þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 38-0572512 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
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PART I — FINANCIAL INFORMATION |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Financing revenue and other interest income | ||||||||
Interest and fees on finance receivables and loans | $ | 1,074 | $ | 1,107 | ||||
Interest on loans held-for-sale | 24 | — | ||||||
Interest and dividends on available-for-sale investment securities | 88 | 95 | ||||||
Interest-bearing cash | 2 | 3 | ||||||
Operating leases | 896 | 870 | ||||||
Total financing revenue and other interest income | 2,084 | 2,075 | ||||||
Interest expense | ||||||||
Interest on deposits | 172 | 163 | ||||||
Interest on short-term borrowings | 11 | 15 | ||||||
Interest on long-term debt | 429 | 534 | ||||||
Total interest expense | 612 | 712 | ||||||
Depreciation expense on operating lease assets | 622 | 542 | ||||||
Net financing revenue | 850 | 821 | ||||||
Other revenue | ||||||||
Servicing fees | 10 | 9 | ||||||
Insurance premiums and service revenue earned | 233 | 241 | ||||||
Gain on mortgage and automotive loans, net | 46 | — | ||||||
Loss on extinguishment of debt | (198 | ) | (39 | ) | ||||
Other gain on investments, net | 55 | 43 | ||||||
Other income, net of losses | 97 | 67 | ||||||
Total other revenue | 243 | 321 | ||||||
Total net revenue | 1,093 | 1,142 | ||||||
Provision for loan losses | 116 | 137 | ||||||
Noninterest expense | ||||||||
Compensation and benefits expense | 255 | 254 | ||||||
Insurance losses and loss adjustment expenses | 56 | 68 | ||||||
Other operating expenses | 384 | 391 | ||||||
Total noninterest expense | 695 | 713 | ||||||
Income from continuing operations before income tax expense | 282 | 292 | ||||||
Income tax expense from continuing operations | 103 | 94 | ||||||
Net income from continuing operations | 179 | 198 | ||||||
Income from discontinued operations, net of tax | 397 | 29 | ||||||
Net income | 576 | 227 | ||||||
Other comprehensive income, net of tax | 31 | 92 | ||||||
Comprehensive income | $ | 607 | $ | 319 |
Three months ended March 31, | ||||||||
(in dollars) (a) | 2015 | 2014 | ||||||
Basic earnings per common share | ||||||||
Net income from continuing operations | $ | 0.23 | $ | 0.27 | ||||
Income from discontinued operations, net of tax | 0.82 | 0.06 | ||||||
Net income | $ | 1.06 | $ | 0.33 | ||||
Diluted earnings per common share | ||||||||
Net income from continuing operations | $ | 0.23 | $ | 0.27 | ||||
Income from discontinued operations, net of tax | 0.82 | 0.06 | ||||||
Net income | $ | 1.06 | $ | 0.33 |
(a) | Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. |
($ in millions, except share data) | March 31, 2015 | December 31, 2014 | ||||||
Assets | ||||||||
Cash and cash equivalents | ||||||||
Noninterest-bearing | $ | 1,552 | $ | 1,348 | ||||
Interest-bearing | 6,084 | 4,228 | ||||||
Total cash and cash equivalents | 7,636 | 5,576 | ||||||
Federal funds sold and securities purchased under resale agreements | 50 | — | ||||||
Investment securities | 17,829 | 16,137 | ||||||
Loans held-for-sale, net of unearned income | 1,559 | 2,003 | ||||||
Finance receivables and loans, net | ||||||||
Finance receivables and loans, net of unearned income | 99,857 | 99,948 | ||||||
Allowance for loan losses | (933 | ) | (977 | ) | ||||
Total finance receivables and loans, net | 98,924 | 98,971 | ||||||
Investment in operating leases, net | 19,021 | 19,510 | ||||||
Premiums receivable and other insurance assets | 1,722 | 1,695 | ||||||
Other assets | 6,783 | 7,302 | ||||||
Assets of operations held-for-sale | — | 634 | ||||||
Total assets | $ | 153,524 | $ | 151,828 | ||||
Liabilities | ||||||||
Deposit liabilities | ||||||||
Noninterest-bearing | $ | 79 | $ | 64 | ||||
Interest-bearing | 60,796 | 58,158 | ||||||
Total deposit liabilities | 60,875 | 58,222 | ||||||
Short-term borrowings | 6,447 | 7,062 | ||||||
Long-term debt | 65,760 | 66,558 | ||||||
Interest payable | 440 | 477 | ||||||
Unearned insurance premiums and service revenue | 2,374 | 2,375 | ||||||
Accrued expenses and other liabilities | 1,694 | 1,735 | ||||||
Total liabilities | 137,590 | 136,429 | ||||||
Contingencies (refer to Note 26) | ||||||||
Equity | ||||||||
Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 482,295,207 and 480,136,039; and outstanding 481,503,108 and 480,094,891) | 21,048 | 21,038 | ||||||
Preferred stock | 1,255 | 1,255 | ||||||
Accumulated deficit | (6,319 | ) | (6,828 | ) | ||||
Accumulated other comprehensive loss | (35 | ) | (66 | ) | ||||
Treasury stock, at cost (792,099 shares) | (15 | ) | — | |||||
Total equity | 15,934 | 15,399 | ||||||
Total liabilities and equity | $ | 153,524 | $ | 151,828 |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Assets | ||||||||
Finance receivables and loans, net | ||||||||
Finance receivables and loans, net of unearned income | $ | 28,030 | $ | 30,081 | ||||
Allowance for loan losses | (175 | ) | (179 | ) | ||||
Total finance receivables and loans, net | 27,855 | 29,902 | ||||||
Investment in operating leases, net | 7,524 | 5,595 | ||||||
Other assets | 2,046 | 2,010 | ||||||
Total assets | $ | 37,425 | $ | 37,507 | ||||
Liabilities | ||||||||
Long-term debt | $ | 23,843 | $ | 24,343 | ||||
Accrued expenses and other liabilities | 18 | 173 | ||||||
Total liabilities | $ | 23,861 | $ | 24,516 |
($ in millions) | Common stock and paid-in capital | Preferred stock | Accumulated deficit | Accumulated other comprehensive income (loss) | Treasury stock | Total equity | |||||||||||||||||
Balance at January 1, 2014 | $ | 20,939 | $ | 1,255 | $ | (7,710 | ) | $ | (276 | ) | $ | — | $ | 14,208 | |||||||||
Net income | 227 | 227 | |||||||||||||||||||||
Preferred stock dividends | (68 | ) | (68 | ) | |||||||||||||||||||
Other comprehensive income | 92 | 92 | |||||||||||||||||||||
Balance at March 31, 2014 | $ | 20,939 | $ | 1,255 | $ | (7,551 | ) | $ | (184 | ) | $ | — | $ | 14,459 | |||||||||
Balance at January 1, 2015 | $ | 21,038 | $ | 1,255 | $ | (6,828 | ) | $ | (66 | ) | $ | — | $ | 15,399 | |||||||||
Net income | 576 | 576 | |||||||||||||||||||||
Preferred stock dividends | (67 | ) | (67 | ) | |||||||||||||||||||
Share-based compensation | 10 | 10 | |||||||||||||||||||||
Other comprehensive income | 31 | 31 | |||||||||||||||||||||
Share repurchases related to employee stock-based compensation awards | (15 | ) | (15 | ) | |||||||||||||||||||
Balance at March 31, 2015 | $ | 21,048 | $ | 1,255 | $ | (6,319 | ) | $ | (35 | ) | $ | (15 | ) | $ | 15,934 |
Three months ended March 31, ($ in millions) | 2015 | 2014 | ||||||
Operating activities | ||||||||
Net income | $ | 576 | $ | 227 | ||||
Reconciliation of net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | 759 | 738 | ||||||
Provision for loan losses | 116 | 137 | ||||||
Gain on mortgage and automotive loans, net | (46 | ) | — | |||||
Other gain on investments, net | (55 | ) | (43 | ) | ||||
Loss on extinguishment of debt | 198 | 39 | ||||||
Originations and purchases of loans held-for-sale | (1,241 | ) | — | |||||
Proceeds from sales and repayments of loans originated as held-for-sale | 125 | 13 | ||||||
Impairment and settlement related to Residential Capital, LLC | — | (26 | ) | |||||
Gain on sale of subsidiaries, net | (452 | ) | — | |||||
Net change in | ||||||||
Deferred income taxes | 165 | 68 | ||||||
Interest payable | (37 | ) | 5 | |||||
Other assets | 396 | 191 | ||||||
Other liabilities | (92 | ) | (368 | ) | ||||
Other, net | (165 | ) | (49 | ) | ||||
Net cash provided by operating activities | 247 | 932 | ||||||
Investing activities | ||||||||
Net change in federal funds sold and securities purchased under resale agreements | (50 | ) | — | |||||
Purchases of available-for-sale securities | (4,023 | ) | (907 | ) | ||||
Proceeds from sales of available-for-sale securities | 1,523 | 1,354 | ||||||
Proceeds from maturities and repayment of available-for-sale securities | 914 | 592 | ||||||
Net (increase) decrease in finance receivables and loans | (45 | ) | 492 | |||||
Proceeds from sales of finance receivables and loans | 1,577 | — | ||||||
Purchases of operating lease assets | (1,447 | ) | (2,360 | ) | ||||
Disposals of operating lease assets | 1,337 | 1,285 | ||||||
Proceeds from sale of business units, net (a) | 1,049 | — | ||||||
Net change in restricted cash | (121 | ) | 1,580 | |||||
Other, net | 91 | 111 | ||||||
Net cash provided by investing activities | 805 | 2,147 |
Three months ended March 31, ($ in millions) | 2015 | 2014 | ||||||
Financing activities | ||||||||
Net change in short-term borrowings | (618 | ) | (3,384 | ) | ||||
Net increase in deposits | 2,652 | 2,017 | ||||||
Proceeds from issuance of long-term debt | 8,820 | 9,402 | ||||||
Repayments of long-term debt | (9,778 | ) | (10,683 | ) | ||||
Dividends paid | (67 | ) | (68 | ) | ||||
Net cash provided by (used in) financing activities | 1,009 | (2,716 | ) | |||||
Effect of exchange-rate changes on cash and cash equivalents | (1 | ) | (1 | ) | ||||
Net increase in cash and cash equivalents | 2,060 | 362 | ||||||
Cash and cash equivalents at beginning of year | 5,576 | 5,531 | ||||||
Cash and cash equivalents at March 31, | $ | 7,636 | $ | 5,893 | ||||
Supplemental disclosures | ||||||||
Cash paid for | ||||||||
Interest | $ | 641 | $ | 664 | ||||
Income taxes | 95 | (6 | ) | |||||
Noncash items | ||||||||
Finance receivables and loans transferred to loans held-for-sale | 69 | 40 | ||||||
Other disclosures | ||||||||
Proceeds from sales and repayments of mortgage loans held-for-investment originally designated as held-for-sale | 43 | 7 |
(a) | Cash flows of discontinued operations are reflected within operating, investing, and financing activities in the Condensed Consolidated Statement of Cash Flows. The cash balance of these operations is reported as assets of operations held-for-sale on the Condensed Consolidated Balance Sheet. |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Select Automotive Finance operations | |||||||
Total net revenue | $ | — | $ | 33 | |||
Pretax income including direct costs to transact a sale (a) | 458 | 30 | |||||
Tax expense (benefit) (b) | 65 | (1 | ) | ||||
Other operations | |||||||
Pretax income | $ | 2 | $ | (2 | ) | ||
Tax benefit | (2 | ) | — |
(a) | Includes certain treasury and other corporate activity recognized by Corporate and Other. |
