Ally Financial Reports Preliminary Second Quarter 2010 Financial Results
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-- Reported second consecutive quarter of profitability; Sixth consecutive profitable quarter for the core automotive business -- Second quarter 2010 net income of $565 million and core pre-tax income of $738 million
NEW YORK, Aug. 3, 201; Ally Financial Inc. (Ally) today reported net income of $565 million for the second quarter of 2010, compared to a net loss of $3.9 billion for the second quarter of 2009. Core pre-tax income, which reflects income from continuing operations before taxes and original issue discount (OID) amortization expense from bond exchanges, totaled $738 million in the second quarter of 2010, compared to a core pre-tax loss of $1.3 billion in the comparable prior year period.
Core pre-tax income during the quarter was driven by higher net revenue, a lower loan loss provision and a lower non-interest expense compared to the second quarter of 2009. Results were also positively impacted by certain factors that may moderate over the coming quarters, including gains on the sale of auto loans under forward flow agreements, lease portfolio remarketing gains resulting from high used vehicle prices, legacy mortgage loan sale gains and gains from the insurance investment portfolio.
"Ally made substantial progress in the second quarter with all operating segments posting a profit," said Ally Chief Executive Officer Michael A. Carpenter. "Ally is a fundamentally stronger organization today than it was a year ago, and we are proud of our central role in the recovery of the U.S. auto industry. As a result of Ally's quick action and the U.S. government's financial support, approximately 1,400 Chrysler dealers, employing an estimated 70,000 people, were able to keep their businesses open and contribute to the stability of their communities.
"Over the past twelve months Ally has financed 82 percent of the vehicles sold to nearly 5,000 GM and Chrysler dealers in the U.S. In addition, the company financed 700,000 new vehicles for GM and Chrysler consumers within the last year," said Carpenter.
"In the first half of 2010, Ally's new consumer auto originations in the U.S. more than doubled compared to the first two quarters of last year to about 400,000 units, reflecting about eight times that of any other lender and demonstrating the company's leadership as a full service auto finance provider," he concluded.
Income/(Loss) From Continuing Operations by Segment
($ in millions)
Increase/
(Decrease)
vs.
---
2Q 10 1Q 10 2Q 09 1Q 10 2Q 09
----- ----- ----- ----- -----
North American Automotive
Finance $630 $653 $451 $(23) $179
International Automotive
Finance 105 42 33 63 72
Insurance 108 183 99 (75) 9
--------- --- --- --- --- ---
Global Automotive Services 843 878 583 (35) 260
Mortgage Operations 230 156 (1,335) 74 1,565
Corporate and Other (ex.
OID)(1) (335) (456) (556) 121 221
------------------------ ---- ---- ---- --- ---
Core pre-tax income
(loss)(2) 738 578 (1,308) 160 2,046
OID amortization
expense(3) 292 397 275 (104) 17
Income tax expense 33 36 1,096 (3) (1,063)
Income (loss) from
discontinued
operations(4) 152 17 (1,224) 135 1,376
------------------ --- --- ------ --- -----
Net income (loss) $565 $162 $(3,903) $403 $4,468
1. Corporate and Other as presented includes Commercial Finance,
certain equity investments and the net impact from treasury asset
liability management activities.
2. Core pre-tax income is defined as income from continuing
operations before taxes and bond exchange OID amortization expense.
3. Amortization of bond exchange OID. Includes $101 million of
accelerated amortization in the first quarter of 2010 from certain
liability management transactions.
4. The following businesses are classified as discontinued
operations: the U.S. consumer property and casualty insurance
business (sale completed 1Q10); the U.K. consumer property and
casualty insurance business; retail automotive finance operations in
Poland (sale completed 2Q10), Argentina and Ecuador; automotive
finance operations in Australia (sale of auto finance retail credit
portfolio completed 2Q10) and Russia; the full-service leasing
businesses in Australia (sale completed 2Q10), Belgium (sale
completed 2Q10), France (sale completed 2Q10), Italy (sale completed
4Q09), Mexico (sale completed 4Q09), the Netherlands (sale completed
4Q09), Poland (sale completed 2Q10) and the U.K.; mortgage
operations in Continental Europe and the U.K.; and the Commercial
Services Division (North American based factoring business) of the
Commercial Finance Group in Corporate and Other (sale completed
2Q10).
