8-K
Ally Financial Inc. (ALLY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
(Date of report; date of earliest event reported)
April 16, 2021
(Date of report; date of earliest event reported)
Commission file number: 1-3754
ALLY FINANCIAL INC.
(Exact name of registrant as specified in its charter)
| Delaware | 38-0572512 |
|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer<br>Identification No.) |
Ally Financial Inc.
500 Woodward Avenue, Floor 10
Detroit, Michigan 48226
(Address of principal executive offices)
(Zip Code)
(866) 710-4623
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act (all listed on the New York Stock Exchange):
| Title of each class | Trading<br>symbols | Name of Each Exchange<br>on Which Registered |
|---|---|---|
| Common Stock, par value $0.01 per share | ALLY | NYSE |
| 8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I | ALLY PRA | NYSE |
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).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operation and Financial Condition. |
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On April 16, 2021, Ally Financial Inc. issued a press release announcing preliminary operating results for the first quarter ended March 31, 2021. 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 No. | Description |
| --- | --- |
| 99.1 | Press Release, Dated April 16, 2021 |
| 99.2 | Charts Furnished to Securities Analysts |
| 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: April 16, 2021 | /s/ David J. DeBrunner |
| David J. DeBrunner | |
| Chief Accounting Officer and Controller |
EX-99.1
Exhibit 99.1
News release: IMMEDIATE RELEASE
Ally Financial Reports First Quarter 2021 Financial Results
| $2.11 | 21.7% | $796MM | $1.94B | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| GAAP EPS | RETURN ON EQUITY | GAAP NET INCOME | GAAP TOTAL NET REVENUE | |||||||
| $2.09 | 24.1% | $790MM | $1.93B | |||||||
| ADJUSTED EPS^1^ | CORE ROTCE^1^ | CORE NET INCOME^1^ | ADJUSTED TOTAL NET REVENUE^1^ | |||||||
| QUARTERLY HIGHLIGHTS | • Consumer auto originations of $10.2 billion | Sourced<br>from 3.3 million decisioned applications<br> <br><br> <br>• 7.21% Estimated Retail Auto Originated Yield^1^ | Retail auto net charge-off rate of 0.53%, down 91 bps YoY<br><br><br><br> <br>• Insurance<br>written premiums of $333 million | Diversified investment income trends remained strong<br> <br><br><br><br>• Retail deposits of $128.4 billion, up 21% YoY, and up $4.0 billion<br>QoQ<br> <br><br><br><br>• Total retail deposit customers of 2.33 million, up 83 thousand QoQ,<br>and up 14% YoY<br> <br><br><br><br>• Ally Home^®^ direct-to-consumer mortgage originations of $1.8 billion, up 145% YoY<br> <br><br><br><br>• Ally Invest net customer assets of $14.5 billion, up 93% YoY | <br>Self-directed accounts up 14% YoY to 425 thousand<br> <br><br> <br>• Ally Lending gross originations of $211 million, up 179% YoY | Active merchant locations up 52% YoY | Retail launch expected in 2Q<br><br><br><br> <br>• Corporate<br>Finance held-for-investment portfolio of $6.3 billion, up 5% QoQ | Stable credit, favorable syndication activity<br><br><br><br> <br>• Board of<br>directors approved 2Q 2021 common dividend of $0.19 per share | Resumed buybacks under $1.6B FY’21 authorization | |
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| CEO COMMENT | “Ally’s strong first quarter performance demonstrated our continued ability to navigate the complexities of the pandemic<br>and emerge as a stronger and more resilient company,” said Ally Chief Executive Officer Jeffrey J. Brown. “The perseverance and professionalism of our approximately 9,700 associates drove our success, with our results further supported by<br>improving macroeconomic conditions and the continued re-opening of the economy.<br> <br><br><br><br>“The impressive momentum we carried into 2021 was fueled by our leading and adaptable auto and digital banking platforms and a culture centered<br>around our promise to ‘Do It Right’ for our customers, employees and communities. This disciplined approach, along with our focus on generating long-term value for all our stakeholders, guides our strategy and positions us for continued<br>success.” | |||||||||
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| First Quarter 2021 Financial Results | ||||||||||
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| % Increase/(Decrease) vs. | ||||||||||
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| ($ millions except per share data) | 1Q 21 | 4Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||
| GAAP Net Income | $ | 796 | $ | 687 | $ | (319) | 16% | 350% | ||
| Core Net Income^1^ | $ | 790 | $ | 606 | $ | (166) | 30% | 576% | ||
| GAAP Earning per Common Share | $ | 2.11 | $ | 1.82 | $ | (0.85) | 16% | 348% | ||
| Adjusted EPS^1^ | $ | 2.09 | $ | 1.60 | $ | (0.44) | 31% | 574% | ||
| Return (NIAC) on GAAP Shareholder’s Equity | 21.7% | 19.1% | (9.1)% | 14% | 338% | |||||
| Core ROTCE^1^ | 24.1% | 18.7% | (5.4)% | 29% | 548% | |||||
| GAAP Total Net Revenue | $ | 1,937 | $ | 1,981 | $ | 1,412 | (2)% | 37% | ||
| Adjusted Total Net Revenue^1^ | $ | 1,930 | $ | 1,879 | $ | 1,606 | 3% | 20% | ||
| GAAP Common Shareholder’s Equity per Share | $ | 39.34 | $ | 39.24 | $ | 36.23 | 0% | 9% | ||
| Adjusted Tangible Book Value per Share^1^ | $ | 36.16 | $ | 36.05 | $ | 32.80 | 0% | 10% | ||
| ^1^ | The following are non-GAAP financial measures which Ally believes are important to<br>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), Adjusted Total Net Revenue, Core Pre-Tax<br>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) and Adjusted<br>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 press release. | |||||||||
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| Net<br>income attributable to common shareholders was 796 million in the quarter, compared to net loss attributable to common shareholders of 319 million in the first quarter of 2020, driven by a 13 million provision benefit in the<br>quarter compared to a 903 million provision expense for credit losses in the prior year period, as well as higher other revenue and higher net financing revenue. <br>Net financing revenue was 1.4 billion, up 226 million year-over-year, driven by lower funding costs, higher retail<br>auto revenue and higher gains on off-lease vehicles, partially offset by higher mortgage premium amortization and lower commercial auto portfolio balance and yield.<br> Other revenue increased 299 million year-over-year<br>to 565 million, including a 17 million increase in the fair value of equity securities in the quarter, compared to an 185 million decrease in the fair value of equity securities in the prior year quarter. Other revenue, excluding<br>the change in fair value of equity securitiesA, increased 97 million year-over-year to 548 million, primarily driven by higher realized investment gains and higher gain-on-sale revenue at Ally Home®. <br>Net interest margin (“NIM”) of 3.16%, including Core OIDB of 2<br>bps, increased 50 bps year-over-year. Excluding Core OIDB, NIM was 3.18%, up 50 bps versus the prior year period, due to lower funding costs, retail auto portfolio yield expansion, and higher<br>gains on off-lease vehicles, partially offset by mortgage premium amortization given elevated prepayment activity and excess liquidity.<br> Provision for credit losses decreased 916 million<br>year-over-year, resulting in a provision benefit of 13 million, primarily due to COVID-19 pandemic-related reserve build in the first quarter of 2020 and lower retail auto net charge-offs.<br> Noninterest expense increased 23 million<br>year-over-year, driven primarily by increased staffing and investments to support the growth of Ally’s businesses. |
All values are in US Dollars.
| ^A^ | 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,<br>a component of equity. | ||||||||||
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| ^B^ | Represents a non-GAAP financial measure. Refer to definitions of Non-GAAP Financial Measures and Other Key Terms and reconciliation to GAAP later in this press release. | ||||||||||
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| First Quarter 2021 Financial Results | |||||||||||
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| Increase/(Decrease) vs. | |||||||||||
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| ($ millions except per share data) | 1Q 21 | 4Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||
| Net Financing Revenue (excluding Core OID)^1^ | $ | 1,382 | $ | 1,312 | $ | 1,154 | $ | 69 | $ | 227 | |
| Core OID | (10) | (9) | (8) | (0) | (1) | ||||||
| (a) Net Financing Revenue | $ | 1,372 | $ | 1,303 | $ | 1,146 | $ | 69 | $ | 226 | |
| Adjusted Other Revenue^2^ | 548 | 567 | 451 | (18) | 97 | ||||||
| Change in Fair Value of Equity Securities | 17 | 111 | (185) | (95) | 202 | ||||||
| (b) Other Revenue | 565 | 678 | 266 | (113) | 299 | ||||||
| (c) Provision for Credit Losses | (13) | 102 | 903 | (115) | (916) | ||||||
| (d) Noninterest Expense | 943 | 1,023 | 920 | (80) | 23 | ||||||
| Pre-Tax Income (Loss) (a+b-c-d) | $ | 1,007 | $ | 856 | $ | (411) | **** | $ | 151 | $ | 1,418 |
| Income Tax Expense | 211 | 169 | (92) | 42 | 303 | ||||||
| Net Income (Loss) | $ | 796 | $ | 687 | $ | (319) | **** | $ | 109 | $ | 1,115 |
| 1Q 21 | 4Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||
| GAAP EPS (diluted) | $ | 2.11 | $ | 1.82 | $ | (0.85) | **** | $ | 0.29 | $ | 2.96 |
| Core OID, Net of Tax | 0.02 | 0.02 | 0.02 | 0.00 | 0.00 | ||||||
| Change in Fair Value of Equity Securities, Net of Tax | (0.03) | (0.23) | 0.39 | 0.20 | (0.42) | ||||||
| Adjusted EPS^3^ | $ | 2.09 | $ | 1.60 | $ | (0.44 | ) | $ | 0.49 | $ | 2.54 |
| (1) | Represents a non-GAAP financial measure. Adjusted for Core OID. Refer to the<br>Definitions of Non-GAAP Financial Measures and Other Key Terms and Reconciliation to GAAP later in this press release. | ||||||||||
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| (2) | Represents a non-GAAP financial measure. Adjusted for change in the fair value of<br>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<br>which such adjustments were recognized through other comprehensive income, a component of equity. | ||||||||||
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| (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. | ||||||||||
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| Pre-Tax Income by Segment | ||||||||||
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| Increase/(Decrease) vs. | ||||||||||
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| ($ millions) | 1Q 21 | 4Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||
| Automotive Finance | $ | 803 | $ | 563 | $ | (173) | $ | 240 | $ | 976 |
| Insurance | 141 | 183 | (105) | (42) | 246 | |||||
| Dealer Financial Services | $ | 944 | $ | 746 | $ | (278) | $ | 198 | $ | 1,222 |
| Corporate Finance | 53 | 64 | (68) | (11) | 121 | |||||
| Mortgage Finance | 23 | 7 | 12 | 16 | 11 | |||||
| Corporate and Other | (13) | 39 | (77) | (52) | 64 | |||||
| Pre-Tax Income fromContinuing Operations | $ | 1,007 | $ | 856 | $ | (411) | $ | 151 | $ | 1,418 |
| Core OID^1^ | 10 | 9 | 8 | 0 | 1 | |||||
| Change in Fair Value of Equity Securities^2^ | (17) | (111) | 185 | 95 | (202) | |||||
| Core Pre-Tax Income^3^ | $ | 1,000 | $ | 754 | $ | (217) | $ | 246 | $ | 1,217 |
| (1) | Core OID for all periods shown is applied to the pre-tax income of the Corporate<br>and Other segment. Refer to the Definitions of Non-GAAP Financial Measures and Other Key Terms and Reconciliation to GAAP later in this press release. | |||||||||
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| (2) | Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Reflects equity fair value<br>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<br>were recognized through other comprehensive income, a component of equity. | |||||||||
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| (3) | Core Pre-Tax Income is a non-GAAP<br>financial measure that adjusts pre-tax income from continuing operations for Core OID, equity fair value adjustments related to ASU 2016-01, and repositioning and other,<br>as applicable. 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<br>Non-GAAP Financial Measures and Other Key Terms later in this press release. | |||||||||
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| Discussion of Segment Results | ||||||||||
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| Auto Finance | ||||||||||
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| Pre-tax income of $803 million was up<br>$976 million year-over-year, primarily due to a provision benefit in the quarter relative to a provision expense for credit losses in the prior year period, as well as higher net financing revenue.<br><br><br><br> <br>Net financing revenue of $1.2 billion was<br>$166 million higher year-over-year, driven by higher retail auto revenue and higher gains on off-lease vehicles, partially offset by lower commercial auto portfolio balance and yield. Ally’s retail auto portfolio yield increased 24 bps<br>year-over-year to 6.90%, excluding the impact of hedges.<br> <br><br><br><br>Provision for credit losses was a $22 million benefit, improving $788 million year-over-year, primarily due a reduction<br>in reserve levels, reflecting strong consumer and commercial performance and improved economic trends, as well as lower retail auto net charge-offs. The retail auto net charge-off rate was 0.53%, down 91 bps<br>year-over-year.<br> <br><br> <br>Consumer auto originations increased<br>to $10.2 billion from $9.1 billion in the prior year period, which included $5.7 billion of used retail volume, or 56% of total originations, $3.1 billion of new retail volume, and $1.4 billion of leases. Estimated retail<br>auto originated yield^C^in the quarter was 7.21%.<br> <br><br><br><br>End-of-period auto earning assets decreased<br>$9.9 billion year-over-year from $112.9 billion to $103.0 billion, as an increase in consumer auto earning assets was more than offset by a decline in commercial earning assets. End-of-period consumer auto earning assets were up $2.2 billion year-over-year, driven by growth in retail loans and operating lease assets. End-of-period commercial earning assets of $19.2 billion were $12.2 billion lower year-over-year, driven by industry-wide vehicle inventory declines.<br><br><br><br> <br>Insurance<br><br><br>Pre-tax income of $141 million was up $246 million year-over-year, primarily<br>due to a $11 million increase in the fair value of equity securities^D^during the first quarter compared to a $182 million decline in the fair value of equity securities^D^in the prior year period. Core pre-tax income^E^was $130 million in the quarter, up $53 million year-over-year, primarily due to higher<br>investment income.<br> <br><br> <br>Written premiums were<br>$333 million, up $16 million year-over-year, driven by higher consumer products volume and rate, partially offset by lower COVID-related dealer inventory levels.<br> <br><br><br><br>Total investment income was $102 million, up $48 million year-over-year, excluding a $11 million increase in the<br>fair value of equity securities during the quarter^D^, primarily driven by higher realized equity investment gains. |
^C^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.
^D^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 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity.
^E^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. Refer to the definitions of Non-GAAP Financial Measures and Other Key Terms and Reconciliation to GAAP later in this press release.
| Corporate Finance<br><br><br>Pre-tax income was $53 million in the quarter, up $121 million year-over-year,<br>primarily driven by lower provision for credit losses and higher net revenue.<br> <br><br><br><br>Net financing revenue increased $3 million year-over-year to $71 million, driven by higher loan balances. Other<br>revenue, excluding the change in fair value of equity securities^F^, increased $4 million year-over-year to $21 million, due to higher investment income.<br><br><br><br> <br>Provision for credit losses totaled $13 million,<br>down $101 million from the prior year period, primarily due to COVID-related reserve build in the first quarter of 2020.<br> <br><br><br><br>The held-for-investment loan portfolio declined<br>4% year-over-year from $6.5 billion to $6.3 billion, driven by elevated revolver utilization in the prior year period.<br> <br><br><br><br>Mortgage Finance<br><br><br>Pre-tax income was $23 million in the quarter, up $11 million year-over-year,<br>as higher other revenue more than offset lower net financing revenue and higher noninterest expense.<br> <br><br><br><br>Net financing revenue was down $15 million year-over-year to $23 million, reflecting ongoing elevated prepayment<br>activity and associated higher premium amortization. Other revenue increased $30 million year-over-year to $40 million, primarily driven by strong gain-on-sale<br>activity.<br> <br><br> <br>Direct-to-consumer originations totaled $1.8 billion in the quarter, up $1.1 billion year-over-year, demonstrating continued momentum in the Ally<br>Home^®^ business.<br> <br><br><br><br>Existing Ally Bank deposit customers accounted for 45% of the quarter’s direct-to-consumer origination volume. |
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| Capital, Liquidity & Deposits |
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| Capital<br><br><br>Ally paid a $0.19 per share quarterly common dividend and completed $219 million of share repurchases in the first quarter,<br>including shares withheld to cover income taxes owed by participants related to share-based incentive plans. Ally’s Board of Directors approved a $0.19 per share common dividend for the second quarter of 2021.<br><br><br><br> <br>Preliminary Common Equity Tier 1 (CET1) capital ratio<br>increased from 10.6% to 11.1% quarter-over-quarter, primarily due to strong net income generation and lower risk-weighted assets.<br> <br><br><br><br>Liquidity & Funding<br><br><br>Consolidated liquid cash and cash equivalents^G^totaled $15.2 billion<br>at quarter-end, up $0.3 billion compared to the end of the fourth quarter of 2020. Total liquidity^H^was $43.6 billion at quarter-end.<br> <br><br><br><br>Deposits represented 87% of Ally’s funding portfolio at quarter-end, increasing<br>from 75% a year ago.<br> <br><br><br><br>Deposits<br><br><br>Retail deposits increased to $128.4 billion at quarter-end, up $22.3 billion<br>year-over-year and up $4.0 billion for the quarter. Total deposits increased to $139.6 billion at quarter-end, up $17.3 billion year-over-year.<br><br><br><br> <br>The average retail portfolio deposit rate was 0.81% for<br>the quarter, down 107 bps year-over-year and down 16 bps quarter-over-quarter.<br> <br><br><br><br>Ally’s retail deposit customer base grew 14% year-over-year, totaling 2.33 million customers at quarter-end. The addition of 83 thousand net new customers drove 53% of retail deposit balance growth during the quarter. Millennials and younger customers continue to comprise the largest generation segment of<br>new customers, accounting for 69% of new customers in the quarter. Approximately 8% of deposit customers maintained an Ally Invest or Ally Home relationship at quarter-end. |
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^F^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 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity.
^G^Cash & cash equivalents may include the restricted cash accumulation for retained notes maturing within the following 30 days and returned to Ally on the distribution date. ^^
^H^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.
| Definitions of Non-GAAP <br>Financial Measures and Other Key Terms |
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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. See Reconciliation to GAAP below for calculation methodology and details regarding each measure.
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) adjusts for tax-effected repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, (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 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, as applicable for respective periods.
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 and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, as applicable for respective periods. In the denominator, total net revenue is adjusted for Core OID and Insurance segment revenue. 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 DTLs, (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, as applicable for respective periods.
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. 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 repositioning and other primarily related to the extinguishment of high-cost legacy debt and strategic activities and significant other, preferred stock capital actions, significant discrete tax items and tax-effected changes in equity investments measured at fair value, as applicable for respective periods. 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, and is believed by management to help the reader better understand the activity removed from: Core pre-tax income (loss), Core net income (loss) attributable to common shareholders, Adjusted EPS, Core ROTCE, Adjusted efficiency ratio, Adjusted total net revenue, and Net financing revenue (excluding Core OID). Core OID is 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 and is believed by management to help the reader better understand the balance removed from Core ROTCE and Adjusted TBVPS. Core OID balance is 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 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 (3) Repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, as applicable for respective periods. 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 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<br>operations net of tax, tax-effected Core OID, tax-effected repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic<br>activities and significant other one-time items, fair value adjustments (net of tax) related to ASU 2016-01 which requires change in the fair value of equity securities<br>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<br>actions, as applicable for respective periods. |
|---|---|
| (2) | In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL, Core<br>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 Ally Lending was included within the Corporate and Other segment.
Estimated impact of CECL on regulatory capital per final rule issued by U.S.banking agencies - In December 2018, the FRB and other U.S. banking agencies approved a final rule to address the impact of CECL on regulatory capital by allowing BHCs and banks, including Ally, the option to phase in the day-one impact of CECL over a three-year period. In March 2020, the FRB and other U.S. banking agencies issued an interim final rule that became effective on March 31, 2020 and provided an alternative option for banks to temporarily delay the impacts of CECL, relative to the incurred loss methodology for estimating the allowance for loan losses, on regulatory capital. A final rule that was largely unchanged from the March 2020 interim final rule was issued by the FRB and other U.S. banking agencies in August 2020, and became effective in September 2020. For regulatory capital purposes, these rules permitted us to delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021. Beginning on January 1, 2022, we will be required to phase in 25% of the previously deferred estimated capital impact of CECL, with an additional 25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. Under these rules, firms that adopt CECL and elect the five-year transition will calculate the estimated impact of CECL on regulatory capital as the day-one impact of adoption plus 25% of the subsequent change in allowance during the two-year deferral period, which according to the final rule approximates the impact of CECL relative to an incurred loss model. We adopted this transition option during the first quarter of 2020, and plan to phase in the regulatory capital impacts of CECL based on this five-year transition period.