(b) | Includes certain income tax activity recognized by Corporate and Other. |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Income from equity-method investments | $ | 33 | $ | 4 | |||
Remarketing fees | 28 | 28 | |||||
Late charges and other administrative fees | 22 | 23 | |||||
Other, net | 14 | 12 | |||||
Total other income, net of losses | $ | 97 | $ | 67 |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Insurance commissions | $ | 93 | $ | 90 | |||
Technology and communications | 69 | 85 | |||||
Advertising and marketing | 31 | 29 | |||||
Lease and loan administration | 29 | 28 | |||||
Regulatory and licensing fees | 21 | 27 | |||||
Professional services | 20 | 28 | |||||
Premises and equipment depreciation | 20 | 19 | |||||
Vehicle remarketing and repossession | 18 | 18 | |||||
Occupancy | 12 | 11 | |||||
Non-income taxes | 8 | 10 | |||||
Other | 63 | 46 | |||||
Total other operating expenses | $ | 384 | $ | 391 |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized | Fair value | Amortized cost | Gross unrealized | Fair value | |||||||||||||||||||||||||||
($ in millions) | gains | losses | gains | losses | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 2,673 | $ | 19 | $ | (4 | ) | $ | 2,688 | $ | 1,195 | $ | 1 | $ | (18 | ) | $ | 1,178 | ||||||||||||||
U.S. States and political subdivisions | 506 | 19 | (1 | ) | 524 | 389 | 17 | — | 406 | |||||||||||||||||||||||
Foreign government | 202 | 13 | — | 215 | 224 | 8 | — | 232 | ||||||||||||||||||||||||
Mortgage-backed residential (a) | 10,246 | 144 | (85 | ) | 10,305 | 10,431 | 119 | (125 | ) | 10,425 | ||||||||||||||||||||||
Mortgage-backed commercial | 313 | — | (1 | ) | 312 | 254 | — | (1 | ) | 253 | ||||||||||||||||||||||
Asset-backed | 2,061 | 6 | (1 | ) | 2,066 | 1,989 | 5 | (3 | ) | 1,991 | ||||||||||||||||||||||
Corporate debt | 731 | 22 | (1 | ) | 752 | 734 | 14 | (2 | ) | 746 | ||||||||||||||||||||||
Total debt securities | 16,732 | 223 | (93 | ) | 16,862 | 15,216 | 164 | (149 | ) | 15,231 | ||||||||||||||||||||||
Equity securities | 984 | 28 | (45 | ) | 967 | 891 | 49 | (34 | ) | 906 | ||||||||||||||||||||||
Total available-for-sale securities (b) | $ | 17,716 | $ | 251 | $ | (138 | ) | $ | 17,829 | $ | 16,107 | $ | 213 | $ | (183 | ) | $ | 16,137 |
(a) | Residential mortgage-backed securities include agency-backed bonds totaling $7,312 million and $7,557 million at March 31, 2015, and |
(b) | Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. Amounts deposited totaled $15 million at March 31, 2015, and December 31, 2014, respectively. |
Total | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years (a) | |||||||||||||||||||||||||||||||
($ in millions) | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||
March 31, 2015 | |||||||||||||||||||||||||||||||||||
Fair value of available-for-sale debt securities | |||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 2,688 | 1.8 | % | $ | 83 | 0.2 | % | $ | 685 | 1.2 | % | $ | 1,920 | 2.0 | % | $ | — | — | % | |||||||||||||||
U.S. States and political subdivisions | 524 | 3.6 | 30 | 2.0 | 25 | 3.0 | 104 | 3.0 | 365 | 3.9 | |||||||||||||||||||||||||
Foreign government | 215 | 2.8 | — | — | 122 | 2.6 | 93 | 3.0 | — | — | |||||||||||||||||||||||||
Mortgage-backed residential | 10,305 | 2.7 | — | — | 51 | 2.1 | 5 | 3.0 | 10,249 | 2.7 | |||||||||||||||||||||||||
Mortgage-backed commercial | 312 | 1.6 | — | — | 28 | 1.6 | — | — | 284 | 1.5 | |||||||||||||||||||||||||
Asset-backed | 2,066 | 2.0 | — | — | 1,290 | 2.0 | 533 | 2.0 | 243 | 2.1 | |||||||||||||||||||||||||
Corporate debt | 752 | 3.2 | 41 | 3.3 | 447 | 2.7 | 232 | 3.8 | 32 | 5.7 | |||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 16,862 | 2.5 | $ | 154 | 1.4 | $ | 2,648 | 1.9 | $ | 2,887 | 2.2 | $ | 11,173 | 2.7 | ||||||||||||||||||||
Amortized cost of available-for-sale debt securities | $ | 16,732 | $ | 153 | $ | 2,631 | $ | 2,845 | $ | 11,103 | |||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||
Fair value of available-for-sale debt securities | |||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,178 | 1.5 | % | $ | 7 | 3.0 | % | $ | 677 | 1.2 | % | $ | 494 | 1.9 | % | $ | — | — | % | |||||||||||||||
U.S. States and political subdivisions | 406 | 3.7 | 34 | 1.9 | 12 | 2.1 | 106 | 3.0 | 254 | 4.3 | |||||||||||||||||||||||||
Foreign government | 232 | 2.7 | — | — | 128 | 2.5 | 104 | 2.9 | — | — | |||||||||||||||||||||||||
Mortgage-backed residential | 10,425 | 2.6 | 34 | 3.1 | 58 | 2.1 | — | — | 10,333 | 2.6 | |||||||||||||||||||||||||
Mortgage-backed commercial | 253 | 1.5 | — | — | 30 | 1.8 | — | — | 223 | 1.4 | |||||||||||||||||||||||||
Asset-backed | 1,991 | 1.9 | — | — | 1,311 | 1.9 | 463 | 2.0 | 217 | 2.2 | |||||||||||||||||||||||||
Corporate debt | 746 | 3.2 | 33 | 3.1 | 460 | 2.7 | 216 | 3.8 | 37 | 5.6 | |||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 15,231 | 2.5 | $ | 108 | 2.7 | $ | 2,676 | 1.9 | $ | 1,383 | 2.4 | $ | 11,064 | 2.6 | ||||||||||||||||||||
Amortized cost of available-for-sale debt securities | $ | 15,216 | $ | 108 | $ | 2,674 | $ | 1,374 | $ | 11,060 |
(a) | Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment options. |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Taxable interest | $ | 80 | $ | 86 | |||
Taxable dividends | 5 | 5 | |||||
Interest and dividends exempt from U.S. federal income tax | 3 | 4 | |||||
Interest and dividends on available-for-sale securities | $ | 88 | $ | 95 |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Gross realized gains | $ | 60 | $ | 60 | |||
Gross realized losses | (3 | ) | (7 | ) | |||
Other-than-temporary impairment | (2 | ) | (10 | ) | |||
Other gain on investments, net | $ | 55 | $ | 43 |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Less than 12 months | 12 months or longer | |||||||||||||||||||||||||||||
($ in millions) | Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | ||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 277 | $ | — | $ | 670 | $ | (4 | ) | $ | 297 | $ | (3 | ) | $ | 859 | $ | (15 | ) | |||||||||||||
U.S. States and political subdivisions | 120 | (1 | ) | — | — | 50 | — | — | — | |||||||||||||||||||||||
Mortgage-backed | 1,064 | (6 | ) | 2,537 | (80 | ) | 1,172 | (10 | ) | 3,098 | (116 | ) | ||||||||||||||||||||
Asset-backed | 524 | (1 | ) | 1 | — | 819 | (3 | ) | 8 | — | ||||||||||||||||||||||
Corporate debt | 34 | (1 | ) | 6 | — | 132 | (2 | ) | 11 | — | ||||||||||||||||||||||
Total temporarily impaired debt securities | 2,019 | (9 | ) | 3,214 | (84 | ) | 2,470 | (18 | ) | 3,976 | (131 | ) | ||||||||||||||||||||
Temporarily impaired equity securities | 374 | (37 | ) | 28 | (8 | ) | 231 | (24 | ) | 40 | (10 | ) | ||||||||||||||||||||
Total temporarily impaired available-for-sale securities | $ | 2,393 | $ | (46 | ) | $ | 3,242 | $ | (92 | ) | $ | 2,701 | $ | (42 | ) | $ | 4,016 | $ | (141 | ) |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Consumer automotive | $ | 1,500 | $ | 1,515 | ||||
Consumer mortgage | 42 | 452 | ||||||
Commercial and industrial — Other | 17 | 36 | ||||||
Total loans held-for-sale | $ | 1,559 | $ | 2,003 |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Consumer automotive (a) | $ | 57,447 | $ | 56,570 | ||||
Consumer mortgage (b)(c) | 7,653 | 7,474 | ||||||
Commercial | ||||||||
Commercial and industrial | ||||||||
Automotive | 29,544 | 30,871 | ||||||
Other | 2,004 | 1,882 | ||||||
Commercial Real Estate — Automotive | 3,209 | 3,151 | ||||||
Total commercial | 34,757 | 35,904 | ||||||
Total finance receivables and loans (d) | $ | 99,857 | $ | 99,948 |
(a) | Includes $68 million and $35 million of fair value adjustment for loans in hedge accounting relationships at March 31, 2015, and December 31, 2014, respectively. Refer to Note 20 for additional information. |
(b) | Includes loans originated as interest-only mortgage loans of $1.1 billion and $1.2 billion at March 31, 2015, and December 31, 2014, respectively, 17% of which are expected to start principal amortization in 2015, 32% in 2016, 21% in 2017, 2% in 2018, and 5% thereafter. |
(c) | Includes consumer mortgages at a fair value of $1 million at both March 31, 2015, and December 31, 2014, as a result of fair value option election. |
(d) | Totals are net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $180 million and $266 million at March 31, 2015, and December 31, 2014, respectively. |
Three months ended March 31, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at January 1, 2015 | $ | 685 | $ | 152 | $ | 140 | $ | 977 | ||||||||
Charge-offs | (193 | ) | (22 | ) | — | (215 | ) | |||||||||
Recoveries | 61 | 3 | 1 | 65 | ||||||||||||
Net charge-offs | (132 | ) | (19 | ) | 1 | (150 | ) | |||||||||
Provision for loan losses | 158 | (5 | ) | (37 | ) | 116 | ||||||||||
Other (a) | — | (9 | ) | (1 | ) | (10 | ) | |||||||||
Allowance at March 31, 2015 | $ | 711 | $ | 119 | $ | 103 | $ | 933 | ||||||||
Allowance for loan losses | ||||||||||||||||
Individually evaluated for impairment | $ | 21 | $ | 54 | $ | 15 | $ | 90 | ||||||||
Collectively evaluated for impairment | 690 | 65 | 88 | 843 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — | ||||||||||||
Finance receivables and loans at historical cost | ||||||||||||||||
Ending balance | $ | 57,447 | $ | 7,652 | $ | 34,757 | $ | 99,856 | ||||||||
Individually evaluated for impairment | 278 | 253 | 65 | 596 | ||||||||||||
Collectively evaluated for impairment | 57,169 | 7,399 | 34,692 | 99,260 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Three months ended March 31, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at January 1, 2014 | $ | 673 | $ | 389 | $ | 146 | $ | 1,208 | ||||||||
Charge-offs | (180 | ) | (15 | ) | (1 | ) | (196 | ) | ||||||||
Recoveries | 59 | 3 | 1 | 63 | ||||||||||||
Net charge-offs | (121 | ) | (12 | ) | — | (133 | ) | |||||||||
Provision for loan losses | 163 | (23 | ) | (3 | ) | 137 | ||||||||||
Other (a) | — | (21 | ) | 1 | (20 | ) | ||||||||||
Allowance at March 31, 2014 | $ | 715 | $ | 333 | $ | 144 | $ | 1,192 | ||||||||
Allowance for loan losses | ||||||||||||||||
Individually evaluated for impairment | $ | 23 | $ | 200 | $ | 25 | $ | 248 | ||||||||
Collectively evaluated for impairment | 692 | 133 | 119 | 944 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — | ||||||||||||
Finance receivables and loans at historical cost | ||||||||||||||||
Ending balance | $ | 56,775 | $ | 8,137 | $ | 34,711 | $ | 99,623 | ||||||||
Individually evaluated for impairment | 290 | 935 | 173 | 1,398 | ||||||||||||
