE1 | ||
| $466 million | 11.2% | $35.06/share | ||
| FULL YEAR 2019 HIGHLIGHTS |
• EPS of $4.34, up 47% YoY; Adjusted EPS1 of $3.72, up 12% YoY | |||
| • Total Net Revenue of $6.4 billion, up 10% YoY; Adjusted Total Net Revenue1 of $6.3 billion, up 5% YoY | ||||
| • Consumer auto originations of $36.3 billion, up 3% YoY – sourced from a record 12.6 million applications | ||||
| • Retail auto portfolio yield of 6.60%, up 46 bps YoY | ||||
| • Retail auto net charge-off rate of 1.29%, down 4 bps YoY | ||||
| • Insurance written premiums of $1.31 billion, up 12% YoY | ||||
| • Ending total deposits of $120.8 billion and retail deposits of $103.7 billion – both up $14.6 billion YoY | ||||
| • Retail deposit customers increased by 322 thousand YoY to 1.97 million – highest annual customer growth for Ally Bank | ||||
| • Ally Home® direct-to-consumer originations increased approximately 4x prior year originated volumes to $2.7 billion | ||||
| • Ally Invest self-directed net funded accounts up 15% YoY | ||||
| • Corporate Finance held-for-investment balances of $5.7 billion up 23% YoY | ||||
| • Common shareholder distributions of $1.3 billion, up 11% YoY | ||||
| • S&P and Fitch Ratings upgraded Ally Financial’s senior unsecured credit rating to investment grade2 | ||||
| QUARTERLY HIGHLIGHTS |
• EPS of $0.99, up 41% YoY; Adjusted EPS1 of $0.95, up 3% YoY | |||
| • Total Net Revenue of $1.6 billion, up 14% YoY; Adjusted Total Net Revenue1 of $1.6 billion, up 4% | ||||
| • Record fourth quarter retail auto application flow of 2.9 million, up 7% YoY | ||||
| • Retail deposit growth of $2.4 billion QoQ | ||||
| • Closed acquisition of Health Credit Services (HCS) – rebranding as Ally Lending | ||||
| • Repurchased $299 million in common stock, resulting in outstanding common share count decreasing 2.4% QoQ | ||||
Ally Chief Executive Officer Jeffrey Brown commented on the financial results:
“Ally achieved multiple milestones in 2019 that demonstrated our continued success in executing on our strategic priorities. Financially, we delivered the highest Adjusted EPS1 and Total Net Revenue since our IPO, with Adjusted Tangible Book Value1 increasing over $5 per share. Our deposit franchise had a terrific year, surpassing $100 billion of retail deposits on $14.6 billion of annual growth while being recognized as the Best Online Bank by Money® Magazine for the seventh time. Our market-leading auto finance business produced strong risk-adjusted returns supported by a record 12.6 million decisioned applications and 23 straight quarters of dealer growth.”
“Our accomplishments in 2019, along with our consistent record of delivering results for our shareholders, were recognized by S&P and Fitch as Ally received investment grade2 credit ratings from both agencies for the first time since 2005.”
“We successfully returned approximately $1.3 billion of capital to shareholders in 2019 and have completed approximately $3.1 billion of share repurchases since the inception of our buyback program, reducing shares outstanding by nearly 23% since the end of 2Q 2016.”
“In 2019, we celebrated the 100-year anniversary of our auto finance business and the 10-year anniversary of Ally Bank. As we continue to diversify into new businesses and grow existing ones, while embracing a purpose-driven culture centered around our mantra to ‘Do It Right’, I remain fully confident in our ability to deliver value for all of our stakeholders over the long-term.”
| 1 | 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 Income, Core Net Income Attributable to Common Shareholders, Core OID, Core Return on Tangible Common Equity (Core ROTCE), Estimated Retail Auto Originated Yield, Tangible Common Equity, Net Financing Revenue (excluding Core OID), Adjusted Total Net Revenue and Adjusted Tangible Book Value per Share (Adjusted TBVPS). These measures are used by management and we believe are useful to investors in assessing the company’s operating performance and capital. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms, and Reconciliation to GAAP later in this document. |
| 2 | S&P and Fitch Ratings define investment grade bonds with a minimum rating of BBB-; Ally was upgraded by both rating agencies from BB+ to BBB- in 2019. |
Discussion of Results
Fourth Quarter
Net income attributable to common shareholders increased $88 million versus the prior year quarter to $378 million, as higher net financing revenue and higher other revenue more than offset higher provision for loan losses and higher noninterest expense.
Net financing revenue increased $16 million versus the prior year quarter. Net financing revenue, excluding Core OIDA, was $1 million higher year-over-year as retail auto portfolio yield expansion was mostly offset by lower commercial balances and lower lease gains.
Other revenue was up $189 million versus the prior year quarter, largely due to a $124 million change in the fair value of equity securities. Other revenue, excluding the impact of the change in fair value of equity securitiesB, increased $65 million year-over-year, largely due to higher realized investment gains and higher earned premiums.
Provision for loan losses increased $10 million to $276 million, compared to the prior year quarter, primarily due to higher net charge-offs and provision expense associated with the acquisition of HCS.
Noninterest expense was up $76 million year-over-year, reflecting continued investment in our brand and technological capabilities, HCS-related expenses, insurance expenses directly linked to higher written premium volumes, and other expenses supporting the growth of our retail auto and deposit businesses.
Full Year 2019
Net income attributable to common shareholders was $1.7 billion in 2019, compared to $1.3 billion in 2018, driven by higher net financing revenue, higher other revenue, and a lower effective tax rate attributable to a $201 million discrete tax benefit from valuation allowance release on foreign tax credit carryforwards in the second quarter, partially offset by higher noninterest expense and higher provision for loan losses.
Net financing revenue improved to $4.6 billion, up $243 million from the prior year, driven by the expansion of retail auto yields and the maturity of high-cost unsecured debt, more than offsetting higher funding costs.
Full year NIM was 2.67%, including Core OIDA of 1 bp, up 2 bps year-over-year. Excluding Core OIDA, NIM was 2.68%, declining 2 bps year-over-year, as a result of growth in capital efficient, lower yielding investment securities and mortgage assets and higher funding costs, partially offset by retail auto portfolio yield expansion.
Provision for loan losses increased $80 million over the prior year, primarily driven by higher net charge offs and earning asset growth in the consumer and corporate finance businesses.
Other revenue was up year-over-year driven by higher realized investment gains and higher insurance premiums, as well as a net $211 million change in the fair value of equity securities. Other revenue, excluding the impact of the change in fair value of equity securitiesB, was up $136 million year-over-year at $1.7 billion.
Noninterest expense increased $165 million over the prior year largely due to costs associated with the enhancement of our digital and technological capabilities, higher marketing spend and higher insurance expenses in support of revenue growth.
| A | Represents a non-GAAP financial measure. Refer to the definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
| B | Adjusted other revenue is a non-GAAP financial measure. Effective 1/1/2018, ASU 2016-01 requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity. |
Full Year 2019 and Fourth Quarter Financial Results
| Increase/(Decrease) vs. | ||||||||||||||||||||||||||||||||
| ($ millions except per share data) | 2019 | 2018 | 4Q 19 | 3Q 19 | 4Q 18 | 2018 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||||
| Net Financing Revenue (excluding Core OID)1 |
$ | 4,662 | $ | 4,476 | $ | 1,164 | $ | 1,195 | $ | 1,163 | $ | 186 | $ | (32 | ) | $ | 1 | |||||||||||||||
| Core OID |
(29 | ) | (86 | ) | (8 | ) | (7 | ) | (23 | ) | 57 | (0 | ) | 15 | ||||||||||||||||||
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| (a) Net Financing Revenue (as reported) |
4,633 | 4,390 | 1,156 | 1,188 | 1,140 | 243 | (32 | ) | 16 | |||||||||||||||||||||||
| Other Revenue (excluding Change in Fair Value of Equity Securities)2 |
1,672 | 1,535 | 458 | 424 | 393 | 136 | 34 | 65 | ||||||||||||||||||||||||
| Change in Fair Value of Equity Securities2 |
89 | (121 | ) | 29 | (11 | ) | (95 | ) | 211 | 40 | 124 | |||||||||||||||||||||
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| (b) Other Revenue (as reported) |
1,761 | 1,414 | 487 | 413 | 298 | 347 | 74 | 189 | ||||||||||||||||||||||||
| (c) Provision for Loan Losses |
998 | 918 | 276 | 263 | 266 | 80 | 13 | 10 | ||||||||||||||||||||||||
| (d) Noninterest Expense |
3,429 | 3,264 | 880 | 838 | 804 | 165 | 42 | 76 | ||||||||||||||||||||||||
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| Pre-tax Income from Continuing Operations (a+b-c-d) |
$ | 1,967 | $ | 1,622 | $ | 487 | $ | 500 | $ | 368 | $ | 345 | $ | (13 | ) | $ | 119 | |||||||||||||||
| Income Tax Expense |
246 | 359 | 106 | 119 | 79 | (113 | ) | (13 | ) | 27 | ||||||||||||||||||||||
| (Loss) / Income from Discontinued Operations, Net of Tax |
(6 | ) | — | (3 | ) | — | 1 | (6 | ) | (3 | ) | (4 | ) | |||||||||||||||||||
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| Net Income |
$ | 1,715 | $ | 1,263 | $ | 378 | $ | 381 | $ | 290 | $ | 452 | $ | (3 | ) | $ | 88 | |||||||||||||||
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| 2019 | 2018 | 4Q 19 | 3Q 19 | 4Q 18 | 2018 | 3Q 19 | 4Q 18 | |||||||||||||||||||||||||
| GAAP EPS (diluted) |
$ | 4.34 | $ | 2.95 | $ | 0.99 | $ | 0.97 | $ | 0.70 | $ | 1.38 | $ | 0.02 | $ | 0.29 | ||||||||||||||||
| Discontinued Operations, Net of Tax |
0.02 | — | 0.01 | — | (0.00 | ) | 0.02 | 0.01 | 0.01 | |||||||||||||||||||||||
| Core OID, Net of Tax |
0.06 | 0.16 | 0.02 | 0.02 | 0.04 | (0.10 | ) | 0.00 | (0.03 | ) | ||||||||||||||||||||||
| Change in Fair Value of Equity Securities, Net of Tax |
(0.18 | ) | 0.22 | (0.06 | ) | 0.02 | 0.18 | (0.40 | ) | (0.08 | ) | (0.24 | ) | |||||||||||||||||||
| Significant Discrete Tax Items4 |
(0.51 | ) | — | — | — | — | (0.51 | ) | — | — | ||||||||||||||||||||||
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| Adjusted EPS3 |
$ | 3.72 | $ | 3.34 | $ | 0.95 | $ | 1.01 | $ | 0.92 | $ | 0.39 | $ | (0.06 | ) | $ | 0.03 | |||||||||||||||
| Core ROTCE3 |
12.0 | % | 12.3 | % | 11.2 | % | 12.3 | % | 13.4 | % | ||||||||||||||||||||||
| Adjusted Efficiency Ratio3 |
47.4 | % | 47.6 | % | 49.4 | % | 45.3 | % | 46.9 | % | ||||||||||||||||||||||
| Effective Tax Rate4 |
12.5 | % | 22.1 | % | 21.7 | % | 23.9 | % | 21.5 | % | ||||||||||||||||||||||
| (1) | Represents a non-GAAP financial measure. Adjusted for Core OID. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
| (2) | Represents a non-GAAP financial measure. Adjusted for change in the fair value of equity securities due to the implementation of ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (3) | Represents a non-GAAP financial measure. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms, and Reconciliation to GAAP later in this press release. |
| (4) | Significant discrete tax items do not relate to the operating performance of the core businesses. 2019 effective tax rate was significantly impacted by the release of valuation allowance on foreign tax credit carryforwards. |
2
Pre-Tax Income by Segment
| Increase/(Decrease) vs. | ||||||||||||||||||||||||||||||||
| ($ millions) | 2019 | 2018 | 4Q 19 | 3Q 19 | 4Q 18 | 2018 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||||
| Automotive Finance |
$ | 1,618 | $ | 1,368 | $ | 401 | $ | 429 | $ | 335 | $ | 250 | $ | (28 | ) | $ | 66 | |||||||||||||||
| Insurance |
315 | 80 | 114 | 56 | (13 | ) | 235 | 58 | 127 | |||||||||||||||||||||||
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| Dealer Financial Services |
$ | 1,933 | $ | 1,448 | $ | 515 | $ | 485 | $ | 322 | $ | 485 | $ | 30 | $ | 193 | ||||||||||||||||
| Corporate Finance |
153 | 144 | 50 | 44 | 21 | 9 | 6 | 29 | ||||||||||||||||||||||||
| Mortgage Finance |
40 | 45 | 2 | 11 | 15 | (5 | ) | (9 | ) | (13 | ) | |||||||||||||||||||||
| Corporate and Other |
(159 | ) | (15 | ) | (80 | ) | (40 | ) | 10 | (144 | ) | (40 | ) | (90 | ) | |||||||||||||||||
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| Pre-Tax Income from Continuing Operations |
$ | 1,967 | $ | 1,622 | $ | 487 | $ | 500 | $ | 368 | $ | 345 | $ | (13 | ) | $ | 119 | |||||||||||||||
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| Core OID1 |
29 | 86 | 8 | 7 | 23 | (57 | ) | 0 | (15 | ) | ||||||||||||||||||||||
| Change in Fair Value of Equity Securities2 |
(89 | ) | 121 | (29 | ) | 11 | 95 | (211 | ) | (40 | ) | (124 | ) | |||||||||||||||||||
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| Core Pre-tax Income3 |
$ | 1,907 | $ | 1,829 | $ | 466 | $ | 519 | $ | 486 | $ | 78 | $ | (53 | ) | $ | (20 | ) | ||||||||||||||
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| (1) | Core OID for all periods shown is applied to the pre-tax income of the Corporate and Other segment. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
| (2) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Reflects equity fair value adjustments related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (3) | Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations for Core OID and equity fair value adjustments related to ASU 2016-01. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
Discussion of Segment Results
Auto Finance
Pre-tax income in the fourth quarter of $401 million was $66 million higher year-over-year as higher net financing revenue and lower provision for loan losses more than offset higher noninterest expense. Quarter-over-quarter results were impacted by lower net financing revenue driven by seasonally lower lease gains, lower commercial auto earning asset balances, and higher noninterest expense, partially offset by lower provision for loan losses.
Fourth quarter net financing revenue was $82 million higher year-over-year as higher retail auto portfolio yield and balances more than offset declines in lease gains and lower commercial auto earning asset balances.
Consumer auto originations were $8.1 billion in the fourth quarter, down $0.1 billion versus the prior year period. Fourth quarter originations included $3.9 billion of used retail volume, or 49% of total originations, $3.0 billion of new retail volume and $1.2 billion of leases.
Full year 2019 pre-tax income increased $250 million to $1.6 billion with higher net financing revenue more than offsetting higher provision for loan losses, lower other revenue and higher noninterest expense. Estimated retail auto originated yieldA was 7.44% in 2019 compared to 7.07% in 2018.
Consumer originations increased $0.9 billion in 2019 to $36.3 billion, with used volume of $19.0 billion, or 52% of total 2019 originations, $12.9 billion of new retail volume and $4.4 billion of leases.
End of period auto earning assets declined $3.5 billion year-over-year to $113.6 billion. Consumer auto earning assets increased from $78.9 billion to $81.1 billion year-over-year, driven by growth in the retail auto portfolio. End of period commercial earning assets decreased $5.6 billion year-over-year to $32.5 billion, primarily due to lower GM and Chrysler inventory levels.
Insurance
Pre-tax income was $114 million in the quarter, up $127 million versus the prior year period, primarily due to a net $120 million change in the fair value of equity securities. Core pre-tax incomeB was $86 million in the quarter, up $7 million versus the prior year period, driven primarily by higher investment income.
Quarterly written premiums were up $37 million year-over-year at $335 million, driven by ongoing vehicle inventory insurance portfolio growth and rate increases across various products. Total investment income of $36 million, excluding the change in fair value of equity securitiesB, was up $13 million year-over-year due to higher realized investment gains.
Full year 2019 pre-tax income was $315 million, up $235 million versus the prior year, primarily due to a net $200 million change in the fair value of equity securities. Core pre-tax incomeB for 2019 was $227 million, up from $192 million in 2018, driven by higher investment income and higher earned premiums.
| A | Estimated retail auto originated yield is a non-GAAP financial measure. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
| B | Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity. Refer to the definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
3
Corporate Finance
Pre-tax income was $50 million in the quarter, compared to $21 million in the prior year period, driven by higher net financing revenue, higher other revenue and lower provision for loan losses due to higher specific loan reserves in the prior year period.
Net financing revenue was $64 million in the quarter, up $13 million year-over-year, driven by strong loan growth. The HFI portfolio increased 23% year-over-year from $4.6 billion to $5.7 billion.
Other revenue in the quarter was $15 million, up $13 million year-over-year, due to higher syndication fee income and investment income, which includes a $4 million decline in the fair value of equity securities in the prior year period.
Full year 2019 pre-tax income was $153 million, compared to pre-tax income of $144 million in 2018, as higher net financing revenue and an $11 million increase in the change in fair value of equity securities more than offset higher provision for loan losses, lower fee income and higher noninterest expense associated with loan growth.
Mortgage Finance
Pre-tax income was $2 million in the quarter, compared to $15 million in the prior year period, as higher other revenue and lower noninterest expense was more than offset by lower net financing revenue and higher provision for loan losses. Net financing revenue was down $12 million year-over-year to $36 million, driven by faster prepayments and higher premium amortization. Total assets increased $1.1 billion to $16.3 billion primarily due to direct-to-consumer originations.
Fourth quarter provision for loan losses was $6 million higher year-over-year driven by originated volume growth and a reserve release in the prior year period.
Full year 2019 pre-tax income was $40 million, down $5 million from 2018, as higher other revenue was more than offset by lower net financing revenue, higher provision for loan losses, and higher noninterest expense driven by the continued expansion of the mortgage business.
Capital, Liquidity & Deposits
Capital
Approximately $1.3 billion of capital was returned to common shareholders in 2019. Ally repurchased $1.0 billion of common stock, or approximately 34.7 million shares, during the year, including shares withheld to cover income taxes owed by participants related to share-based incentive plans. Since initiating share repurchases in 3Q 2016, Ally has repurchased approximately 121 million shares and outstanding share count has declined by 22.6%.
During 2019, Ally paid four quarterly common dividends totaling $0.68 per share and increased the dividend per share from $0.15 in the fourth quarter of 2018 to $0.17 in the first quarter of 2019. Ally’s Board of Directors approved a $0.19 per share common dividend for the first quarter of 2020, reflecting a $0.02 increase per share relative to the prior quarter dividend.
Preliminary Basel III Transition Common Equity Tier 1 (CET1) capital ratio increased from 9.1% to 9.5% year-over-year, driven by risk-weighted asset decline due to lower commercial auto balances.
Liquidity & Funding
Consolidated cash and cash equivalents totaled $3.6 billion at quarter-end, flat compared to the end of the third quarter. Ally had $0.8 billion of institutional unsecured debt maturities in the quarter. Total liquidityC was $29.9 billion at quarter-end.
Auto securitizations totaled $1.0 billion in the quarter. For the year, the company had $3.6 billion in term auto securitization activity and issued $750 million of institutional unsecured debt. Ally reduced its total committed secured credit facility capacity by $6.1 billion year-over-year.
At year-end, 93% of Ally’s total assets were funded at Ally Bank, up from 89% a year ago.
Deposits represented 75% of Ally’s funding portfolio at year-end, excluding Core OID balanceD, improving from 66% a year ago.
Deposits
Retail deposits increased to $103.7 billion at year-end, up $2.4 billion for the quarter and up a record $14.6 billion year-over-year. Total deposits increased to $120.8 billion at year-end, up $14.6 billion year-over-year.
The average retail portfolio deposit rate was 2.02% for the quarter, up 9 bps year-over-year and down 12 bps quarter-over-quarter.
Ally’s retail deposit customer base grew 20% year-over-year, totaling 1.97 million customers at year-end, while adding a record 322 thousand customers in 2019. Average customer balance ended the quarter at $52.7 thousand. Millennials continue to comprise the largest generation segment of new customers, accounting for 60% of new customers in the fourth quarter.
| C | Total liquidity includes cash & cash equivalents, highly liquid securities and current committed unused borrowing capacity. See page 18 of the Financial Supplement for more details. |
| D | Represents a non-GAAP financial measure. Refer to the definitions of Non-GAAP Financial Measures and Other Key Terms later in this press release. |
4
Definitions of Non-GAAP Financial Measures and Other Key Terms
Ally believes the non-GAAP financial measures defined here are important to the reader of the Consolidated Financial Statements, but these are supplemental to and not a substitute for GAAP measures.
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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. In the numerator of Adjusted EPS, GAAP net income attributable to common shareholders is adjusted for the following items: (1) excludes discontinued operations, net of tax, as Ally is primarily a domestic company and sales of international businesses and other discontinued operations in the past have significantly impacted GAAP EPS, (2) adds back the tax-effected non-cash Core OID, (3) excludes equity fair value adjustments (net of tax) related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity, and (4) excludes significant discrete tax items that do not relate to the operating performance of the core businesses.
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 Adjusted Efficiency Ratio, total noninterest expense is adjusted for Insurance segment expense, rep and warrant expense and repositioning items primarily related to strategic activities. In the denominator, total net revenue is adjusted for Insurance segment revenue and Core OID. See Reconciliation to GAAP on page 7 for calculation methodology and details.
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 statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. Adjusted TBVPS generally adjusts common equity for: (1) goodwill and identifiable intangibles, net of deferred tax liabilities (DTLs) and (2) tax-effected Core OID balance to reduce tangible common equity in the event the corresponding discounted bonds are redeemed/tendered. In December 2017, tax-effected Core OID balance was adjusted from a statutory U.S. federal tax rate of 35% to 21% (“rate”) as a result of changes to U.S. tax law. The adjustment conservatively increased the tax-effected Core OID balance and consequently reduced Adjusted TBVPS as any acceleration of the non-cash charge in the future periods would flow through the financial statements at a 21% rate versus a previously modeled 35% rate. See Reconciliation to GAAP on page 7 for calculation methodology and details.
Core Net Income Attributable to Common Shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. Core net income attributable to common shareholders adjusts GAAP net income attributable to common shareholders for discontinued operations net of tax, tax-effected Core OID expense, tax-effected changes in equity investments measured at fair value, and significant discrete tax items. See Reconciliation to GAAP on page 6 for calculation methodology and details.
Core Original Issue Discount (Core OID) amortization expense is a non-GAAP financial measure for OID, primarily related to bond exchange OID which excludes international operations and future issuances. See page 7 for calculation methodology and details.
Core Outstanding Original Issue Discount Balance (Core OID balance) is a non-GAAP financial measure for outstanding OID, primarily related to bond exchange OID which excludes international operations and future issuances. See page 7 for calculation methodology and details.
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, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See the Pre-Tax Income by Segment Table on page 3 for calculation methodology and details.
