Ally Financial Reports Preliminary Fourth Quarter and Full Year 2010 Financial Results

 

  • Fourth consecutive quarter of profitability
  • Fourth quarter 2010 net income of $79 million and core pre-tax income of $533 million; Full year 2010 net income of $1.1 billion and core pre-tax income of $2.5 billion
     

NEW YORK, Feb. 1, 2011 -- Ally Financial Inc. (Ally) today reported net income of $79 million for the fourth quarter of 2010, compared to a net loss of $5.0 billion for the fourth quarter of 2009.  Core pre-tax income, which reflects income from continuing operations before taxes and original issue discount (OID) amortization expense from bond exchanges, totaled $533 million in the fourth quarter of 2010, compared to a core pre-tax loss of $3.5 billion in the comparable prior year period.  

For full-year 2010, Ally reported net income of $1.1 billion, compared to a net loss of $10.3 billion in 2009.  Core pre-tax income in 2010 totaled $2.5 billion, compared to a core pre-tax loss of $5.8 billion in the prior year.

The losses reported for the 2009 fourth quarter and full year were largely affected by losses related to legacy assets in the mortgage operations.  

"2010 was a transformational year for Ally as we successfully achieved our strategic objectives and restored financial performance with $2.5 billion of core pre-tax income for the year," commented Ally Chief Executive Officer Michael A. Carpenter.  "Our automotive finance business remained a leading provider of auto loans with U.S. consumer originations increasing 72 percent over last year.  We substantially reduced risk in the mortgage business and are focused on our conforming mortgage origination and servicing platform; and Ally Bank has demonstrated the strength of its customer value proposition with strong deposit growth and high retention rates.  These steps, along with our improved cost and capital structures and access to the capital markets, have significantly strengthened the company and will enable repayment of the U.S. Treasury's investment over time."

Income/(Loss) From Continuing Operations by Segment

($ in millions)

 

 

 

 

 

 

Increase/(Decrease)

vs.

 

 

4Q 10

3Q 10

4Q 09


 

3Q 10

4Q 09

 

North American Automotive Finance (1)

$589

$551

$343


 

$38

$246

 

International Automotive Finance

12

74

(145)


 

(62)

157

 

Insurance

164

114

85


 

50

79

 

  Global Automotive Services

$765

$739

$283


 

$26

$482

 

Mortgage Origination and Servicing

172

425

(180)


 

(253)

352

 

Legacy Portfolio and Other (2)

(49)

(271)

(3,171)


 

222

3,122

 

  Mortgage Operations

$123

$154

$(3,351)


 

$(31)

$3,474

 

Corporate and Other (ex. OID) (3)

(355)

(258)

(420)


 

(97)

65

 

Core pre-tax income (loss) (4)

$533

$635

$(3,488)


 

$(102)

$4,021

 

OID amortization expense

301

310

315


 

(9)

(14)

 

Income tax expense (benefit)

36

48

(597)


 

(12)

633

 

Income (loss) from discontinued operations (5)

(117)

(8)

(1,747)


 

(109)

1,630

 

Net income (loss)

$79

$269

$(4,953)


 

$(190)

$5,032

 

 
 
             


 

 
 

 

 

 

 

Increase/

 

 

FY 2010

FY 2009


 

(Decrease)

 

North American Automotive Finance (1)

$2,344

$1,624


 

$720

 

International Automotive Finance

228

(157)


 

385

 

Insurance

569

329


 

240

 

  Global Automotive Services

$3,141

$1,796


 

$1,345

 

Mortgage Origination and Servicing

917

39


 

878

 

Legacy Portfolio and Other (2)

(254)

(6,304)


 

6,050

 

  Mortgage Operations

$663

$(6,265)


 

6,928

 

Corporate and Other (ex. OID) (3)

(1,325)

(1,347)


 

22

 

Core pre-tax income (loss) (4)

$2,479

$(5,816)


 

8,295

 

OID amortization expense

1,300

1,143


 

157

 

Income tax expense

153

74


 

79

 

Income (loss) from discontinued operations (5)

49

(3,265)


 

3,314

 

Net income (loss)

$1,075

$(10,298)


 

$11,373

 
         


 

1. During the fourth quarter of 2010, the company made modifications to the funds transfer pricing allocations applicable to its North American Automotive Finance operation's commercial loan portfolio.  Amounts for prior periods have been reclassified to conform to the current management view.

2. The Legacy Portfolio and Other segment primarily consists of loans originated prior to Jan. 1, 2009, and includes non-core business activities including portfolios in run off.

3. Corporate and Other as presented includes the Commercial Finance Group, certain equity investments and Treasury activities, including the residual impact from the corporate funds transfer pricing and asset liability management activities.

4. Core pre-tax income (loss) is defined as income from continuing operations before taxes and bond exchange OID amortization expense.