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 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 Retail – used vehicle loans | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Growth – total originations from<br>non-GM/Chrysler dealers and direct-to-consumer loans | Lease – new vehicle lease originations | ||||||||
| Reconciliation to GAAP | |||||||||
| --- | |||||||||
| Adjusted Earnings per Share | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Numerator ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||
| GAAP Net Income (Loss) Attributable to Common Shareholders | $ | 796 | **** | $ | 687 | **** | $ | (319 | ) |
| Core OID | 10 | 9 | 8 | ||||||
| Change in the Fair Value of Equity Securities | (17 | ) | (111 | ) | 185 | ||||
| Tax on: Core OID & Change in Fair Value of Equity Securities (21% tax rate) | 1 | 21 | (41 | ) | |||||
| Core Net Income (Loss) Attributable to Common Shareholders | $ | 790 | **** | $ | 606 | **** | $ | (166 | ) |
| Denominator | |||||||||
| Weighted-Average Common Shares Outstanding - (Diluted, thousands) | **** | 377,529 | **** | **** | 378,424 | **** | **** | 375,723 | **** |
| Adjusted EPS | $ | 2.09 | **** | $ | 1.60 | **** | $ | (0.44 | ) |
| Core Return on Tangible Common Equity (Core ROTCE) | |||||||||
| Numerator ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||
| GAAP Net Income (Loss) Attributable to Common Shareholders | $ | 796 | **** | $ | 687 | **** | $ | (319 | ) |
| Core OID | 10 | 9 | 8 | ||||||
| Change in Fair Value of Equity Securities | (17 | ) | (111 | ) | 185 | ||||
| Tax on: Core OID & Change in Fair Value of Equity Securities (21% tax rate) | 1 | 21 | (41 | ) | |||||
| Core Net Income (Loss) Attributable to Common Shareholders | $ | 790 | **** | $ | 606 | **** | $ | (166 | ) |
| Denominator (Average, billions) | |||||||||
| GAAP Shareholder’s Equity | $ | 14.7 | **** | $ | 14.4 | **** | $ | 14.0 | **** |
| Goodwill & Identifiable Intangibles, Net of Deferred Tax Liabilities (DTLs) | (0.4 | ) | (0.4 | ) | (0.4 | ) | |||
| Tangible Common Equity | $ | 14.3 | **** | $ | 14.0 | **** | $ | 13.5 | **** |
| Core OID Balance | (1.0 | ) | (1.0 | ) | (1.1 | ) | |||
| Net Deferred Tax Asset (DTA) | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||
| Normalized Common Equity | $ | 13.1 | **** | $ | 12.9 | **** | $ | 12.3 | **** |
| Core Return on Tangible Common Equity | **** | 24.1 | % | **** | 18.7 | % | **** | (5.4 | )% |
All values are in US Dollars.
| Adjusted Tangible Book Value per Share | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Numerator ( billions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||||
| GAAP Common Shareholder’s Equity | $ | 14.6 | **** | $ | 14.7 | **** | $ | 13.5 | **** | ||
| Goodwill and Identifiable Intangible Assets, Net of DTLs | (0.4 | ) | (0.4 | ) | (0.4 | ) | |||||
| Tangible Common Equity | 14.2 | 14.3 | 13.1 | ||||||||
| Tax-effected Core OID Balance (21% starting in 4Q17) | (0.8 | ) | (0.8 | ) | (0.8 | ) | |||||
| Adjusted Tangible Book Value | [a] | **** | $ | 13.4 | **** | $ | 13.5 | **** | $ | 12.2 | **** |
| Denominator | |||||||||||
| Issued Shares Outstanding (period-end, thousands) | 371,805 | 374,674 | 373,155 | ||||||||
| Metric | |||||||||||
| GAAP Common Shareholder’s Equity per Share | $ | 39.3 | **** | $ | 39.2 | **** | $ | 36.2 | **** | ||
| Goodwill and Identifiable Intangible Assets, Net of DTLs per Share | (1.0 | ) | (1.0 | ) | (1.2 | ) | |||||
| Tangible Common Equity per Share | 38.3 | 38.2 | 35.0 | ||||||||
| Tax-effected Core OID Balance (21% starting in 4Q17) per<br>Share | (2.2 | ) | (2.2 | ) | (2.2 | ) | |||||
| Adjusted Tangible Book Value per<br>Share | [a] ÷ [b] | **** | $ | 36.2 | **** | $ | 36.1 | **** | $ | 32.8 | **** |
| Adjusted Efficiency Ratio | **** | ||||||||||
| Numerator ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||||
| GAAP Noninterest Expense | $ | 943 | **** | $ | 1,023 | **** | $ | 920 | **** | ||
| Rep and Warrant Expense | 0 | (0 | ) | 0 | |||||||
| Insurance Expense | (253 | ) | (246 | ) | (256 | ) | |||||
| Adjusted Noninterest Expense for Adjusted Efficiency Ratio | [a | ] | $ | 690 | **** | $ | 777 | **** | $ | 664 | **** |
| Denominator ( millions) | |||||||||||
| Total Net Revenue | $ | 1,937 | **** | $ | 1,981 | **** | $ | 1,412 | **** | ||
| Core OID | 10 | 9 | 8 | ||||||||
| Insurance Revenue | (394 | ) | (429 | ) | (151 | ) | |||||
| Adjusted Net Revenue for Adjusted Efficiency Ratio | [b] | **** | $ | 1,553 | **** | $ | 1,561 | **** | $ | 1,269 | **** |
| Adjusted Efficiency Ratio | [a] ÷ [b] | **** | **** | 44.4 | % | **** | 49.8 | % | **** | 52.3 | % |
| Original Issue Discount Amortization Expense ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||||
| Core Original Issue Discount (Core OID) Amortization Expense | $ | 10 | **** | $ | 9 | **** | $ | 8 | **** | ||
| Other OID | 3 | 3 | 3 | ||||||||
| GAAP Original Issue Discount<br>Amortization Expense | $ | 12 | **** | $ | 13 | **** | $ | 11 | **** | ||
| Outstanding Original Issue Discount Balance ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | ||||||||
| Core Outstanding Original Issue Discount Balance (Core OID Balance) | $ | (1,018 | ) | $ | (1,027 | ) | $ | (1,055 | ) | ||
| Other Outstanding OID Balance | (34 | ) | (37 | ) | (34 | ) | |||||
| GAAP Outstanding Original Issue<br>Discount Balance | $ | (1,052 | ) | $ | (1,064 | ) | $ | (1,089 | ) |
All values are in US Dollars.
| Net Financing Revenue (ex. Core OID) | ||||||
|---|---|---|---|---|---|---|
| ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | |||
| GAAP Net Financing Revenue | $ | 1,372 | $ | 1,303 | $ | 1,146 |
| Core OID | 10 | 9 | 8 | |||
| Net Financing Revenue (ex. Core<br>OID) | $ | 1,382 | $ | 1,312 | $ | 1,154 |
| Adjusted Other Revenue | ||||||
| ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | |||
| GAAP Other Revenue | $ | 565 | $ | 678 | $ | 266 |
| Change in Fair Value of Equity Securities | (17) | (111) | 185 | |||
| Adjusted Other Revenue | $ | 548 | $ | 567 | $ | 451 |
| Adjusted Total Net Revenue | ||||||
| ( millions) | 1Q 21 | 4Q 20 | 1Q 20 | |||
| Adjusted Total Net Revenue | $ | 1,930 | $ | 1,879 | $ | 1,606 |
All values are in US Dollars.
| Insurance<br>Non-GAAP Walk to Core Pre-Tax Income | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q 2020 | |||||||||||||||||
| ( millions) <br> Insurance | GAAP | **** | Core OID | **** | Change inthe fair valueof equitysecurities | **** | **** | Non-GAAP^1^ | GAAP | Core OID | Change in<br>the fair value<br>of equity<br>securities | Non-GAAP^1^ | |||||
| Premiums, Service Revenue Earned and Other | 281 | $ | - | $ | - | **** | $ | 281 | $ | 279 | **** | $ | - | $ | - | $ | 279 |
| Losses and Loss Adjustment Expenses | 63 | - | - | 63 | 74 | - | - | 74 | |||||||||
| Acquisition and Underwriting Expenses | 190 | - | - | 190 | 182 | - | - | 182 | |||||||||
| Investment Income and Other | 113 | - | (11 | ) | 102 | (128 | ) | - | 182 | 54 | |||||||
| Pre-Tax Income from<br>Continuing Operations | 141 | $ | - | $ | (11 | ) | $ | 130 | $ | (105 | ) | $ | - | $ | 182 | $ | 77 |
All values are in US Dollars.
^1^Non-GAAP line items walk to Core Pre-Tax Income, a non-GAAP financial measure that adjusts Pre-Tax Income.
| Additional Financial Information |
|---|
For additional financial information, the first quarter 2021 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 $181.9 billion in assets as of March 31, 2021. 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, personal lending, 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 AnnualReports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. This information is preliminary and basedon company and third-party data available at the time of the release or related communication.
This earnings release and related communications containforward-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 aboutfuture effects of COVID-19 and our ability to navigate them, the outlook for financial and operating metrics and performance, and future capital allocation and actions. Forward-looking statements often usewords 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 suchas “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-lookingstatements, 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 thefuture.
Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in anyforward 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 Form10-K for the year ended December 31, 2020, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, orother 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 wasmade. 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 releaseand 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 betweennon-GAAP financial measures and comparable GAAP financial measures are reconciled in the release.
Unless the contextotherwise 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 ofcredit, 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 ofthe 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 salescontracts. The term “commercial” means all commercial products associated with our loan activities, other than commercial retail installment sales contracts. The term “partnerships” means business arrangements rather thanpartnerships as defined by law.
| Contacts: | |
|---|---|
| Daniel Eller | Jillian Palash |
| Ally Investor Relations | Ally Communications (Media) |
| 704-444-5216 | 704-644-6201 |
| daniel.eller@ally.com | jillian.palash@ally.com |
9
EX-99.2
1Q 2021 Preliminary Results Exhibit 99.2 Ally Financial Inc. 1Q 2021 Earnings Review April 16, 2021 Contact Ally Investor Relations at (866) 710-4623 or investor.relations@ally.com 1
1Q 2021 Preliminary Results Forward-Looking Statements and Additional Information This presentation and related communications should be read in conjunction with the financial statements, notes, and other information contained in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. This information is preliminary and based on company and third-partydata available atthe 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 future effects of COVID- 19 and our ability to navigate them, the outlook for financial and operating metrics and performance, and 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, 2020, 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 consultfurther disclosures (including disclosures ofa forward-lookingnature) thatwe maymake 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. The term “partnerships” means business arrangements rather than partnerships as definedbylaw. 2
1Q 2021 Preliminary Results GAAP and Core Results: Quarterly ($ millions except per share data) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 GAAP net income (loss) attributable to common shareholders (NIAC) $ 796 $ 687 $ 476 $ 241 $ (319) (1)(2) Core net income (loss) attributable to common shareholders $ 790 $ 606 $ 473 $ 228 $ (166) GAAP earnings per common share (EPS) (basic or diluted as applicable, NIAC) $ 2.11 $ 1.82 $ 1.26 $ 0.64 $ (0.85) (1)(3) Adjusted EPS $ 2.09 $ 1.60 $ 1.25 $ 0.61 $ (0.44) Return (NIAC) on GAAP shareholder's equity 21.7% 19.1% 13.6% 7.1% -9.1% (1)(4) Core ROTCE 24.1% 18.7% 15.2% 7.6% -5.4% GAAP common shareholder's equity per share $ 39.34 $ 39.24 $ 37.78 $ 36.98 $ 36.23 (1)(5) Adjusted tangible book value per share (Adjusted TBVPS) $ 36.16 $ 36.05 $ 34.56 $ 33.73 $ 32.80 Efficiency ratio 48.7% 51.6% 53.7% 61.2% 65.2% (1)(6) Adjusted efficiency ratio 44.4% 49.8% 47.3% 52.5% 52.3% GAAP total net revenue $ 1,937 $ 1,981 $ 1,684 $ 1,609 $ 1,412 (1)(7) Adjusted total net revenue $ 1,930 $ 1,879 $ 1,680 $ 1,528 $ 1,606 Effective tax rate 21.0% 19.7% 24.8% 28.2% 22.5% (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 p er share (Adjusted EPS), Core pre-tax income (loss), Core net income (loss) attributable to common sh arehold ers, Core return on tangible common equity (Core ROTCE), Adjusted efficiency ratio, Adjusted total net revenu e, Net financing revenue (excluding Core OID), Adjusted other revenue, Adjusted noninterest expense, Core original issue discount (Core OID) amortization expense, Core outstanding original issue discount balance (Core OID balan ce), and Adjusted t angible book valu e per share (Adjust ed TBVPS). These measures are used by management and we believe are useful to investors in assessing thecompany’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) Core net income (loss) attributable to common shareholders is a non-GAAP financial measure. See page 28 for definition and 29 for calculation methodology. (3) Adjusted earnings per share (Adjusted EPS) is a non-GAAP financial measure. See page 29 for definition and calculation methodology. (4) Core return on tangible common equity (Core ROTCE) is a non-GAAP financial measure. See page 31 for definition and calculation methodology. (5) Adjusted tangible book value per share (Adjusted TBVPS) is a non-GAAP financial measure. See page 30 for definition and calculation methodology. (6) Adjusted efficiency ratio is a non-GAAP financial measure. See page 32 for definition and calculation methodology. (7) Adjusted total net revenue is a non-GAAP financial measure. See page 34 for calculation methodology. 3
1Q 2021 Preliminary Results Ally: Consistent Priorities and Focus ‘Do It Right’ Culture and Values Customers: Relentless customer-focus | Dealers, consumers & commercial clients Employees: Continuous prioritization of the well-being of our teammates Communities: Driving meaningful and lasting change, including through the Ally Foundation Driving long-term, enhanced value for all of our stakeholders 4
1Q 2021 Preliminary Results 1Q 2021 Highlights Delivering Results |
Long-term Focus $ % % $ 24.1 1.93B 11.1 2.09 Core Adjusted Adjusted Total Preliminary CET1 (1) (1) (1) EPS ROTCE Net Revenue Capital Ratio ▪ Resumed buybacks in 1Q, on track with 2021 share repurchase program of up to $1.6B | Announced 2Q dividend of $0.19 Auto & Insurance: Leading, Adaptable Partner | Comprehensive Capabilities & Products ▪ Consumer auto originations of $10.2B | Sourced from 3.3M decisioned applications (2) ▪ 7.21% estimated retail auto originated yield | 0.53% retail auto net charge-offs ▪ Insurance written premiums of $333M | Diversified investment income trends remained strong Ally Bank: Leading, All-Digital Platform | Ongoing Momentum Across Products ▪ $128.4B retail deposit balances, ↑ 21% YoY | 1Q’21 retail growth of $4.0B | 2.33M deposit customers, ↑ 14% YoY ▪ Ally Home®: $1.8B direct-to-consumer originations, ↑ 145% YoY ▪ Ally Invest: $14.5B net customer assets, ↑ 93% YoY | 425k self-directed accounts, ↑ 14% YoY ▪ Ally Lending: $211M gross originations, ↑ 179% YoY | Active merchant locations ↑ 52% YoY | Retail launch expected in 2Q ▪ Corporate Finance: $6.3B HFI portfolio, ↑ 5% QoQ | Stable credit, favorable syndication activity (1) Represents a non-GAAP financial measure. See pages 29, 31, and 34 for calculation methodology and details. (2) Estimated Retail Auto Originated Yield is a forward-looking non-GAAP financial measure. See page 28 for details. Note: Ally Bank, Member FDIC and Equal Housing Lender, offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products, including savings, money-market, and checking accounts, CDs, and IRAs. Additionally, we offer securities-brokerage and investment-advisory services through Ally Invest. 5
CECL Day 1 Impact: $2.7/share 1Q 2021 Preliminary Results Quarterly Core Metric Trends (1) (2) Adjusted Earnings Per Share Adjusted Total Net Revenue ($ millions) $1,930 $2.09 $1,879 $1.60 $548 $1,680 $567 $1.25 $1,620 $1,622 $1,606 $1,556 $1,557 $1,535 $1,521 $1,528 $1.01 $471 $0.97 $0.95 $0.92 $0.91 $1,471 $424 $1,463 $458 $0.83 $451 $0.80 $393 $393 $396 $0.68 $392 $0.61 $356 $465 $394 $1,382 $1,312 $1,209 $1,195 $1,163 $1,164 $1,164 $1,154 $1,139 $1,129 $1,115 $1,069 $1,063 ($0.44) 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Net financing revenue (ex. Core OID) Adjusted other revenue (1) Represents a non-GAAP financial measure. See page 29 for calculation methodology and details. (2) Represents a non-GAAP financial measure. See page 34 for calculation methodology and details. (3) Total Deposits Adjusted Tangible Book Value per Share ($ billions) $140 $137 $36.2 $135 $36.1 $131 $35.1 $34.7 $34.6 $122 $121 $11 $119 $13 $116 $33.7 $33.6 $14 $113 $15 $32.8 $106 $101 $16 $99 $17 $31.4 $97 $18 $18 $18 $29.9 $17 $17 $16 $17 $28.6 $28.1 $27.4 $128 $124 $121 $116 $106 $104 $101 $99 $95 $89 $85 $82 $82 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Retail Deposits Brokered / Other (3) Represents a non-GAAP financial measure. See page 30 for calculation methodology and details. Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. Numbers may not foot due to rounding. 6
1Q 2021 Preliminary Results Ally Auto & Insurance: Agile Market Leader # # # 1 1 1 Top-3 Leading Prime Auto Bank Floorplan Retail Auto Loan Used Auto Insurance Provider (4) (1) (2) (3) Lender Lender Outstandings Lender (F&I, P&C Products) Extensive Dealer Reach Enhanced Tech, Data & Digital Skilled, Experienced Teams Engage 95%+ of U.S. Franchised Dealers Digital Self-Service Customer Portals Dedicated Underw riters & Field Reps Partnering w ith emerging players (e.g., Carvana) All-Digital SmartAuction Platform Focused Customer Care & Servicing Ops Dealer Relationships Consumer Applications High-Touch + High-Tech Capabilities Active U.S. Dealers Annual Decisioned Volume Approved Apps: Auto-Decision % 19.0K +53% 12.1M +3.2X 69% +30pp 10.6M 16.2K 39% 3.7M 26% 12.4K 2010 2015 2020 2010 2015 1Q 21 2010 2015 1Q 21 Large, Addressable U.S. Auto Market High Consumer Utility and Priority Auto Debt portion of Auto Loan & Lease Auto Payment Priority within Annual Loan & Lease # # $ $ or (7) (5) 9-10% (8) (6) 1 2 1.3T Total Consumer Debt Outstanding Balances 600B+ Consumer Payment Waterfall Origination Volume Note: see page 36 for footnotes. 7
1Q 2021 Preliminary Results Ally Bank: Leading, Growing, All-Digital Disruptor # $ 1 12 48 128B Largest All-Digital, Retail Deposit Consecutive Years Consecutive Quarters (1) Direct U.S. Bank Balances of Deposit Growth of Customer Growth Ally Bank Customers Ally Invest Retail Depositors: Consistent, accelerating growth New Funded Accounts: 50-60% sourced from existing depositors 2.33M 425K 20%+ CAGR +86% 324K 228K Acquired: 1Q'18 1Q'20 1Q'21 2010 2016 1Q 21 2Q'16 Ally Home Ally Lending $ Originations: 45-60% sourced from existing depositors PoS Originations: Healthcare (4Q'19), Home Improvement (2Q'20) & Retail (est. 2Q'21) $1.8B $211M +6X FY’17 +159% $82M $0.3B Launched: 1Q'18 1Q'20 1Q'21 Acquired: 1Q'20 4Q'20 1Q'21 1Q'17 4Q'19 Ongoing momentum demonstrates Ally’s strong value and established brand (1) see page 36 for footnotes. Note: Ally Bank, Member FDIC and Equal Housing Lender, offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products, including savings, 8 money-market, and checking accounts, CDs, and IRAs. Additionally, we offer securities-brokerage and investment-advisory services through Ally Invest.
1Q 2021 Preliminary Results 1Q 2021 Financial Results Inc / (Dec) v. ($ millions; except per share data) 1Q 21 4Q 20 1Q 20 4Q 20 1Q 20 (1) $ 1,382 $ 1,312 $ 1,154 $ 69 $ 227 Net financing revenue (ex. Core OID) (1) (1 0) (9) (8 ) (0) (1) Core OID Net financing revenue $ 1,372 $ 1,303 $ 1,146 $ 69 $ 226 (1) Adjusted other revenue 548 567 451 (18) 97 (2) 17 111 (1 85) (95) 202 Change in fair value of equity securities Other revenue 565 678 266 (113) 299 Provision for credit losses (13) 102 903 (115) (916) Noninterest expense 943 1,023 920 (80) 23 Pre-tax income (loss) $ 1,007 $ 856 $ (411) $ 151 $ 1 ,418 Income tax expense 211 169 (9 2) 42 303 Net income (loss) $ 796 $ 687 $ (319) $ 109 $ 1,115 GAAP EPS (diluted) $ 2 .11 $ 1.82 $ ( 0.85) $ 0.29 $ 2.96 Core OID, net of tax 0 .02 0.02 0.02 0.00 0.00 Change in fair value of equity securities, net of tax (0.03) (0.23) 0 .39 0.20 (0.42) (3) $ 2 .09 $ 1.60 $ ( 0.44) $ 0.49 $ 2.54 Adjusted EPS (1) Represents a non-GAAP financial measure. For calculation methodology see page 33. (2) See page 35 for details. (3) Represents a non-GAAP financial measure. For calculation methodology see page 29. 9
1Q 2021 Preliminary Results Balance Sheet and Net Interest Margin 1Q 21 4Q 20 1Q 20 ($ millions) Average Average Average Balance Yield Balance Yield Balance Yield Retail Auto Loan $ 73,500 6.66% $ 73,401 6.57% $ 72,550 6.54% Retail Auto Loan (ex. hedge impact) 6.90% 6.83% 6.66% Auto Lease (net of depreciation) 9,831 8.57% 9,587 7.82% 9,078 5.22% Commercial Auto 21,341 3.49% 22,418 3.34% 30,472 4.11% Corporate Finance 6,338 5.14% 6,203 5.69% 6,088 6.27% (1) 14,310 2.74% 15,445 2.74% 17,296 3.45% Mortgage (2) 444 14.95% 366 16.68% 225 13.52% Consumer Other Cash and Cash Equivalents 15,363 0.10% 17,758 0.10% 4,853 1.16% Investment Securities & Other 34,996 1.55% 33,331 1.70% 32,858 2.79% Total Earning Assets $ 176,123 4.44% $ 178,509 4.34% $ 173,420 4.88% (3)(6) Unsecured Debt $ 12,910 5.42% $ 12,735 5.45% $ 12,182 6.32% Secured Debt 3,793 3.35% 5,289 3.07% 9,193 2.82% (4) 137,718 0.90% 135,642 1.08% 121,217 1.97% Deposits (5) 6,307 2.47% 9,462 2.18% 17,302 2.34% Other Borrowings (3) $ 160,728 1.38% $ 163,128 1.55% $ 159,894 2.39% Total Funding Sources (3) 3.18% 2.92% 2.68% NIM (ex. Core OID) NIM (as reported) 3.16% 2.90% 2.66% (1) Mortgage includes held-for-investment (HFI) loans from the Mortgage Finance segment and the HFI legacy mortgage portfolio in run-off at the Corporate and Other segment. (2) ‘Consumer Other’ consists of unsecured consumer lending from point-of-sale financing. (3) Represents a non-GAAP financial measure. Excludes Core OID and Core OID balance. See page 34 calculation methodology. (4) Includes retail, brokered (inclusive of sweep deposits) and other deposits (inclusive of mortgage escrow and other deposits). (5) Includes: Demand Notes (Ally terminated the demand note program and redeemed all outstanding demand notes, Ally had $2.1B of outstandings asof 12/31/2020), FHLB borrowings and Repurchase Agreements. (6) Includes trust preferred securities. 10
1Q 2021 Preliminary Results Deposits • Total Deposits of $140 billion, up 14% YoY Retail Deposit Balances ($ billions, EoP) Retail Brokered / Other Customer Retention Rate – Retail deposits of $128 billion, up $4 billion QoQ $140 $137 $135 – Brokered deposits declined $5 billion YoY $131 $122 $11 $13 $14 $15 $16 • 2.33 million retail deposit customers, up 14% YoY 96% 96% 96% 96% 96% – Customer retention of 96% remained strong $128 $124 $121 $116 $106 – 83 thousand net new customers drove 53% of balance growth in 1Q 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 – 69% of 1Q new customers and 53% of total customers from Millennial and younger generations Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. See page 35 for Customer Retention Rate definition. Numbers may not foot due to rounding. Deposit Mix & Retail Portfolio Rate Retail Deposit Customers Multi-relationship customers (thousands) Brokered / Other Retail CD MMA/OSA/Checking Avg. Retail Portfolio Interest Rate 2,334 83 39 78 3.00% 94 71 30 2.50% 72 49% 62% 58% 53% 56% 100 2.00% 120 1.88% 72 1.64% 57 1.50% 41 59 1.26% 41 52 1.00% 38% 0.97% 49 8% 36% 0.81% 28 56 7% 1,105 34% 33% 41 5% 0.50% 43 3% 30% 2% 13% 11% 10% 9% 8% 0.00% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2016 2017 2018 2019 2020 '21 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Note: Brokered includes sweep deposits. Other includes mortgage escrow and other deposits. Note: Multi-relationship customers represent Deposit Customers with an Ally Invest or Ally Home relationship. 11
1Q 2021 Preliminary Results Capital Ratios and Shareholder Distributions • Preliminary 1Q 2021 CET1 ratio of 11.1% Capital Ratios and Risk-Weighted Assets ($ billions) • Ally Board of Directors approved 2Q 2021 common 14.6% 14.1% 14.1% 13.8% dividend of $0.19 per share 12.8% 12.8% 12.4% 12.1% 11.9% 11.1% 10.9% 10.6% 10.4% 10.1% 9.3% • Resumed share buyback program in 1Q 2021 (1) $146 – Aligned with Federal Reserve guidelines, Ally repurchased $219 $140 $137 $138 $139 million of common shares during 1Q; remain on track to execute 2021 share repurchase program of up to $1.6 billion 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Risk-Weighted Assets ($B) Total Capital Ratio Tier 1 Ratio CET1 Ratio – Federal Reserve intends to end temporary restrictions on dividends & share repurchase activity after June 30th, 2021 Note: For more details on the final rule to address the impact of CECL on regulatory capital by allowing BHCs and banks, including Ally, to delay and subsequently phase-in its impact, see page 35 for details. Capital Deployment Actions Outstanding Shares (# millions) Dividend Per Share 19¢ 19¢ 19¢ 19¢ 19¢ 17¢ 17¢ 17¢ 17¢ 15¢ 15¢ 13¢ 13¢ 12¢ 12¢ 484 475 467 462 452 444 437 433 426 417 405 400 393 384 374 373 374 374 375 372 8¢ 8¢ 8¢ 8¢ 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2016 2017 2018 2019 2020 '21 2016 2017 2018 2019 2020 '21 12 (1) Repurchased common shares include shares withheld to cover income taxes owed by participants related to share-based incentive plans. Excludes commissions.
