Core Viewpoint - Ally Financial Inc. is set to release its fourth quarter and full year 2024 financial results on January 22, 2025, at 7:30 a.m. ET, followed by a conference call to discuss the performance at 9 a.m. ET [1][2]. Financial Results Announcement - The financial results will be available on the Ally Press Room website [1]. - A conference call will be hosted to review the company's performance, accessible via webcast or dial-in [2]. - Participants must pre-register for the dial-in option at least 15 minutes before the call [3]. - The presentation and financial supplement will be posted on the Investor Relations website at the same time as the results [3]. Company Overview - Ally Financial Inc. operates the largest all-digital bank in the U.S. and has a leading position in the auto financing sector [5]. - The company serves approximately 11 million customers with a range of online banking services, including deposits, mortgage, and credit card products, as well as securities brokerage and investment advisory services [5]. - Ally also has a corporate finance business that provides capital for equity sponsors and middle-market companies, along with auto financing and insurance offerings [5].

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Group 1 - Ally Financial Inc. will be presenting at the Goldman Sachs US Financial Services Conference on December 11, 2024, at approximately 10:00 a.m. ET [1] - A live webcast of the presentation will be available on Ally's Investor Relations website, along with a replay after the event [1] Group 2 - Ally Financial is a financial services company with the largest all-digital bank in the nation and a leading auto financing business [2] - The company serves around 11 million customers through a variety of online banking services, including deposits, mortgage, and credit card products [2] - Ally also has a corporate finance business that provides capital for equity sponsors and middle-market companies, in addition to auto financing and insurance offerings [2]

Ally Financial's Credit Card Business - Ally Financial is considering selling its credit card business, as reported by Bloomberg, with the company working with a financial advisor to find potential buyers [1][2] - As of Sept 30, 2024, the company had $2 13 billion in average credit card loans and 1 25 million active cardholders [2] - The company has a long history in the credit card business, previously partnering with The Toronto-Dominion Bank (TD) for the Ally CashBack credit card until 2019, when it stopped onboarding new customers to reduce losses [3] - In 2020, Ally Financial attempted to acquire Cardholder Management Services, Inc (CardWorks) for $2 65 billion, but the deal was mutually terminated due to the impact of COVID-19 [4] - In December 2021, Ally Financial acquired Fair Square Financial, a digital-first credit card company, for $750 million, which had 693,000 cardholders and $816 million in loan balances at the time [5] - The company is now considering exiting the credit card business due to stiff competition from larger providers like Capital One, which is set to become even bigger with its acquisition of Discover Financial [5] Ally Financial's Core Operations and Strategy - Ally Financial is focusing on its core businesses, including auto finance and digital banking, as part of its strategy to invest in growing scale businesses and strengthen relationships with dealer customers and consumers [6] - In March 2024, the company sold its point-of-sale financing business, Ally Lending, which included $2 2 billion of loan receivables as of Dec 31, 2023 [6] - The company has been taking steps to improve profitability, including reducing headcount, which led to $80 million in annualized expense savings [7] - Ally Financial has diversified into other businesses such as mortgage, wealth management, and online brokerage, and in 2023 launched Ally ai, a proprietary AI platform for enterprise-scale integration of AI capabilities [8] Financial Performance and Challenges - Ally Financial is facing challenges related to asset quality and higher interest rates, with the company noting a "dynamic operating environment" including high interest rates, volatility, and inflationary pressure [9] - The company expects loan losses to increase in 2024, with retail auto NCO rates projected to be between 2 25% and 2 30%, up from the prior target of 2 1%, and consolidated NCOs likely to be in the 1 50-1 55% range, up from earlier guidance of 1 45-1 5% [9] - Ally Financial has lowered its NIM target for 2024 to almost 3 20%, down from earlier guidance of approximately 3 30%, with NIM at 3 32% in 2023 [10][11] Medium-Term Outlook - With expected interest rate cuts in 2024 and 2025, Ally Financial is well-positioned to benefit from the liability-sensitive nature of its balance sheet and rising consumer loan demand, with management expecting NIM to reach 4% over the medium term [12] - Divesting the credit card business could further improve NIM over time, as credit cards have floating rate interest, and lower rates might negatively impact NIM [13] - Over the past three months, Ally Financial's shares have lost 11 7%, underperforming the industry's rally of 22 5%, due to concerns related to asset quality and NIM [13]