Highlights
-- Core auto finance business continues to perform well.
-- No. 1 ranked provider of new car financing in the U.S. during the
first half of 2010 (Source: AutoCount).
-- Global consumer financing originations remained strong, as levels
increased more than 30 percent from the previous quarter.
-- Non-incentivized business accounted for 52 percent of new GM and
Chrysler consumer originations in the U.S., up from 31 percent in
the second quarter of 2009.
-- Second quarter 2010 consumer penetration rates for both GM and
Chrysler increased compared to the corresponding prior year
period.
-- Ally began accepting retail finance applications for recreation
vehicles from Thor Industries dealers in early June.
-- Announced plans to rebrand the company's consumer and dealer-related
auto finance operations in the U.S., Canada and Mexico to leverage the
Ally name.
-- Follows the rebranding of the corporation from GMAC Inc. to Ally
Financial Inc. on May 10, 2010.
-- Net bank deposits grew by approximately $2.3 billion during the second
quarter, which was supported by an 82 percent CD retention rate.
-- Continued to focus on streamlining non-strategic operations to further
improve Ally's cost structure and efficiency.
-- During the second quarter, Ally completed the sale of the North
American factoring business, the auto finance retail credit
portfolio in Australia, the retail automotive finance operations
in Poland and the full-service auto leasing businesses in
Australia, Poland, Belgium and France.
-- Ally also reached agreements during the second quarter to sell the
reinsurance-related infrastructure, assets and liabilities of GMAC
International Insurance, Ltd. and the auto finance retail credit
portfolio in New Zealand. In addition, Residential Capital, LLC
(ResCap) reached an agreement to sell its European mortgage
origination and servicing business.
-- Continued to strengthen access to liquidity with more than $25 billion
of funding transactions completed to date in 2010.
-- Cost of funds has declined more than 100 basis points since becoming a
bank holding company.
-- Continued to make progress in minimizing legacy mortgage risk during
the quarter, as the company executed the sale of domestic non-core and
international assets totaling more than $1.2 billion in unpaid
principal balance.
-- Expense reduction efforts remain on track, with quarterly controllable
expenses down $124 million year-over-year.
Liquidity and Capital
Ally's consolidated cash and cash equivalents were $14.3 billion as of June 30, 2010, compared to $14.7 billion at March 31, 2010. Included in the consolidated cash and cash equivalents balance are: $621 million at ResCap; $2.6 billion at Ally Bank, which excludes certain intercompany deposits; and $823 million at the insurance businesses.
Ally's total equity at June 30, 2010, was $20.8 billion, compared to $20.5 billion at March 31, 2010. Ally's preliminary second quarter 2010 tier 1 capital ratio was 15.3 percent, compared to 14.9 percent in the prior quarter. Ally's tier 1 capital ratio improved due to net income, the sale of assets and the continued run-off of the lease portfolio, partially offset by growth in consumer and commercial receivables.
Ally Bank
Ally Bank's deposit-taking capabilities are a significant component of the company's diversified funding strategy. For the second quarter of 2010, Ally Bank reported pre-tax income of $126 million, compared to a pre-tax loss of $299 million in the corresponding prior year period. Performance in the quarter was driven by improved margins and a decrease in loan loss provision expense. Total assets at Ally Bank were $61.7 billion at June 30, 2010, compared to $55.2 billion at March 31, 2010. Higher asset levels were the result of increases in automotive consumer finance receivables, floorplan and warehouse lending, and available-for-sale securities.
Deposits
The company continued to grow its deposit base during the quarter through its subsidiaries, Ally Bank and ResMor Trust. Ally Bank and ResMor Trust deposits, excluding certain intercompany deposits, increased in the second quarter to $34.3 billion, from $32.0 billion at March 31, 2010. Retail deposits at Ally Bank were $18.7 billion at June 30, 2010, compared to $17.7 billion at March 31, 2010. Retail deposits accounted for approximately 60 percent of Ally Bank's total deposits as the company remains focused on growing its retail deposit base. Brokered deposits at Ally Bank totaled approximately $9.9 billion at quarter-end, compared to $9.8 billion at the end of the first quarter of 2010.