Collectively evaluated for impairment | 56,480 | 7,202 | 34,538 | 98,220 | ||||||||||||
Loans acquired with deteriorated credit quality | 5 | — | — | 5 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Consumer mortgage | $ | 69 | $ | 40 | ||||
Total sales and transfers | $ | 69 | $ | 40 |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Consumer mortgage | $ | 654 | $ | — | ||||
Total purchases of finance receivables and loans | $ | 654 | $ | — |
($ in millions) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total finance receivables and loans | ||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||
Consumer automotive | $ | 968 | $ | 182 | $ | 148 | $ | 1,298 | $ | 56,149 | $ | 57,447 | ||||||||||||
Consumer mortgage | 87 | 22 | 107 | 216 | 7,436 | 7,652 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | — | — | 8 | 8 | 29,536 | 29,544 | ||||||||||||||||||
Other | — | — | — | — | 2,004 | 2,004 | ||||||||||||||||||
Commercial real estate — Automotive | — | — | — | — | 3,209 | 3,209 | ||||||||||||||||||
Total commercial | — | — | 8 | 8 | 34,749 | 34,757 | ||||||||||||||||||
Total consumer and commercial | $ | 1,055 | $ | 204 | $ | 263 | $ | 1,522 | $ | 98,334 | $ | 99,856 | ||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Consumer automotive | $ | 1,340 | $ | 293 | $ | 164 | $ | 1,797 | $ | 54,773 | $ | 56,570 | ||||||||||||
Consumer mortgage | 76 | 25 | 124 | 225 | 7,248 | 7,473 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | — | 9 | — | 9 | 30,862 | 30,871 | ||||||||||||||||||
Other | — | — | — | — | 1,882 | 1,882 | ||||||||||||||||||
Commercial real estate — Automotive | — | — | — | — | 3,151 | 3,151 | ||||||||||||||||||
Total commercial | — | 9 | — | 9 | 35,895 | 35,904 | ||||||||||||||||||
Total consumer and commercial | $ | 1,416 | $ | 327 | $ | 288 | $ | 2,031 | $ | 97,916 | $ | 99,947 |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Consumer automotive | $ | 377 | $ | 386 | ||||
Consumer mortgage | 151 | 177 | ||||||
Commercial | ||||||||
Commercial and industrial | ||||||||
Automotive | 35 | 32 | ||||||
Other | 26 | 46 | ||||||
Commercial real estate — Automotive | 4 | 4 | ||||||
Total commercial | 65 | 82 | ||||||
Total consumer and commercial finance receivables and loans | $ | 593 | $ | 645 |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Performing | Nonperforming | Total | Performing | Nonperforming | Total | ||||||||||||||||||
Consumer automotive | $ | 57,070 | $ | 377 | $ | 57,447 | $ | 56,184 | $ | 386 | $ | 56,570 | ||||||||||||
Consumer mortgage | 7,501 | 151 | 7,652 | 7,296 | 177 | 7,473 |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Pass | Criticized (a) | Total | Pass | Criticized (a) | Total | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | $ | 27,823 | $ | 1,721 | $ | 29,544 | $ | 29,150 | $ | 1,721 | $ | 30,871 | ||||||||||||
Other | 1,503 | 501 | 2,004 | 1,509 | 373 | 1,882 | ||||||||||||||||||
Commercial real estate — Automotive | 3,059 | 150 | 3,209 | 3,015 | 136 | 3,151 | ||||||||||||||||||
Total commercial | $ | 32,385 | $ | 2,372 | $ | 34,757 | $ | 33,674 | $ | 2,230 | $ | 35,904 |
(a) | Includes loans classified as special mention, substandard, or doubtful. These classifications are based on regulatory definitions and generally represent loans within our portfolio that have a higher default risk or have already defaulted. |
($ in millions) | Unpaid principal balance | Carrying value before allowance | Impaired with no allowance | Impaired with an allowance | Allowance for impaired loans | |||||||||||||||
March 31, 2015 | ||||||||||||||||||||
Consumer automotive | $ | 278 | $ | 278 | $ | — | $ | 278 | $ | 21 | ||||||||||
Consumer mortgage | 254 | 253 | 62 | 191 | 54 | |||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 35 | 35 | 5 | 30 | 6 | |||||||||||||||
Other | 26 | 26 | — | 26 | 8 | |||||||||||||||
Commercial real estate — Automotive | 4 | 4 | 1 | 3 | 1 | |||||||||||||||
Total commercial | 65 | 65 | 6 | 59 | 15 | |||||||||||||||
Total consumer and commercial finance receivables and loans | $ | 597 | $ | 596 | $ | 68 | $ | 528 | $ | 90 | ||||||||||
December 31, 2014 | ||||||||||||||||||||
Consumer automotive | $ | 282 | $ | 282 | $ | — | $ | 282 | $ | 23 | ||||||||||
Consumer mortgage | 340 | 336 | 86 | 250 | 62 | |||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 32 | 32 | 4 | 28 | 5 | |||||||||||||||
Other | 46 | 46 | — | 46 | 15 | |||||||||||||||
Commercial real estate — Automotive | 4 | 4 | 1 | 3 | 1 | |||||||||||||||
Total commercial | 82 | 82 | 5 | 77 | 21 | |||||||||||||||
Total consumer and commercial finance receivables and loans | $ | 704 | $ | 700 | $ | 91 | $ | 609 | $ | 106 |
2015 | 2014 | |||||||||||||||
Three months ended March 31, ($ in millions) | Average balance | Interest income | Average balance | Interest income | ||||||||||||
Consumer automotive | $ | 290 | $ | 4 | $ | 294 | $ | 4 | ||||||||
Consumer mortgage | 311 | 2 | 928 | 8 | ||||||||||||
Commercial | ||||||||||||||||
Commercial and industrial | ||||||||||||||||
Automotive | 34 | — | 104 | 1 | ||||||||||||
Other | 40 | 3 | 74 | — | ||||||||||||
Commercial real estate — Automotive | 4 | — | 11 | — | ||||||||||||
Total commercial | 78 | 3 | 189 | 1 | ||||||||||||
Total consumer and commercial finance receivables and loans | $ | 679 | $ | 9 | $ | 1,411 | $ | 13 |
2015 | 2014 | |||||||||||||||||||||
Three months ended March 31, ($ in millions) | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | ||||||||||||||||
Consumer automotive | 4,055 | $ | 63 | $ | 53 | 5,359 | $ | 84 | $ | 71 | ||||||||||||
Consumer mortgage | 40 | 7 | 6 | 218 | 49 | 45 | ||||||||||||||||
Commercial | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||
Automotive | — | — | — | 3 | 23 | 23 | ||||||||||||||||
Other | — | — | — | 3 | 48 | 48 | ||||||||||||||||
Total commercial | — | — | — | 6 | 71 | 71 | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 4,095 | $ | 70 | $ | 59 | 5,583 | $ | 204 | $ | 187 |
2015 | 2014 | |||||||||||||||||||||
Three months ended March 31, ($ in millions) | Number of loans | Carrying value before allowance | Charge-off amount | Number of loans | Carrying value before allowance | Charge-off amount | ||||||||||||||||
Consumer automotive | 1,581 | $ | 19 | $ | 11 | 1,614 | $ | 20 | $ | 10 | ||||||||||||
Consumer mortgage | 4 | — | — | 2 | 1 | — | ||||||||||||||||
Commercial | — | — | — | — | — | — | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 1,585 | $ | 19 | $ | 11 | 1,616 | $ | 21 | $ | 10 |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Vehicles | $ | 22,842 | $ | 23,144 | ||||
Accumulated depreciation | (3,821 | ) | (3,634 | ) | ||||
Investment in operating leases, net | $ | 19,021 | $ | 19,510 |
Three months ended March 31, | |||||||
($ in millions) | 2015 | 2014 | |||||
Depreciation expense on operating lease assets (excluding remarketing gains) | $ | 691 | $ | 651 | |||
Remarketing gains | (69 | ) | (109 | ) | |||
Depreciation expense on operating lease assets | $ | 622 | $ | 542 |
($ in millions) | Consolidated involvement with VIEs | Assets of nonconsolidated VIEs (a) | Maximum exposure to loss in nonconsolidated VIEs | ||||||||||
March 31, 2015 | |||||||||||||
On-balance sheet variable interest entities | |||||||||||||
Consumer automotive | $ | 30,907 | (b) | ||||||||||
Commercial automotive | 16,727 | ||||||||||||
Off-balance sheet variable interest entities | |||||||||||||
Consumer automotive | — | $ | 2,500 | $ | 2,500 | (c) | |||||||
Commercial other | 182 | (d) | — | (e) | 413 | ||||||||
Total | $ | 47,816 | $ | 2,500 | $ | 2,913 | |||||||
December 31, 2014 | |||||||||||||
On-balance sheet variable interest entities | |||||||||||||
Consumer automotive | $ | 31,994 | (b) | ||||||||||
Commercial automotive | 18,171 | ||||||||||||
Off-balance sheet variable interest entities | |||||||||||||
Consumer automotive | — | $ | 2,801 | $ | 2,801 | (c) | |||||||
Commercial other | 146 | (d) | — | (e) | 362 | ||||||||
Total | $ | 50,311 | $ | 2,801 | $ | 3,163 |
(a) | Asset values represent the current unpaid principal balance of outstanding consumer finance receivables and loans within the VIEs. |
(b) | Includes $10.2 billion and $12.7 billion of assets that are not encumbered by VIE beneficial interests held by third parties at March 31, 2015 and December 31, 2014, respectively. Ally or consolidated affiliates hold the interests in these assets which eliminate in consolidation. |
(c) | Maximum exposure to loss represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions. This measure is based on the unlikely event that all of the loans have underwriting defects or other defects that trigger a representation and warranty provision and the collateral supporting the loans are worthless. This required disclosure is not an indication of our expected loss. |
(d) | Includes $198 million and $164 million classified as other assets, offset by $16 million and $18 million classified as accrued expenses and other liabilities at March 31, 2015, and December 31, 2014, respectively. |
(e) | Includes a VIE for which we have no management oversight and therefore we are not able to provide the total assets of the VIEs. |
Three months ended March 31, ($ in millions) | Consumer automotive | Consumer mortgage | ||||||
2015 | ||||||||
Servicing fees | $ | 7 | $ | — | ||||
2014 | ||||||||
Servicing fees | $ | 2 | $ | — | ||||
Representations and warranties obligations | — | 1 |
Total Amount | Amount 60 days or more past due | |||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||
On-balance sheet loans | ||||||||||||||||
Consumer automotive | $ | 58,947 | $ | 58,085 | $ | 332 | $ | 457 | ||||||||
Consumer mortgage | 7,695 | 7,926 | 133 | 151 | ||||||||||||
Commercial automotive | 32,753 | 34,022 | 8 | 9 | ||||||||||||
Commercial other | 2,021 | 1,918 | — | — | ||||||||||||
Total on-balance sheet loans | 101,416 | 101,951 | 473 | 617 | ||||||||||||
Off-balance sheet securitization entities | ||||||||||||||||
Consumer automotive | 2,500 | 2,801 | 4 | 5 | ||||||||||||
Total off-balance sheet securitization entities | 2,500 | 2,801 | 4 | 5 | ||||||||||||
Whole-loan transactions (a) | 1,662 | 929 | 21 | 33 | ||||||||||||
Total | $ | 105,578 | $ | 105,681 | $ | 498 | $ | 655 |
(a) | Whole-loan transactions are not part of a securitization transaction, but represent consumer automotive pools of loans sold to third-party investors. |
Net credit losses | ||||||||
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
On-balance sheet loans | ||||||||
