Ally Financial : Q1 2019 Ally Financial Inc. Earnings Conference Call Financial Supplement

FIRST QUARTER 2019

FINANCIAL SUPPLEMENT

ALLY FINANCIAL INC.

FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION

This document and related communications should be read in conjunction with the financial statements, notes, and other information contained in our 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 and third-party data available at the time of the presentation or related communication.

This document and related communications contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts-such as statements about the outlook for various financial and operating metrics and statements about future capital allocation and actions. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "pursue," "seek," "continue," "estimate," "project," "outlook," "forecast," "potential," "target," "objective," "trend," "plan," "goal," "initiative," "priorities," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10- Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our "SEC filings"). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent SEC filings.

This document and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to generally accepted accounting principles ("GAAP"). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the presentation.

Unless the context otherwise requires, the following definitions apply. The term "loans" means the following consumer and commercial products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other financing products excluding operating leases. The term "operating leases" means consumer- and commercial-vehicle lease agreements where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the vehicle's residual value. The terms "lend," "finance," and "originate" mean our direct extension or origination of loans, our purchase or acquisition of loans, or our purchase of operating leases as applicable. The term "consumer" means all consumer products associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term "commercial" means all commercial products associated with our loan activities, other than commercial retail installment sales contracts.

1Q 2019 Preliminary Results

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ALLY FINANCIAL INC.

TABLE OF CONTENTS

Consolidated Results	Page(s)
Consolidated Financial Highlights	4
Consolidated Income Statement	5
Consolidated Period-End Balance Sheet	6
Consolidated Average Balance Sheet	7
Segment Detail
Segment Highlights	8
Automotive Finance	9-10
Insurance	11
Mortgage Finance	12
Corporate Finance	13
Corporate and Other	14
Credit Related Information	15-16
Supplemental Detail
Capital	17
Liquidity	18
Net Interest Margin and Deposits	19
Ally Bank Consumer Mortgage HFI Portfolios	20
Earnings Per Share Related Information	21
Adjusted Tangible Book Per Share Related Information	22
Core ROTCE Related Information	23
Adjusted Efficiency Ratio Related Information	24