1Q 2021 Preliminary Results Asset Quality: Key Metrics Consolidated Net Charge-Offs (NCOs) Net Charge-Off Activity Allowance as % of Annualized NCOs Annualized NCO Rate ($ millions) Variance 900% 0.91% 0.90% Net Charge-Offs 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 850% 0.84% 800% 0.83% 0.80% 750% Retail Auto $ 271 $ 262 $ 137 $ 117 $ 186 $ 97 700% 0.70% 0.67% 650% 600% Commercial Auto 10 2 1 4 7 - 0.60% 0.58% 550% 0.56% 500% 0.50% Mortgage Finance - - - 1 2 1 450% 0.41% 400% 0.41% 0.40% 350% Corporate Finance 6 - 38 - (1) 14 691% 667% 300% 0.30% 250% 471% 200% 0.20% Ally Lending 5 4 4 2 4 8 414% 150% 305% 100% 0.10% (1) 176% Corp/Other (2) (2) (2) (2) - (2) 119% 50% 109% 0% 0.00% Total $ 290 $ 266 $ 178 $ 122 $ 198 $ 118 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Note Ratios exclude loans measured at fair value and loans held-for-sale. (1) Corp/Other includes legacy Mortgage HFI portfolio. Retail Auto Net Charge-Offs Retail Auto Delinquencies (60+ DPD) 1.00% $500 $480 1.49% $460 1.44% $440 1.38% $420 $400 0.75% $380 0.66% 0.66% $360 $340 0.58% 0.56% $320 0.50% $300 0.47% 0.47% 1.01% $280 $260 $540 0.95% $240 $480 $478 $271 0.32% $220 $262 $428 $253 $405 $200 $350 $341 $180 0.76% $160 $233 $140 $172 $120 0.64% $186 $100 0.00% $137 0.53% $80 $117 $60 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 $40 $97 $20 $0 Delinquent Contracts ($M) Delinquency Rate 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 30+ DPD ($M and %) Net Charge-Offs ($M) Annualized NCO Rate 2.90% 3.32% 3.61% 3.19% 2.20% 2.25% 2.49% 1.43% $2,113 $2,428 $2,616 $2,322 $1,599 $1,658 $1,834 $1,059 Note: See page 35 for definition. Note: Includes accruing contracts only. Days-past-due (“DPD”) 13
1Q 2021 Preliminary Results Asset Quality: Coverage and Reserves Consolidated Coverage Ratio Retail Auto Coverage Ratio ($ billions) Reserve - $ Reserve - % ($ billions) Reserve - $ Reserve - % 2.87% 2.85% 2.78% 2.79% 4.09% 4.06% 2.54% 3.95% 3.91% 3.80% 2.03% 3.34% 0.99% $3.0 $3.0 $2.9 $2.8 $2.8 $3.4 $3.4 $3.2 $3.3 $3.2 1.49% $2.4 $2.6 $1.1 $1.3 4Q 19 CECL 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 4Q 19 CECL 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Day 1 Day 1 Note: coverage rate calculations exclude fair value adjustment for loans in hedge accounting relationships. Note: coverage rate calculations exclude fair value adjustment for loans in hedge accounting relationships. Consolidated QoQ Reserve Walk ($ millions) All Other Incl. Net Charge-off ∆ in Portfolio 1 2 3 4Q’201Q’21 Macroeconomic Activity Size Reserve Reserve ($118) 1Q’21 NCOs $21 ($152) $3,152 $3,283 Primarily Favorable ↑ Retail Auto, ↑ Ally Lending, $118 Replenished Macro-economic Trends partly offset by ↓ Floorplan 14
1Q 2021 Preliminary Results Auto Finance Inc / (Dec) v. • Pre-tax income of $803 million, up $976 million YoY and up Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 $240 million QoQ Net financing revenue $ 1,206 $ 53 $ 166 Total other revenue 62 6 15 – Net financing revenue up YoY and QoQ due to higher retail revenue and higher off-lease vehicle gains Total net revenue 1,268 59 181 Provision for credit losses (22) ( 108) (788) (1) – Provision expense reflects strong consumer and commercial Noninterest expense 487 (73) (7) performance and improved economic trends Pre-tax income $ 803 $ 240 $ 976 U.S. auto earning assets (EOP) $ 1 02,978 $ (3,245) $ (9,939) • Earning assets of $103.0 billion, down $9.9 billion YoY and Key Statistics down $3.2 billion QoQ Remarketing gains ($ millions) $ 64 $ (1) $ 62 Average gain per vehicle $ 2,114 $ (36) $ 1,993 – Commercial balances mainly driven by lower industry inventory levels Off-lease vehicles terminated (# units) 3 0,488 8 1 0,069 Application Volume (# thousands) 3,284 480 298 • Average gain per vehicle reflects strong consumer demand and lower industry inventories Retail Auto Trends Lease: Average Gain / (Loss) per Vehicle (2) Portfolio Yield (ex. hedge) Est. Retail Auto Originated Yield Retail Auto NCO % 2019 2020 2021 7.59% 7.55% 7.50% $3.0k 7.25% 7.21% 7.10% 7.07% 6.95% 6.81% $2.0k 6.90% 6.83% 6.83% 6.77% 6.74% 6.66% 6.66% 6.57% 6.46% $1.0k $0.0k 1.49% 1.44% 1.38% 1.32% 1.01% 0.95% 0.76% 0.64% 0.53% ($1.0k) 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (1) For additional footnotes see page 36. 15 (2) Estimated Retail Auto Originated Yield is a forward-looking non-GAAP financial measure. See page 28 for details. Thousands
1Q 2021 Preliminary Results Auto Finance Key Metrics Consumer Originations Consumer Origination Mix ($ billions; % of $ originations) (% of $ originations) 691 687 690 686 685 685 $9.8 $10.2 $9.1 $9.1 49% 51% 55% 55% 56% $8.1 60% $7.2 51% 50% 48% 50% 44% 14% 13% 50% 13% 14% 13% 12% 27% 29% 29% 37% 29% 26% 32% 36% 31% 31% 28% 28% 12% 12% 12% 27% 24% 21% 23% 22% 11% 9% 22% 9% 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 New Retail Lease Used Nonprime % of Total Retail GM Stellantis Growth Retail Auto - Weighted average FICO Note: See page 35 for definitions. Note: See page 35 for definition. Consumer Assets Commercial Assets (Average balance, $ billions) (End of period, $ billions) $83.8 $82.9 $83.1 $81.1 $81.5 $81.5 $31.9 $9.9 $9.5 $9.6 $30.5 $9.1 $8.9 $9.1 $26.1 $5.6 $5.3 $22.4 $21.3 $21.3 $5.9 $5.8 $5.9 $5.7 $72.3 $72.5 $72.4 $73.5 $73.4 $73.8 $26.3 $25.1 $20.2 $16.6 $15.4 $15.6 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Retail Lease Dealer Floorplan Other Dealer Loans Note: Held-for-investment (HFI) asset balances reflect the average daily balance for the quarter. 16
1Q 2021 Preliminary Results Insurance Inc / (Dec) v. • Pre-tax income of $141 million, up $246 million YoY and Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 down $42 million QoQ reflecting change in fair value of Premiums, service revenue earned and other $ 281 $ (9) $ 2 equity securities VSC Losses 30 (2) (2) (1) • Core pre-tax income of $130 million, up $53 million YoY Weather Losses 6 4 (9) and up $57 million QoQ Other Losses 27 (1) - Losses and loss adjustment expenses 63 1 (11) – Earned premiums up YoY driven by consumer products, partially (2) Acquisition and underwriting expenses 190 6 8 offset by lower vehicle inventory exposure Total underwriting income (loss) 28 (16) 5 (1) – Seasonally higher reinsurance costs QoQ; renewed 2021 Investment income and other (adjusted) 102 73 48 reinsurance policy at favorable terms in early April (1) Core pre-tax income $ 130 $ 57 $ 53 (3) Change in fair value of equity securities 11 (99) 193 – Losses down YoY driven by lower weather losses Pre-tax income $ 141 $ ( 42) $ 246 – Investment income reflects higher realized investment gains Total assets (EOP) $ 9,221 $ 84 $ 801 primarily from equities portfolio Key Statistics - Insurance Ratios 1Q 21 4Q 20 1Q 20 • Written premiums of $333 million in 1Q 2021 Loss ratio 22.4% 21.6% 26.5% Underwriting expense ratio 67.1% 63.5% 65.1% – Reflects higher consumer products volume and rate partially offset Combined ratio 89.5% 85.1% 91.6% by lower vehicle inventories Insurance Investment Portfolio Insurance Written Premiums ($ billions, EOP) (($ $ m miilllilo io nn ss )) Fixed Income Securities Equity Securities Cash & Cash Equivalents and Other $390 $357 $370 $335 $333 $333 $350 $317 $314 $312 $6.3 $305 $330 $298 $310 $5.1 $5.2 $1.2 $267 $290 $0.9 $1.1 $270 $1.0 $250 $0.8 $0.9 $230 $4.0 $210 $3.2 $3.4 $190 $170 $150 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 (1) Represents a non-GAAP financial measure. See page 33 for calculation methodology and details. 17 For additional footnotes see page 36.
1Q 2021 Preliminary Results Corporate Finance Inc / (Dec) v. • Pre-tax income of $53 million, up $121 million YoY and down Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 $11 million QoQ Net financing revenue $ 71 $ (8) $ 3 – Net financing revenue down QoQ due to prepayment activity (1) Adjusted total other revenue 21 4 4 (1) – Other revenue up QoQ from higher investment income Adjusted total net revenue 92 (4) 7 Provision for credit losses 13 4 (101) – Provision decrease YoY driven primarily by COVID-19 macroeconomic (2) Noninterest expense 31 8 (4) impacts in the prior year (1) Core pre-tax income $ 48 $ ( 16) $ 112 • $6.3 billion held-for-investment portfolio, down 4% YoY (3) Change in fair value of equity securities 5 5 9 driven by elevated PY revolver utilization Pre-tax income $ 53 $ ( 11) $ 121 – Growth in unfunded commitments reflects steady originations; Total assets (EOP) $ 6,421 $ 313 $ (151) utilization levels remain low, supporting future loan growth – Credit remains strong – criticized and non-accrual loans below historical averages Key % % HFI Loans and Unfunded Commitments % 52 99.9 ~70 (end of period balances, $ billions) Portfolio Asset Based First Loans with Lending Lien Libor Floors Metrics Outstandings by Industry (as of 3/31/21) $4.7 Chemicals & Wholesale Construction Services Paper Printing & $4.1 Metals 3% Other 2% $2.5 $3.5 $3.8 Publishing 7% 1% 1% Other Manufactured Prod. Food And 3% Beverages 2% Manufacturing Machinery. Equip. Elect. 5% $6.5 $6.3 Financial Services $6.0 $6.0 $5.9 Auto & 24% Transportation 10% Other Retail Trade 1% 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Health Services Other Services 21% Held-for-investment loans Unfunded Commitments 20% (1) Represents a non-GAAP financial measure. See page 33 for calculation methodology and details. 18 For additional footnotes see page 36.
1Q 2021 Preliminary Results Mortgage Finance • Pre-tax incomeof $23 million, up $11 million YoY and up Inc / (Dec) v. $16 million QoQ Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 23 $ 3 $ ( 15) – Net financing revenue declined YoY reflecting ongoing elevated Total other revenue 40 3 30 prepayment activity Total net revenue $ 63 $ 6 $ 15 Provision for credit losses (4) (7) (5) (1) – Other revenue up YoY reflecting strong gain-on-sale margins Noninterest expense 44 (3) 9 Pre-tax income $ 23 $ 16 $ 11 Total assets (EOP) $ 12,923 $ (1,966) $ (3,212) • Direct-to-consumer (DTC) originations of $1.8 billion in 1Q 2021, up 145% YoY Mortgage Finance HFI Portfolio 1Q 21 4Q 20 1Q 20 Net Carry Value ($ billions) $ 12.4 $ 14.6 $ 15.9 – 45% of 1Q originations from Ally Bank deposit customers (2) 57.5% 60.1% 60.0% Wtd. Avg. LTV/CLTV Refreshed FICO 775 776 772 – 83% of origination units from refinance activity, up 17% YoY Mortgage Finance DTC Originations Mortgage Finance Held-for-Investment Assets ($ billions, EOP) ($ billions) ($ billions) $1.8 $16.4 $15.9 $15.2 $14.6 $1.4 $12.4 $3.9 $3.5 $1.3 $1.2 $3.9 58% $3.9 $3.9 62% $0.7 55% 66% $12.4 $12.6 41% $11.3 $10.7 $8.5 42% 45% 38% 59% 34% 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 DTC - HFI DTC - HFS Bulk DTC For footnotes see page 36. 19
1Q 2021 Preliminary Results Financial Outlook Steady execution, delivering against our long-term strategic objectives (1) Progression of Core ROTCE 1Q’21 Reserve Reduction Sustained, Organic Growth ~15% 15%+ Ongoing Optimization ✓ Positive Operating Leverage ✓ Strong Q1’21 results ✓ Expanding NIM (Mid 3%) and Net ✓ Positive Operating Leverage Financing Revenue ✓ Expanding NIM (Lo/Mid 3%) and✓ Steadily Expanding Other Revenue Net Financing Revenue ✓ Stabilized Credit Trends ✓ Other Revenue (Lo/Mid $400 / qtr) ✓ Consistent Tax Rate (23-24%) 9.1% (assumes statutory U.S. Federal tax rate is unchanged at 21%) ✓ Improving Credit Expectations ✓ Consistent Tax Rate (23-24%) 2022-2023 2020 2021 (1) Represents a non-GAAP financial measure. See page 31 for details. 20
1Q 2021 Preliminary Results Strategic Priorities ‘Do It Right’ Culture | Relentless Customer Focus | Steady, Long-term Execution Leading, adaptable Auto and Insurance Consumer businesses and digitally-based bank platform & Commercial Lender Ongoing customer growth & relationship Savings & deepening across scalable platforms Insurance Checking Sustainable, organic growth in expanded product offerings Servicing Efficient, disciplined risk management & capital & Customer Investing deployment Solutions Payments Long-term execution & sustainable results Delivering for All Stakeholders 21
1Q 2021 Preliminary Results Supplemental 22
1Q 2021 Preliminary Results Supplemental Results by Segment Inc / (Dec) v. Segment Detail ($ millions) 1Q 21 4Q 20 1Q 20 4Q 20 1Q 20 Automotive Finance $ 803 $ 563 $ (173) $ 240 $ 976 Insurance 141 183 (105) (42) 246 Dealer Financial Services $ 944 $ 746 $ (278) $ 198 $ 1 ,222 Corporate Finance 53 64 (68) (1 1) 121 Mortgage Finance 23 7 12 16 11 Corporate and Other (13) 39 (7 7) (52) 64 Pre-tax income (loss) from continuing operations $ 1 ,007 $ 856 $ (411) $ 151 $ 1 ,418 10 9 8 0 1 (1) Core OID (1 7) (111) 185 95 (2 02) (2) Change in fair value of equity securities (1) $ 246 $ 1,217 $ 1,000 $ 754 $ (217) Core pre-tax income (loss) (1) Represents a non-GAAP financial measure. See pages 33, and 34 for calculation methodology and details. 23 (2) See page 36 for additional footnotes
1Q 2021 Preliminary Results Supplemental Funding Profile Details Funding Mix Ally Financial Rating Details Deposits Secured Debt FHLB / Other Unsecured Debt LT Debt ST Debt Outlook Date 6% 7% Fitch BBB- F3 Stable 3/30/2021 7% 10% 13% 4% 13% 13% 2% 9% 15% Moody's Ba1 Not Prime Stable 5/12/2020 6% 10% 11% 19% S&P BBB- A-3 Stable 3/25/2021 DBRS BBB (Low) R-3 Stable 3/4/2021 87% 75% 70% 64% Note: Ratings and Outlook as of 3/31/2021. Our borrowing costs and access to the capital markets 59% could be negatively impacted if our credit ratings are downgraded or otherwise fail to meet investor expectations or demands. 1Q 17 1Q 18 1Q 19 1Q 20 1Q 21 (1) Unsecured Long-Term Debt Maturities Wholesale Funding Issuance Term ABS and Term Unsecured Issuance Principal Amount ($ billions) (2) AART (Ally Bank - Retail Auto) AMOT (Ally Bank - Floorplan) Maturity Date Coupon Outstanding AFIN (AFI-Retail Auto) AART-SN (Ally Bank - Lease) ($ billions) $7.9 $7.3 $0.8 $6.5 4/15/2021 4.25 $0.60 $1.8 $0.5 $4.9 2022 4.32 $1.05 $1.4 $4.0 $2.6 $3.5 $2.5 2023 2.09 $2.00 $1.3 $4.6 (3) $3.5 $3.0 2024+ 6.27 $6.24 $2.4 $1.8 (1) Excludes retail notes, demand notes (terminated Ally’s demand note program and redeemed all 2015 2016 2017 2018 2019 2020 2021 outstanding demand notes, Ally had $2.1B of outstandings as of 12/31/2020) and trust preferred securities; as of 3/31/2021. Term Unsecured Issuance (2) Reflects notional value of outstanding bond. Excludes total GAAP OID and capitalized transaction costs. $0.0 $0.8 $2.8 $5.4 $0.9 $0.0 $0.0 (3) 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 Note: Term ABS shown includes funding amounts (notes sold) at new respective year. 2024+ excludes ~$2.6 billion Trust Preferred securities (excluding OID/issuance costs). issue and does not include private offerings sold at a later date. 24
1Q 2021 Preliminary Results Supplemental Corporate and Other Inc / (Dec) v. • Corporate and Other activity reflects: Key Financials ($ millions) 1Q 21 4Q 20 1Q 20 Net financing revenue $ 57 $ 14 $ 71 – Centralized asset and liability management Total other revenue 58 (89) (1) Total net revenue $ 115 $ (75) $ 70 – Corporate allocation activities Provision for credit losses - (4) (22) Noninterest expense 128 (19) 28 – Legacy mortgage portfolio Pre-tax (loss) $ ( 13) $ (52) $ 64 (1) Core OID 10 0 1 – Ally Invest and Ally Lending activities (1) Core pre-tax (loss) $ (3) $ (52) $ 65 • Pre-tax loss of $13 million, up $64 million YoY and down Cash & securities $ 45,746 $ 3,422 $ 13,186 $52 million QoQ (2) Held-for-investment loans, net 1,230 5 (490) (3) Intercompany loan (591) 239 (591) – Net financing revenue up QoQ and YoY from deposit pricing actions (4) Other 5,363 845 ( 203) Total assets $ 51,748 $ 4,511 $ 11,902 – Total other revenue down QoQ driven by activity in 4Q: Ally Ventures gain and Legacy mortgage portfolio gain on sale, partially offset by FHLB early retirement expense – Provision expense decrease primarily from a lower coverage rate at Ally Invest Details (brokerage) 1Q 21 4Q 20 1Q 20 Ally Lending due to improved economic trends Net Funded Accounts (thousands) 425.1 405.9 373.1 Average Customer Trades Per Day (thousands) 80.9 60.1 43.9 – Noninterest expense down QoQ primarily from the contribution to the Total Customer Cash Balances ($ millions) $ 2,022 $ 2,085 $ 1,856 Ally Charitable Foundation in 4Q and up YoY primarily from the build- Total Net Customer Assets ($ millions) $ 14,473 $ 13,445 $ 7,489 out of Ally Lending • Total assets of $51.7 billion, up $11.9 billion YoY, driven by elevated cash balances Ally Lending (previously HCS) 1Q 21 4Q 20 1Q 20 Gross Originations ($ millions) $ 211 $ 177 $ 76 Held-for-investment loans ($ millions) (EOP) $ 490 $ 407 $ 224 Portfolio yield 15.0% 16.7% 13.5% NCO % 7.0% 4.7% 7.5% (1) Represents a non-GAAP financial measure. See page 33 and 34 for calculation methodology and details. See page 36 for additional footnotes. 25
1Q 2021 Preliminary Results Supplemental Interest Rate Risk Sensitivities (1) Net Financing Revenue Sensitivity Analysis 1Q 21 4Q 20 (2) (2) Change in interest rates Gradual Instantaneous Gradual Instantaneous (3) -25 bps $ ( 44) $ (96) $ (3) $ ( 40) +100 bps $ (27) $ ( 9) $ 32 $ 68 Stable rate environment n/m $ ( 34) n/m $ ( 8) (1) Net financing revenue impacts reflect a rolling 12-month view. See page 35 for additional details. (2) Gradual changes in interest rates are recognized over 12 months. (3) The -100bps shock has been replaced with a -25bps shock, given low interest rate environment. Model assumes OSA rate near current pricing levels in down shock scenarios. 26
1Q 2021 Preliminary Results Supplemental Deferred Tax Asset Deferred Tax Asset / (Liability) 1Q 21 4Q 20 Gross DTA/(DTL) Valuation Net DTA/(DTL) Net DTA/(DTL) ($ millions) Balance Allowance Balance Balance Net Operating Loss (Federal) $ 7 $ - $ 7 $ 7 Tax Credit Carryforwards 978 (724) 254 1,052 State/Local Tax Carryforwards 196 (103) 93 62 Other Deferred Tax Liabilities, net (105) - (105) ( 1,119) Net Deferred Tax Asset / (Liability) $ 1,076 $ (827) $ 249 $ 2 (1) GAAP does not prescribe a method for calculating individual elements of deferred taxes for interim periods; therefore, these balances are estimates. Note: ‘Other Deferred Tax Liabilities, net’ balances declined QoQ primarily driven by a change in tax depreciation election that accelerated taxable income, utilized tax credit carryforwards, and increased DTA balance overall. Deferred Tax Asset / (Liability) Utilization ($ millions) Net GAAP DTA / (DTL) Balance Disallowed DTA $249 $215 $137 $77 $36 $25 $20 $20 $18 $17 $2 -$9 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Note: 4Q19 to 1Q20 DTA build was significantly impacted by CECL adoption on 1-1-2020. 1Q21 increase in DTA driven by change in tax depreciation election. 27
1Q 2021 Preliminary Results Supplemental Notes on Non-GAAP Financial Measures The following are non-GAAP financial measures which Ally believes are important to the reader of the Consolidated Financial Stat ements, 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, Adjusted noninterest expense, Core original issue discount (Core OID) amortization expense and Core outstanding orig inal 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. For calculation methodology, refer to the Reconciliation to GAAP later in this document. 1) 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 peri od 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 (change in fair value of equity securities impacts the Insurance and Corporate Finance segments), and (3) Repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, as applicable for respective periods or businesses. 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 33 for calculation methodology and details. 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, tax-effected repositioning and other primarily related to the extinguishment of high-cost legacy debt and strategic activities and significant other, preferred stock capital actions, significant discrete tax items and tax-effected changes in equity investments measured at fair value, as applicable for respective periods. See page 29 calculation methodology and details. 3) 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 30 for more details. 4) Core original issue discount (Core OID) amortization expense is a non-GAAP financial measure for OID and is believed by management to help the reader better understand the activity removed from: Core pre-tax income (loss), Core net income (loss) attributable to common shareholders, Adjusted EPS, Core ROTCE, Adjusted efficiency ratio, Adjusted total net revenue, and Net financing revenue (excluding Core OID). Core OID is primarily related to bond exchange OID which excludes international operations and future issuances. Core OID for all periods shown is applied to the pre-tax income of the Corporate and Other segment. See page 34 calculation methodology and details. 5) Core outstanding original issue discount balance (Core OID balance) is a non-GAAP financial measure for outstanding OID and is believed by management to help the reader better understand the balance removed from Core ROTCE and Adjusted TBVPS. Core OID balance is primarily related to bond exchange OID which excludes international operations and future issuances. See page 34 for calculation methodology and details 6) Accelerated issuance expense (Accelerated OID) is the recognition of issuance expenses related to calls of redeemable debt. 7) 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 informati on. 28