Consumer automotive | $ | 132 | $ | 121 | ||||
Consumer mortgage | 19 | 12 | ||||||
Commercial automotive | (1 | ) | — | |||||
Commercial other | — | — | ||||||
Total on-balance sheet loans | 150 | 133 | ||||||
Off-balance sheet securitization entities | ||||||||
Consumer automotive | 1 | — | ||||||
Total off-balance sheet securitization entities | 1 | — | ||||||
Whole-loan transactions | — | 3 | ||||||
Total | $ | 151 | $ | 136 |
($ in millions) | March 31, 2015 | December 31, 2014 | |||||
On-balance sheet automotive finance loans and leases | |||||||
Consumer automotive | $ | 58,947 | $ | 58,085 | |||
Commercial automotive | 32,753 | 34,022 | |||||
Operating leases | 19,021 | 19,510 | |||||
Other | 59 | 55 | |||||
Off-balance sheet automotive finance loans | |||||||
Loans sold to third-party investors | |||||||
Securitizations | 2,527 | 2,832 | |||||
Whole-loan | 1,643 | 887 | |||||
Total serviced automotive finance loans and leases | $ | 114,950 | $ | 115,391 |
($ in millions) | March 31, 2015 | December 31, 2014 | |||||
Property and equipment at cost | $ | 744 | $ | 775 | |||
Accumulated depreciation | (531 | ) | (550 | ) | |||
Net property and equipment | 213 | 225 | |||||
Restricted cash collections for securitization trusts (a) | 2,369 | 2,221 | |||||
Net deferred tax assets | 1,639 | 1,812 | |||||
Fair value of derivative contracts in receivable position (b) | 315 | 263 | |||||
Cash reserve deposits held-for-securitization trusts (c) | 289 | 303 | |||||
Unamortized debt issuance costs | 246 | 238 | |||||
Other accounts receivable | 233 | 298 | |||||
Collateral placed with counterparties | 228 | 236 | |||||
Nonmarketable equity securities | 213 | 271 | |||||
Other assets | 1,038 | 1,435 | |||||
Total other assets | $ | 6,783 | $ | 7,302 |
(a) | Represents cash collections from customer payments on securitized receivables. These funds are distributed to investors as payments on the related secured debt. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(c) | Represents credit enhancement in the form of cash reserves for various securitization transactions. |
($ in millions) | March 31, 2015 | December 31, 2014 | |||||
Noninterest-bearing deposits | $ | 79 | $ | 64 | |||
Interest-bearing deposits | |||||||
Savings and money market checking accounts | 29,718 | 26,769 | |||||
Certificates of deposit | 30,768 | 31,070 | |||||
Dealer deposits | 310 | 319 | |||||
Total deposit liabilities | $ | 60,875 | $ | 58,222 |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Unsecured | Secured (a) | Total | Unsecured | Secured (a) | Total | ||||||||||||||||||
Demand notes | $ | 3,481 | $ | — | $ | 3,481 | $ | 3,338 | $ | — | $ | 3,338 | ||||||||||||
Federal Home Loan Bank | — | 800 | 800 | — | 2,950 | 2,950 | ||||||||||||||||||
Securities sold under agreements to repurchase | — | 2,166 | 2,166 | — | 774 | 774 | ||||||||||||||||||
Total short-term borrowings | $ | 3,481 | $ | 2,966 | $ | 6,447 | $ | 3,338 | $ | 3,724 | $ | 7,062 |
(a) | Refer to Note 14 for further details on assets restricted as collateral for payment of the related debt. |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Unsecured | Secured | Total | Unsecured | Secured | Total | ||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Due within one year | $ | 3,152 | $ | 10,266 | $ | 13,418 | $ | 4,809 | $ | 12,629 | $ | 17,438 | ||||||||||||
Due after one year (a) | 18,219 | 33,647 | 51,866 | 17,154 | 31,514 | 48,668 | ||||||||||||||||||
Fair value adjustment (b) | 476 | — | 476 | 452 | — | 452 | ||||||||||||||||||
Total long-term debt | $ | 21,847 | $ | 43,913 | $ | 65,760 | $ | 22,415 | $ | 44,143 | $ | 66,558 |
(a) | Includes $2.6 billion of trust preferred securities at both March 31, 2015 and December 31, 2014, respectively. |
(b) | Represents the fair value adjustment associated with the application of hedge accounting on certain of our long-term unsecured debt positions. Refer to Note 20 for additional information. |
Year ended December 31, ($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 and thereafter | Fair value adjustment | Total | ||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||
Long-term debt | $ | 2,716 | $ | 1,934 | $ | 4,398 | $ | 1,895 | $ | 1,625 | $ | 10,228 | $ | 476 | $ | 23,272 | ||||||||||||||||
Original issue discount | (47 | ) | (72 | ) | (84 | ) | (96 | ) | (35 | ) | (1,091 | ) | — | (1,425 | ) | |||||||||||||||||
Total unsecured | 2,669 | 1,862 | 4,314 | 1,799 | 1,590 | 9,137 | 476 | 21,847 | ||||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||
Long-term debt | 8,657 | 9,745 | 11,742 | 5,543 | 4,590 | 3,636 | — | 43,913 | ||||||||||||||||||||||||
Total long-term debt | $ | 11,326 | $ | 11,607 | $ | 16,056 | $ | 7,342 | $ | 6,180 | $ | 12,773 | $ | 476 | $ | 65,760 |
March 31, 2015 | December 31, 2014 | |||||||||||||||
($ in millions) | Total | Ally Bank (a) | Total | Ally Bank (a) | ||||||||||||
Investment securities | $ | 2,215 | $ | 695 | $ | 786 | $ | 786 | ||||||||
Mortgage assets held-for-investment and lending receivables | 7,699 | 7,699 | 7,541 | 7,541 | ||||||||||||
Consumer automotive finance receivables | 31,878 | 10,338 | 33,438 | 11,263 | ||||||||||||
Commercial automotive finance receivables | 19,087 | 18,617 | 20,605 | 20,083 | ||||||||||||
Investment in operating leases, net | 8,687 | 5,334 | 6,820 | 4,672 | ||||||||||||
Total assets restricted as collateral (b)(c) | $ | 69,566 | $ | 42,683 | $ | 69,190 | $ | 44,345 | ||||||||
Secured debt (d) | $ | 46,879 | $ | 23,803 | $ | 47,867 | $ | 27,134 |
(a) | Ally Bank is a component of the total column. |
(b) | Ally Bank has an advance agreement with the Federal Home Loan Bank of Pittsburgh (FHLB), and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling $10.8 billion and $10.7 billion at March 31, 2015, and December 31, 2014, respectively. These assets were composed primarily of consumer mortgage finance receivables and loans, net. Ally Bank has access to the Federal Reserve Bank Discount Window. Ally Bank had assets pledged and restricted as collateral to the Federal Reserve Bank totaling $3.3 billion and $3.2 billion at March 31, 2015, and December 31, 2014, respectively. These assets were composed of consumer automotive finance receivables and loans, net and investment in operating leases, net. Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its subsidiaries. |
(c) | Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Condensed Consolidated Balance Sheet. Refer to Note 11 for additional information. |
(d) | Includes $3.0 billion and $3.7 billion of short-term borrowings at March 31, 2015, and December 31, 2014, respectively. |
Outstanding | Unused capacity (a) | Total capacity | ||||||||||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||||||||
Bank funding | ||||||||||||||||||||||||
Secured | $ | 3,015 | $ | 3,250 | $ | 1,485 | $ | 250 | $ | 4,500 | $ | 3,500 | ||||||||||||
Parent funding | ||||||||||||||||||||||||
Secured | 15,191 | 15,030 | 2,940 | 3,425 | 18,131 | 18,455 | ||||||||||||||||||
Total committed facilities | $ | 18,206 | $ | 18,280 | $ | 4,425 | $ | 3,675 | $ | 22,631 | $ | 21,955 |
(a) | Funding from committed secured facilities is available on request in the event excess collateral resides in certain facilities or is available to the extent incremental collateral is available and contributed to the facilities. |
($ in millions) | March 31, 2015 | December 31, 2014 | |||||
Accounts payable | $ | 313 | $ | 298 | |||
Fair value of derivative contracts in payable position (a) | 268 | 252 | |||||
Reserves for insurance losses and loss adjustment expenses | 201 | 208 | |||||
Employee compensation and benefits | 190 | 298 | |||||
Deferred revenue | 143 | 151 | |||||
Other liabilities | 579 | 528 | |||||
Total accrued expenses and other liabilities | $ | 1,694 | $ | 1,735 |
(a) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
March 31, 2015 | December 31, 2014 | |||||||
Series A preferred stock (a) (b) | ||||||||
Carrying value ($ in millions) | $ | 1,021 | $ | 1,021 | ||||
Par value (per share) | 0.01 | 0.01 | ||||||
Liquidation preference (per share) | 25 | 25 | ||||||
Number of shares authorized | 40,870,560 | 40,870,560 | ||||||
Number of shares issued and outstanding | 40,870,560 | 40,870,560 | ||||||
Dividend/coupon | ||||||||
Prior to May 15, 2016 | 8.5 | % | 8.5 | % | ||||
On and after May 15, 2016 | Three month LIBOR + 6.243% | Three month LIBOR + 6.243% | ||||||
Series G preferred stock (c) | ||||||||
Carrying value ($ in millions) | $ | 234 | $ | 234 | ||||
Par value (per share) | 0.01 | 0.01 | ||||||
Liquidation preference (per share) | 1,000 | 1,000 | ||||||
Number of shares authorized | 2,576,601 | 2,576,601 | ||||||
Number of shares issued and outstanding | 2,576,601 | 2,576,601 | ||||||
Dividend/coupon | 7 | % | 7 | % |
(a) | Nonredeemable prior to May 15, 2016. |
(b) | On April 23, 2015, we announced a tender offer to purchase up to 13 million shares of our outstanding Series A Preferred Stock, for $26.65 per Series A share. |
(c) | On April 10, 2015, we redeemed 1,288,300 shares of our outstanding Series G Preferred Stock, with an aggregate liquidation preference of approximately $1.3 billion. Following this transaction, 1,288,301 shares of our Series G Preferred Stock remain outstanding, with a carrying value of approximately $117 million. |
($ in millions) | Unrealized (losses) gains on investment securities (a) | Translation adjustments and net investment hedges (b) | Cash flow hedges | Defined benefit pension plans | Accumulated other comprehensive loss | ||||||||||||||
Balance at December 31, 2013 | $ | (269 | ) | $ | 65 | $ | 5 | $ | (77 | ) | $ | (276 | ) | ||||||
2014 net change | 100 | (8 | ) | — | — | 92 | |||||||||||||
Balance at March 31, 2014 | $ | (169 | ) | $ | 57 | $ | 5 | $ | (77 | ) | $ | (184 | ) | ||||||
Balance at December 31, 2014 | $ | (21 | ) | $ | 36 | $ | 7 | $ | (88 | ) | $ | (66 | ) | ||||||
2015 net change | 52 | (21 | ) | — | — | 31 | |||||||||||||
Balance at March 31, 2015 | $ | 31 | $ | 15 | $ | 7 | $ | (88 | ) | $ | (35 | ) |
(a) | Represents the after-tax difference between the fair value and amortized cost of our available-for-sale securities portfolio. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
Three months ended March 31, 2015 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Unrealized gains on investment securities | |||||||||||
Net unrealized gains arising during the period | $ | 138 | $ | (51 | ) | $ | 87 | ||||
