EX-99.3 4 v444882_ex99-3.htm EXHIBIT 99.3

Exhibit 99.3

 

 

 

SECOND QUARTER 2016

 

FINANCIAL SUPPLEMENT

 

 

 

 

ALLY FINANCIAL INC.

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. Certain non-GAAP measures are provided in this presentation which are important to the reader of the Consolidated Financial Statements but should be supplemental and not a substitute for to primary U.S. GAAP measures. Reconciliation of non-GAAP financial measures are included within 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.

 

2Q 2016 Preliminary Results2

 

 

ALLY FINANCIAL INC.

TABLE OF CONTENTS

 

  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 Portfolio 20
Discontinued Operations 21
Earnings Per Share Related Information 22
Adjusted Tangible Book Per Share Related Information 23
Core ROTCE Related Information 24
Supplemental Financial Data 25

 

2Q 2016 Preliminary Results3

 

 

ALLY FINANCIAL INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

 

($ in millions, shares in thousands)

 

   QUARTERLY TRENDS   CHANGE VS. 
  2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Selected Income Statement Data                            
Net financing revenue (ex. OID) (1)  $998   $964   $995   $981   $927   $34   $71 
OID amortization expense (2)   (14)   (13)   (12)   (11)   (11)   (1)   (3)
Net financing revenue (as reported)   984    951    983    970    916    33    68 
Total other revenue   374    376    356    332    211    (2)   163 
Total net revenue   1,358    1,327    1,339    1,302    1,127    31    231 
Provision for loan losses   172    220    240    211    140    (48)   32 
Controllable expenses (3)   463    477    466    452    452    (14)   11 
Other noninterest expenses   310    233    202    222    272    77    38 
Pre-tax income from continuing operations   413    397    431    417    263    16    150 
Income tax expense   56    150    155    144    94    (94)   (38)
Income from discontinued operations, net of tax   3    3    (13)   (5)   13    0    (10)
Net income   360    250    263    268    182    110    178 
Preferred dividends   15    15    1,216    38    1,251    0    (1,236)
Net income (loss) available to common  $345   $235   $(953)  $230   $(1,069)  $110   $1,414 
                                    
Selected Balance Sheet Data (Period-End)                                   
Total assets  $157,931   $156,505   $158,581   $155,916   $156,278   $1,426   $1,653 
Consumer loans   74,365    73,688    74,065    73,380    69,998    677    4,367 
Commercial loans   38,288    37,188    37,535    34,611    35,175    1,100    3,113 
Allowance for loan losses   (1,089)   (1,077)   (1,054)   (1,018)   (974)   (12)   (115)
Deposits   72,802    70,265    66,478    64,020    61,930    2,537    10,872 
Common equity (4)   13,611    13,127    12,743    13,786    13,482    484    129 
Total equity   13,611    13,823    13,439    14,599    14,295    (212)   (684)
                                    
Common Share Count                                   
Weighted average basic (5)   485,370    484,233    483,300    483,073    482,847    1,137    2,523 
Weighted average diluted (5)(6)   486,074    484,654    484,845    484,399    483,687    1,420    2,388 
Issued shares outstanding (period-end)   483,753    483,475    481,980    481,750    481,750    278    2,003 
                                    
Per Common Share Data                                   
Earnings per share (basic) (5)  $0.71   $0.49   $(1.97)  $0.48   $(2.22)  $0.23   $2.93 
Earnings per share (diluted) (5)(6)   0.71    0.49    (1.97)   0.47    (2.22)   0.22    2.93 
Adjusted earnings per share (7)   0.54    0.52    0.52    0.51    0.46    0.02    0.08 
Book value per share   28.1    28.6    27.9    30.3    29.7    (0.5)   (1.5)
Tangible book value per share (8)   27.6    27.1    26.4    28.6    27.9    0.5    (0.4)
Adjusted tangible book value per share (8)   25.9    25.4    24.6    24.3    23.7    0.5    2.2 
                                    
Select Financial Ratios                                   
Net interest margin (as reported)   2.68%   2.59%   2.65%   2.64%   2.55%          
Net interest margin (excluding OID)   2.72%   2.63%   2.68%   2.67%   2.58%          
Cost of funds (incl. OID)   1.90%   1.88%   1.75%   1.76%   1.82%          
Cost of funds (excl. OID)   1.84%   1.82%   1.70%   1.71%   1.77%          
Efficiency Ratio   56.9%   53.5%   49.9%   51.8%   64.2%          
Adjusted efficiency ratio (9)   43.7%   45.4%   43.6%   43.7%   45.6%          
Return on average assets (10)   0.9%   0.6%   0.7%   0.7%   0.5%          
Return on average total equity (10)   10.4%   7.3%   7.4%   7.4%   4.8%          
Return on average tangible common equity (10)   10.4%   7.3%   n/m    6.8%   n/m           
Core ROTCE (10)(11)   9.7%   9.8%   9.8%   9.2%   8.3%          
                                    
Capital Ratios (12)                                   
Common Equity Tier 1 (CET1) capital ratio (13)   9.6%   9.5%   9.2%   10.0%   9.8%          
Tier 1 capital ratio   11.2%   11.6%   11.1%   12.0%   11.7%          
Total capital ratio   12.8%   13.0%   12.5%   12.9%   12.6%          

 

 

(1) Represents a non-GAAP financial measure. Excludes original issue discount expense (OID).

(2) OID is primarily related to bond exchange. OID (excludes international operations and post 2009 issuances)

(3) Includes employee related costs, consulting and legal fees, marketing, information technology, facility, portfolio servicing and restructuring expenses

(4) Includes common stock and paid-in capital, treasury stock, accumulated deficit and accumulated other comprehensive income

(5) Includes shares related to share-based compensation that vested but were not yet issued

(6) Due to antidilutive effect of the net loss from continuing operations attributable to common shareholders for the year ended December 31, 2015 and June 30, 2015, basic weighted-average common shares outstanding were used to calculate basic and diluted earnings per share

(7) Represents a non-GAAP financial measure. For more details refer to page 22

(8) Represents a non-GAAP financial measure. For more details refer to page 23

(9) Represents a non-GAAP financial measure. For more details refer to page 25

(10) Return metrics are annualized.

(11) Return metrics are annualized. For more details reer to page 24

(12) Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital

(13) Common Equity Tier 1 capital ratio is a non-GAAP measurement. Refer to page 17 for additional details

 

2Q 2016 Preliminary Results4

 

 

ALLY FINANCIAL INC.

CONSOLIDATED INCOME STATEMENT

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Financing revenue and other interest income                                   
Interest and fees on finance receivables and loans  $1,265   $1,235   $1,212   $1,166   $1,118   $30   $147 
Interest on loans held-for-sale   -    -    -    2    14    -    (14)
Total interest and dividends on investment securities   99    102    98    102    93    (3)   6 
Interest-bearing cash   4    3    2    2    2    1    2 
Operating leases   701    769    812    830    860    (68)   (159)
Total financing revenue and other interest income   2,069    2,109    2,124    2,102    2,087    (40)   (18)
Interest expense                                   
Interest on deposits   203    193    188    181    177    10    26 
Interest on short-term borrowings   12    13    13    13    12    (1)   - 
Interest on long-term debt   436    442    404    410    419    (6)   17 
Total interest expense   651    648    605    604    608    3    43 
Depreciation expense on operating lease assets   434    510    536    528    563    (76)   (129)
Net financing revenue (as reported)  $984   $951   $983   $970   $916   $33   $68 
Other revenue                                   
Servicing fees   18    13    13    12    10    6    8 
Insurance premiums and service revenue earned   236    230    234    236    237    6    (1)
Gain on mortgage and automotive loans, net   3    1    -    (2)   1    2    2 
Loss on extinguishment of debt   (0)   (4)   (3)   -    (156)   4    156 
Other gain on investments, net   39    54    49    6    45    (15)   (6)
Other income, net of losses   77    82    63    80    74    (4)   3 
Total other revenue   374    376    356    332    211    (2)   163 
Total net revenue   1,358    1,327    1,339    1,302    1,127    31    231 
Provision for loan losses   172    220    240    211    140    (48)   32 
Noninterest expense                                   
Compensation and benefits expense   242    252    237    235    236    (10)   6 
Insurance losses and loss adjustment expenses   145    73    54    61    122    72    23 
Other operating expenses   386    385    377    378    366    1    20 
Total noninterest expense   773    710    668    674    724    63    49 
Pre-tax income from continuing operations  $413   $397   $431   $417   $263   $16   $150 
Income tax (benefit) expense from continuing operations   56    150    155    144    94    (94)   (38)
Net income from continuing operations   357    247    276    273    169    110    188 
Income from discontinued operations, net of tax   3    3    (13)   (5)   13    -    (10)
Net income  $360   $250   $263   $268   $182   $110   $178 
                                    