1Q 2021 Preliminary Results Supplemental GAAP to Core Results: Adjusted EPS - Quarterly Adjusted Earnings per Share ( Adjusted EPS ) QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Numerator ($ millions) GAAP net income attributable to common shareholders $ 796 $ 687 $ 476 $ 241 $ (319) $ 378 $ 381 $ 582 $ 374 $ 290 $ 374 $ 349 $ 250 Discontinued operations, net of tax - - - 1 - 3 - 2 1 (1) - (1) 2 Core OID 10 9 9 9 8 8 7 7 7 23 22 21 20 Repositioning items - - - 50 - - - - - - - - - Change in fair value of equity securities (17) ( 111) (13) (90) 185 (29) 11 (2) (70) 95 (6) (8) 40 Tax on Core OID, repositioning items, & change in fair value of equity securities 1 21 1 17 (41) 4 (4) (1) 13 (25) (3) (3) (13) (assumes 21% tax rate starting in 1Q18, 35% prior) Significant discrete tax items - - - - - - - ( 201) - - - - - Core net income attributable to common shareholders [a] $ 790 $ 606 $ 473 $ 228 $ (166) $ 364 $ 396 $ 387 $ 325 $ 382 $ 386 $ 358 $ 300 Denominator Weighted-average common shares outstanding - (Diluted, thousands) [b] 377,529 378,424 377,011 375,762 375,723 383,391 392,604 399,916 405,959 414,750 424,784 432,554 438,931 0 Metric GAAP EPS $ 2.11 $ 1.82 $ 1.26 $ 0.64 $ (0.85) $ 0.99 $ 0.97 $ 1.46 $ 0.92 $ 0.70 $ 0.88 $ 0.81 $ 0.57 Discontinued operations, net of tax - - - 0.00 - 0 .01 - 0.01 0 .00 (0.00) - ( 0.00) 0.00 Core OID 0.03 0.02 0.02 0.02 0 .02 0.02 0 .02 0.02 0.02 0 .06 0.05 0.05 0 .05 Repositioning items - - - 0 .13 - - - - - - - - - Change in fair value of equity securities (0.04) ( 0.29) ( 0.04) ( 0.24) 0.49 (0.08) 0.03 (0.01) (0.17) 0 .23 ( 0.01) (0.02) 0 .09 Tax on Core OID, repositioning items, & change in fair value of equity securities 0.00 0.06 0 .00 0 .05 (0.11) 0 .01 ( 0.01) ( 0.00) 0 .03 (0.06) (0.01) (0.01) (0.03) (assumes 21% tax rate starting in 1Q18, 35% prior) Significant discrete tax items - - - - - - - ( 0.50) - - - - - Adjusted EPS [a] / [b] $ 2.09 $ 1.60 $ 1.25 $ 0.61 $ (0.44) $ 0.95 $ 1.01 $ 0.97 $ 0.80 $ 0.92 $ 0.91 $ 0.83 $ 0.68 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) adjusts for tax-effected repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, (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 di screte tax items that do not relate to the operating performance of the core businesses, and 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, as applicable for respective periods. 29
1Q 2021 Preliminary Results Supplemental GAAP to Core Results: Adjusted TBVPS - Quarterly Adjusted Tangible Book Value per Share ( Adjusted TBVPS ) QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Numerator ($ billions) GAAP common shareholder's equity $ 14.6 $ 14.7 $ 14.1 $ 13.8 $ 13.5 $ 14.4 $ 14.5 $ 14.3 $ 13.7 $ 13.3 $ 13.1 $ 13.1 $ 13.1 Goodwill and identifiable intangibles, net of DTLs (0.4) (0.4) (0.4) (0.4) (0.4) (0.5) (0.3) (0.3) (0.3) (0.3) (0.3) (0.3) (0.3) Tangible common equity 14.2 14.3 1 3.7 13.4 13.1 14.0 14.2 1 4.0 1 3.4 13.0 12.8 1 2.8 12.8 Tax-effected Core OID balance (assumes 21% tax rate starting in 4Q17, 35% prior) (0.8) (0.8) (0.8) (0.8) (0.8) (0.8) (0.8) (0.9) (0.9) (0.9) (0.9) (0.9) (0.9) Adjusted tangible book value [a] $ 13.4 $ 13.5 $ 12.9 $ 12.6 $ 12.2 $ 13.1 $ 13.3 $ 13.2 $ 12.6 $ 12.1 $ 11.9 $ 12.0 $ 11.9 Denominator Issued shares outstanding (period-end, thousands) [b] 371,805 374,674 373,857 373,837 373,155 374,332 383,523 392,775 399,761 404,900 416,591 425,752 432,691 Metric GAAP common shareholder's equity per share $ 39.3 $ 39.2 $ 37.8 $ 37.0 $ 36.2 $ 38.5 $ 37.7 $ 36.4 $ 34.3 $ 32.8 $ 31.4 $ 30.9 $ 30.2 Goodwill and identifiable intangibles, net of DTLs per share (1.0) (1.0) (1.0) (1.0) (1.2) (1.2) (0.7) (0.7) (0.7) (0.7) (0.7) (0.7) (0.7) Tangible common equity per share 38.3 38.2 3 6.7 3 5.9 3 5.0 37.3 37.0 35.7 33.6 3 2.1 30.7 30.2 2 9.6 Tax-effected Core OID balance (assumes 21% tax rate starting in 4Q17, 35% prior) per share (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.1) (2.1) (2.1) (2.1) (2.1) Adjusted tangible book value per share [a] / [b] $ 36.2 $ 36.1 $ 34.6 $ 33.7 $ 32.8 $ 35.1 $ 34.7 $ 33.6 $ 31.4 $ 29.9 $ 28.6 $ 28.1 $ 27.4 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, (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, as applicable for respective periods. 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. Calculated Impact to Adjusted TBVPS from CECL Day-1 1Q 20 Numerator ($ billions) Adjusted tangible book value $ 12.2 CECL Day-1 impact to retained earnings, net of tax 1.0 Adjusted tangible book value less CECL Day-1 impact [a] $ 13.3 Denominator Issued shares outstanding (period-end, thousands) [b] 373,155 Metric Adjusted TBVPS $ 32.8 CECL Day-1 impact to retained earnings, net of tax per share 2.7 Adjusted tangible book value, less CECL Day-1 impact per share [a] / [b] $ 35.5 Ally adopted CECL on January 1, 2020. Upon implementation of CECL Ally recognized a reduction to our opening retained earnings balance of approximately $1.0 billion, net of income tax, which reflects a pre-tax increase to the allowance for loan losses of approximately $1.3 billion. This increase is almost exclusively driven by our consumer automotive loan portfolio. 30
1Q 2021 Preliminary Results Supplemental GAAP to Core Results: Core ROTCE - Quarterly Core Return on Tangible Common Equity ( Core ROTCE ) QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 Numerator ($ millions) GAAP net income (loss) attributable to common shareholders $ 796 $ 687 $ 476 $ 241 $ (319) Discontinued operations, net of tax - - - 1 - Core OID 10 9 9 9 8 Repositioning Items - - - 50 - Change in fair value of equity securities (17) (111) (13) (90) 185 Tax on Core OID & change in fair value of equity securities (assumes 21% tax rate) 1 21 1 17 (41) Core net income (loss) attributable to common shareholders [a] $ 790 $ 606 $ 473 $ 228 $ (166) Denominator (Average, $ billions) GAAP shareholder's equity $ 14.7 $ 14.4 $ 14.0 $ 13.7 $ 14.0 Goodwill & identifiable intangibles, net of deferred tax liabilities ( DTLs ) (0.4) (0.4) (0.4) (0.4) (0.4) Tangible common equity $ 14.3 $ 14.0 $ 13.6 $ 13.3 $ 13.5 Core OID balance (1.0) (1.0) (1.0) (1.1) (1.1) Net deferred tax asset ( DTA ) (0.1) (0.1) (0.1) (0.2) (0.1) Normalized common equity [b] $ 13.1 $ 12.9 $ 12.4 $ 12.0 $ 12.3 Core Return on Tangible Common Equity [a] / [b] 24.1% 18.7% 15.2% 7.6% -5.4% 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 bas ed 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 n et of tax, tax-effected Core OID, tax- effected repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, 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 componentof equity, significant discrete tax items, and preferred stock capital actions, as applicable for respective periods. (2) In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL, Core OID balance, and net DTA. 31
1Q 2021 Preliminary Results Supplemental GAAP to Core Results: Adjusted Efficiency Ratio - Quarterly Adjusted Efficiency Ratio QUARTERLY TREND 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 Numerator ($ millions) GAAP noninterest expense $ 943 $ 1,023 $ 905 $ 985 $ 920 Rep and warrant expense - (0) - - - Insurance expense ( 253) (246) (268) ( 322) ( 256) Repositioning items - - - (50) - Adjusted noninterest expense for efficiency ratio [a] $ 690 $ 777 $ 637 $ 613 $ 664 Denominator ($ millions) Total net revenue $ 1,937 $ 1,981 $ 1,684 $ 1,609 $ 1,412 Core OID 10 9 9 9 8 Insurance revenue (394) (429) ( 346) (450) (151) Adjusted net revenue for the efficiency ratio [b] $ 1,553 $ 1,561 $ 1,347 $ 1,168 $ 1,269 Adjusted Efficiency Ratio [a] / [b] 44.4% 49.8% 47.3% 52.5% 52.3% 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. (1) In the numerator of Adjusted efficiency ratio, total noninterest expense is adjusted for Rep and warrant expense, Insurance segment expense, and repositioning and other which are primarily related to the extinguishment of high-cost legacy debt, strategic activities and significant other one-time items, as applicable for respective periods. (2) In the denominator, total net revenue is adjusted for Core OID and Insurance segment revenue. See page 17 for the combined ratio for the Insurance segment which management uses as a primary measure of underwriting profitability for the Insurance segment. 32
1Q 2021 Preliminary Results Supplemental Non-GAAP Reconciliation – Core Income ($ millions) 1Q 21 4Q 20 1Q 20 Change in fair Change in fair Change in fair (1) (1) (1) GAAP Core OID value of equity GAAP Core OID value of equity GAAP Core OID value of equity Non-GAAP Non-GAAP Non-GAAP securities securities securities Consolidated Ally Net financing revenue $ 1,372 $ 10 $ - 1,382 $ 1,303 $ 9 $ - $ 1,312 $ 1,146 $ 8 $ - $ 1,154 Total other revenue 565 - ( 17) 548 678 - (111) 567 266 - 185 451 Provision for credit losses (13) - - (13) 102 - - 102 903 - - 903 Noninterest expense 943 - - 943 1,023 - - 1,023 920 - - 920 Pre-tax income (loss) $ 1,007 $ 10 $ (17) $ 1,000 $ 856 $ 9 $ (111) $ 754 $ ( 411) $ 8 $ 185 $ (217) Corporate / Other Net financing revenue $ 57 $ 10 $ - $ 67 $ 43 $ 9 $ - $ 52 $ (14) $ 8 $ - $ (6) Total other revenue 58 - - 58 147 - - 147 59 - - 59 Provision for credit losses - - - - 4 - - 4 22 - - 22 Noninterest expense 128 - - 128 147 - - 147 100 - - 100 Pre-tax income (loss) $ (13) $ 10 $ - $ (3) $ 39 $ 9 $ - $ 48 $ (77) $ 8 $ - $ (69) Insurance Premiums, service revenue earned and other $ 281 $ - $ - $ 281 $ 290 $ - $ - $ 290 $ 279 $ - $ - $ 279 Losses and loss adjustment expenses 63 - - 63 62 - - 62 74 - - 74 Acquisition and underwriting expenses 190 - - 190 184 - - 184 182 - - 182 Investment income and other 113 - (11) 102 139 - (111) 28 (128) - 182 54 Pre-tax income (loss) $ 141 $ - $ (11) $ 130 $ 183 $ - $ (111) $ 72 $ ( 105) $ - $ 182 $ 77 Corporate Finance Net financing revenue $ 71 $ - $ - $ 71 $ 79 $ - $
- $ 79 $ 68 $ - $ - $ 68 Total other revenue 26 - (5) 21 17 - (1) 16 13 - 4 17 Provision for credit losses 13 - - 13 9 - - 9 114 - - 114 Noninterest expense 31 - - 31 23 - - 23 35 - - 35 Pre-tax income (loss) $ 53 $ - $ (5) $ 48 $ 64 $ - $ (1) $ 63 $ (68) $ - $ 4 $ (64) (1) Non-GAAP line items walk to Core pre-tax income, a non-GAAP financial measure that adjusts pre-tax income. See page 28 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. 33
1Q 2021 Preliminary Results Supplemental Non-GAAP Reconciliations Net Financing Revenue (ex. Core OID) QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 GAAP Net Financing Revenue $ 1 ,372 $ 1 ,303 $ 1 ,200 $ 1,054 $ 1,146 $ 1,156 $ 1 ,188 $ 1 ,157 $ 1,132 $ 1,140 $ 1,107 $ 1 ,094 $ 1 ,049 Core OID 10 9 9 9 8 8 7 7 7 23 22 21 20 Net Financing Revenue (ex. Core OID) [a] $ 1,382 $ 1,312 $ 1 ,209 $ 1 ,063 $ 1 ,154 $ 1,164 $ 1 ,195 $ 1 ,164 $ 1 ,139 $ 1 ,163 $ 1,129 $ 1 ,115 $ 1,069 Adjusted Other Revenue QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 GAAP Other Revenue $ 565 $ 678 $ 484 $ 555 $ 266 $ 487 $ 413 $ 395 $ 466 $ 298 $ 398 $ 364 $ 354 Change in fair value of equity securities (17) (111) (13) (90) 185 (29) 11 ( 2) (70) 95 (6) ( 8) 40 Adjusted Other Revenue [b] $ 548 $ 567 $ 471 $ 465 $ 451 $ 458 $ 424 $ 393 $ 396 $ 393 $ 392 $ 356 $ 394 Adjusted Total Net Revenue ($ millions) Adjusted Total Net Revenue [a]+[b] $ 1,930 $ 1,879 $ 1 ,680 $ 1 ,528 $ 1,606 $ 1 ,622 $ 1,620 $ 1 ,557 $ 1,535 $ 1,556 $ 1 ,521 $ 1 ,471 $ 1 ,463 Adjusted NIE (ex. Repositioning) QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 GAAP Noninterest Expense $ 943 $ 1,023 $ 905 $ 985 $ 920 $ 880 $ 838 $ 881 $ 830 $ 804 $ 807 $ 839 $ 814 Repositioning - - - (50) - - - - - - - - - Adjusted NIE (ex. Repositioning) [c] $ 943 $ 1 ,023 $ 905 $ 935 $ 920 $ 880 $ 838 $ 881 $ 830 $ 804 $ 807 $ 839 $ 814 Original issue discount amortization expense QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Core original issue discount (Core OID) amortization expense $ 10 $ 9 $ 9 $ 9 $ 8 $ 8 $ 7 $ 7 $ 7 $ 23 $ 22 $ 21 $ 20 Other OID 3 3 3 4 3 3 3 3 3 2 4 4 4 GAAP original issue discount amortization expense $ 12 $ 13 $ 12 $ 12 $ 11 $ 11 $ 11 $ 10 $ 10 $ 26 $ 25 $ 25 $ 24 Outstanding original issue discount balance QUARTERLY TREND ($ millions) 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18 Core outstanding original issue discount balance (Core OID balance) $ (1,018) $ (1,027) $ (1,037) $ (1,046) $ ( 1,055) $ (1,063) $ ( 1,071) $ ( 1,078) $ ( 1,085) $ ( 1,092) $ ( 1,115) $ (1,137) $ ( 1,158) Other outstanding OID balance (34) (37) (48) (46) (34) (37) (40) (44) (39) (43) (46) (49) (53) GAAP outstanding original issue discount balance $ ( 1,052) $ ( 1,064) $ (1,084) $ (1,092) $ (1,089) $ ( 1,100) $ ( 1,111) $ (1,122) $ (1,125) $ (1,135) $ (1,161) $ ( 1,187) $ ( 1,211) 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. ‘Repositioning’ is primarily related to the extinguishment of high-cost legacy debt, strategic activities and significant other one-time items. See page 28 for definitions. 34
1Q 2021 Preliminary Results Supplemental Notes on Other Financial Measures 1) 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 our SEC filings for more details. 2) 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. 3) 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/Stellantis dealers and direct-to-consumer loans. Note: Stellantis N.V. (“Stellantis”) announced January 17, 2021, following completion of the merger of Peugeot S.A. (“Groupe PSA”) and Fiat Chrysler Automobiles N.V. (“FCA”) on January 16, 2021, the combined company was renamed Stellantis. ▪ Nonprime – originations with a FICO® score of less than 620 4) Customer retention rate is the annualized 3-month rolling average of 1 minus the monthly attrition rate; excludes escheatment. 5) Estimated impact of CECL on regulatory capital per final rule issued by U.S. banking agencies - In December 2018, the FRB and other U.S. banking agencies approved a final rule to address the impact of CECL on regulatory capital by allowing BHCs and banks, including Ally, the option to phase in the day-one impact of CECL over a three-year period. In March 2020, the FRB and other U.S. banking agencies issued an interim final rule that became effective on March 31, 2020 and provided an alternative option for banks to temporarily delay the impacts of CECL, relative to the incurred loss methodology for estimating the allowance for loan losses, on regulatory capital. A final rule that was largely unchanged from the March 2020 interim final rule was is sued by the FRB and other U.S. banking agencies in August 2020, and became effective in September 2020. For regulatory capital purposes, these rules permitted us to delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021. Beginning on January 1, 2022, we will be required to phase in 25% of the previously deferred estimated capital impact of CECL, with an additional 25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. Under these rules, firms that adopt CECL and elect the fi ve-year transition will calculate the estimated impact of CECL on regulatory capital as the day-one impact of adoption plus 25% of the subsequent change in allowance during the two-year deferral period, which according to the final rule approximates the impact of CECL relative to an incurred loss model. We adopted this transition option during the first quarter of 2020, and plan to phase in the regulatory capital impacts of CECL based on this five-year transition period. 6) 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 per iods prior to 1/1/18 in which such adjustments were recognized through other comprehensive income, a component of equity. 35
1Q 2021 Preliminary Results Supplemental Additional Notes Page – 7 | Ally Auto & Insurance: Leading, Adaptable Partner (1) ‘Prime Auto Lender’ - Source: PIN Navigator Data & Analytics, a business division of J.D. Power. The credit scores provided within these reports have been provided by FICO® Risk Score, Auto 08 FICO® is a registered trademark of Fair Isaac Corporation in the United States and other countries. (2) ‘Bank Floorplan Lender’ - Source: Company filings, including WFC and HBAN. (3) ‘Retail Auto Loan Outstandings’ - Source: Big Wheels Auto Finance Data 2019. (note, 2020 report not available as of 4/16/2021). (4) ‘Top-3 Used Auto Lender’ - Source: Experian AutoCount. (5) ‘Auto Loan & Lease Outstanding Balances’ – Source: Federal Reserve Bank of New York, 2020 Q4 Quarterly Report on Household Debt and Credit . (6) ‘Annual Loan & Lease Origination Volume’ – Source: https://www.consumerfinance.gov/data-research/consumer-credit-trends/auto-loans/origination-activity/ (Dec. ’19) (7) ‘Auto Debt portion of Total Consumer Debt’ – Source: Federal Reserve Bank of New York, 2020 Q4 Quarterly Report on Household Deb t and Credit . (8) ‘Auto Payment Priority within Consumer Payment Waterfall’ – Source: Experian Consumer payment hierarchy by trade type: Time series analysis based on a sample of the US population. (Jan. ’21) Page – 8 | Ally Bank: Leading, Growing, All-Digital Disruptor (1) Source: FDIC, FFIEC Call Reports and Company filings of branchless banks including Marcus, Discover, American Express, Synchrony. Page – 15 | Auto Finance (1) Noninterest expense includes corporate allocations of $211 million in 1Q 2021, $209 million in 4Q 2020, and $209 million in 1Q 2020. Page – 17 | Insurance (2) Acquisition and underwriting expenses includes corporate allocations of $17 million in 1Q 2021, $15 million in 4Q 2020, and $17 million in 1Q 2020. (3) Change in fair value of equity securities impacts the Insurance segment. 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. Page – 18 | Corporate Finance (2) Noninterest expense includes corporate allocations of $9 million in 1Q 2021, $8 million in 4Q 2020, and $10 million in 1Q 2020. (3) Change in fair value of equity securities impacts the Corporate Finance segment. 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. Page – 19 | Mortgage Finance (1) Noninterest expense includes corporate allocations of $20 million in 1Q 2021, $22 million in 4Q 2020, and $20 million in 1Q 2020. (2) 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. Page – 25 | Corporate and Other (2) HFI legacy mortgage portfolio and HFI Ally Lending portfolio. (3) Intercompany loan related to activity between Insurance and Corporate for liquidity purposes from the wind down of the Demand Notes program. (4) Includes loans held-for-sale. 36
EX-99.3
Exhibit 99.3
FIRST QUARTER 2021
FINANCIAL SUPPLEMENT
| ALLY FINANCIAL INC.<br><br><br>FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION |
|---|
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 future effects of COVID-19, the outlook for financial and operating metrics, and 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, 2020, 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 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.