Less: Net realized gains reclassified to income from continuing operations | 55 | (a) | (20 | ) | (b) | 35 | |||||
Net change | 83 | (31 | ) | 52 | |||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (20 | ) | 7 | (13 | ) | ||||||
Less: Net realized gains reclassified to income from discontinued operations, net of tax | 42 | (20 | ) | 22 | |||||||
Net change | (62 | ) | 27 | (35 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 18 | (7 | ) | 11 | |||||||
Less: Net realized losses reclassified to income from discontinued operations, net of tax | (4 | ) | 1 | (3 | ) | ||||||
Net change | 22 | (8 | ) | 14 | |||||||
Other comprehensive income | $ | 43 | $ | (12 | ) | $ | 31 |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
Three months ended March 31, 2014 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Unrealized gains on investment securities | |||||||||||
Net unrealized gains arising during the period | $ | 188 | $ | (51 | ) | $ | 137 | ||||
Less: Net realized gains reclassified to income from continuing operations | 43 | (a) | (6 | ) | (b) | 37 | |||||
Net change | 145 | (45 | ) | 100 | |||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (22 | ) | 7 | (15 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 11 | (4 | ) | 7 | |||||||
Other comprehensive income | $ | 134 | $ | (42 | ) | $ | 92 |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
Three months ended March 31, | ||||||||
($ in millions, except share data) (a) | 2015 | 2014 | ||||||
Net income from continuing operations | $ | 179 | $ | 198 | ||||
Preferred stock dividends | (67 | ) | (68 | ) | ||||
Net income from continuing operations attributable to common shareholders | 112 | 130 | ||||||
Income from discontinued operations, net of tax | 397 | 29 | ||||||
Net income attributable to common shareholders | $ | 509 | $ | 159 | ||||
Basic weighted-average common shares outstanding (b) | 482,247,935 | 479,767,540 | ||||||
Diluted weighted-average common shares outstanding (b) | 482,781,619 | 479,767,540 | ||||||
Basic earnings per common share | ||||||||
Net income from continuing operations | $ | 0.23 | $ | 0.27 | ||||
Income from discontinued operations, net of tax | 0.82 | 0.06 | ||||||
Net income | $ | 1.06 | $ | 0.33 | ||||
Diluted earnings per common share | ||||||||
Net income from continuing operations | $ | 0.23 | $ | 0.27 | ||||
Income from discontinued operations, net of tax | 0.82 | 0.06 | ||||||
Net income | $ | 1.06 | $ | 0.33 |
(a) | Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. |
(b) | Includes shares related to share-based compensation that have vested but have not been issued for the three months ended March 31, 2015. |
Under Basel III | Under Basel I | ||||||||||||||||||
March 31, 2015 (a) | December 31, 2014 (b) | Required minimum | Well-capitalized minimum | ||||||||||||||||
($ in millions) | Amount | Ratio | Amount | Ratio | |||||||||||||||
Risk-based capital | |||||||||||||||||||
Common Equity Tier 1 (to risk-weighted assets) (c) | |||||||||||||||||||
Ally Financial Inc. | $ | 14,240 | 10.94 | % | $ | 12,588 | 9.64 | % | 4.50 | % | (d) | ||||||||
Ally Bank | 16,185 | 17.49 | 16,022 | 16.89 | 4.50 | 6.50 | % | ||||||||||||
Tier 1 (to risk-weighted assets) | |||||||||||||||||||
Ally Financial Inc. | $ | 17,131 | 13.16 | % | $ | 16,389 | 12.55 | % | 6.00 | % | (d) | ||||||||
Ally Bank | 16,185 | 17.49 | 16,022 | 16.89 | 6.00 | 8.00 | % | ||||||||||||
Total (to risk-weighted assets) | |||||||||||||||||||
Ally Financial Inc. | $ | 18,365 | 14.11 | % | $ | 17,294 | 13.24 | % | 8.00 | % | (d) | ||||||||
Ally Bank | 16,574 | 17.91 | 16,468 | 17.36 | 8.00 | 10.00 | % | ||||||||||||
Tier 1 leverage (to adjusted quarterly average assets) (e) | |||||||||||||||||||
Ally Financial Inc. | $ | 17,131 | 11.43 | % | $ | 16,389 | 10.94 | % | 4.00 | % | (d) | ||||||||
Ally Bank | 16,185 | 15.61 | 16,022 | 15.44 | 15.00 | (f) | 5.00 | % |
(a) | U.S. Basel III became effective for us on January 1, 2015, subject to transitional provisions primarily related to deductions and adjustments impacting Common Equity Tier 1 capital and Tier 1 capital. |
(b) | Capital ratios as of December 31, 2014 are presented under the U.S. Basel I capital framework. |
(c) | Previously referred to as Tier 1 Common Equity under the U.S. Basel I capital framework. |
(d) | U.S. Basel III does not establish standards for determining whether a BHC is "well-capitalized." |
(e) | Federal regulatory reporting guidelines require the calculation of adjusted quarterly average assets using a daily average methodology. |
(f) | Ally Bank, in accordance with the CLMA, is required to maintain a Tier 1 leverage ratio of at least 15%. |
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Derivative contracts in a | Notional amount | Derivative contracts in a | Notional amount | |||||||||||||||||||||
($ in millions) | receivable position (a) | payable position (b) | receivable position (a) | payable position (b) | ||||||||||||||||||||
Derivatives qualifying for hedge accounting | ||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||
Swaps (c) | $ | 170 | $ | 12 | $ | 19,166 | $ | 118 | $ | 7 | $ | 18,554 | ||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Forwards | — | 1 | 237 | — | — | 210 | ||||||||||||||||||
Total derivatives qualifying for hedge accounting | 170 | 13 | 19,403 | 118 | 7 | 18,764 | ||||||||||||||||||
Economic hedges | ||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||
Swaps | 47 | 72 | 12,721 | 40 | 65 | 11,979 | ||||||||||||||||||
Futures and forwards | 6 | 7 | 18,955 | 4 | 2 | 18,886 | ||||||||||||||||||
Written options | — | 71 | 15,665 | — | 94 | 14,823 | ||||||||||||||||||
Purchased options | 71 | — | 15,902 | 94 | — | 15,159 | ||||||||||||||||||
Total interest rate risk | 124 | 150 | 63,243 | 138 | 161 | 60,847 | ||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Swaps | 12 | 88 | 1,073 | — | 74 | 1,210 | ||||||||||||||||||
Futures and forwards | 9 | 6 | 458 | 5 | 4 | 304 | ||||||||||||||||||
Total foreign exchange risk | 21 | 94 | 1,531 | 5 | 78 | 1,514 | ||||||||||||||||||
Equity contracts | ||||||||||||||||||||||||
Forwards | — | 9 | 62 | — | 3 | 74 | ||||||||||||||||||
Written options | — | 2 | 1 | — | 3 | 1 | ||||||||||||||||||
Purchased options | — | — | — | 2 | — | — | ||||||||||||||||||
Total equity risk | — | 11 | 63 | 2 | 6 | 75 | ||||||||||||||||||
Total economic hedges | 145 | 255 | 64,837 | 145 | 245 | 62,436 | ||||||||||||||||||
Total derivatives | $ | 315 | $ | 268 | $ | 84,240 | $ | 263 | $ | 252 | $ | 81,200 |
(a) | Derivative contracts in a receivable position are classified as other assets on the Condensed Consolidated Balance Sheet, and includes accrued interest of $49 million and $50 million at March 31, 2015 and December 31, 2014, respectively. |
(b) | Derivative contracts in a liability position are classified as accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet, and includes accrued interest of $10 million and $17 million at March 31, 2015 and December 31, 2014, respectively. |
(c) | Includes fair value hedges consisting of receive-fixed swaps on fixed-rate debt obligations with $166 million and $97 million in a receivable position, $0 million and $1 million in a payable position, and of a $5.9 billion and $4.7 billion notional amount at March 31, 2015 and December 31, 2014, respectively. Of the hedge notional amount at March 31, 2015, $2.6 billion is associated with debt maturing in five or more years. Other fair value hedges include pay-fixed swaps on portfolios of held-for-investment automotive loan assets with $4 million and $21 million in a receivable position, $12 million and $6 million in a payable position, and of a $13.2 billion and $13.9 billion notional amount at March 31, 2015 and December 31, 2014, respectively. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Derivatives qualifying for hedge accounting | ||||||||
(Loss) gain recognized in earnings on derivatives | ||||||||
Interest rate contracts | ||||||||
Interest and fees on finance receivables and loans (a) | $ | (23 | ) | $ | 2 | |||
Interest on long-term debt (b) | 86 | 34 | ||||||
Gain (loss) recognized in earnings on hedged items (c) | ||||||||
Interest rate contracts | ||||||||
Interest and fees on finance receivables and loans | 33 | 11 | ||||||
Interest on long-term debt | (87 | ) | (32 | ) | ||||
Total derivatives qualifying for hedge accounting | 9 | 15 | ||||||
Economic derivatives | ||||||||
Loss recognized in earnings on derivatives | ||||||||
Interest rate contracts | ||||||||
Loss on mortgage and automotive loans, net | (2 | ) | — | |||||
Other income, net of losses | (12 | ) | (8 | ) | ||||
Total interest rate contracts | (14 | ) | (8 | ) | ||||
Foreign exchange contracts (d) | ||||||||
Interest on long-term debt | (143 | ) | (5 | ) | ||||
Other income, net of losses | 11 | — | ||||||
Total foreign exchange contracts | (132 | ) | (5 | ) | ||||
Equity contracts | ||||||||
Compensation and benefits expense | (6 | ) | — | |||||
Total equity contracts | (6 | ) | — | |||||
(Loss) gain recognized in earnings on derivatives | $ | (143 | ) | $ | 2 |
(a) | Amounts exclude losses related to interest for qualifying accounting hedges of portfolios of retail automotive loans held-for-investment of $17 million and $13 million for the three months ended March 31, 2015 and 2014, respectively. These losses are primarily offset by the fixed coupon receipts on the retail automotive loans held-for-investment. |
(b) | Amounts exclude gains related to interest for qualifying accounting hedges of debt, which are primarily offset by the fixed coupon payment on the long-term debt. The gains were $23 million and $35 million for the three months ended March 31, 2015 and 2014, respectively. |
(c) | Amounts exclude gains related to amortization of deferred basis adjustments on the de-designated hedged item of $28 million and $45 million for the three months ended March 31, 2015 and 2014, respectively. |
(d) | Amounts exclude gains related to the revaluation of the related foreign-denominated debt or receivable of $134 million and $4 million for the three months ended March 31, 2015 and 2014, respectively. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Foreign exchange contracts | ||||||||
Loss reclassified from accumulated other comprehensive loss to income from discontinued operations, net | $ | (4 | ) | $ | — | |||
Total loss from discontinued operations, net | $ | (4 | ) | $ | — | |||
Gain recognized in other comprehensive income (a) | $ | 22 | $ | 11 |