Core Pre-Tax Income Walk                                   
Net financing revenue (ex. OID) (1)  $998   $964   $995   $981   $927   $34   $71 
Total other revenue (ex. OID) (2)   374    380    358    332    368    (6)   6 
Provision for loan losses   172    220    240    211    140    (48)   32 
Controllable expenses (3)   459    473    465    449    448    (14)   11 
Other noninterest expenses   310    233    202    222    272    77    38 
Total Noninterest Expense   769    706    667    672    720    63    49 
Core pre-tax income  $431   $419   $446   $431   $435   $12   $(4)
less: Repositioning items (3)   4    7    3    2    154    (3)   (150)
less: OID amoritzation expense   14    15    12    11    18    (1)   (4)
Pre-tax income from continuing operations  $413   $397   $431   $417   $263   $16   $150 

 

 

(1) Represents a non-GAAP financial measure. Excludes OID

(2) Represents a non-GAAP financial measure. Excludes accelerated OID primarily related to the extinguishment of high-cost legacy debt of $2 million in 1Q 2016 and $7 million in 2Q of 2015

(3) Excludes Repositioning items. Repositioning items are primarily related to the extinghuishment of high-cost legacy debt and other strategic activities.

 

2Q 2016 Preliminary Results5

 

 

ALLY FINANCIAL INC.

CONSOLIDATED PERIOD-END BALANCE SHEET

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   6/30/2016   3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2016   6/30/2015 
Assets                                   
Cash and cash equivalents                                   
Noninterest-bearing  $1,790   $1,906   $2,148   $1,666   $1,739   $(116)  $51 
Interest-bearing   3,941    3,095    4,232    3,561    4,119    846    (178)
Total cash and cash equivalents   5,731    5,001    6,380    5,227    5,858    730    (127)
Investment securities (1)   18,768    18,298    17,157    18,758    19,142    470    (374)
Loans held-for-sale, net   15    39    105    37    1,438    (24)   (1,423)
Finance receivables and loans, net                                   
Finance receivables and loans, net   112,653    110,876    111,600    107,991    105,173    1,777    7,480 
Allowance for loan losses   (1,089)   (1,077)   (1,054)   (1,018)   (974)   (12)   (115)
Total finance receivables and loans, net   111,564    109,799    110,546    106,973    104,199    1,765    7,365 
Investment in operating leases, net   13,755    14,958    16,271    17,292    17,950    (1,203)   (4,195)
Premiums receivables and other insurance assets   1,844    1,828    1,801    1,794    1,759    16    85 
Other assets   6,254    6,582    6,321    5,835    5,932    (328)   322 
Total assets  $157,931   $156,505   $158,581   $155,916   $156,278   $1,426   $1,653 
                                    
Liabilities                                   
Deposit liabilities                                   
Noninterest-bearing  $94   $92   $89   $91   $89   $2   $5 
Interest-bearing   72,708    70,173    66,389    63,929    61,841    2,535    10,867 
Total deposit liabilities   72,802    70,265    66,478    64,020    61,930    2,537    10,872 
Short-term borrowings   5,994    5,365    8,101    5,378    10,013    629    (4,019)
Long-term debt   61,040    62,044    66,234    67,293    65,675    (1,004)   (4,635)
Interest payable   427    374    350    437    418    53    9 
Unearned insurance premiums and service revenue   2,465    2,449    2,434    2,438    2,417    16    48 
Accrued expense and other liabilities   1,592    2,185    1,545    1,751    1,530    (593)   62 
Total liabilities  $144,320   $142,682   $145,142   $141,317   $141,983   $1,638   $2,337 
                                    
Equity                                   
Common stock and paid-in capital (2)  $21,106   $21,087   $21,084   $21,066   $21,053   $19   $53 
Preferred stock   -    696    696    813    813    (696)   (813)
Accumulated deficit   (7,530)   (7,875)   (8,110)   (7,158)   (7,388)   345    (142)
Accumulated other comprehensive (loss) income   35    (85)   (231)   (122)   (183)   120    218 
Total equity   13,611    13,823    13,439    14,599    14,295    (212)   (684)
Total liabilities and equity  $157,931   $156,505   $158,581   $155,916   $156,278   $1,426   $1,653 

 

 

(1) Includes held-to-maturity securities

(2) Includes Treasury stock

 

2Q 2016 Preliminary Results6

 

 

ALLY FINANCIAL INC.

CONSOLIDATED AVERAGE BALANCE SHEET (1)

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   6/30/2016   3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2016   6/30/2015 
Assets                                   
Interest-bearing cash and cash equivalents  $2,708   $2,867   $2,743   $3,667   $4,013   $(159)  $(1,305)
Federal funds sold and securities purchased under resale agreements   2    -    -    -    1    2    1 
Investment securities   17,559    16,856    16,066    17,745    17,078    703    481 
Loans held-for-sale, net   -    35    13    111    1,493    (35)   (1,493)
Total finance receivables and loans, net (2)   112,158    111,525    110,623    105,604    101,962    633    10,196 
Investment in operating leases, net   14,392    15,638    16,824    17,519    18,520    (1,246)   (4,128)
Total interest earning assets   146,819    146,921    146,269    144,646    143,067    (102)   3,752 
Noninterest-bearing cash and cash equivalents   1,339    1,841    1,368    1,563    1,337    (502)   2 
Other assets   9,386    9,667    9,299    9,665    9,472    (281)   (86)
Allowance for loan losses   (1,088)   (1,060)   (1,030)   (988)   (953)   (28)   (135)
Total assets  $156,456   $157,369   $155,906   $154,886   $152,923   $(913)  $3,533 
                                    
Liabilities                                   
Interest-bearing deposit liabilities  $71,479   $68,148   $64,890   $62,791   $61,224   $3,331   $10,255 
Short-term borrowings   5,535    5,609    6,073    6,745    6,057    (74)   (522)
Long-term debt (3)   60,758    64,841    66,162    66,857    66,371    (4,083)   (5,613)
Total interest-bearing liabilities (3)   137,772    138,598    137,125    136,393    133,652    (826)   4,120 
Noninterest-bearing deposit liabilities   91    92    95    91    81    (1)   10 
Other liabilities   4,948    5,053    4,144    3,971    4,538    (105)   410 
Total liabilities  $142,811   $143,743   $141,364   $140,455   $138,271   $(932)  $4,540 
                                    
Equity                                   
Total equity  $13,645   $13,626   $14,542   $14,431   $14,652   $19   $(1,007)
Total liabilities and equity  $156,456   $157,369   $155,906   $154,886   $152,923   $(913)  $3,533 

 

 

(1) Average balances are calculated using a combination of monthly and daily average methodologies

(2) Nonperforming finance receivables and loans are included in the average balances net of unearned income, unamortized premiums and discounts, and deferred fees and costs

(3) QTD: includes OID average of $1,286 million in 2Q 2016, $1,298 million in 1Q 2016, $1,310 million in 4Q 2015, $1,322 million in 3Q 2015, $1,334 million in 2Q 2015, and $1,345 million in 1Q 2015

 

2Q 2016 Preliminary Results7

 

 

ALLY FINANCIAL INC.

SEGMENT HIGHLIGHTS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Automotive Finance  $426   $337   $333   $323   $373   $89   $53 
Insurance   (18)   50    78    40    15    (68)   (33)
Dealer Financial Services   408    387    411    363    388    21    20 
Mortgage Finance   9    2    9    4    (3)   7    12 
Corporate Finance   14    11    9    14    10    3    4 
Corporate and Other (1)   (18)   (3)   2    36    (132)   (15)   114 
Pre-tax income from continuing operations  $413   $397   $431   $417   $263   $16   $150 
OID amortization expense (2)   14    15    12    11    18    (1)   (4)
Repositioning items (3)   4    7    3    2    154    (3)   (150)
Core pre-tax income (4)  $431   $419   $446   $431   $435   $12   $(4)

 

 

(1) 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. June 2016 TradeKing activity included wihin the Corporate & Other segment.