1Q 2019 Preliminary Results

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ALLY FINANCIAL INC

CONSOLIDATED FINANCIAL HIGHLIGHTS

($ in millions, shares in thousands)								QUARTERLY TRENDS									CHANGE VS.
Selected Income Statement Data		1Q 19			4Q 18			3Q 18			2Q 18			1Q 18			4Q 18			1Q 18
Net financing revenue (ex. Core OID) (1)	$	1,139	$		1,163	$		1,129	$		1,115	$		1,069	$		(25)	$		70
Core OID		(7)			(23)			(22)			(21)			(20)			17			13
Net financing revenue (as reported)		1,132			1,140			1,107			1,094			1,049			(8)			83
Other revenue (ex. change in the fair value of equity securities) (2)		396			393			392			356			394			3			2
Change in the fair value of equity securities (3)		70			(95)			6			8			(40)			165			110
Other revenue (as reported)		466			298			398			364			354			168			112
Provision for loan losses		282			266			233			158			261			16			21
Total noninterest expense (4)		830			804			807			839			814			26			16
Pre-tax income from continuing operations		486			368			465			461			328			118			158
Income tax expense		111			79			91			113			76			32			35
Income / (loss) from discontinued operations, net of tax		(1)			1			-			1			(2)			(2)			1
Net income attributable to common shareholders	$	374		$	290		$	374		$	349		$	250		$	84		$	124
Selected Balance Sheet Data (Period-End)
Total assets	$	180,117	$		178,869	$		173,101	$		171,345	$		170,021	$		1,248	$		10,096
Consumer loans		89,211			87,240			86,501			85,604			84,002			1,971			5,209
Commercial loans		40,844			42,686			40,104			39,940			41,325			(1,842)			(481)
Allowance for loan losses		(1,288)			(1,242)			(1,248)			(1,257)			(1,278)			(46)			(10)
Deposits		113,299			106,178			101,379			98,734			97,446			7,121			15,853
Total equity		13,699			13,268			13,085			13,139			13,082			431			617
Common Share Count
Weighted average basic (5)		404,129			411,931			422,187			430,628			436,213			(7,802)			(32,084)
Weighted average diluted (5)		405,959			414,750			424,784			432,554			438,931			(8,791)			(32,972)
Issued shares outstanding (period-end)		399,761			404,900			416,591			425,752			432,691			(5,139)			(32,930)
Per Common Share Data
Earnings per share (basic) (5)	$	0.93	$		0.70	$		0.89	$		0.81	$		0.57	$		0.22	$		0.35
Earnings per share (diluted) (5)		0.92			0.70			0.88			0.81			0.57			0.22			0.35
Adjusted earnings per share (6)		0.80			0.92			0.91			0.83			0.68			(0.12)			0.12
Book value per share		34.3			32.8			31.4			30.9			30.2			1.5			4.0
Tangible book value per share (7)		33.6			32.1			30.7			30.2			29.6			1.5			4.0
Adjusted tangible book value per share (7)		31.4			29.9			28.6			28.1			27.4			1.5			4.0
Select Financial Ratios
Net interest margin (as reported)		2.67%			2.66%			2.67%			2.68%			2.64%
Net interest margin (ex. Core OID) (8)		2.69%			2.72%			2.72%			2.74%			2.69%
Cost of funds		2.70%			2.60%			2.45%			2.30%			2.16%
Cost of funds (ex. Core OID) (8)		2.66%			2.52%			2.38%			2.23%			2.09%
Efficiency Ratio (9)		51.9%			55.9%			53.6%			57.5%			58.0%
Adjusted efficiency ratio (8)(9)		48.9%			46.9%			46.0%			47.7%			50.1%
Return on average assets (10)		0.8%			0.7%			0.9%			0.8%			0.6%
Return on average total equity (10)		11.1%			8.8%			11.4%			10.6%			7.5%
Return on average tangible common equity (10)		11.3%			9.0%			11.7%			10.9%			7.7%
Core ROTCE (11)		10.9%			13.4%			13.7%			12.8%			10.6%
Capital Ratios (12)
Common Equity Tier 1 (CET1) capital ratio		9.3%			9.1%			9.4%			9.4%			9.3%
Tier 1 capital ratio		11.0%			10.8%			11.1%			11.1%			11.0%
Total capital ratio		12.5%			12.3%			12.7%			12.7%			12.6%
Tier 1 leverage ratio		9.0%			9.0%			9.2%			9.2%			9.3%

(1)Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21.

(2)Represents a non-GAAP financial measure. Adjusted for change in the fair value of equity securities due to the implementation of ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. For Non-GAAP calculation methodology and details see page 21.

(3)Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity.

(4)Including but not limited to employee related expenses, commissions and provision for losses and loss adjustment expense related to the insurance business, information technology expenses, servicing expenses, facilities expenses, marketing expenses, and other professional and legal expenses.

(5)Includes shares related to share-based compensation that vested but were not yet issued.

(6)Represents a non-GAAP financial measure. For more details refer to page 21.

(7)Represents a non-GAAP financial measure. For more details refer to page 22.

(8)Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21.

(9)Represents a non-GAAP financial measure. For more details refer to page 24.

(10)Return metrics are annualized.

(11)Return metrics are annualized. Represents a non-GAAP financial measure. For more details refer to page 23.

(12)Basel III rules became effective on January 1, 2015, subject to transition provisions primarily related to deductions and adjustments impacting CET1 capital and Tier 1 capital.

1Q 2019 Preliminary Results

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ALLY FINANCIAL INC.