(a) | The amounts represent the effective portion of net investment hedges. There are offsetting amounts recognized in accumulated other comprehensive income related to the revaluation of the related net investment in foreign operations. There were losses of $43 million and $19 million for the three months ended March 31, 2015 and 2014, respectively. |
Level 1 | Inputs are quoted prices in active markets for identical assets or liabilities at the measurement date. Additionally, the entity must have the ability to access the active market, and the quoted prices cannot be adjusted by the entity. |
Level 2 | Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities. |
Level 3 | Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management's best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation. |
Transfers | Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfer occurred. There were no transfers between any levels during the three months ended March 31, 2015. |
• | Available-for-sale securities — All classes of available-for-sale securities are carried at fair value based on observable market prices, when available. If observable market prices are not available, our valuations are based on internally developed discounted cash flow models (an income approach) that use a market-based discount rate and consider recent market transactions, experience with similar securities, current business conditions, and analysis of the underlying collateral, as available. To estimate cash flows, we are required to utilize various significant assumptions including market observable inputs (e.g., forward interest rates) and internally developed inputs (including prepayment speeds, delinquency levels, and credit losses). |
• | Automotive loans held-for-sale, net — Our automotive loans held-for-sale are accounted for at the lower-of-cost or fair value. The automotive loans at fair value are presented in the nonrecurring fair value measurement table. We based our valuation of automotive loans held-for-sale on internally developed discounted cash flow models (an income approach) and classified all these loans as Level 3. These valuation models estimate the exit price we expect to receive in the loan’s principal market, which, depending on characteristics of the loans, may be the whole-loan market or the securitization market. Although we utilize and give priority to market observable inputs, such as interest rates and market spreads within these models, we are typically required to utilize internal inputs, such as prepayment speeds (absolute prepayment model, or ABS), gross loss range by loan segment (percentage of receivable balance lost in the event of default), and credit spreads (the risk premium component added to observed benchmark rate to determine the discount rate used in the discounted cash flow model). While numerous controls exist to calibrate, corroborate, and validate these internal inputs, these internal inputs require the use of judgment and can have a significant impact on the determination of the loan’s value. Accordingly, we classified all automotive loans held-for-sale as Level 3. |
• | Mortgage loans held-for-sale, net — Certain of our mortgage loans held-for-sale are accounted for at fair value because of fair value option elections. Mortgage loans held-for-sale are typically pooled together and sold into certain exit markets depending on underlying attributes of the loan, such as eligibility with the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), or the Government National Mortgage Association (Ginnie Mae) (collectively, the Government-sponsored Enterprises, or GSEs), product type, interest rate, and credit quality. Mortgage loans previously classified as Level 2 were mainly GSE-eligible mortgage loans carried at fair value due to fair value option election, which were valued predominantly using published forward agency prices. It also included any domestic loans where recently negotiated market prices for the loan pool exist with a counterparty (which approximates fair value) or quoted market prices for similar loans are available. These mortgage loans were transferred into Level 3 as of December 31, 2014 based on decreased observability of significant inputs resulting from no longer being an active seller of mortgage loans to GSEs. As a result, they are now valued based on a discounted cash flow basis utilizing cash flow projections from internally developed models that utilized prepayment, default, and discount rate assumptions. |
• | Interests retained in financial asset sales — The interests retained are in securitization trusts and deferred purchase prices on the sale of whole-loans. Due to inactivity in the market, valuations are based on internally developed discounted cash flow models (an income approach) that use a market-based discount rate; therefore, we classified these assets as Level 3. The valuation considers recent market transactions, experience with similar assets, current business conditions, and analysis of the underlying collateral, as available. To estimate cash flows, we utilize various significant assumptions, including market observable inputs (e.g., forward interest rates) and internally developed inputs (e.g., prepayment speeds, delinquency levels, and credit losses). |
• | Derivative instruments — We enter into a variety of derivative financial instruments as part of our risk management strategies. Certain of these derivatives are exchange traded, such as Eurodollar futures, options of Eurodollar futures, and equity options. To determine the fair value of these instruments, we utilize the quoted market prices for the particular derivative contracts; therefore, we classified these contracts as Level 1. |
Recurring fair value measurements | ||||||||||||||||
March 31, 2015 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
Debt securities | ||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,816 | $ | 872 | $ | — | $ | 2,688 | ||||||||
U.S. State and political subdivisions | — | 524 | — | 524 | ||||||||||||
Foreign government | 14 | 201 | — | 215 | ||||||||||||
Mortgage-backed residential | — | 10,305 | — | 10,305 | ||||||||||||
Mortgage-backed commercial | — | 312 | — | 312 | ||||||||||||
Asset-backed | — | 2,066 | — | 2,066 | ||||||||||||
Corporate debt securities | — | 752 | — | 752 | ||||||||||||
Total debt securities | 1,830 | 15,032 | — | 16,862 | ||||||||||||
Equity securities (a) | 967 | — | — | 967 | ||||||||||||
Total available-for-sale securities | 2,797 | 15,032 | — | 17,829 | ||||||||||||
Mortgage loans held-for-sale, net (b) | — | — | 3 | 3 | ||||||||||||
Other assets | ||||||||||||||||
Interests retained in financial asset sales | — | — | 42 | 42 | ||||||||||||
Derivative contracts in a receivable position (c) | ||||||||||||||||
Interest rate | 6 | 288 | — | 294 | ||||||||||||
Foreign currency | — | 21 | — | 21 | ||||||||||||
Other | — | — | — | — | ||||||||||||
Total derivative contracts in a receivable position | 6 | 309 | — | 315 | ||||||||||||
Collateral placed with counterparties (d) | — | 9 | — | 9 | ||||||||||||
Total assets | $ | 2,803 | $ | 15,350 | $ | 45 | $ | 18,198 | ||||||||
Liabilities | ||||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||||
Derivative contracts in a payable position | ||||||||||||||||
Interest rate | $ | (7 | ) | $ | (155 | ) | $ | — | $ | (162 | ) | |||||
Foreign currency | — | (95 | ) | — | (95 | ) | ||||||||||
Other | (2 | ) | (9 | ) | — | (11 | ) | |||||||||
Total derivative contracts in a payable position (c) | (9 | ) | (259 | ) | — | (268 | ) | |||||||||
Other liabilities | — | — | — | — | ||||||||||||
Total liabilities | $ | (9 | ) | $ | (259 | ) | $ | — | $ | (268 | ) |
(a) | Our investment in any one industry did not exceed 14%. |
(b) | Carried at fair value due to fair value option elections. |
(c) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(d) | Represents collateral in the form of investment securities. Cash collateral was excluded. |
Recurring fair value measurements | ||||||||||||||||
December 31, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
Debt securities | ||||||||||||||||
U.S. Treasury and federal agencies | $ | 217 | $ | 961 | $ | — | $ | 1,178 | ||||||||
U.S. State and political subdivisions | — | 406 | — | 406 | ||||||||||||
Foreign government | 14 | 218 | — | 232 | ||||||||||||
Mortgage-backed residential | — | 10,425 | — | 10,425 | ||||||||||||
Mortgage-backed commercial | — | 253 | — | 253 | ||||||||||||
Asset-backed | — | 1,991 | — | 1,991 | ||||||||||||
Corporate debt securities | — | 746 | — | 746 | ||||||||||||
Total debt securities | 231 | 15,000 | — | 15,231 | ||||||||||||
Equity securities (a) | 906 | — | — | 906 | ||||||||||||
Total available-for-sale securities | 1,137 | 15,000 | — | 16,137 | ||||||||||||
Mortgage loans held-for-sale, net (b) | — | — | 3 | 3 | ||||||||||||
Other assets | ||||||||||||||||
Interests retained in financial asset sales | — | — | 47 | 47 | ||||||||||||
Derivative contracts in a receivable position (c) | ||||||||||||||||
Interest rate | 4 | 252 | — | 256 | ||||||||||||
Foreign currency | — | 5 | — | 5 | ||||||||||||
Other | 2 | — | — | 2 | ||||||||||||
Total derivative contracts in a receivable position | 6 | 257 | — | 263 | ||||||||||||
Collateral placed with counterparties (d) | — | 15 | — | 15 | ||||||||||||
Total assets | $ | 1,143 | $ | 15,272 | $ | 50 | $ | 16,465 | ||||||||
Liabilities | ||||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||||
Derivative contracts in a payable position (c) | ||||||||||||||||
Interest rate | $ | (2 | ) | $ | (166 | ) | $ | — | $ | (168 | ) | |||||
Foreign currency | — | (78 | ) | — | (78 | ) | ||||||||||
Other | (2 | ) | (4 | ) | — | (6 | ) | |||||||||
Total derivative contracts in a payable position | (4 | ) | (248 | ) | — | (252 | ) | |||||||||
Total liabilities | $ | (4 | ) | $ | (248 | ) | $ | — | $ | (252 | ) |
(a) | Our investment in any one industry did not exceed 16%. |
(b) | Carried at fair value due to fair value option elections. |
(c) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(d) | Represents collateral in the form of investment securities. Cash collateral was excluded. |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Net realized/unrealized gains | Fair value at March 31, 2015 | Net unrealized gains included in earnings still held at March 31, 2015 | |||||||||||||||||||||||||||||