Global Automotive Services
Global Automotive Services consists of Ally's auto-centric businesses around the world, including: North American Automotive Finance, International Automotive Finance and Insurance. Global Automotive Services reported second quarter 2010 pre-tax income from continuing operations of $843 million, compared to $583 million in the comparable prior year period. This represents the sixth consecutive profitable quarter from the core automotive business.
North American Automotive Finance, which includes results for the U.S. and Canada, reported pre-tax income from continuing operations of $630 million in the second quarter of 2010, compared to $451 million in the comparable prior year period. Results were driven by strong growth in originations supported by improved penetration for GM and Chrysler, and remarketing gains due to favorable used vehicle prices.
International Automotive Finance reported pre-tax income from continuing operations of $105 million in the second quarter of 2010, compared to $33 million in the same period last year. Results in the quarter were favorably affected by a lower noninterest expense and a lower loan loss provision due to improving asset quality. Ally has significantly streamlined its international presence in recent years to focus on strategic operations and improve financial performance. The company's international auto finance footprint currently consists of 14 countries, with a focus on five core international markets: Germany, U.K., Brazil, Mexico and China.
Ally's insurance business reported pre-tax income from continuing operations of $108 million in the second quarter of 2010, compared to $99 million in the prior year period. Results were primarily driven by improved underwriting income due to lower expenses, partially offset by lower earned premiums on the extended service contracts written in prior periods. In addition, investment income remained strong during the quarter. Ally remains focused on streamlining its insurance segment to focus primarily on dealer-centric products, such as extended service contracts and dealer inventory insurance.
Automotive originations and penetration
Total consumer financing originations during the second quarter of 2010 were $10.7 billion. This included $8.4 billion of new originations, $1.4 billion of used originations and approximately $900 million of new leases. Second quarter 2009 consumer financing originations totaled $6.1 billion, which included $5.3 billion of new originations, approximately $600 million of used originations and approximately $200 million of new leases. Growth in consumer financing originations was driven by improved conditions in the auto market, increased consumer penetration rates for GM and Chrysler, higher used vehicle originations and continued improvement in leasing levels.
North American consumer financing originations in the second quarter of 2010 were $9.1 billion, which included $8.0 billion in the U.S. Second quarter 2009 consumer financing originations in North America were $4.6 billion, which included approximately $4.4 billion in the U.S.
International consumer originations, which include a non-consolidated joint venture in China, were $1.7 billion during the second quarter of 2010, compared to $1.5 billion in the second quarter of 2009. International consumer originations continue to be driven by Ally's five key markets with strong growth in China and Brazil. Consumer originations in the quarter increased 95 percent in Brazil and 83 percent in China compared to the second quarter of 2009.
Ally's U.S. wholesale penetration for GM dealer stock was 84.4 percent at June 30, 2010, compared to 87.7 percent at March 31, 2010, and 83.0 percent at June 30, 2009. U.S. consumer penetration for GM was 34.4 percent during the second quarter of 2010, compared to 33.5 percent in the prior quarter and 30.6 percent in the second quarter of 2009. GM consumer penetration levels in the U.S. remained stable despite lower incentivized originations, which dropped to 41.7 percent of new units in the second quarter of 2010 from 46.0 percent in the prior quarter and 72.7 percent in the second quarter of 2009.
Ally's U.S. wholesale penetration for Chrysler dealer stock was 74.9 percent at June 30, 2010, compared to 76.4 percent at March 31, 2010. Ally's U.S. consumer penetration for Chrysler during the second quarter of 2010 improved significantly to 52.5 percent, compared to 42.1 percent in the first quarter of 2010.
Global automotive delinquencies and credit losses
Delinquencies, defined as the dollar amount of accruing contracts greater than 30 days past due, from continuing operations were 2.93 percent in the second quarter of 2010, compared to 2.87 percent in the first quarter of 2010 and 3.27 percent in the second quarter of 2009. Delinquency trends remained relatively stable in the second quarter. This reflects improved economic conditions, continued focus on collection efforts and higher quality credit in more recent vintages. Excluding the Nuvell subprime legacy portfolio, delinquencies continued to fall on a sequential quarter basis.
