Exhibit 99.2
Ally Financial Inc. 2 Q Earnings Review Contact Ally Investor Relations at (866) 710 - 4623 or investor.relations@ally.com July 29, 2014
2 2Q 2014 Preliminary Results Forward - Looking Statements and Additional Information The following should be read in conjunction with the financial statements, notes and other information contained in the Compa ny’ 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 “expec t,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “explore,” “ pos itions,” “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 tha t involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe th ese judgments are reasonable, these statements are not guarantees of any events or financial results, and Ally’s actual results may differ mate ria lly 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 revise d or supplemented in subsequent reports filed with the SEC. Such factors include, among others, the following: maintaining the mut ual ly beneficial relationship between Ally and General Motors (“GM”), and Ally and Chrysler Group LLC (“Chrysler”); our ability to maintain relationships with automotive dealers; our ability to realize the anticipated benefits associated with being a financial holding company, and the significant regula tio n and restrictions that we are now subject to; the potential for deterioration in the residual value of off - lease vehicles; disrup tions in the market in which we fund our operations, with resulting negative impact on our liquidity; changes in our accounting assumptions that may re quire or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in the cr edit ratings of Ally, Chrysler, or GM; changes in economic conditions, currency exchange rates or political stability in the markets in which we op era te; and changes in the existing or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar orga niz ations (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 publi cly or otherwise revise any forward - looking statements, whether as a result of new information, future events or other such factors that affect t he subject of these statements, except where expressly required by law. Reconciliation of non - GAAP financial measures included within this presentat ion are provided in this presentation. Use of the term “loans” describes products associated with direct and indirect lending activities of Ally’s operations. The s pec ific products include retail installment sales contracts, lines of credit, leases or other financing products. The term “originate” refers to Ally’ s p urchase, acquisition or direct origination of various “loan” products.
3 2Q 2014 Preliminary Results Second Quarter Highlights • Net income of $323 million and EPS of $0.54 – Core pretax income excluding repositioning items (1) of $417 million, and Adjusted EPS (2) of $0.42 – Results reflect continued strong lease performance and favorable credit trends – Strong results partially offset by unprecedented insurance weather - related losses • Auto originations of $10.9 billion, up from $ 9 .2 billion in 1Q14 and $9.8 billion in 2Q13 – Dealer relationship growth drove record number of decisioned applications • Retail deposit growth of $0.7 billion, with balances up 2 % QoQ and 15% YoY (1) Represents a non - GAAP financial measure. As presented excludes repositioning items, OID amortization expense, taxes and discontinued operations. See slide 22 for details (2) See slide 4 for details (3) Excludes OID (4) See slide 23 for details NIM Expansion Expense Reduction Regulatory Normalization • Net financing revenue (3) of $912 million, up 32% YoY • NIM (3) of 2.63%, up 59 bps YoY • Cost of funds (3) down 63 bps YoY • Controllable expenses (4) down $40 million YoY ; YTD down $110 million vs. 2013 • Adjusted efficiency ratio (4) of 49% down from 67% in 2Q13 • Ally Bank paid a $1.5 billion dividend to the parent in 2Q14 • Contributed Ally Corporate Finance assets to the bank in 2Q14 • Re - deployed capital through liability management (zero coupon bond redemption) Continued progress on path to double - digit Core ROTCE