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 support core operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and net DTA. Ally’s core net income attributable to common shareholders for purposes of calculating Core ROTCE is based on the actual effective tax rate for the period adjusted for significant discrete tax items including tax reserve releases, which aligns with the methodology used in calculating adjusted earnings per share.
| (1) | In the numerator of Core ROTCE, GAAP net income attributable to common shareholders is adjusted for discontinued operations net of tax, tax-effected Core OID, fair value adjustments (net of tax) related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity, and significant discrete tax items. |
| (2) | In the denominator, GAAP shareholder’s equity is adjusted for preferred equity and goodwill and identifiable intangibles net of DTL, Core OID balance, and net DTA. |
Corporate and Other primarily consists of activity related to centralized corporate treasury activities such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with new debt issuances and bond exchanges, and the residual impacts of our corporate FTP and treasury ALM activities. Corporate and Other also includes certain equity investments, the management of our legacy mortgage portfolio, and reclassifications and eliminations between the reportable operating segments. Subsequent to June 1, 2016, the revenue and expense activity associated with Ally Invest was included within the Corporate and Other segment. Subsequent to October 1, 2019, the revenue and expense activity associated with Health Credit Services (rebranded Ally Lending) was included within the Corporate and Other segment.
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 measure for Estimated Retail Auto Originated Yield and therefore this forecasted estimate of yield at the time of origination cannot be quantitatively reconciled to comparable GAAP information.
Net Financing Revenue (excluding OID) excludes Core OID.
5
Net Charge-Off Ratios are calculated as annualized net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale.
Tangible Common Equity is a non-GAAP financial measure that is defined as common stockholders’ equity less goodwill and identifiable intangible assets, net of deferred tax liabilities. Ally considers various measures when evaluating capital adequacy, including tangible common equity. Ally believes that tangible common equity is important because we believe readers may assess our capital adequacy using this measure. Additionally, presentation of this measure allows readers to compare certain aspects of our capital adequacy on the same basis to other companies in the industry. For purposes of calculating Core return on tangible common equity (Core ROTCE), tangible common equity is further adjusted for Core OID balance and net deferred tax asset. See page 6 for calculation methodology & details.
U.S. Consumer Auto Originations
| New Retail – standard and subvented rate new vehicle loans | Used – used vehicle loans | |
| Growth – total originations from non-GM/Chrysler dealers and direct-to-consumer loans | Lease – new vehicle lease originations |
Reconciliation to GAAP
Adjusted Earnings per Share
| Numerator ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Net Income Attributable to Common Shareholders |
$ | 1,715 | $ | 1,263 | $ | 929 | $ | 378 | $ | 381 | $ | 290 | ||||||||||||
| Discontinued Operations, Net of Tax |
6 | — | (3 | ) | 3 | — | (1 | ) | ||||||||||||||||
| Core OID |
29 | 86 | 71 | 8 | 7 | 23 | ||||||||||||||||||
| Change in Fair Value of Equity Securities |
(89 | ) | 121 | — | (29 | ) | 11 | 95 | ||||||||||||||||
| Tax on: Core OID, Repo. Items & Change in Fair Value of Equity Securities (21% starting 1Q18, 35% prior) |
13 | (43 | ) | (25 | ) | 4 | (4 | ) | (25 | ) | ||||||||||||||
| Significant Discrete Tax Items |
(201 | ) | — | 119 | — | — | — | |||||||||||||||||
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| Core Net Income Attributable to Common Shareholders [a] |
$ | 1,472 | $ | 1,427 | $ | 1,091 | $ | 364 | $ | 396 | $ | 382 | ||||||||||||
| Denominator |
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| Weighted-Average Common Shares Outstanding - (Diluted, thousands) [b] |
395,395 | 427,680 | 455,350 | 383,391 | 392,604 | 414,750 | ||||||||||||||||||
| Adjusted EPS [a] ÷ [b] |
$ | 3.72 | $ | 3.34 | $ | 2.39 | $ | 0.95 | $ | 1.01 | $ | 0.92 | ||||||||||||
| Core Return on Tangible Common Equity (ROTCE) |
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| Numerator ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Net Income Attributable to Common Shareholders |
$ | 1,715 | $ | 1,263 | $ | 929 | $ | 378 | $ | 381 | $ | 290 | ||||||||||||
| Discontinued Operations, Net of Tax |
6 | — | (3 | ) | 3 | — | (1 | ) | ||||||||||||||||
| Core OID |
29 | 86 | 71 | 8 | 7 | 23 | ||||||||||||||||||
| Change in Fair Value of Equity Securities |
(89 | ) | 121 | — | (29 | ) | 11 | 95 | ||||||||||||||||
| Tax on: Core OID, Repo. Items & Change in Fair Value of Equity Securities (21% starting 1Q18, 35% prior) |
13 | (43 | ) | (25 | ) | 4 | (4 | ) | (25 | ) | ||||||||||||||
| Significant Discrete Tax Items |
(201 | ) | — | 119 | — | — | — | |||||||||||||||||
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| Core Net Income Attributable to Common Shareholders [a] |
$ | 1,472 | $ | 1,427 | $ | 1,091 | $ | 364 | $ | 396 | $ | 382 | ||||||||||||
| Denominator (2-period average, $ billions) |
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| GAAP Shareholder’s Equity |
$ | 13.8 | $ | 13.4 | $ | 13.4 | $ | 14.4 | $ | 14.4 | $ | 13.2 | ||||||||||||
| Goodwill & Identifiable Intangibles, Net of Deferred Tax Liabilities (DTLs) |
(0.4 | ) | (0.3 | ) | (0.3 | ) | (0.4 | ) | (0.3 | ) | (0.3 | ) | ||||||||||||
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| Tangible Common Equity |
$ | 13.5 | $ | 13.1 | $ | 13.1 | $ | 14.1 | $ | 14.1 | $ | 12.9 | ||||||||||||
| Core OID Balance |
(1.1 | ) | (1.1 | ) | (1.2 | ) | (1.1 | ) | (1.1 | ) | (1.1 | ) | ||||||||||||
| Net Deferred Tax Asset (DTA) |
(0.2 | ) | (0.4 | ) | (0.7 | ) | (0.0 | ) | (0.1 | ) | (0.4 | ) | ||||||||||||
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| Normalized Common Equity [b] |
$ | 12.2 | $ | 11.6 | $ | 11.2 | $ | 13.0 | $ | 12.9 | $ | 11.4 | ||||||||||||
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| Core Return on Tangible Common Equity [a] ÷ [b] |
12.0 | % | 12.3 | % | 9.8 | % | 11.2 | % | 12.3 | % | 13.4 | % | ||||||||||||
6
Adjusted Tangible Book Value per Share
| Numerator ($ billions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Common Shareholder’s Equity |
$ | 14.4 | $ | 13.3 | $ | 13.5 | $ | 14.4 | $ | 14.5 | $ | 13.3 | ||||||||||||
| Goodwill and Identifiable Intangible Assets, Net of DTLs |
(0.5 | ) | (0.3 | ) | (0.3 | ) | (0.5 | ) | (0.3 | ) | (0.3 | ) | ||||||||||||
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| Tangible Common Equity |
14.0 | 13.0 | 13.2 | 14.0 | 14.2 | 13.0 | ||||||||||||||||||
| Tax-effected Core OID Balance (21% starting 4Q17, 35% prior) |
(0.8 | ) | (0.9 | ) | (0.9 | ) | (0.8 | ) | (0.8 | ) | (0.9 | ) | ||||||||||||
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| Adjusted Tangible Book Value [a] |
$ | 13.1 | $ | 12.1 | $ | 12.3 | $ | 13.1 | $ | 13.3 | $ | 12.1 | ||||||||||||
| Denominator |
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| Issued Shares Outstanding (period-end, thousands) [b] |
374,332 | 404,900 | 437,054 | 374,332 | 383,523 | 404,900 | ||||||||||||||||||
| Metric |
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| GAAP Common Shareholder’s Equity per Share |
$ | 38.5 | $ | 32.8 | $ | 30.9 | $ | 38.5 | $ | 37.7 | $ | 32.8 | ||||||||||||
| Goodwill and Identifiable Intangible Assets, Net of DTLs per Share |
(1.2 | ) | (0.7 | ) | (0.7 | ) | (1.2 | ) | (0.7 | ) | (0.7 | ) | ||||||||||||
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| Tangible Common Equity per Share |
$ | 37.3 | $ | 32.1 | $ | 30.2 | $ | 37.3 | $ | 37.0 | $ | 32.1 | ||||||||||||
| Tax-effected Core OID Balance (21% starting 4Q17, 35% prior) per Share |
(2.2 | ) | (2.1 | ) | (2.1 | ) | (2.2 | ) | (2.2 | ) | (2.1 | ) | ||||||||||||
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| Adjusted Tangible Book Value per Share [a] ÷ [b] |
$ | 35.1 | $ | 29.9 | $ | 28.1 | $ | 35.1 | $ | 34.7 | $ | 29.9 | ||||||||||||
| Adjusted Efficiency Ratio |
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| Numerator ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Noninterest Expense |
$ | 3,429 | $ | 3,264 | $ | 3,110 | $ | 880 | $ | 838 | $ | 804 | ||||||||||||
| Rep and Warrant Expense |
(0 | ) | 3 | 0 | — | (0 | ) | 1 | ||||||||||||||||
| Insurance Expense |
(1,013 | ) | (955 | ) | (950 | ) | (238 | ) | (247 | ) | (215 | ) | ||||||||||||
| Repositioning Items |
— | — | — | — | — | — | ||||||||||||||||||
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| Adjusted Noninterest Expense for Adjusted Efficiency Ratio [a] |
$ | 2,416 | $ | 2,312 | $ | 2,160 | $ | 642 | $ | 591 | $ | 590 | ||||||||||||
| Denominator ($ millions) |
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| Total Net Revenue |
$ | 6,394 | $ | 5,804 | $ | 5,765 | $ | 1,643 | $ | 1,601 | $ | 1,438 | ||||||||||||
| Core OID |
29 | 86 | 71 | 8 | 7 | 23 | ||||||||||||||||||
| Insurance Revenue |
(1,328 | ) | (1,035 | ) | (1,118 | ) | (352 | ) | (303 | ) | (202 | ) | ||||||||||||
| Repositioning Items |
— | — | — | — | — | — | ||||||||||||||||||
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| Adjusted Net Revenue for Adjusted Efficiency Ratio [b] |
$ | 5,095 | $ | 4,855 | $ | 4,718 | $ | 1,299 | $ | 1,305 | $ | 1,259 | ||||||||||||
| Adjusted Efficiency Ratio [a] ÷ [b] |
47.4 | % | 47.6 | % | 45.8 | % | 49.4 | % | 45.3 | % | 46.9 | % | ||||||||||||
| Original Issue Discount Amortization Expense ($ millions) | FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| Core Original Issue Discount (Core OID) Amortization Expense (excl. accelerated OID) |
$ | 29 | $ | 86 | $ | 71 | $ | 8 | $ | 7 | $ | 23 | ||||||||||||
| Other OID |
13 | 15 | 20 | 3 | 3 | 2 | ||||||||||||||||||
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| GAAP Original Issue Discount Amortization Expense |
$ | 42 | $ | 101 | $ | 90 | $ | 11 | $ | 11 | $ | 26 | ||||||||||||
| Outstanding Original Issue Discount Balance ($ millions) | FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| Core Outstanding Original Issue Discount Balance (Core OID Balance) |
$ | (1,063 | ) | $ | (1,092 | ) | $ | (1,178 | ) | $ | (1,063 | ) | $ | (1,071 | ) | $ | (1,092 | ) | ||||||
| Other Outstanding OID Balance |
(37 | ) | (43 | ) | (57 | ) | (37 | ) | (40 | ) | (43 | ) | ||||||||||||
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| GAAP Outstanding Original Issue Discount Balance |
$ | (1,100 | ) | $ | (1,135 | ) | $ | (1,235 | ) | $ | (1,100 | ) | $ | (1,111 | ) | $ | (1,135 | ) | ||||||
7
Net Financing Revenue (ex. Core OID)
| ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Net Financing Revenue |
$ | 4,633 | $ | 4,390 | $ | 4,221 | $ | 1,156 | $ | 1,188 | $ | 1,140 | ||||||||||||
| Core OID |
29 | 86 | 71 | 8 | 7 | 23 | ||||||||||||||||||
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| Net Financing Revenue (ex. Core OID) [a] |
$ | 4,662 | $ | 4,476 | $ | 4,292 | $ | 1,164 | $ | 1,195 | $ | 1,163 | ||||||||||||
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| Adjusted Other Revenue | ||||||||||||||||||||||||
| ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| GAAP Other Revenue |
$ | 1,761 | $ | 1,414 | $ | 1,544 | $ | 487 | $ | 413 | $ | 298 | ||||||||||||
| Change in Fair Value of Equity Securities |
(89 | ) | 121 | — | (29 | ) | 11 | 95 | ||||||||||||||||
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| Adjusted Other Revenue [b] |
$ | 1,672 | $ | 1,535 | $ | 1,544 | $ | 458 | $ | 424 | $ | 393 | ||||||||||||
| Adjusted Total Net Revenue | ||||||||||||||||||||||||
| ($ millions) |
FY 2019 | FY 2018 | FY 2017 | 4Q 19 | 3Q 19 | 4Q 18 | ||||||||||||||||||
| Adjusted Total Net Revenue [a] + [b] |
$ | 6,334 | $ | 6,011 | $ | 5,836 | $ | 1,662 | $ | 1,620 | $ | 1,556 | ||||||||||||
Insurance Non-GAAP Walk to Core Pre-Tax Income (Quarterly)
| 4Q 2019 | 4Q 2018 | |||||||||||||||||||||||||||||||
| ($ millions)
Insurance |
GAAP | Core OID | Change in the fair value of equity securities |
Non-GAAP1 | GAAP | Core OID | Change in the fair value of equity securities |
Non-GAAP1 | ||||||||||||||||||||||||
| Premiums, Service Revenue Earned and Other |
$ | 288 | $ | — | $ | — | $ | 288 | $ | 271 | $ | — | $ | — | $ | 271 | ||||||||||||||||
| Losses and Loss Adjustment Expenses |
61 | — | — | 61 | 54 | — | — | 54 | ||||||||||||||||||||||||
| Acquisition and Underwriting Expenses |
177 | — | — | 177 | 161 | — | — | 161 | ||||||||||||||||||||||||
| Investment Income and Other |
64 | — | (28 | ) | 36 | (69 | ) | — | 91 | 22 | ||||||||||||||||||||||
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| Pre-tax Income (Loss) from Continuing Operations |
$ | 114 | — | $ | (28 | ) | $ | 86 | $ | (13 | ) | — | $ | 91 | $ | 78 | ||||||||||||||||
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| 1 | Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. |
Insurance Non-GAAP Walk to Core Pre-Tax Income (Annual)
| FY 2019 | FY 2018 | |||||||||||||||||||||||||||||||
| ($ millions)
Insurance |
GAAP | Core OID | Change in the fair value of equity securities |
Non-GAAP1 | GAAP | Core OID | Change in the fair value of equity securities |
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| Premiums, Service Revenue Earned and Other |
$ | 1,099 | $ | — | $ | — | $ | 1,099 | $ | 1,032 | $ | — | $ | — | $ | 1,032 | ||||||||||||||||
| Losses and Loss Adjustment Expenses |
321 | — | — | 321 | 295 | — | — | 295 | ||||||||||||||||||||||||
| Acquisition and Underwriting Expenses |
692 | — | — | 692 | 660 | — | — | 660 | ||||||||||||||||||||||||
| Investment Income and Other |
229 | — | (88 | ) | 141 | 3 | — | 112 | 115 | |||||||||||||||||||||||
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| Pre-tax Income from Continuing Operations |
$ | 315 | — | $ | (88 | ) | $ | 227 | $ | 80 | — | $ | 112 | $ | 192 | |||||||||||||||||
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| 1 | Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. |
8
Additional Financial Information
For additional financial information, the fourth quarter and full year 2019 earnings presentation and financial supplement are available in the Events & Presentations section of Ally’s Investor Relations Website at http://www.ally.com/about/investor/events-presentations/.
About Ally Financial Inc.
Ally Financial Inc. (NYSE: ALLY) is a leading digital financial-services company with $180.6 billion in assets as of December 31, 2019. As a customer-centric company with passionate customer service and innovative financial solutions, we are relentlessly focused on “Doing it Right” and being a trusted financial-services provider to our consumer, commercial, and corporate customers. We are one of the largest full-service automotive-finance operations in the country and offer a wide range of financial services and insurance products to automotive dealerships and consumers. Our award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products, including savings, money-market, and checking accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs). Additionally, we offer securities-brokerage and investment-advisory services through Ally Invest. Our robust corporate finance business offers capital for equity sponsors and middle-market companies.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures.
Forward-Looking Statements
This earnings release 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. This information is preliminary and based on company and third-party data available at the time of the release or related communication.
This earnings release and related communications contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as statements about the outlook for various financial and operating metrics and statements about future capital allocation and actions. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future.
Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our “SEC filings”). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent SEC filings.
This earnings release and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the release.
Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other financing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the vehicle’s residual value. The terms “lend,” “finance,” and “originate” mean our direct extension or origination of loans, our purchase or acquisition of loans, or our purchase of operating leases as applicable. The term “consumer” means all consumer products associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial products associated with our loan activities, other than commercial retail installment sales contracts.
Contacts:
| Daniel Eller | Rebecca Anderson | |||
| Ally Investor Relations | Ally Communications (Media) | |||
| 704-444-5216 | 980-312-8681 | |||
| daniel.eller@ally.com | rebecca.anderson@ally.com |
9
Ally Financial Inc. 4Q 2019 Earnings Review January 22, 2020 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com Exhibit 99.2
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. This information is preliminary and based on company and third-party data available at the time of the presentation or related communication. This presentation and related communications contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as statements about the outlook for various financial and operating metrics and statements about future capital allocation and actions. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our “SEC filings”). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent SEC filings. This presentation and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the presentation. Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other financing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the vehicle’s residual value. The terms “lend,” “finance,” and “originate” mean our direct extension or origination of loans, our purchase or acquisition of loans, or our purchase of operating leases, as applicable. The term “consumer” means all consumer products associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial products associated with our loan activities, other than commercial retail installment sales contracts.
GAAP and Core Results – Annual 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 income, Core net income attributable to common shareholders, Core return on tangible common equity (Core ROTCE), Adjusted efficiency ratio, Adjusted total net revenue, Net financing revenue (excluding Core OID), Adjusted other revenue, Core original issue discount (Core OID) amortization expense, Core outstanding original issue discount balance (Core OID balance), and Adjusted tangible book value per share (Adjusted TBVPS). These measures are used by management and we believe are useful to investors in assessing the company’s operating performance and capital. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms, and Reconciliation to GAAP later in this document. Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See pages 31 and 32 for calculation methodology and details. 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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See page 32 for calculation methodology and details. 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 operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and the net deferred tax asset. See page 36 for calculation methodology and details. 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 tax-effected Core OID balance were accelerated immediately through the financial statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. See page 34 for calculation methodology and details. 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. Adjusted efficiency ratio generally adjusts for Insurance segment revenue and expense, rep and warrant expense and Core OID. See page 38 for calculation methodology and details. Adjusted total net revenue is a non-GAAP financial measure that adjusts GAAP total net revenue for Core OID and for change in the fair value of equity securities due to the implementation of ASU 2016-01 which 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 component of equity. See page 43 for calculation methodology and details.
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 income, Core net income attributable to common shareholders, Core return on tangible common equity (Core ROTCE), Adjusted efficiency ratio, Adjusted total net revenue, Net financing revenue (excluding Core OID), Adjusted other revenue, Core original issue discount (Core OID) amortization expense, Core outstanding original issue discount balance (Core OID balance), and Adjusted tangible book value per share (Adjusted TBVPS). These measures are used by management and we believe are useful to investors in assessing the company’s operating performance and capital. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms, and Reconciliation to GAAP later in this document. Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See pages 31 and 33 for calculation methodology and details. 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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See page 33 for calculation methodology and details. 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 operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and the net deferred tax asset. See page 37 for calculation methodology and details. 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 tax-effected Core OID balance were accelerated immediately through the financial statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. See page 35 for calculation methodology and details. 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. Adjusted efficiency ratio generally adjusts for Insurance segment revenue and expense, rep and warrant expense and Core OID. See page 39 for calculation methodology and details. Adjusted total net revenue is a non-GAAP financial measure that adjusts GAAP total net revenue for Core OID and for change in the fair value of equity securities due to the implementation of ASU 2016-01 which 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 component of equity. See page 44 for calculation methodology and details.
2019 Full-Year Highlights Adjusted EPS(1) of $3.72 – up 12% YoY | Core ROTCE(1) of 12.0% Adjusted total net revenue(1) of $6.3 billion – up 5% YoY Auto: Solid origination volumes and enhanced risk-adjusted returns Consumer auto originations of $36.3 billion – sourced from a record 12.6 million applications Retail auto portfolio yield of 6.60% – expansion of 46 bps YoY Estimated retail auto originated yield(2) of 7.44% for FY 2019 – up 37 bps YoY Consistent credit profile, retail auto net-charge off rate of 1.29% – down 4 bps YoY Deposits, Consumer & Commercial Products: Steady execution and sustained momentum Ending Total Deposits of $120.8 billion and Retail Deposits of $103.7 billion – both up $14.6 billion YoY Deposit customers of 1.97 million at year-end, up 322k YoY – highest annual growth for Ally Bank Ally Home® – $2.7 billion direct-to-consumer originations – 4x 2018 originated volume Ally Invest – self-directed net funded accounts up 15% YoY Closed acquisition of Health Credit Services in 4Q – rebranding as Ally Lending Corporate Finance held-for-investment balances of $5.7 billion increased 23% YoY Continued Delivering Against Our Long-Term Objectives Represents a non-GAAP financial measure. See pages 32, 36 and 43 for calculation methodology and details. 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. See page 31 for details. S&P and Fitch Ratings define investment grade bonds with a minimum rating of BBB-; Ally was upgraded by both rating agencies from BB+ to BBB- in 2019. Insurance: Written premiums of $1.31 billion, up 12% YoY – highest in 12 years 2019 common stock repurchases and dividends of $1.3 billion, increased 11% YoY S&P and Fitch Ratings upgraded Ally Financial’s senior unsecured credit rating to investment grade(3)
2019 Full-Year Financial Performance 2019 Outlook Adjusted EPS (1) Growth Core ROTCE (1) Adjusted Efficiency Ratio (1) Adjusted Total Net Revenue (1) Retail Auto NCO % (1) Represents a non-GAAP financial measure. See pages 32, 36, 38 and 43 for details. 2019 Actuals P 12 – 13% + Up 4 – 6% < 1.4% Up 7 – 10% Flat to Down 1% 12.0% 47.4% | ↓ 21bps $6.33B | ↑ 5% 1.29% $3.72 | ↑ 12% P P P P Met or Exceeded ALL Investor Guidance
Adjusted Earnings Per Share(1) Adjusted Total Net Revenue(2) Total Deposits Adjusted Tangible Book Value per Share(3) Core Metric Trends (2) Represents a non-GAAP financial measure. See page 44 for details. (1) Represents a non-GAAP financial measure. See page 33 for details. (3) Represents a non-GAAP financial measure. See page 35 for details. Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits.