5. The following businesses are classified as discontinued operations: the U.S. consumer property and casualty insurance business (sale completed 1Q10); the U.K. consumer property and casualty insurance business; retail automotive finance operations in Poland (sale completed 2Q10), Argentina (sale completed 3Q10) and Ecuador; automotive finance operations in Australia (sale of auto finance retail credit portfolio completed 2Q10), Russia and Venezuela; the full-service leasing businesses in Australia (sale completed 2Q10), Belgium (sale completed 2Q10), France (sale completed 2Q10), Italy (sale completed 4Q09), Mexico (sale completed 4Q09), the Netherlands (sale completed 4Q09), Poland (sale completed 2Q10) and the U.K. (sale completed 4Q10); mortgage operations in Continental Europe and the U.K. (sales completed 3Q10 and 4Q10); and the Commercial Services Division (North American based factoring business) of the Commercial Finance Group in Corporate and Other (sale completed 2Q10).


 
 
 


 

Highlights

  • Ranked No. 1 provider of new vehicle retail financing in the U.S. during 2010 (Source: AutoCount data from Experian Automotive).
  • Global consumer auto financing originations increased 68 percent during 2010 compared to 2009.
  • Global used consumer auto financing originations in 2010 increased 92 percent compared to 2009.
  • Ally's U.S. consumer penetration of the OEMs improved in 2010.
    • U.S. consumer penetration of GM was 38.2 percent during 2010 compared 28.2 percent in the prior year.
    • U.S. consumer penetration of Chrysler during 2010 was 45.4 percent compared to 8.9 percent in 2009.
  • Selected as recommended provider of finance and insurance products and services for Saab dealerships and as the preferred financing provider for Fiat vehicles in the U.S.
  • On Dec. 30, 2010, Ally Financial and the U.S. Treasury agreed to convert $5.5 billion of the $11.4 billion of mandatorily convertible preferred (MCP) securities issued by Ally and owned by the U.S. Treasury into common equity.
  • Deposits grew by $7.3 billion during 2010, which was supported by strong CD retention rates.  
  • Strengthened access to capital markets with nearly $36 billion of new funding transactions completed in 2010, compared to approximately $12 billion of funding transactions during 2009.
  • Cost reduction efforts were successful during 2010.
    • Exceeded expense reduction goal with $680 million of savings.
    • Sold 15 non-core operations.
  • Significant progress made in reducing mortgage risk during 2010.
    • Balance sheet has been streamlined and performance has stabilized.
    • Sold legacy mortgage assets totaling approximately $2.5 billion of unpaid principal balance in 2010, at a gain.
    • Reduced representation and warranty exposure through several settlements, including Fannie Mae and Freddie Mac.


 

Liquidity and Capital

Ally's consolidated cash and cash equivalents were $11.7 billion as of Dec. 31, 2010, compared to $12.6 billion at Sept. 30, 2010.  Included in the consolidated cash and cash equivalents balance are: $672 million at Residential Capital, LLC (ResCap), $3.1 billion at Ally Bank and $1.2 billion at the insurance businesses.  The decrease in cash and cash equivalents during the quarter was the result of growth in the company's loan and investment securities portfolios.

Ally's total equity at Dec. 31, 2010, was $20.5 billion, compared to $21.0 billion at Sept. 30, 2010.  The company's preliminary fourth quarter 2010 tier 1 capital ratio was 15.0 percent, compared to 15.4 percent in the prior quarter.  The decrease was due to quarterly results, net of dividends, and a slight increase in risk-weighted assets.

During 2010, Ally completed nearly $36 billion of new funding transactions, as it executed on its strategic objective of improving its access to the capital markets.  During the year, the company issued more than $8 billion of unsecured debt, raised more than $9 billion in the domestic asset-backed securities (ABS) market, completed $6 billion of international ABS transactions and entered into new revolving facilities with more than $12 billion of capacity.

U.S. Treasury MCP Securities Converted to Common Equity

On Dec. 30, 2010, Ally and the U.S. Treasury agreed to convert $5.5 billion of the $11.4 billion of MCP securities issued by Ally and owned by the U.S. Treasury into common equity.  This action represents a critical step toward full repayment of U.S. Treasury investments, as it conforms the company's capital structure to one more typical of a bank holding company.  It also removes GM's status as an affiliate of Ally Bank for the purposes of Sections 23A and 23B of the Federal Reserve Act, which imposes limitations on transactions between banks and affiliates.  The conversion reduces dividends by $500 million per year, assists with capital preservation and is expected to improve profitability with a lower cost of funds.

Deposits

The company continued to grow deposits during the quarter through its subsidiaries, Ally Bank and ResMor Trust.  Ally deposits increased in the fourth quarter to $39.0 billion, from $38.0 billion at Sept. 30, 2010.  Deposits continue to be an increasingly important component of Ally's strategic business plan and now comprise 29 percent of the company's total funding.  Retail deposits at Ally Bank were $21.9 billion at Dec. 31, 2010, compared to $20.5 billion at Sept. 30, 2010.  Retail deposits have grown 29 percent over the last year and now account for approximately 64 percent of Ally Bank's total deposit base.  Brokered deposits at Ally Bank totaled approximately $10.0 billion at quarter-end, which is relatively flat compared to the prior quarter end.  