4 2Q 2014 Preliminary Results ($ millions except EPS or as noted) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Net financing revenue (1) 912$ 865$ 689$ 47$ 223$ Total other revenue (1) 372 321 411 51 (38) Provision for loan losses 63 137 89 (74) (26) Total noninterest expense 805 710 799 95 6 Core pre-tax income, ex. repositioning (2) 417$ 339$ 211$ 78$ 205$ Net income (loss) 323$ 227$ (927)$ 96$ 1,250$ GAAP EPS (diluted) 0.54$ 0.33$ (2.73)$ 0.21$ 3.27$ Discontinued operations, net of tax (0.09) (0.06) 2.49 (0.03) (2.58) OID expense, net of tax 0.07 0.06 0.10 0.01 (0.02) One time items / repositioning (3) (0.11) 0.00 0.02 (0.11) (0.12) Adjusted EPS 0.42$ 0.34$ (0.13)$ 0.08$ 0.55$ ROTCE (4) 7.7% 4.9% n/m Core ROTCE (4) 8.4% 6.5% 3.1% Adjusted Efficiency ratio (4) 49% 55% 67% Tier 1 Common ratio (5) 9.4% 9.1% 8.0% Increase/(Decrease) vs. Second Quarter Financial Results (1) Excludes OID. 2Q14 total other revenue excludes $7 million of accelerated OID expense associated with debt redemption (2) Core pre - tax income as presented excludes the impact of repositioning items, OID amortization expense, taxes and discontinued op erations. See slide 22 for details (3) 2Q14 includes repositioning items of $16 million pre - tax and a one - time tax benefit of $62 million (4) Represents a non - GAAP financial measure . Core ROTCE adjusts for certain items such as net DTA and OID . See slide 23 for details (5) Tier 1 Common is a non - GAAP financial measure. See page 16 of the Financial Supplement for details (6) Includes ResCap bankruptcy settlement charge (6)
5 2Q 2014 Preliminary Results Pre-Tax Income ($ millions) 2Q 14 1Q 14 2Q 13 Automotive Finance 461$ 122$ 79$ Insurance (23) (97) (68) Dealer Financial Services 438$ 25$ 11$ Mortgage 27 10 54 Corporate and Other (1) (48) 43 141 Core pre-tax income, ex. repositioning (2) 417$ 78$ 205$ Increase/(Decrease) vs. Results by Segment (1) Results exclude the impact of repositioning items and OID amortization expense. See slide 22 for details (2) Core pre - tax income is a non - GAAP financial measure and as presented excludes the impact of repositioning items, OID amortizatio n expense, taxes and discontinued operations. See slide 22 for details • Auto Finance results driven by continued strong lease performance and favorable credit performance • Insurance results negatively impacted by historically high weather - related losses of $124 million, up $119 million QoQ and $55 million YoY • Mortgage provision release of $25 million as a result of improved portfolio performance and improving economic conditions • Corporate and Other results largely driven by improving corporate cost of funds and expense reductions – Offset by $30 million of expense associated with debt redemption
6 2Q 2014 Preliminary Results Net Interest Margin • Net Interest Margin (“NIM”) (1) improved 10 bps QoQ and 59 bps YoY – Cost of funds (1) declined 63 bps YoY driven primarily by the redemption of legacy high - cost callable debt and continued growth in deposits ▪ Increase QoQ driven by redemption of zero coupon bond, which resulted in $30 million of interest expense in the quarter but will improve cost of funds trajectory going forward – Earning asset yield favorability continues to be driven by stronger lease remarketing performance Note: Continuing operations only (1) Excludes OID Ally Financial - Net Interest Margin $134 $138 $138 4.48% 4.49% 4.61% 2.04% 2.53% 2.63% 2.72% 2.06% 2.09% 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Average Earning Assets ($B) Earning Asset Yield NIM (ex. OID) Cost of Funds (ex. OID)