Adjusted EPS(1) and Core ROTCE(1) Sustained Financial Improvement (1) Represents a non-GAAP financial measure. See page 32 and 36 for details. Adjusted Earnings per Share(1) Core ROTCE(1) + 415 bps 17% CAGR
Adjusted Total Net Revenue(1) Balance Sheet Powering Ongoing Revenue Expansion Represents a non-GAAP financial measure. Excludes Core OID from Net Financing Revenue. Excludes activity related to the extinguishment of high-cost legacy debt and for change in the fair value of equity securities due to the implementation of ASU 2016-01, effective 1/1/18, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity, and repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, from Other Revenue. See page 43 for calculation methodology and details. (1) (1) Adjusted Total Net Revenue(1) ($ millions) ‘14 → ‘19 ↑ $1.35B ↑ $1.12B ↑ $233M
Earning Asset Trends Steady Growth and Ongoing Asset Optimization Note: Retail auto loans exclude fair value adjustments for loans in hedge accounting relationship. Risk-weighted assets are Basel III transitional for 2015 – 2019, Basel I for 2014. ‘Other’ includes held-for-investment loans associated with Ally Lending, and excludes FHLB & FRB investments and restricted cash. ‘14 → ‘19 Risk-weighted assets (“RWA”) (1) $130.6B $135.8B $138.5B $138.9B $146.6B ↑ $29.5B ↑ $14.4B $145.0B (2)
Noninterest Expense Focused on Efficiency Gains While Prudently Investing for the Future Noninterest expense (excluding Insurance) is comprised of compensation & benefits, information technology, servicing and other unspecified noninterest expenses. Insurance expenses represents the segment’s noninterest expenses. Represents a non-GAAP financial measure. See page 38 for calculation methodology and details. (3) (1) (2)
Fourth Quarter and Full-Year 2019 Financial Results Represents a non-GAAP financial measure. Adjusted for Core OID. See pages 40, 41 and 42 for calculation methodology and details. Represents a non-GAAP financial measure. Adjusted for change in the fair value of equity securities due to the implementation of ASU 2016-01 which 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 component of equity. For Non-GAAP calculation methodology and details see pages 40, 41 and 42. For Non-GAAP calculation methodology and details see pages 32 and 33. Significant discrete tax items do not relate to the operating performance of the core businesses. 2019 effective tax rate was significantly impacted by the release of valuation allowance on foreign tax credit carryforwards. See page 30 for calculation methodology. excluding discrete tax benefit of $201M: 22.8% (4)
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 & Other segment. ‘Other’ includes Ally Lending held-for-investment consumer loans. Represents a non-GAAP financial measure. Excludes Core OID and Core OID balance. See page 43 and 44 for calculation methodology and details. Includes retail, brokered (inclusive of sweep deposits) and other deposits (inclusive of mortgage escrow and other deposits). Includes Demand Notes, FHLB borrowings and Repurchase Agreements. Includes trust preferred securities.
+$5.1B +$1.8B Retail Deposit Balance Growth Deposit Mix & Retail Rate Trend Retail Balance & Customer Growth Deposits Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. See page 31 for Customer Retention Rate definition. Total deposits of $120.8 billion, up $14.6 billion or 14% YoY Strong customer retention rate at 96% Ending retail deposits at $103.7 billion, up a record $14.6 billion YoY for Ally Bank and up $2.4 billion QoQ Deposits represent 75% of total funding(1) 1.97 million retail deposit customers, up 20% YoY Named “Best Online Bank” by Money® Magazine for the seventh time Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. Excludes Core OID and Core OID balance. See page 44 for calculation methodology and details. + 230k Existing Existing $77.9B +$9.4B New +$9.6B $89.1B $103.7B 2017 2018 2019 Retail Deposit Balances and Retail Deposit Customers New and Existing Retail Deposit Customer Growth ($ billions; customers thousands) New 1,416 1,646 1,968 Retail Deposit Customers + 322k +$11.2B YoY +$14.6B YoY
Capital Ratios and Risk-Weighted Assets Shareholder Distributions – Share Repurchases and Common Stock Dividends Capital Preliminary Basel III transition CET1 ratio of 9.5% YoY risk-weighted asset decline driven by lower commercial auto balances Repurchased 9.6M shares in 4Q 19 – nearly 23% of shares repurchased in aggregate since program inception Ally’s Board of Directors approved a $0.19 per share common dividend for the first quarter of 2020, reflecting a $0.02 increase per share relative to the prior quarter dividend Note: 'Since Inception' is activity in 3Q 16 - 4Q 19. Shares Repurchased include shares withheld to cover income taxes owed by participants related to share-based incentive plans. Excludes commissions. Note: Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital.
CECL Perspectives Net-Charge-off ‘Replenishment’ 1 Change in Portfolio Asset Size 2 All Other Incl. Macroeconomic Variables and Forecasts 3 Expect day 1 implementation of Current Expected Credit Losses (“CECL”) accounting standard on January 1, 2020 to result in approximately 106% increase to 4Q reserves Expect 1Q 20 CET1 impact of 17-19bps (in accordance with phase-in), based on tax-effected reserves Day 1 Reserve Ongoing Disclosure Ally expects to provide key drivers of provisioning and reserving under CECL construct Points of Emphasis Ongoing determination of reserve levels by management will continue to utilize quantitative and qualitative information Key macroeconomic drivers embedded in Ally’s quantitative forecast of lifetime losses: Reasonable and Supportable Period 12 months – Utilizing one macroeconomic scenario Reversion to Mean Period: Occurs in linear manner over 24 months (months 13-36) All macroeconomic variables used for mean reversion, including unemployment, utilize January 2008 – current period data set
Consolidated Net Charge-Offs Provision Expense Retail Auto Net Charge-Offs Retail Auto Delinquencies (60+ DPD) Asset Quality Note: Above loans are classified as held-for-investment and recorded at gross carrying value. Note: Includes accruing contracts only. Days-past-due (“DPD”). Note: Retail auto loans exclude fair value adjustments for loans in hedge accounting relationship. Note: See page 31 for definition.
Auto Finance – Results (1) Noninterest expense includes corporate allocations of $186 million in 4Q 2019, $184 million in 3Q 2019, and $182 million in 4Q 2018. Pre-tax income of $401 million, up $66 million YoY and down $28 million QoQ Net financing revenue increased YoY due to higher retail yields and balances, offsetting lower commercial assets primarily from lower inventory levels QoQ decrease due to seasonally lower lease remarketing gains and declining benchmarks, impacting dealer floorplan Noninterest expense up QoQ and YoY primarily supporting servicing and consumer portfolio growth Earning assets of $113.6 billion, down $3.5 billion YoY Lower commercial assets partly offset by higher consumer Solid progress and ongoing optimization across our market-leading, adaptable auto finance franchise Strong dealer relationships(2), grew to 18.3k in 4Q – 23 consecutive quarters of growth Record 4Q application flow of 2.9 million, up 7% YoY Successful conversion in January 2020 to new servicing and accounting technology platform for 4+ million customers (2) Dealer relationships include Ally active dealers, excluding RV Commercial & Consumer lines of business exited in 2Q 18. ↑ 46bps ↓ 4bps ‘18 v ‘19 ↑ 37bps (3) (3) 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. See page 31 for definitions.
Consumer Originations Origination Mix Consumer Assets Commercial Assets Auto Finance – Key Metrics Note: Held-for-investment (“HFI”) asset balances reflect the average daily balance for the quarter. Note: See page 31 for definition. Note: See page 31 for definition.
Insurance Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01 which 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 component of equity. See page 42 for details. Noninterest expense includes corporate allocations of $13 million in 4Q 2019, $14 million in 3Q 2019, and $12 million in 4Q 2018. Pre-tax income of $114 million, up $127 million YoY and up $58 million QoQ Core pre-tax income(1) of $86 million, up $7 million YoY and up $20 million QoQ Earned premiums up YoY driven primarily by vehicle inventory insurance portfolio growth Higher YoY loss expense primarily reflects growth in written premiums across product offerings and inventory insurance portfolio growth Investment income up YoY and QoQ driven by higher realized investment gains Written premiums of $335 million, up $37 million YoY Driven by ongoing vehicle inventory insurance portfolio growth and rate increases across various products
Corporate Finance Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01 which 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 component of equity. See page 42 for details. Noninterest expense includes corporate allocations of $7 million in 4Q 2019, $7 million in 3Q 2019, and $6 million in 4Q 2018. Pre-tax income of $50 million, up $29 million YoY and up $6 million QoQ Core pre-tax income(1) of $50 million, up $25 million YoY and up $4 million QoQ Net financing revenue increase YoY driven by strong loan growth Adjusted total other revenue(1) up due to higher syndication fee income and higher investment income Held-for-investment loan portfolio of $5.7 billion, up 23% YoY Asset-based products accounted for 90%+ of YoY growth Highly diversified portfolio with continued expansion into new verticals, led by experienced cycle-tested teams
Mortgage Finance Noninterest expense includes corporate allocations of $19 million in 4Q 2019, $20 million in 3Q 2019, and $19 million in 4Q 2018. 1st lien only. Updated home values derived using a combination of appraisals, Broker price opinion (BPOs), Automated Valuation Models (AVMs) and Metropolitan Statistical Area (MSA) level house price indices. Pre-tax income of $2 million, down $13 million YoY and $9 million QoQ Total net revenue down YoY, reflecting faster prepayments, higher premium amortization QoQ decrease primarily due to prior quarter loan sale Provision increase QoQ and YoY reflects originated volume growth and a reserve release in the prior year period that did not repeat Direct-to-consumer originations of $1.0 billion in 4Q 56% of 4Q originations from existing Ally Bank customers 84% of DTC originated volume sourced through Better.com
2020 Full-Year Outlook 2019 FY Results 2020 Outlook Adjusted EPS(1) Growth $3.72 ↑ 10 - 15% YoY Core ROTCE(1) 12.0% 12 - 13% Adjusted Total Net Revenue(1) $6.33B ↑ 6 - 9% YoY Adjusted Efficiency Ratio(1) 47.4% ↓ 50 - 150bps YoY Retail Auto NCO% 1.29% Low-end 1.4 - 1.6% Reflects steady coverage rate assumption under CECL methodology (1) Represents a non-GAAP financial measure. See pages 32, 36, 38 and 43 for details.
Conclusion Relentless Customer Focus and ‘Do It Right’ Culture Focused on Driving Long-Term Shareholder Value Ongoing optimization of market leading Auto and Insurance business lines Sustained growth in customers and optimization of deposit funding profile Expanding consumer product offerings Efficient capital deployment & disciplined risk management Steady execution along earnings growth path Servicing & Customer Care Payments Investing Savings & Checking Lending Consumer & Commercial Insurance
Supplemental
Results by Segment Core OID for all periods shown is applied to the pre-tax income of the Corporate and Other segment. Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Reflects equity fair value adjustments related to ASU 2016-01 which 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 component of equity. See pages 40 and 42 for details. Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations for Core OID and equity fair value adjustments related to ASU 2016-01. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See pages 40 and 42 for calculation methodology and details. Supplemental
Growth in Bank Funded Assets Funding Mix Unsecured Long-Term Debt Maturities(1) Funding and Liquidity Ally Bank funded assets at 93% up 4 pts YoY Deposits at 75% of total funding (excluding Core OID balance)(a) up 9 pts YoY Wholesale funding in 4Q: $1.0 billion of new retail secured funding Total liquidity levels at $29.9 billion as of 12/31/19 Supplemental Excludes retail notes, demand notes and trust preferred securities. 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 unsecured bonds as of January 1st of the respective year. Does not reflect weighted average interest expense for the respective year. 2021+ excludes ~$2.6 billion Trust Preferred securities (excluding OID/issuance costs). Note: Total Liquidity includes cash & cash equivalents, highly liquid securities and current committed unused capacity. See page 18 of the Financial Supplement for more details. (a) Excludes Core OID and Core OID balance. See page 43 for details. (a)
Corporate and Other Represents a non-GAAP financial measure. See page 44 for details. Represents a non-GAAP financial measure. See page 42 for calculation methodology and details. HFI legacy mortgage portfolio and HFI Ally Lending portfolio Corporate and Other includes the impact of centralized asset and liability management, corporate overhead allocation activities, the legacy mortgage portfolio, Ally Invest activity and Ally Lending activity Pre-tax loss of $80 million, down $90 million YoY and down $40 million QoQ Net financing revenue down YoY primarily driven by higher deposit funding costs Other revenue up QoQ and YoY primarily driven by gains on investments Noninterest expense up QoQ and YoY primarily driven by addition of Ally Lending in 4Q 19 and technology spend supporting business initiatives Total assets of $36.2 billion, up $2.2 billion YoY Higher investment securities balance partially offset by legacy mortgage portfolio run-off Supplemental
Interest Rate Sensitivity Supplemental Net financing revenue impacts reflect a rolling 12-month view. See page 31 for additional details. Gradual changes in interest rates are recognized over 12 months.
GAAP does not prescribe a method for calculating individual elements of deferred taxes for interim periods; therefore, these balances are estimates. Primarily book / tax timing differences. Deferred Tax Asset and Effective Tax Rate Supplemental Note: Significant discrete tax items do not relate to the operating performance of the core businesses. 2019 effective tax rate was significantly impacted by the release of valuation allowance on foreign tax credit carryforwards.
Notes on Non-GAAP and Other 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 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 component of equity. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See page 40 for calculation methodology and details. Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. Core net income attributable to common shareholders adjusts GAAP net income attributable to common shareholders for discontinued operations net of tax, tax-effected Core OID expense, tax-effected repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, preferred stock capital actions, significant discrete tax items and tax-effected changes in equity investments measured at fair value. See page 32 for calculation methodology and details. Core original issue discount (Core OID) amortization expense is a non-GAAP financial measure for OID, primarily related to bond exchange OID which excludes international operations and future issuances. See page 43 for calculation methodology and details. Core outstanding original issue discount balance (Core OID balance) is a non-GAAP financial measure for outstanding OID, primarily related to bond exchange OID which excludes international operations and future issuances. See page 43 for calculation methodology and details. Accelerated issuance expense (Accelerated OID) is the recognition of issuance expenses related to calls of redeemable debt. 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 on the implied forward curve. The analysis is highly dependent upon a variety of assumptions including the repricing characteristics of retail deposits with both contractual and non-contractual maturities. We continually monitor industry and competitive repricing activity along with other market factors when contemplating deposit pricing actions. Please see the 10-K for more details. Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale. Tangible Common Equity is a non-GAAP financial measure that is defined as common stockholders’ equity less goodwill and identifiable intangible assets, net of deferred tax liabilities. Ally considers various measures when evaluating capital adequacy, including tangible common equity. Ally believes that tangible common equity is important because we believe readers may assess our capital adequacy using this measure. Additionally, presentation of this measure allows readers to compare certain aspects of our capital adequacy on the same basis to other companies in the industry. For purposes of calculating Core return on tangible common equity (Core ROTCE), tangible common equity is further adjusted for Core OID balance and net deferred tax asset. See page 34 for more details. U.S. consumer auto originations New Retail – standard and subvented rate new vehicle loans Lease – new vehicle lease originations Used – used vehicle loans Growth – total originations from non-GM/Chrysler dealers and direct-to-consumer loans Nonprime – originations with a FICO® score of less than 620 Customer retention rate is the annualized 3-month rolling average of 1 minus the monthly attrition rate; excludes non-recurring escheatment. 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 measure for Estimated Retail Auto Originated Yield and therefore this forecasted estimate of yield at the time of origination cannot be quantitatively reconciled to comparable GAAP information. 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 income, Core net income attributable to common shareholders, Core return on tangible common equity (Core ROTCE), Adjusted efficiency ratio, Adjusted total net revenue, Adjusted other revenue, Core original issue discount (Core OID) amortization expense and Core outstanding original issue discount balance (Core OID balance), Net financing revenue (excluding Core OID), and Adjusted tangible book value per share (Adjusted TBVPS). These measures are used by management and we believe are useful to investors in assessing the company’s operating performance and capital. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms, and Reconciliation to GAAP later in this document.
GAAP to Core Results: Adjusted EPS - Annual 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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. In the numerator of Adjusted EPS, GAAP net income attributable to common shareholders is adjusted for the following items: (1) excludes discontinued operations, net of tax, as Ally is primarily a domestic company and sales of international businesses and other discontinued operations in the past have significantly impacted GAAP EPS, (2) adds back the tax-effected non-cash Core OID, (3) adds back tax-effected repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, (4) excludes equity fair value adjustments (net of tax) related to ASU 2016-01 which 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 component of equity, (5) excludes significant discrete tax items that do not relate to the operating performance of the core businesses, and (6) excludes certain discrete tax items that do not relate to the operating performance of the core businesses, and (6) adjusts for preferred stock capital actions (e.g., Series A and Series G) that have been taken by the company to normalize its capital structure.
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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. In the numerator of Adjusted EPS, GAAP net income attributable to common shareholders is adjusted for the following items: (1) excludes discontinued operations, net of tax, as Ally is primarily a domestic company and sales of international businesses and other discontinued operations in the past have significantly impacted GAAP EPS, (2) adds back the tax-effected non-cash Core OID, (3) excludes equity fair value adjustments (net of tax) related to ASU 2016-01 which 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 component of equity, and (4) excludes significant discrete tax items that do not relate to the operating performance of the core businesses.
GAAP to Core Results: Adjusted TBVPS - Annual 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 statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. Adjusted TBVPS generally adjusts common equity for: (1) goodwill and identifiable intangibles, net of DTLs, and (2) tax-effected Core OID balance to reduce tangible common equity in the event the corresponding discounted bonds are redeemed/tendered and (3) Series G discount which reduces tangible common equity as the company has normalized its capital structure. Note: In December 2017, tax-effected Core OID balance was adjusted from a statutory U.S. Federal tax rate of 35% to 21% (“rate”) as a result of changes to U.S. tax law. The adjustment conservatively increased the tax-effected Core OID balance and consequently reduced Adjusted TBVPS as any acceleration of the non-cash charge in future periods would flow through the financial statements at a 21% rate versus a previously modeled 35% rate.
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 statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. Adjusted TBVPS generally adjusts common equity for: (1) goodwill and identifiable intangibles, net of DTLs, and (2) tax-effected Core OID balance to reduce tangible common equity in the event the corresponding discounted bonds are redeemed/tendered. Note: In December 2017, tax-effected Core OID balance was adjusted from a statutory U.S. Federal tax rate of 35% to 21% (“rate”) as a result of changes to U.S. tax law. The adjustment conservatively increased the tax-effected Core OID balance and consequently reduced Adjusted TBVPS as any acceleration of the non-cash charge in future periods would flow through the financial statements at a 21% rate versus a previously modeled 35% rate.
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 operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and net DTA. Ally’s Core net income attributable to common shareholders for purposes of calculating Core ROTCE is based on the actual effective tax rate for the period adjusted for significant discrete tax items including tax reserve releases, which aligns with the methodology used in calculating adjusted earnings per share. In the numerator of Core ROTCE, GAAP net income attributable to common shareholders is adjusted for discontinued operations net of tax, tax-effected Core OID, tax-effected repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, fair value adjustments (net of tax) related to ASU 2016-01 which 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 component of equity, significant discrete tax items, and preferred stock capital actions. In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL, Core OID balance, and net DTA.
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 core operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and net DTA. Ally’s Core net income attributable to common shareholders for purposes of calculating Core ROTCE is based on the actual effective tax rate for the period adjusted for significant discrete tax items including tax reserve releases, which aligns with the methodology used in calculating adjusted earnings per share. In the numerator of Core ROTCE, GAAP net income attributable to common shareholders is adjusted for discontinued operations net of tax, tax-effected Core OID, fair value adjustments (net of tax) related to ASU 2016-01 which 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 component of equity, and significant discrete tax items. In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL, Core OID balance, and net DTA.
GAAP to Core Results: Adjusted Efficiency Ratio - Annual 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 Adjusted efficiency ratio, total noninterest expense is adjusted for Rep and warrant expense, Insurance segment expense, and repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities. In the denominator, total net revenue is adjusted for Core OID, Insurance segment revenue, and repositioning items – primarily related to the extinguishment of high-cost legacy debt and strategic activities. See page 20 for the combined ratio for the Insurance segment which management uses as a primary measure of underwriting profitability for the Insurance segment.
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 Adjusted efficiency ratio, total noninterest expense is adjusted for Rep and warrant expense and Insurance segment expense. In the denominator, total net revenue is adjusted for Core OID and Insurance segment revenue. See page 20 for the combined ratio for the Insurance segment which management uses as a primary measure of underwriting profitability for the Insurance segment.
Notes on Non-GAAP and Other Financial Measures Supplemental Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. See page 31 for definitions.
Notes on Non-GAAP and Other Financial Measures Supplemental Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. See page 31 for definitions.
Notes on Non-GAAP and Other Financial Measures Supplemental Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. See page 31 for definitions.
Notes on Non-GAAP and Other Financial Measures Supplemental (1) Excludes accelerated OID. See page 31 for definitions. 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 component of equity. See page 31 for definitions.
Notes on Non-GAAP and Other Financial Measures Supplemental Excludes accelerated OID. See page 31 for definitions. 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 component of equity. See page 31 for definitions.
Exhibit 99.3
FOURTH QUARTER 2019
FINANCIAL SUPPLEMENT
| ALLY FINANCIAL INC. FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION |
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This document 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. This information is preliminary and based on company and third-party data available at the time of the presentation or related communication.
This document and related communications contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as statements about the outlook for various financial and operating metrics and statements about future capital allocation and actions. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our “SEC filings”). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent SEC filings.
This document and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the presentation.
Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other financing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the vehicle’s residual value. The terms “lend,” “finance,” and “originate” mean our direct extension or origination of loans, our purchase or acquisition of loans, or our purchase of operating leases as applicable. The term “consumer” means all consumer products associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial products associated with our loan activities, other than commercial retail installment sales contracts.
| 4Q 2019 Preliminary Results | 2 |
| ALLY FINANCIAL INC. TABLE OF CONTENTS |
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| Page(s) | ||||
| Consolidated Results |
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| Consolidated Financial Highlights |
4 | |||
| Consolidated Income Statement |
5 | |||
| Consolidated Period-End Balance Sheet |
6 | |||
| Consolidated Average Balance Sheet |
7 | |||
| Segment Detail |
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| Segment Highlights |
8 | |||
| Automotive Finance |
9-10 | |||
| Insurance |
11 | |||
| Mortgage Finance |
12 | |||
| Corporate Finance |
13 | |||
| Corporate and Other |
14 | |||
| Credit Related Information |
15-16 | |||
| Supplemental Detail |
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| Capital |
17 | |||
| Liquidity |
18 | |||
| Net Interest Margin and Deposits |
19 | |||
| Ally Bank Consumer Mortgage HFI Portfolios |
20 | |||
| Earnings Per Share Related Information |
21 | |||
| Adjusted Tangible Book Value Per Share Related Information |
22 | |||
| Core ROTCE Related Information |
23 | |||
| Adjusted Efficiency Ratio Related Information |
24 | |||
| 4Q 2019 Preliminary Results | 3 |
| ALLY FINANCIAL INC. CONSOLIDATED FINANCIAL HIGHLIGHTS |
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| ($ in millions, shares in thousands) |
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| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Selected Income Statement Data |
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| Net financing revenue (ex. Core OID) (1) |
$ | 1,164 | $ | 1,195 | $ | 1,164 | $ | 1,139 | $ | 1,163 | $ | (32 | ) | $ | 1 | $ | 4,662 | $ | 4,476 | $ | 186 | |||||||||||||||||||
| Core OID |
(8 | ) | (7 | ) | (7 | ) | (7 | ) | (23 | ) | (0 | ) | 15 | (29 | ) | (86 | ) | 57 | ||||||||||||||||||||||
| Net financing revenue (as reported) |
1,156 | 1,188 | 1,157 | 1,132 | 1,140 | (32 | ) | 16 | 4,633 | 4,390 | 243 | |||||||||||||||||||||||||||||
| Other revenue (ex. change in the fair value of equity securities) (2) |
458 | 424 | 393 | 396 | 393 | 34 | 65 | 1,672 | 1,535 | 136 | ||||||||||||||||||||||||||||||
| Change in the fair value of equity securities (3) |
29 | (11 | ) | 2 | 70 | (95 | ) | 40 | 124 | 89 | (121 | ) | 211 | |||||||||||||||||||||||||||
| Other revenue (as reported) |
487 | 413 | 395 | 466 | 298 | 74 | 189 | 1,761 | 1,414 | 347 | ||||||||||||||||||||||||||||||
| Provision for loan losses |
276 | 263 | 177 | 282 | 266 | 13 | 10 | 998 | 918 | 80 | ||||||||||||||||||||||||||||||
| Total noninterest expense (4) |
880 | 838 | 881 | 830 | 804 | 42 | 76 | 3,429 | 3,264 | 165 | ||||||||||||||||||||||||||||||
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| Pre-tax income from continuing operations |
487 | 500 | 494 | 486 | 368 | (13 | ) | 119 | 1,967 | 1,622 | 345 | |||||||||||||||||||||||||||||
| Income tax expense / (benefit) |
106 | 119 | (90 | ) | 111 | 79 | (13 | ) | 27 | 246 | 359 | (113 | ) | |||||||||||||||||||||||||||
| (Loss) / income from discontinued operations, net of tax |
(3 | ) | — | (2 | ) | (1 | ) | 1 | (3 | ) | (4 | ) | (6 | ) | — | (6 | ) | |||||||||||||||||||||||
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| Net income attributable to common shareholders |
$ | 378 | $ | 381 | $ | 582 | $ | 374 | $ | 290 | $ | (3 | ) | $ | 88 | $ | 1,715 | $ | 1,263 | $ | 452 | |||||||||||||||||||
| Selected Balance Sheet Data (Period-End) |
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| Total assets |
$ | 180,644 | $ | 181,485 | $ | 180,448 | $ | 180,117 | $ | 178,869 | $ | (841 | ) | $ | 1,775 | |||||||||||||||||||||||||
| Consumer loans |
89,924 | 90,081 | 90,698 | 89,211 | 87,240 | (157 | ) | 2,684 | ||||||||||||||||||||||||||||||||
| Commercial loans |
38,307 | 38,528 | 38,512 | 40,844 | 42,686 | (221 | ) | (4,379 | ) | |||||||||||||||||||||||||||||||
| Allowance for loan losses |
(1,263 | ) | (1,277 | ) | (1,282 | ) | (1,288 | ) | (1,242 | ) | 14 | (21 | ) | |||||||||||||||||||||||||||
| Deposits |
120,752 | 119,230 | 116,325 | 113,299 | 106,178 | 1,522 | 14,574 | |||||||||||||||||||||||||||||||||
| Total equity |
14,416 | 14,450 | 14,316 | 13,699 | 13,268 | (34 | ) | 1,148 | ||||||||||||||||||||||||||||||||
| Common Share Count |
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| Weighted average basic (5) |
380,793 | 390,205 | 398,100 | 404,129 | 411,931 | (9,413 | ) | (31,138 | ) | 393,234 | 425,165 | (31,931 | ) | |||||||||||||||||||||||||||
| Weighted average diluted (5) |
383,391 | 392,604 | 399,916 | 405,959 | 414,750 | (9,213 | ) | (31,359 | ) | 395,395 | 427,680 | (32,285 | ) | |||||||||||||||||||||||||||
| Issued shares outstanding (period-end) |
374,332 | 383,523 | 392,775 | 399,761 | 404,900 | (9,191 | ) | (30,568 | ) | |||||||||||||||||||||||||||||||
| Per Common Share Data |
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| Earnings per share (basic) (5) |
$ | 0.99 | $ | 0.98 | $ | 1.46 | $ | 0.93 | $ | 0.70 | $ | 0.02 | $ | 0.29 | $ | 4.36 | $ | 2.97 | $ | 1.39 | ||||||||||||||||||||
| Earnings per share (diluted) (5) |
0.99 | 0.97 | 1.46 | 0.92 | 0.70 | 0.02 | 0.29 | 4.34 | 2.95 | 1.38 | ||||||||||||||||||||||||||||||
| Adjusted earnings per share (6) |
0.95 | 1.01 | 0.97 | 0.80 | 0.92 | (0.06 | ) | 0.03 | 3.72 | 3.34 | 0.39 | |||||||||||||||||||||||||||||
| Book value per share |
38.5 | 37.7 | 36.4 | 34.3 | 32.8 | 0.8 | 5.7 | 38.5 | 32.8 | 5.7 | ||||||||||||||||||||||||||||||
| Tangible book value per share (7) |
37.3 | 37.0 | 35.7 | 33.6 | 32.1 | 0.4 | 5.2 | 37.3 | 32.1 | 5.2 | ||||||||||||||||||||||||||||||
| Adjusted tangible book value per share (7) |
35.1 | 34.7 | 33.6 | 31.4 | 29.9 | 0.3 | 5.1 | 35.1 | 29.9 | 5.1 | ||||||||||||||||||||||||||||||
| Select Financial Ratios |
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| Net interest margin (as reported) |
2.64 | % | 2.70 | % | 2.66 | % | 2.67 | % | 2.66 | % | 2.67 | % | 2.65 | % | ||||||||||||||||||||||||||
| Net interest margin (ex. Core OID) (8) |
2.66 | % | 2.72 | % | 2.67 | % | 2.69 | % | 2.72 | % | 2.68 | % | 2.70 | % | ||||||||||||||||||||||||||
| Cost of funds |
2.55 | % | 2.66 | % | 2.74 | % | 2.70 | % | 2.60 | % | 2.66 | % | 2.38 | % | ||||||||||||||||||||||||||
| Cost of funds (ex. Core OID) (8) |
2.51 | % | 2.62 | % | 2.70 | % | 2.66 | % | 2.52 | % | 2.62 | % | 2.31 | % | ||||||||||||||||||||||||||
| Efficiency Ratio (9) |
53.6 | % | 52.3 | % | 56.8 | % | 51.9 | % | 55.9 | % | 53.6 | % | 56.2 | % | ||||||||||||||||||||||||||
| Adjusted efficiency ratio (8)(9) |
49.4 | % | 45.3 | % | 46.1 | % | 48.9 | % | 46.9 | % | 47.4 | % | 47.6 | % | ||||||||||||||||||||||||||
| Return on average assets (10) |
0.8 | % | 0.8 | % | 1.3 | % | 0.8 | % | 0.7 | % | 1.0 | % | 0.7 | % | ||||||||||||||||||||||||||
| Return on average total equity (10) |
10.5 | % | 10.6 | % | 16.6 | % | 11.1 | % | 8.8 | % | 12.4 | % | 9.4 | % | ||||||||||||||||||||||||||
| Return on average tangible common equity (10) |
10.7 | % | 10.8 | % | 17.0 | % | 11.3 | % | 9.0 | % | 12.7 | % | 9.8 | % | ||||||||||||||||||||||||||
| Core ROTCE (11) |
11.2 | % | 12.3 | % | 12.4 | % | 10.9 | % | 13.4 | % | 12.0 | % | 12.3 | % | ||||||||||||||||||||||||||
| Capital Ratios (12) |
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| Common Equity Tier 1 (CET1) capital ratio |
9.5 | % | 9.6 | % | 9.5 | % | 9.3 | % | 9.1 | % | ||||||||||||||||||||||||||||||
| Tier 1 capital ratio |
11.2 | % | 11.2 | % | 11.2 | % | 11.0 | % | 10.8 | % | ||||||||||||||||||||||||||||||
| Total capital ratio |
12.8 | % | 12.8 | % | 12.7 | % | 12.5 | % | 12.3 | % | ||||||||||||||||||||||||||||||
| Tier 1 leverage ratio |
9.1 | % | 9.1 | % | 9.0 | % | 9.0 | % | 9.0 | % | ||||||||||||||||||||||||||||||
| (1) | Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21. |
| (2) | Represents a non-GAAP financial measure. Adjusted for change in the fair value of equity securities due to the implementation of ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. For Non-GAAP calculation methodology and details see page 21. |
| (3) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (4) | Including but not limited to employee related expenses, commissions and provision for losses and loss adjustment expense related to the insurance business, information technology expenses, servicing expenses, facilities expenses, marketing expenses, and other professional and legal expenses. |
| (5) | Includes shares related to share-based compensation that vested but were not yet issued. |
| (6) | Represents a non-GAAP financial measure. For more details refer to page 21. |
| (7) | Represents a non-GAAP financial measure. For more details refer to page 22. |
| (8) | Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21. |
| (9) | Represents a non-GAAP financial measure. For more details refer to page 24. |
| (10) | Return metrics are annualized. |
| (11) | Return metrics are annualized. Represents a non-GAAP financial measure. For more details refer to page 23. |
| (12) | Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital. |
| 4Q 2019 Preliminary Results | 4 |
| ALLY FINANCIAL INC. CONSOLIDATED INCOME STATEMENT |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Financing revenue and other interest income |
||||||||||||||||||||||||||||||||||||||||
| Interest and fees on finance receivables and loans |
$ | 1,811 | $ | 1,859 | $ | 1,860 | $ | 1,807 | $ | 1,790 | $ | (48 | ) | $ | 21 | $ | 7,337 | $ | 6,688 | $ | 649 | |||||||||||||||||||
| Interest on loans held-for-sale |
4 | 8 | 3 | 2 | 5 | (4 | ) | (1 | ) | 17 | 15 | 2 | ||||||||||||||||||||||||||||
| Total interest and dividends on investment securities |
217 | 221 | 227 | 222 | 211 | (4 | ) | 6 | 887 | 729 | 158 | |||||||||||||||||||||||||||||
| Interest-bearing cash |
15 | 19 | 21 | 23 | 22 | (4 | ) | (7 | ) | 78 | 72 | 6 | ||||||||||||||||||||||||||||
| Other earning assets |
17 | 16 | 17 | 18 | 15 | 1 | 2 | 68 | 59 | 9 | ||||||||||||||||||||||||||||||
| Operating leases |
378 | 368 | 363 | 361 | 365 | 10 | 13 | 1,470 | 1,489 | (19 | ) | |||||||||||||||||||||||||||||
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|||||||||||||||||||||
| Total financing revenue and other interest income |
2,442 | 2,491 | 2,491 | 2,433 | 2,408 | (49 | ) | 34 | 9,857 | 9,052 | 805 | |||||||||||||||||||||||||||||
| Interest expense |
||||||||||||||||||||||||||||||||||||||||
| Interest on deposits |
637 | 658 | 651 | 592 | 523 | (21 | ) | 114 | 2,538 | 1,735 | 803 | |||||||||||||||||||||||||||||
| Interest on short-term borrowings |
21 | 33 | 37 | 44 | 48 | (12 | ) | (27 | ) | 135 | 149 | (14 | ) | |||||||||||||||||||||||||||
| Interest on long-term debt |
366 | 378 | 407 | 419 | 457 | (12 | ) | (91 | ) | 1,570 | 1,753 | (183 | ) | |||||||||||||||||||||||||||
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| Total interest expense |
1,024 | 1,069 | 1,095 | 1,055 | 1,028 | (45 | ) | (4 | ) | 4,243 | 3,637 | 606 | ||||||||||||||||||||||||||||
| Depreciation expense on operating lease assets |
262 | 234 | 239 | 246 | 240 | 28 | 22 | 981 | 1,025 | (44 | ) | |||||||||||||||||||||||||||||
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|||||||||||||||||||||
| Net financing revenue (as reported) |
$ | 1,156 | $ | 1,188 | $ | 1,157 | $ | 1,132 | $ | 1,140 | $ | (32 | ) | $ | 16 | $ | 4,633 | $ | 4,390 | $ | 243 | |||||||||||||||||||
| Other revenue |
||||||||||||||||||||||||||||||||||||||||
| Servicing fees |
3 | 4 | 5 | 6 | 6 | (1 | ) | (3 | ) | 18 | 27 | (10 | ) | |||||||||||||||||||||||||||
| Insurance premiums and service revenue earned |
285 | 280 | 261 | 261 | 269 | 5 | 16 | 1,087 | 1,022 | 65 | ||||||||||||||||||||||||||||||
| Gain on mortgage and automotive loans, net |
6 | 10 | 2 | 10 | 6 | (4 | ) | — | 28 | 25 | 3 | |||||||||||||||||||||||||||||
| Other gain/loss on investments, net |
69 | 27 | 39 | 108 | (87 | ) | 42 | 156 | 243 | (50 | ) | 293 | ||||||||||||||||||||||||||||
| Other income, net of losses |
125 | 92 | 88 | 81 | 104 | 33 | 21 | 386 | 390 | (3 | ) | |||||||||||||||||||||||||||||
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| Total other revenue |
487 | 413 | 395 | 466 | 298 | 74 | 189 | 1,761 | 1,414 | 347 | ||||||||||||||||||||||||||||||
| Total net revenue |
1,643 | 1,601 | 1,552 | 1,598 | 1,438 | 42 | 205 | 6,394 | 5,804 | 590 | ||||||||||||||||||||||||||||||
| Provision for loan losses |
276 | 263 | 177 | 282 | 266 | 13 | 10 | 998 | 918 | 80 | ||||||||||||||||||||||||||||||
| Noninterest expense |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits expense |
312 | 296 | 296 | 318 | 283 | 16 | 29 | 1,222 | 1,155 | 67 | ||||||||||||||||||||||||||||||
| Insurance losses and loss adjustment expenses |
61 | 74 | 127 | 59 | 54 | (13 | ) | 7 | 321 | 295 | 26 | |||||||||||||||||||||||||||||
| Other operating expenses |
507 | 468 | 458 | 453 | 467 | 39 | 40 | 1,886 | 1,814 | 72 | ||||||||||||||||||||||||||||||
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| Total noninterest expense |
880 | 838 | 881 | 830 | 804 | 42 | 76 | 3,429 | 3,264 | 165 | ||||||||||||||||||||||||||||||
| Pre-tax income from continuing operations |
$ | 487 | $ | 500 | $ | 494 | $ | 486 | $ | 368 | $ | (13 | ) | $ | 119 | $ | 1,967 | $ | 1,622 | $ | 345 | |||||||||||||||||||
| Income tax expense / (benefit) from continuing operations |
106 | 119 | (90 | ) | 111 | 79 | (13 | ) | 27 | 246 | 359 | (113 | ) | |||||||||||||||||||||||||||
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| Net income from continuing operations |
381 | 381 | 584 | 375 | 289 | — | 92 | 1,721 | 1,263 | 458 | ||||||||||||||||||||||||||||||
| (Loss) / income from discontinued operations, net of tax |
(3 | ) | — | (2 | ) | (1 | ) | 1 | (3 | ) | (4 | ) | (6 | ) | — | (6 | ) | |||||||||||||||||||||||
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| Net income |
$ | 378 | $ | 381 | $ | 582 | $ | 374 | $ | 290 | $ | (3 | ) | $ | 88 | $ | 1,715 | $ | 1,263 | $ | 452 | |||||||||||||||||||
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| Core Pre-Tax Income Walk |
||||||||||||||||||||||||||||||||||||||||
| Net financing revenue (ex. Core OID) (1) |
$ | 1,164 | $ | 1,195 | $ | 1,164 | $ | 1,139 | $ | 1,163 | $ | (32 | ) | $ | 1 | $ | 4,662 | $ | 4,476 | $ | 186 | |||||||||||||||||||
| Adjusted other revenue (2) |
458 | 424 | 393 | 396 | 393 | 34 | 65 | 1,672 | 1,535 | 136 | ||||||||||||||||||||||||||||||
| Provision for loan losses |
276 | 263 | 177 | 282 | 266 | 13 | 10 | 998 | 918 | 80 | ||||||||||||||||||||||||||||||
| Noninterest expense |
880 | 838 | 881 | 830 | 804 | 42 | 76 | 3,429 | 3,264 | 165 | ||||||||||||||||||||||||||||||
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| Core pre-tax income (3) |
$ | 466 | $ | 519 | $ | 499 | $ | 423 | $ | 486 | $ | (53 | ) | $ | (20 | ) | $ | 1,907 | $ | 1,829 | $ | 78 | ||||||||||||||||||
| Core OID |
(8 | ) | (7 | ) | (7 | ) | (7 | ) | (23 | ) | (0 | ) | 15 | (29 | ) | (86 | ) | 57 | ||||||||||||||||||||||
| Change in the fair value of equity securities (4) |
29 | (11 | ) | 2 | 70 | (95 | ) | 40 | 124 | 89 | (121 | ) | 211 | |||||||||||||||||||||||||||
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| Pre-tax income from continuing operations |
$ | 487 | $ | 500 | $ | 494 | $ | 486 | $ | 368 | $ | (13 | ) | $ | 119 | $ | 1,967 | $ | 1,622 | $ | 345 | |||||||||||||||||||
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|||||||||||||||||||||
| (1) | Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21. |
| (2) | Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. For more details refer to page 21. |
| (3) | 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 securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. |
| (4) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| 4Q 2019 Preliminary Results | 5 |
| ALLY FINANCIAL INC. CONSOLIDATED PERIOD-END BALANCE SHEET |
|
| ($ in millions) |
||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||
| Cash and cash equivalents |
||||||||||||||||||||||||||||
| Noninterest-bearing |
$ | 619 | $ | 723 | $ | 659 | $ | 946 | $ | 810 | $ | (104 | ) | $ | (191 | ) | ||||||||||||
| Interest-bearing |
2,936 | 2,894 | 2,904 | 3,011 | 3,727 | 42 | (791 | ) | ||||||||||||||||||||
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|||||||||||||||
| Total cash and cash equivalents |
3,555 | 3,617 | 3,563 | 3,957 | 4,537 | (62 | ) | (982 | ) | |||||||||||||||||||
| Investment securities (1) |
32,468 | 32,572 | 31,740 | 30,553 | 28,438 | (104 | ) | 4,030 | ||||||||||||||||||||
| Loans held-for-sale, net |
158 | 1,000 | 275 | 107 | 314 | (842 | ) | (156 | ) | |||||||||||||||||||
| Finance receivables and loans |
128,231 | 128,609 | 129,210 | 130,055 | 129,926 | (378 | ) | (1,695 | ) | |||||||||||||||||||
| Allowance for loan losses |
(1,263 | ) | (1,277 | ) | (1,282 | ) | (1,288 | ) | (1,242 | ) | 14 | (21 | ) | |||||||||||||||
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| Total finance receivables and loans, net |
126,968 | 127,332 | 127,928 | 128,767 | 128,684 | (364 | ) | (1,716 | ) | |||||||||||||||||||
| Investment in operating leases, net |
8,864 | 8,653 | 8,407 | 8,339 | 8,417 | 211 | 447 | |||||||||||||||||||||
| Premiums receivables and other insurance assets |
2,558 | 2,521 | 2,460 | 2,401 | 2,326 | 37 | 232 | |||||||||||||||||||||
| Other assets |
6,073 | 5,790 | 6,075 | 5,993 | 6,153 | 283 | (80 | ) | ||||||||||||||||||||
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| Total assets |
$ | 180,644 | $ | 181,485 | $ | 180,448 | $ | 180,117 | $ | 178,869 | $ | (841 | ) | $ | 1,775 | |||||||||||||
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| Liabilities |
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| Deposit liabilities |
||||||||||||||||||||||||||||
| Noninterest-bearing |
$ | 119 | $ | 156 | $ | 162 | $ | 141 | $ | 142 | $ | (37 | ) | $ | (23 | ) | ||||||||||||
| Interest-bearing |
120,633 | 119,074 | 116,163 | 113,158 | 106,036 | 1,559 | 14,597 | |||||||||||||||||||||
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| Total deposit liabilities |
120,752 | 119,230 | 116,325 | 113,299 | 106,178 | 1,522 | 14,574 | |||||||||||||||||||||
| Short-term borrowings |
5,531 | 5,335 | 6,519 | 6,115 | 9,987 | 196 | (4,456 | ) | ||||||||||||||||||||
| Long-term debt |
34,027 | 35,730 | 37,466 | 41,490 | 44,193 | (1,703 | ) | (10,166 | ) | |||||||||||||||||||
| Interest payable |
641 | 894 | 744 | 696 | 523 | (253 | ) | 118 | ||||||||||||||||||||
| Unearned insurance premiums and service revenue |
3,305 | 3,246 | 3,171 | 3,096 | 3,044 | 59 | 261 | |||||||||||||||||||||
| Accrued expense and other liabilities |
1,972 | 2,600 | 1,907 | 1,722 | 1,676 | (628 | ) | 296 | ||||||||||||||||||||
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| Total liabilities |
$ | 166,228 | $ | 167,035 | $ | 166,132 | $ | 166,418 | $ | 165,601 | $ | (807 | ) | $ | 627 | |||||||||||||
| Equity |
||||||||||||||||||||||||||||
| Common stock and paid-in capital (2) |
$ | 18,350 | $ | 18,628 | $ | 18,914 | $ | 19,119 | $ | 19,296 | $ | (278 | ) | $ | (946 | ) | ||||||||||||
| Accumulated deficit |
(4,057 | ) | (4,368 | ) | (4,682 | ) | (5,195 | ) | (5,489 | ) | 311 | 1,432 | ||||||||||||||||
| Accumulated other comprehensive income / (loss) |
123 | 190 | 84 | (225 | ) | (539 | ) | (67 | ) | 662 | ||||||||||||||||||