| 1Q 2021 Preliminary Results | 2 | |
|---|---|---|
| ALLY FINANCIAL INC.<br><br><br>TABLE OF CONTENTS | ||
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| Page(s) | ||
| --- | --- | --- |
| Consolidated Results | ||
| Consolidated Financial Highlights | 4 | |
| Consolidated Income Statement | 5 | |
| Consolidated Period-End Balance Sheet | 6 | |
| Consolidated Average Balance Sheet | 7 | |
| Segment Detail | ||
| 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 | ||
| 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 Per Share Related Information | 22 | |
| Core ROTCE Related Information | 23 | |
| Adjusted Efficiency Ratio Related Information | 24 | |
| 1Q 2021 Preliminary Results | 3 | |
| --- | --- | |
| ALLY FINANCIAL INC.<br><br><br>CONSOLIDATED FINANCIAL HIGHLIGHTS | ||
| --- |
($ in millions, shares in thousands)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Income Statement Data | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Net financing revenue (excluding Core OID) ^(1)^ | $ | 1,382 | $ | 1,312 | $ | 1,209 | $ | 1,063 | $ | 1,154 | $ | 69 | $ | 227 | |||||||
| Core OID | (10 | ) | (9 | ) | (9 | ) | (9 | ) | (8 | ) | (0 | ) | (1 | ) | |||||||
| Net financing revenue (as reported) | 1,372 | 1,303 | 1,200 | 1,054 | 1,146 | 69 | 226 | ||||||||||||||
| Other revenue (excluding change in fair value of equity securities) ^(2)^ | 548 | 567 | 471 | 465 | 451 | (18 | ) | 97 | |||||||||||||
| Change in fair value of equity securities ^(3)^ | 17 | 111 | 13 | 90 | (185 | ) | (95 | ) | 202 | ||||||||||||
| Other revenue (as reported) | 565 | 678 | 484 | 555 | 266 | (113 | ) | 299 | |||||||||||||
| Provision for loan losses | (13 | ) | 102 | 147 | 287 | 903 | (115 | ) | (916 | ) | |||||||||||
| Total noninterest expense ^(4)^ | 943 | 1,023 | 905 | 985 | 920 | (80 | ) | 23 | |||||||||||||
| Pre-tax income (loss) from continuing operations | **** | 1,007 | **** | **** | 856 | **** | **** | 632 | **** | **** | 337 | **** | **** | (411 | ) | **** | 151 | **** | **** | 1,418 | **** |
| Income tax expense / (benefit) | 211 | 169 | 156 | 95 | (92 | ) | 42 | 303 | |||||||||||||
| (Loss) from discontinued operations, net of tax | - | - | - | (1 | ) | - | - | - | |||||||||||||
| Net income / (loss) attributable to common shareholders | **** | 796 | **** | **** | 687 | **** | **** | 476 | **** | **** | 241 | **** | **** | (319 | ) | **** | 109 | **** | **** | 1,115 | **** |
| Selected Balance Sheet Data (Period-End) | |||||||||||||||||||||
| Total assets | $ | 181,879 | $ | 182,165 | $ | 185,270 | $ | 184,061 | $ | 182,527 | $ | (286 | ) | $ | (648 | ) | |||||
| Consumer loans | 87,391 | 89,202 | 90,160 | 90,365 | 90,066 | (1,811 | ) | (2,675 | ) | ||||||||||||
| Commercial loans | 25,685 | 29,332 | 27,868 | 27,869 | 38,073 | (3,647 | ) | (12,388 | ) | ||||||||||||
| Allowance for loan losses | (3,152 | ) | (3,283 | ) | (3,379 | ) | (3,354 | ) | (3,245 | ) | 131 | 93 | |||||||||
| Deposits | 139,585 | 137,036 | 134,938 | 131,036 | 122,324 | 2,549 | 17,261 | ||||||||||||||
| Total equity | 14,625 | 14,703 | 14,126 | 13,826 | 13,519 | (78 | ) | 1,106 | |||||||||||||
| Common Share Count | |||||||||||||||||||||
| Weighted average basic ^(5)^ | 375,229 | 376,081 | 375,658 | 375,051 | 375,723 | (852 | ) | (494 | ) | ||||||||||||
| Weighted average diluted ^(5)^ | 377,529 | 378,424 | 377,011 | 375,762 | 375,723 | (895 | ) | 1,806 | |||||||||||||
| Issued shares outstanding (period-end) | 371,805 | 374,674 | 373,857 | 373,837 | 373,155 | (2,870 | ) | (1,350 | ) | ||||||||||||
| Per Common Share Data | |||||||||||||||||||||
| Earnings per share (basic) ^(5)^ | $ | 2.12 | $ | 1.83 | $ | 1.27 | $ | 0.64 | $ | (0.85 | ) | $ | 0.29 | $ | 2.97 | ||||||
| Earnings per share (diluted) ^(5)^ | 2.11 | 1.82 | 1.26 | 0.64 | (0.85 | ) | 0.29 | 2.96 | |||||||||||||
| Adjusted earnings per share ^(6)^ | 2.09 | 1.60 | 1.25 | 0.61 | (0.44 | ) | 0.49 | 2.54 | |||||||||||||
| Book value per share | 39.3 | 39.2 | 37.8 | 37.0 | 36.2 | 0.1 | 3.1 | ||||||||||||||
| Tangible book value per share ^(7)^ | 38.3 | 38.2 | 36.7 | 35.9 | 35.0 | 0.1 | 3.3 | ||||||||||||||
| Adjusted tangible book value per share ^(7)^ | 36.2 | 36.1 | 34.6 | 33.7 | 32.8 | 0.1 | 3.4 | ||||||||||||||
| Select Financial Ratios | |||||||||||||||||||||
| Net interest margin (as reported) | 3.16% | 2.90% | 2.65% | 2.40% | 2.66% | ||||||||||||||||
| Net interest margin (ex. Core OID) ^(8)^ | 3.18% | 2.92% | 2.67% | 2.42% | 2.68% | ||||||||||||||||
| Cost of funds | 1.42% | 1.58% | 1.86% | 2.16% | 2.43% | ||||||||||||||||
| Cost of funds (ex. Core OID) ^(8)^ | 1.38% | 1.55% | 1.82% | 2.13% | 2.39% | ||||||||||||||||
| Efficiency Ratio ^(9)^ | 48.7% | 51.6% | 53.7% | 61.2% | 65.2% | ||||||||||||||||
| Adjusted efficiency ratio ^(8)(9)^ | 44.4% | 49.8% | 47.3% | 52.5% | 52.3% | ||||||||||||||||
| Return on average assets ^(10)^ | 1.7% | 1.5% | 1.0% | 0.5% | (0.7)% | ||||||||||||||||
| Return on average total equity ^(10)^ | 21.7% | 19.1% | 13.6% | 7.1% | (9.1)% | ||||||||||||||||
| Return on average tangible common equity ^(10)^ | 22.3% | 19.6% | 14.0% | 7.3% | (9.4)% | ||||||||||||||||
| Core ROTCE ^(11)^ | 24.1% | 18.7% | 15.2% | 7.6% | (5.4)% | ||||||||||||||||
| Capital Ratios ^(12)^ | |||||||||||||||||||||
| Common Equity Tier 1 (CET1) capital ratio | 11.1% | 10.6% | 10.4% | 10.1% | 9.3% | ||||||||||||||||
| Tier 1 capital ratio | 12.8% | 12.4% | 12.1% | 11.9% | 10.9% | ||||||||||||||||
| Total capital ratio | 14.6% | 14.1% | 14.1% | 13.8% | 12.8% | ||||||||||||||||
| Tier 1 leverage ratio | 9.8% | 9.4% | 9.0% | 8.9% | 8.9% |
(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 theimplementation 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 wererecognized 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 othercomprehensive income, a component of equity.
(4) Including but not limited to employee related expenses, commissions and provision for losses and lossadjustment expense related to the insurance business, information technology expenses, servicing expenses, facilities expenses, marketing expenses, and other professional and legal expenses.
(5) Due to antidilutive effect of the net loss from pre-tax loss from continuing operations attributable to commonshareholders for the first quarter 2020, basic weighted average common shares outstanding were used to calculate diluted earnings per share.
(6) Represents a non-GAAP financial measure. For more details refer to page 21.
(7) Represents anon-GAAP financial measure. For more details refer to page 22.
(8) Represents anon-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) For more details on final rules to address the impact of CECL on regulatory capital by allowing BHCs and banks, including Ally, see page 17.
| 1Q 2021 Preliminary Results | 4 |
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| ALLY FINANCIAL INC.<br><br><br>CONSOLIDATED INCOME STATEMENT | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||||||||
| Financing revenue and other interest income | |||||||||||||||||||||
| Interest and fees on finance receivables and loans | $ | 1,582 | $ | 1,607 | $ | 1,602 | $ | 1,630 | $ | 1,742 | $ | (25 | ) | $ | (160 | ) | |||||
| Interest on loans<br>held-for-sale | 5 | 6 | 5 | 4 | 2 | (1 | ) | 3 | |||||||||||||
| Total interest and dividends on investment securities | 124 | 130 | 162 | 187 | 213 | (6 | ) | (89 | ) | ||||||||||||
| Interest-bearing cash | 4 | 5 | 5 | 4 | 14 | (1 | ) | (10 | ) | ||||||||||||
| Other earning assets | 7 | 10 | 11 | 10 | 13 | (3 | ) | (6 | ) | ||||||||||||
| Operating leases | 370 | 365 | 360 | 343 | 367 | 5 | 3 | ||||||||||||||
| Total financing revenue and other interest income | 2,092 | 2,123 | 2,145 | 2,178 | 2,351 | (31 | ) | (259 | ) | ||||||||||||
| Interest expense | |||||||||||||||||||||
| Interest on deposits | 306 | 367 | 452 | 541 | 592 | (61 | ) | (286 | ) | ||||||||||||
| Interest on short-term borrowings | 1 | 3 | 9 | 13 | 17 | (2 | ) | (16 | ) | ||||||||||||
| Interest on long-term debt | 250 | 274 | 309 | 318 | 348 | (24 | ) | (98 | ) | ||||||||||||
| Total interest expense | 557 | 644 | 770 | 872 | 957 | (87 | ) | (400 | ) | ||||||||||||
| Depreciation expense on operating lease assets | 163 | 176 | 175 | 252 | 248 | (13 | ) | (85 | ) | ||||||||||||
| Net financing revenue (as reported) | $ | 1,372 | **** | $ | 1,303 | **** | $ | 1,200 | **** | $ | 1,054 | **** | $ | 1,146 | **** | $ | 69 | **** | $ | 226 | **** |
| Other revenue | |||||||||||||||||||||
| Insurance premiums and service revenue earned | 280 | 287 | 276 | 263 | 277 | (7 | ) | 3 | |||||||||||||
| Gain on mortgage and automotive loans, net | 36 | 75 | 33 | 14 | (12 | ) | (39 | ) | 48 | ||||||||||||
| Loss on extinguishment of debt | (1 | ) | (52 | ) | (49 | ) | (1 | ) | (0 | ) | 51 | (1 | ) | ||||||||
| Other gain/loss on investments, net | 123 | 134 | 64 | 188 | (79 | ) | (11 | ) | 202 | ||||||||||||
| Other income, net of losses | 127 | 234 | 160 | 91 | 80 | (107 | ) | 47 | |||||||||||||
| Total other revenue | **** | 565 | **** | **** | 678 | **** | **** | 484 | **** | **** | 555 | **** | **** | 266 | **** | **** | (113 | ) | **** | 299 | **** |
| Total net revenue | **** | 1,937 | **** | **** | 1,981 | **** | **** | 1,684 | **** | **** | 1,609 | **** | **** | 1,412 | **** | **** | (44 | ) | **** | 525 | **** |
| Provision for loan losses | **** | (13 | ) | **** | 102 | **** | **** | 147 | **** | **** | 287 | **** | **** | 903 | **** | **** | (115 | ) | **** | (916 | ) |
| Noninterest expense | |||||||||||||||||||||
| Compensation and benefits expense | 395 | 340 | 342 | 334 | 360 | 55 | 35 | ||||||||||||||
| Insurance losses and loss adjustment expenses | 63 | 62 | 85 | 142 | 74 | 1 | (11 | ) | |||||||||||||
| Goodwill impairment | - | - | - | 50 | - | - | - | ||||||||||||||
| Other operating expenses | 485 | 621 | 478 | 459 | 486 | (136 | ) | (1 | ) | ||||||||||||
| Total noninterest expense | 943 | 1,023 | 905 | 985 | 920 | (80 | ) | 23 | |||||||||||||
| Pre-tax income (loss) from continuing operations | $ | 1,007 | **** | $ | 856 | **** | $ | 632 | **** | $ | 337 | **** | $ | (411 | ) | $ | 151 | **** | $ | 1,418 | **** |
| Income tax expense / (benefit) from continuing operations | 211 | 169 | 156 | 95 | (92 | ) | 42 | 303 | |||||||||||||
| Net income (loss) from continuing operations | **** | 796 | **** | **** | 687 | **** | **** | 476 | **** | **** | 242 | **** | **** | (319 | ) | **** | 109 | **** | **** | 1,115 | **** |
| (Loss) from discontinued operations, net of tax | - | - | - | (1 | ) | - | - | - | |||||||||||||
| Net income (loss) | $ | 796 | **** | $ | 687 | **** | $ | 476 | **** | $ | 241 | **** | $ | (319 | ) | $ | 109 | **** | $ | 1,115 | **** |
| Core Pre-Tax Income Walk | |||||||||||||||||||||
| Net financing revenue (ex. OID) ^(1)^ | $ | 1,382 | **** | $ | 1,312 | **** | $ | 1,209 | **** | $ | 1,063 | **** | $ | 1,154 | **** | $ | 69 | **** | $ | 227 | **** |
| Adjusted other revenue ^(2)^ | 548 | 567 | 471 | 465 | 451 | (18 | ) | 97 | |||||||||||||
| Provision for credit losses | (13 | ) | 102 | 147 | 287 | 903 | (115 | ) | (916 | ) | |||||||||||
| Adjusted noninterest expense ^(3)^ | 943 | 1,023 | 905 | 935 | 920 | (80 | ) | 23 | |||||||||||||
| Core pre-tax income (loss) ^(4)^ | $ | 1,000 | **** | $ | 754 | **** | $ | 628 | **** | $ | 306 | **** | $ | (217 | ) | $ | 246 | **** | $ | 1,217 | **** |
| Core OID | (10 | ) | (9 | ) | (9 | ) | (9 | ) | (8 | ) | (0 | ) | (1 | ) | |||||||
| Change in the fair value of equity securities ^(5)^ | 17 | 111 | 13 | 90 | (185 | ) | (95 | ) | 202 | ||||||||||||
| Repositioning and other ^(6)^ | - | - | - | (50 | ) | - | - | - | |||||||||||||
| Pre-tax income (loss) from continuing operations | $ | 1,007 | **** | $ | 856 | **** | $ | 632 | **** | $ | 337 | **** | $ | (411 | ) | $ | 151 | **** | $ | 1,418 | **** |
(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 incurrent 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) Represents a non-GAAP financial measure. Excludes Goodwill impairment at Ally Invest in 2Q 20. For more details refer topage 21.
(4) Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations by excluding (1) Core OID, (2) equity fair value adjustments related to ASU 2016-01, which requires change in the fairvalue 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 and (3) repositioning andother which is primarily related to the extinguishment of high cost legacy debt, strategic activities and significant one-time items, as applicable for respective periods. 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.
(5) 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 othercomprehensive income, a component of equity.
(6) Repositioning and other includes a $50 million Goodwill impairment at Ally Invest in 2Q 20
| 1Q 2021 Preliminary Results | 5 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CONSOLIDATED PERIOD-END BALANCE SHEET | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||||||||
| Assets | |||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||
| Noninterest-bearing | $ | 747 | $ | 724 | $ | 719 | $ | 609 | $ | 453 | $ | 23 | $ | 294 | |||||||
| Interest-bearing | 15,031 | 14,897 | 19,220 | 18,522 | 5,708 | 134 | 9,323 | ||||||||||||||
| Total cash and cash equivalents | 15,778 | 15,621 | 19,939 | 19,131 | 6,161 | 157 | 9,617 | ||||||||||||||
| Investment securities ^(1)^ | 35,711 | 32,154 | 31,871 | 31,228 | 31,619 | 3,557 | 4,092 | ||||||||||||||
| Loans held-for-sale,<br>net | 630 | 406 | 441 | 404 | 235 | 224 | 395 | ||||||||||||||
| Finance receivables and loans, net | 113,076 | 118,534 | 118,028 | 118,234 | 128,139 | (5,458 | ) | (15,063 | ) | ||||||||||||
| Allowance for loan losses | (3,152 | ) | (3,283 | ) | (3,379 | ) | (3,354 | ) | (3,245 | ) | 131 | 93 | |||||||||
| Total finance receivables and loans, net | 109,924 | 115,251 | 114,649 | 114,880 | 124,894 | (5,327 | ) | (14,970 | ) | ||||||||||||
| Investment in operating leases, net | 9,944 | 9,639 | 9,454 | 9,088 | 9,064 | 305 | 880 | ||||||||||||||
| Premiums receivables and other insurance assets | 2,725 | 2,679 | 2,662 | 2,609 | 2,576 | 46 | 149 | ||||||||||||||
| Other assets | 7,167 | 6,415 | 6,254 | 6,721 | 7,978 | 752 | (811 | ) | |||||||||||||
| Total assets | $ | 181,879 | **** | $ | 182,165 | **** | $ | 185,270 | **** | $ | 184,061 | **** | $ | 182,527 | **** | $ | (286 | ) | $ | (648 | ) |
| Liabilities | |||||||||||||||||||||
| Deposit liabilities | |||||||||||||||||||||
| Noninterest-bearing | $ | 155 | $ | 128 | $ | 159 | $ | 134 | $ | 139 | $ | 27 | $ | 16 | |||||||
| Interest-bearing | 139,430 | 136,908 | 134,779 | 130,902 | 122,185 | 2,522 | 17,245 | ||||||||||||||
| Total deposit liabilities | 139,585 | 137,036 | 134,938 | 131,036 | 122,324 | 2,549 | 17,261 | ||||||||||||||
| Short-term borrowings | - | 2,136 | 3,032 | 3,689 | 9,493 | (2,136 | ) | (9,493 | ) | ||||||||||||
| Long-term debt | 20,503 | 22,006 | 25,704 | 29,176 | 31,066 | (1,503 | ) | (10,563 | ) | ||||||||||||
| Interest payable | 453 | 412 | 748 | 697 | 710 | 41 | (257 | ) | |||||||||||||
| Unearned insurance premiums and service revenue | 3,487 | 3,438 | 3,401 | 3,338 | 3,305 | 49 | 182 | ||||||||||||||
| Accrued expense and other liabilities | 3,226 | 2,434 | 3,321 | 2,299 | 2,110 | 792 | 1,116 | ||||||||||||||
| Total liabilities | $ | 167,254 | **** | $ | 167,462 | **** | $ | 171,144 | **** | $ | 170,235 | **** | $ | 169,008 | **** | $ | (208 | ) | $ | (1,754 | ) |
| Equity | |||||||||||||||||||||
| Common stock and paid-in capital ^(2)^ | $ | 18,153 | $ | 18,350 | $ | 18,324 | $ | 18,307 | $ | 18,278 | $ | (197 | ) | $ | (125 | ) | |||||
| Accumulated deficit | (3,555 | ) | (4,278 | ) | (4,893 | ) | (5,296 | ) | (5,465 | ) | 723 | 1,910 | |||||||||
| Accumulated other comprehensive income / (loss) | 27 | 631 | 695 | 815 | 706 | (604 | ) | (679 | ) | ||||||||||||
| Total equity | 14,625 | 14,703 | 14,126 | 13,826 | 13,519 | (78 | ) | 1,106 | |||||||||||||
| Total liabilities and equity | $ | 181,879 | **** | $ | 182,165 | **** | $ | 185,270 | **** | $ | 184,061 | **** | $ | 182,527 | **** | $ | (286 | ) | $ | (648 | ) |
(1) Includes held-to-maturity securities.
(2) Includes Treasury stock.
| 1Q 2021 Preliminary Results | 6 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CONSOLIDATED AVERAGE BALANCE SHEET ^(1)^ | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||||||||
| Assets | |||||||||||||||||||||
| Interest-bearing cash and cash equivalents | $ | 15,363 | $ | 17,758 | $ | 20,719 | $ | 12,496 | $ | 4,853 | $ | (2,395 | ) | $ | 10,510 | ||||||
| Investment securities and other earning assets | 34,694 | 33,107 | 32,059 | 32,201 | 32,694 | 1,587 | 2,000 | ||||||||||||||
| Loans held-for-sale,<br>net | 570 | 635 | 472 | 337 | 150 | (65 | ) | 420 | |||||||||||||
| Total finance receivables and loans, net ^(2)^ | 115,665 | 117,422 | 117,546 | 122,428 | 126,646 | (1,757 | ) | (10,980 | ) | ||||||||||||
| Investment in operating leases, net | 9,831 | 9,587 | 9,317 | 9,068 | 9,078 | 244 | 753 | ||||||||||||||
| Total interest earning assets | 176,123 | 178,509 | 180,113 | 176,530 | 173,420 | (2,386 | ) | 2,703 | |||||||||||||
| Noninterest-bearing cash and cash equivalents | 531 | 505 | 536 | 432 | 418 | 26 | 113 | ||||||||||||||
| Other assets | 8,502 | 8,112 | 8,137 | 8,250 | 7,583 | 390 | 919 | ||||||||||||||
| Allowance for loan losses | (3,280 | ) | (3,363 | ) | (3,371 | ) | (3,227 | ) | (2,629 | ) | 83 | (651 | ) | ||||||||
| Total assets | $ | 181,876 | **** | $ | 183,763 | **** | $ | 185,415 | **** | $ | 181,985 | **** | $ | 178,792 | **** | $ | (1,887 | ) | $ | 3,084 | **** |
| Liabilities | |||||||||||||||||||||
| Interest-bearing deposit liabilities | |||||||||||||||||||||
| Retail deposit liabilities | $ | 125,715 | $ | 122,166 | $ | 118,307 | $ | 111,152 | $ | 104,483 | $ | 3,549 | $ | 21,232 | |||||||
| Other interest-bearing deposit liabilities ^(3)^ | 11,851 | 13,327 | 14,500 | 15,726 | 16,593 | (1,475 | ) | (4,742 | ) | ||||||||||||
| Total Interest-bearing deposit liabilities | 137,566 | 135,493 | 132,807 | 126,878 | 121,076 | 2,073 | 16,490 | ||||||||||||||
| Short-term borrowings | 814 | 2,350 | 3,343 | 4,712 | 4,496 | (1,536 | ) | (3,682 | ) | ||||||||||||
| Long-term debt ^(4)^ | 21,173 | 24,103 | 28,512 | 30,554 | 33,122 | (2,930 | ) | (11,949 | ) | ||||||||||||
| Total interest-bearing liabilities ^(4)^ | 159,553 | 161,946 | 164,662 | 162,144 | 158,694 | (2,393 | ) | 859 | |||||||||||||
| Noninterest-bearing deposit liabilities | 152 | 149 | 157 | 136 | 141 | 3 | 11 | ||||||||||||||
| Other liabilities | 7,038 | 6,819 | 6,472 | 5,343 | 6,137 | 219 | 901 | ||||||||||||||
| Total liabilities | $ | 166,743 | **** | $ | 168,914 | **** | $ | 171,291 | **** | $ | 167,623 | **** | $ | 164,972 | **** | $ | (2,171 | ) | $ | 1,771 | **** |
| Equity | |||||||||||||||||||||
| Total equity | $ | 15,133 | $ | 14,849 | $ | 14,124 | $ | 14,362 | $ | 13,820 | $ | 284 | $ | 1,313 | |||||||
| Total liabilities and equity | $ | 181,876 | **** | $ | 183,763 | **** | $ | 185,415 | **** | $ | 181,985 | **** | $ | 178,792 | **** | $ | (1,887 | ) | $ | 3,084 | **** |
(1) Average balancesare calculated using an average daily balance methodology
(2) Nonperforming finance receivables and loans are included in the average balances net of unearnedincome, unamortized premiums and discounts, and deferred fees and costs.
(3) Includes brokered (inclusive of sweep deposits) and other deposits (inclusive ofmortgage escrow, and other deposits).
(4) Includes average Core OID balance of $1,023 million in 1Q 2021, $1,032 million in 4Q 2020,$1,041 million in 3Q 2020, $1,050 million in 2Q 2020, and $1,059 million in 1Q 20.
| 1Q 2021 Preliminary Results | 7 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>SEGMENT HIGHLIGHTS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||||||||
| Pre-tax Income / (Loss) | |||||||||||||||||||||
| Automotive Finance | $ | 803 | $ | 563 | $ | 566 | $ | 329 | $ | (173 | ) | $ | 240 | $ | 976 | ||||||
| Insurance | 141 | 183 | 78 | 128 | (105 | ) | (42 | ) | 246 | ||||||||||||
| Dealer Financial Services | **** | 944 | **** | **** | 746 | **** | **** | 644 | **** | **** | 457 | **** | **** | (278 | ) | **** | 198 | **** | **** | 1,222 | **** |
| Corporate Finance | 53 | 64 | 60 | 32 | (68 | ) | (11 | ) | 121 | ||||||||||||
| Mortgage Finance | 23 | 7 | 26 | 8 | 12 | 16 | 11 | ||||||||||||||
| Corporate and Other ^(1)^ | (13 | ) | 39 | (98 | ) | (160 | ) | (77 | ) | (52 | ) | 64 | |||||||||
| Pre-tax income from continuing operations | $ | 1,007 | **** | $ | 856 | **** | $ | 632 | **** | $ | 337 | **** | $ | (411 | ) | $ | 151 | **** | $ | 1,418 | **** |
| Core OID ^(2)^ | 10 | 9 | 9 | 9 | 8 | 0 | 1 | ||||||||||||||
| Change in the fair value of equity securities ^(3)^ | (17 | ) | (111 | ) | (13 | ) | (90 | ) | 185 | 95 | (202 | ) | |||||||||
| Repositioning and other ^(4)^ | - | - | - | 50 | - | - | - | ||||||||||||||
| Core pre-tax income (loss) ^(5)^ | $ | 1,000 | **** | $ | 754 | **** | $ | 628 | **** | $ | 306 | **** | $ | (217 | ) | $ | 246 | **** | $ | 1,217 | **** |
(1) Corporate andOther 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 othercomprehensive income, a component of equity.