Core Insights - Ally Bank has reintroduced "Banksgiving," a customer appreciation initiative aimed at addressing customers' financial challenges during the holiday season [1][3][5] - The initiative involves customer care specialists engaging with customers to offer personalized assistance beyond typical banking services [2][5] Group 1: Customer Engagement - During a single day in early November, Ally customer care specialists transformed the end-of-call survey into a meaningful conversation by inquiring about customers' financial challenges and providing support [2] - Requests from customers included assistance with family vacations, swim lessons, rent for new apartments, and Thanksgiving dinner [4] Group 2: Company Philosophy - The CEO of Ally emphasized that doing right by customers is integral to the company's values, highlighting the passion of customer care specialists in connecting with customers on a personal level [5] - "Banksgiving" serves as an extension of the company's appreciation and empathy towards customers, reinforcing the strong relationship between representatives and clients [5] Group 3: Marketing and Outreach - Videos showcasing the heartfelt interactions during "Banksgiving" will be shared on social media platforms like TikTok and Instagram, as well as on linear and connected TV, to further promote the initiative [5] - The initiative was inspired by a previous successful "Banksgiving" celebration, indicating a positive customer response to the personalized service approach [5] Group 4: Company Overview - Ally Financial Inc. operates the largest all-digital bank in the U.S. and offers a wide range of financial services, including online banking, auto financing, and investment advisory services, serving approximately 11 million customers [7]

Core Insights - Ally Financial Inc. has announced several leadership appointments to enhance its future positioning [1][2] - The new appointments include Stephanie Richard as chief risk officer, Meghan Ryan as chief audit executive, and Lindsay Sacknoff as head of Deposits and Invest [3][4][5] Leadership Changes - Stephanie Richard has been appointed as chief risk officer, responsible for independent risk management, with a 27-year tenure at Ally [3] - Meghan Ryan has been promoted to chief audit executive, previously serving as chief financial officer for Ally's Consumer and Commercial Banking businesses [4] - Lindsay Sacknoff will join as head of Deposits and Invest, bringing over 20 years of banking experience, effective January 13 [5] Additional Appointments - Sean Leary has been named chief financial planning and investor relations officer, taking on additional responsibilities for business line CFO duties [7] - Kathie Patterson, chief human resources officer, will assume responsibility for the Ally Charitable Foundation following the departure of Ali Summerville [6] Company Overview - Ally Financial Inc. operates the largest all-digital bank in the U.S. and has a leading auto financing business, serving approximately 11 million customers [8]

Group 1: Coupang - Coupang is the largest e-commerce company in South Korea, with a stock price increase of 70% year to date, outperforming broader market indexes [3][4] - The company has nearly half of South Korea's population using its platform, generating close to $7 billion in net revenue last quarter, which represents a 20% year-over-year growth in constant currency [4] - Coupang's premium subscription service, Rocket Wow, offers ultra-fast delivery and various services, similar to Amazon Prime, enhancing customer attraction [5] - The company is diversifying beyond e-commerce with a fintech subsidiary and an internal food delivery service, Coupang Eats [6] - Coupang's Developing Offerings revenue line grew 347% year-over-year to $975 million last quarter, indicating strong growth potential [7] - Despite significant investments, Coupang generated a slight profit of $64 million last quarter and has a market cap under $50 billion, suggesting room for further stock price appreciation [8] Group 2: Ally Financial - Ally Financial is a leading online-only bank in the U.S., with over $100 billion in deposits and approximately 3.26 million depositors, a significant increase from less than 1 million in 2014 [9] - The bank offers high interest rates on deposits due to lower overhead costs from not having physical branches, benefiting from recent Federal Reserve interest rate hikes [10] - Ally's balance sheet includes $83.6 billion in retail auto loans and $23.9 billion in commercial auto loans, generating profit from the spread between deposit interest and loan interest [11] - Although delinquency rates on automotive loans have risen above pre-pandemic levels, Ally remains profitable with $884 million in net income over the past 12 months and offers a dividend yield of 3.41% [12][13] - The stock trades at a P/E of 14, which is expected to appear even cheaper as loan delinquencies normalize, indicating potential for future earnings growth [13][14]