(2) OID amortization expense and repositioning items for all periods shown is applied to the pre-tax income of the Corporate and Other segment. Includes accelerated OID expense of $2 million in 1Q 2016 and $7 million in 2Q 2015 associated with debt redemptions

(3) Repositioning items are primarily related to the extinguishment of high-cost legacy debt and strategic activities

(4) Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations by excluding (1) original issue discount (OID) amortization expense and (2) repositioning items primarily

related to the extinguishment of high-cost legacy debt and strategic activities. 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

 

2Q 2016 Preliminary Results8

 

 

ALLY FINANCIAL INC.

AUTOMOTIVE FINANCE - CONDENSED FINANCIAL STATEMENTS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Income Statement                                   
Net financing revenue                                   
Consumer  $877   $866   $867   $833   $785   $11   $92 
Commercial   262    252    238    228    235    10    27 
Loans held-for-sale   -    -    (1)   2    14    -    (14)
Operating leases   701    769    812    830    860    (68)   (159)
Other interest income   2    3    2    2    2    (1)   - 
Total financing revenue and other interest income   1,842    1,890    1,918    1,895    1,896    (48)   (54)
Interest expense   479    484    482    497    483    (5)   (4)
Depreciation expense on operating lease assets:                                   
Depreciation expense on operating lease assets (ex. remarketing)   520    565    604    633    671    (45)   (151)
Remarketing gains   (86)   (55)   (68)   (105)   (108)   (31)   22 
Total depreciation expense on operating lease assets   434    510    536    528    563    (76)   (129)
Net financing revenue   929    896    900    870    850    33    79 
Other revenue                                   
Servicing fees   18    13    13    12    10    6    8 
Gain/(loss) on automotive loans, net   5    5    -    (2)   (6)   (0)   11 
Other income   53    59    52    53    51    (6)   2 
Total other revenue   77    77    65    63    55    (0)   22 
Total net revenue   1,006    973    965    933    905    33    101 
Provision for loan losses   170    209    236    201    132    (39)   38 
Noninterest expense                                   
Compensation and benefits   118    126    119    121    123    (8)   (5)
Other operating expenses   292    301    277    288    277    (9)   15 
Total noninterest expense   410    427    396    409    400    (17)   10 
Income before income tax expense  $426   $337   $333   $323   $373   $89   $53 
                                    
Memo: Net lease revenue                                   
Operating lease revenue  $701   $769   $812   $830   $860   $(68)  $(159)
Depreciation expense on operating lease assets (ex. remarketing)   520    565    604    633    671    (45)   (151)
Remarketing gains   (86)   (55)   (68)   (105)   (108)   (31)   22 
Total depreciation expense on operating lease assets   434    510    536    528    563    (76)   (129)
Net lease revenue  $267   $259   $276   $302   $297   $8   $(30)
                                    
Balance Sheet (Period-End)                                   
Cash, trading and investment securities  $30   $31   $31   $32   $33   $(1)  $(3)
Loans held-for-sale   -    -    -    -    1,356    -    (1,356)
Finance receivables and loans, net:                                   
Consumer loans   63,193    62,926    64,226    63,503    60,717    267    2,476 
Commercial loans (1)   35,258    34,348    34,918    32,345    33,044    910    2,214 
Allowance for loan losses   (919)   (905)   (887)   (852)   (815)   (14)   (104)
Total finance receivables and loans, net   97,532    96,369    98,257    94,996    92,946    1,163    4,586 
Investment in operating leases, net   13,755    14,958    16,271    17,292    17,950    (1,203)   (4,195)
Other assets   1,039    931    1,077    1,523    1,322    108    (283)
Total assets  $112,356   $112,289   $115,636   $113,843   $113,607   $67   $(1,251)

 

 

(1) Includes intercompany

 

2Q 2016 Preliminary Results9

 

 

ALLY FINANCIAL INC.

AUTOMOTIVE FINANCE - KEY STATISTICS

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
U.S. Consumer Originations (1) ($ in billions)                                   
Retail standard - new vehicle GM  $1.9   $1.9   $2.3   $2.8   $2.6   $0.0   $(0.7)
Retail standard - new vehicle Chrysler (2)   1.2    1.0    1.1    1.3    1.3    0.2    (0.1)
Retail standard - new vehicle Growth (2)   1.4    1.2    1.2    1.3    1.3    0.2    0.1 
Retail standard - used vehicle - all channels   4.0    4.1    3.4    3.9    4.0    (0.1)   0.1 
Lease - GM   0.0    0.0    0.0    0.0    0.1    0.0    (0.1)
Lease - Other   0.8    0.8    1.0    1.0    0.9    0.0    (0.0)
Retail subvented - new vehicle GM   -    -    0.2    0.7    0.7    -    (0.7)
Total originations  $9.4   $9.0   $9.3   $11.1   $10.8   $0.3   $(1.4)
                                    
U.S. Consumer Originations - FICO Score                                   
Super Prime (CB 740+)  $2.1   $2.0   $2.3   $2.9   $2.6   $0.1   $(0.5)
Prime (CB 739-660)   3.5    3.2    3.2    3.8    3.7    0.2    (0.3)
Prime/Near (CB 659-620)   2.3    2.2    2.1    2.4    2.5    0.0    (0.2)
Non Prime (CB 619-540)   0.9    1.0    1.1    1.3    1.3    (0.1)   (0.4)
Sub Prime (CB 539-0)   0.1    0.1    0.1    0.2    0.2    (0.0)   (0.1)
Unscored (3)   0.5    0.5    0.5    0.5    0.5    0.0    (0.0)
Total originations  $9.4   $9.0   $9.3   $11.1   $10.8   $0.3   $(1.4)
                                    
U.S. Market                                   
Light vehicle sales (SAAR - units in millions)   17.1    17.1    17.8    17.8    17.1    (0.0)   0.0 
Light vehicle sales (quarterly - units in millions)   4.5    4.1    4.4    4.5    4.5    0.5    (0.0)
GM market share   16.7%   16.8%   17.8%   17.6%   18.1%          
Chrysler market share   13.3%   13.6%   13.3%   12.7%   12.7%          
                                    
U.S. Consumer Penetration                                   
GM   9.1%   9.3%   13.0%   16.3%   16.4%          
Chrysler   13.8%   12.5%   15.1%   13.9%   13.7%          
                                    
U.S. Commercial Outstandings EOP ($ in billions)                                   
Floorplan outstandings, net  $30.0   $29.2   $29.9   $27.5   $28.3   $0.8   $1.7 
Other dealer loans   5.2    5.1    5.0    4.8    4.7    0.1    0.5 
Total Commercial outstandings  $35.3   $34.3   $34.9   $32.3   $33.0   $0.9   $2.2 
                                    
U.S. Off-Lease Remarketing                                   
Manheim used vehicle index (3 month average)   124.5    123.7    125.4    124.4    124.0    0.8    0.5 
Off-lease vehicles terminated - On-balance sheet (# in units)   76,001    78,820    69,710    65,363    64,123    (2,819)   11,878 
Average gain per vehicle  $1,126   $700   $979   $1,611   $1,686   $426   $(560)
Total gains ($ in millions)  $86   $55   $68   $105   $108   $31   $(22)

 

 

(1) Some standard rate loan originations contain manufacturer sponsored cash back rebate incentives. Some lease originations contain rate subvention. While Ally may jointly develop marketing programs for these originations, Ally does not have exclusive rights to such originations under operating agreements with manufacturers

(2) Includes an immaterial balance of subvented volume

(3) Unscored are primarily Commercial Services Group ("CSG")

 

2Q 2016 Preliminary Results10

 

 

ALLY FINANCIAL INC.

