News Column

Ally Financial Reports First Quarter 2014 Financial Results

May 17, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- Ally Financial Inc. (NYSE: ALLY) reported net income of $227 million, or $0.33 per diluted common share, for the first quarter of 2014 compared to net income of $104 million, or a loss of $0.78 per diluted common share, in the prior quarter, and net income of $1.1 billion, or $2.16 per diluted common share, for the first quarter of 2013. The company reported core pre-tax income of $336 million in the first quarter of 2014, compared to core pre-tax income of $142 million in the prior quarter and a core pre-tax loss of $6 million in the comparable prior year period. Core pre-tax income, excluding repositioning items, was $339 million for the first quarter of 2014, increasing $132 million compared to same period last year. Core pre-tax income reflects income from continuing operations before taxes and original issue discount (OID) amortization expense primarily from legacy bond exchanges.

Results for the quarter continued to be driven by significant improvement to Ally's cost of funds(1) which declined 15 basis points from the prior quarter and 55 basis points year-over-year. Primary contributors included retail deposit growth, up 17 percent year-over-year, and continued execution of Ally's liability management strategy, as the company completed its $9.7 billion legacy debt call program. As a result, Ally's quarterly net financing revenue(1) improved 24 percent year-over-year. Additionally, auto earning assets grew 6 percent compared to the prior year period.

"In the first four months of the year, Ally completed several key steps toward exiting TARP and positioning the company for longer-term success," said Chief Executive Officer Michael A. Carpenter. "The U.S. Treasury has received $5.4 billion so far this year through a private placement of common stock and Ally's initial public offering. As a result, the U.S. taxpayer received a return of approximately $500 million on its original investment in the company, and the U.S. Treasury's stake has been reduced to 17 percent.

"Ally continued to post strong performance in its core businesses, with auto finance originations up $1 billion since the fourth quarter of 2013, and new and used originations from diversified dealers up 40 percent year-over-year," Carpenter continued. "Retail deposit growth at Ally Bank continued steadily at $2 billion in the first quarter and the customer base expanded by 19 percent since the first quarter of 2013."

Carpenter concluded, "As Ally begins its chapter as a publicly-held company, we are squarely focused on making continued progress on improving profitability and achieving a double-digit core return on tangible common equity. Our plan to achieve this is centered on three key areas that aim to improve net interest margin, reduce controllable expenses and normalize regulatory requirements over time, as we fully exit TARP and demonstrate continued strength and stability."

Keywords for this news article include: Ally Financial, Investment and Finance.

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Source: Investment Weekly News


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