7 2Q 2014 Preliminary Results Ally Bank Deposit Levels ($ billions) $39.9 $41.7 $43.2 $45.2 $45.9 $49.4 $51.4 $52.8 $54.9 $55.6 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Ally Bank Retail Ally Bank Brokered Ally Bank Deposit Franchise • Continued franchise momentum with almost $46 billion of retail deposits • $0.7 billion of retail deposit growth in 2 Q, with balances up 2 % QoQ and 15% YoY – 2Q growth seasonally lower driven by tax payments – Growth continues to be driven largely by savings products • Focus on continuing to build on strong franchise and brand while improving efficiencies – Ally Bank again ranked in top 5 among customers and top 10 among non - customers in 2014 American Banker/Reputation Institute Survey of Bank Reputations – Launched iPad® app to further expand suite of mobile services – Continued focus on “purposeful savers” – On track to achieve target $5 billion of annual retail deposit growth • Expansion of loyal customer base with 854K primary customers, up 3 % QoQ and 18% YoY Stable, consistent growth of retail deposits Deposit Mix Ally Bank Deposit Composition and Average Retail Portfolio Interest Rate 19% 19% 18% 18% 17% 46% 45% 45% 43% 42% 35% 36% 37% 39% 40% 1.24% 1.22% 1.21% 1.19% 1.17% 2Q13 3Q13 4Q13 1Q14 2Q14 Brokered CD Retail CD MMA/OSA/Checking Average Retail Portfolio Interest Rate
8 2Q 2014 Preliminary Results ($ millions) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Compensation and benefits 216$ 254$ 249$ (38)$ (33)$ Technology and communications 93 85 89 9 4 Professional services 25 28 38 (2) (13) Servicing expenses (1) 53 46 45 6 8 Advertising and marketing 25 29 28 (5) (4) Other controllable expenses (2) 47 45 49 2 (2) Controllable Expense 458$ 487$ 498$ (29)$ (40)$ Other Noninterest Expense 347$ 223$ 300$ 123$ 46$ Total Noninterest Expense (ex. repositioning) 805$ 710$ 799$ 95$ 6$ Repositioning expenses (3) 16 3 2 13 15 Total Noninterest Expense 821$ 713$ 801$ 108$ 20$ Increase/(Decrease) vs. Expenses • Controllable expenses down $29 million QoQ and $40 million YoY – QoQ decline from lower compensation and benefit expense driven by corporate overhead reduction and equity compensation revaluation – YoY decline driven by overall streamlining of the company from strategic actions • Other noninterest expense up QoQ and YoY driven by weather - related insurance losses (1) Includes lease and loan administration expenses and vehicle remarketing and repossession expenses (2) Includes occupancy and premises and equipment depreciation (3) See slides 22 and 23 for details
9 2Q 2014 Preliminary Results Capital • Tier 1 Common capital increased in the quarter driven primarily by: – $258 million of net income available to common – $155 million decrease in disallowed DTA • Tier 1 Common ratio of 9.4%, up 25 bps QoQ and 139 bps YoY – Estimated fully phased - in Basel III Common Equity Tier 1 ratio of 9.5% Tier 1 Common is a non - GAAP financial measure. See page 16 of the Financial Supplement for details 2Q14 Tier 1 Common ratio pro forma for remaining international sale is 9.9% Ally Financial Capital $127 $127 $129 $128 $129 16.5% 16.4% 12.8% 13.0% 13.2% 15.4% 15.4% 11.8% 12.1% 12.3% 8.0% 7.9% 8.8% 9.1% 9.4% 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Risk-Weighted Assets ($B) Total Capital Ratio Tier 1 Ratio Tier 1 Common Ratio