Financial Performance - For the three months ended September 30, 2024, Ally Financial reported net income from continuing operations of $357 million, an increase of 20.6% compared to $296 million in the same period of 2023[10]. - Total net revenue for the three months ended September 30, 2024, was $2.103 billion, compared to $1.968 billion in the same period of 2023, marking an increase of 6.9%[10]. - Net income for the nine months ended September 30, 2024, was $808 million, down from $944 million for the same period in 2023, reflecting a decrease of about 14.4%[25]. - Net income attributable to common stockholders for the nine months ended September 30, 2024, was $725 million, down from $862 million in 2023, a decrease of 15.9%[194]. - Ally Financial's diluted earnings per common share for the three months ended September 30, 2024, was $1.06, up from $0.88 in the same period of 2023, representing a growth of 20.5%[12]. - Basic earnings per common share for the three months ended September 30, 2024, was $1.07, compared to $0.88 in 2023, reflecting a 21.6% increase[194]. Revenue and Income Sources - Total financing revenue and other interest income for the nine months ended September 30, 2024, was $10.694 billion, up from $10.335 billion in the same period of 2023, reflecting a growth of 3.5%[10]. - For the three months ended September 30, 2024, total revenue from contracts with customers was $319 million, with noninsurance contracts contributing $246 million[57]. - During the nine months ended September 30, 2024, total revenue from contracts with customers reached $887 million, with noninsurance contracts accounting for $666 million[60]. - Ally Financial's total other revenue for the nine months ended September 30, 2024, was $1.650 billion, with all other revenue contributing $763 million[60]. Assets and Liabilities - Total assets as of September 30, 2024, were $192.981 billion, a decrease from $196.392 billion as of December 31, 2023, reflecting a decline of 1.9%[14]. - Total liabilities decreased to $178.256 billion as of September 30, 2024, from $182.626 billion as of December 31, 2023, indicating a reduction of 2%[14]. - Total assets decreased from $7,075 million on December 31, 2023, to $5,458 million on September 30, 2024, representing a decline of approximately 22.8%[17]. - Total liabilities increased from $1,513 million on December 31, 2023, to $1,720 million on September 30, 2024, marking an increase of approximately 13.7%[17]. - Total equity of Ally Financial increased to $14.725 billion as of September 30, 2024, compared to $13.766 billion as of December 31, 2023, reflecting an increase of 7%[14]. Credit Losses and Provisions - The provision for credit losses increased to $645 million for the three months ended September 30, 2024, compared to $508 million in the same period of 2023, representing a rise of 27%[10]. - The provision for credit losses rose to $1,609 million for the nine months ended September 30, 2024, compared to $1,381 million for the same period in 2023, indicating an increase of about 16.5%[25]. - The allowance for loan losses at September 30, 2024, was $3,700 million, reflecting a provision for credit losses of $1,609 million during the nine months ended September 30, 2024[82]. - The provision for credit losses for the three months ended September 30, 2024, was $645 million, indicating a proactive approach to managing credit risk[80]. Investments and Securities - The total available-for-sale securities amounted to $27.312 billion as of September 30, 2024, with unrealized losses of $3.430 billion[67]. - The fair value of total available-for-sale securities decreased from $28.416 billion at December 31, 2023, to $23.905 billion at September 30, 2024, a decline of 15.7%[67]. - The total gross reserves for insurance losses and loss adjustment expenses at September 30, 2024, were $197 million, compared to $145 million in 2023, marking a 36% increase[63]. - The net unrealized gain on equity securities for the three months ended September 30, 2024, was $58 million[73]. Dividends and Shareholder Returns - The company declared cash dividends of $0.30 per common share for the three months ended September 30, 2024, consistent with the same period in 2023[12]. - Common stock dividends paid remained stable at $280 million for the nine months ended September 30, 2024, compared to $277 million in the same period of 2023[27]. Regulatory and Capital Requirements - As of September 30, 2024, Ally's stress capital buffer requirement was 2.5%, which was updated to 2.6% in August 2024[198]. - Ally is subject to enhanced prudential standards and must maintain a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%[198]. - Common Equity Tier 1 capital ratio for Ally Financial Inc. increased to 9.79% as of September 30, 2024, up from 9.36% on December 31, 2023[202]. - The total capital ratio for Ally Financial Inc. reached 12.90% as of September 30, 2024, compared to 12.41% at the end of 2023[202].

Core Viewpoint - Ally Financial Inc. reported third-quarter 2024 results that exceeded Zacks Consensus Estimates, with both top and bottom lines showing year-over-year growth [1] Financial Performance - Ally Financial's shares declined by 2% following the quarterly results announcement, attributed to a challenging operating environment characterized by high interest rates and inflationary pressures [2] - The company's stock fell 10.2% in the third quarter, contrasting with a 6.2% increase in the industry [3] Asset Quality - A significant concern was the deterioration in asset quality, with a provision for loan losses of $645 million, a 27% increase year over year [5] - Net charge-offs (NCOs) rose to $517 million or 1.50%, up from $456 million or 1.31% in the prior-year quarter, driven by an 18.8% increase in retail auto loan NCOs [5][6] Revenue Insights - Net financing revenues, the largest revenue source for Ally Financial, decreased by 2.9% to $1.49 billion due to lower average earning assets and higher funding costs [6] - Total other revenues surged by 41.4% year over year to $615 million, supported by growth in insurance and other revenue streams [9] Net Interest Margin (NIM) - The net interest margin contracted by 2 basis points to 3.22%, influenced by the asset-sensitive balance sheet [7] - NIM is projected to be around 3.20% for 2024, down from earlier guidance of approximately 3.30% [11] Strategic Initiatives - Ally Financial is diversifying into mortgage, wealth management, and online brokerage businesses, and launched Ally.ai, an AI platform to enhance operations [12] - The company sold its point-of-sale financing business, Ally Lending, in March 2024 to focus on core business growth [13] Future Outlook - The company anticipates increased loan losses in 2024, with retail auto NCO rates projected between 2.25% and 2.30% [14] - The Zacks Consensus Estimate for 2024 earnings indicates a 1.3% decline year over year, while 2025 earnings are expected to grow by 40.9% [15] Valuation Metrics - Ally Financial stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) ratio of 0.88X, below the industry average of 1.29X [16] - Compared to peers, Ally's stock appears undervalued, with Capital One at 1.33X and SLM at 2.64X [17]

Group 1 - Ally Financial's shares have increased by 48% over the past year, indicating strong performance, but recent performance has declined due to rising credit cost concerns [1] - Q3 earnings results have not alleviated investor concerns regarding credit costs [1]