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| Total equity |
14,416 | 14,450 | 14,316 | 13,699 | 13,268 | (34 | ) | 1,148 | ||||||||||||||||||||
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|||||||||||||||
| Total liabilities and equity |
$ | 180,644 | $ | 181,485 | $ | 180,448 | $ | 180,117 | $ | 178,869 | $ | (841 | ) | $ | 1,775 | |||||||||||||
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| (1) | Includes held-to-maturity securities. |
| (2) | Includes Treasury stock. |
| 4Q 2019 Preliminary Results | 6 |
| ALLY FINANCIAL INC. CONSOLIDATED AVERAGE BALANCE SHEET (1) |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | Full Year | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||||||||||
| Interest-bearing cash and cash equivalents |
$ | 3,811 | $ | 3,539 | $ | 3,713 | $ | 4,212 | $ | 4,311 | $ | 272 | $ | (500 | ) | $ | 3,837 | $ | 4,365 | $ | (528 | ) | ||||||||||||||||||
| Investment securities and other earning assets |
33,680 | 32,708 | 32,446 | 30,555 | 28,926 | 972 | 4,754 | 32,357 | 27,399 | 4,958 | ||||||||||||||||||||||||||||||
| Loans held-for-sale, net |
405 | 745 | 191 | 190 | 394 | (340 | ) | 11 | 375 | 287 | 88 | |||||||||||||||||||||||||||||
| Total finance receivables and loans, net (2) |
127,184 | 128,799 | 129,950 | 128,663 | 127,681 | (1,615 | ) | (497 | ) | 128,654 | 124,932 | 3,722 | ||||||||||||||||||||||||||||
| Investment in operating leases, net |
8,749 | 8,525 | 8,370 | 8,389 | 8,516 | 224 | 233 | 8,509 | 8,590 | (81 | ) | |||||||||||||||||||||||||||||
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| Total interest earning assets |
173,829 | 174,316 | 174,670 | 172,009 | 169,828 | (487 | ) | 4,001 | 173,732 | 165,573 | 8,159 | |||||||||||||||||||||||||||||
| Noninterest-bearing cash and cash equivalents |
297 | 391 | 544 | 445 | 432 | (94 | ) | (135 | ) | 418 | 493 | (75 | ) | |||||||||||||||||||||||||||
| Other assets |
7,232 | 7,012 | 6,722 | 6,558 | 6,412 | 220 | 820 | 6,864 | 6,267 | 597 | ||||||||||||||||||||||||||||||
| Allowance for loan losses |
(1,277 | ) | (1,287 | ) | (1,284 | ) | (1,248 | ) | (1,247 | ) | 10 | (30 | ) | (1,274 | ) | (1,266 | ) | (8 | ) | |||||||||||||||||||||
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| Total assets |
$ | 180,081 | $ | 180,432 | $ | 180,652 | $ | 177,764 | $ | 175,425 | $ | (351 | ) | $ | 4,656 | $ | 179,740 | $ | 171,067 | $ | 8,673 | |||||||||||||||||||
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| Liabilities |
||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposit liabilities |
||||||||||||||||||||||||||||||||||||||||
| Retail deposit liabilities |
$ | 102,362 | $ | 99,874 | $ | 96,855 | $ | 91,881 | $ | 86,897 | $ | 2,488 | $ | 15,465 | $ | 94,476 | $ | 82,783 | $ | 11,694 | ||||||||||||||||||||
| Other interest-bearing deposit liabilities (3) |
17,553 | 17,615 | 17,402 | 17,291 | 16,763 | (62 | ) | 790 | 20,768 | 16,273 | 4,494 | |||||||||||||||||||||||||||||
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|||||||||||||||||||||
| Total Interest-bearing deposit liabilities |
119,915 | 117,489 | 114,257 | 109,172 | 103,660 | 2,426 | 16,255 | 115,244 | 99,056 | 16,188 | ||||||||||||||||||||||||||||||
| Short-term borrowings |
4,283 | 5,550 | 5,887 | 7,054 | 8,082 | (1,267 | ) | (3,799 | ) | 5,686 | 7,674 | (1,988 | ) | |||||||||||||||||||||||||||
| Long-term debt (4) |
34,954 | 36,395 | 40,222 | 42,396 | 45,257 | (1,441 | ) | (10,303 | ) | 38,466 | 45,893 | (7,427 | ) | |||||||||||||||||||||||||||
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|||||||||||||||||||||
| Total interest-bearing liabilities (4) |
159,152 | 159,434 | 160,366 | 158,622 | 156,999 | (282 | ) | 2,153 | 159,396 | 152,623 | 6,773 | |||||||||||||||||||||||||||||
| Noninterest-bearing deposit liabilities |
142 | 149 | 135 | 137 | 142 | (7 | ) | — | 141 | 133 | 8 | |||||||||||||||||||||||||||||
| Other liabilities |
6,352 | 6,468 | 6,357 | 5,660 | 5,330 | (116 | ) | 1,022 | 6,215 | 5,222 | 993 | |||||||||||||||||||||||||||||
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| Total liabilities |
$ | 165,646 | $ | 166,051 | $ | 166,858 | $ | 164,419 | $ | 162,471 | $ | (405 | ) | $ | 3,175 | $ | 165,752 | $ | 157,978 | $ | 7,774 | |||||||||||||||||||
| Equity |
||||||||||||||||||||||||||||||||||||||||
| Total equity |
$ | 14,435 | $ | 14,381 | $ | 13,794 | $ | 13,345 | $ | 12,954 | $ | 54 | $ | 1,481 | $ | 13,988 | $ | 13,089 | $ | 899 | ||||||||||||||||||||
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| Total liabilities and equity |
$ | 180,081 | $ | 180,432 | $ | 180,652 | $ | 177,764 | $ | 175,425 | $ | (351 | ) | $ | 4,656 | $ | 179,740 | $ | 171,067 | $ | 8,673 | |||||||||||||||||||
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| (1) | Average balances are calculated using a combination of monthly and daily average methodologies. |
| (2) | Nonperforming finance receivables and loans are included in the average balances net of unearned income, unamortized premiums and discounts, and deferred fees and costs. |
| (3) | Includes brokered (inclusive of sweep deposits) and other deposits (inclusive of mortgage escrow, and other deposits). |
| (4) | Includes average Core OID balance of $1,067 million in 4Q 19, $1,075 million in 3Q 19, $1,082 million in 2Q 19, $1,089 million in 1Q 19, and $1,104 million in 4Q 18. |
| 4Q 2019 Preliminary Results | 7 |
| ALLY FINANCIAL INC. SEGMENT HIGHLIGHTS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Pre-tax Income / (Loss) |
||||||||||||||||||||||||||||||||||||||||
| Automotive Finance |
$ | 401 | $ | 429 | $ | 459 | $ | 329 | $ | 335 | $ | (28 | ) | $ | 66 | $ | 1,618 | $ | 1,368 | $ | 250 | |||||||||||||||||||
| Insurance |
114 | 56 | — | 145 | (13 | ) | 58 | 127 | 315 | 80 | 235 | |||||||||||||||||||||||||||||
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| Dealer Financial Services |
515 | 485 | 459 | 474 | 322 | 30 | 193 | 1,933 | 1,448 | 485 | ||||||||||||||||||||||||||||||
| Corporate Finance |
50 | 44 | 46 | 13 | 21 | 6 | 29 | 153 | 144 | 9 | ||||||||||||||||||||||||||||||
| Mortgage Finance |
2 | 11 | 14 | 13 | 15 | (9 | ) | (13 | ) | 40 | 45 | (5 | ) | |||||||||||||||||||||||||||
| Corporate and Other (1) |
(80 | ) | (40 | ) | (25 | ) | (14 | ) | 10 | (40 | ) | (90 | ) | (159 | ) | (15 | ) | (144 | ) | |||||||||||||||||||||
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| Pre-tax income from continuing operations |
$ | 487 | $ | 500 | $ | 494 | $ | 486 | $ | 368 | $ | (13 | ) | $ | 119 | $ | 1,967 | $ | 1,622 | $ | 345 | |||||||||||||||||||
| Core OID (2) |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
| Change in the fair value of equity securities (3) |
(29 | ) | 11 | (2 | ) | (70 | ) | 95 | (40 | ) | (124 | ) | (89 | ) | 121 | (211 | ) | |||||||||||||||||||||||
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| Core pre-tax income (4) |
$ | 466 | $ | 519 | $ | 499 | $ | 423 | $ | 486 | $ | (53 | ) | $ | (20 | ) | $ | 1,907 | $ | 1,829 | $ | 78 | ||||||||||||||||||
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| (1) | Corporate and Other includes the impact of centralized asset and liability management, corporate overhead allocation activities, the legacy mortgage portfolio, Ally Invest activity, and Ally Lending activity. |
| (2) | Core OID for all periods shown are applied to the pre-tax income of the Corporate and Other segment. |
| (3) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (4) | 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 securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. |
| 4Q 2019 Preliminary Results | 8 |
| ALLY FINANCIAL INC. AUTOMOTIVE FINANCE - CONDENSED FINANCIAL STATEMENTS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Income Statement |
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| Net financing revenue |
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| Consumer |
$ | 1,234 | $ | 1,227 | $ | 1,184 | $ | 1,130 | $ | 1,120 | $ | 7 | $ | 114 | $ | 4,775 | $ | 4,287 | $ | 488 | ||||||||||||||||||||
| Commercial |
342 | 385 | 412 | 422 | 422 | (43 | ) | (80 | ) | 1,561 | 1,516 | 45 | ||||||||||||||||||||||||||||
| Loans held for sale |
(1 | ) | — | — | 1 | 2 | (1 | ) | (3 | ) | — | 3 | (3 | ) | ||||||||||||||||||||||||||
| Operating leases |
378 | 368 | 363 | 361 | 365 | 10 | 13 | 1,470 | 1,489 | (19 | ) | |||||||||||||||||||||||||||||
| Other interest income |
1 | 3 | 3 | 1 | 2 | (2 | ) | (1 | ) | 8 | 7 | 1 | ||||||||||||||||||||||||||||
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| Total financing revenue and other interest income |
1,954 | 1,983 | 1,962 | 1,915 | 1,911 | (29 | ) | 43 | 7,814 | 7,302 | 512 | |||||||||||||||||||||||||||||
| Interest expense |
631 | 671 | 701 | 689 | 692 | (40 | ) | (61 | ) | 2,692 | 2,508 | 184 | ||||||||||||||||||||||||||||
| Depreciation expense on operating lease assets: |
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| Depreciation expense on operating lease assets (ex. remarketing) |
265 | 262 | 261 | 262 | 268 | 3 | (3 | ) | 1,050 | 1,115 | (65 | ) | ||||||||||||||||||||||||||||
| Remarketing gains |
3 | 28 | 23 | 15 | 28 | (26 | ) | (25 | ) | 69 | 90 | (21 | ) | |||||||||||||||||||||||||||
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| Total depreciation expense on operating lease assets |
262 | 234 | 239 | 246 | 240 | 28 | 22 | 981 | 1,025 | (44 | ) | |||||||||||||||||||||||||||||
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| Net financing revenue |
1,061 | 1,078 | 1,022 | 980 | 979 | (17 | ) | 82 | 4,141 | 3,769 | 372 | |||||||||||||||||||||||||||||
| Other revenue |
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| Servicing fees |
2 | 3 | 4 | 5 | 6 | (1 | ) | (4 | ) | 13 | 27 | (14 | ) | |||||||||||||||||||||||||||
| Gain/(loss) on automotive loans, net |
— | — | — | 8 | 4 | — | (4 | ) | 8 | 22 | (14 | ) | ||||||||||||||||||||||||||||
| Other income |
58 | 57 | 57 | 56 | 50 | 2 | 8 | 228 | 220 | 8 | ||||||||||||||||||||||||||||||
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| Total other revenue |
61 | 59 | 61 | 68 | 60 | 2 | 1 | 249 | 269 | (20 | ) | |||||||||||||||||||||||||||||
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| Total net revenue |
1,122 | 1,137 | 1,083 | 1,048 | 1,039 | (15 | ) | 83 | 4,390 | 4,038 | 352 | |||||||||||||||||||||||||||||
| Provision for loan losses |
255 | 265 | 180 | 262 | 262 | (10 | ) | (7 | ) | 962 | 920 | 42 | ||||||||||||||||||||||||||||
| Noninterest expense |
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| Compensation and benefits |
133 | 128 | 127 | 136 | 124 | 5 | 9 | 524 | 505 | 19 | ||||||||||||||||||||||||||||||
| Other operating expenses |
333 | 315 | 317 | 321 | 318 | 18 | 15 | 1,286 | 1,245 | 41 | ||||||||||||||||||||||||||||||
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| Total noninterest expense |
466 | 443 | 444 | 457 | 442 | 23 | 24 | 1,810 | 1,750 | 60 | ||||||||||||||||||||||||||||||
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| Pre-tax income |
$ | 401 | $ | 429 | $ | 459 | $ | 329 | $ | 335 | $ | (28 | ) | $ | 66 | $ | 1,618 | $ | 1,368 | $ | 250 | |||||||||||||||||||
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| Memo: Net lease revenue |
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| Operating lease revenue |
$ | 378 | $ | 368 | $ | 363 | $ | 361 | $ | 365 | $ | 10 | $ | 13 | $ | 1,470 | $ | 1,489 | $ | (19 | ) | |||||||||||||||||||
| Depreciation expense on operating lease assets (ex. remarketing) |
265 | 262 | 261 | 262 | 268 | 3 | (3 | ) | 1,050 | 1,115 | (65 | ) | ||||||||||||||||||||||||||||
| Remarketing gains (losses), net of repo valuation |
3 | 28 | 23 | 15 | 28 | (26 | ) | (25 | ) | 69 | 90 | (21 | ) | |||||||||||||||||||||||||||
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| Total depreciation expense on operating lease assets |
262 | 234 | 239 | 246 | 240 | 28 | 22 | 981 | 1,025 | (44 | ) | |||||||||||||||||||||||||||||
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| Net lease revenue |
$ | 116 | $ | 134 | $ | 124 | $ | 115 | $ | 125 | $ | (18 | ) | $ | (9 | ) | $ | 489 | $ | 464 | $ | 25 | ||||||||||||||||||
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| Balance Sheet (Period-End) |
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| Cash, trading and investment securities |
$ | 23 | $ | 23 | $ | 23 | $ | 23 | $ | 23 | $ | — | $ | — | ||||||||||||||||||||||||||
| Consumer loans |
72,254 | 72,894 | 72,746 | 71,490 | 70,515 | (640 | ) | 1,739 | ||||||||||||||||||||||||||||||||
| Commercial loans |
32,490 | 33,330 | 33,575 | 35,726 | 38,134 | (840 | ) | (5,644 | ) | |||||||||||||||||||||||||||||||
| Allowance for loan losses |
(1,130 | ) | (1,156 | ) | (1,146 | ) | (1,138 | ) | (1,111 | ) | 26 | (19 | ) | |||||||||||||||||||||||||||
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| Total finance receivables and loans, net |
103,614 | 105,068 | 105,175 | 106,078 | 107,538 | (1,454 | ) | (3,924 | ) | |||||||||||||||||||||||||||||||
| Investment in operating leases, net |
8,864 | 8,653 | 8,407 | 8,339 | 8,417 | 211 | 447 | |||||||||||||||||||||||||||||||||
| Other assets |
1,362 | 1,352 | 1,350 | 1,349 | 1,326 | 10 | 36 | |||||||||||||||||||||||||||||||||
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| Total assets |
$ | 113,863 | $ | 115,096 | $ | 114,955 | $ | 115,789 | $ | 117,304 | $ | (1,233 | ) | $ | (3,441 | ) | ||||||||||||||||||||||||
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| 4Q 2019 Preliminary Results | 9 |
| ALLY FINANCIAL INC. AUTOMOTIVE FINANCE - KEY STATISTICS |
|
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| U.S. Consumer
Originations (1) |
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| Retail standard - new vehicle GM |
$ | 1.2 | $ | 1.3 | $ | 1.2 | $ | 1.0 | $ | 1.1 | $ | (0.1 | ) | $ | 0.1 | $ | 4.7 | $ | 4.7 | $ | (0.1 | ) | ||||||||||||||||||
| Retail standard - new vehicle Chrysler |
0.8 | 0.9 | 0.9 | 0.8 | 0.8 | (0.1 | ) | (0.0 | ) | 3.3 | 3.4 | (0.1 | ) | |||||||||||||||||||||||||||
| Retail standard - new vehicle Growth |
1.0 | 1.2 | 1.3 | 1.2 | 1.1 | (0.2 | ) | (0.2 | ) | 4.8 | 4.7 | 0.1 | ||||||||||||||||||||||||||||
| Used vehicle |
3.9 | 4.6 | 5.3 | 5.2 | 4.3 | (0.7 | ) | (0.3 | ) | 19.0 | 18.2 | 0.7 | ||||||||||||||||||||||||||||
| Lease |
1.2 | 1.3 | 1.1 | 0.9 | 0.8 | (0.1 | ) | 0.4 | 4.4 | 4.1 | 0.3 | |||||||||||||||||||||||||||||
| Retail subvented |
0.0 | 0.1 | 0.1 | 0.1 | 0.1 | (0.0 | ) | (0.0 | ) | 0.2 | 0.3 | (0.1 | ) | |||||||||||||||||||||||||||
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| Total originations |
$ | 8.1 | $ | 9.3 | $ | 9.7 | $ | 9.2 | $ | 8.2 | $ | (1.1 | ) | $ | (0.1 | ) | $ | 36.3 | $ | 35.4 | $ | 0.9 | ||||||||||||||||||
| U.S. Consumer Originations - FICO Score |
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| Super Prime (740+) |
$ | 2.1 | $ | 2.2 | $ | 2.2 | $ | 2.1 | $ | 2.0 | $ | (0.1 | ) | $ | 0.0 | $ | 8.7 | $ | 8.7 | $ | (0.1 | ) | ||||||||||||||||||
| Prime (660-739) |
2.9 | 3.4 | 3.6 | 3.3 | 3.0 | (0.5 | ) | (0.1 | ) | 13.3 | 12.9 | 0.4 | ||||||||||||||||||||||||||||
| Prime/Near (620-659) |
1.6 | 2.0 | 2.1 | 2.1 | 1.8 | (0.4 | ) | (0.2 | ) | 7.7 | 8.1 | (0.4 | ) | |||||||||||||||||||||||||||
| Non Prime (540-619) |
0.8 | 0.9 | 1.0 | 0.9 | 0.7 | (0.1 | ) | 0.1 | 3.5 | 3.1 | 0.4 | |||||||||||||||||||||||||||||
| Sub Prime (0-539) |
0.1 | 0.1 | 0.1 | 0.1 | 0.1 | (0.0 | ) | (0.0 | ) | 0.4 | 0.3 | 0.0 | ||||||||||||||||||||||||||||
| Commercial Services Group (2) |
0.7 | 0.7 | 0.7 | 0.7 | 0.6 | 0.0 | 0.0 | 2.7 | 2.2 | 0.5 | ||||||||||||||||||||||||||||||
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| Total originations |
$ | 8.1 | $ | 9.3 | $ | 9.7 | $ | 9.2 | $ | 8.2 | $ | (1.1 | ) | $ | (0.1 | ) | $ | 36.3 | $ | 35.4 | $ | 0.9 | ||||||||||||||||||
| U.S. Market |
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| Light vehicle sales (SAAR - units in millions) |
16.8 | 17.0 | 17.0 | 16.9 | 17.5 | (0.2 | ) | (0.7 | ) | 16.9 | 17.2 | (0.3 | ) | |||||||||||||||||||||||||||
| Light vehicle sales (NSA - units in millions) |
4.3 | 4.3 | 4.4 | 4.0 | 4.4 | (0.0 | ) | (0.1 | ) | 17.0 | 17.2 | (0.2 | ) | |||||||||||||||||||||||||||
| GM market share |
17.3 | % | 17.2 | % | 16.9 | % | 16.6 | % | 18.0 | % | 17.0 | % | 17.2 | % | ||||||||||||||||||||||||||
| Chrysler market share |
12.7 | % | 13.1 | % | 13.5 | % | 12.4 | % | 12.8 | % | 13.0 | % | 13.0 | % | ||||||||||||||||||||||||||
| Ally U.S. Consumer Penetration |
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| GM |
5.6 | % | 5.7 | % | 5.6 | % | 5.7 | % | 4.6 | % | 5.6 | % | 4.6 | % | ||||||||||||||||||||||||||
| Chrysler |
12.5 | % | 12.1 | % | 11.1 | % | 12.1 | % | 10.7 | % | 12.5 | % | 10.7 | % | ||||||||||||||||||||||||||
| Ally U.S. Commercial Outstandings EOP ($ in billions) |
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| Floorplan outstandings |
$ | 27.0 | $ | 27.7 | $ | 27.9 | $ | 30.1 | $ | 32.3 | $ | (0.7 | ) | $ | (5.4 | ) | ||||||||||||||||||||||||
| Dealer loans and other |
5.5 | 5.6 | 5.6 | 5.7 | 5.8 | (0.1 | ) | (0.3 | ) | |||||||||||||||||||||||||||||||
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| Total Commercial outstandings |
$ | 32.5 | $ | 33.3 | $ | 33.6 | $ | 35.7 | $ | 38.1 | $ | (0.8 | ) | $ | (5.6 | ) | ||||||||||||||||||||||||
| U.S. Off-Lease Remarketing |
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| Off-lease vehicles terminated - on-balance sheet |
27,832 | 29,985 | 29,267 | 26,030 | 25,706 | (2,153 | ) | 2,126 | 113,114 | 135,365 | (22,251 | ) | ||||||||||||||||||||||||||||
| Average gain / (loss) per vehicle |
$ | 99 | $ | 944 | $ | 776 | $ | 573 | $ | 1,089 | $ | (844 | ) | $ | (990 | ) | $ | 607 | $ | 661 | $ | (54 | ) | |||||||||||||||||
| Total gain / (loss) |
$ | 3 | $ | 28 | $ | 23 | $ | 15 | $ | 28 | $ | (26 | ) | $ | (25 | ) | $ | 69 | $ | 90 | $ | (21 | ) | |||||||||||||||||
| (1) | Some standard rate loan originations contain manufacturer sponsored cash back rebate incentives. Some lease originations contain rate subvention. While Ally may jointly develop marketing programs for these originations, Ally does not have exclusive rights to such originations under operating agreements with manufacturers. |
| (2) | Commercial Services Group (CSG) are business customers. Average annualized credit losses of 40-45 bps on CSG loans from 2016 through 4Q19. |
| 4Q 2019 Preliminary Results | 10 |
| ALLY FINANCIAL INC. INSURANCE - CONDENSED FINANCIAL STATEMENTS AND KEY STATISTICS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Income Statement (GAAP View) |
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| Net financing revenue |
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| Interest and dividends on investment securities |
$ | 29 | $ | 28 | $ | 29 | $ | 27 | $ | 30 | $ | 1 | $ | (1 | ) | $ | 113 | $ | 111 | $ | 2 | |||||||||||||||||||
| Interest bearing cash |
5 | 6 | 5 | 4 | 3 | (1 | ) | 2 | 20 | 10 | 10 | |||||||||||||||||||||||||||||
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| Total financing revenue and other interest revenue |
34 | 34 | 34 | 31 | 33 | — | 1 | 133 | 121 | 12 | ||||||||||||||||||||||||||||||
| Interest expense |
21 | 20 | 19 | 19 | 18 | 1 | 3 | 79 | 67 | 12 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
| Net financing revenue |
13 | 14 | 15 | 12 | 15 | (1 | ) | (2 | ) | 54 | 54 | — | ||||||||||||||||||||||||||||
| Other revenue |
||||||||||||||||||||||||||||||||||||||||
| Insurance premiums and service revenue earned |
285 | 280 | 261 | 261 | 269 | 5 | 16 | 1,087 | 1,022 | 65 | ||||||||||||||||||||||||||||||
| Other gain / (loss) on investments, net |
51 | 6 | 23 | 95 | (84 | ) | 45 | 135 | 175 | (51 | ) | 226 | ||||||||||||||||||||||||||||
| Other income, net of losses |