INSURANCE - CONDENSED FINANCIAL STATEMENTS AND KEY STATISTICS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Income Statement (GAAP View)                                   
Net financing revenue                                   
Interest and dividends on investment securities  $25   $24   $25   $26   $25   $1   $- 
Interest bearing cash   3    2    2    2    2    1    1 
Total financing revenue and other interest revenue   28    26    27    28    27    2    1 
Interest expense   12    12    12    12    13    -    (1)
Net financing revenue   16    14    15    16    14    2    2 
Other revenue                                   
Insurance premiums and service revenue earned   236    230    234    236    237    6    (1)
Other gain/(loss) on investments, net   21    22    28    (5)   29    (1)   (8)
Other income, net of losses   2    2    2    2    2    -    - 
Total other revenue   259    254    264    233    268    5    (9)
Total net revenue   275    268    279    249    282    7    (7)
Noninterest expense                                   
Compensation and benefits expense   17    18    15    18    16    (1)   1 
Insurance losses and loss adjustment expenses   145    73    54    61    122    72    23 
Other operating expenses   131    127    132    130    129    4    2 
Total noninterest expense   293    218    201    209    267    75    26 
Income (loss) from cont. ops before income tax expense  $(18)  $50   $78   $40   $15   $(68)  $(33)
                                    
Memo: Income Statement (Managerial View)                                   
Insurance premiums and other income                                   
Insurance premiums and service revenue earned  $236   $230   $234   $236   $237   $6   $(1)
Investment income   34    34    41    9    41    -    (7)
Other income   5    4    4    4    4    1    1 
Total insurance premiums and other income   275    268    279    249    282    7    (7)
Expense                                   
Insurance losses and loss adjustment expenses   145    73    54    61    122    72    23 
Acquisition and underwriting expenses                                   
Compensation and benefit expense   17    18    15    18    16    (1)   1 
Insurance commission expense   97    94    94    95    95    4    2 
Other expense   34    33    38    35    34    0    (0)
Total acquisition and underwriting expense   148    145    147    148    145    3    3 
Total expense   293    218    201    209    267    75    26 
Income (loss) from cont. ops before income tax expense  $(18)  $50   $78   $40   $15   $(68)  $(33)
                                    
Balance Sheet (Period-End)                                   
Cash, trading and investment securities  $5,140   $5,141   $5,053   $4,991   $5,312   $(1)  $(172)
Premiums receivable and other insurance assets   1,856    1,840    1,813    1,805    1,769    16    87 
Other assets   197    213    187    201    179    (16)   18 
Total assets  $7,193   $7,194   $7,053   $6,997   $7,260   $(1)  $(67)
                                    
Key Statistics (Continuing Operations)                                   
Total written premiums and revenue (1)  $237   $222   $222   $254   $263   $15   $(26)
                                    
Loss ratio   60.9%   31.5%   22.5%   25.7%   51.2%          
Underwriting expense ratio   61.9%   62.5%   62.6%   62.0%   61.0%          
Combined ratio   122.8%   94.0%   85.1%   87.7%   112.2%          

 

 

(1) Excludes Canadian Personal Lines business, which is in runoff

 

2Q 2016 Preliminary Results11

 

 

ALLY FINANCIAL INC.

MORTGAGE FINANCE - CONDENSED FINANCIAL STATEMENTS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Income Statement                                   
Net financing revenue                                   
Total financing revenue and other interest income  $64   $57   $54   $51   $39   $7   $25 
Interest expense   38    37    36    34    28    1    10 
Net financing revenue   26    20    18    17    11    6    15 
Total net revenue   26    20    18    17    11    6    15 
Provision for loan losses   -    3    (2)   3    4    (3)   (4)
Noninterest expense                                   
Compensation and benefits expense   3    3    2    1    1    -    2 
Other operating expense   14    12    9    9    9    2    5 
Total noninterest expense   17    15    11    10    10    2    7 
Income (loss) from cont. ops before income tax expense  $9   $2   $9   $4   $(3)  $7   $12 
                                    
Balance Sheet (Period-End)                                   
Finance receivables and loans, net:                                   
Consumer loans  $8,009   $7,443   $6,413   $6,286   $5,589    566    2,420 
Allowance for loan losses   (18)   (18)   (16)   (17)   (15)   -    (3)
Total finance receivables and loans, net   7,991    7,425    6,397    6,269    5,574    566    2,417 
Other assets   23    68    64    57    49    (45)   (26)
Total assets  $8,014   $7,493   $6,461   $6,326   $5,623   $521   $2,391 

 

2Q 2016 Preliminary Results12

 

 

ALLY FINANCIAL INC.

CORPORATE FINANCE - CONDENSED FINANCIAL STATEMENTS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Income Statement                                   
Net financing revenue                                   
Total financing revenue and other interest income  $46   $44   $39   $36   $35   $2   $11 
Interest expense   17    16    14    14    13    1    4 
Net financing revenue   29    28    25    22    22    1    7 
Other income, net of losses   4    6    3    10    6    (2)   (2)
Total other revenue   4    6    3    10    6    (2)   (2)
Total net revenue   33    34    28    32    28    (1)   5 
Provision for loan losses   3    6    6    4    4    (3)   (1)
Noninterest expense                                   
Compensation and benefits expense   10    10    8    8    8    -    2 
Other operating expense   6    7    5    6    6    (1)   - 
Total noninterest expense   16    17    13    14    14    (1)   2 
Income (loss) from cont. ops before income tax expense  $14   $11   $9   $14   $10   $3   $4 
                                    
                                    
Balance Sheet (Period-End)                                   
Loans held for sale  $15   $39   $105   $37   $36   $(24)  $(21)
Commercial loans (1)   2,975    2,795    2,568    2,228    2,088    180    887 
Allowance for loan losses   (59)   (56)   (50)   (44)   (38)   (3)   (21)
Total finance receivables and loans, net   2,916    2,739    2,518    2,184    2,050    177    866 
Other assets   58    61    54    48    46    (3)   12 
Total assets  $2,989   $2,839   $2,677   $2,269   $2,132   $150   $857 

 

 

(1) Includes intercompany loan activity

 

2Q 2016 Preliminary Results13

 

 

ALLY FINANCIAL INC.

CORPORATE AND OTHER - CONDENSED FINANCIAL STATEMENTS

 

($ in millions)

 

Includes CFG  QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Income Statement                                   
Net financing revenue                                   
Total financing revenue and other interest income  $89   $92   $86   $92   $90   $(3)  $(1)
Interest expense                                   
Original issue discount amortization (1)   14    13    12    11    11    1    3 
Other interest expense   91    86    49    36    60    5    31 
Total interest expense   105    99    61    47    71    6    34 
Net financing revenue (deficit)   (16)   (7)   25    45    19    (9)   (35)
Other revenue                                   
Loss on extinguishment of debt   -    (4)   (3)   -    (156)   4    156 
Other gain on investments, net   18    32    21    11    16    (14)   2 
Other income, net of losses (2)   16    11    6    15    22    5    (6)
Total other (loss) revenue   34    39    24    26    (118)   (5)   152 
Total net revenue (deficit)   18    32    49    71    (99)   (14)   117 
Provision for loan losses   (1)   2    -    3    -    (3)   (1)
Noninterest expense                                   
Compensation and benefits expense   94    95    93    87    88    (1)   6 
Other operating expense (3)   (57)   (62)   (46)   (55)   (55)   5    (2)
Total noninterest expense   37    33    47    32    33    4    4 
Income (loss) from cont. ops before income tax expense  $(18)  $(3)  $2   $36   $(132)  $(15)  $114 
                                    
Balance Sheet (Period-End)                                   
Cash, trading and investment securities  $19,329   $18,127   $18,453   $18,962   $19,655   $1,202   $(326)
Loans held-for-sale   -    -    -    -    46    -    (46)
Finance receivables and loans, net                                   
 Consumer loans   3,163    3,319    3,426    3,591    3,692    (156)   (529)
 Commercial loans (4)   55    45    49    38    43    10    12 
 Allowance for loan losses   (93)   (98)   (101)   (105)   (106)   5    13 
Total finance receivables and loans, net   3,125    3,266    3,374    3,524    3,629    (141)   (504)
Other assets   4,925    5,297    4,927    3,995    4,326    (372)   599 
Total assets  $27,379   $26,690   $26,754   $26,481   $27,656   $689   $(277)
                                    
OID Amortization Schedule (5)   2016    2017    2018    2019 and After                
Remaining Core OID Amortization (as of 6/30/2016)  $29   $69   $85     Avg = $50/yr                 

 

 

(1) Does not include accelerated OID expense of $2 million in 1Q16 and $7 million in 2Q15

(2) Includes gain/(loss) on mortgage and automotive loans

(3) Other operating expenses includes (i) certain unallocated expenses primarily associated with operations that have been sold or discontinued and (ii) corporate overhead allocated to the other business segments. Amounts of corporate overhead allocated were $186 million for 2Q16, $202 million for 1Q16, $178 million for 4Q15, $189 million for 3Q15, and $186 million for 2Q15. The receiving business segment records the allocation of corporate overhead expense within other operating expenses.

(4) Includes intercompany

(5) Primarily represents bond exchange OID amortization expense used for calculating core pre-tax income

 

2Q 2016 Preliminary Results14

 

 

ALLY FINANCIAL INC.