10 2Q 2014 Preliminary Results 263% 287% 238% 234% 224% 344% 0.46% 0.42% 0.53% 0.53% 0.53% 0.34% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 ALLL as % of Annualized NCOs Annualized NCO Rate $1,192 $1,208 $1,198 $1,183 $1,197 $1,171 ALLL Balance ($M) Consolidated Net Charge - Offs U.S. Commercial Auto Net Charge - Offs Asset Quality U.S. Retail Auto Net Charge - Offs U.S. Retail Auto Delinquencies Note: Above loans are classified as held - for - investment and recorded at historical cost. See slide 23 for details Note: 4Q13 charge - off decline driven by non - recurring recognition of additional recoveries Note: Includes accruing contracts only (30+ DPD) $843 $999 $1,188 $1,325 $904 $1,174 1.53% 1.78% 2.10% 2.35% 1.59% 2.02% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Delinquent Contracts ($M) Delinquency Rate $93 $80 $115 $114 $121 $83 0.69% 0.57% 0.82% 0.80% 0.85% 0.58% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Net Charge-Offs ($M) Annualized NCO Rate $1 ($1) $0 $2 $0 $1 0.01% - 0.01% 0.00% 0.03% 0.00% 0.01% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Net Charge-Offs ($M) Annualized NCO Rate
11 2Q 2014 Preliminary Results Key Financials ($ millions) 2Q 14 1Q 14 2Q 13 Net financing revenue 884$ 64$ 107$ Total other revenue 62 (2) 2 Total net revenue 946 62 109 Provision for loan losses 99 (60) 11 Noninterest expense 386 - 19 Pre-tax income from continuing ops 461$ 122$ 79$ U.S. auto earning assets 109,938$ 2,005$ 7,633$ Increase/(Decrease) vs. • Auto finance reported pre - tax income of $461 million in 2Q, up $122 million from 1Q and $79 million from a year ago – Net financing revenue increase driven primarily by retail portfolio growth and lease performance ▪ Strong used car prices and higher termination volumes – Provision down QoQ driven partially by seasonally lower charge - offs ▪ Increase YoY driven by portfolio normalization and balance sheet growth • Earning assets up 2 % QoQ and 7 % YoY • $ 10.9 billion of originations in 2Q, up $1.7 billion QoQ and $1.1 billion YoY – Second highest quarter of originations in Ally history – Record used originations ($3.1B) – Record number of decisioned applications (2.3M ) – Chrysler penetration higher QoQ (11% vs. 8%) – Net increase of over 900 non - GM/Chrysler dealers actively originating volume vs. 2Q13 – Non - GM/Chrysler originations increased to 20% Auto Finance – Results See slide 23 for definitions U.S. Consumer Origination Credit Characteristics % of $ originations 37% 36% 36% 35% 34% 34% 16% 17% 17% 9% 9% 9% 3% 4% 4% 2012 2013 1H 2014 Super Prime Prime Near Prime Non Prime No FICO
12 2Q 2014 Preliminary Results ($ billions) $32.0 $30.3 $28.1 $31.6 $32.6 $32.9 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 (EOP $ billions) $69.8 $72.1 $73.7 $74.1 $74.9 $76.9 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 ($ billions; % of $ originations) $9.7 $9.8 $9.6 $8.2 $9.2 $10.9 61% 64% 69% 66% 66% 63% 13% 15% 16% 18% 19% 20% 26% 21% 15% 16% 15% 17% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 GM Chrysler Other Auto Finance – Key Metrics See slide 23 for definitions Consumer Assets Commercial Assets Consumer Originations Origination Mix Note: Asset balances reflect the average daily balance for the quarter (% of $ originations) 14% 9% 8% 26% 24% 27% 6% 7% 8% 28% 29% 29% 25% 30% 28% 0% 25% 50% 75% 100% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 New Subvented New Standard New Diversified Lease Used