3 | 3 | 2 | 4 | 2 | — | 1 | 12 | 10 | 2 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total other revenue |
339 | 289 | 286 | 360 | 187 | 50 | 152 | 1,274 | 981 | 293 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total net revenue |
352 | 303 | 301 | 372 | 202 | 49 | 150 | 1,328 | 1,035 | 293 | ||||||||||||||||||||||||||||||
| Noninterest expense |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits expense |
20 | 19 | 20 | 21 | 18 | 1 | 2 | 80 | 75 | 5 | ||||||||||||||||||||||||||||||
| Insurance losses and loss adjustment expenses |
61 | 74 | 127 | 59 | 54 | (13 | ) | 7 | 321 | 295 | 26 | |||||||||||||||||||||||||||||
| Other operating expenses |
157 | 154 | 154 | 147 | 143 | 3 | 14 | 612 | 585 | 27 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total noninterest expense |
238 | 247 | 301 | 227 | 215 | (9 | ) | 23 | 1,013 | 955 | 58 | |||||||||||||||||||||||||||||
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|
|
|
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|
|
|
|
|
|
|
|||||||||||||||||||||
| Pre-tax income / (loss) |
$ | 114 | $ | 56 | $ | — | $ | 145 | $ | (13 | ) | $ | 58 | $ | 127 | $ | 315 | $ | 80 | $ | 235 | |||||||||||||||||||
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|
|||||||||||||||||||||
| Memo: Income Statement (Managerial View) |
||||||||||||||||||||||||||||||||||||||||
| Insurance premiums and other income |
||||||||||||||||||||||||||||||||||||||||
| Insurance premiums and service revenue earned |
$ | 285 | $ | 280 | $ | 261 | $ | 261 | $ | 269 | $ | 5 | $ | 16 | $ | 1,087 | $ | 1,022 | $ | 65 | ||||||||||||||||||||
| Investment income (adjusted) (1) |
36 | 30 | 34 | 42 | 22 | 6 | 13 | 141 | 115 | 26 | ||||||||||||||||||||||||||||||
| Other income |
3 | 3 | 2 | 4 | 2 | — | 1 | 12 | 10 | 2 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
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|
|
|
|
|
|
|
|||||||||||||||||||||
| Total insurance premiums and other income |
324 | 313 | 297 | 307 | 293 | 11 | 30 | 1,240 | 1,147 | 93 | ||||||||||||||||||||||||||||||
| Expense |
||||||||||||||||||||||||||||||||||||||||
| Insurance losses and loss adjustment expenses |
61 | 74 | 127 | 59 | 54 | (13 | ) | 7 | 321 | 295 | 26 | |||||||||||||||||||||||||||||
| Acquisition and underwriting expenses |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefit expense |
20 | 19 | 20 | 21 | 18 | 1 | 2 | 80 | 75 | 5 | ||||||||||||||||||||||||||||||
| Insurance commission expense |
123 | 120 | 117 | 114 | 108 | 3 | 15 | 475 | 440 | 35 | ||||||||||||||||||||||||||||||
| Other expense |
34 | 34 | 37 | 33 | 35 | (0 | ) | (1 | ) | 137 | 145 | (8 | ) | |||||||||||||||||||||||||||
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|
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|
|
|
|
|
|
|
|||||||||||||||||||||
| Total acquisition and underwriting expense |
177 | 173 | 174 | 168 | 161 | 4 | 16 | 692 | 660 | 32 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total expense |
238 | 247 | 301 | 227 | 215 | (9 | ) | 23 | 1,013 | 955 | 58 | |||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Core pre-tax income / (loss) (1) |
86 | 66 | (4 | ) | 80 | 78 | 20 | 7 | 227 | 192 | 35 | |||||||||||||||||||||||||||||
| Change in the fair value of equity securities (1) |
28 | (10 | ) | 4 | 65 | (91 | ) | 38 | 120 | 88 | (112 | ) | 200 | |||||||||||||||||||||||||||
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|
|
|
|||||||||||||||||||||
| Income / (loss) before income tax expense |
$ | 114 | $ | 56 | $ | — | $ | 145 | $ | (13 | ) | $ | 58 | $ | 127 | $ | 315 | $ | 80 | $ | 235 | |||||||||||||||||||
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|
|
|||||||||||||||||||||
| Balance Sheet (Period-End) |
||||||||||||||||||||||||||||||||||||||||
| Cash, trading and investment securities |
$ | 5,742 | $ | 5,713 | $ | 5,538 | $ | 5,512 | $ | 5,092 | $ | 29 | $ | 650 | ||||||||||||||||||||||||||
| Premiums receivable and other insurance assets |
2,576 | 2,539 | 2,478 | 2,420 | 2,347 | 37 | 229 | |||||||||||||||||||||||||||||||||
| Other assets |
229 | 226 | 225 | 247 | 295 | 3 | (66 | ) | ||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total assets |
$ | 8,547 | $ | 8,478 | $ | 8,241 | $ | 8,179 | $ | 7,734 | $ | 69 | $ | 813 | ||||||||||||||||||||||||||
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|
|
|||||||||||||||||||||||||||
| Key Statistics |
||||||||||||||||||||||||||||||||||||||||
| Total written premiums and revenue (2) |
$ | 335 | $ | 357 | $ | 314 | $ | 305 | $ | 298 | $ | (22 | ) | $ | 37 | $ | 1,310 | $ | 1,174 | $ | 136 | |||||||||||||||||||
| Loss ratio (3) |
21.2 | % | 26.1 | % | 48.5 | % | 22.2 | % | 20.1 | % | 29.2 | % | 28.6 | % | ||||||||||||||||||||||||||
| Underwriting expense ratio (4) |
61.5 | % | 61.4 | % | 65.9 | % | 63.5 | % | 59.4 | % | 63.0 | % | 64.0 | % | ||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Combined ratio |
82.7 | % | 87.5 | % | 114.4 | % | 85.7 | % | 79.5 | % | 92.2 | % | 92.6 | % | ||||||||||||||||||||||||||
| (1) | Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (2) | Written premiums are net of ceded premium for reinsurance. |
| (3) | Loss Ratio is calculated as Insurance losses and loss adjustment expenses divided by Insurance premiums and service revenue earned and Other Income, net of losses. |
| (4) | Underwriting Expense Ratio is calculated as Compensation and benefits expense and Other operating expenses divided by Insurance premiums and service revenue earned and Other Income, net of losses. |
| 4Q 2019 Preliminary Results | 11 |
| ALLY FINANCIAL INC. MORTGAGE FINANCE - CONDENSED FINANCIAL STATEMENTS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Income Statement |
||||||||||||||||||||||||||||||||||||||||
| Net financing revenue |
||||||||||||||||||||||||||||||||||||||||
| Total financing revenue and other interest income |
$ | 137 | $ | 144 | $ | 150 | $ | 146 | $ | 138 | $ | (7 | ) | $ | (1 | ) | $ | 577 | $ | 483 | $ | 94 | ||||||||||||||||||
| Interest expense |
101 | 105 | 104 | 96 | 90 | (4 | ) | 11 | 406 | 304 | 102 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net financing revenue |
36 | 39 | 46 | 50 | 48 | (3 | ) | (12 | ) | 171 | 179 | (8 | ) | |||||||||||||||||||||||||||
| Gain on mortgage loans, net |
6 | 10 | 2 | 2 | 1 | (4 | ) | 5 | 20 | 5 | 15 | |||||||||||||||||||||||||||||
| Other income, net of losses |
— | — | 2 | — | 1 | — | (1 | ) | 2 | 2 | — | |||||||||||||||||||||||||||||
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total other revenue |
6 | 10 | 4 | 2 | 2 | (4 | ) | 4 | 22 | 7 | 15 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total net revenue |
42 | 49 | 50 | 52 | 50 | (7 | ) | (8 | ) | 193 | 186 | 7 | ||||||||||||||||||||||||||||
| Provision for loan losses |
3 | — | — | 2 | (3 | ) | 3 | 6 | 5 | 1 | 4 | |||||||||||||||||||||||||||||
| Noninterest expense |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits expense |
7 | 7 | 9 | 8 | 8 | — | (1 | ) | 31 | 32 | (1 | ) | ||||||||||||||||||||||||||||
| Other operating expense |
30 | 31 | 27 | 29 | 30 | (1 | ) | — | 117 | 108 | 9 | |||||||||||||||||||||||||||||
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total noninterest expense |
37 | 38 | 36 | 37 | 38 | (1 | ) | (1 | ) | 148 | 140 | 8 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Pre-tax income |
$ | 2 | $ | 11 | $ | 14 | $ | 13 | $ | 15 | $ | (9 | ) | $ | (13 | ) | $ | 40 | $ | 45 | $ | (5 | ) | |||||||||||||||||
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|||||||||||||||||||||
| Balance Sheet (Period-End) |
||||||||||||||||||||||||||||||||||||||||
| Finance receivables and loans, net: |
||||||||||||||||||||||||||||||||||||||||
| Consumer loans |
$ | 16,181 | $ | 15,782 | $ | 16,485 | $ | 16,225 | $ | 15,155 | $ | 399 | $ | 1,026 | ||||||||||||||||||||||||||
| Allowance for loan losses |
(19 | ) | (17 | ) | (18 | ) | (18 | ) | (16 | ) | (2 | ) | (3 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total finance receivables and loans, net |
16,162 | 15,765 | 16,467 | 16,207 | 15,139 | 397 | 1,023 | |||||||||||||||||||||||||||||||||
| Other assets |
117 | 818 | 117 | 94 | 72 | (701 | ) | 45 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total assets |
$ | 16,279 | $ | 16,583 | $ | 16,584 | $ | 16,301 | $ | 15,211 | $ | (304 | ) | $ | 1,068 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 4Q 2019 Preliminary Results | 12 |
| ALLY FINANCIAL INC. CORPORATE FINANCE - CONDENSED FINANCIAL STATEMENTS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Income Statement |
||||||||||||||||||||||||||||||||||||||||
| Net financing revenue |
||||||||||||||||||||||||||||||||||||||||
| Total financing revenue and other interest income |
$ | 93 | $ | 93 | $ | 97 | $ | 90 | $ | 86 | $ | — | $ | 7 | $ | 373 | $ | 331 | $ | 42 | ||||||||||||||||||||
| Interest expense |
29 | 33 | 36 | 36 | 35 | (4 | ) | (6 | ) | 134 | 127 | 7 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net financing revenue |
64 | 60 | 61 | 54 | 51 | 4 | 13 | 239 | 204 | 35 | ||||||||||||||||||||||||||||||
| Total other revenue (adjusted) (1) |
15 | 10 | 12 | 7 | 6 | 4 | 9 | 43 | 47 | (4 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total net revenue |
79 | 70 | 73 | 61 | 57 | 8 | 22 | 282 | 251 | 31 | ||||||||||||||||||||||||||||||
| Provision for loan losses |
7 | 3 | 3 | 23 | 10 | 4 | (3 | ) | 36 | 12 | 24 | |||||||||||||||||||||||||||||
| Noninterest expense |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits expense |
13 | 13 | 13 | 19 | 13 | — | — | 58 | 53 | 5 | ||||||||||||||||||||||||||||||
| Other operating expense |
9 | 9 | 9 | 10 | 9 | — | — | 37 | 33 | 4 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total noninterest expense |
22 | 22 | 22 | 29 | 22 | — | — | 95 | 86 | 9 | ||||||||||||||||||||||||||||||
| Core pre-tax income (1) |
50 | 45 | 48 | 9 | 25 | 4 | 25 | 151 | 153 | (2 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Change in the fair value of equity securities (2) |
0 | (1 | ) | (2 | ) | 4 | (4 | ) | 2 | 4 | 2 | (9 | ) | 11 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Pre-tax income |
$ | 50 | $ | 44 | $ | 46 | $ | 13 | $ | 21 | $ | 6 | $ | 29 | $ | 153 | $ | 144 | $ | 9 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance Sheet (Period-End) |
||||||||||||||||||||||||||||||||||||||||
| Cash, trading and investment securities |
$ | 8 | $ | 8 | $ | 9 | $ | 12 | $ | 7 | $ | — | $ | 1 | ||||||||||||||||||||||||||
| Loans held for sale |
100 | 240 | 195 | 24 | 47 | (140 | ) | 53 | ||||||||||||||||||||||||||||||||
| Commercial loans |
5,688 | 5,033 | 4,795 | 5,001 | 4,636 | 655 | 1,052 | |||||||||||||||||||||||||||||||||
| Allowance for loan losses |
(77 | ) | (75 | ) | (87 | ) | (96 | ) | (77 | ) | (2 | ) | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total finance receivables and loans, net |
5,611 | 4,958 | 4,708 | 4,905 | 4,559 | 653 | 1,052 | |||||||||||||||||||||||||||||||||
| Other assets |
68 | 69 | 68 | 65 | 57 | (1 | ) | 11 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total assets |
$ | 5,787 | $ | 5,275 | $ | 4,980 | $ | 5,006 | $ | 4,670 | $ | 512 | $ | 1,117 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| (1) | Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. See page 21 for more details. |
| (2) | Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| 4Q 2019 Preliminary Results | 13 |
| ALLY FINANCIAL INC. CORPORATE AND OTHER - CONDENSED FINANCIAL STATEMENTS |
|
| ($ in millions) |
||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Income Statement |
||||||||||||||||||||||||||||||||||||||||
| Net financing revenue |
||||||||||||||||||||||||||||||||||||||||
| Total financing revenue and other interest income |
$ | 224 | $ | 237 | $ | 248 | $ | 251 | $ | 240 | $ | (13 | ) | $ | (16 | ) | $ | 960 | $ | 815 | $ | 145 | ||||||||||||||||||
| Interest expense |
||||||||||||||||||||||||||||||||||||||||
| Core original issue discount amortization |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
| Other interest expense |
234 | 233 | 228 | 208 | 170 | 2 | 64 | 903 | 545 | 358 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total interest expense |
242 | 240 | 235 | 215 | 193 | 2 | 49 | 932 | 631 | 301 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
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|
|
|
|
|
|||||||||||||||||||||
| Net financing (loss) / revenue |
(18 | ) | (3 | ) | 13 | 36 | 47 | (15 | ) | (65 | ) | 28 | 184 | (156 | ) | |||||||||||||||||||||||||
| Other revenue |
||||||||||||||||||||||||||||||||||||||||
| Other gain on investments, net |
18 | 22 | 14 | 9 | — | (4 | ) | 18 | 63 | 8 | 55 | |||||||||||||||||||||||||||||
| Other income, net of losses (1) |
48 | 24 | 20 | 16 | 47 | 24 | 1 | 108 | 111 | (3 | ) | |||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total other revenue |
66 | 46 | 34 | 25 | 47 | 20 | 19 | 171 | 119 | 52 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total net revenue |
48 | 43 | 47 | 61 | 94 | 5 | (46 | ) | 199 | 303 | (104 | ) | ||||||||||||||||||||||||||||
| Provision for loan losses |
11 | (5 | ) | (6 | ) | (5 | ) | (3 | ) | 16 | 14 | (5 | ) | (15 | ) | 10 | ||||||||||||||||||||||||
| Noninterest expense |
||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits expense |
139 | 129 | 127 | 134 | 120 | 10 | 19 | 529 | 490 | 39 | ||||||||||||||||||||||||||||||
| Other operating expense (2) |
(22 | ) | (41 | ) | (49 | ) | (54 | ) | (33 | ) | 19 | 11 | (166 | ) | (157 | ) | (9 | ) | ||||||||||||||||||||||
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|
|||||||||||||||||||||
| Total noninterest expense |
117 | 88 | 78 | 80 | 87 | 29 | 30 | 363 | 333 | 30 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
| Pre-tax (loss) / income |
$ | (80 | ) | $ | (40 | ) | $ | (25 | ) | $ | (14 | ) | $ | 10 | $ | (40 | ) | $ | (90 | ) | $ | (159 | ) | $ | (15 | ) | $ | (144 | ) | |||||||||||
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|||||||||||||||||||||
| Balance Sheet (Period-End) |
||||||||||||||||||||||||||||||||||||||||
| Cash, trading and investment securities |
$ | 30,250 | $ | 30,445 | $ | 29,733 | $ | 28,963 | $ | 27,853 | $ | (195 | ) | $ | 2,397 | |||||||||||||||||||||||||
| Loans held-for-sale |
30 | 67 | 58 | 50 | 49 | (37 | ) | (19 | ) | |||||||||||||||||||||||||||||||
| Consumer loans |
1,489 | 1,405 | 1,467 | 1,496 | 1,570 | 84 | (81 | ) | ||||||||||||||||||||||||||||||||
| Commercial loans (3) |
129 | 165 | 142 | 135 | 126 | (36 | ) | 3 | ||||||||||||||||||||||||||||||||
| Allowance for loan losses |
(37 | ) | (29 | ) | (31 | ) | (36 | ) | (38 | ) | (8 | ) | 1 | |||||||||||||||||||||||||||
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| Total finance receivables and loans, net |
1,581 | 1,541 | 1,578 | 1,595 | 1,658 | 40 | (77 | ) | ||||||||||||||||||||||||||||||||
| Other assets |
4,307 | 4,000 | 4,319 | 4,234 | 4,390 | 307 | (83 | ) | ||||||||||||||||||||||||||||||||
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| Total assets |
$ | 36,168 | $ | 36,053 | $ | 35,688 | $ | 34,842 | $ | 33,950 | $ | 115 | $ | 2,218 | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
| 2020 | 2021 | 2022 | 2023 | 2024 & After | ||||||||||||||||||||||||||||||||||||
| Core OID Amortization Schedule (4) |
||||||||||||||||||||||||||||||||||||||||
| Remaining Core OID amortization expense |
$ | 34 | $ | 39 | $ | 45 | $ | 53 | Avg = $ | 52/yr | ||||||||||||||||||||||||||||||
| (1) | Includes the impact of centralized asset and liability management, corporate overhead allocation activities, the legacy mortgage portfolio, Ally Invest activity, and Ally Lending activity. |
| (2) | Other operating expenses includes corporate overhead allocated to the other business segments. Amounts of corporate overhead allocated were $225 million for 4Q19, $225 million for 3Q19, $219 million for 2Q19, $229 million for 1Q19 and $220 million for 4Q18. Full year amounts were $899 million in 2019 and $854 million in 2018. The receiving business segment records the allocation of corporate overhead expense within other operating expenses. |
| (3) | Includes intercompany. |
| (4) | Represents a non-GAAP financial measure. For more details refer to page 21. |
| 4Q 2019 Preliminary Results | 14 |
| ALLY FINANCIAL INC. CREDIT RELATED INFORMATION |
|
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Asset Quality - Consolidated (1) |
||||||||||||||||||||||||||||||||||||||||
| Ending loan balance |
$ | 128,220 | $ | 128,609 | $ | 129,210 | $ | 130,055 | $ | 129,926 | $ | (389 | ) | $ | (1,706 | ) | ||||||||||||||||||||||||
| 30+ Accruing DPD |
$ | 2,709 | $ | 2,561 | $ | 2,227 | $ | 1,920 | $ | 2,598 | $ | 148 | $ | 111 | ||||||||||||||||||||||||||
| 30+ Accruing DPD % |
2.11 | % | 1.99 | % | 1.72 | % | 1.48 | % | 2.00 | % | ||||||||||||||||||||||||||||||
| Non-performing loans (NPLs) |
$ | 1,012 | $ | 929 | $ | 903 | $ | 987 | $ | 1,092 | $ | 83 | $ | (80 | ) | |||||||||||||||||||||||||
| Net charge-offs (NCOs) |
$ | 290 | $ | 267 | $ | 182 | $ | 237 | $ | 271 | $ | 23 | $ | 19 | $ | 976 | $ | 945 | $ | 31 | ||||||||||||||||||||
| Net charge-off rate (2) |
0.91 | % | 0.83 | % | 0.56 | % | 0.73 | % | 0.85 | % | 0.76 | % | 0.75 | % | ||||||||||||||||||||||||||
| Provision for loan losses |
$ | 276 | $ | 263 | $ | 177 | $ | 282 | $ | 266 | $ | 13 | $ | 10 | $ | 998 | $ | 918 | $ | 80 | ||||||||||||||||||||
| Allowance for loan losses (ALLL) |
$ | 1,263 | $ | 1,277 | $ | 1,282 | $ | 1,288 | $ | 1,242 | $ | (14 | ) | $ | 21 | |||||||||||||||||||||||||
| ALLL as % of Loans (3) (4) |
0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.96 | % | ||||||||||||||||||||||||||||||
| ALLL as % of NPLs (3) |
125 | % | 137 | % | 142 | % | 130 | % | 114 | % | ||||||||||||||||||||||||||||||
| ALLL as % of NCOs (3) |
109 | % | 119 | % | 176 | % | 136 | % | 115 | % | ||||||||||||||||||||||||||||||
| US Auto Delinquencies - HFI Retail Contract $’s (5) |
||||||||||||||||||||||||||||||||||||||||
| Delinquent contract $ |
$ | 2,616 | $ | 2,428 | $ | 2,113 | $ | 1,833 | $ | 2,501 | $ | 188 | $ | 115 | ||||||||||||||||||||||||||
| % of retail contract $ outstanding |
3.61 | % | 3.32 | % | 2.90 | % | 2.56 | % | 3.55 | % | ||||||||||||||||||||||||||||||
| U.S. Auto Annualized Net Charge-Offs - HFI Retail Contract $’s |
||||||||||||||||||||||||||||||||||||||||
| Net charge-offs |
$ | 271 | $ | 253 | $ | 172 | $ | 234 | $ | 259 | $ | 18 | $ | 12 | $ | 930 | $ | 927 | $ | 3 | ||||||||||||||||||||
| % of avg. HFI assets (2) |
1.49 | % | 1.38 | % | 0.95 | % | 1.32 | % | 1.48 | % | 1.29 | % | 1.33 | % | ||||||||||||||||||||||||||
| U.S. Auto Annualized Net Charge-Offs - HFI Commercial Contract $’s |
||||||||||||||||||||||||||||||||||||||||
| Net charge-offs |
$ | 10 | $ | 1 | $ | 1 | $ | 0 | $ | 0 | $ | 9 | $ | 10 | $ | 12 | $ | 5 | $ | 7 | ||||||||||||||||||||
| % of avg. HFI assets (2) |
0.12 | % | 0.02 | % | 0.01 | % | 0.00 | % | 0.00 | % | 0.04 | % | 0.01 | % | ||||||||||||||||||||||||||
| (1) | Loans within this table are classified as held-for-investment recorded at amortized cost as these loans are included in our allowance for loan losses. |
| (2) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance recievables and loans excluding loans measured at fair value, conditional repurchase loans and loans held-for-sale during the year for each loan category. |
| (3) | ALLL coverage ratios are based on the allowance for loan losses related to loans held-for-investment excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
| (4) | Excludes $135 million of fair value adjustment for loans in hedge accounting relationships in 4Q19, $176 million in 3Q19, $153 million in 2Q19, $63 million in 1Q19 and $24 million in 4Q18. |
| (5) | Dollar amount of accruing contracts greater than 30 days past due |
| 4Q 2019 Preliminary Results | 15 |
| ALLY FINANCIAL INC. CREDIT RELATED INFORMATION, CONTINUED |
