UPDATE: Ally Financial Inc. (ALLY) Misses Q1 EPS by 9c
Ally Financial Inc. (NYSE: ALLY) reported Q1 EPS of $0.33, $0.09 worse than the analyst estimate of $0.42.
Return on Average Tangible Common Equity (ROTCE) Ally continues to make progress on its three-point plan to increase shareholder value and improve the company's return on average tangible common equity.
- Net Interest Margin (NIM) Expansion: Ally executed its liability management program and continued to increase deposits, which contributed to a cost of funds reduction of 15 basis points since last quarter and 55 basis points since the prior year period. Year-over-year, net financing revenue, excluding OID, improved 24 percent and NIM improved 46 basis points.
- Expense Reduction: Through efforts to streamline the business, controllable expenses decreased approximately $70 million year-over-year and Ally's adjusted efficiency ratio improved to 55 percent for the quarter.
- Regulatory Normalization: Effective May 1, Ally's Commercial Finance Group, which has been renamed Ally Corporate Finance, will be aligned under Ally Bank, allowing this business to have a more competitive source of funding. Additionally, in the second quarter of 2014, Ally Bank plans to begin paying a dividend to its parent, Ally Financial.
Liquidity and Capital Highlights
- Improved cost of funds, excluding OID, approximately 15 basis points quarter-over-quarter and approximately 55 basis points in the past year.
- Completed a $9.7 billion legacy debt call program.
- Returned a total of $17.7 billion to the U.S. Treasury, approximately $500 million more than initially invested in the company, and reduced common equity stake to 17 percent.
Ally's consolidated cash and cash equivalents increased to $5.9 billion as of Mar. 31, 2014, compared to $5.5 billion at Dec. 31, 2013. Included in this quarter's balance are: $2.5 billion at Ally Bank and $1.2 billion at the Insurance business.
For earnings history and earnings-related data on Ally Financial Inc. (ALLY) click here.