Annualized credit losses from continuing operations declined in the second quarter of 2010 to 1.05 percent of average managed retail contract assets, versus 2.04 percent in the prior quarter and 2.29 percent in the second quarter of 2009. The decline from the prior quarter reflects significantly lower losses in both the core auto portfolio and the Nuvell portfolio due to a favorable used car market, lower loss frequency, consumer loss recoveries and stronger performance on more recent vintages. The Nuvell portfolio continues to run-off, as the balance of its consumer auto portfolio declined to $3.1 billion at quarter end.
Mortgage Operations
Ally's Mortgage Operations, which includes ResCap and the mortgage activities of Ally Bank and ResMor Trust, ranks as the fourth largest originator and the fifth largest servicer in the U.S. (Source: Inside Mortgage Finance). The segment reported pre-tax income from continuing operations of $230 million during the second quarter of 2010, versus a pre-tax loss from continuing operations of $1.3 billion in the comparable prior year period. Results in the second quarter of 2010 were driven by improved performance in the origination and servicing business, strong margins, lower operating expenses and gains on the sale of legacy mortgage assets. In addition, loan loss provision and repurchase reserve expenses were significantly lower from the corresponding period a year ago, due to the strategic actions taken in the fourth quarter of 2009 and the settlement reached with The Federal Home Loan Mortgage Corporation (Freddie Mac) for representation and warranty claims in the first quarter of 2010.
Ally continues to make progress in minimizing legacy mortgage risk, while asset values have remained stable. During the quarter, the company executed the sales of domestic non-core assets with an unpaid principal balance of $510 million. The sales of these assets generated cash proceeds of $308 million and a gain to book value of $73 million. In addition, the company sold international assets totaling $723 million of unpaid principal balance. The cash proceeds for the international sales were $447 million with a gain to book value of $93 million. The revenue generated from the international sales is reflected in discontinued operations, beginning in the second quarter of 2010.
The ResCap legal entity reported its second consecutive profitable quarter, as second quarter 2010 net income totaled $364 million, compared to a net loss of $841 million in the comparable prior year period. Pre-tax income from continuing operations was $263 million for the 2010 second quarter, compared to a pre-tax loss from continuing operations of $205 million in the second quarter of 2009. The entity required no additional capital or liquidity support in the 2010 second quarter.
Total mortgage loan production in the second quarter of 2010 was $13.5 billion, compared to $13.3 billion in the first quarter of 2010 and $18.8 billion in the second quarter of 2009. The majority of second quarter 2010 production was driven by prime conforming and government loans. Production increased marginally compared to the prior quarter, as market demand remained strong due to low mortgage interest rate levels.
Corporate and Other
Corporate and Other reported a second quarter 2010 core pre-tax loss of $335 million, compared to a core pre-tax loss of $556 million in the second quarter of 2009. Including OID, Corporate and Other reported a pre-tax loss from continuing operations of $627 million in the second quarter of 2010, compared to a pre-tax loss from continuing operations of $831 million in the comparable prior year period. The main performance drivers in the second quarter of 2010 were treasury asset liability management activities, which include corporate interest expense, and $292 million of OID amortization expense. Approximately $600 million of OID is expected to amortize over the remainder of 2010, with the expense moderating significantly after 2011.
Strategic Direction
The company continued to make significant progress on its strategic priorities during the second quarter with strong auto origination levels, ongoing cost reduction efforts, growth in the deposit base at Ally Bank, and the continued minimization of risk associated with the legacy mortgage business. While certain drivers of earnings in the first half of the year may moderate in the coming quarters, Ally expects that successful execution of its six priorities will lead to sustained positive core income going forward and aid in the timely repayment of the U.S. Treasury investments.
Ally's six key priorities are:
-- Become the premier global auto finance provider for dealers and
consumers.
-- Improve our cost structure and efficiency.
-- Improve our access to the capital markets, our debt ratings and cost
of funds.
-- Fully transition to a bank holding company model.
-- Improve our liquidity position by building deposits at Ally Bank.
-- Continue to de-risk our mortgage business and define a viable
long-term strategy for our mortgage origination and servicing
business.
About Ally Financial Inc.
Ally Financial Inc. (formerly GMAC Inc.) is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. With more than $176 billion in assets as of June 30, 2010, Ally operates as a bank holding company. For more information, visit the Ally media site at http://media.ally.com/.