|
| ($ in millions) | ||||||||||||||||||||||||||||
| CONTINUING OPERATIONS | ||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||
| Automotive Finance (1) |
||||||||||||||||||||||||||||
| Consumer |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 1,075 | $ | 1,090 | $ | 1,078 | $ | 1,070 | $ | 1,048 | $ | (15 | ) | $ | 27 | |||||||||||||
| Total consumer loans (2) |
$ | 72,390 | $ | 73,071 | $ | 72,898 | $ | 71,553 | $ | 70,539 | $ | (681 | ) | $ | 1,851 | |||||||||||||
| Coverage ratio (3) |
1.49 | % | 1.50 | % | 1.48 | % | 1.50 | % | 1.49 | % | ||||||||||||||||||
| Commercial |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 55 | $ | 66 | $ | 68 | $ | 68 | $ | 63 | $ | (11 | ) | $ | (8 | ) | ||||||||||||
| Total commercial loans |
$ | 32,490 | $ | 33,330 | $ | 33,575 | $ | 35,708 | $ | 37,924 | $ | (840 | ) | $ | (5,434 | ) | ||||||||||||
| Coverage ratio |
0.17 | % | 0.20 | % | 0.20 | % | 0.19 | % | 0.17 | % | ||||||||||||||||||
| Mortgage (1) |
||||||||||||||||||||||||||||
| Consumer |
||||||||||||||||||||||||||||
| Mortgage Finance |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 19 | $ | 17 | $ | 18 | $ | 18 | $ | 16 | $ | 2 | $ | 3 | ||||||||||||||
| Total consumer loans |
$ | 16,181 | $ | 15,782 | $ | 16,485 | $ | 16,225 | $ | 15,155 | $ | 399 | $ | 1,026 | ||||||||||||||
| Coverage ratio |
0.12 | % | 0.11 | % | 0.11 | % | 0.11 | % | 0.11 | % | ||||||||||||||||||
| Mortgage - Legacy |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 27 | $ | 27 | $ | 31 | $ | 34 | $ | 37 | $ | — | $ | (10 | ) | |||||||||||||
| Total consumer loans |
$ | 1,141 | $ | 1,228 | $ | 1,315 | $ | 1,433 | $ | 1,546 | $ | (87 | ) | $ | (405 | ) | ||||||||||||
| Coverage ratio |
2.35 | % | 2.23 | % | 2.35 | % | 2.36 | % | 2.37 | % | ||||||||||||||||||
| Total Mortgage |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 46 | $ | 44 | $ | 49 | $ | 52 | $ | 53 | $ | 2 | $ | (7 | ) | |||||||||||||
| Total consumer loans |
$ | 17,322 | $ | 17,010 | $ | 17,800 | $ | 17,658 | $ | 16,701 | $ | 312 | $ | 621 | ||||||||||||||
| Coverage ratio |
0.27 | % | 0.26 | % | 0.27 | % | 0.29 | % | 0.32 | % | ||||||||||||||||||
| Consumer Other (1)(4) |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 9 | $ | 9 | $ | 9 | ||||||||||||||||||||||
| Total consumer loans |
$ | 201 | $ | 201 | $ | 201 | ||||||||||||||||||||||
| Coverage ratio |
4.65 | % | ||||||||||||||||||||||||||
| Corporate Finance (1) |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 77 | $ | 75 | $ | 87 | $ | 96 | $ | 77 | $ | 2 | $ | — | ||||||||||||||
| Total commercial loans |
$ | 5,688 | $ | 5,033 | $ | 4,795 | $ | 5,001 | $ | 4,636 | $ | 655 | $ | 1,052 | ||||||||||||||
| Coverage ratio |
1.35 | % | 1.50 | % | 1.81 | % | 1.91 | % | 1.66 | % | ||||||||||||||||||
| Corporate and Other (1) |
||||||||||||||||||||||||||||
| Allowance for loan losses |
$ | 1 | $ | 2 | $ | 0 | $ | 2 | $ | 1 | $ | (1 | ) | $ | — | |||||||||||||
| Total commercial loans |
$ | 129 | $ | 165 | $ | 142 | $ | 135 | $ | 126 | $ | (36 | ) | $ | 3 | |||||||||||||
| Coverage ratio |
0.69 | % | 0.93 | % | 0.34 | % | 1.31 | % | 1.15 | % | ||||||||||||||||||
| (1) | ALLL coverage ratios are based on the domestic allowance as a percentage of finance receivables and loans reported at their gross carrying value, which includes the principal amount outstanding, net of unearned income, unamortized deferred fees reduced by costs on originated loans, unamortized premiums and discounts on purchased loans, unamortized basis adjustments arising from the designation of finance receivables and loans as the hedged item in qualifying fair value hedge relationships, and cumulative principal charge-offs. Excludes loans held at fair value. |
| (2) | Includes $135 million of fair value adjustment for loans in hedge accounting relationships in 4Q19, $176 million in 3Q19, $153 million in 2Q19, $63 million in 1Q19 and $24 million in 4Q18. |
| (3) | Excludes $135 million of fair value adjustment for loans in hedge accounting relationships in 4Q19, $176 million in 3Q19, $153 million in 2Q19, $63 million in 1Q19 and $24 million in 4Q18. |
| (4) | Represents Health Credit Services (HCS) which Ally acquired in 4Q19 (now Ally Lending). |
| 4Q 2019 Preliminary Results | 16 |
| ALLY FINANCIAL INC. CAPITAL |
|
| ($ in billions) | ||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||||||||||
| Basel III Transition |
|
|||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||
| Capital (1) |
||||||||||||||||||||||||||||
| Risk-weighted assets |
$ | 145.0 | $ | 146.1 | $ | 145.9 | $ | 145.9 | $ | 146.6 | $ | (1.1 | ) | $ | (1.6 | ) | ||||||||||||
| Common Equity Tier 1 (CET1) capital ratio |
9.5 | % | 9.6 | % | 9.5 | % | 9.3 | % | 9.1 | % | ||||||||||||||||||
| Tier 1 capital ratio |
11.2 | % | 11.2 | % | 11.2 | % | 11.0 | % | 10.8 | % | ||||||||||||||||||
| Total capital ratio |
12.8 | % | 12.8 | % | 12.7 | % | 12.5 | % | 12.3 | % | ||||||||||||||||||
| Tangible common equity / Tangible assets (2)(3) |
7.8 | % | 7.8 | % | 7.8 | % | 7.5 | % | 7.3 | % | ||||||||||||||||||
| Tangible common equity / Risk-weighted assets (2) |
9.6 | % | 9.7 | % | 9.6 | % | 9.2 | % | 8.9 | % | ||||||||||||||||||
| Shareholders’ equity |
$ | 14.4 | $ | 14.5 | $ | 14.3 | $ | 13.7 | $ | 13.3 | $ | (0.1 | ) | $ | 1.1 | |||||||||||||
| less: Disallowed DTA |
— | — | (0.1 | ) | (0.1 | ) | (0.1 | ) | — | 0.1 | ||||||||||||||||||
| Certain AOCI items and other adjustments |
(0.6 | ) | (0.5 | ) | (0.3 | ) | — | 0.3 | (0.1 | ) | (0.9 | ) | ||||||||||||||||
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|||||||||||||||
| Common Equity Tier 1 capital (4) |
$ | 13.8 | $ | 14.0 | $ | 13.9 | $ | 13.6 | $ | 13.4 | $ | (0.2 | ) | $ | 0.4 | |||||||||||||
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|||||||||||||||
| Common Equity Tier 1 capital |
$ | 13.8 | $ | 14.0 | $ | 13.9 | $ | 13.6 | $ | 13.4 | $ | (0.2 | ) | $ | 0.4 | |||||||||||||
| add: Trust preferred securities |
2.5 | 2.5 | 2.5 | 2.5 | 2.5 | — | — | |||||||||||||||||||||
| less: Other adjustments |
(0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | — | — | ||||||||||||||||
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|||||||||||||||
| Tier 1 capital |
$ | 16.3 | $ | 16.4 | $ | 16.3 | $ | 16.0 | $ | 15.8 | $ | (0.1 | ) | $ | 0.5 | |||||||||||||
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|||||||||||||||
| Tier 1 capital |
$ | 16.3 | $ | 16.4 | $ | 16.3 | $ | 16.0 | $ | 15.8 | $ | (0.1 | ) | $ | 0.5 | |||||||||||||
| add: Qualifying subordinated debt |
1.0 | 1.0 | 1.0 | 1.0 | 1.0 | — | — | |||||||||||||||||||||
| Allowance for loan and lease losses includible in Tier 2 capital and other adjustments |
1.2 | 1.2 | 1.2 | 1.2 | 1.2 | — | — | |||||||||||||||||||||
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|||||||||||||||
| Total capital |
$ | 18.5 | $ | 18.6 | $ | 18.6 | $ | 18.3 | $ | 18.0 | $ | (0.1 | ) | $ | 0.5 | |||||||||||||
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|||||||||||||||
| Total shareholders’ equity |
$ | 14.4 | $ | 14.5 | $ | 14.3 | $ | 13.7 | $ | 13.3 | $ | (0.1 | ) | $ | 1.1 | |||||||||||||
| Goodwill and intangible assets, net of deferred tax liabilities |
(0.5 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||
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| Tangible common equity (2) |
$ | 14.0 | $ | 14.2 | $ | 14.0 | $ | 13.4 | $ | 13.0 | $ | (0.2 | ) | $ | 1.0 | |||||||||||||
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|||||||||||||||
| Total assets |
$ | 180.6 | $ | 181.5 | $ | 180.4 | $ | 180.1 | $ | 178.9 | $ | (0.9 | ) | $ | 1.7 | |||||||||||||
| less: Goodwill and intangible assets, net of deferred tax liabilities |
(0.5 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||
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| Tangible assets (3) |
$ | 180.2 | $ | 181.2 | $ | 180.2 | $ | 179.8 | $ | 178.6 | $ | (1.0 | ) | $ | 1.6 | |||||||||||||
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| Denominator for Common equity tier 1 ratio |
||||||||||||||||||||||||||||
| Risk-weighted assets (transition) |
$ | 145.0 | $ | 146.1 | $ | 145.9 | $ | 145.9 | $ | 146.6 | ||||||||||||||||||
| DTAs arising from temporary differences that could not be realized through NOL, net of VA and net of DTLs phased-in during transition |
0.1 | 0.1 | 0.2 | 0.1 | 0.2 | |||||||||||||||||||||||
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| Risk-weighted assets (fully phased-in) |
$ | 145.1 | $ | 146.1 | $ | 146.0 | $ | 146.0 | $ | 146.8 | ||||||||||||||||||
| Metric |
||||||||||||||||||||||||||||
| Common equity tier 1 ratio (transition) |
9.5 | % | 9.6 | % | 9.5 | % | 9.3 | % | 9.1 | % | ||||||||||||||||||
| Common equity tier 1 ratio (fully phased-in) (4) |
9.5 | % | 9.6 | % | 9.5 | % | 9.3 | % | 9.1 | % | ||||||||||||||||||
Note: Numbers may not foot due to rounding
| (1) | Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital |
| (2) | Represents a non-GAAP financial measure. Tangible Common Equity is a non-GAAP financial measure that is defined as common stockholders’ equity less goodwill and identifiable intangible assets, net of deferred tax liabilities. Ally considers various measures when evaluating capital adequacy, including tangible common equity. Ally believes that tangible common equity is important because we believe readers may assess our capital adequacy using this measure. Additionally, presentation of this measure allows readers to compare certain aspects of our capital adequacy on the same basis to other companies in the industry. For purposes of calculating Core return on tangible common equity (Core ROTCE), tangible common equity is further adjusted for tax-effected Core OID balance and net deferred tax asset. |
| (3) | Represents a non-GAAP financial measure. Ally defines tangible assets as total assets less goodwill and intangible assets, net of deferred tax liabilities. |
| (4) | Common Equity Tier 1 (“CET1”) capital fully phased-in: Under the Basel III regulatory framework as adopted in the United States, banking organizations like the company are required to comply with a minimum ratio of common equity tier 1 capital to risk-weighted assets (CET1 Capital Ratio). Common equity tier 1 capital generally consists of common stock (plus any related surplus and net of any treasury stock), retained earnings, accumulated other comprehensive income, and minority interests in the common equity of consolidated subsidiaries, subject to specified conditions and adjustments. The obligation to comply with the minimum CET1 Capital Ratio is subject to ongoing transition periods and other provisions under Basel III. Management believes that both the transitional CET1 Capital Ratio and the fully phased-in CET1 Capital Ratio are helpful to readers in evaluating the company’s capital utilization and adequacy in absolute terms and relative to its peers. The fully phased-in CET1 Capital Ratio is a non-GAAP financial measure that is reconciled to the transitional CET1 Capital Ratio above. |
| 4Q 2019 Preliminary Results | 17 |
| ALLY FINANCIAL INC. LIQUIDITY |
|
| ($ in billions) | ||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||
| Consolidated Available Liquidity |
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| Cash and cash equivalents (1) |
$ | 3.1 | $ | 3.2 | $ | 3.2 | $ | 3.5 | $ | 4.2 | $ | (0.0 | ) | $ | (1.1 | ) | ||||||||||||
| Highly liquid securities (2) |
24.7 | 23.5 | 21.5 | 20.3 | 12.8 | 1.2 | 11.9 | |||||||||||||||||||||
| Current committed unused capacity |
2.1 | 2.0 | 1.6 | 1.8 | 1.9 | 0.1 | 0.1 | |||||||||||||||||||||
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| Total current available liquidity |
$ | 29.9 | $ | 28.6 | $ | 26.3 | $ | 25.6 | $ | 19.0 | $ | 1.3 | $ | 10.9 | ||||||||||||||
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| Unsecured Long-Term Debt Maturity Profile | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 & After | ||||||||||||||||||||||
| Consolidated remaining maturities |
$ | 2.3 | $ | 0.7 | $ | 1.1 | $ | — | $ | 1.5 | $ | 6.8 | ||||||||||||||||
| (1) | May include the restricted cash accumulation for retained notes maturing within the following 30 days and returned to Ally on the distribution date |
| (2) | Includes unencumbered UST, Agency debt and Agency MBS |
| 4Q 2019 Preliminary Results | 18 |
| ALLY FINANCIAL INC. NET INTEREST MARGIN AND DEPOSITS |
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| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | YEARLY TRENDS | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Average Balance Details |
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| Retail Auto Loans |
$ | 72,626 | $ | 73,162 | $ | 72,274 | $ | 70,981 | $ | 69,982 | $ | (536 | ) | $ | 2,644 | $ | 72,268 | $ | 69,804 | $ | 2,464 | |||||||||||||||||||
| Auto Lease (net of dep) |
8,749 | 8,525 | 8,370 | 8,389 | 8,516 | 224 | 233 | 8,509 | 8,590 | (81 | ) | |||||||||||||||||||||||||||||
| Commercial Auto |
31,921 | 33,273 | 34,757 | 35,641 | 36,815 | (1,352 | ) | (4,894 | ) | 33,886 | 35,570 | (1,684 | ) | |||||||||||||||||||||||||||
| Corporate Finance |
5,526 | 5,166 | 5,080 | 4,825 | 4,402 | 360 | 1,124 | 5,162 | 4,235 | 927 | ||||||||||||||||||||||||||||||
| Mortgage |
17,140 | 17,723 | 17,841 | 17,186 | 16,602 | (583 | ) | 538 | 17,473 | 15,295 | 2,178 | |||||||||||||||||||||||||||||
| Cash, Securities and Other(1) |
37,867 | 36,467 | 36,348 | 34,987 | 33,511 | 1,400 | 4,356 | 36,434 | 32,079 | 4,355 | ||||||||||||||||||||||||||||||
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| Total Earning Assets |
$ | 173,829 | $ | 174,316 | $ | 174,670 | $ | 172,009 | $ | 169,828 | $ | (487 | ) | $ | 4,001 | $ | 173,732 | $ | 165,573 | $ | 8,159 | |||||||||||||||||||
| Interest Revenue |
2,180 | 2,257 | 2,252 | 2,187 | 2,168 | (77 | ) | 12 | 8,876 | 8,027 | 849 | |||||||||||||||||||||||||||||
| Unsecured Debt (ex. Core OID balance) (2)(5) |
$ | 12,741 | $ | 13,164 | $ | 12,749 | $ | 12,664 | $ | 13,963 | $ | (423 | ) | $ | (1,222 | ) | $ | 12,831 | $ | 15,287 | $ | (2,456 | ) | |||||||||||||||||
| Secured Debt |
9,563 | 9,860 | 13,722 | 16,163 | 18,029 | (297 | ) | (8,466 | ) | 12,302 | 18,346 | (6,044 | ) | |||||||||||||||||||||||||||
| Deposits (3) |
120,057 | 117,638 | 114,392 | 109,309 | 103,802 | 2,419 | 16,255 | 115,385 | 99,189 | 16,196 | ||||||||||||||||||||||||||||||
| Other Borrowings (4) |
18,000 | 19,996 | 20,720 | 21,712 | 22,451 | (1,996 | ) | (4,451 | ) | 20,097 | 21,070 | (973 | ) | |||||||||||||||||||||||||||
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| Total Funding Sources (ex. Core OID balance) (2) |
$ | 160,361 | $ | 160,658 | $ | 161,583 | $ | 159,848 | $ | 158,245 | $ | (297 | ) | $ | 2,116 | $ | 160,615 | $ | 153,892 | $ | 6,724 | |||||||||||||||||||
| Interest Expense (ex. Core OID) (2) |
1,016 | 1,062 | 1,088 | 1,048 | 1,005 | (46 | ) | 12 | 4,214 | 3,551 | 664 | |||||||||||||||||||||||||||||
| Net Financing Revenue (ex. Core OID) (2) |
$ | 1,164 | $ | 1,195 | $ | 1,164 | $ | 1,139 | $ | 1,163 | $ | (31 | ) | $ | 1 | $ | 4,662 | $ | 4,476 | $ | 185 | |||||||||||||||||||
| Net Interest Margin (yield details) |
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| Retail Auto Loan |
6.68 | % | 6.66 | % | 6.58 | % | 6.47 | % | 6.39 | % | 0.02 | % | 0.29 | % | 6.60 | % | 6.14 | % | 0.46 | % | ||||||||||||||||||||
| memo: retail auto hedge impact |
-0.07 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.05 | % | -0.08 | % | -0.12 | % | -0.01 | % | 0.00 | % | -0.01 | % | ||||||||||||||||||||
| Auto Lease (net of dep) |
5.19 | % | 6.24 | % | 5.94 | % | 5.56 | % | 5.82 | % | -1.05 | % | -0.63 | % | 5.74 | % | 5.40 | % | 0.34 | % | ||||||||||||||||||||
| Commercial Auto |
4.25 | % | 4.59 | % | 4.75 | % | 4.80 | % | 4.55 | % | -0.34 | % | -0.30 | % | 4.61 | % | 4.26 | % | 0.35 | % | ||||||||||||||||||||
| Corporate Finance |
6.65 | % | 7.14 | % | 7.66 | % | 7.48 | % | 7.48 | % | -0.49 | % | -0.83 | % | 7.23 | % | 7.58 | % | -0.35 | % | ||||||||||||||||||||
| Mortgage |
3.46 | % | 3.51 | % | 3.71 | % | 3.82 | % | 3.73 | % | -0.05 | % | -0.27 | % | 3.63 | % | 3.64 | % | -0.01 | % | ||||||||||||||||||||
| Cash, Securities and Other(1) |
2.71 | % | 2.82 | % | 2.96 | % | 3.09 | % | 3.02 | % | -0.11 | % | -0.31 | % | 2.88 | % | 2.74 | % | 0.14 | % | ||||||||||||||||||||
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| Total Earning Assets |
4.97 | % | 5.14 | % | 5.17 | % | 5.16 | % | 5.06 | % | -0.17 | % | -0.09 | % | 5.11 | % | 4.85 | % | 0.26 | % | ||||||||||||||||||||
| Unsecured Debt (ex. Core OID & Core OID balance) (2)(5) |
6.20 | % | 6.15 | % | 6.32 | % | 6.37 | % | 6.14 | % | 0.05 | % | 0.06 | % | 6.26 | % | 5.80 | % | 0.46 | % | ||||||||||||||||||||
| Secured Debt |
2.92 | % | 3.02 | % | 3.16 | % | 3.11 | % | 2.95 | % | -0.10 | % | -0.03 | % | 3.07 | % | 2.71 | % | 0.36 | % | ||||||||||||||||||||
| Deposits (3) |
2.11 | % | 2.22 | % | 2.29 | % | 2.20 | % | 2.00 | % | -0.11 | % | 0.11 | % | 2.20 | % | 1.75 | % | 0.45 | % | ||||||||||||||||||||
| Other Borrowings (4) |
2.42 | % | 2.48 | % | 2.48 | % | 2.48 | % | 2.33 | % | -0.06 | % | 0.09 | % | 2.47 | % | 2.06 | % | 0.41 | % | ||||||||||||||||||||
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| Total Funding Sources (ex. Core OID & Core OID balance) (2) |
2.51 | % | 2.62 | % | 2.70 | % | 2.66 | % | 2.52 | % | -0.11 | % | -0.01 | % | 2.62 | % | 2.31 | % | 0.31 | % | ||||||||||||||||||||
| NIM (as reported) |
2.64 | % | 2.70 | % | 2.66 | % | 2.67 | % | 2.66 | % | -0.06 | % | -0.02 | % | 2.67 | % | 2.65 | % | 0.02 | % | ||||||||||||||||||||
| NIM (ex. Core OID & Core OID balance) (2) |
2.66 | % | 2.72 | % | 2.67 | % | 2.69 | % | 2.72 | % | -0.06 | % | -0.06 | % | 2.68 | % | 2.70 | % | -0.02 | % | ||||||||||||||||||||
| Ally Bank Deposits |
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| Key Deposit Statistics |
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| Average retail CD maturity (months) |
20.1 | 20.3 | 20.6 | 20.9 | 21.3 | (0.3 | ) | (1.3 | ) | |||||||||||||||||||||||||||||||
| Average retail deposit rate |
2.02 | % | 2.14 | % | 2.22 | % | 2.14 | % | 1.93 | % | ||||||||||||||||||||||||||||||
| End of Period Deposit Levels |
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| Retail |
$ | 103,734 | $ | 101,295 | $ | 98,600 | $ | 95,423 | $ | 89,121 | $ | 2,439 | $ | 14,613 | ||||||||||||||||||||||||||
| Brokered & other(3) |
17,018 | 17,935 | 17,725 | 17,876 | 17,057 | (917 | ) | (39 | ) | |||||||||||||||||||||||||||||||
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| Total deposits |
$ | 120,752 | $ | 119,230 | $ | 116,325 | $ | 113,299 | $ | 106,178 | $ | 1,522 | $ | 14,574 | ||||||||||||||||||||||||||
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| Deposit Mix |
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| Retail CD |
37 | % | 36 | % | 34 | % | 34 | % | 34 | % | ||||||||||||||||||||||||||||||
| MMA/OSA/Checking |
49 | % | 49 | % | 51 | % | 50 | % | 50 | % | ||||||||||||||||||||||||||||||
| Brokered(3) |
14 | % | 15 | % | 15 | % | 16 | % | 16 | % | ||||||||||||||||||||||||||||||
| (1) | ‘Other’ includes held-for-investment consumer loans associated with Health Credit Services (HCS), now Ally Lending. |
| (2) | Represents a non-GAAP financial measure. Excludes Core OID from interest expense and Core OID balance from Unsecured Debt. |
| (3) | Includes retail, brokered, and other deposits. Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. |
| (4) | Includes Demand Notes, FHLB Borrowings and Repurchase Agreements. |
| (5) | Includes trust preferred securities. |
| 4Q 2019 Preliminary Results | 19 |
| ALLY FINANCIAL INC. ALLY BANK CONSUMER MORTGAGE HFI PORTFOLIOS (PERIOD-END) |
|
| ($ in billions) | ||||||||||||||||||||