(4) Repositioning and other includes a $50 million Goodwill impairment at Ally Invest in 2Q 20
(5) Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations by excluding (1) Core OID, (2) equity fair value adjustments related to ASU 2016-01, which requires change in the fairvalue of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity and (3) repositioning andother which is primarily related to the extinguishment of high cost legacy debt, strategic activities and significant one-time items, as applicable for respective periods. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings.
| 1Q 2021 Preliminary Results | 8 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>AUTOMOTIVE FINANCE - CONDENSED FINANCIAL STATEMENTS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Net financing revenue | |||||||||||||||||||||
| Consumer | $ | 1,251 | $ | 1,261 | $ | 1,253 | $ | 1,215 | $ | 1,202 | $ | (10 | ) | $ | 49 | ||||||
| Commercial | 161 | 163 | 153 | 210 | 307 | (2 | ) | (146 | ) | ||||||||||||
| Operating leases | 370 | 365 | 360 | 343 | 367 | 5 | 3 | ||||||||||||||
| Other interest income | - | 1 | 1 | 2 | 1 | (1 | ) | (1 | ) | ||||||||||||
| Total financing revenue and other interest income | 1,782 | 1,790 | 1,767 | 1,770 | 1,877 | (8 | ) | (95 | ) | ||||||||||||
| Interest expense | 413 | 461 | 490 | 529 | 589 | (48 | ) | (176 | ) | ||||||||||||
| Depreciation expense on operating lease assets: | |||||||||||||||||||||
| Depreciation expense on operating lease assets (ex. remarketing) | 226 | 242 | 245 | 240 | 251 | (15 | ) | (25 | ) | ||||||||||||
| Remarketing gains / (losses) | 64 | 66 | 70 | (11 | ) | 2 | (1 | ) | 62 | ||||||||||||
| Total depreciation expense on operating lease assets | 163 | 176 | 175 | 252 | 248 | (13 | ) | (85 | ) | ||||||||||||
| Net financing revenue | 1,206 | 1,153 | 1,102 | 989 | 1,040 | 53 | 166 | ||||||||||||||
| Other revenue | |||||||||||||||||||||
| Total other revenue | 62 | 56 | 61 | 40 | 47 | 6 | 15 | ||||||||||||||
| Total net revenue | 1,268 | 1,209 | 1,163 | 1,029 | 1,087 | 59 | 181 | ||||||||||||||
| Provision for credit losses | (22 | ) | 86 | 128 | 256 | 766 | (108 | ) | (788 | ) | |||||||||||
| Noninterest expense | |||||||||||||||||||||
| Compensation and benefits | 145 | 134 | 134 | 133 | 148 | 11 | (3 | ) | |||||||||||||
| Other operating expenses | 342 | 426 | 335 | 311 | 346 | (84 | ) | (4 | ) | ||||||||||||
| Total noninterest expense | 487 | 560 | 469 | 444 | 494 | (73 | ) | (7 | ) | ||||||||||||
| Pre-tax Income / (loss) | $ | 803 | **** | $ | 563 | **** | $ | 566 | **** | $ | 329 | **** | $ | (173 | ) | $ | 240 | **** | $ | 976 | **** |
| Memo: Net lease revenue | |||||||||||||||||||||
| Operating lease revenue | $ | 370 | $ | 365 | $ | 360 | $ | 343 | $ | 367 | $ | 5 | $ | 3 | |||||||
| Depreciation expense on operating lease assets (ex. remarketing) | 226 | 242 | 245 | 240 | 251 | (15 | ) | (25 | ) | ||||||||||||
| Remarketing gains (losses), net of repo valuation | 64 | 66 | 70 | (11 | ) | 2 | (1 | ) | 62 | ||||||||||||
| Total depreciation expense on operating lease assets | 163 | 176 | 175 | 252 | 248 | (13 | ) | (85 | ) | ||||||||||||
| Net lease revenue | $ | 207 | **** | $ | 189 | **** | $ | 185 | **** | $ | 91 | **** | $ | 119 | **** | $ | 18 | **** | $ | 88 | **** |
| Balance Sheet (Period-End) | |||||||||||||||||||||
| Cash, trading and investment securities | $ | 23 | $ | 23 | $ | 23 | $ | 23 | $ | 23 | $ | - | $ | - | |||||||
| Consumer loans | 73,826 | 73,443 | 73,484 | 72,378 | 72,463 | 383 | 1,363 | ||||||||||||||
| Commercial loans | 19,208 | 23,141 | 21,854 | 21,708 | 31,390 | (3,933 | ) | (12,182 | ) | ||||||||||||
| Allowance for loan losses | (2,867 | ) | (2,986 | ) | (3,092 | ) | (3,084 | ) | (2,968 | ) | 119 | 101 | |||||||||
| Total finance receivables and loans, net | 90,167 | 93,598 | 92,246 | 91,002 | 100,885 | (3,431 | ) | (10,718 | ) | ||||||||||||
| Investment in operating leases, net | 9,944 | 9,639 | 9,454 | 9,088 | 9,064 | 305 | 880 | ||||||||||||||
| Other assets | 1,432 | 1,534 | 1,643 | 1,903 | 1,582 | (102 | ) | (150 | ) | ||||||||||||
| Total assets | $ | 101,566 | **** | $ | 104,794 | **** | $ | 103,366 | **** | $ | 102,016 | **** | $ | 111,554 | **** | $ | (3,228 | ) | $ | (9,988 | ) |
| 1Q 2021 Preliminary Results | 9 | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| ALLY FINANCIAL INC.<br><br><br>AUTOMOTIVE FINANCE - KEY STATISTICS | |||||||||||||||||||||
| --- | |||||||||||||||||||||
| CHANGE VS. | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||||
| U.S. Consumer Originations (1) (<br>in billions) | |||||||||||||||||||||
| Retail standard - new vehicle GM | 1.0 | $ | 1.1 | $ | 1.0 | $ | 0.7 | $ | 1.0 | $ | (0.1 | ) | $ | 0.0 | |||||||
| Retail standard - new vehicle Stellantis | 1.0 | 1.0 | 1.0 | 0.7 | 0.8 | 0.0 | 0.2 | ||||||||||||||
| Retail standard - new vehicle Growth | 1.1 | 1.1 | 1.0 | 0.6 | 1.1 | 0.0 | 0.0 | ||||||||||||||
| Used vehicle | 5.7 | 4.7 | 5.4 | 4.3 | 5.0 | 1.0 | 0.7 | ||||||||||||||
| Lease | 1.4 | 1.2 | 1.4 | 0.9 | 1.2 | 0.2 | 0.1 | ||||||||||||||
| Retail subvented | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||
| Total originations | 10.2 | $ | 9.1 | $ | 9.8 | $ | 7.2 | $ | 9.1 | $ | 1.1 | $ | 1.1 | ||||||||
| U.S. Consumer Originations - FICO Score | |||||||||||||||||||||
| Super Prime (740+) | 2.2 | $ | 2.1 | $ | 2.3 | $ | 1.6 | $ | 2.1 | $ | 0.1 | $ | 0.1 | ||||||||
| Prime (660-739) | 4.2 | 3.7 | 3.9 | 2.9 | 3.4 | 0.5 | 0.8 | ||||||||||||||
| Prime/Near (620-659) | 2.3 | 2.0 | 2.0 | 1.6 | 1.9 | 0.4 | 0.4 | ||||||||||||||
| Non Prime (540-619) | 0.8 | 0.6 | 0.8 | 0.6 | 0.9 | 0.1 | (0.2 | ) | |||||||||||||
| Sub Prime (0-539) | 0.1 | 0.1 | 0.2 | 0.1 | 0.1 | 0.0 | 0.0 | ||||||||||||||
| Commercial Services Group (2) | 0.6 | 0.6 | 0.5 | 0.4 | 0.6 | 0.0 | 0.0 | ||||||||||||||
| Total originations | 10.2 | $ | 9.1 | $ | 9.8 | $ | 7.2 | $ | 9.1 | $ | 1.1 | $ | 1.1 | ||||||||
| U.S. Consumer Retail Originations - Average FICO | |||||||||||||||||||||
| New vehicle | 693 | 698 | 699 | 697 | 695 | (5 | ) | (2 | ) | ||||||||||||
| Used vehicle | 681 | 684 | 681 | 680 | 681 | (4 | ) | - | |||||||||||||
| Total retail originations | 685 | 690 | 687 | 685 | 686 | (5 | ) | (1 | ) | ||||||||||||
| U.S. Market | |||||||||||||||||||||
| Light vehicle sales (SAAR - units in millions) | 16.7 | 16.1 | 15.3 | 11.3 | 15.0 | 0.6 | 1.7 | ||||||||||||||
| Light vehicle sales (quarterly - units in millions) | 3.9 | 4.2 | 3.9 | 3.0 | 3.5 | (0.3 | ) | 0.4 | |||||||||||||
| Dealer Engagement | |||||||||||||||||||||
| Total Active Dealers | 18,986 | 18,716 | 18,658 | 18,423 | 18,293 | 270 | 693 | ||||||||||||||
| Total Application Volume (000s) | 3,284 | 2,804 | 3,240 | 3,099 | 2,987 | 480 | 298 | ||||||||||||||
| Ally U.S. Commercial Outstandings EOP ( in billions) | |||||||||||||||||||||
| Floorplan outstandings | 13.5 | $ | 17.3 | $ | 16.0 | $ | 15.8 | $ | 26.1 | $ | (3.8 | ) | $ | (12.6 | ) | ||||||
| Dealer loans and other | 5.7 | 5.9 | 5.8 | 5.9 | 5.3 | (0.2 | ) | 0.4 | |||||||||||||
| Total Commercial outstandings | 19.2 | $ | 23.1 | $ | 21.9 | $ | 21.7 | $ | 31.4 | $ | (3.9 | ) | $ | (12.2 | ) | ||||||
| U.S. Off-Lease Remarketing | |||||||||||||||||||||
| Off-lease vehicles terminated -<br>on-balance sheet (# in units) | 30,488 | 30,480 | 28,917 | 26,785 | 20,419 | 8 | 10,069 | ||||||||||||||
| Average gain / (loss) per vehicle | 2,114 | $ | 2,150 | $ | 2,437 | $ | (421 | ) | $ | 121 | $ | (37 | ) | $ | 1,993 | ||||||
| Total gain / (loss) ( in millions) | 64 | $ | 66 | $ | 70 | $ | (11 | ) | $ | 2 | $ | (1 | ) | $ | 62 |
All values are in US Dollars.
(1) Some standardrate 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 suchoriginations 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 1Q21
| 1Q 2021 Preliminary Results | 10 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>INSURANCE - CONDENSED FINANCIAL STATEMENTS AND KEY STATISTICS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement (GAAP View) | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||
| Net financing revenue | |||||||||||||||||
| Total interest and fees on finance receivables and loans^(1)^ | $ | 4 | $ | 1 | $ | - | $ | - | $ | - | $ | 3 | $ | 4 | |||
| Interest and dividends on investment securities | 25 | 26 | 25 | 27 | 29 | (1 | ) | (4 | ) | ||||||||
| Interest bearing cash | - | 1 | 4 | 4 | 5 | (1 | ) | (5 | ) | ||||||||
| Total financing revenue and other interest revenue | 29 | 28 | 29 | 31 | 34 | 1 | (5 | ) | |||||||||
| Interest expense | 14 | 20 | 21 | 19 | 20 | (6 | ) | (6 | ) | ||||||||
| Net financing revenue | 15 | 8 | 8 | 12 | 14 | 7 | 1 | ||||||||||
| Other revenue | |||||||||||||||||
| Insurance premiums and service revenue earned | 280 | 287 | 276 | 263 | 277 | (7 | ) | 3 | |||||||||
| Other gain / (loss) on investments, net | 98 | 131 | 59 | 172 | (142 | ) | (33 | ) | 240 | ||||||||
| Other income, net of losses | 1 | 3 | 3 | 3 | 2 | (2 | ) | (1 | ) | ||||||||
| Total other revenue | 379 | 421 | 338 | 438 | 137 | (42 | ) | 242 | |||||||||
| Total net revenue | 394 | 429 | 346 | 450 | 151 | (35 | ) | 243 | |||||||||
| Noninterest expense | |||||||||||||||||
| Compensation and benefits expense | 22 | 20 | 21 | 20 | 21 | 2 | 1 | ||||||||||
| Insurance losses and loss adjustment expenses | 63 | 62 | 85 | 142 | 74 | 1 | (11 | ) | |||||||||
| Other operating expenses | 168 | 164 | 162 | 160 | 161 | 4 | 7 | ||||||||||
| Total noninterest expense | 253 | 246 | 268 | 322 | 256 | 7 | (3 | ) | |||||||||
| Pre-tax Income / (Loss) | $ | 141 | $ | 183 | $ | 78 | $ | 128 | $ | (105 | ) | $ | (42 | ) | $ | 246 | **** |
| Memo: Income Statement (Managerial View) | |||||||||||||||||
| Insurance premiums and other income | |||||||||||||||||
| Insurance premiums and service revenue earned | $ | 280 | $ | 287 | $ | 276 | $ | 263 | $ | 277 | $ | (7 | ) | $ | 3 | ||
| Investment income (adjusted) ^(2)^ | 102 | 28 | 54 | 95 | 54 | 73 | 48 | ||||||||||
| Other income | 1 | 3 | 3 | 3 | 2 | (2 | ) | (1 | ) | ||||||||
| Total insurance premiums and other income | 383 | 318 | 333 | 361 | 333 | 64 | 50 | ||||||||||
| Expense | |||||||||||||||||
| Insurance losses and loss adjustment expenses | 63 | 62 | 85 | 142 | 74 | 1 | (11 | ) | |||||||||
| Acquisition and underwriting expenses | |||||||||||||||||
| Compensation and benefit expense | 22 | 20 | 21 | 20 | 21 | 2 | 1 | ||||||||||
| Insurance commission expense | 136 | 133 | 130 | 127 | 126 | 3 | 10 | ||||||||||
| Other expense | 32 | 31 | 32 | 33 | 35 | 1 | (3 | ) | |||||||||
| Total acquistion and underwriting expense | 190 | 184 | 183 | 180 | 182 | 6 | 8 | ||||||||||
| Total expense | 253 | 246 | 268 | 322 | 256 | 7 | (3 | ) | |||||||||
| Core pre-tax income / (loss) ^(2)^ | 130 | 72 | 65 | 39 | 77 | 57 | 53 | ||||||||||
| Change in the fair value of equity securities ^(2)^ | 11 | 111 | 13 | 89 | (182 | ) | (99 | ) | 193 | ||||||||
| Income / (Loss) before income tax expense | $ | 141 | $ | 183 | $ | 78 | $ | 128 | $ | (105 | ) | $ | (42 | ) | $ | 246 | **** |
| Balance Sheet (Period-End) | |||||||||||||||||
| Cash, trading and investment securities | $ | 5,706 | $ | 5,421 | $ | 6,006 | $ | 5,920 | $ | 5,193 | $ | 285 | $ | 513 | |||
| Intercompany loans^(1)^ | 591 | 830 | - | - | - | (239 | ) | 591 | |||||||||
| Premiums receivable and other insurance assets | 2,738 | 2,693 | 2,674 | 2,621 | 2,594 | 45 | 144 | ||||||||||
| Other assets | 186 | 193 | 264 | 199 | 633 | (7 | ) | (447 | ) | ||||||||
| Total assets | $ | 9,221 | $ | 9,137 | $ | 8,944 | $ | 8,740 | $ | 8,420 | **** | $ | 84 | **** | $ | 801 | **** |
| Key Statistics | |||||||||||||||||
| Total written premiums and revenue ^(3)^ | $ | 333 | $ | 312 | $ | 333 | $ | 267 | $ | 317 | $ | 21 | $ | 16 | |||
| Loss ratio ^(4)^ | 22.4% | 21.6% | 30.3% | 53.4% | 26.5% | ||||||||||||
| Underwriting expense ratio ^(5)^ | 67.1% | 63.5% | 65.8% | 67.4% | 65.1% | ||||||||||||
| Combined ratio | **** | 89.5% | **** | 85.1% | **** | 96.1% | **** | 120.9% | **** | 91.6% | **** |
(1) Intercompanyactivity represents excess liquidity placed with corporate segment
(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 to1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity.
(3) Written premiums are net of ceded premiumfor reinsurance.
(4) Loss Ratio is calculated as Insurance losses and loss adjustment expenses divided by Insurance premiums and service revenue earned andOther Income, net of losses.
(5) Underwriting Expense Ratio is calculated as Compensation and benefits expense and Other operating expenses divided byInsurance premiums and service revenue earned and Other Income, net of losses.
| 1Q 2021 Preliminary Results | 11 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>MORTGAGE FINANCE - CONDENSED FINANCIAL STATEMENTS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Net financing revenue | |||||||||||||||||||||
| Total financing revenue and other interest income | $ | 93 | $ | 101 | $ | 121 | $ | 127 | $ | 138 | $ | (8 | ) | $ | (45 | ) | |||||
| Interest expense | 70 | 81 | 91 | 97 | 100 | (11 | ) | (30 | ) | ||||||||||||
| Net financing revenue | 23 | 20 | 30 | 30 | 38 | 3 | (15 | ) | |||||||||||||
| Gain on mortgage loans, net | 36 | 33 | 34 | 17 | 9 | 3 | 27 | ||||||||||||||
| Other income, net of losses | 4 | 4 | 2 | 2 | 1 | - | 3 | ||||||||||||||
| Total other revenue | 40 | 37 | 36 | 19 | 10 | 3 | 30 | ||||||||||||||
| Total net revenue | 63 | 57 | 66 | 49 | 48 | 6 | 15 | ||||||||||||||
| Provision for loan losses | (4 | ) | 3 | - | 3 | 1 | (7 | ) | (5 | ) | |||||||||||
| Noninterest expense | |||||||||||||||||||||
| Compensation and benefits expense | 6 | 5 | 6 | 5 | 6 | 1 | - | ||||||||||||||
| Other operating expense | 38 | 42 | 34 | 33 | 29 | (4 | ) | 9 | |||||||||||||
| Total noninterest expense | 44 | 47 | 40 | 38 | 35 | (3 | ) | 9 | |||||||||||||
| Pre-tax Income | $ | 23 | **** | $ | 7 | **** | $ | 26 | **** | $ | 8 | **** | $ | 12 | **** | $ | 16 | **** | $ | 11 | **** |
| Balance Sheet (Period-End) | |||||||||||||||||||||
| Finance receivables and loans, net: | |||||||||||||||||||||
| Consumer loans | $ | 12,445 | $ | 14,632 | $ | 15,168 | $ | 16,429 | $ | 15,949 | $ | (2,187 | ) | $ | (3,504 | ) | |||||
| Allowance for loan losses | (16 | ) | (21 | ) | (20 | ) | (21 | ) | (18 | ) | 5 | 2 | |||||||||
| Total finance receivables and loans, net | 12,429 | 14,611 | 15,148 | 16,408 | 15,931 | (2,182 | ) | (3,502 | ) | ||||||||||||
| Other assets | 494 | 278 | 355 | 261 | 204 | 216 | 290 | ||||||||||||||
| Total assets | $ | 12,923 | **** | $ | 14,889 | **** | $ | 15,503 | **** | $ | 16,669 | **** | $ | 16,135 | **** | $ | (1,966 | ) | $ | (3,212 | ) |
| 1Q 2021 Preliminary Results | 12 | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| ALLY FINANCIAL INC.<br><br><br>CORPORATE FINANCE - CONDENSED FINANCIAL STATEMENTS | |||||||||||||||||||||
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Net financing revenue | |||||||||||||||||||||
| Total financing revenue and other interest income | $ | 80 | $ | 89 | $ | 84 | $ | 92 | $ | 95 | $ | (9 | ) | $ | (15 | ) | |||||
| Interest expense | 9 | 10 | 9 | 15 | 27 | (1 | ) | (18 | ) | ||||||||||||
| Net financing revenue | 71 | 79 | 75 | 77 | 68 | (8 | ) | 3 | |||||||||||||
| Total other revenue (adjusted) ^(1)^ | 21 | 16 | 8 | 5 | 17 | 4 | 4 | ||||||||||||||
| Total net revenue | 92 | 95 | 83 | 82 | 85 | (4 | ) | 7 | |||||||||||||
| Provision for loan losses | 13 | 9 | 1 | 25 | 114 | 4 | (101 | ) | |||||||||||||
| Noninterest expense | |||||||||||||||||||||
| Compensation and benefits expense | 20 | 14 | 13 | 14 | 21 | 6 | (1 | ) | |||||||||||||
| Other operating expense | 11 | 9 | 10 | 12 | 14 | 2 | (3 | ) | |||||||||||||
| Total noninterest expense | 31 | 23 | 23 | 26 | 35 | 8 | (4 | ) | |||||||||||||
| Core pre-tax income<br>^(1)^ | 48 | 63 | 59 | 31 | (64 | ) | (16 | ) | 112 | ||||||||||||
| Change in the fair value of equity securities ^(2)^ | 5 | 1 | 1 | 1 | (4 | ) | 5 | 9 | |||||||||||||
| Pre-tax Income / (loss) | $ | 53 | **** | $ | 64 | **** | $ | 60 | **** | $ | 32 | **** | $ | (68 | ) | $ | (11 | ) | $ | 121 | **** |
| Balance Sheet (Period-End) | |||||||||||||||||||||
| Equity securities | $ | 14 | $ | 7 | $ | 6 | $ | 5 | $ | 4 | $ | 7 | $ | 10 | |||||||
| Loans held for sale | 229 | 205 | 207 | 265 | 133 | 24 | 96 | ||||||||||||||
| Commercial loans | 6,285 | 6,006 | 5,883 | 6,031 | 6,549 | 279 | (264 | ) | |||||||||||||
| Allowance for loan losses | (187 | ) | (189 | ) | (180 | ) | (178 | ) | (191 | ) | 2 | 4 | |||||||||
| Total finance receivables and loans, net | 6,098 | 5,817 | 5,703 | 5,853 | 6,358 | 281 | (260 | ) | |||||||||||||
| Other assets | 80 | 79 | 79 | 83 | 77 | 1 | 3 | ||||||||||||||
| Total assets | $ | 6,421 | **** | $ | 6,108 | **** | $ | 5,995 | **** | $ | 6,206 | **** | $ | 6,572 | **** | $ | 313 | **** | $ | (151 | ) |
(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 incurrent 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 securitiesto 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.
| 1Q 2021 Preliminary Results | 13 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CORPORATE AND OTHER - CONDENSED FINANCIAL STATEMENTS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||||||
| Net financing revenue | ||||||||||||||||||||
| Total financing revenue and other interest income | $ | 108 | $ | 115 | $ | 144 | $ | 158 | $ | 207 | $ | (7 | ) | $ | (99 | ) | ||||
| Interest expense | ||||||||||||||||||||
| Core original issue discount amortization | 10 | 9 | 9 | 9 | 8 | - | 1 | |||||||||||||
| Other interest expense | 41 | 63 | 150 | 203 | 213 | (21 | ) | (171 | ) | |||||||||||
| Total interest expense | 51 | 72 | 159 | 212 | 221 | (21 | ) | (170 | ) | |||||||||||
| Net financing revenue / (loss) | 57 | 43 | (15 | ) | (54 | ) | (14 | 14 | 71 | |||||||||||
| Other revenue | ||||||||||||||||||||
| Loss on extinguishment of debt | (1 | ) | (52 | ) | (49 | ) | (1 | ) | (0 | 51 | (1 | ) | ||||||||
| Other gain on investments, net | 20 | 1 | 5 | 15 | 67 | 19 | (47 | ) | ||||||||||||
| Gain/(loss) on mortgage and automotive loans, net | - | 42 | (1 | ) | (3 | ) | (21 | (42 | ) | 21 | ||||||||||
| Other income, net of losses ^(1)^ | 39 | 156 | 85 | 41 | 13 | (117 | ) | 26 | ||||||||||||
| Total other revenue | 58 | 147 | 40 | 52 | 59 | (89 | ) | (1 | ) | |||||||||||
| Total net revenue | 115 | 190 | 25 | (2 | ) | 45 | (75 | ) | 70 | |||||||||||
| Provision for loan losses | - | 4 | 18 | 3 | 22 | (4 | ) | (22 | ) | |||||||||||
| Noninterest expense | ||||||||||||||||||||
| Compensation and benefits expense | 202 | 167 | 168 | 162 | 164 | 35 | 38 | |||||||||||||
| Goodwill impairment | - | - | - | 50 | - | - | - | |||||||||||||
| Other operating expense ^(2)^ | (74 | ) | (20 | ) | (63 | ) | (57 | ) | (64 | (54 | ) | (10 | ) | |||||||
| Total noninterest expense | 128 | 147 | 105 | 155 | 100 | (19 | ) | 28 | ||||||||||||
| Pre-tax (loss) income | $ | (13 | ) | $ | 39 | **** | $ | (98 | ) | $ | (160 | ) | $ | (77 | $ | (52 | ) | $ | 64 | **** |
| Balance Sheet (Period-End) | ||||||||||||||||||||
| Cash, trading and investment securities | $ | 45,746 | $ | 42,324 | $ | 45,775 | $ | 44,411 | $ | 32,560 | $ | 3,422 | $ | 13,186 | ||||||
| Loans held-for-sale | 117 | 110 | 78 | 48 | 34 | 7 | 83 | |||||||||||||
| Consumer loans | 1,120 | 1,127 | 1,508 | 1,558 | 1,654 | (7 | ) | (534 | ) | |||||||||||
| Commercial loans | 192 | 185 | 131 | 130 | 134 | 7 | 58 | |||||||||||||
| Intercompany loans^(3)^ | (591 | ) | (830 | ) | - | - | - | 239 | (591 | ) | ||||||||||
| Allowance for loan losses | (82 | ) | (87 | ) | (87 | ) | (71 | ) | (68 | 5 | (14 | ) | ||||||||
| Total finance receivables and loans, net | 639 | 395 | 1,552 | 1,617 | 1,720 | 244 | (1,081 | ) | ||||||||||||
| Other assets | 5,246 | 4,408 | 4,057 | 4,354 | 5,532 | 838 | (286 | ) | ||||||||||||
| Total assets | $ | 51,748 | **** | $ | 47,237 | **** | $ | 51,462 | **** | $ | 50,430 | **** | $ | 39,846 | $ | 4,511 | **** | $ | 11,902 | **** |
| Core OID Amortization Schedule^(4)^ | 2021 | 2022 | 2023 | 2024 | 2025 & After | |||||||||||||||
| Remaining Core OID amortization expense | $ | 29 | $ | 45 | $ | 52 | $ | 60 | Avg = 52/yr |
All values are in US Dollars.