Ally Bank

For purposes of quarterly financial reporting, Ally Bank's operating results are divided between the North American Automotive Finance and Mortgage Operations segments based on its underlying business activities.  During the fourth quarter of 2010, Ally Bank reported pre-tax income from continuing operations of $317 million, compared to a pre-tax loss from continuing operations of $1.5 billion in the corresponding prior year period.  Performance in the quarter was driven by continued strong automotive originations and improved cost of funds. The loss in the corresponding prior year period was due to a loss on the sale of mortgage assets to the parent company of $1.3 billion.  Total assets at Ally Bank were $70.3 billion at Dec. 31, 2010, compared to $66.2 billion at Sept. 30, 2010.  The growth in assets was due to the increase in automotive asset levels resulting from strong retail originations and increased wholesale funding.

Global Automotive Services

Global Automotive Services consists of Ally's auto-centric businesses, including: North American Automotive Finance, International Automotive Finance and Insurance.   Global Automotive Services reported fourth quarter 2010 pre-tax income from continuing operations of $765 million, compared to $283 million in the comparable prior year period.  

North American Automotive Finance, which includes results for the U.S. and Canada, reported pre-tax income from continuing operations of $589 million in the fourth quarter of 2010, compared to $343 million in the comparable prior year period.  Results were driven by a significantly lower loan loss provision due to improved credit quality, continued growth in originations and stable wholesale penetration.  Origination levels have been supported by automakers' incentive programs, the expanded features and benefits of the Ally Dealer Rewards program and access to a broader dealer network via DealerTrack.  

International Automotive Finance reported pre-tax income from continuing operations of $12 million in the fourth quarter of 2010, compared to a pre-tax loss of $145 million in the same period last year.  This improvement was driven by favorable loss performance and lower restructuring charges on wind-down operations.  The quarter was negatively impacted by $12 million of certain tax and legal provisions.   The company's international auto finance footprint currently consists of 15 countries, including the company's five core international markets: Germany, U.K., Brazil, Mexico and its joint venture in China.

Insurance, which focuses primarily on dealer-centric products, such as extended service contracts and dealer inventory insurance, reported pre-tax income from continuing operations of $164 million in the fourth quarter of 2010, compared to $85 million in the prior year period.  Results were driven by realized gains related to the investment portfolio and lower acquisition and underwriting expenses.

Automotive originations and penetration

Total consumer financing originations increased 56 percent during the fourth quarter of 2010 to $12.7 billion, compared to $8.2 billion in the prior year period.  Fourth quarter 2010 consumer auto originations were comprised of $9.9 billion of new originations, $1.4 billion of used originations and $1.4 billion of new leases, while fourth quarter 2009 consumer auto originations included $6.8 billion of new originations, $1.0 billion of used originations and approximately $300 million of new leases.  Growth in consumer financing originations was driven by higher industry sales and an increase in GM consumer penetration driven by year-end marketing programs.  The increase in used originations during the quarter reflects the company's view that this market continues to be a growth opportunity.  Leasing increased to 11.0 percent of total originations in the fourth quarter from 4.1 percent in the corresponding period last year, as Ally continues to grow this business under prudent underwriting principles.  

North American consumer financing originations in the fourth quarter of 2010 were $10.2 billion, which included $9.3 billion in the U.S.  Fourth quarter 2009 consumer financing originations in North America were $6.6 billion, which included approximately $5.9 billion in the U.S.

International consumer originations from continuing operations, which include a non-consolidated joint venture in China, were $2.5 billion during the fourth quarter of 2010, compared to $1.6 billion in the fourth quarter of 2009.  International consumer originations continued to be driven by the company's five key markets with strong growth in China, Brazil and Mexico during the quarter.  Consumer originations increased 100 percent in Brazil, 97 percent in China and 54 percent in Mexico compared to the fourth quarter of 2009.

Ally's average U.S. wholesale penetration for GM dealer stock was 82.1 percent in the fourth quarter of 2010, compared to 83.7 percent in the prior quarter and 87.0 percent in the fourth quarter of 2009.  U.S. consumer penetration for GM was 49.7 percent during the fourth quarter of 2010, compared to 34.2 percent in the prior quarter and 30.3 percent in the fourth quarter of 2009.  Ally continues to diversify its business as GM incentivized business accounted for 22 percent of Ally's overall consumer originations in 2010, compared to 45 percent for full year 2009.

Ally's average U.S. wholesale penetration for Chrysler dealer stock was 76.0 percent in the fourth quarter of 2010, compared to 76.2 percent in the third quarter of 2010 and 74.8 percent in the corresponding period last year.  Ally's U.S. consumer penetration for Chrysler during the fourth quarter of 2010 was 36.3 percent, compared to 49.4 percent in the prior quarter and 25.5 percent in the fourth quarter of 2009.  The sequential quarterly decline was due to a change in the mix of sales incentives with Chrysler.

Mortgage Operations

Ally's Mortgage Operations, which includes ResCap and the mortgage activities of Ally Bank and ResMor Trust, ranks as the fifth largest originator and the fifth largest servicer in the U.S. (Source: Inside Mortgage Finance, Nine Months 2010).  Mortgage Operations reported pre-tax income from continuing operations of $123 million during the fourth quarter of 2010, versus a pre-tax loss from continuing operations of $3.4 billion in the comparable prior year period.  