($ in millions) | Fair value at January 1, 2015 | included in earnings | included in OCI | Purchases | Sales | Issuances | Settlements | Transfers out of Level 3 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Mortgage loans held-for-sale, net | $ | 3 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3 | $ | — | |||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | 47 | 3 | (a) | — | — | — | 1 | (9 | ) | — | 42 | — | |||||||||||||||||||
Total assets | $ | 50 | $ | 3 | $ | — | $ | — | $ | — | $ | 1 | $ | (9 | ) | $ | — | $ | 45 | $ | — |
(a) | Reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Fair value at January 1, 2014 | Net realized/unrealized gains | Purchases | Sales | Issuances | Settlements | Transfers out of Level 3 | Fair value at March 31, 2014 | Net unrealized gains included in earnings still held at March 31, 2014 | |||||||||||||||||||||||
($ in millions) | included in earnings | included in OCI | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | $ | 100 | $ | 1 | (a) | $ | — | $ | — | $ | — | $ | — | $ | (17 | ) | $ | — | $ | 84 | $ | — | |||||||||
Interest rate derivative contracts, net | (1 | ) | — | — | — | — | — | (2 | ) | 3 | — | — | |||||||||||||||||||
Total assets | $ | 99 | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | (19 | ) | $ | 3 | $ | 84 | $ | — |
(a) | Reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. |
Nonrecurring fair value measurements | Lower-of-cost or fair value or valuation reserve allowance | Total gain included in earnings for the three months ended | |||||||||||||||||||||
March 31, 2015 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Loans held-for-sale | |||||||||||||||||||||||
Automotive | $ | — | $ | — | $ | 1,500 | $ | 1,500 | $ | (8 | ) | n/m | (a) | ||||||||||
Mortgage | — | — | 28 | 28 | (5 | ) | n/m | (a) | |||||||||||||||
Other | — | — | 17 | 17 | — | n/m | (a) | ||||||||||||||||
Total loans held-for-sale | — | — | 1,545 | 1,545 | (13 | ) | n/m | (a) | |||||||||||||||
Commercial finance receivables and loans, net (b) | |||||||||||||||||||||||
Automotive | — | — | 26 | 26 | (7 | ) | n/m | (a) | |||||||||||||||
Other | — | — | 18 | 18 | (8 | ) | n/m | (a) | |||||||||||||||
Total commercial finance receivables and loans, net | — | — | 44 | 44 | (15 | ) | n/m | (a) | |||||||||||||||
Other assets | |||||||||||||||||||||||
Repossessed and foreclosed assets (c) | — | — | 8 | 8 | (2 | ) | n/m | (a) | |||||||||||||||
Other | — | — | 2 | 2 | — | n/m | (a) | ||||||||||||||||
Total assets | $ | — | $ | — | $ | 1,599 | $ | 1,599 | $ | (30 | ) | n/m | (a) |
(a) | We consider the applicable valuation or loan loss allowance to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation or loan loss allowance. |
(b) | Represents the portion of the portfolio specifically impaired during 2015. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables. |
(c) | The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value. |
Nonrecurring fair value measurements | Lower-of-cost or fair value or valuation reserve allowance | Total loss included in earnings for the three months ended | |||||||||||||||||||||
March 31, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Commercial finance receivables and loans, net (a) | |||||||||||||||||||||||
Automotive | $ | — | $ | — | $ | 31 | $ | 31 | $ | (6 | ) | n/m | (b) | ||||||||||
Other | — | — | 53 | 53 | (20 | ) | n/m | (b) | |||||||||||||||
Total commercial finance receivables and loans, net | — | — | 84 | 84 | (26 | ) | n/m | (b) | |||||||||||||||
Other assets | |||||||||||||||||||||||
Repossessed and foreclosed assets (c) | — | — | 11 | 11 | 1 | n/m | (b) | ||||||||||||||||
Other | — | — | 2 | 2 | — | n/m | (b) | ||||||||||||||||
Total assets | $ | — | $ | — | $ | 97 | $ | 97 | $ | (25 | ) | n/m |
(a) | Represents the portion of the portfolio specifically impaired during 2014. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables. |
(b) | We consider the applicable valuation or loan loss allowance to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation or loan loss allowance. |
(c) | The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value. |
March 31, 2015 ($ in millions) | Level 3 nonrecurring measurements | Valuation technique | Unobservable input | Weighted average/range | ||||||
Assets | ||||||||||
Automotive loans held-for-sale, net | $ | 1,500 | Discounted cash flow | Prepayment rate | 1.30% | |||||
Gross loss | 0-4.80% | |||||||||
Credit spread | 0.58% |
Estimated fair value | |||||||||||||||||||
($ in millions) | Carrying value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
March 31, 2015 | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Loans held-for-sale, net | $ | 1,559 | $ | — | $ | — | $ | 1,561 | $ | 1,561 | |||||||||
Finance receivables and loans, net | 98,924 | — | — | 99,781 | 99,781 | ||||||||||||||
Nonmarketable equity investments | 213 | — | 188 | 32 | 220 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Deposit liabilities | $ | 60,875 | $ | — | $ | — | $ | 61,504 | $ | 61,504 | |||||||||
Short-term borrowings | 6,447 | — | — | 6,447 | 6,447 | ||||||||||||||
Long-term debt | 65,760 | — | 24,376 | 43,889 | 68,265 | ||||||||||||||
December 31, 2014 | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Loans held-for-sale, net | $ | 2,003 | $ | — | $ | 485 | $ | 1,554 | $ | 2,039 | |||||||||
Finance receivables and loans, net | 98,971 | — | — | 99,430 | 99,430 | ||||||||||||||
Nonmarketable equity investments | 271 | — | 246 | 33 | 279 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Deposit liabilities | $ | 58,222 | $ | — | $ | — | $ | 58,777 | $ | 58,777 | |||||||||
Short-term borrowings | 7,062 | — | — | 7,063 | 7,063 | ||||||||||||||
Long-term debt | 66,558 | — | 25,224 | 44,084 | 69,308 |
• | Cash and cash equivalents — Included in cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty |
• | Loans held-for-sale, net — Loans held-for-sale classified as Level 3 include all loans valued using internally developed valuation models because observable market prices were not available. We based our valuation of automotive loans held-for-sale on internally developed discounted cash flow models (an income approach). These valuation models estimate the exit price we expect to receive in the loan’s principal market, which, depending on characteristics of the loans, may be the whole-loan market or the securitization market. Although we utilize and give priority to market observable inputs, such as interest rates and market spreads within these models, we are typically required to utilize internal inputs, such as prepayment speeds (absolute prepayment model, or ABS), gross loss range by loan segment (percentage of receivable balance lost in the event of default), and credit spreads (the risk premium component added to observed benchmark rate to determine the discount rate used in the discounted cash flow model). While numerous controls exist to calibrate, corroborate, and validate these internal inputs, these internal inputs require the use of judgment and can have a significant impact on the determination of the loan’s value. Accordingly, we classified all automotive loans held-for-sale as Level 3. Loans held-for-sale classified as Level 2 as of December 31, 2014 represent mortgage TDR loans valued using quoted prices in active markets for similar assets. |
• | Finance receivables and loans, net — With the exception of mortgage loans held-for-investment, the fair value of finance receivables and loans was based on discounted future cash flows using applicable spreads to approximate current rates applicable to each category of finance receivables and loans (an income approach using Level 3 inputs). The carrying value of commercial receivables in certain markets and certain automotive and other receivables for which interest rates reset on a short-term basis with applicable market indices are assumed to approximate fair value either because of the short-term nature or because of the interest rate adjustment feature. The fair value of commercial receivables in other markets was based on discounted future cash flows using applicable spreads to approximate current rates applicable to similar assets in those markets. |
• | Deposit liabilities — Deposit liabilities represent certain consumer and brokered bank deposits, mortgage escrow deposits, and dealer deposits. The fair value of deposits at Level 3 were estimated by discounting projected cash flows based on discount factors derived from the forward interest rate swap curve. |
• | Short-term borrowings and Long-term debt — Level 2 debt was valued using quoted market prices for similar instruments, when available, or other means for substantiation with observable inputs. Debt valued using internally derived inputs, such as prepayment speeds and discount rates, was classified as Level 3. |
Gross Amounts of Recognized Assets/(Liabilities) | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts of Assets/(Liabilities) Presented in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
March 31, 2015 ($ in millions) | Financial Instruments | Collateral (a) (b) | Net Amount | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Derivative assets in net asset positions | $ | 261 | $ | — | $ | 261 | $ | (72 | ) | $ | (102 | ) | $ | 87 | ||||||||||
Derivative assets in net liability positions | 54 | — | 54 | (54 | ) | — | — | |||||||||||||||||
Total derivative assets (c) | 315 | — | 315 | (126 | ) | (102 | ) | 87 | ||||||||||||||||
Reverse repurchase, securities borrowing, and similar arrangements | 50 | — | 50 | — | — | 50 | ||||||||||||||||||
Total assets | $ | 365 | $ | — | $ | 365 | $ | (126 | ) | $ | (102 | ) | $ | 137 | ||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities in net liability positions | $ | (186 | ) | $ | — | $ | (186 | ) | $ | 54 | $ | 68 | $ | (64 | ) | |||||||||
Derivative liabilities in net asset positions | (72 | ) | — | (72 | ) | 72 | — | — | ||||||||||||||||
Derivative liabilities with no offsetting arrangements | (10 | ) | — | (10 | ) | — | — | (10 | ) | |||||||||||||||
Total derivative liabilities (c) | (268 | ) | — | (268 | ) | 126 | 68 | (74 | ) | |||||||||||||||
Securities sold under agreements to repurchase (d) | (2,166 | ) | — | (2,166 | ) | — | 2,166 | — | ||||||||||||||||
Total liabilities | $ | (2,434 | ) | $ | — | $ | (2,434 | ) | $ | 126 | $ | 2,234 | $ | (74 | ) |
(a) | Financial collateral received/pledged shown as a balance based on the sum of all net asset and liability positions between Ally and each individual derivative counterparty. |