(1) Includes theimpact 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 $257 million for1Q21, $254 million for 4Q20, $234 million for 3Q20, $242 million for 2Q20 and $256 million for 1Q20. The receiving business segment records the allocation of corporate overhead expense within other operating expenses.
(3) Intercompany loan related to activity between Insurance and Corporate for liquidity purposes.
(4) Represents a non-GAAP financial measure. For more details refer to page 21.
| 1Q 2021 Preliminary Results | 14 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CREDIT RELATED INFORMATION | |
| --- |
($ in millions)
| CHANGE VS. | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Asset Quality - Consolidated (1) | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||
| Ending loan balance | 113,068 | $ | 118,526 | $ | 118,020 | $ | 118,226 | $ | 128,129 | $ | (5,458 | ) | $ | (15,061 | ) | |
| 30+ Accruing DPD | 1,122 | $ | 1,914 | $ | 1,840 | $ | 1,695 | $ | 2,416 | $ | (792 | ) | $ | (1,294 | ) | |
| 30+ Accruing DPD % | 0.99% | 1.61% | 1.56% | 1.43% | 1.89% | |||||||||||
| 60+ Accruing DPD | 244 | $ | 438 | $ | 366 | $ | 349 | $ | 489 | $ | (194 | ) | $ | (245 | ) | |
| 60+ Accruing DPD % | 0.22% | 0.37% | 0.31% | 0.30% | 0.38% | |||||||||||
| Non-performing loans (NPLs) | 1,439 | $ | 1,522 | $ | 1,493 | $ | 1,532 | $ | 1,396 | $ | (83 | ) | $ | 43 | ||
| Net charge-offs (NCOs) | 118 | $ | 198 | $ | 122 | $ | 178 | $ | 266 | $ | (80 | ) | $ | (148 | ) | |
| Net charge-off rate<br>(2) | 0.41% | 0.67% | 0.41% | 0.58% | 0.84% | |||||||||||
| Provision for loan losses | (13 | ) | $ | 102 | $ | 147 | $ | 287 | $ | 903 | $ | (115 | ) | $ | (916 | ) |
| Allowance for loan losses (ALLL) | 3,152 | $ | 3,283 | $ | 3,379 | $ | 3,354 | $ | 3,245 | $ | (131 | ) | $ | (93 | ) | |
| ALLL as % of Loans (3) (4) | 2.79% | 2.78% | 2.87% | 2.85% | 2.54% | |||||||||||
| ALLL as % of NPLs (3) | 219% | 216% | 226% | 219% | 232% | |||||||||||
| ALLL as % of NCOs (3) | 667% | 414% | 691% | 471% | 305% | |||||||||||
| US Auto Delinquencies - HFI Retail Contract ‘s | ||||||||||||||||
| 30+ Delinquent contract | 1,059 | $ | 1,834 | $ | 1,658 | $ | 1,599 | $ | 2,322 | $ | (775 | ) | $ | (1,263 | ) | |
| % of retail contract outstanding | 1.43% | 2.49% | 2.25% | 2.20% | 3.19% | |||||||||||
| 60+ Delinquent contract | 233 | $ | 428 | $ | 350 | $ | 341 | $ | 478 | |||||||
| % of retail contract outstanding | 0.32% | 0.58% | 0.47% | 0.47% | 0.66% | |||||||||||
| U.S. Auto Annualized Net Charge-Offs - HFI Retail Contract ‘s | ||||||||||||||||
| Net charge-offs | 97 | $ | 186 | $ | 117 | $ | 137 | $ | 262 | $ | (89 | ) | $ | (165 | ) | |
| % of avg. HFI assets (2) | 0.53% | 1.01% | 0.64% | 0.76% | 1.44% | |||||||||||
| U.S. Auto Annualized Net Charge-Offs - HFI Commercial Contract ‘s | ||||||||||||||||
| Net charge-offs | 0 | $ | 7 | $ | 4 | $ | 1 | $ | 2 | $ | (7 | ) | $ | (2 | ) | |
| % of avg. HFI assets (2) | -% | 0.12% | 0.07% | 0.02% | 0.03% |
All values are in US Dollars.
(1) Loans withinthis 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 andloans 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 loansheld-for-investment excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts.
(4) Excludes $173 million of fair value adjustment for loans in hedge accounting relationships in 1Q21, $225 million in 4Q20, $277 million in 3Q20,$334 million in 2Q20 and $370 million in 1Q20.
| 1Q 2021 Preliminary Results | 15 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CREDIT RELATED INFORMATION, CONTINUED | |
| --- |
($ in millions)
| Automotive Finance ^(1)^ | QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consumer | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||
| Allowance for loan losses | $ | 2,809 | $ | 2,902 | $ | 2,982 | $ | 2,963 | $ | 2,833 | $ | (93 | ) | $ | (24 | ) |
| Total consumer loans ^(2)^ | $ | 73,998 | $ | 73,668 | $ | 73,761 | $ | 72,712 | $ | 72,832 | $ | 330 | $ | 1,166 | ||
| Coverage ratio ^(3)^ | 3.80% | 3.95% | 4.06% | 4.09% | 3.91% | |||||||||||
| Commercial | ||||||||||||||||
| Allowance for loan losses | $ | 58 | $ | 84 | $ | 110 | $ | 121 | $ | 135 | $ | (26) | $ | (77) | ||
| Total commercial loans | $ | 19,208 | $ | 23,141 | $ | 21,854 | $ | 21,708 | $ | 31,390 | $ | (3,933) | $ | (12,182) | ||
| Coverage ratio | 0.30% | 0.36% | 0.51% | 0.56% | 0.43% | |||||||||||
| Mortgage ^(1)^ | ||||||||||||||||
| Consumer | ||||||||||||||||
| Mortgage Finance | ||||||||||||||||
| Allowance for loan losses | $ | 16 | $ | 21 | $ | 20 | $ | 21 | $ | 18 | $ | (5 | ) | $ | (2) | |
| Total consumer loans | $ | 12,445 | $ | 14,632 | $ | 15,168 | $ | 16,429 | $ | 15,949 | $ | (2,187 | ) | $ | (3,504) | |
| Coverage ratio | 0.13% | 0.15% | 0.13% | 0.13% | 0.11% | |||||||||||
| Mortgage - Legacy | ||||||||||||||||
| Allowance for loan losses | $ | 10 | $ | 12 | $ | 19 | $ | 21 | $ | 21 | $ | (2) | $ | (11) | ||
| Total consumer loans | $ | 458 | $ | 495 | $ | 904 | $ | 984 | $ | 1,061 | $ | (37) | $ | (603) | ||
| Coverage ratio | 2.19% | 2.40% | 2.09% | 2.08% | 1.99% | |||||||||||
| Total Mortgage | ||||||||||||||||
| Allowance for loan losses | $ | 26 | $ | 33 | $ | 39 | $ | 42 | $ | 39 | $ | (7 | ) | $ | (13 | ) |
| Total consumer loans | $ | 12,903 | $ | 15,127 | $ | 16,072 | $ | 17,413 | $ | 17,010 | $ | (2,224 | ) | $ | (4,107 | ) |
| Coverage ratio | 0.20% | 0.22% | 0.24% | 0.24% | 0.23% | |||||||||||
| Consumer Other ^(1)(4)^ | ||||||||||||||||
| Allowance for loan losses | $ | 69 | $ | 73 | $ | 67 | $ | 49 | $ | 45 | $ | (4 | ) | $ | 24 | |
| Total consumer loans | $ | 482 | $ | 399 | $ | 319 | $ | 232 | $ | 214 | $ | 83 | $ | 268 | ||
| Coverage ratio | 14.33% | 18.38% | 20.93% | 21.06% | 21.23% | |||||||||||
| Corporate Finance ^(1)^ | ||||||||||||||||
| Allowance for loan losses | $ | 187 | $ | 189 | $ | 180 | $ | 178 | $ | 191 | $ | (2 | ) | $ | (4) | |
| Total commercial loans | $ | 6,285 | $ | 6,006 | $ | 5,883 | $ | 6,031 | $ | 6,549 | $ | 279 | $ | (264) | ||
| Coverage ratio | 2.98% | 3.14% | 3.05% | 2.95% | 2.92% | |||||||||||
| Corporate and Other ^(1)^ | ||||||||||||||||
| Allowance for loan losses | $ | 3 | $ | 2 | $ | 1 | $ | 1 | $ | 2 | $ | 1 | $ | 1 | ||
| Total commercial loans | $ | 192 | $ | 185 | $ | 131 | $ | 130 | $ | 134 | $ | 7 | $ | 58 | ||
| Coverage ratio | 1.36% | 1.36% | 1.13% | 1.13% | 1.36% |
(1) ALLL coverageratios 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 costson 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 cumulativeprincipal charge-offs. Excludes loans held at fair value.
(2) Includes $173 million of fair value adjustment for loans in hedge accounting relationshipsin 1Q21, $225 million in 4Q20, $277 million in 3Q20, $334 million in 2Q20 and $370 million in 1Q20.
(3) Excludes $173 million of fairvalue adjustment for loans in hedge accounting relationships in 1Q21, $225 million in 4Q20, $277 million in 3Q20, $334 million in 2Q20 and $370 million in 1Q20.
(4) Represents Health Credit Services (HCS) which Ally acquired in 4Q19 (now Ally Lending).
| 1Q 2021 Preliminary Results | 16 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CAPITAL | |
| --- |
($ in billions)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Capital | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Risk-weighted assets | $ | 138.8 | $ | 139.8 | $ | 137.6 | $ | 137.0 | $ | 146.1 | $ | (1.0 | ) | $ | (7.3 | ) | |||||
| Common Equity Tier 1 (CET1) capital ratio | 11.1% | 10.6% | 10.4% | 10.1% | 9.3% | ||||||||||||||||
| Tier 1 capital ratio | 12.8% | 12.4% | 12.1% | 11.9% | 10.9% | ||||||||||||||||
| Total capital ratio | 14.6% | 14.1% | 14.1% | 13.8% | 12.8% | ||||||||||||||||
| Tangible common equity / Tangible assets ^(1)(2)^ | 7.8% | 7.9% | 7.4% | 7.3% | 7.2% | ||||||||||||||||
| Tangible common equity / Risk-weighted assets ^(1)^ | 10.3% | 10.2% | 10.0% | 9.8% | 9.0% | ||||||||||||||||
| Shareholders’ equity | $ | 14.6 | $ | 14.7 | $ | 14.1 | $ | 13.8 | $ | 13.5 | $ | (0.1 | ) | $ | 1.1 | ||||||
| add: CECL phase-in adjustment | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | - | - | ||||||||||||||
| less: Certain AOCI items and other adjustments | (0.4 | ) | (1.0 | ) | (1.1 | ) | (1.2 | ) | (1.2 | ) | 0.6 | 0.8 | |||||||||
| Common Equity Tier 1 capital | $ | 15.4 | $ | 14.9 | $ | 14.3 | $ | 13.8 | $ | 13.5 | $ | 0.5 | $ | 1.9 | |||||||
| Common Equity Tier 1 capital | $ | 15.4 | $ | 14.9 | $ | 14.3 | $ | 13.8 | $ | 13.5 | $ | 0.5 | $ | 1.9 | |||||||
| 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 | ) | - | - | |||||||||
| Tier 1 capital | $ | 17.8 | $ | 17.3 | $ | 16.7 | $ | 16.2 | $ | 16.0 | $ | 0.5 | $ | 1.8 | |||||||
| Tier 1 capital | $ | 17.8 | $ | 17.3 | $ | 16.7 | $ | 16.2 | $ | 16.0 | $ | 0.5 | $ | 1.8 | |||||||
| add: Qualifying subordinated debt | 0.8 | 0.8 | 1.0 | 1.0 | 1.0 | - | (0.2 | ) | |||||||||||||
| add: Allowance for loan and lease losses includible in Tier 2 capital and other adjustments | 1.6 | 1.7 | 1.6 | 1.6 | 1.7 | (0.1 | ) | (0.1 | ) | ||||||||||||
| Total capital | $ | 20.2 | $ | 19.8 | $ | 19.3 | $ | 18.9 | $ | 18.6 | $ | 0.4 | $ | 1.6 | |||||||
| Total shareholders’ equity | $ | 14.6 | $ | 14.7 | $ | 14.1 | $ | 13.8 | $ | 13.5 | $ | (0.1 | ) | $ | 1.1 | ||||||
| Goodwill and intangible assets, net of deferred tax liabilities | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | - | - | |||||||||
| Tangible common equity ^(1)^ | $ | 14.2 | $ | 14.3 | $ | 13.7 | $ | 13.4 | $ | 13.1 | $ | (0.1 | ) | $ | 1.1 | ||||||
| Total assets | $ | 181.9 | $ | 182.2 | $ | 185.3 | $ | 184.1 | $ | 182.5 | $ | (0.3 | ) | $ | (0.6 | ) | |||||
| less: Goodwill and intangible assets, net of deferred tax liabilities | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | - | - | |||||||||
| Tangible assets ^(2)^ | $ | 181.5 | $ | 181.8 | $ | 184.9 | $ | 183.7 | $ | 182.1 | $ | (0.3 | ) | $ | (0.6 | ) |
Note: Numbers maynot foot due to rounding
(1) Represents a non-GAAP financial measure. Tangible Common Equity is a non-GAAP financial measure that is defined as commonstockholders’ 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 commonequity 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 inthe 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.
(2) Represents a non-GAAP financial measure. Ally defines tangible assets as total assets less goodwill and intangible assets,net of deferred tax liabilities.
In December 2018, the FRB and other U.S. banking agencies approved a final rule to address the impact of CECL on regulatorycapital by allowing BHCs and banks, including Ally, the option to phase in the day-one impact of CECL over a three-year period. In March 2020, the FRB and other U.S. banking agencies issued an interim final rule that became effective on March 31,2020, and provided an alternative option for banks to temporarily delay the impacts of CECL, relative to the incurred loss methodology for estimating the allowance for loan losses, on regulatory capital. A final rule that was largely unchanged fromthe March 2020 interim final rule was issued by the FRB and other U.S. banking agencies in August 2020, and became effective in September 2020. For regulatory capital purposes, these rules permitted us to delay recognizing the estimated impact ofCECL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021. Beginning on January 1, 2022, we will be required to phase in 25% of the previously deferred estimated capital impact of CECL, with anadditional 25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. Under these rules, firms that adopt CECL and elect the five-year transition will calculate the estimated impact of CECL onregulatory capital as the day-one impact of adoption plus 25% of the subsequent change in allowance during the two-year deferral period, which according to the final rule approximates the impact of CECL relative to an incurred loss model. We adoptedthis transition option during the first quarter of 2020, and plan to phase in the regulatory capital impacts of CECL based on this five-year transition period.
| 1Q 2021 Preliminary Results | 17 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>LIQUIDITY | |
| --- |
($ in billions)
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Available Liquidity | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||
| Liquid cash and cash equivalents ^(1)^ | $ | 15.2 | $ | 14.9 | $ | 19.3 | $ | 18.6 | $ | 5.7 | $ | 0.3 | $ | 9.5 |
| Highly liquid securities ^(2)^ | 28.0 | 24.8 | 23.5 | 23.4 | 24.0 | 3.2 | 4.0 | |||||||
| Current committed unused capacity | 0.4 | 0.6 | 1.4 | 1.6 | 0.4 | -0.2 | -0.0 | |||||||
| Total current available liquidity | $ | 43.6 | $ | 40.3 | $ | 44.2 | $ | 43.5 | $ | 30.1 | $ | 3.3 | $ | 13.5 |
| Unsecured Long-Term Debt Maturity Profile | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 & After | ||||||||
| Consolidated remaining maturities ^(3)^ | $ | 0.6 | $ | 1.1 | $ | 2.0 | $ | 1.5 | $ | 2.3 | $ | 2.5 |
(1) May include the restricted cash accumulation for retained notes maturing within the following 30 days and returned to Ally on thedistribution date
(2) Includes unencumbered UST, Agency debt, Agency MBS, and highly liquid Corporates
(3) Excludes retail notes and trust preferred securities; as of 3/31/2021. Reflects notional value of outstanding bond. Excludes total GAAP OID and capitalizedtransaction costs.
| 1Q 2021 Preliminary Results | 18 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>NET INTEREST MARGIN AND DEPOSITS | |
| --- |
($ in millions)
| QUARTERLY TRENDS | CHANGE VS. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Balance Details | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | |||||||||
| Retail Auto Loans | $ | 73,500 | $ | 73,401 | $ | 72,999 | $ | 72,262 | $ | 72,550 | $ | 99 | $ | 950 | ||
| Auto Lease (net of dep) | 9,831 | 9,587 | 9,317 | 9,068 | 9,078 | 244 | 753 | |||||||||
| Commercial Auto | 21,341 | 22,418 | 21,265 | 26,106 | 30,472 | (1,077 | ) | (9,131 | ) | |||||||
| Corporate Finance | 6,338 | 6,203 | 6,188 | 6,580 | 6,088 | 135 | 250 | |||||||||
| Mortgage^(1)^ | 14,310 | 15,445 | 17,096 | 17,422 | 17,296 | (1,135 | ) | (2,986 | ) | |||||||
| Consumer Other^(2)^ | 444 | 366 | 285 | 221 | 225 | 78 | 219 | |||||||||
| Cash and Cash equivalents | 15,363 | 17,758 | 20,719 | 12,496 | 4,853 | (2,395 | ) | 10,510 | ||||||||
| Investment Securities and Other | 34,996 | 33,331 | 32,244 | 32,375 | 32,858 | 1,665 | 2,138 | |||||||||
| Total Earning Assets | $ | 176,123 | $ | 178,509 | $ | 180,113 | $ | 176,530 | $ | 173,420 | $ | (2,386) | **** | $ | 2,703 | **** |
| Interest Revenue | 1,929 | 1,947 | 1,970 | 1,926 | 2,103 | (18 | ) | (174 | ) | |||||||
| Unsecured Debt (ex. Core OID balance) ^(3)(6)^ | $ | 12,910 | $ | 12,735 | $ | 12,315 | $ | 11,627 | $ | 12,182 | $ | 175 | $ | 728 | ||
| Secured Debt | 3,793 | 5,289 | 6,154 | 8,122 | 9,193 | (1,496 | ) | (5,400 | ) | |||||||
| Deposits ^(4)^ | 137,718 | 135,642 | 132,964 | 127,014 | 121,217 | 2,076 | 16,501 | |||||||||
| Other Borrowings ^(5)^ | 6,307 | 9,462 | 14,427 | 16,567 | 17,302 | (3,155 | ) | (10,995 | ) | |||||||
| Total Funding Sources (ex. Core OID balance) ^(3)^ | $ | 160,728 | $ | 163,128 | $ | 165,860 | $ | 163,330 | $ | 159,894 | $ | (2,400 | ) | $ | 834 | **** |
| Interest Expense (ex. Core OID) ^(3)^ | 547 | 635 | 761 | 863 | 949 | (88 | ) | (402 | ) | |||||||
| Net Financing Revenue (ex. Core OID) ^(3)^ | $ | 1,382 | $ | 1,312 | $ | 1,209 | $ | 1,063 | $ | 1,154 | $ | 70 | **** | $ | 228 | **** |
| Net Interest Margin (yield details) | ||||||||||||||||
| Retail Auto Loan | 6.66% | 6.57% | 6.56% | 6.48% | 6.54% | 0.09% | 0.12% | |||||||||
| Retail Auto Loan (excl. hedge impacts) | 6.90% | 6.83% | 6.83% | 6.77% | 6.66% | 0.07% | 0.24% | |||||||||
| Auto Lease (net of dep) | 8.57% | 7.82% | 7.89% | 4.10% | 5.22% | 0.75% | 3.35% | |||||||||
| Commercial Auto | 3.49% | 3.34% | 3.30% | 3.55% | 4.11% | 0.15% | (0.62)% | |||||||||
| Corporate Finance | 5.14% | 5.69% | 5.40% | 5.64% | 6.27% | (0.55)% | (1.13)% | |||||||||
| Mortgage | 2.74% | 2.74% | 3.00% | 3.15% | 3.45% | -% | (0.71)% | |||||||||
| Consumer Other | 14.95% | 16.68% | 17.77% | 14.09% | 13.52% | (1.73)% | 1.43% | |||||||||
| Cash and Cash Equivalents | 0.10% | 0.10% | 0.11% | 0.12% | 1.16% | -% | (1.06)% | |||||||||
| Investment Securities and Other | 1.55% | 1.70% | 2.14% | 2.47% | 2.79% | (0.15)% | (1.24)% | |||||||||
| Total Earning Assets | **** | 4.44% | **** | 4.34% | **** | 4.35% | **** | 4.39% | **** | 4.88% | **** | 0.10% | **** | **** | (0.44)% | **** |
| Unsecured Debt (ex. Core OID & Core OID balance)<br>^(2)(5)^ | 5.42% | 5.45% | 5.74% | 6.11% | 6.32% | (0.03)% | (0.90)% | |||||||||
| Secured Debt | 3.35% | 3.07% | 2.94% | 2.64% | 2.82% | 0.28% | 0.53% | |||||||||
| Deposits ^(3)^ | 0.90% | 1.08% | 1.35% | 1.72% | 1.97% | (0.18)% | (1.07)% | |||||||||
| Other Borrowings^(4)^ | 2.47% | 2.18% | 2.36% | 2.25% | 2.34% | 0.29% | 0.13% | |||||||||
| Total Funding Sources (ex. Core OID & Core OID balance) ^(2)^ | **** | 1.38% | **** | 1.55% | **** | 1.82% | **** | 2.13% | **** | 2.39% | **** | (0.17)% | **** | **** | (1.01)% | **** |
| NIM (as reported) | **** | 3.16% | **** | 2.90% | **** | 2.65% | **** | 2.40% | **** | 2.66% | **** | 0.26% | **** | **** | 0.50% | **** |
| NIM (ex. Core OID & Core OID balance) ^(2)^ | **** | 3.18% | **** | 2.92% | **** | 2.67% | **** | 2.42% | **** | 2.68% | **** | 0.26% | **** | **** | 0.50% | **** |
| Ally Bank Deposits | ||||||||||||||||
| Key Deposit Statistics | ||||||||||||||||
| Average retail CD maturity (months) | 20.0 | 19.7 | 19.6 | 19.6 | 19.9 | 0.3 | 0.1 | |||||||||
| Average retail deposit rate | 0.81% | 0.97% | 1.26% | 1.64% | 1.88% | |||||||||||
| End of Period Deposit Levels | ||||||||||||||||
| Retail | $ | 128,370 | $ | 124,357 | $ | 120,789 | $ | 115,813 | $ | 106,068 | $ | 4,013 | $ | 22,301 | ||
| Brokered & other | $ | 11,215 | $ | 12,680 | $ | 14,149 | $ | 15,223 | $ | 16,256 | $ | (1,465 | ) | $ | (5,041 | ) |
| Total deposits | $ | 139,585 | $ | 137,036 | $ | 134,938 | $ | 131,036 | $ | 122,324 | $ | 2,549 | **** | $ | 17,262 | **** |
| Deposit Mix | ||||||||||||||||
| Retail CD | 30% | 33% | 34% | 36% | 38% | |||||||||||
| MMA/OSA/Checking | 62% | 58% | 56% | 53% | 49% | |||||||||||
| Brokered^(3)^ | 8% | 9% | 10% | 11% | 13% |
(1) ‘Mortgageincludes held-for-investment (HFI) loans from the Mortgage Finance segment and the HFI legacy mortgage portfolio in run-off atthe Corporate and Other segment.