The company's Mortgage Operations business is now reported as two distinct segments: Origination and Servicing and Legacy Portfolio and Other.  The principal activities of the Origination and Servicing segment include originating, purchasing, selling, and securitizing conforming and government-insured residential mortgage loans in the U.S. and Canada; servicing residential mortgage loans for Ally and others; and providing collateralized lines of credit to other mortgage originators, which the company refers to as warehouse lending. In addition, the segment also originates high-quality prime jumbo mortgage loans in the U.S.  The company utilizes three primary channels for originating mortgages: wholesale lending, traditional retail lending and community financial institutions.  The Legacy Portfolio and Other segment primarily consists of loans originated prior to Jan. 1, 2009, and includes non-core business activities including portfolios in run off.

The Origination and Servicing segment reported fourth quarter 2010 pre-tax income from continuing operations of $172 million, compared to a pre-tax loss from continuing operations of $180 million during the fourth quarter 2009.  Results were driven by strong originations from refinancings, continued strong margins, higher net servicing revenue, lower provision for loan losses and lower non-interest expense.

Total mortgage loan production in the fourth quarter of 2010 was $23.8 billion, compared to $20.5 billion in the third quarter of 2010 and $18.1 billion in the fourth quarter of 2009.  The vast majority of fourth quarter 2010 production was driven by the origination of prime conforming loans.  Production increased compared to the prior quarter, as the refinance market remained strong during the quarter.  Approximately, 84 percent of the company's global mortgage loan production during the quarter was due to refinancings.

The Legacy Portfolio and Other segment of Mortgage Operations reported a pre-tax loss from continuing operations of $49 million, compared to a $3.2 billion pre-tax loss from continuing operations in the corresponding prior year period.  The results in the quarter were primarily driven by an improved gain on the sale of loans, significantly lower loan loss provision and lower representation and warranty expense compared to the fourth quarter of 2009.

Fannie Mae Settlement

ResCap and certain of its subsidiaries reached an agreement with Fannie Mae to resolve potential repurchase exposure for breaches of selling representations and warranties.  The agreement covers loans serviced by GMAC Mortgage on behalf of Fannie Mae prior to June 30, 2010, and all mortgage-backed securities that Fannie Mae purchased at various times prior to the settlement, including private label securities.  The settlement was for approximately $462 million and releases ResCap and its subsidiaries from liability related to originations for approximately $292 billion of original UPB ($84 billion of current UPB) on these loans.

Foreclosure Update

During the fourth quarter, Ally's indirect subsidiary, GMAC Mortgage, continued to make significant progress in its review of foreclosure cases where an affidavit may have been used that was subject to a procedural issue.  Of the approximately 25,000 potentially affected affidavits identified at the end of the third quarter, all but 2,548 have been remediated or, where necessary, re-executed.  As each of the files were addressed and deemed to be appropriate, the foreclosure process for those select cases continued to move forward.  Of the remaining population being reviewed and, where needed, remediated, there are 2,540 cases in three states where further guidance from the states on remediation efforts is required.  The company has not found any evidence of inappropriate foreclosures in its review process to date related to the affidavit matter. 

GMAC Mortgage continues to demonstrate a leadership position in preserving home ownership having executed more than twice as many loan modifications than foreclosures.  Among the large servicers, the company's conversion rate for HAMP trial modifications to HAMP permanent modifications is 73 percent, a significantly higher success rate than that of its nearest competitor (Source: U.S. Treasury December HAMP report).  Since 2008, GMAC Mortgage has completed more than 610,000 default workouts for borrowers, which comprises 22 percent of loans serviced during that time period. 

Corporate and Other

Corporate and Other reported a fourth quarter 2010 core pre-tax loss of $355 million, compared to a core pre-tax loss of $420 million in the fourth quarter of 2009.  Including OID, Corporate and Other reported a pre-tax loss from continuing operations of $656 million in the fourth quarter of 2010, compared to a pre-tax loss from continuing operations of $735 million in the comparable prior year period.  The improved results in the fourth quarter of 2010 were primarily due to a lower loss provision expense in the Commercial Finance Group's European operations and resort finance portfolio, which was sold in the third quarter of 2010.  The performance of Corporate and Other during the fourth quarter of 2010 was also driven by the net impacts of the corporate funds transfer pricing methodology and asset liability management activities and $301 million of OID amortization expense.  The net impact of the funds transfer pricing methodology represents the unallocated cost of maintaining the liquidity and investment portfolios and other unassigned funding costs and unassigned equity.  

About Ally Financial Inc.

Ally Financial Inc. (formerly GMAC Inc.) is one of the world's largest automotive financial services companies.  The company offers a full suite of automotive financing products and services in key markets around the world.  Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products.  With more than $172 billion in assets as of Dec. 31, 2010, Ally operates as a bank holding company.  For more information, visit the Ally media site at http://media.ally.com.