13 2Q 2014 Preliminary Results Dealer Products & Services Written Premiums ($ millions) $260 $267 $236 $233 $276 $267 $225 $244 $267 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Key Financials ($ millions) 2Q 14 1Q 14 2Q 13 Insurance premiums, service revenue earned and other 252$ 8$ (11)$ Insurance losses and loss adjustment expenses 188 120 42 Acquisition and underwriting expenses 141 (4) (8) Total underwriting income (77) (108) (45) Investment income and other 54 11 (23) Pre-tax (loss) from continuing ops (23)$ (97)$ (68)$ Total assets 7,232$ 48$ (104)$ Key Statistics 2Q 14 1Q 14 2Q 13 Insurance ratios Loss ratio 75% 28% 56% Underwriting expense ratio 56% 60% 57% Combined ratio 131% 88% 113% Increase/(Decrease) vs. Gross Weather-Related Losses ($ millions) $87 $85 $69 $124 2Q 11 2Q 12 2Q 13 2Q 14 Insurance • Pre - tax loss of $23 million, down $97 million from 1Q and $68 million from a year ago – Seasonal increase in weather - related losses compounded by severe hailstorms – Realized equity gains driving variances in investment income QoQ (higher) and YoY (lower) • W ritten premiums up QoQ but lower YoY – QoQ increase from strong origination levels driving higher service contracts – YoY decrease from lower service contract levels partially driven by higher mix of GM lease originations Note: Excludes Canadian Personal Lines business, which is in runoff Note: Excludes the benefit of reinsurance in prior year periods
14 2Q 2014 Preliminary Results Key Financials ($ millions) 2Q14 1Q14 2Q13 Net financing revenue (ex. OID) 0$ (16)$ 118$ Total other revenue (ex. OID) 11 30 (12) Provision for loan losses (11) (12) (6) Noninterest expense 71 (16) (27) Core pre-tax loss (1) (48)$ 43$ 141$ OID amortization expense (2) 53 9 (7) Pre-tax loss from continuing ops (1) (102)$ 33$ 147$ Total assets 23,731$ (293)$ (3,014)$ Increase/(Decrease) vs. Key Financials ($ millions) 2Q 14 1Q 14 2Q 13 Net financing revenue 12$ (2)$ (3)$ Total other revenue 9 5 6 Total net revenue 21 3 3 Provision for loan losses (25) (2) (31) Noninterest expense 19 (5) (20) Pre-tax income from continuing ops (1) 27$ 10$ 54$ Total assets 7,640$ (297)$ (1,421)$ Ally Bank HFI Portfolio 2Q 14 1Q 14 2Q 13 Net Carry Value ($ billions) 7.5$ 7.8$ 8.8$ Ongoing (originated post 1/1/2009) 39% 39% 40% Legacy (originated pre 1/1/2009) 61% 61% 60% % Interest Only 13.5% 13.5% 15.3% % 30+ Delinquent 2.7% 2.5% 2.8% Net Charge-off Rate 0.3% 0.6% 1.1% Wtd. Avg. LTV/CLTV (2) 76.6% 77.8% 84.9% Refreshed FICO 726 727 731 Increase/(Decrease) vs. Mortgage and Corporate and Other (1) Excludes repositioning items in 2Q13. See slide 22 for details (2) Updated home values derived using a combination of appraisals, BPOs, AVMs and MSA level house price indices Mortgage Results (1) Excludes repositioning items. See slide 22 for details (2) Primarily bond exchange OID amortization expense used for calculating core pre - tax income . 2Q14 total other revenue excludes $7 million of accelerated OID expense associated with debt redemption Corporate and Other Results
15 2Q 2014 Preliminary Results Summary and Outlook • Strong performance in the auto finance business – $10.9 billion of auto originations – Strong used vehicle prices and higher termination volumes continued to benefit lease performance • Continuing to strengthen our leading d irect bank franchise while growing deposit base • Dedicated to three - point plan to achieve double - digit Core ROTCE – Cost of funds down 63 bps YoY – Controllable expenses down $110 million YTD vs. 2013 ▪ On track to deliver long - term efficiency target of mid - 40%, but quarterly trajectory may be subject to variability – Progress made on regulatory normalization and continuing to explore opportunities to re - deploy excess capital • Will assist U.S. Treasury to complete Ally’s exit from TARP – Remaining investment of 15.6% of common equity (75 million shares)
