Ally Financial Inc
Q3 2024 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.98%.
Did ALLY Beat Earnings? Q3 2024 Results
Ally Financial delivered a decisive earnings beat in the third quarter of 2024, posting adjusted EPS of $0.95 against a consensus estimate of $0.53, a 79.25% positive surprise, while revenue of $2.10 billion edged past the $2.03 billion estimate by 3.59%, though revenue fell 47.7% year over year. The headline numbers were materially shaped by a $124.00 million income tax benefit tied to $179.00 million in EV lease tax credits, which drove an effective tax rate of negative 53%; strip that out, and core pre-tax income of $188.00 million tells a more pressured story, down from $326.00 million a year ago. Credit quality remains the defining challenge, with retail auto net charge-offs at a 2.24% annualized rate and 30-plus day delinquencies rising 66 basis points year over year to 4.51%, a dynamic that has weighed on investor sentiment even as management expresses confidence in improving vintages. Looking ahead, Ally guided for a full-year retail auto net charge-off rate of 2.25% to 2.30% and a medium-term path toward 4% NIM, underpinned by $141.00 billion in retail deposits.
- $9.4 billion consumer auto originations with 10.54% estimated retail originated yield
- $124 million income tax benefit including $179 million of EV lease tax credits
- Insurance written premiums of $384 million, up 15% year over year
- Corporate Finance delivered $95 million pre-tax income with 33% ROE
- 62 consecutive quarters of retail deposit customer growth, now 3.3 million customers
- Net interest margin ex. OID of 3.25%, positioned for expansion over the medium term
- 43% of retail auto originations in highest credit quality S-tier
- Adjusted efficiency ratio of 52.1%, flat year over year
- Core ROTCE of 13.1%, up from 12.9% a year ago
- Total available liquidity of $67.9 billion, up $3.8 billion year over year
“I'm proud of the way our team continued to serve our 11 million customers amid an evolving operating environment - a testament to our "Do It Right" culture. I'm pleased with the way we are executing across the organization, originating business with compelling risk adjusted returns and being disciplined in deploying capital.”
Ally Financial CEO, on the earnings call
Forward Guidance & Outlook
For 2024 full year, Ally expects NIM of approximately 3.20%, adjusted other revenue up approximately 12% year over year, retail auto net charge-off rate of 2.25%-2.30%, consolidated net charge-off rate of 1.50%-1.55%, controllable noninterest expense down more than 1% year over year with total adjusted noninterest expense up less than 2% year over year, average earning assets down approximately 1% year over year, and a tax rate of negative 25% to 30%. Over the medium term, management targets a path to 4% NIM and mid-teens Core ROTCE, supported by structural liability sensitivity from $141 billion in retail deposits and improving credit trends as higher-quality origination vintages season.
ALLY YoY Financials
ALLY Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.