Forward-Looking Statements

In this earnings release and in 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 any of those words or similar expressions is intended to identify forward-looking statements. All statements herein and in related charts and 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 on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: our inability to repay our outstanding obligations to the U.S. Department of the Treasury, or to do so in a timely fashion and without disruption to our business; uncertainty related to Chrysler's and GM's recent exits from bankruptcy; securing low cost funding for Ally and Residential Capital, LLC ("ResCap") and maintaining the mutually beneficial relationship between Ally and GM, and Ally and Chrysler; our ability to maintain an appropriate level of debt and capital; the profitability and financial condition of GM and Chrysler; our ability to realize the anticipated benefits associated with our conversion to a bank holding company, and the increased regulation and restrictions that we are now subject to; continued challenges in the residential mortgage and capital markets; the potential for deterioration in the residual value of off-lease vehicles; the continuing negative impact on ResCap and our mortgage business generally due to the decline in the U.S. housing market; any impact resulting from delayed foreclosure sales or related matters; the potential for legal liability resulting from claims related to the sale of private-label mortgage-backed securities; changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate; disruptions in the market in which we fund Ally's and ResCap's 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 the credit ratings of ResCap, Ally, Chrysler or GM; 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 recently enacted financial regulatory reform bill).

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.

Contacts:

 

Gina Proia

 

646-781-2692

 

gina.proia@ally.com

 

 
 

Jim Olecki

 

212-884-7955

 

james.olecki@ally.com

 
 


 

Ally Financial Preliminary Unaudited Fourth Quarter 2010 Financial Highlights

($ millions)

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 

 

4Q


 

4Q


 

FY


 

FY

 

Summary Statement of Income

Note

2010


 

2009


 

2010


 

2009

 

Financing revenue and other interest income


 

 

 

 

 

 

 

 
 

Finance receivables and loans


 

 

 

 

 

 

 

 
 

Consumer


 

$1,109


 

$1,022


 

$4,505


 

$4,484

 

Commercial


 

502


 

440


 

1,862


 

1,699

 

Notes receivable from General Motors


 

53


 

68


 

188


 

212

 

Total finance receivables and loans


 

1,664


 

1,530


 

6,555


 

6,395

 

Loans held-for-sale


 

140


 

165


 

664


 

447

 

Interest on trading securities


 

3


 

13


 

15


 

132

 

Interest and dividends on available-for-sale investment securities


 

87


 

70


 

362


 

226

 

Interest bearing cash


 

16


 

12


 

70


 

99

 

Other interest income, net


 

1


 

29


 

1


 

86

 

Operating leases


 

751


 

1,224


 

3,780


 

5,715

 

Total financing revenue and other interest income


 

2,662


 

3,043


 

11,447


 

13,100

 

Interest expense


 

 

 

 

 

 

 

 
 

Interest on deposits


 

175


 

168


 

660


 

700

 

Interest on short-term borrowings


 

127


 

119


 

447


 

566

 

Interest on long-term debt


 

1,436


 

1,339


 

5,729


 

6,008

 

Total interest expense


 

1,738


 

1,626


 

6,836


 

7,274

 

Depreciation expense on operating lease assets


 

394


 

741


 

2,030


 

3,748

 

Net financing revenue


 

530


 

676


 

2,581


 

2,078

 

Other revenue


 

 

 

 

 

 

 

 
 

Servicing fees


 

390


 

373


 

1,563


 

1,549

 

Servicing asset valuation and hedge activities, net


 

(213)


 

(417)


 

(394)


 

(1,104)

 

Total servicing income, net


 

177


 

(44)


 

1,169


 

445

 

Insurance premiums and service revenue earned


 

450


 

476


 

1,865


 

1,977

 

Gain on mortgage and automotive loans, net


 

404


 

145


 

1,267


 

811

 

(Loss) gain on extinguishment of debt


 

-


 

(2)


 

(123)


 

665

 

Other gain on investments, net


 

150


 

52


 

505


 

166

 

Other income, net of losses


 

197


 

271


 

638


 

353

 

Total other revenue


 

1,378


 

898


 

5,321


 

4,417

 

Total net revenue


 

1,908


 

1,574


 

7,902


 

6,495

 

Provision for loan losses


 

71


 

3,063


 

442


 

5,604

 

Noninterest expense


 

 

 

 

 

 

 

 
 

Compensation and benefits expense


 

416


 

410


 

1,622


 

1,576

 

Insurance losses and loss adjustment expenses


 

212


 

242


 

876


 

1,042

 

Other operating expenses


 

977


 

1,662


 

3,783


 

5,232

 

Total noninterest expense


 

1,605


 

2,314


 

6,281


 

7,850

 

Income (loss) from continuing operations before income tax expense (benefit)


 

232


 

(3,803)


 

1,179


 

(6,959)

 

Income tax expense (benefit) from continuing operations


 

36


 

(597)


 

153


 

74

 

Net income (loss) from continuing operations


 

196


 

(3,206)


 

1,026


 

(7,033)

 

(Loss) income from discontinued operations, net of tax


 

(117)


 

(1,747)


 

49


 