CONSOLIDATED INCOME STATEMENT

($ in millions)						QUARTERLY TRENDS											CHANGE VS.
Financing revenue and other interest income		1Q 19			4Q 18			3Q 18			2Q 18			1Q 18			4Q 18			1Q 18
Interest and fees on finance receivables and loans	$	1,807	$		1,790	$		1,708		$	1,647	$		1,543	$		17	$		264
Interest on loans held-for-sale		2			5			4			6			-			(3)			2
Total interest and dividends on investment securities		222			211			182			173			163			11			59
Interest-bearing cash		23			22			18			17			15			1			8
Other earning assets		18			15			16			15			13			3			5
Operating leases		361			365			368			374			382			(4)			(21)
Total financing revenue and other interest income		2,433			2,408			2,296			2,232			2,116			25			317
Interest expense
Interest on deposits		592			523			462			399			351			69			241
Interest on short-term borrowings		44			48			29			40			32			(4)			12
Interest on long-term debt		419			457			451			434			411			(38)			8
Total interest expense		1,055			1,028			942			873			794			27			261
Depreciation expense on operating lease assets		246			240			247			265			273			6			(27)
Net financing revenue (as reported)	$	1,132		$	1,140		$	1,107		$	1,094		$	1,049		$	(8)		$	83
Other revenue
Servicing fees		6			6			6			7			8			(1)			(3)
Insurance premiums and service revenue earned		261			269			258			239			256			(8)			5
Gain on mortgage and automotive loans, net		10			6			17			1			1			4			9
Other gain/loss on investments, net		108			(87)			22			27			(12)			195			120
Other income, net of losses		81			104			95			91			100			(23)			(19)
Total other revenue		466			298			398			364			354			168			112
Total net revenue		1,598			1,438			1,505			1,458			1,403			160			195
Provision for loan losses		282			266			233			158			261			16			21
Noninterest expense
Compensation and benefits expense		318			283			274			292			306			35			12
Insurance losses and loss adjustment expenses		59			54			77			101			63			5			(4)
Other operating expenses		453			467			456			446			445			(14)			8
Total noninterest expense		830			804			807			839			814			26			16
Pre-tax income from continuing operations	$	486	$		368	$		465		$	461	$		328	$		118	$		158
Income tax expense from continuing operations		111			79			91			113			76			32			35
Net income from continuing operations		375			289			374			348			252			86			123
(Loss) / income from discontinued operations, net of tax		(1)			1			-			1			(2)			(2)			1
Net income	$	374		$	290		$	374		$	349		$	250		$	84		$	124
Core Pre-Tax Income Walk
Net financing revenue (ex. Core OID) (1)	$	1,139	$		1,163	$		1,129		$	1,115	$		1,069	$		(25)	$		70
Adjusted other revenue (2)		396			393			392			356			394			3			2
Provision for loan losses		282			266			233			158			261			16			21
Noninterest expense		830			804			807			839			814			26			16
Core pre-tax income (3)	$	423	$		486	$		481		$	474	$		388	$		(63)	$		35
Core OID		7			23			22			21			20			(17)			(13)
Change in the fair value of equity securities (4)		(70)			95			(6)			(8)			40			(165)			(110)
Pre-tax income from continuing operations	$	486		$	368		$	465		$	461		$	328		$	118		$	158

(1)Represents a non-GAAP financial measure. Excludes Core OID. For more details refer to page 21.

(2)Represents a non-GAAP financial measure. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. For more details refer to page 21.

(3)Core pre-tax income is a non-GAAP financial measure that adjusts pre-tax income from continuing operations by excluding (1) Core OID and (2) equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity. Management believes core pre-tax income can help the reader better understand the operating performance of the core businesses and their ability to generate earnings.

(4)Change in fair value of equity securities impacts the Insurance and Corporate Finance segments. Excludes equity fair value adjustments related to ASU 2016-01, which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/2018 in which such adjustments were recognized through other comprehensive income, a component of equity.

1Q 2019 Preliminary Results

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