(2) Consumer Other’ consists of unsecured consumer lending from point-of-sale financing.
(3) Represents a non-GAAP financial measure.Excludes Core OID from interest expense and Core OID balance from Unsecured Debt.
(4) Includes retail, brokered, and other deposits. Brokered includes sweepdeposits. Other includes mortgage escrow and other deposits.
(5) Includes Demand Notes (terminated on 3/1/21), FHLB Borrowings and Repurchase Agreements.
(6) Includes trust preferred securities.
| 1Q 2021 Preliminary Results | 19 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ALLY FINANCIAL INC.<br><br><br>ALLY BANK CONSUMER MORTGAGE HFI PORTFOLIOS (PERIOD-END) | ||||||||||
| --- | ||||||||||
| ($ in billions) | QUARTERLY TRENDS | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Mortgage Finance HFI Portfolio | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | |||||
| Loan Value | ||||||||||
| Gross carry value | $ | 12.4 | $ | 14.6 | $ | 15.2 | $ | 16.4 | $ | 15.9 |
| Net carry value | $ | 12.4 | $ | 14.6 | $ | 15.1 | $ | 16.4 | $ | 15.9 |
| Estimated Pool Characteristics | ||||||||||
| % Second lien | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | |||||
| % Interest only | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | |||||
| % 30+ Day delinquent^(1)(2)^ | 0.8% | 0.8% | 1.3% | 0.6% | 0.5% | |||||
| % Low/No documentation | 0.2% | 0.2% | 0.2% | 0.2% | 0.2% | |||||
| % Non-primary residence | 4.9% | 4.8% | 4.7% | 4.6% | 4.5% | |||||
| Refreshed FICO^(3)^ | 775 | 776 | 776 | 774 | 772 | |||||
| Wtd. Avg. LTV/CLTV ^(4)^ | 57.5% | 60.1% | 60.3% | 60.4% | 60.0% | |||||
| Corporate Other Legacy Mortgage HFI Portfolio | ||||||||||
| Loan Value | ||||||||||
| Gross carry value | $ | 0.5 | $ | 0.5 | $ | 0.9 | $ | 1.0 | $ | 1.1 |
| Net carry value | $ | 0.4 | $ | 0.5 | $ | 0.9 | $ | 1.0 | $ | 1.0 |
| Estimated Pool Characteristics | ||||||||||
| % Second lien | 18.0% | 19.8% | 12.6% | 13.2% | 13.6% | |||||
| % Interest only | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | |||||
| % 30+ Day delinquent^(1)(2)^ | 7.0% | 7.1% | 4.7% | 4.0% | 5.1% | |||||
| % Low/No documentation | 22.5% | 22.2% | 24.0% | 23.4% | 23.1% | |||||
| % Non-primary residence | 3.7% | 3.6% | 7.1% | 6.9% | 7.1% | |||||
| Refreshed FICO^(3)^ | 731 | 733 | 733 | 730 | 730 | |||||
| Wtd. Avg. LTV/CLTV ^(4)^ | 62.2% | 62.8% | 59.2% | 62.1% | 63.0% |
1) MBA Delinquency buckets were used for First Lien products and OTS Delinquency buckets were used for all others
2) %30+Day Delinquency bucket excludes loans which are current but are in bankruptcy
3) Refreshed FICO includes the entire Bank HFI portfolio, inclusive of SBO. Previously, SBO loans had been excluded from our reporting
4) 1st lien only. Updated home values derived using a combination of appraisals, BPOs, AVMs and MSA level house price indices
| 1Q 2021 Preliminary Results | 20 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>EARNINGS PER SHARE RELATED INFORMATION | |
| --- |
($ in millions, shares in thousands)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Per Share Data | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| GAAP net income (loss) attributable to common shareholders | $ | 796 | **** | $ | 687 | **** | $ | 476 | **** | $ | 241 | **** | $ | (319 | ) | $ | 109 | **** | $ | 1,115 | **** |
| Weighted-average common shares outstanding - basic ^(1)^ | 375,229 | 376,081 | 375,658 | 375,051 | 375,723 | (852 | ) | (494 | ) | ||||||||||||
| Weighted-average common shares outstanding - diluted ^(1)^ | 377,529 | 378,424 | 377,011 | 375,762 | 375,723 | (895 | ) | 1,806 | |||||||||||||
| Issued shares outstanding (period-end) | 371,805 | 374,674 | 373,857 | 373,837 | 373,155 | (2,870 | ) | (1,350 | ) | ||||||||||||
| Net income (loss) per share - basic ^(1)^ | $ | 2.12 | **** | $ | 1.83 | **** | $ | 1.27 | **** | $ | 0.64 | **** | $ | (0.85 | ) | $ | 0.29 | **** | $ | 2.97 | **** |
| Net income (loss) per share - diluted ^(1)^ | $ | 2.11 | **** | $ | 1.82 | **** | $ | 1.26 | **** | $ | 0.64 | **** | $ | (0.85 | ) | $ | 0.29 | **** | $ | 2.96 | **** |
| Adjusted Earnings per Share (“Adjusted EPS”) | |||||||||||||||||||||
| Numerator | |||||||||||||||||||||
| GAAP net income (loss) attributable to common shareholders | $ | 796 | **** | $ | 687 | **** | $ | 476 | **** | $ | 241 | **** | $ | (319 | ) | $ | 109 | **** | $ | 1,115 | **** |
| Discontinued operations, net of tax | - | - | - | 1 | - | - | - | ||||||||||||||
| Core OID | 10 | 9 | 9 | 9 | 8 | 0 | 1 | ||||||||||||||
| Change in the fair value of equity securities ^(2)^ | (17 | ) | (111 | ) | (13 | ) | (90 | ) | 185 | 95 | (202 | ) | |||||||||
| Core OID & change in the fair value of equity securities tax (tax rate 21%) | 1 | 21 | 1 | 17 | (41 | ) | (20 | ) | 42 | ||||||||||||
| Repositioning and other ^(3)^ | - | - | - | 50 | - | - | - | ||||||||||||||
| Core net income attributable to common shareholders ^(4)^ | $ | 790 | **** | $ | 606 | **** | $ | 473 | **** | $ | 228 | **** | $ | (166 | ) | $ | 184 | **** | $ | 956 | **** |
| Denominator | |||||||||||||||||||||
| Weighted-average common shares outstanding - diluted ^(1)^ | **** | 377,529 | **** | **** | 378,424 | **** | **** | 377,011 | **** | **** | 375,762 | **** | **** | 375,723 | **** | **** | (895 | ) | **** | 1,806 | **** |
| Adjusted EPS ^(5)^ | $ | 2.09 | **** | $ | 1.60 | **** | $ | 1.25 | **** | $ | 0.61 | **** | $ | (0.44 | ) | $ | 0.49 | **** | $ | 2.54 | **** |
| Memo | |||||||||||||||||||||
| Original Issue Discount Amortization Expense | |||||||||||||||||||||
| Core original issue discount (Core OID) amortization expense ^(6)^ | $ | 10 | $ | 9 | $ | 9 | $ | 9 | $ | 8 | $ | 0 | $ | 1 | |||||||
| Other OID | 3 | 3 | 3 | 4 | 3 | - | - | ||||||||||||||
| GAAP original issue discount amortization expense | $ | 12 | $ | 13 | $ | 12 | $ | 12 | $ | 11 | $ | - | $ | 1 | |||||||
| Outstanding Original Issue Discount Balance | |||||||||||||||||||||
| Core outstanding original issue discount balance (Core OID balance) ^(7)^ | $ | (1,018 | ) | $ | (1,027 | ) | $ | (1,037 | ) | $ | (1,046 | ) | $ | (1,055 | ) | $ | 10 | **** | $ | 37 | **** |
| Other outstanding OID balance | (34 | ) | (37 | ) | (48 | ) | (46 | ) | (34 | ) | 3 | - | |||||||||
| GAAP outstanding original issue discount balance | $ | (1,052 | ) | $ | (1,064 | ) | $ | (1,084 | ) | $ | (1,092 | ) | $ | (1,089 | ) | $ | 12 | **** | $ | 37 | **** |
| Adjusted Other Revenue | |||||||||||||||||||||
| GAAP Other Revenue | $ | 565 | **** | $ | 678 | **** | $ | 484 | **** | $ | 555 | **** | $ | 266 | **** | $ | (113 | ) | $ | 299 | **** |
| Change in the fair value of equity securities ^(2)^ | (17 | ) | (111 | ) | (13 | ) | (90 | ) | 185 | 95 | (202 | ) | |||||||||
| Adjusted Other Revenue | $ | 548 | **** | $ | 567 | **** | $ | 471 | **** | $ | 465 | **** | $ | 451 | **** | $ | (18 | ) | $ | 97 | **** |
| Net Financing Revenue (ex. Core OID) | |||||||||||||||||||||
| GAAP net financing revenue | $ | 1,372 | **** | $ | 1,303 | **** | $ | 1,200 | **** | $ | 1,054 | **** | $ | 1,146 | **** | $ | 69 | **** | $ | 226 | **** |
| Core OID | 10 | 9 | 9 | 9 | 8 | 0 | 1 | ||||||||||||||
| Net Financing Revenue (ex. Core OID) | $ | 1,382 | **** | $ | 1,312 | **** | $ | 1,209 | **** | $ | 1,063 | **** | $ | 1,154 | **** | $ | 69 | **** | $ | 227 | **** |
| Adjusted Noninterest Expense | |||||||||||||||||||||
| GAAP Noninterest expense | $ | 943 | **** | $ | 1,023 | **** | $ | 905 | **** | $ | 985 | **** | $ | 920 | **** | $ | (80 | ) | $ | 23 | **** |
| Repositioning and other ^(3)^ | - | - | - | (50 | ) | - | - | - | |||||||||||||
| Adjusted Noninterest Expense | $ | 943 | **** | $ | 1,023 | **** | $ | 905 | **** | $ | 935 | **** | $ | 920 | **** | $ | (80 | ) | $ | 23 | **** |
(1) Due toantidilutive effect of the net loss from pre-tax loss from continuing operations attributable to common shareholders for the first quarter 2020, basic weighted average common shares outstanding were used tocalculate diluted earnings per share
(2) Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fairvalue 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 suchadjustments were recognized through other comprehensive income, a component of equity.
(3) Repositioning and other includes a $50 million Goodwillimpairment at Ally Invest in 2Q 20
(4) Core net income attributable to common shareholders is a non-GAAP financialmeasure 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 abilityto 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,repositioning and other which is primarily related to the extinguishment of high cost legacy debt, strategic activities and significant one-time items, significant discrete tax items and tax-effected changes in equity investments measured at fair value, as applicable for respective periods
(5) Adjustedearnings 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 otherwisedoes 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 ofAdjusted 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 otherdiscontinued operations in the past have significantly impacted GAAP EPS, (2) adds back the tax-effected non-cash Core OID, (3) adjusts for tax-effected repositioning and other which are primarily related to the extinguishment of high cost legacy debt, strategic activities and significant other one-time items, (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 periodsprior to 1/1/18 in which such adjustments were recognized through other comprehensive income, a component of equity, and (5) excludes significant discrete tax items that do not relate to the operating performance of the core businesses, andadjusts for preferred stock capital actions (e.g., Series A and Series G) that have been taken by the company to normalize its capital structure, as applicable for respective periods.
(6) Core original issue discount (Core OID) amortization expense is a non-GAAP financial measure for OID, and is believed bymanagement to help the reader better understand the activity removed from: Core pre-tax income (loss), Core net income (loss) attributable to common shareholders, Adjusted EPS, Core ROTCE, Adjusted efficiencyratio, Adjusted total net revenue, and Net financing revenue (excluding Core OID). Core OID is primarily related to bond exchange OID which excludes international operations and future issuances.
(7) Core outstanding original issue discount balance (Core OID balance) is a non-GAAP financial measure for outstanding OID,and is believed by management to help the reader better understand the balance removed from Core ROTCE and Adjusted TBVPS. Core OID balance is primarily related to bond exchange OID which excludes international operations and future issuances.
| 1Q 2021 Preliminary Results | 21 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>ADJUSTED TANGIBLE BOOK PER SHARE RELATED INFORMATION | |
| --- |
($ in billions, shares in thousands)
| QUARTERLY TRENDS | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Adjusted Tangible Book Value Per Share (“Adjusted TBVPS”)Information | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Numerator | |||||||||||||||||||||
| GAAP common shareholder’s equity | $ | 14.6 | **** | $ | 14.7 | **** | $ | 14.1 | **** | $ | 13.8 | **** | $ | 13.5 | **** | $ | (0.1 | ) | $ | 1.1 | **** |
| Goodwill and identifiable intangibles, net of DTLs | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | - | 0.1 | |||||||||
| Tangible common equity | 14.2 | 14.3 | 13.7 | 13.4 | 13.1 | (0.1 | ) | 1.2 | |||||||||||||
| Tax-effected Core OID balance (21% tax rate) | (0.8 | ) | (0.8 | ) | (0.8 | ) | (0.8 | ) | (0.8 | ) | - | - | |||||||||
| Adjusted tangible book value ^(1)^ | $ | 13.4 | **** | $ | 13.5 | **** | $ | 12.9 | **** | $ | 12.6 | **** | $ | 12.2 | **** | $ | (0.1 | ) | $ | 1.2 | **** |
| Denominator | |||||||||||||||||||||
| Issued shares outstanding (period-end, thousands) | **** | 371,805 | **** | **** | 374,674 | **** | **** | 373,857 | **** | **** | 373,837 | **** | **** | 373,155 | **** | **** | (2,870 | ) | **** | (1,350 | ) |
| GAAP common shareholder’s equity per share | $ | 39.3 | **** | $ | 39.2 | **** | $ | 37.8 | **** | $ | 37.0 | **** | $ | 36.2 | **** | $ | 0.1 | **** | $ | 3.1 | **** |
| Goodwill and identifiable intangibles, net of DTLs per share | (1.0 | ) | (1.0 | ) | (1.0 | ) | (1.0 | ) | (1.2 | ) | - | 0.2 | |||||||||
| Tangible common equity per share | 38.3 | 38.2 | 36.7 | 35.9 | 35.0 | 0.1 | 3.3 | ||||||||||||||
| Tax-effected Core OID balance (21% tax rate) per<br>share | (2.2 | ) | (2.2 | ) | (2.2 | ) | (2.2 | ) | (2.2 | ) | - | 0.1 | |||||||||
| Adjusted tangible book value per share^(1)^ | $ | 36.2 | **** | $ | 36.1 | **** | $ | 34.6 | **** | $ | 33.7 | **** | $ | 32.8 | **** | $ | 0.1 | **** | $ | 3.4 | **** |
(1) Adjustedtangible 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 throughthe 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 equityfor (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 areredeemed/tendered and (3) Series G discount which reduces tangible common equity as the company has normalized its capital structure, as applicable for respective periods.
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.
| 1Q 2021 Preliminary Results | 22 |
|---|---|
| ALLY FINANCIAL INC.<br><br><br>CORE ROTCE RELATED INFORMATION | |
| --- |
($ inmillions) unless noted otherwise
| CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Core Return on Tangible Common Equity (“Core ROTCE”) | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Numerator | ||||||||||||||||||||
| GAAP net income attributable to common shareholders | 796 | **** | $ | 687 | **** | $ | 476 | **** | $ | 241 | **** | $ | (319 | ) | $ | 109 | **** | $ | 1,115 | **** |
| Discontinued operations, net of tax | - | - | - | 1 | - | - | - | |||||||||||||
| Core OID | 10 | 9 | 9 | 9 | 8 | 0 | 1 | |||||||||||||
| Change in the fair value of equity securities (1) | (17 | ) | (111 | ) | (13 | ) | (90 | ) | 185 | 95 | (202 | ) | ||||||||
| Core OID & change in the fair value of equity securities tax (tax rate 21%) (1) | 1 | 21 | 1 | 17 | (41 | ) | (20 | ) | 42 | |||||||||||
| Repositioning and other (2) | - | - | - | 50 | - | - | - | |||||||||||||
| Core net income attributable to common shareholders (3) | 790 | **** | $ | 606 | **** | $ | 473 | **** | $ | 228 | **** | $ | (166 | ) | $ | 184 | **** | $ | 956 | **** |
| Denominator (average, billions) | ||||||||||||||||||||
| GAAP shareholder’s equity | 14.7 | **** | $ | 14.4 | **** | $ | 14.0 | **** | $ | 13.7 | **** | $ | 14.0 | **** | $ | 0.2 | **** | $ | 0.7 | **** |
| Goodwill & identifiable intangibles, net of deferred tax liabilities (“DTLs”) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | 0.0 | 0.1 | ||||||||
| Tangible common equity | 14.3 | $ | 14.0 | $ | 13.6 | $ | 13.3 | $ | 13.5 | $ | 0.3 | $ | 0.8 | |||||||
| Core OID balance | (1.0 | ) | (1.0 | ) | (1.0 | ) | (1.1 | ) | (1.1 | ) | - | - | ||||||||
| Net deferred tax asset (“DTA”) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | - | |||||||
| Normalized common equity (4) | 13.1 | **** | $ | 12.9 | **** | $ | 12.4 | **** | $ | 12.0 | **** | $ | 12.3 | **** | $ | 0.2 | **** | $ | 0.8 | **** |
| Core Return on Tangible Common Equity (5) | 24.1% | **** | **** | 18.7% | **** | **** | 15.2% | **** | **** | 7.6% | **** | **** | -5.4% | **** |
All values are in US Dollars.
(1) Change in fairvalue 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 tobe 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) Repositioning and other includes a $50 million Goodwill impairment at Ally Invest in 2Q 20
(3) Core net income attributable to common shareholders is a non-GAAP financial measure that serves as the numerator in thecalculations 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 incomeattributable to common shareholders adjusts GAAP net income attributable to common shareholders for discontinued operations net of tax, tax-effected Core OID expense, repositioning and other which is primarilyrelated to the extinguishment of high cost legacy debt, strategic activities and significant one-time items, significant discrete tax items and tax-effected changes inequity investments measured at fair value, as applicable for respective periods.
(4) Normalized common equity is a non-GAAP measure calculated using 2 periodaverage
(5) Core return on tangible common equity (Core ROTCE) is a non-GAAP financial measure that managementbelieves 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 balanceand 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 discontinuedoperations net of tax, repositioning and other which is primarily related to the extinguishment of high cost legacy debt, strategic activities and significant onetime items, tax-effected Core OID, fair valueadjustments (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 inwhich such adjustments were recognized through other comprehensive income, a component of equity, significant discrete tax items, and preferred stock capital actions, as applicable for respective periods |
|---|---|
| 2. | In the denominator, GAAP shareholder’s equity is adjusted for goodwill and identifiable intangibles net of DTL,Core OID balance, and net DTA. |
| --- | --- |
| 1Q 2021 Preliminary Results | 23 |
| --- | --- |
| ALLY FINANCIAL INC.<br><br><br>ADJUSTED EFFICIENCY RATIO RELATED INFORMATION | |
| --- |
($ in millions)
| QUARTERLY TREND | CHANGE VS. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Adjusted Efficiency Ratio Calculation | 1Q 21 | 4Q 20 | 3Q 20 | 2Q 20 | 1Q 20 | 4Q 20 | 1Q 20 | ||||||||||||||
| Numerator | |||||||||||||||||||||
| GAAP Noninterest expense | $ | 943 | $ | 1,023 | $ | 905 | $ | 985 | $ | 920 | $ | (80 | ) | $ | 23 | ||||||
| Insurance expense | (253 | ) | (246 | ) | (268 | ) | (322 | ) | (256 | ) | (7 | ) | 3 | ||||||||
| Repositioning and other ^(1)^ | - | - | - | (50 | ) | - | - | - | |||||||||||||
| Adjusted noninterest expense for the efficiency ratio | $ | 690 | **** | $ | 777 | **** | $ | 637 | **** | $ | 613 | **** | $ | 664 | **** | $ | (87 | ) | $ | 26 | **** |
| Denominator | |||||||||||||||||||||
| Total net revenue | $ | 1,937 | $ | 1,981 | $ | 1,684 | $ | 1,609 | $ | 1,412 | $ | (44 | ) | $ | 525 | ||||||
| Core OID | 10 | 9 | 9 | 9 | 8 | - | 1 | ||||||||||||||
| Insurance revenue | (394 | ) | (429 | ) | (346 | ) | (450 | ) | (151 | ) | 35 | (243 | ) | ||||||||
| Adjusted net revenue for the efficiency ratio | $ | 1,553 | **** | $ | 1,561 | **** | $ | 1,347 | **** | $ | 1,168 | **** | $ | 1,269 | **** | $ | (9 | ) | $ | 283 | **** |
| Adjusted Efficiency Ratio ^(2)^ | **** | 44.4% | **** | **** | 49.8% | **** | **** | 47.3% | **** | **** | 52.5% | **** | **** | 52.3% | **** |
(1) Repositioningand other includes a $50 million Goodwill impairment at Ally Invest in 2Q 20
(2) Adjusted efficiency ratio is anon-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 efficiencyratio, total noninterest expense is adjusted for Insurance segment expense, Rep and warrant expense, and repositioning and other which is primarily related to the extinguishment of high cost legacy debt, strategic activities and significant one-time items, as applicable for respective periods. 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 whichmanagement uses as a primary measure of underwriting profitability for the Insurance business.
| 1Q 2021 Preliminary Results | 24 |
|---|