Ally Financial Inc. Auto Securitization - Corporate Overview

Transcription

1 Ally Financial Inc. Auto Securitization - Corporate Overview 3Q 2015 Contact Ally Investor Relations at (866) or investor.relations@ally.com

2 Forward-Looking Statements and Additional Information The following should be read in conjunction with the financial statements, notes and other information contained in the Company s 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 data available at the time of the presentation In the presentation that follows and related comments by Ally Financial Inc. ( Ally ) management, the use of the words expect, anticipate, estimate, forecast, initiative, objective, plan, goal, project, outlook, priorities, target, explore, positions, intend, evaluate, pursue, seek, may, would, could, should, believe, potential, continue, or the negative of these words, or similar expressions is intended to identify forward-looking statements. All statements herein and in related management comments, other than statements of historical fact, including without limitation, statements about future events and financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and Ally s actual results may differ materially due to numerous important factors that are described in the most recent reports on SEC Forms 10-K and 10-Q for Ally, each of which may be revised or supplemented in subsequent reports filed with the SEC. Such factors include, among others, the following: maintaining the mutually beneficial relationship between Ally and General Motors, and Ally and Chrysler and our ability to further diversify our business; our ability to maintain relationships with automotive dealers; the significant regulation and restrictions that we are subject to as a bank holding company and financial holding company; the potential for deterioration in the residual value of off-lease vehicles; disruptions in the market in which we fund our operations, with resulting negative impact on our liquidity; changes in our accounting assumptions that may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in our credit ratings; changes in economic conditions, currency exchange rates or political stability in the markets in which we operate; and changes in the existing or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations (including as a result of the Dodd-Frank Act and Basel III). Investors are cautioned not to place undue reliance on forward-looking statements. Ally undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law. Reconciliation of non-gaap financial measures included within this presentation are provided in this presentation. Use of the term loans describes products associated with direct and indirect lending activities of Ally s operations. The specific products include retail installment sales contracts, lines of credit, leases or other financing products. The term originate refers to Ally s purchase, acquisition or direct origination of various loan products. 2

3 Ally Overview Differentiated U.S. Auto Finance Franchise One of the largest non-captive finance providers Premium service model focused on dealer relationships Over 17,000 dealer relationships $113 billion of auto earning assets 3Q2015 originations of $11.1 billion 3Q15 Growth channel originations up 46% YoY A Leading U.S. Direct Bank Franchise Continued momentum of stable deposit growth Growing customer base $63.7 billion of deposits Over 1 million primary customers Retail deposit balances up 15% YoY Strong and Stable Financial Profile Streamlined operations and balance sheet Strong capital and liquidity 0.61% loss rate 9.6% fully phased-in Basel III Common Equity Tier 1 ratio ~$14.8 billion of available liquidity Improving Profitability Liability management and deposit growth driving improved funding costs Rationalizing expense base 3 Cost of funds down 18 bps YoY 3Q2015 Efficiency Ratio of 44% Core ROTCE in 3Q2015 of 9.2%* Note: All metrics as of 3Q15 * Represents a non-gaap financial measure. See slide 4 for additional details.

4 Third Quarter Financial Results Increase/(Decrease) vs. ($ millions except per share data) 3Q 15 2Q 15 3Q 14 2Q 15 3Q 14 Net financing revenue (1) $ 981 $ 927 $ 936 $ 55 $ 46 Total other revenue (1)(2) (36) (43) Provision for loan losses Controllable expenses (2) (20) Other noninterest expenses (2) (50) (50) Core pre-tax income, ex. repositioning (3) $ 431 $ 435 $ 467 $ (4) $ (36) Net income $ 268 $ 182 $ 423 $ 86 $ (155) GAAP EPS (diluted) $ 0.47 $ (2.22) $ 0.74 $ 2.69 $ (0.27) Discontinued operations, net of tax 0.01 (0.03) (0.27) OID expense, net of tax (0.01) (0.05) Capital actions (Series A and G) (2.47) - Repositioning / other (4) (0.21) 0.00 Adjusted EPS $ 0.51 $ 0.46 $ 0.53 $ 0.04 $ (0.03) Core ROTCE (5) 9.2% 8.2% 9.1% Adjusted Efficiency Ratio (5) 44% 46% 49% Effective Tax Rate 34.5% 36.0% 30.3% (1) Excludes OID. Total other revenue excludes accelerated OID expense of $7 million in 2Q15 associated with debt redemptions (2) Excludes repositioning items. See slide 9 for details (3) As presented excludes the impact of repositioning items, OID amortization expense, income tax expense and discontinued operations. See slide 9 for details (4) Repositioning items in 2Q15 are primarily related to the extinguishment of high-cost legacy debt (5) Represents a non-gaap financial measure. See slide 9 for details 4