Supplemental Charts
17 2Q 2014 Preliminary Results ($ millions) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Net financing revenue (1) 912$ 865$ 689$ 47$ 223$ Total other revenue (1) 372 321 411 51 (38) Provision for loan losses 63 137 89 (74) (26) Controllable expenses (2) 458 487 498 (29) (40) Other noninterest expenses 347 223 301 124 46 Core pre-tax income, ex. repositioning (3) 417$ 339$ 211$ 78$ 205$ Repositioning items (4) (16) (3) (11) (13) (6) Core pre-tax income 400$ 336$ 201$ 64$ 200$ OID amortization expense (5) 53 44 61 9 (7) Income tax expense (benefit) 64 94 40 (30) 24 Income (loss) from discontinued operations 40 29 (1,027) 11 1,067 Net income (loss) 323$ 227$ (927)$ 96$ 1,250$ Increase/(Decrease) vs. Second Quarter Financial Results (1) Excludes OID. 2Q14 total other revenue excludes $7 million of accelerated OID expense associated with debt redemption (2) See slide 23 for definitions (3) Core pre - tax income as presented excludes the impact of repositioning items, OID amortization expense, taxes and discontinued op erations. See slide 22 for details (4) Repositioning items for 2Q14 are primarily related to Ally’s Initial Public Offering. See slide 23 for additional details (5) 2Q14 includes $ 7 million of accelerated OID associated with debt redemption Supplemental
18 2Q 2014 Preliminary Results ($ in millions) Average Outstanding Balance (1) Quarterly Interest Expense Annualized Cost of Funds LT Unsecured Debt 25,367$ 377$ 5.96% Secured Debt 40,843 123 1.21% Other Borrowings (2) 9,129 16 0.70% Deposits 55,626 166 1.20% Total / Weighted Average 130,965$ 682$ 2.09% ($ billions) $3.0 $0.8 $0.0 $1.7 $5.0 $1.9 $4.1 $1.3 1Q 14 2Q 14 3Q 14 4Q 14 2015 2016 2017 2018 Matured Remaining • Diversified funding strategy with opportunities to lower cost of funds – 68% of total assets reside at Ally Bank – Deposits now represent 43% of Ally’s funding • Efficient capital markets funding in 2Q – Completed $3.2 billion of term securitizations at the parent and Ally Bank – Modest need for unsecured issuance Funding As of 6/30/14. Total maturities for 2019 and beyond equal $10.1 billion and do not exceed $4 billion in any given year. Prior periods do not include early debt redemptions Total Asset Breakdown Unsecured Long - Term Debt Maturities Supplemental Liability and Cost of Funds Detail (1) Excludes OID (2) Includes Demand Notes, FHLB, and Repurchase Agreements ($ billions) 61% 61% 65% 66% 68% $150.6 $150.6 $151.2 $148.5 $149.9 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Ally Bank Assets Non-Bank Assets
19 2Q 2014 Preliminary Results Liquidity Supplemental (1) Parent company liquidity is defined as our consolidated operations less Ally Bank and the regulated subsidiaries of Ally Insu ran ce’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 distrib uti on date (3) Includes UST, Agency debt and Agency MBS (4) Includes equal allocation of shared unused capacity totaling $4.1 billion in 2Q13, which was available for use by Ally Bank or the Parent. As of 3Q13 , the facility was renewed for the exclusive use of the Parent (5) To optimize the use of cash, Ally Financial lends cash to Ally Bank from time to time under an intercompany loan agreement. Amo unts outstanding on this loan are repayable to Ally Financial at any time, subject to 5 days notice (6) Represents capacity from certain domestic and foreign forward purchase commitments and committed secured facilities that are gen erally reliant upon the origination of future automotive receivables in 2013. As of December 