Ally Financial Reports Q3 Net Income of $269M, Core Pre-Tax Income of $636M

NEW YORK - Ally Financial Inc. reported net income of $269 million for the third quarter of 2010, compared to a net loss of $767 million for the third 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 $636 million in the third quarter of 2010, compared to a core pre-tax loss of $565 million in the comparable prior year period. Core pre-tax income during the quarter was driven by slightly higher net revenue, a lower loan loss provision and lower operating expenses due to our continued focus on cost reduction.

"The third quarter demonstrated continued positive momentum for Ally with all four operating segments recording profitable results," said Ally CEO Michael A. Carpenter. "Our leadership position in the auto finance industry is evidenced by consistent market share, a more diversified product mix and the addition of another auto partner with Fiat in the U.S.

"In each quarter of this year, we have made substantial progress toward our strategic objectives, including deposit growth at Ally Bank, accessing the capital markets to support our funding and liquidity needs, and reducing balance sheet risk in the legacy mortgage business," Carpenter said. "We remain focused on being an independent, market-driven competitor, and are optimistic about the long-term prospects for the company."

Highlights

• Core auto finance business reported seventh consecutive profitable quarter.
  • Quarterly global consumer auto financing originations remained strong, as levels increased 48 percent from the third quarter of 2009.
  • Ranked No. 1 provider of new car financing in the U.S. during the first nine months of 2010 (Source: AutoCount).
  • Selected as the preferred financing provider for Fiat vehicles in the U.S.
  • Received the 2010 Auto Finance Excellence Award from Auto Finance News for success and contributions to the industry.
• Bank deposits increased approximately $2.6 billion during the quarter, which was supported by an 88 percent CD retention rate at Ally Bank.
• Continued to strengthen access to capital markets with more than $30 billion of funding transactions completed to date in 2010, compared to approximately $8 billion of funding transactions during the same period last year.
  • During the third quarter, the company completed a $1.8 billion senior unsecured debt offering and issued approximately $2.2 billion in auto asset-backed securities.
• Expense reduction efforts continue to be on track, with quarterly controllable expenses down $146 million compared to the third quarter of 2009.
• Rebranded U.S. commercial finance operations as Ally Commercial Finance.  This follows the transition of the corporate entity to Ally Financial Inc. in May 2010 and the rebranding of the consumer and dealer-related auto finance operations in the U.S., Canada and Mexico to leverage the Ally name in July 2010.
• Continued to make progress in minimizing balance sheet risk associated with legacy mortgage assets.
  • Residential Capital, LLC (ResCap) completed the sales of its European mortgage assets and operations, including a combination of approximately $11 billion of securitized loans, other loan assets (including non-performing loans) and servicing rights, and the shares of the related operating entities in the U.K., Germany and the Netherlands.
  • Sold legacy mortgage assets totaling approximately $1.9 billion of unpaid principal balance to date in 2010, at a gain.
  • Sold the Resort Finance portfolio, which had an unpaid principal balance of approximately $1 billion, at a gain.