CREDIT RELATED INFORMATION

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Asset Quality - Consolidated (1)                                   
Ending loan balance  $112,653   $110,876   $111,600   $107,990   $105,172   $1,777   $7,481 
30+ Accruing DPD  $1,740   $1,496   $1,985   $1,754   $1,474   $244   $266 
30+ Accruing DPD %   1.54%   1.35%   1.78%   1.62%   1.40%          
Non-performing loans (NPLs)  $734   $698   $680   $637   $642   $35   $91 
Net charge-offs (NCOs)  $152   $179   $198   $161   $100   $(28)  $52 
Net charge-off rate (2)   0.54%   0.64%   0.72%   0.61%   0.39%          
                                    
Provision for loan losses  $172   $220   $240   $211   $140   $(48)  $32 
Allowance for loan losses (ALLL)  $1,089   $1,077   $1,054   $1,018   $974   $12   $115 
                                    
ALLL as % of Loans (3)   1.0%   1.0%   0.9%   0.9%   0.9%          
ALLL as % of NPLs (3)   148.4%   154.2%   155.0%   159.9%   151.6%          
ALLL as % of NCOs (3)   179.1%   150.3%   133.1%   158.2%   243.8%          
                                    
US Auto Delinquencies - HFI Retail Contract $'s (5)                                   
Delinquent contract $  $1,643   $1,387   $1,886   $1,656   $1,389   $257   $254 
% of retail contract $ outstanding   2.60%   2.20%   2.93%   2.60%   2.29%          
                                    
U.S. Auto Annualized Net Charge-Offs - HFI Retail Contract $'s                                   
Net charge-offs  $148   $173   $194   $156   $96   $(24)  $53 
% of avg. HFI assets (2)   0.94%   1.08%   1.21%   1.01%   0.65%          
                                    
U.S. Auto Annualized Net Charge-Offs - HFI Commercial Contract $'s                                   
Net charge-offs  $0   $0   $3   $0   $1   $0   $(1)
% of avg. HFI assets (2)   0.00%   0.00%   0.04%   0.00%   0.01%          

 

 

(1) Loans within this table are classified as held-for-investment recorded at amortized cost as these loans are included in our allowance for loan losses.

(2) Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance recievables and loans excluding loans measured at fair value, conditional repurchase loans and loans held-for-sale during the year for each loan category.

(3) ALLL coverage ratios are based on the allowance for loan losses related to loans held-for-investment excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts.

(4) Excludes $88 million Corporate Treasury hedging activity related to domestic consumer auto outstandings in 2Q16, $87 million in 1Q16, $66 million in 4Q15, $107 million in 3Q15 and $69 million in 2Q15.

(5) Dollar amount of accruing contracts greater than 30 days past due

 

2Q 2016 Preliminary Results15

 

 

ALLY FINANCIAL INC.

CREDIT RELATED INFORMATION, CONTINUED

 

($ in millions)

CONTINUING OPERATIONS

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Automotive Finance (1)                                   
Consumer                                   
Allowance for loan losses  $862   $850   $834   $804   $767   $12   $95 
Total consumer loans (2)  $63,281   $63,013   $64,292   $63,610   $60,786   $267   $2,494 
Coverage ratio (3)   1.4%   1.3%   1.3%   1.3%   1.3%          
                                    
Commercial                                   
Allowance for loan losses  $57   $55   $53   $48   $48   $2   $9 
Total commercial loans  $35,251   $34,325   $34,895   $32,322   $33,026   $926   $2,225 
Coverage ratio   0.2%   0.2%   0.2%   0.1%   0.1%          
                                    
Mortgage (1)                                   
Consumer                                   
Mortgage Finance                                   
Allowance for loan losses  $18   $18   $16   $17   $15   $1   $4 
Total consumer loans  $8,009   $7,443   $6,413   $6,286   $5,589   $567   $2,420 
Coverage ratio   0.2%   0.2%   0.2%   0.3%   0.3%          
                                    
Mortgage - Legacy                                   
Allowance for loan losses  $91   $97   $98   $102   $104   $(6)  $(13)
Total consumer loans  $3,075   $3,232   $3,360   $3,483   $3,622   $(157)  $(547)
Coverage ratio   2.9%   3.0%   2.9%   2.9%   2.9%          
                                    
Total Mortgage                                   
Allowance for loan losses  $109   $115   $114   $119   $119   $(6)  $(10)
Total consumer loans  $11,084   $10,675   $9,773   $9,769   $9,211   $410   $1,873 
Coverage ratio   1.0%   1.1%   1.2%   1.2%   1.3%          
                                    
Corporate Finance (1)                                   
Allowance for loan losses  $59   $56   $50   $44   $38   $4   $21 
Total commercial loans  $2,976   $2,796   $2,568   $2,228   $2,088   $180   $887 
Coverage ratio   2.0%   2.0%   2.0%   2.0%   1.8%          
                                    
Corporate and Other (1)                                   
Allowance for loan losses  $2   $1   $3   $3   $2   $0   $(1)
Total commercial loans  $61   $67   $72   $61   $61   $(6)  $0 
Coverage ratio   2.6%   2.1%   4.0%   4.2%   4.0%          

 

 

(1) ALLL coverage ratios are based on the domestic allowance as a percentage of finance receivables and loans reported at their gross carrying value, which includes the principal amount outstanding, net of unearned income, unamortized deferred fees reduced by costs on originated loans, unamortized premiums and discounts on purchased loans, unamortized basis adjustments arising from the designation of finance receivables and loans as the hedged item in qualifying fair value hedge relationships, and cumulative principal charge-offs. Excludes loans held at fair value.

(2) Includes $88 million Corporate Treasury hedging activity related to domestic consumer auto outstandings in 2Q16, $87 million in 1Q16, $66 million in 4Q15, $107 million in 3Q15 and $69 million in 2Q15.

(3) Excludes $88 million Corporate Treasury hedging activity related to domestic consumer auto outstandings in 2Q16, $87 million in 1Q16, $66 million in 4Q15, $107 million in 3Q15 and $69 million in 2Q15.

 

2Q 2016 Preliminary Results16

 

 

ALLY FINANCIAL INC.

CAPITAL

 

($ in billions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   Basel III Transition         
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Capital (1)                                   
Risk-weighted assets  $133.8   $133.6   $135.8   $133.8   $134.0   $0.2   $(0.2)
                                    
Common Equity Tier 1 (CET1) capital ratio (2)   9.6%   9.5%   9.2%   10.0%   9.8%          
Tier 1 capital ratio   11.2%   11.6%   11.1%   12.0%   11.7%          
Total capital ratio   12.8%   13.0%   12.5%   12.9%   12.6%          
                                    
Tangible common equity / Tangible assets (3)(4)   8.5%   8.4%   8.0%   8.8%   8.6%          
Tangible common equity / Risk-weighted assets (3)   10.0%   9.8%   9.4%   10.3%   10.0%          
                                    
Shareholders’ equity  $13.6   $13.8   $13.4   $14.6   $14.3   $(0.2)  $(0.7)
less: Preferred equity   -    (0.7)   (0.7)   (0.8)   (0.8)   0.7    0.8 
 Disallowed DTA   (0.5)   (0.5)   (0.4)   (0.4)   (0.4)   -    (0.1)
 Certain AOCI items and other  adjustments   (0.3)   -    0.2    -    0.1    (0.3)   (0.4)
Common Equity Tier 1 capital (2)  $12.8   $12.7   $12.5   $13.4   $13.2   $0.1   $(0.4)
                                    
Common Equity Tier 1 capital  $12.8   $12.7   $12.5   $13.4   $13.2   $0.1   $(0.4)
add: Preferred equity   -    0.7    0.7    0.7    0.7    (0.7)   (0.7)
 Trust preferred securities   2.5    2.5    2.5    2.5    2.5    -    - 
less: Other adjustments   (0.4)   (0.4)   (0.6)   (0.6)   (0.7)   -    0.3 
Tier 1 capital  $15.0   $15.5   $15.1   $16.1   $15.7   $0.5   $0.7 
                                    
Tier 1 capital  $15.0   $15.5   $15.1   $16.1   $15.7   $(0.5)  $(0.7)
add: Qualifying subordinated debt and redeemable preferred stock   1.2    0.9    0.9    0.3    0.3    0.3    0.9 
Allowance for loan and lease losses includible in Tier 2 capital and other adjustments   1.0    1.0    1.0    1.0    0.9    -    0.1 
Total capital  $17.2   $17.4   $17.0   $17.3   $16.9   $(0.2)  $0.3 
                                    