(3,265)

 

Net income (loss)


 

$79


 

($4,953)


 

$1,075


 

($10,298)

 
                 


 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

Dec 31,


 

Dec 31,

 

Select Balance Sheet Data


 

 

 

 

 

2010


 

2009

 

Cash and cash equivalents


 

 

 

 

 

$11,670


 

$14,788

 

Loans held-for-sale


 

 

 

 

 

11,411


 

20,625

 

Finance receivables and loans, net

1


 

 

 

 

 

 

 
 

Consumer


 

 

 

 

 

63,017


 

42,849

 

Commercial


 

 

 

 

 

38,912


 

33,941

 

Notes receivable from General Motors


 

 

 

 

 

484


 

911

 

Investments in operating leases, net

2


 

 

 

 

9,128


 

15,995

 

Total assets


 

 

 

 

 

172,008


 

172,306

 

Deposit liabilities


 

 

 

 

 

39,048


 

31,756

 

Total debt

3


 

 

 

 

94,120


 

98,313

 

 

 

 

 

 

 

 

 

 
 
                 


 

 

 

 

 

 

 

 
 

 

 

Fourth Quarter


 

Twelve Months

 

Operating Statistics


 

2010


 

2009


 

2010


 

2009

 

Ally Financial's Worldwide Cost of Borrowing (incl. OID)

4

5.4%


 

5.5%


 

5.3%


 

6.1%

 

Ally Financial's Worldwide Cost of Borrowing (excl. OID)

4

4.3%


 

4.4%


 

4.3%


 

5.0%

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Tier 1 Capital


 

$22,189


 

$22,398


 

 

 

 
 

Tier 1 Common Capital


 

12,677


 

7,678


 

 

 

 
 

Total Risk-Based Capital


 

24,213


 

24,623


 

 

 

 
 

Tangible Common Equity

5

12,986


 

8,125


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Tangible Assets

6

$171,476


 

$171,772


 

 

 

 
 

Risk-Weighted Assets

7

$147,742


 

$158,314


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Tier 1 Capital Ratio


 

15.0%


 

14.1%


 

 

 

 
 

Tier 1 Common Capital Ratio


 

8.6%


 

4.8%


 

 

 

 
 

Total Risk-Based Capital Ratio


 

16.4%


 

15.6%


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Tangible Common Equity / Tangible Assets


 

7.6%


 

4.7%


 

 

 

 
 

Tangible Common Equity / Risk-Weighted Assets


 

8.8%


 

5.1%


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 
                 


 

(1) Finance receivables and loans are net of unearned income, unamortized premiums and discounts, and deferred fees and costs

(2) Net of accumulated depreciation

(3) Represents both secured and unsecured on-balance sheet debt such as commercial paper, medium-term notes and long-term debt

(4) Calculated by dividing total interest expense by total average interest bearing liabilities. Reported amounts represent the average cost of funds for continuing operations in each period.  The impact of historical financial statement restatements for discontinued operations are not reflected in prior period cost of funds.  Reported amounts in the Q4 2010 Form 10-Q may be different as a result

(5) Tangible Common Equity is a non-GAAP financial measure, which includes total equity of $20.5 billion, less preferred equity of $7.0 billion and goodwill and other intangible assets of $0.5 billion

(6) Tangible Assets is a non-GAAP financial measure, which includes total assets of $172 billion, less goodwill and other intangible assets of $0.5 billion

(7) The risk-weighted assets are determined by allocating assets and specified off-balance sheet financial instruments in several broad risk categories, with higher levels of capital being required for the categories perceived as representing greater risk.  The company’s December 2010 preliminary risk-weighted assets reflect estimated on-balance sheet risk-weighted assets of $139 billion and derivatives and off-balance sheet risk-weighted assets of $9 billion


Numbers may not foot due to rounding

 
 


 

Ally Financial Preliminary Unaudited Fourth Quarter 2010 Financial Highlights


 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

($ millions)


 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

Note

Fourth Quarter


 

Twelve Months

 

Automotive Finance Operations


 

2010


 

2009


 

2010


 

2009

 

 

 

 

 

 

 

 

 

 

 

 
 

 

NAO

Income from continuing operations before income tax expense

$589


 

$343


 

$2,344


 

$1,624

 

 

 

 

 

 

 

 

 

 

 

 
 

 

IO

Income (loss) from continuing operations before income tax expense

$12


 

($145)


 

$228


 

($157)

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Consumer Portfolio Statistics


 

 

 

 

 

 

 

 
 

 

NAO

Number of contracts originated (# thousands)

383


 

224


 

1,316


 

704

 

 

 

Dollar amount of contracts originated ($ billions)

$10.2


 

$6.6


 

$35.4


 

$19.8

 

 

 

Dollar amount of contracts outstanding at end of period

$50,639


 

$43,139


 

 

 

 
 

 

 

Share of new GM consumer sales


 

49.7%


 

31.4%


 

39.5%


 

27.4%

 

 

 

Share of new Chrysler consumer sales


 

32.2%


 

22.0%


 

39.2%


 

8.0%

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Dollar amount of new GM wholesale outstanding (average)