| HISTORICAL QUARTERLY TRENDS | ||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | ||||||||||||||||
| Mortgage Finance HFI Portfolio |
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| Loan Value |
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| Gross carry value |
$ | 16.2 | $ | 15.8 | $ | 16.5 | $ | 16.2 | $ | 15.2 | ||||||||||
| Net carry value |
$ | 16.2 | $ | 15.8 | $ | 16.5 | $ | 16.2 | $ | 15.1 | ||||||||||
| Estimated Pool Characteristics | ||||||||||||||||||||
| % Second lien |
0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||
| % Interest only |
0.0 | % | 0.0 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||
| % 30+ Day delinquent |
0.5 | % | 0.8 | % | 0.6 | % | 0.4 | % | 0.5 | % | ||||||||||
| % Low/No documentation |
0.1 | % | 0.1 | % | 0.1 | % | 0.0 | % | 0.0 | % | ||||||||||
| % Non-primary residence |
4.5 | % | 4.5 | % | 4.7 | % | 4.6 | % | 4.4 | % | ||||||||||
| Refreshed FICO |
774 | 774 | 774 | 772 | 774 | |||||||||||||||
| Wtd. Avg. LTV/CLTV (1) |
60.3 | % | 60.7 | % | 60.6 | % | 60.7 | % | 59.6 | % | ||||||||||
| Corporate Other Legacy Mortgage HFI Portfolio | ||||||||||||||||||||
| Loan Value | ||||||||||||||||||||
| Gross carry value |
$ | 1.1 | $ | 1.2 | $ | 1.3 | $ | 1.4 | $ | 1.5 | ||||||||||
| Net carry value |
$ | 1.1 | $ | 1.2 | $ | 1.3 | $ | 1.4 | $ | 1.5 | ||||||||||
| Estimated Pool Characteristics |
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| % Second lien |
13.9 | % | 14.0 | % | 15.2 | % | 15.6 | % | 15.4 | % | ||||||||||
| % Interest only |
0.1 | % | 0.1 | % | 0.2 | % | 0.3 | % | 0.2 | % | ||||||||||
| % 30+ Day delinquent |
5.4 | % | 5.2 | % | 5.7 | % | 5.4 | % | 5.4 | % | ||||||||||
| % Low/No documentation |
23.5 | % | 23.2 | % | 23.2 | % | 23.2 | % | 23.3 | % | ||||||||||
| % Non-primary residence |
7.2 | % | 7.1 | % | 7.4 | % | 7.5 | % | 7.6 | % | ||||||||||
| Refreshed FICO |
730 | 731 | 731 | 729 | 730 | |||||||||||||||
| Wtd. Avg. LTV/CLTV (1) |
63.8 | % | 64.5 | % | 65.4 | % | 65.9 | % | 65.8 | % | ||||||||||
| (1) | First lien only. Updated home values derived using a combination of appraisals, Broker Price opinion (BPOs), Automated valuation models (AVMs) and Metropolitan statistical area (MSA) level house price indices. |
| 4Q 2019 Preliminary Results | 20 |
| ALLY FINANCIAL INC. EARNINGS PER SHARE RELATED INFORMATION |
|
| ($ in millions, shares in thousands) | ||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Earnings Per Share Data |
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| GAAP net income attributable to common shareholders |
$ | 378 | $ | 381 | $ | 582 | $ | 374 | $ | 290 | $ | (3 | ) | $ | 88 | $ | 1,715 | $ | 1,263 | $ | 452 | |||||||||||||||||||
| Weighted-average common shares outstanding - basic (1) |
380,793 | 390,205 | 398,100 | 404,129 | 411,931 | (9,413 | ) | (31,138 | ) | 393,234 | 425,165 | (31,931 | ) | |||||||||||||||||||||||||||
| Weighted-average common shares outstanding - diluted (1) |
383,391 | 392,604 | 399,916 | 405,959 | 414,750 | (9,213 | ) | (31,359 | ) | 395,395 | 427,680 | (32,285 | ) | |||||||||||||||||||||||||||
| Issued shares outstanding (period-end) |
374,332 | 383,523 | 392,775 | 399,761 | 404,900 | (9,191 | ) | (30,568 | ) | 374,332 | 404,900 | (30,568 | ) | |||||||||||||||||||||||||||
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| Net income (loss) per share - basic (1) |
$ | 0.99 | $ | 0.98 | $ | 1.46 | $ | 0.93 | $ | 0.70 | $ | 0.02 | $ | 0.29 | $ | 4.36 | $ | 2.97 | $ | 1.39 | ||||||||||||||||||||
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| Net income (loss) per share - diluted (1) |
$ | 0.99 | $ | 0.97 | $ | 1.46 | $ | 0.92 | $ | 0.70 | $ | 0.02 | $ | 0.29 | $ | 4.34 | $ | 2.95 | $ | 1.38 | ||||||||||||||||||||
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| Adjusted Earnings per Share (“Adjusted EPS”) |
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| Numerator |
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| GAAP net income attributable to common shareholders |
$ | 378 | $ | 381 | $ | 582 | $ | 374 | $ | 290 | $ | (3 | ) | $ | 88 | $ | 1,715 | $ | 1,263 | $ | 452 | |||||||||||||||||||
| Discontinued operations, net of tax |
3 | — | 2 | 1 | (1 | ) | 3 | 4 | 6 | — | 6 | |||||||||||||||||||||||||||||
| Core OID |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
| Change in the fair value of equity securities (2) |
(29 | ) | 11 | (2 | ) | (70 | ) | 95 | (40 | ) | (124 | ) | (89 | ) | 121 | (211 | ) | |||||||||||||||||||||||
| Core OID & change in the fair value of equity securities tax (tax rate 21% starting 1Q18) (2) |
4 | (4 | ) | (1 | ) | 13 | (25 | ) | 8 | 29 | 13 | (43 | ) | 56 | ||||||||||||||||||||||||||
| Significant discrete tax items |
— | — | (201 | ) | — | — | — | — | (201 | ) | — | (201 | ) | |||||||||||||||||||||||||||
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| Core net income attributable to common shareholders (3) |
$ | 364 | $ | 396 | $ | 387 | $ | 325 | $ | 382 | $ | (31 | ) | $ | (18 | ) | $ | 1,472 | $ | 1,427 | $ | 46 | ||||||||||||||||||
| Denominator |
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| Weighted-average common shares outstanding - diluted (1) |
383,391 | 392,604 | 399,916 | 405,959 | 414,750 | (9,213 | ) | (31,359 | ) | 395,395 | 427,680 | (32,285 | ) | |||||||||||||||||||||||||||
| Adjusted EPS (4) |
$ | 0.95 | $ | 1.01 | $ | 0.97 | $ | 0.80 | $ | 0.92 | $ | (0.06 | ) | $ | 0.03 | $ | 3.72 | $ | 3.34 | $ | 0.39 | |||||||||||||||||||
| Memo |
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| Original Issue Discount Amortization Expense |
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| Core original issue discount (Core OID) amortization expense (5) |
$ | 8 | $ | 7 | $ | 7 | $ | 7 | $ | 23 | $ | 0 | $ | (15 | ) | $ | 29 | $ | 86 | $ | (57 | ) | ||||||||||||||||||
| Other OID |
3 | 3 | 3 | 3 | 2 | (0 | ) | 1 | 13 | 15 | (2 | ) | ||||||||||||||||||||||||||||
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| GAAP original issue discount amortization expense |
$ | 11 | $ | 11 | $ | 10 | $ | 10 | $ | 26 | $ | 0 | $ | (15 | ) | $ | 42 | $ | 101 | $ | (59 | ) | ||||||||||||||||||
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| Outstanding Original Issue Discount Balance |
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| Core outstanding original issue discount balance (Core OID balance) (6) |
$ | (1,063 | ) | $ | (1,071 | ) | $ | (1,078 | ) | $ | (1,085 | ) | $ | (1,092 | ) | $ | 8 | $ | 29 | $ | (1,063 | ) | $ | (1,092 | ) | $ | 29 | |||||||||||||
| Other outstanding OID balance |
(37 | ) | (40 | ) | (44 | ) | (39 | ) | (43 | ) | 3 | 6 | (37 | ) | (43 | ) | 6 | |||||||||||||||||||||||
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| GAAP outstanding original issue discount balance |
$ | (1,100 | ) | $ | (1,111 | ) | $ | (1,122 | ) | $ | (1,125 | ) | $ | (1,135 | ) | $ | 11 | $ | 35 | $ | (1,100 | ) | $ | (1,135 | ) | $ | 35 | |||||||||||||
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| Adjusted Other Revenue |
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| GAAP Other Revenue |
$ | 487 | $ | 413 | $ | 395 | $ | 466 | $ | 298 | $ | 74 | $ | 189 | $ | 1,761 | $ | 1,414 | $ | 347 | ||||||||||||||||||||
| Change in the fair value of equity securities (2) |
(29 | ) | 11 | (2 | ) | (70 | ) | 95 | (40 | ) | (124 | ) | (89 | ) | 121 | (211 | ) | |||||||||||||||||||||||
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| Adjusted Other Revenue |
$ | 458 | $ | 424 | $ | 393 | $ | 396 | $ | 393 | $ | 34 | $ | 65 | $ | 1,672 | $ | 1,535 | $ | 136 | ||||||||||||||||||||
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| Net Financing Revenue (ex. Core OID) |
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| GAAP net financing revenue |
$ | 1,156 | $ | 1,188 | $ | 1,157 | $ | 1,132 | $ | 1,140 | $ | (32 | ) | $ | 16 | $ | 4,633 | $ | 4,390 | $ | 243 | |||||||||||||||||||
| Core OID |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
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| Net Financing Revenue (ex. Core OID) |
$ | 1,164 | $ | 1,195 | $ | 1,164 | $ | 1,139 | $ | 1,163 | $ | (32 | ) | $ | 1 | $ | 4,662 | $ | 4,476 | $ | 186 | |||||||||||||||||||
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| (1) | Includes shares related to share-based compensation that vested but were not yet issued |
| (2) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (3) | Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. Core net income attributable to common shareholders adjusts GAAP net income attributable to common shareholders for discontinued operations net of tax, tax-effected Core OID expense, significant discrete tax items and tax-effected changes in equity investments measured at fair value. |
| (4) | 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 performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. In the numerator of Adjusted EPS, GAAP net income attributable to common shareholders is adjusted for the following items: (1) excludes discontinued operations, net of tax, as Ally is primarily a domestic company and sales of international businesses and other discontinued operations in the past have significantly impacted GAAP EPS, (2) adds back the tax-effected non-cash Core OID, (3) excludes equity fair value adjustments (net of tax) related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity that do not reflect the operating performance of the core businesses, and (4) excludes significant discrete tax items that do not relate to the operating performance of the core businesses. |
| (5) | Core original issue discount (Core OID) amortization expense is a non-GAAP financial measure for OID, primarily related to bond exchange OID which excludes international operations and future issuances. |
| (6) | Core outstanding original issue discount balance (Core OID balance) is a non-GAAP financial measure for outstanding OID, primarily related to bond exchange OID which excludes international operations and future issuances. |
| 4Q 2019 Preliminary Results | 21 |
| ALLY FINANCIAL INC. ADJUSTED TANGIBLE BOOK VALUE PER SHARE RELATED INFORMATION |
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| ($ in billions, shares in thousands) | ||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | ||||||||||||||||||||||
| Adjusted Tangible Book Value Per Share (“Adjusted TBVPS”) Information |
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| Numerator |
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| GAAP Common shareholder’s equity |
$ | 14.4 | $ | 14.5 | $ | 14.3 | $ | 13.7 | $ | 13.3 | $ | (0.0 | ) | $ | 1.1 | |||||||||||||
| Goodwill and identifiable intangibles, net of DTLs |
(0.5 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||
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| Tangible common equity |
14.0 | 14.2 | 14.0 | 13.4 | 13.0 | (0.2 | ) | 1.0 | ||||||||||||||||||||
| Tax-effected Core OID balance (21% tax rate starting 4Q17) |
(0.8 | ) | (0.8 | ) | (0.9 | ) | (0.9 | ) | (0.9 | ) | 0.0 | 0.0 | ||||||||||||||||
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| Adjusted tangible book value (1) |
$ | 13.1 | $ | 13.3 | $ | 13.2 | $ | 12.6 | $ | 12.1 | $ | (0.2 | ) | $ | 1.0 | |||||||||||||
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| Denominator |
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| Issued shares outstanding (period-end, thousands) |
374,332 | 383,523 | 392,775 | 399,761 | 404,900 | (9,191 | ) | (30,568 | ) | |||||||||||||||||||
| GAAP Common shareholder’s equity per share |
$ | 38.5 | $ | 37.7 | $ | 36.4 | $ | 34.3 | $ | 32.8 | $ | 0.8 | $ | 5.7 | ||||||||||||||
| Goodwill and identifiable intangibles, net of DTLs per share |
(1.2 | ) | (0.7 | ) | (0.7 | ) | (0.7 | ) | (0.7 | ) | (0.5 | ) | (0.5 | ) | ||||||||||||||
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| Tangible common equity per share |
37.3 | 37.0 | 35.7 | 33.6 | 32.1 | 0.4 | 5.2 | |||||||||||||||||||||
| Tax-effected Core OID (21% tax rate starting 4Q17) per share |
(2.2 | ) | (2.2 | ) | (2.2 | ) | (2.1 | ) | (2.1 | ) | (0.0 | ) | (0.1 | ) | ||||||||||||||
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| Adjusted tangible book value per share (1) |
$ | 35.1 | $ | 34.7 | $ | 33.6 | $ | 31.4 | $ | 29.9 | $ | 0.3 | $ | 5.1 | ||||||||||||||
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| (1) | 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 statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder’s equity per share. Adjusted TBVPS generally adjusts common equity for (1) goodwill and identifiable intangibles, net of DTLs, and (2) tax-effected Core OID balance to reduce tangible common equity in the event the corresponding discounted bonds are redeemed/tendered. |
| 4Q 2019 Preliminary Results | 22 |
| ALLY FINANCIAL INC. CORE ROTCE RELATED INFORMATION |
|
| ($ in millions) unless noted otherwise | ||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Core Return on Tangible Common Equity (“Core ROTCE”) |
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| Numerator |
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| GAAP net income attributable to common shareholders |
$ | 378 | $ | 381 | $ | 582 | $ | 374 | $ | 290 | $ | (3 | ) | $ | 88 | $ | 1,715 | $ | 1,263 | $ | 452 | |||||||||||||||||||
| Discontinued operations, net of tax |
3 | — | 2 | 1 | (1 | ) | 3 | 4 | 6 | — | 6 | |||||||||||||||||||||||||||||
| Core OID |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
| Change in the fair value of equity securities (1) |
(29 | ) | 11 | (2 | ) | (70 | ) | 95 | (40 | ) | (124 | ) | (89 | ) | 121 | (211 | ) | |||||||||||||||||||||||
| Core OID & change in the fair value of equity securities tax (tax rate 21% starting 1Q18) (1) |
4 | (4 | ) | (1 | ) | 13 | (25 | ) | 8 | 29 | 13 | (43 | ) | 56 | ||||||||||||||||||||||||||
| Significant discrete tax items |
— | — | (201 | ) | — | — | — | — | (201 | ) | — | (201 | ) | |||||||||||||||||||||||||||
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| Core net income attributable to common shareholders (2) |
$ | 364 | $ | 396 | $ | 387 | $ | 325 | $ | 382 | $ | (31 | ) | $ | (18 | ) | $ | 1,472 | $ | 1,427 | $ | 46 | ||||||||||||||||||
| Denominator (2-period average, $billions) |
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| GAAP shareholder’s equity |
$ | 14.4 | $ | 14.4 | $ | 14.0 | $ | 13.5 | $ | 13.2 | $ | 0.1 | $ | 1.3 | $ | 13.8 | $ | 13.4 | $ | 0.5 | ||||||||||||||||||||
| Goodwill & identifiable intangibles, net of deferred tax liabilities (“DTLs”) |
(0.4 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.3 | ) | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.3 | ) | (0.1 | ) | ||||||||||||||||||||
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| Tangible common equity |
$ | 14.1 | $ | 14.1 | $ | 13.7 | $ | 13.2 | $ | 12.9 | $ | (0.0 | ) | $ | 1.2 | $ | 13.5 | $ | 13.1 | $ | 0.4 | |||||||||||||||||||
| Core OID balance |
(1.1 | ) | (1.1 | ) | (1.1 | ) | (1.1 | ) | (1.1 | ) | 0.0 | 0.0 | (1.1 | ) | (1.1 | ) | 0.1 | |||||||||||||||||||||||
| Net deferred tax asset (“DTA”) |
(0.0 | ) | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.4 | ) | 0.1 | 0.3 | (0.2 | ) | (0.4 | ) | 0.2 | |||||||||||||||||||||||
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| Normalized common equity (3) |
$ | 13.0 | $ | 12.9 | $ | 12.5 | $ | 11.9 | $ | 11.4 | $ | 0.1 | $ | 1.6 | $ | 12.2 | $ | 11.6 | $ | 0.7 | ||||||||||||||||||||
| Core Return on Tangible Common Equity (4) |
11.2 | % | 12.3 | % | 12.4 | % | 10.9 | % | 13.4 | % | 12.0 | % | 12.3 | % | ||||||||||||||||||||||||||
| (1) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. |
| (2) | Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in the calculations of Adjusted EPS and Core ROTCE and that, like those measures, is believed by management to help the reader better understand the operating performance of the core businesses and their ability to generate earnings. Core net income attributable to common shareholders adjusts GAAP net income attributable to common shareholders for discontinued operations net of tax, tax-effected Core OID expense, significant discrete tax items and tax-effected changes in equity investments measured at fair value. |
| (3) | Normalized common equity is a non - GAAP measure calculated using 2 period average |
| (4) | 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 operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and net DTA. Ally’s Core net income attributable to common shareholders for purposes of calculating Core ROTCE is based on the actual effective tax rate for the period adjusted for significant discrete tax items including tax reserve releases, which aligns with the methodology used in calculating adjusted earnings per share. 1. In the numerator of Core ROTCE, GAAP net income attributable to common shareholders is adjusted for discontinued operations net of tax, tax-effected Core OID, fair value adjustments (net of tax) related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity, and significant discrete tax items that do not relate to the operating performance of the core businesses. 2. In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL, Core OID balance, and net DTA. |
| 4Q 2019 Preliminary Results | 23 |
| ALLY FINANCIAL INC. ADJUSTED EFFICIENCY RATIO RELATED INFORMATION |
|
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||
| QUARTERLY TRENDS | CHANGE VS. | FULL YEAR | ||||||||||||||||||||||||||||||||||||||
| 4Q 19 | 3Q 19 | 2Q 19 | 1Q 19 | 4Q 18 | 3Q 19 | 4Q 18 | FY 2019 | FY 2018 | CHANGE | |||||||||||||||||||||||||||||||
| Adjusted Efficiency Ratio Calculation |
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| Numerator |
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| GAAP noninterest expense |
$ | 880 | $ | 838 | $ | 881 | $ | 830 | $ | 804 | $ | 42 | $ | 76 | $ | 3,429 | $ | 3,264 | $ | 165 | ||||||||||||||||||||
| Rep and warrant expense |
— | (0 | ) | (0 | ) | — | 1 | 0 | (1 | ) | (0 | ) | 3 | (3 | ) | |||||||||||||||||||||||||
| Insurance expense |
(238 | ) | (247 | ) | (301 | ) | (227 | ) | (215 | ) | 9 | (23 | ) | (1,013 | ) | (955 | ) | (58 | ) | |||||||||||||||||||||
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| Adjusted noninterest expense for the Adjusted Efficiency Ratio |
$ | 642 | $ | 591 | $ | 580 | $ | 603 | $ | 590 | $ | 51 | $ | 52 | $ | 2,416 | $ | 2,312 | $ | 104 | ||||||||||||||||||||
| Denominator |
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| Total net revenue |
$ | 1,643 | $ | 1,601 | $ | 1,552 | $ | 1,598 | $ | 1,438 | $ | 42 | $ | 205 | $ | 6,394 | $ | 5,804 | $ | 590 | ||||||||||||||||||||
| Core OID |
8 | 7 | 7 | 7 | 23 | 0 | (15 | ) | 29 | 86 | (57 | ) | ||||||||||||||||||||||||||||
| Insurance revenue |
(352 | ) | (303 | ) | (301 | ) | (372 | ) | (202 | ) | (49 | ) | (150 | ) | (1,328 | ) | (1,035 | ) | (293 | ) | ||||||||||||||||||||
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| Adjusted net revenue for the Adjusted Efficiency Ratio |
$ | 1,299 | $ | 1,305 | $ | 1,258 | $ | 1,233 | $ | 1,259 | $ | (7 | ) | $ | 40 | $ | 5,095 | $ | 4,855 | $ | 240 | |||||||||||||||||||
| Adjusted Efficiency Ratio (1) |
49.4 | % | 45.3 | % | 46.1 | % | 48.9 | % | 46.9 | % | 47.4 | % | 47.6 | % | ||||||||||||||||||||||||||
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| (1) | 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 Adjusted efficiency ratio, total noninterest expense is adjusted for Insurance segment expense and Rep and warrant expense. In the denominator, total net revenue is adjusted for Insurance segment revenue and Core OID. See page 11 for the combined ratio for the Insurance segment which management uses as a primary measure of underwriting profitability for the Insurance business. |
| 4Q 2019 Preliminary Results | 24 |