Total shareholders' equity  $13.6   $13.8   $13.4   $14.6   $14.3   $(0.2)  $(0.7)
less: Preferred equity   -    (0.7)   (0.7)   (0.8)   (0.8)   0.7    0.8 
Goodwill and intangible assets, net of deferred tax liabilities   (0.3)   -    -    -    -    (0.3)   (0.3)
Tangible common equity (3)  $13.3   $13.1   $12.7   $13.8   $13.5   $0.2   $(0.2)
                                    
Total assets  $157.9   $156.5   $158.6   $155.9   $156.3   $1.4   $1.6 
less: Goodwill and intangible assets, net of deferred tax liabilities   (0.3)   -    -    -    -    (0.3)   (0.3)
Tangible assets (4)  $157.7   $156.5   $158.6   $155.9   $156.3   $1.2   $1.4 
                                    
Regulatory Capital - Basel III transition to fully phased-in                                   
Numerator                                   
Common equity tier 1 capital (transition)  $12.8   $12.7   $12.5   $13.4   $13.2           
DTAs arising from NOL and tax credit carryforwards phased-in during transition   (0.3)   (0.3)   (0.6)   (0.6)   (0.7)          
Intangibles phased-in during transition   (0.0)   -    -    -    -           
Common equity tier 1 capital (fully phased-in)  $12.5   $12.3   $11.9   $12.9   $12.5           
                                    
Denominator                                   
Risk-weighted assets (transition  $133.8   $133.6   $135.8   $133.8   $134.0           
DTAs arising from temporary differences that could not be realized through NOL , net of VA and net of DTLs phased-in during transition   0.5    0.4    0.5    0.7    0.8           
Intagibles phased in during transition   0.0    0.0    0.0    -    -           
Risk-weighted assets (fully phased-in)  $134.2   $134.0   $136.4   $134.5   $134.8           
                                    
Metric                                   
Common equity tier 1 (transition)   9.6%   9.5%   9.2%   10.0%   9.8%          
Common equity tier 1 (fully phased-in) (2)   9.3%   9.2%   8.7%   9.6%   9.3%          

 

 

 

Note: Numbers may not foot due to rounding

(1) Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital

(2) Common Equity Tier 1 capital (“CET1”) fully phased-in: Under the Basel III regulatory framework as adopted in the United States, banking organizations like the company are required to comply with a minimum ratio of common equity tier 1 capital to risk-weighted assets (CET1 Capital Ratio). Common equity tier 1 capital generally consists of common stock (plus any related surplus and net of any treasury stock), retained earnings, accumulated other comprehensive income, and minority interests in the common equity of consolidated subsidiaries, subject to specified conditions and adjustments. The obligation to comply with the minimum CET1 Capital Ratio is subject to ongoing transition periods and other provisions under Basel III. Management believes that both the transitional CET1 Capital Ratio and the fully phased-in CET1 Capital Ratio are helpful to readers in evaluating the company’s capital utilization and adequacy in absolute terms and relative to its peers. The fully phased-in CET1 Capital Ratio is a non-GAAP financial measure that is reconciled to the transitional CET1 Capital Ratio above.

(3) Represents a non-GAAP financial measure. We define tangible common equity 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. Tangible common equity is not formally defined by GAAP or codified in the federal banking regulations and, therefore, is considered to be a non-GAAP financial measure. Ally believes that tangible common equity is important because we believe analysts and banking regulators 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.

(4) Represents a non-GAAP financial measure. We define tangible assets as total assets less goodwill and intangible assets, net of deferred tax liabilities

 

2Q 2016 Preliminary Results17

 

 

ALLY FINANCIAL INC.

LIQUIDITY

 

($ in billions)

 

   6/30/2016   3/31/2016   6/30/2015 
   Parent (1)   Ally Bank   Parent (1)   Ally Bank   Parent (1)   Ally Bank 
Available Liquidity                              
Cash and cash equivalents (2)  $2.0   $3.3   $2.7   $2.1   $2.6   $2.8 
Highly liquid securities (3)   2.4    7.8    1.8    6.8    1.4    6.9 
Current committed unused capacity   1.1    1.1    0.5    1.8    1.1    0.2 
Subtotal  $5.4   $12.1   $5.0   $10.7   $5.0   $9.9 
Ally Bank intercompany loan (4)   1.4    (1.4)   0.8    (0.8)   -    - 
Total Current Available Liquidity  $6.8   $10.7   $5.7   $9.9   $5.0   $9.9 
                               
   2016    2017    2018    2019    2020    2021 and
After		 
Unsecured Long-Term Debt Maturity Profile                              
Consolidated remaining maturities (5)  $1.4   $4.4   $3.7   $1.7   $2.2   $9.1 

 

 

(1) Parent company liquidity is defined as our consolidated operations less Ally Bank and the regulated subsidiaries of Ally Insurance's holding company

(2) May include the restricted cash accumulation for retained notes maturing within the following 30 days and returned to Ally on the distribution date

(3) Includes unencumbered UST, Agency debt and Agency MBS

(4) To optimize use of cash and secured facility capacity between entities, Ally Financial lends cash to Ally Bank from time to time under an intercompany loan agreement. Amounts outstanding on this loan are repayable to Ally Financial at any time, subject to 5 days notice

(5) Excludes OID

 

2Q 2016 Preliminary Results18

 

 

ALLY FINANCIAL INC.

NET INTEREST MARGIN AND DEPOSITS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Average Balance Details                                   
Retail Auto Loan  $63,621   $64,566   $64,231   $62,115   $60,436   $(945)  $3,185 
Auto Lease (net of dep)   14,392    15,638    16,824    17,519    18,520    (1,246)   (4,128)
Commercial Auto   34,800    34,026    34,077    31,726    32,547    774    2,253 
Corporate Finance   2,973    2,781    2,506    2,309    2,114    192    859 
Mortgage   10,764    10,152    9,809    9,564    8,363    612    2,401 
Cash, Securities and Other   20,269    19,758    18,822    21,413    21,087    511    (818)
Total Earning Assets  $146,819   $146,921   $146,269   $144,646   $143,067   $(102)  $3,752 
                                    
Interest Revenue   1,630    1,595    1,582    1,567    1,517    35    113 
                                    
LT Unsecured Debt  $22,698   $22,452   $21,716   $20,884   $22,564   $246   $134 
Secured Debt   34,019    37,587    40,134    42,150    42,186    (3,568)   (8,167)
Deposits (2)   71,570    68,240    64,985    62,882    61,305    3,330    10,265 
Other Borrowings (3)   10,862    11,709    11,695    11,890    9,012    (847)   1,850 
Total Funding Sources (1)  $139,149   $139,988   $138,530   $137,806   $135,067   $(839)  $4,082 
                                    
Interest Expense   637    635    593    593    597    2    40 
                                    
Net Financing Revenue (4)  $993   $960   $989   $974   $920   $33   $73 
                                    
Net Interest Margin (yield details)                                   
Retail Auto Loan   5.47%   5.31%   5.26%   5.24%   5.26%          
Auto Lease (net of dep)   7.46%   6.66%   6.51%   6.84%   6.43%          
Commercial Auto   3.03%   2.98%   2.78%   2.85%   2.90%          
Corporate Finance   6.36%   6.51%   6.33%   6.19%   6.64%          
Mortgage   3.36%   3.37%   3.28%   3.36%   3.36%          
Cash, Securities and Other   1.94%   2.06%   1.98%   1.83%   1.67%          
Total Earning Assets   4.47%   4.37%   4.29%   4.30%   4.25%          
                                    
LT Unsecured Debt   4.80%   4.89%   4.55%   4.96%   5.01%          
Secured Debt   1.56%   1.48%   1.27%   1.19%   1.16%          
Deposits   1.14%   1.14%   1.15%   1.14%   1.16%          
Other Borrowings (3)   1.15%   1.06%   0.95%   0.83%   0.71%          
Total Funding Sources (1)   1.84%   1.82%   1.70%   1.71%   1.77%          
                                    
NIM (as reported)   2.68%   2.59%   2.65%   2.64%   2.55%          
NIM (excluding OID) (1)   2.72%   2.63%   2.68%   2.67%   2.58%          
                                    
Key Deposit Statistics                                   
Average retail CD maturity (months)   31.4    31.6    31.8    32.0    32.1    (0.1)   (0.7)
Average retail deposit rate   1.11%   1.11%   1.12%   1.14%   1.15%          
                                    