31, 2013, these funding facilities have matured • Consolidated available liquidity of $18.8 billion – $10.7 billion at the parent and $8.1 billion at Ally Bank Available Liquidity 6/30/2014 3/31/2014 6/30/2013 ($ billions) Parent (1) Ally Bank Parent (1) Ally Bank Parent (1) Ally Bank Cash and Cash Equivalents (2) 2.9$ 2.2$ 2.9$ 2.5$ 4.5$ 3.1$ Highly Liquid Securities (3) 2.5 6.6 2.2 5.9 2.5 6.7 Current Committed Unused Capacity (4) 3.6 1.0 4.6 1.0 12.3 3.9 Subtotal 9.0$ 9.8$ 9.7$ 9.4$ 19.3$ 13.7$ Ally Bank Intercompany Loan (5) 1.7 (1.7) 0.5 (0.5) 3.4 (3.4) SubtotalTotal Current Available Liquidity 10.7$ 8.1$ 10.2$ 8.9$ 22.7$ 10.3$ Forward Committed Unused Capacity (6) - - - - 1.3 - Total Available Liquidity 10.7$ 8.1$ 10.2$ 8.9$ 24.0$ 10.3$
20 2Q 2014 Preliminary Results Impact of Discontinued Operations ($ millions) 2Q 14 1Q 14 2Q 13 Auto Finance 22$ (6)$ 267$ Insurance 1 1 (293) Corporate and Other (1) 25 26 1,718 Consolidated pre-tax income 48$ 20$ 1,691$ Tax expense 7 9 624 Consolidated net income 40$ 11$ 1,067$ Increase/(Decrease) vs. Discontinued Operations Supplemental (1) Results for Corporate and Other in 2Q13 include ResCap bankruptcy charge • Sale of stake in China joint - venture expected to generate an approximate $0.4 billion gain upon sale
21 2Q 2014 Preliminary Results Deferred Tax Asset Supplemental (1) U.S. GAAP does not prescribe a method for calculating individual elements of deferred taxes for interim periods. Therefore, these ba lances are estimated (2) Primarily book / tax timing differences • DTA utilization resulted in less than $10 million of cash taxes (state and local) paid in 2Q14 Deferred Tax Asset (1) 1Q14 ($ millions) Gross DTA/(DTL) Balance Valuation Allowance Net DTA/(DTL) Balance Net DTA/(DTL) Balance Net Operating Loss (Federal) 885$ -$ 885$ 980$ Capital Loss (Federal) 421 421 - - Tax Credit Carryforwards 1,898 552 1,346 1,336 State/Local Tax Carryforwards 290 137 153 150 Other Deferred Tax Assets/(Liabilities) (2) (555) 3 (559) (548) Net Deferred Tax Assets 2,940$ 1,115$ 1,825$ 1,918$ 2Q14
22 2Q 2014 Preliminary Results Notes on non - GAAP and other financial measures Supplemental (1) Represents core pre - tax income excluding repositioning items. See slide 23 for definitions $ in millions GAAP OID & Repositioning Items Non-GAAP (1) GAAP OID & Repositioning Items Non-GAAP (1) GAAP OID & Repositioning Items Non-GAAP (1) Consolidated Results Net financing revenue 866$ 46$ 912$ 821$ 44$ 865$ 628$ 61$ 689$ Total other revenue 365 7 372 321 - 321 402 9 411 Provision for loan losses 63 - 63 137 - 137 89 - 89 Controllable expenses 455 3 458 490 (3) 487 519 (21) 498 Other noninterest expenses 366 (19) 347 223 - 223 282 19 301 Pre-tax income from continuing ops 347$ 70$ 417$ 292$ 47$ 339$ 140$ 71$ 211$ Mortgage Operations Net financing revenue 12$ -$ 12$ 14$ -$ 14$ 15$ -$ 15$ Gain (loss) on sale of mortgage loans, net 6 - 6 - - - (1) - (1) Other revenue (loss) (excluding gain on sale) 3 - 3 4 - 4 (5) - (5) Total net revenue 21 - 21 18 - 18 9 - 9 Provision for loan losses (25) - (25) (23) - (23) 6 - 6 Noninterest expense 19 - 19 24 - 24 46 (7) 39 Pre-tax income (loss) from continuing ops 27$ -$ 27$ 17$ -$ 17$ (43)$ 7$ (36)$ Corporate and Other (incl. CFG) Net financing (loss) income (46)$ 46$ 0$ (28)$ 44$ 16$ (179)$ 61$ (118)$ Total other revenue (loss) 4 7 11 (19) - (19) 23 - 23 Provision for loan losses (11) - (11) 1 - 1 (5) - (5) Noninterest expense 87 (16) 71 90 (3) 87 93 5 98 Pre-tax loss from continuing ops (118)$ 70$ (48)$ (138)$ 47$ (91)$ (244)$ 55$ (189)$ 2Q 14 1Q 14 2Q 13