Ally Financial Preliminary Unaudited Second Quarter 2010 Financial
Highlights
($ in millions)
Summary Statement of Income Note 2Q 1Q 2Q
--------------------------- ---- 2010 2010 2009
---- ---- ----
Financing revenue and other
interest income
Finance receivables and loans
Consumer $1,128 $1,130 $1,175
Commercial 456 435 434
Notes receivable from General
Motors 40 55 47
----------------------------- --- --- ---
Total finance receivables and
loans 1,624 1,620 1,656
Loans held-for-sale 156 215 84
Interest on trading
securities 6 1 34
Interest and dividends on
available-for-sale
investment securities 91 100 55
Interest bearing cash 18 14 27
Other interest income (4) 4 30
Operating leases 1,011 1,163 1,503
---------------- ----- ----- -----
Total financing revenue and
other interest income 2,902 3,117 3,389
Interest expense
Interest on deposits 155 158 179
Interest on short-term
borrowings 100 112 182
Interest on long-term debt 1,409 1,435 1,579
-------------------------- ----- ----- -----
Total interest expense 1,664 1,705 1,940
Depreciation expense on
operating lease assets 526 656 1,056
----------------------- --- --- -----
Net financing revenue 712 756 393
Other revenue
Servicing fees 384 385 393
Servicing asset valuation and
hedge activities, net (21) (133) (225)
----------------------------- --- ---- ----
Total servicing income, net 363 252 168
Insurance premiums and
service revenue earned 477 468 496
Gain on mortgage and
automotive loans, net 266 271 206
(Loss) gain on extinguishment
of debt (3) (118) 13
Other gain on investments,
net 95 140 97
Other income, net of losses 190 85 (113)
--------------------------- --- --- ----
Total other revenue 1,388 1,098 867
Total net revenue 2,100 1,854 1,260
Provision for loan losses 220 146 1,117
Noninterest expense
Compensation and benefits
expense 388 427 389
Insurance losses and loss
adjustment expenses 224 211 261
Other operating expenses 822 889 1,076
------------------------ --- --- -----
Total noninterest expense 1,434 1,527 1,726
Income (loss) from continuing
operations before income tax
expense 446 181 (1,583)
Income tax expense from
continuing operations 33 36 1,096
----------------------- --- --- -----
Net income (loss) from
continuing operations 413 145 (2,679)
Income (loss) from
discontinued operations, net
of tax 152 17 (1,224)
Net income (loss) $565 $162 ($3,903)
----------------- ---- ---- -------
Select Balance Sheet Data June 30,
------------------------- 2010
---- Mar 31, June 30,
2010 2009
---- ----
Cash and cash equivalents $14,348 $14,670 $18,655
Loans held-for-sale 10,382 13,998 11,440
Finance receivables and
loans, net 1
Consumer 55,346 51,928 57,983
Commercial 37,005 36,293 32,838
Notes receivable from General
Motors 365 819 1,071
Investments in operating
leases, net 2 11,895 14,003 21,597
Total assets 176,802 179,427 181,248
Deposit liabilities 35,214 32,860 26,152
Total debt 3 92,259 97,885 105,175
---------- --- ------ ------ -------
Second First Second
Quarter Quarter Quarter
------- ------- -------
Operating Statistics 2010 2010 2009
-------------------- ---- ---- ----
Ally Financial's Worldwide
Cost of Borrowing (incl.
OID) 4 5.2% 5.5% 6.3%
Ally Financial's Worldwide
Cost of Borrowing (excl.
OID) 4 4.2% 4.4% 5.3%
Tier 1 Capital $22,389 $22,088 $25,014
Tier 1 Common Capital 7,669 7,368 11,227
Total Risk-Based Capital 24,629 24,370 27,660
Tangible Common Equity 8,062 7,834 11,550
Tangible Assets $176,270 $178,893 $180,539
Risk-Weighted Assets 5 $146,306 $148,408 $183,420
Tier 1 Capital Ratio 15.3% 14.9% 13.6%
Tier 1 Common Capital Ratio 5.2% 5.0% 6.1%
Total Risk-Based Capital
Ratio 16.8% 16.4% 15.1%
Tangible Common Equity /
Tangible Assets 4.6% 4.4% 6.4%
Tangible Common Equity /
Risk-Weighted Assets 5.5% 5.3% 6.3%
------------------------ --- --- ---
(1) Finance receivables and loans are net of unearned income
(2) Net of accumulated depreciation
(3) Represents both secured and unsecured on-balance sheet debt such
as commercial paper, medium-term notes and long-term debt
(4) Calculated by dividing total interest expense by total average
interest bearing liabilities. Reported amounts represent the average
cost of funds for continuing operations in each period. The impact
of historical financial statement restatements for discontinued
operations are not reflected in prior period cost of funds.