Ally Financial Deposits Levels                                   
Ally Bank retail  $61,239   $58,977   $55,437   $53,501   $51,750   $2,263   $9,489 
Ally Bank brokered   11,269    10,979    10,723    10,201    9,861    290    1,408 
Other   294    309    318    318    319    (16)   (25)
Total deposits  $72,802   $70,265   $66,478   $64,020   $61,930   $2,537   $10,872 
                                    
Ally Bank Deposit Mix                                   
Retail CD   29.0%   30.1%   31.8%   34.0%   36.3%          
MMA/OSA/Checking   55.4%   54.2%   52.0%   50.0%   47.7%          
Brokered   15.5%   15.7%   16.2%   16.0%   16.0%          

 

 

(1) Excludes OID

(2) Includes brokered deposits. Includes average noninterest-bearing deposits of $91 million in 2Q16, $92 million in 1Q16, $95 million in 4Q15, $91 million in 3Q15 and $81 million in 2Q15

(3) Includes Demand Notes, FHLB and Repurchase Agreements

(4) Excludes dividend income from equity investments

 

2Q 2016 Preliminary Results19

 

 

ALLY FINANCIAL INC.

ALLY BANK CONSUMER MORTGAGE HFI PORTFOLIOS (PERIOD-END)

 

($ in billions)

 

   HISTORICAL QUARTERLY TRENDS 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15 
Mortgage Finance HFI Portfolio                         
Loan Value                         
Gross carry value  $8.0   $7.4   $6.4   $6.3   $5.6 
Net carry value  $8.0   $7.4   $6.4   $6.3   $5.6 
                          
Estimated Pool Characteristics                         
% Second lien   0.0%   0.0%   0.0%   0.0%   0.0%
% Interest only   0.4%   0.5%   0.6%   0.6%   0.8%
% 30+ Day delinquent   0.8%   1.0%   0.9%   1.0%   1.0%
% Low/No documentation   0.0%   0.0%   0.0%   0.0%   0.0%
% Non-primary residence   3.4%   3.5%   3.4%   3.4%   3.2%
Refreshed FICO   771    770    769    768    767 
Wtd. Avg. LTV/CLTV (1)   61.1%   60.8%   60.4%   61.4%   62.0%
                          
Corporate Other Legacy Mortgage HFI Portfolio                         
Loan Value                         
Gross carry value  $3.1   $3.2   $3.4   $3.5   $3.6 
Net carry value  $3.0   $3.1   $3.3   $3.4   $3.5 
                          
Estimated Pool Characteristics                         
% Second lien   18.4%   18.6%   18.9%   19.2%   19.6%
% Interest only   12.9%   14.0%   16.9%   19.4%   21.9%
% 30+ Day delinquent   4.0%   4.1%   4.4%   4.1%   4.2%
% Low/No documentation   22.9%   22.7%   22.6%   22.5%   22.4%
% Non-primary residence   7.4%   7.4%   7.4%   7.4%   7.4%
Refreshed FICO   728    728    728    728    728 
Wtd. Avg. LTV/CLTV (1)   77.8%   77.6%   78.1%   77.4%   78.2%

 

 

(1) Updated home values derived using a combination of appraisals, BPOs, AVMs and MSA level house price indices; calculation only includes first liens

 

2Q 2016 Preliminary Results20

 

 

ALLY FINANCIAL INC.

DISCONTINUED OPERATIONS

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Impact of Discontinued Operations (1)                                   
Auto Finance  $(0)  $(1)  $(5)  $(4)  $(4)  $1   $4 
Insurance   0    -    (0)   -    3    0    (3)
Mortgage Finance   -    -    -    -    -    -    - 
Corporate Finance   0    (0)   -    1    25    0    (25)
Corporate and Other   (3)   6    2    0    (11)   (9)   8 
Consolidated pretax income  $(3)  $4   $(3)  $(2)  $14   $(7)  $(17)
Tax expense (benefit)   (6)   1    10    4    (0)   (7)   (6)
Consolidated net income  $3   $3   $(13)  $(5)  $13   $-   $(10)
                                    
Assets of discontinued operations held-for-sale  $-   $-   $-   $-   $-   $-   $- 

 

 

 

(1) Disc ops activity reflects several actions including divestitures of international businesses in addition to certain discrete tax items

 

2Q 2016 Preliminary Results21

 

 

ALLY FINANCIAL INC.

PER SHARE RELATED INFORMATION

 

($ in millions, shares in thousands)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Earnings Per Share Data                                   
Net income (loss)  $360   $250   $263   $268   $182   $110   $178 
less: Preferred stock dividends   15    15    1,216    38    1,251    0    (1,236)
GAAP net income available to common shareholders  $345   $235   $(953)  $230   $(1,069)  $110   $1,414 
                                    
Weighted-average shares outstanding - basic (1)   485,370    484,233    483,300    483,073    482,847    1,137    2,523 
                                    
Weighted-average shares outstanding - diluted (1)(2)   486,074    484,654    484,845    484,399    483,687    1,420    2,388 
                                    
Issued shares outstanding (period-end)   483,753    483,475    481,980    481,750    481,750    278    2,003 
                                    
Net income (loss) per share - basic (1)  $0.71   $0.49   $(1.97)  $0.48   $(2.22)  $0.23   $2.93 
                                    
Net income (loss) per share - diluted (1)(2)  $0.71   $0.49   $(1.97)  $0.47   $(2.22)  $0.22   $2.93 
                                    
Adjusted Earnings per Share ("Adjusted EPS")                                   
Numerator                                   
GAAP net income available to common shareholders  $345   $235   $(953)  $230   $(1,069)  $110   $1,414 
less: Disc Ops, net of tax   (3)   (3)   13    5    (13)   -    10 
add back: Original issue discount expense ("OID expense")   14    15    12    11    18    (1)   (4)
add back: Repositioning Items   4    7    3    2    154    (3)   (150)
less: OID & Repo. Tax (35% in '16, 34% in '15)   (6)   (8)   (5)   (5)   (58)   1    52 
Significant Discrete Tax Items   (91)   7    -    -    -    (98)   (91)
Series G Actions   -    -    1,179    -    1,171    -    (1,171)
Series A Actions   1    -    -    -    22    1    (22)
Core net income available to common shareholders (3)  $263   $253   $249   $244   $224   $11   $39 
                                    
Denominator                                   
Weighted-Average Shares Outstanding - (Diluted, thousands)   486,074    484,654    484,845    484,399    483,687           
                                    
Adjusted EPS (4)  $0.54   $0.52   $0.52   $0.51   $0.46   $0.02   $0.08 

 

 

(1) Includes shares related to share-based compensation that vested but were not yet issued

(2) Due to antidilutive effect of the net loss from continuing operations attributable to common shareholders for the year ended December 31, 2015 and June 30, 2015, basic weighted-average common shares outstanding were used to calculate basic and diluted earnings per share

(3) Core net income available to common 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 available to common adjusts GAAP net income available to common for discontinued operations, OID expense, repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, certain discrete tax items including tax settlements and preferred stock capital actions.

(4) Adjusted earnings per share (Adjusted EPS) is a non-GAAP financial measure that adjusts GAAP EPS for revenue and expense items that are typically strategic in nature or that management otherwise does not view as reflecting the operating performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. In the numerator of Adjusted EPS, GAAP net income available to common is adjusted for the following items: (a) excludes discontinued operations, net of tax, as Ally is primarily a domestic company and sales of international businesses in the past have significantly impacted GAAP EPS, (b) excludes the tax-effected non-cash expense bond exchange original issue discount (OID), (c) excludes tax-effected repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, (d) excludes certain discrete tax items that do not relate to the operating performance of the core businesses, and (e) 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.

 

2Q 2016 Preliminary Results22

 

 

ALLY FINANCIAL INC.