5 Auto Finance Key Metrics Consumer Originations Origination Mix ($ billions; % of $ originations) $11.8 $10.9 $10.8 $ % $9.8 20% $9.0 32% 32% 16% 17% 22% 28% 18% 20% 24% 24% 63% 63% 60% 52% 45% 45% GM Chrysler Growth (% of $ originations) 28% 27% 30% 36% 37% 35% 29% 26% 27% 17% 9% 9% 12% 12% 8% 8% 8% 10% 27% 24% 30% 31% 36% 37% 8% 15% 5% 5% 6% 6% GM Subvented New Standard New Growth Lease Used Consumer Assets Commercial Assets (EOP $ billions) $79.2 $81.3 $81.3 $82.1 $83.7 $85.7 $18.8 $19.3 $19.5 $19.0 $17.9 $17.3 ($ billions) $32.9 $31.4 $33.2 $32.4 $32.5 $31.7 $58.1 $58.7 $58.0 $58.9 $62.1 $63.5 On Balance Sheet Retail Off Balance Sheet Retail Lease 5 Note: Asset balances reflect the average daily balance for the quarter

6 Funding Diversified funding strategy with opportunities to lower cost of funds Total Asset Breakdown 69% of total assets reside at Ally Bank Deposits represent 47% of Ally s funding ($ billions) $149.2 $151.8 $153.5 $156.5 $156.1 $2.6 billion of ABS transactions in 3Q, including a $1 billion full securitization 68% 69% 68% 68% 69% Whole loan sale of approximately $1 billion Minimal unsecured maturities in 3Q 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 Ally Bank Assets Non-Bank Assets Diversified Funding Profile Stable, consistent growth of retail deposits Ally Bank Deposit Levels ($ billions) $56.4 $57.8 $9.7 $9.9 $60.5 $61.6 $63.7 $9.9 $9.9 $10.2 $46.7 $48.0 $50.6 $51.8 $53.5 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 Ally Bank Retail Ally Bank Brokered Note: Numbers may not sum due to rounding 6

7 Asset Quality Consolidated Net Charge-Offs Provision Expense 344% 0.60% 0.68% 0.61% 0.61% ($ millions) Provision Expense 0.34% 0.39% Retail Auto $ 97 $ 112 $ 168 $ 158 $ 152 $ 200 Commercial Auto 2 (3) 7 (31) (20) 1 187% 144% 155% 244% 158% Mortgage (25) (7) (14) (5) 3 6 Corp/Other (11) - (6) (6) 5 4 Total $ 63 $ 102 $ 155 $ 116 $ 140 $ 211 ALLL as % of Annualized NCOs Annualized NCO Rate ALLL Balance ($M) $1,171 $1,113 $977 $933 $974 $1,018 Retail Auto Coverage Ratio 1.25% 1.18% 1.21% 1.24% 1.26% 1.27% Retail Auto Loan Bal (EOP) $ 58,084 $ 58,659 $ 56,535 $ 57,379 $ 60,717 $ 63,503 Note: Above loans are classified as held-for-investment and recorded at historical cost. U.S. Retail Auto Delinquencies U.S. Retail Auto Net Charge-Offs (30+ DPD) 2.02% $1, % $1, % $1, % $1, % $1, % $1, % $ % $ % $ % $ % $ % $156 Delinquent Contracts ($M) Delinquency Rate Net Charge-Offs ($M) Annualized NCO Rate Note: Includes accruing contracts only 7

8 Appendix

9 Non-GAAP Reconciliations ($ in millions) Core Pre-Tax Income Calculation 3Q 15 2Q 15 3Q 14 Net financing revenue (ex. OID) $ 981 $ 927 $ 936 Total other revenue (ex. OID) Total net revenue (ex. OID) 1,313 1,295 1,311 Provision for loan losses Controllable expenses Other noninterest expenses Core pre-tax income, ex. repositioning $ 431 $ 435 $ 467 Repositioning items (2) (154) - Core pre-tax income (loss) $ 429 $ 281 $ 467 Core OID amortization expense Income tax expense (benefit) Income (loss) from discontinued operations (5) Net income (loss) $ 268 $ 182 $ 423 Core ROTCE Calculation Pre-tax income (loss) from continuing operations $ 417 $ 263 $ 420 add: Core original issue discount expense Repositioning items Core pre-tax income $ 431 $ 435 $ 467 Normalized income tax expense at 34% Core net income Preferred dividends (Series A & G) Operating net income available to common shareholders $ 246 $ $ 241 Tangible common equity $ 13,606 $ 14,053 $ 13,752 less: Unamortized original issue discount 1,322 1,333 1,411 Net deferred tax asset 1,540 1,632 1,806 Normalized common equity $ 10,745 $ 11,087 $ 10,534 Core ROTCE 9.2% 8.2% 9.1% Adjusted Efficiency Ratio Calculation Total noninterest expense $ 674 $ 724 $ 742 less: Rep and warrant expense (3) (9) - Insurance expense Repositioning items Numerator $ 465 $ 462 $ 499 Total net revenue $ 1,302 $ 1,127 $ 1,264 add: Original issue discount Repositioning less: Insurance revenue Denominator $ 1,064 $ 1,013 $ 1,008 Adjusted Efficiency Ratio 44% 46% 49% 9