Reported amounts in the Q2 2010 Form 10-Q may be different as a
result.
(5) The risk-weighted assets are determined by allocating assets and
specified off-balance sheet financial instruments in several broad
risk categories, with higher levels of capital being required for
the categories perceived as representing greater risk. The
company's June 2010 preliminary risk-weighted assets reflect
estimated on-balance sheet risk-weighted assets of $137 billion
and derivative and off-balance sheet risk-weighted assets of $9
billion.
Numbers may not foot due to rounding
Ally Financial Preliminary Unaudited Second Quarter 2010 Financial
Highlights
($ in millions)
Note Second First Second
------ ----- ------
Quarter Quarter Quarter
------- ------- -------
Automotive Finance Operations 2010 2010 2009
----------------------------- ---- ---- ----
Income from continuing
operations before income tax
NAO expense $630 $653 $451
Income tax expense from
continuing operations 176 257 972
Net income from continuing
operations $454 $396 ($521)
Income (loss) from continuing
operations before income tax
IO expense $105 $42 $33
Income tax (benefit) expense
from continuing operations 4 (13) 145
Net income (loss) from
continuing operations $101 $55 ($112)
Consumer Portfolio Statistics
Number of contracts originated
NAO (# thousands) 340 246 163
Dollar amount of contracts
originated $9,058 $6,678 $4,594
Dollar amount of contracts
outstanding at end of period $45,463 $46,041 $43,746
Share of new GM consumer sales 36% 34% 27%
Share of new Chrysler consumer
sales 45% 36% 4%
Dollar amount of new GM
wholesale outstanding at end
of period 6,7 $14,780 $14,654 $15,783
GM wholesale penetration at end
of period 6,7 86% 89% 85%
Dollar amount of new Chrysler
wholesale outstanding at end
of period 7 $5,836 $5,924 $710
Chrysler wholesale penetration
at end of period 7 73% 75% 12%
Mix of retail & lease contract
originations (% based on # of
units):
New 80% 76% 82%
Used 20% 24% 18%
GM subvented (% based on # of
new units) 52% 52% 72%
Chrysler subvented (% based on
# of new units) 61% 53% 22%
Average original term in months
(U.S. retail only) 64 65 64
Off-lease remarketing (U.S.
only)
Sales proceeds on scheduled
lease terminations (36-month)
per vehicle -Serviced 8 $18,990 $19,059 $15,741
Off-lease vehicles terminated
- Serviced (# units) 8 96,073 96,056 100,807
Sales proceeds on scheduled
lease terminations (36-month)
per vehicle - On-balance
sheet $18,994 $19,036 $15,878
Off-lease vehicles terminated
- On-balance sheet (# units) 9 87,421 84,722 62,622
Number of contracts originated
IO (# thousands) 10 116 102 93
Dollar amount of contracts
originated 10 $1,640 $1,487 $1,372
Dollar amount of retail
contracts outstanding at end
of period 10,11 $8,902 $9,773 $13,466
Mix of retail & lease contract
originations (% based on # of
units):
New 95% 95% 94%
Used 5% 5% 6%
GM subvented (% based on # of
units, total IO) 35% 34% 54%
Asset Quality Statistics
Annualized net retail charge-
offs as a % of on-balance
NAO sheet assets 1.03% 2.30% 2.59%
Managed retail contracts over
30 days delinquent 3.14% 3.07% 3.59%
Annualized net charge-offs as
a % of on-balance sheet
IO assets 10 1.09% 1.24% 1.47%
Managed retail contracts over
30 days delinquent 10 2.15% 2.25% 2.50%
Operating Statistics
Allowance as a % of related on-
balance sheet consumer
NAO receivables at end of period 2.92% 3.32% 4.47%
Repossessions as a % of average
number of managed retail
contracts outstanding 2.40% 3.46% 3.25%
Severity of loss per unit
serviced -Retail 12
New $8,495 $8,951 $10,398
Used $6,996 $7,504 $8,660
Allowance as a % of related on-
balance sheet consumer