8,9

$16,584


 

$13,188


 

 

 

 
 

 

 

GM Average Wholesale Penetration

8,9

83%


 

88%


 

 

 

 
 

 

 

Dollar amount of new Chrysler wholesale outstanding (average)

8

$6,535


 

$4,207


 

 

 

 
 

 

 

Chrysler Average Wholesale Penetration

8

74%


 

75%


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Mix of retail & lease contract originations (% based on # of units)


 

 

 

 
 

 

 

  New


 

81%


 

77%


 

80%


 

80%


 

 
 

 

 

  Used


 

19%


 

23%


 

20%


 

20%


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

GM subvented (% based on # of new units) - U.S. Only

44%


 

55%


 

44%


 

66%


 

 
 

 

 

Chrysler subvented (% based on # of new units) - U.S. Only

50%


 

41%


 

55%


 

38%


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Average original term in months (U.S. retail only)

62


 

67


 

64


 

65


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Off-lease remarketing (U.S. only)


 

 

 

 

 

 

 

 

 

 
 

 

 

Sales proceeds on scheduled lease terminations (36-month) per vehicle - Serviced  

10

$20,218


 

$19,294


 

$19,388


 

$16,593


 

 
 

 

 

Off-lease vehicles terminated - Serviced (# units)

10

84,167


 

84,845


 

376,203


 

369,981


 

 
 

 

 

Sales proceeds on scheduled lease terminations (36-month) per vehicle - On-balance sheet  

$20,223


 

$19,317


 

$19,393


 

$17,440


 

 
 

 

 

Off-lease vehicles terminated - On-balance sheet (# units)

11

83,598


 

70,106


 

352,956


 

256,476


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

IO

Number of contracts originated (# thousands)

12

175


 

108


 

536


 

402


 

 
 

 

 

Dollar amount of contracts originated

12

$2,488


 

$1,557


 

$7,612


 

$5,710


 

 
 

 

 

Dollar amount of retail contracts outstanding at end of period

12,13

$9,359


 

$11,641


 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Mix of retail & lease contract originations (% based on # of units)


 

 

 

 
 

 

 

  New


 

96%


 

95%


 

95%


 

94%


 

 
 

 

 

  Used


 

4%


 

5%


 

5%


 

6%


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

GM subvented (% based on # of units)

12

49%


 

39%


 

43%


 

55%


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Asset Quality Statistics


 

 

 

 

 

 

 

 

 

 
 

 

NAO

Annualized consumer net charge-offs as a % of on-balance sheet assets

0.92%


 

4.01%


 

1.36%


 

3.20%


 

 
 

 

 

Managed retail contracts over 30 days delinquent  


 

2.02%


 

3.92%


 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

IO

Annualized consumer net charge-offs as a % of on-balance sheet assets

12

0.72%


 

2.36%


 

0.99%


 

2.04%


 

 
 

 

 

Managed retail contracts over 30 days delinquent  

12

1.56%


 

2.26%


 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Consumer Operating Statistics


 

 

 

 

 

 

 

 

 

 
 

 

NAO

Allowance as a % of related on-balance sheet consumer receivables at end of period

1.90%


 

4.42%


 

 

 

 

 

 
 

 

 

Repossessions as a % of average number of managed retail contracts outstanding

2.23%


 

3.69%


 

2.67%


 

3.54%


 

 
 

 

 

Severity of loss per unit serviced - Retail

14


 

 

 

 

 

 

 

 

 
 

 

 

New


 

$8,314


 

$9,635


 

$8,522


 

$10,214


 

 
 

 

 

Used


 

$6,920


 

$8,203


 

$7,110


 

$8,593


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

IO

Allowance as a % of related on-balance sheet consumer receivables at end of period

1.70%


 

1.74%


 

 

 

 

 

 
 

 

 

Repossessions as a % of average number of contracts outstanding

12

0.59%


 

0.67%


 

0.63%


 

0.83%


 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

(8) Dealer inventories include in-transit vehicles


 

 

 

 

 

 

 

 

 

 
 

(9) Fourth quarter 2009 based on managed assets


 

 

 

 

 

 

 

 

 

 
 

(10) Serviced assets represent operating leases where Ally continues to service the underlying asset


 

 

 

 

 

 

 

 
 

(11) Ally-owned portfolio reflects lease assets on Ally's books after distribution to GM of automotive leases in connection with the sale transaction which occurred in November 2006

 

(12) Continuing Operations only


 

 

 

 

 

 

 

 

 

 
 

(13) Represents on-balance sheet assets including retail leases


 

 

 

 

 

 

 

 

 

 
 

(14) Serviced assets represent on-balance sheet finance receivables and loans where Ally continues to service the underlying asset

 

 

 

 

 

 

 

 

 

 

 

 
 

Numbers may not foot due to rounding


 

 

 

 

 

 

 

 

 

 
 
                         


 

Ally Financial Preliminary Unaudited Fourth Quarter 2010 Financial Highlights

($ millions)

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Note

Fourth Quarter


 

Twelve Months

 

Insurance Operations


 

