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Ally Earnings Up for 2015, Q4

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Ally Financial

Ally Financial reported net income of $1.3 billion for full year 2015 and $263 million for the fourth quarter.

The figures compare to net income of $268 million in the prior quarter and $177 million for the fourth quarter of 2014, an increase of 49 percent over the prior year period. For the full year 2015, net income increased 12 percent from $1.2 billion in 2014.

Full Year 2015

Core pre-tax income in 2015, excluding repositioning items, improved 11 percent to $1.8 billion, compared to $1.6 billion in the prior year. For full year 2015, Ally reported adjusted earnings per diluted common share of $2, increasing 19 percent from $1.68 in 2014, excluding the impact of the redemption of Series G and repurchase of Series A preferred securities during 2015.

Including the redemption of these securities, the company reported a generally accepted accounting principles loss of $2.66 per common share for the year.

The redemption of these preferred securities were planned actions to normalize Ally’s capital structure, drive improved financial performance in the future, and to support the objective of initiating a common dividend and share repurchase program in 2016.

Fourth Quarter 2015

The company reported core pre-tax income of $446 million, excluding repositioning items, in the fourth quarter of 2015, increasing 4 percent from $431 million in the third quarter and up 13 percent from $396 million in the fourth quarter 2014.

Strong quarterly operating results continued to be driven by improved net financing revenue, excluding original issue discount (OID), which totaled $995 million in the fourth quarter of 2015, up from $835 million a year ago.

Net interest margin expanded 33 basis points year-over-year to end the year at 2.68 percent as a result of the company’s continued focus on improved cost of funds. Revenue from retail auto loan growth more than offset a decline in net lease revenue.

Partially offsetting results was $240 million in provision expense, an increase of $85 million year-over-year, which was driven by the shift toward more retail auto assets on the balance sheet and fewer leasing assets which do not contribute to provision expense.

Consumer auto originations remained strong at $9.3 billion for the quarter, up from $9 billion in the prior year period. The company posted $41 billion in originations for the year, exceeding its originations target for 2015.

Ally deployed a disciplined originations strategy as it shifted capital previously used to support GM incentivized originations toward new and used retail financing contracts.

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