ADJUSTED TANGIBLE BOOK PER SHARE RELATED INFORMATION

 

($ in billions, shares in thousands)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Adjusted Tangible Book Value Per Share ("Adjusted TBVPS") Information                                   
                                    
Numerator                                   
GAAP shareholder's equity  $13.6   $13.8   $13.4   $14.6   $14.3   $(0.2)  $(0.7)
less: Preferred equity   -    (0.7)   (0.7)   (0.8)   (0.8)   0.7    0.8 
GAAP Common shareholder's equity   13.6    13.1    12.7    13.8    13.5    0.5    0.1 
less: Goodwill and identifiable intangibles, net of DTLs   (0.3)   (0.0)   (0.0)   (0.0)   (0.0)   (0.2)   (0.2)
Tangible common equity   13.3    13.1    12.7    13.8    13.5    0.2    (0.1)
less: Tax-effected bond OID (35% tax rate in 2016; 34% tax rate in 2015 and prior)   (0.8)   (0.8)   (0.9)   (0.9)   (0.9)   0.0    0.0 
less: Series G discount   -    -    -    (1.2)   (1.2)   -    1.2 
Adjusted tangible book value  $12.5   $12.3   $11.9   $11.7   $11.4   $0.2   $1.1 
                                    
Denominator                                   
Issued shares outstanding (period-end, thousands)   483,753    483,475    481,980    481,750    481,750           
                                    
GAAP shareholder's equity per share  $28.1   $28.6   $27.9   $30.3   $29.7   $(0.5)  $(1.5)
less: Preferred equity per share   -    (1.4)   (1.4)   (1.7)   (1.7)   1.4    1.7 
GAAP Common shareholder's equity per share   28.1    27.2    26.4    28.6    28.0    1.0    0.2 
less: Goodwill and identifiable intangibles, net of DTLs per share   (0.6)   (0.1)   (0.1)   (0.1)   (0.1)   (0.5)   (0.5)
Tangible common equity per share   27.6    27.1    26.4    28.6    27.9    0.5    (0.4)
less: Tax-effected bond OID (35% tax rate in 2016; 34% tax rate in 2015 and prior) per share   (1.7)   (1.7)   (1.8)   (1.8)   (1.8)   0.0    0.1 
less: Series G discount per share   -    -    -    (2.4)   (2.4)   -    2.4 
Adjusted tangible book value per share (1)  $25.9   $25.4   $24.6   $24.3   $23.7   $0.5   $2.2 

 

 

(1) Adjusted tangible book value per share (Adjusted TBVPS) is a non-GAAP financial measure that reflects the book value of equity available to shareholders even if original issue discount (OID) expense 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 (a) goodwill and identifiable intangibles, net of DTLs, (b) tax-effected bond OID to reduce tangible common equity in the event the corresponding discounted bonds are redeemed/tendered and (c) Series G discount which reduces tangible common equity as the company has normalized its capital structure.

 

2Q 2016 Preliminary Results23

 

 

ALLY FINANCIAL INC.

CORE ROTCE RELATED INFORMATION

 

($ in millions) unless noted otherwise

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Core Return on Tangible Common Equity ("Core ROTCE")                                   
Numerator                                   
GAAP net income available to common shareholders  $345   $235   $(953)  $230   $(1,069)  $110   $1,414 
less: Disc Ops, net of tax   (3)   (3)   13    5    (13)   -    10 
add back: Original issue discount expense ("OID expense")   14    15    12    11    18    (1)   (4)
add back: Repositioning Items   4    7    3    2    154    (3)   (150)
less: OID & Repo. Tax (35% in '16, 34% in '15)   (6)   (8)   (5)   (5)   (58)   1    52 
Significant Discrete Tax Items & Other   (91)   7    8    2    5    (98)   (96)
Series G Actions   -    -    1,179    -    1,171    -    (1,171)
Series A Actions   1    -    -    -    22    1    (22)
Core net income available to common shareholders (1)  $263   $253   $257   $246   $229   $11   $34 
                                    
Denominator (2-period average, $ billions)                                   
GAAP shareholder's equity  $13.7   $13.6   $14.0   $14.4   $15.1   $0.1   $(1.4)
less: Preferred equity   0.3    0.7    0.8    0.8    1.0    (0.3)   (0.7)
less: Goodwill & identifiable intangibles, net of deferred tax liabilities ("DTLs")   0.1    0.0    0.0    0.0    0.0    0.1    0.1 
Tangible common equity  $13.2   $12.9   $13.2   $13.6   $14.1   $0.3   $(0.9)
less: Unamortized original issue discount ("OID discount")   1.3    1.3    1.3    1.3    1.3    (0.0)   (0.0)
less: Net deferred tax asset ("DTA")   1.1    1.2    1.4    1.5    1.6    (0.1)   (0.5)
Normalized common equity (2)  $10.8   $10.4   $10.5   $10.7   $11.1   $0.4   $(0.3)
Core ROTCE (3)   9.7%   9.8%   9.8%   9.2%   8.3%          

 

 

(1) Core net income available to common 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 available to common adjusts GAAP net income available to common for discontinued operations, OID expense, repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, certain discrete tax items including tax settlements and preferred stock capital actions.

(2) Normalized common equity calculated using 2 period average

(3) 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. Ally’s Core net income available to common utilized a static 34% tax rate for purposes of calculating Core ROTCE through 4Q 2015. As of 1Q 2016, Ally’s Core net income available to common for purposes of calculating Core ROTCE is based on the actual effective tax rate for the period adjusted for any discrete tax items including tax settlements, which aligns with the methodology used calculating adjusted earnings per share.
(a) In the numerator of Core ROTCE, GAAP net income available to common is adjusted for discontinued operations net of tax, tax-effected OID expense, tax-effected repositioning items primarily related to the extinguishment of high-cost legacy debt and strategic activities, certain discrete tax items and preferred stock capital actions.
(b) In the denominator, GAAP shareholder’s equity is adjusted for preferred equity and goodwill and identifiable intangibles net of DTL, unamortized OID, and net DTA.

 

2Q 2016 Preliminary Results24

 

 

ALLY FINANCIAL INC.

SUPPLEMENTAL FINANCIAL DATA

 

($ in millions)

 

   QUARTERLY TRENDS   CHANGE VS. 
   2Q 16   1Q 16   4Q 15   3Q 15   2Q 15   1Q 16   2Q 15 
Adjusted Efficiency Ratio Calculation                                   
Numerator                                   
Total noninterest expense  $773   $710   $668   $674   $724   $63   $49 
less: Rep and warrant expense   (3)   (1)   (2)   (3)   (9)   (3)   5 
less: Insurance expense   293    218    201    209    267    75    26 
less: Repositioning items   4    4    1    2    4    (0)   0 
Adjusted noninterest expense  $479   $488   $468   $465   $462   $(9)  $18 
                                    
Denominator ($ millions)                                   
Total net revenue  $1,358   $1,327   $1,339   $1,302   $1,127   $31   $231 
add: Original issue discount   14    15    12    11    18    (1)   (4)
add: Repositioning items   -    3    2    -    150    (3)   (150)
less: Insurance revenue   275    268    279    249    282    7    (7)
Adjusted net revenue  $1,097   $1,076   $1,074   $1,064   $1,013   $20   $84 
Adjusted Efficiency Ratio (1)   43.7%   45.4%   43.6%   43.7%   45.6%          
                                    
Noninterest Expense                                   
Compensation and benefits  $242   $252   $237   $235   $236   $(10)  $6 
Technology and communications   67    66    69    65    64    1    3 
Professional services   22    21    25    24    25    2    (2)
Servicing expenses (2)   56    56    56    51    50    (0)   6 
Advertising and marketing   21    27    27    26    23    (6)   (2)
Other controllable expenses (3)   52    51    50    50    50    1    1 
Controllable Expense  $459   $473   $465   $449   $448   $(14)  $11 
Other Noninterest Expense   310    233    202    222    272    77    38 
Total Noninterest Expense (ex. repositioning) (4)  $769   $706   $667   $672   $720   $63   $49 
Repositioning expenses (4)   4    4    1    2    4    (0)   0 
Total Noninterest Expense (as reported)  $773   $710   $668   $674   $724   $63   $49 

 

 

(1) Adjusted efficiency ratio is a non-GAAP financial measure that management believes is helpful to readers in comparing the efficiency of its core banking and lending businesses with those of its peers. In the numerator of Adjusted efficiency ratio, total noninterest expense is adjusted for Insurance segment expense, repositioning items primarily related to strategic activities and rep and warrant expense. In the denominator, total net revenue is adjusted for Insurance segment revenue, repositioning items primarily related to the extinguishment of high-cost legacy debt and original issue discount (OID).

(2) Includes lease and loan administration expenses and vehicle remarketing and repossession expenses

(3) Includes occupancy and premises and equipment depreciation

(4) Repositioning items are primarily related to the extinguishment of high-cost legacy debt and strategic activities

 

2Q 2016 Preliminary Results25