Ally Financial 2018 Annual Report
ALLY FINANCIAL 2018 ANNUAL REPORT
our business: a leader in digital financial services
Ally Financial Inc. is a leading digital financial-services company with $178.9 billion in assets as of December 31, 2018. As a customer-centric company with passionate customer service and innovative financial solutions, we are relentlessly focused on "Doing It Right" and being a trusted financial-services provider to our consumer, commercial, and corporate customers. We are one of the largest full-service automotive-finance operations in the country and offer a wide range of financial services and insurance products to automotive dealerships and consumers. Our award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products, including savings, money-market, and checking accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs). We also support the Ally CashBack Credit Card. Additionally, we offer securities-brokerage and investment-advisory services through Ally Invest. Our robust corporate finance business offers capital for equity sponsors and middle-market companies.
our vision: be a relentless ally for your financial well-being
Our commitment to our customers has been at the core of who we are for nearly 100 years. We're committed to constantly creating and reinventing with the singular purpose of making a real difference for our customers. That's why we offer award-winning online banking, rewarding credit and lending experiences, leading auto financing products and services and a growing wealth management and brokerage platform.
2018 ANNUAL REPORT
ALLY FINANCIAL
1
2018 FINANCIAL HIGHLIGHTS
$3.34 Adj. EPS*
$106b Total Deposits
12.3% Core ROTCE*
$179b Total Assets
2018 ACCOLADES
Best Banks to Work for by American Banker
E-Commerce Customer Service Gold Stevie Award ? Financial Services
Best Places to Work by Human Rights Campaign
* The following are non-GAAP financial measures which Ally believes are important to the reader of the Consolidated Financial Statements, but which are supplemental to and not a substitute for GAAP measures: Adjusted Earnings per Share (Adj. EPS), Core Return on Tangible Common Equity (Core ROTCE), Adjusted Tangible Book Value Per Share (Adj. Tangible Book Value Per Share), Adjusted Total Net Revenue (Adj. Total Net Revenue) and Adjusted Other Revenue (Adj. Other Revenue). These measures are used by management and we believe are useful to investors in assessing the company's operating performance and capital. Refer to the 2018 Financial Tables later in this document for a Reconciliation to GAAP.
dear shareholders,
The Ally team delivered exceptional financial and operational results in 2018, demonstrating the strength of the Ally brand and the underlying earnings power of our leading auto and digital bank franchises. We achieved several milestones in 2018, including the highest Adjusted Total Net Revenue* and Adjusted EPS* since becoming a public company, while surpassing $100 billion of total deposits, a testament to the robust franchise we've built at Ally Bank. Our results reflect our deep industry expertise, resilient and customer-centric business model and strong alignment with consumer banking trends. As we enter 2019 and prepare to celebrate our 100th year in auto finance and 10th year since establishing Ally Bank, I remain optimistic about our ability to continue innovating and serving our customers while delivering strong shareholder value. As I reflect on our performance, we skillfully navigated a variety of challenges to deliver these results, including tumultuous capital markets, a difficult interest rate environment, a highly competitive deposit market, and an uncertain political landscape. Our strategic focus on prioritizing the customer and our unrelenting commitment to `Do It Right' guided us through this backdrop. At Ally, `Do It Right' is more than just a tagline, it's our promise to our stakeholders and the embodiment of how we strive to operate and serve our customers and communities each and every day.
* Represents a non-GAAP financial measure. These measures are used by management and we believe are useful to investors in assessing the company's operating performance and capital. Refer to the 2018 Financial Tables later in this document for a Reconciliation to GAAP.
2018 ANNUAL REPORT
ALLY FINANCIAL
3
Operationally, our auto business had an outstanding
progress in 2018 with increased originations and account
year, posting $35.4 billion of consumer originations and
openings. In our first full year offering a diversified and
growing pre-tax income by 12% relative to 2017. We have
cohesive product suite to our banking customers, we
been successful in executing a very deliberate strategy
saw encouraging progress, including significant growth
to diversify the composition and sourcing of our auto
in customers using multiple Ally products. The revenue
originations while optimizing risk-adjusted returns.
trends and customer growth serve as affirmation that
Along those lines, we've increased our non-RV dealer
these products align with customer preferences to
base, and the application volume we see from those
have simple, convenient offerings, coupled with strong
dealers, every year since 2014. In 2018, we processed
customer service levels. These are cornerstones of our
11.6 million applications, or more than 30,000 applications
approach at Ally, and we expect momentum to continue
on average every day. Our Growth channel1 accounted for
from here.
46% of our consumer originations in 2018, compared to
just 20% in 2014, strong evidence that Ally's best-in-class
Our operational performance, along with our disciplined
service and superior product suite appeal to dealers
risk management and efficient capital deployment
across all OEMs. We are
strategy, translated to excellent
a comprehensive finance provider for our dealers
with our compelling
top-line and bottom-line financial results in 2018. Adjusted Total Net
and customers, with a nationwide platform and
culture and business
Revenue* exceeded $6.0 billion for the first time since our IPO,
full spectrum of products, including our insurance
model I see a
while Adjusted EPS* increased 39% to $3.34 and Core ROTCE*
offerings. Our insurance business had a great year in
substantial runway
expanded 256 basis points to 12.3%. We remained committed
2018, posting strong written premium growth while
for growth and a
to distributing capital to our owners, returning $1.2 billion to
diversifying its dealer base and introducing new and
business that ref lects common shareholders through dividends and share repurchases
the future of banking innovative products under the
Ally Premier Protection brand.
in 2018, up 26% versus the prior year, while reducing outstanding
share count by 7.4%.
Our corporate finance business also posted solid results, with total assets growing 17% while experiencing strong credit performance across a highly diversified middle-market portfolio. The attractive risk-adjusted return profile of this business, along with our expertise in secured lending, aligns well with our commercial product offerings. We expect corporate finance to be a source of enhanced returns and profitability in the future.
As I enter my fifth year as CEO of Ally, I'm continually amazed by the transformation I've seen over such a short period of time. We've evolved from a privatelyheld, majority wholesale funded, auto finance lender to a publicly traded, majority deposit-funded, digital financial services company. The one constant during that time, however, has been a culture that is committed to innovation, diversity and the empowerment of every
Our retail deposit business was resilient in the face of
Ally team member. We strive to put the customer at
heightened competition, growing balances $11.2 billion
the center of everything we do, every day. With our
while adding 230 thousand customers, the highest
compelling culture and business model I see a substantial
annual customer growth we've seen since the inception
runway for growth and a business that reflects the
of Ally Bank, while finishing 2018 with over 1.6 million
future of banking. As we move forward, I remain confident
retail deposit customers. I'm excited about the investments
as ever in our ability to deliver significant value to our
we've made over the past two years to better serve our
customers, communities, and shareholders.
customers. Ally Home and Ally Invest made considerable
* Represents a non-GAAP financial measure. These measures are used by management and we believe are useful to investors in assessing the company's operating performance and capital. Refer to the 2018 Financial Tables later in this document for a Reconciliation to GAAP.
1 Growth channel defined as originations from non-GM/Chrysler dealers and direct-to-consumer loans
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