23 2Q 2014 Preliminary Results Notes on non - GAAP and other financial measures Supplemental 1) Core pre - tax income (loss) is a non - GAAP financial measure. It is defined as income (loss) from continuing operations before taxes and primarily bond exchange original issue discount ("OID") amortization expense . 2) Repositioning items for 2 Q14 are primarily related to Ally’s Initial Public Offering. 3) Repositioning items for 1Q14 are primarily employee costs related to the disposition of certain businesses. 4) Repositioning items for 2Q13 are primarily related to final closing costs for Ally Bank’s MSR sales, which were partially off - set by the reversal of a mortga ge related liability accrual. 5) ROTCE is equal to GAAP Net I ncome A vailable to Common S hareholders divided by a two period average of Tangible C ommon Equity. See pages 4 and 16 in the Financial Supplement for more detail. 6) Core ROTCE is equal to Operating Net Income Available to Common divided by Normalized Common Equity. See page 22 in the Financial Supplement for full calculation . A. Operating Net Income Available to Common is calculated as (a) Pre - Tax Income from Continuing Operations minus (b) Income Tax Expense using a normalized 34% rate plus (c) expense associated with original issue bond discount amortization minus (d) preferred dividends associated with our Series A and Series G preferred stock plus (e) impact of any disclosed repositioning items . B. Normalized Common Equity is calculated as the two period average of (a) shareholder equity minus (b) the book value of preferred stock outstanding minus (c) goodwill and other intangibles minus (d) remaining original issue bond discount minus (e) remaining net deferred tax asset. 7) Adjusted Efficiency ratio is equal to (A) total noninterest expense less ( i ) Insurance operating segment related expenses, (ii) mortgage repurchase expense and (iii) expense related to repositioning items divided by ( B) total net revenue less ( i ) Insurance operating segment related revenue, (ii) OID amortization expense and (iii) any revenue related to repositioning items . See page 22 in the Financial Supplement for full calculation. 8) Corporate and Other primarily consists of Ally’s centralized treasury activities, the residual impacts of the company’s corporate funds transfer pri cing and asset liability management activities, and the amortization of the discount associated with debt issuances and bond exchanges . C orporate and Other also includes the Ally Corporate Finance business, certain equity investments and reclassifications, eliminations between the repo rta ble operating segments, and overhead previously allocated to operations that have since been sold or discontinued. 9) Controllable expenses include employee related costs, consulting and legal fees, marketing, information technology, facility, portfolio servicing a nd restructuring expenses. 10) U.S. consumer auto originations ▪ New Subvented – subvented rate new vehicle loans from GM and Chrysler dealers ▪ New Standard – standard rate new vehicle loans from GM and Chrysler dealers ▪ New Diversified – new vehicle loans from non - GM/Chrysler dealers ▪ Lease – new vehicle lease originations from all dealers ▪ Used – used vehicle loans from all dealers ▪ Super Prime – FICO score of 740 or greater ▪ Prime – FICO score of 660 - 739 ▪ Near Prime – FICO score of 620 - 659 ▪ Non Prime – FICO score of less than 620 ▪ No FICO – Primarily Commercial Services Group originations where Dun & Bradstreet scores used 11) Net charge - off ratios are calculated as annualized net charge - offs divided by average outstanding finance receivables and loans excluding loans measur ed at fair value and loans held - for - sale .