 

2010


 

2009


 

2010


 

2009

 

 

 

 

 

 

 

 

 

 

 
 

 

Income from continuing operations before income tax expense


 

$164


 

$85


 

$569


 

$329

 

 

 

 

 

 

 

 

 

 

 
 

 

Premiums and service revenue written

12

346


 

343


 

1,588


 

1,437

 

 

Premiums and service revenue earned

12

444


 

466


 

1,836


 

1,933

 

 

Combined ratio

12,15

94.2%


 

100.2%


 

94.1%


 

97.0%

 

 

 

 

 

 

 

 

 

 

 
 

 

Investment portfolio fair value at end of period


 

$4,155


 

$4,654


 

 

 

 
 

 

Memo: After-tax at end of period


 

 

 

 

 

 

 

 
 

 

Unrealized gains


 

$129


 

$119


 

 

 

 
 

 

Unrealized losses


 

(57)


 

(18)


 

 

 

 
 

 

Net unrealized gains


 

$72


 

$101


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

Fourth Quarter


 

Twelve Months

 

Mortgage Operations


 

2010


 

2009


 

2010


 

2009

 

 

 

 

 

 

 

 

 

 

 
 

 

Originations & Servicing


 

 

 

 

 

 

 

 
 

 

Income (loss) from continuing operations before income tax expense


 

$172


 

($180)


 

$917


 

$39

 

 

 

 

 

 

 

 

 

 

 
 

 

Gain on mortgage loans, net


 

 

 

 

 

 

 

 
 

 

Domestic


 

$208


 

$146


 

$609


 

$642

 

 

International


 

6


 

4


 

7


 

12

 

 

Total gain on mortgage loans, net


 

$214


 

$150


 

$616


 

$654

 

 

 

 

 

 

 

 

 

 

 
 

 

Legacy Portfolio & Other


 

 

 

 

 

 

 

 
 

 

(Loss) income from continuing operations before income tax expense


 

($49)


 

($3,171)


 

($254)


 

($6,304)

 

 

 

 

 

 

 

 

 

 

 
 

 

Gain on mortgage loans, net


 

 

 

 

 

 

 

 
 

 

Domestic


 

$140


 

($38)


 

$384


 

$26

 

 

International


 

(4)


 

(1)


 

(4)


 

(12)

 

 

Total gain on mortgage loans, net


 

$136


 

($39)


 

$380


 

$14

 

 

 

 

 

 

 

 

 

 

 
 

 

Portfolio Statistics


 

 

 

 

 

 

 

 
 

 

Mortgage loan production


 

 

 

 

 

 

 

 
 

 

Prime conforming


 

$20,045


 

$10,676


 

$53,721


 

$37,651

 

 

Prime non-conforming


 

352


 

286


 

1,548


 

992

 

 

Government


 

2,839


 

6,668


 

14,273


 

26,087

 

 

Total domestic


 

23,235


 

17,630


 

69,542


 

64,731

 

 

International


 

517


 

453


 

1,503


 

1,405

 

 

Total mortgage production


 

$23,752


 

$18,083


 

$71,045


 

$66,136

 

 

 

 

 

 

 

 

 

 

 
 

 

Mortgage loan servicing rights at end of period


 

3,738


 

3,554


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Loan servicing at end of period


 

 

 

 

 

 

 

 
 

 

Domestic


 

$355,680


 

$349,813


 

 

 

 
 

 

International


 

5,087


 

25,941


 

 

 

 
 

 

Total loan servicing


 

$360,767


 

$375,754


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Asset Quality Statistics


 

 

 

 

 

 

 

 
 

 

   Provision for loan losses by product


 

 

 

 

 

 

 

 
 

 

Mortgage loans held for investment


 

$22


 

$2,508


 

$164


 

$3,951

 

 

Lending receivables


 

1


 

2


 

(20)


 

321

 

 

Total provision for loan losses


 

$23


 

$2,510


 

$144


 

$4,272

 

 

 

 

 

 

 

 

 

 

 
 

 

Allowance by product at end of period


 

 

 

 

 

 

 

 
 

 

Mortgage loans held for investment


 

$580


 

$640


 

 

 

 
 

 

Lending receivables


 

26


 

137


 

 

 

 
 

 

Total allowance by product                                        


 

$606


 

$777


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Allowance as a % of related receivables at end of period


 

 

 

 

 

 

 

 
 

 

Mortgage loans held for investment

16

5.40%


 

5.71%


 

 

 

 
 

 

Lending receivables


 

1.60%


 

7.00%


 

 

 

 
 

 

Total allowance as a % of related receivables

16

4.90%


 

5.90%


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Nonaccrual loans at end of period

16

$671


 

$699


 

 

 

 
 

 

Nonaccrual loans as a % of related receivables at end of period  

16

5.41%


 

5.31%


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

(15) Combined ratio represents the sum of all incurred losses and expenses (excluding interest and income tax expense) divided by the total of premiums and service revenues earned and other income


(16) Gross carry value before allowance, excludes SFAS 159 & SFAS 140 assets


Numbers may not foot due to rounding