IO receivables at end of period 1.81% 1.82% 2.00%
Repossessions as a % of average
number of contracts
outstanding 10 0.71% 0.60% 0.82%
(6) Dealer inventories include in-transit vehicles
(7) Second quarter 2009 based on managed assets
(8) Serviced assets represent operating leases where Ally continues
to service the underlying asset
(9) Ally-owned portfolio reflects lease assets on Ally's books after
distribution to GM of automotive leases in connection with the sale
transaction which occurred in November 2006
(10) Continuing Operations only
(11) Represents on-balance sheet assets including retail leases
(12) Serviced assets represent on-balance sheet finance receivables
and loans where Ally continues to service the underlying asset
Numbers may not foot due to rounding
Ally Financial Preliminary Unaudited Second Quarter 2010 Financial
Highlights
($ in millions)
Note Second First Second
Quarter Quarter Quarter
------- ------- -------
Insurance Operations 2010 2010 2009
-------------------- ---- ---- ----
Income from continuing
operations before income
tax expense $108 $183 $99
Income tax expense from
continuing operations 22 61 28
Net income from continuing
operations $86 $122 $71
--- ---- ---
Premiums and service
revenue written 10 $415 $423 $350
Premiums and service
revenue earned 10 469 460 484
Combined ratio 10,13 96.0% 91.3% 97.8%
Investment portfolio fair
value at end of period $4,181 $4,483 $4,651
Memo: After-tax at end of
period
Unrealized gains 99 154 164
Unrealized losses (131) (19) (155)
---- --- ----
Net unrealized gains
(losses) ($32) $135 $9
Second First Second
Quarter Quarter Quarter
------- ------- -------
Mortgage Operations 2010 2010 2009
------------------- ---- ---- ----
Income (loss) from
continuing operations
before income tax expense $230 $156 ($1,335)
Income tax expense
(benefit) from continuing
operations (2) 8 (183)
Net income (loss) from
continuing operations $232 $148 ($1,152)
---- ---- -------
Gain on mortgage loans, net
Domestic $195 $149 $166
International $1 $2 $1
--- --- ---
Total gain on mortgage
loans, net $197 $152 $167
Portfolio Statistics
Mortgage loan production
Prime conforming $9,061 $9,476 $10,507
Prime non-conforming 462 370 325
Government 3,637 3,121 7,648
Total domestic 13,159 12,968 18,480
International 346 292 325
--- --- ---
Total mortgage production $13,506 $13,260 $18,805
Mortgage loan servicing
rights at end of period $2,983 $3,543 $3,509
Loan servicing at end of
period
Domestic $349,078 $349,032 $353,852
International 21,878 29,870 27,458
------ ------ ------
Total loan servicing $370,955 $378,902 $381,310
Asset Quality Statistics
Provision for loan losses
by product
Mortgage loans held for
investment $97 $18 $640
Lending receivables (5) (10) 231
--- --- ---
Total provision for loan
losses $92 $7 $871
Allowance by product at end
of period
Mortgage loans held for
investment $659 $635 $1,133
Lending receivables 70 82 536
--- --- ---
Total allowance by product $729 $717 $1,669
Allowance as a % of related
receivables at end of
period
Mortgage loans held for
investment 14 5.84% 5.65% 5.42%
Lending receivables 3.49% 5.30% 15.71%
---- ---- -----
Total allowance as a % of
related receivables 14 5.49% 5.60% 6.86%
Nonaccrual loans at end of
period 14 $791 $683 $3,099
Nonaccrual loans as a % of
related receivables at end
of period 14 5.95% 5.34% 12.74%
(13) Combined ratio represents the sum of all incurred losses and
expenses (excluding interest and income tax expense) divided by the
total of premiums and service revenues earned and other income
(14) Gross carry value before allowance, excludes SFAS 159 & SFAS 140
assets
Numbers may not foot due to rounding