(b) | Amounts disclosed are limited to the financial asset or liability balance and, accordingly, exclude excess collateral received or pledged. As of March 31, 2015, $10 million of derivative non-cash collateral received and $50 million of non-cash collateral related to the reverse repurchase agreement were excluded. We do not record such collateral received on our Condensed Consolidated Balance Sheet unless certain conditions are met. |
(c) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(d) | For additional information on securities sold under agreements to repurchase, refer to Note 13. |
Gross Amounts of Recognized Assets/(Liabilities) | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts of Assets/(Liabilities) Presented in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
December 31, 2014 ($ in millions) | Financial Instruments | Collateral (a) | Net Amount | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Derivative assets in net asset positions | $ | 216 | $ | — | $ | 216 | $ | (60 | ) | $ | (68 | ) | $ | 88 | ||||||||||
Derivative assets in net liability positions | 47 | — | 47 | (47 | ) | — | — | |||||||||||||||||
Total assets (b) | $ | 263 | $ | — | $ | 263 | $ | (107 | ) | $ | (68 | ) | $ | 88 | ||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities in net liability positions | $ | (188 | ) | $ | — | $ | (188 | ) | $ | 47 | $ | 54 | $ | (87 | ) | |||||||||
Derivative liabilities in net asset positions | (60 | ) | — | (60 | ) | 60 | — | — | ||||||||||||||||
Derivative liabilities with no offsetting arrangements | (4 | ) | — | (4 | ) | — | — | (4 | ) | |||||||||||||||
Total derivative liabilities (b) | (252 | ) | — | (252 | ) | 107 | 54 | (91 | ) | |||||||||||||||
Securities sold under agreements to repurchase (c) | (774 | ) | — | (774 | ) | — | 774 | — | ||||||||||||||||
Total liabilities | $ | (1,026 | ) | $ | — | $ | (1,026 | ) | $ | 107 | $ | 828 | $ | (91 | ) |
(a) | Financial collateral received/pledged shown as a balance based on the sum of all net asset and liability positions between Ally and each individual derivative counterparty. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(c) | For additional information on securities sold under agreements to repurchase, refer to Note 13. |
Three months ended March 31, ($ in millions) | Automotive Finance operations | Insurance operations | Mortgage operations | Corporate and Other (a) | Consolidated (b) | |||||||||||||||
2015 | ||||||||||||||||||||
Net financing revenue | $ | 809 | $ | 12 | $ | 15 | $ | 14 | $ | 850 | ||||||||||
Other revenue (loss) | 52 | 268 | 68 | (145 | ) | 243 | ||||||||||||||
Total net revenue (loss) | 861 | 280 | 83 | (131 | ) | 1,093 | ||||||||||||||
Provision for loan losses | 127 | — | (5 | ) | (6 | ) | 116 | |||||||||||||
Total noninterest expense | 403 | 202 | 19 | 71 | 695 | |||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 331 | $ | 78 | $ | 69 | $ | (196 | ) | $ | 282 | |||||||||
Total assets | $ | 111,149 | $ | 7,242 | $ | 7,694 | $ | 27,439 | $ | 153,524 | ||||||||||
2014 | ||||||||||||||||||||
Net financing revenue (loss) | $ | 820 | $ | 15 | $ | 14 | $ | (28 | ) | $ | 821 | |||||||||
Other revenue (loss) | 64 | 272 | 4 | (19 | ) | 321 | ||||||||||||||
Total net revenue (loss) | 884 | 287 | 18 | (47 | ) | 1,142 | ||||||||||||||
Provision for loan losses | 159 | — | (23 | ) | 1 | 137 | ||||||||||||||
Total noninterest expense | 386 | 213 | 24 | 90 | 713 | |||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 339 | $ | 74 | $ | 17 | $ | (138 | ) | $ | 292 | |||||||||
Total assets | $ | 109,307 | $ | 7,184 | $ | 7,937 | $ | 24,024 | $ | 148,452 |
(a) | Total assets for Corporate Finance were $2.0 billion and $1.7 billion at March 31, 2015 and 2014, respectively. |
(b) | Net financing revenue after the provision for loan losses totaled $734 million and $684 million for the three months ended March 31, 2015 and 2014, respectively. |
Three months ended March 31, ($ in millions) | Revenue (a) | Income from continuing operations before income tax expense (b) | Net income (b) (c) | |||||||||
2015 | ||||||||||||
Canada | $ | 24 | $ | 11 | $ | 8 | ||||||
Europe | 1 | 4 | 11 | |||||||||
Asia-Pacific | — | — | 452 | |||||||||
Total foreign (d) | 25 | 15 | 471 | |||||||||
Total domestic (e) | 1,068 | 267 | 105 | |||||||||
Total | $ | 1,093 | $ | 282 | $ | 576 | ||||||
2014 | ||||||||||||
Canada | $ | 31 | $ | 13 | $ | 10 | ||||||
Europe | 2 | 2 | 3 | |||||||||
Asia-Pacific | — | — | 33 | |||||||||
Total foreign | 33 | 15 | 46 | |||||||||
Total domestic (e) | 1,109 | 277 | 181 | |||||||||
Total | $ | 1,142 | $ | 292 | $ | 227 |
(a) | Revenue consists of net financing revenue and total other revenue as presented in our Condensed Consolidated Financial Statements. |
(b) | Domestic amounts include original discount amortization of $14 million and $48 million for the three months ended March 31, 2015 and 2014, respectively. |
(c) | Gain (loss) realized on sale of discontinued operations are allocated to the geographic area in which the business operated. |
(d) | Our foreign operations as of March 31, 2015 consist of our ongoing Insurance operations in Canada and our remaining international entities in wind-down. |
(e) | Amounts include eliminations between our domestic and foreign operations. |
Three months ended March 31, 2015 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | 4 | $ | — | $ | 1,070 | $ | — | $ | 1,074 | ||||||||||
Interest and fees on finance receivables and loans — intercompany | 10 | — | 16 | (26 | ) | — | ||||||||||||||
Interest on loans held-for-sale | — | — | 24 | — | 24 | |||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 88 | — | 88 | |||||||||||||||
Interest-bearing cash | — | — | 2 | — | 2 | |||||||||||||||
Interest-bearing cash — intercompany | — | — | 2 | (2 | ) | — | ||||||||||||||
Operating leases | — | — | 896 | — | 896 | |||||||||||||||
Total financing revenue and other interest income | 14 | — | 2,098 | (28 | ) | 2,084 | ||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 3 | — | 169 | — | 172 | |||||||||||||||
Interest on short-term borrowings | 10 | — | 1 | — | 11 | |||||||||||||||
Interest on long-term debt | 292 | — | 137 | — | 429 | |||||||||||||||
Interest on intercompany debt | 19 | — | 9 | (28 | ) | — | ||||||||||||||
Total interest expense | 324 | — | 316 | (28 | ) | 612 | ||||||||||||||
Depreciation expense on operating lease assets | — | — | 622 | — | 622 | |||||||||||||||
Net financing (loss) revenue | (310 | ) | — | 1,160 | — | 850 | ||||||||||||||
Dividends from subsidiaries | ||||||||||||||||||||
Bank subsidiary | 125 | 125 | — | (250 | ) | — | ||||||||||||||
Nonbank subsidiaries | 238 | — | — | (238 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 279 | — | 204 | (473 | ) | 10 | ||||||||||||||
Insurance premiums and service revenue earned | — | — | 233 | — | 233 | |||||||||||||||
(Loss) gain on mortgage and automotive loans, net | (8 | ) | — | 54 | — | 46 | ||||||||||||||
Loss on extinguishment of debt | (197 | ) | — | (1 | ) | — | (198 | ) | ||||||||||||
Other gain on investments, net | — | — | 55 | — | 55 | |||||||||||||||
Other income, net of losses | 72 | — | 152 | (127 | ) | 97 | ||||||||||||||
Total other revenue | 146 | — | 697 | (600 | ) | 243 | ||||||||||||||
Total net revenue | 199 | 125 | 1,857 | (1,088 | ) | 1,093 | ||||||||||||||
Provision for loan losses | 100 | — | 16 | — | 116 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 154 | — | 225 | (124 | ) | 255 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 56 | — | 56 | |||||||||||||||
Other operating expenses | 310 | — | 550 | (476 | ) | 384 | ||||||||||||||
Total noninterest expense | 464 | — | 831 | (600 | ) | 695 | ||||||||||||||
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income of subsidiaries | (365 | ) | 125 | 1,010 | (488 | ) | 282 | |||||||||||||
Income tax (benefit) expense from continuing operations | (115 | ) | — | 218 | — | 103 | ||||||||||||||
Net (loss) income from continuing operations | (250 | ) | 125 | 792 | (488 | ) | 179 | |||||||||||||
Income from discontinued operations, net of tax | 387 | — | 10 | — | 397 | |||||||||||||||
Undistributed income of subsidiaries | ||||||||||||||||||||
Bank subsidiary | 180 | 180 | — | (360 | ) | — | ||||||||||||||
Nonbank subsidiaries | 259 | — | — | (259 | ) | — | ||||||||||||||
Net income | 576 | 305 | 802 | (1,107 | ) | 576 | ||||||||||||||
Other comprehensive income, net of tax | 31 | 42 | 47 | (89 | ) | 31 | ||||||||||||||
Comprehensive income | $ | 607 | $ | 347 | $ | 849 | $ | (1,196 | ) | $ | 607 |
Three months ended March 31, 2014 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | (9 | ) | $ | — | $ | 1,116 | $ | — | $ | 1,107 | |||||||||
Interest and fees on finance receivables and loans — intercompany | 11 | — | 21 | (32 | ) | — | ||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 95 | — | 95 | |||||||||||||||
Interest-bearing cash | — | — | 3 | — | 3 | |||||||||||||||
Interest-bearing cash - intercompany | — | — | 1 | (1 | ) | — | ||||||||||||||
Operating leases | 91 | — | 779 | — | 870 | |||||||||||||||
Total financing revenue and other interest income | 93 | — | 2,015 | (33 | ) | 2,075 | ||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 4 | — | 159 | — | 163 | |||||||||||||||
Interest on short-term borrowings | 11 | — | 4 | — | 15 | |||||||||||||||
Interest on long-term debt | 388 | — | 146 | — | 534 | |||||||||||||||
Interest on intercompany debt | 22 | — | 11 | (33 | ) | — | ||||||||||||||
Total interest expense | 425 | — | 320 | (33 | ) | 712 | ||||||||||||||
Depreciation expense on operating lease assets | 65 | — | 477 | — | 542 | |||||||||||||||
Net financing (loss) revenue | (397 | ) | — | 1,218 | — | 821 | ||||||||||||||
Dividends from subsidiaries | ||||||||||||||||||||
Nonbank subsidiaries | 121 | — | — | (121 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 9 | — | — | — | 9 | |||||||||||||||
Insurance premiums and service revenue earned | — | — | 241 | — | 241 | |||||||||||||||
Loss on extinguishment of debt | (39 | ) | — | — | — | (39 | ) | |||||||||||||
Other gain on investments, net | — | — | 43 | — | 43 | |||||||||||||||
Other income, net of losses | 186 | — | 336 | (455 | ) | 67 | ||||||||||||||
Total other revenue | 156 | — | 620 | (455 | ) | 321 | ||||||||||||||
Total net (loss) revenue | (120 | ) | — | 1,838 | (576 | ) | 1,142 | |||||||||||||
Provision for loan losses | 48 | — | 89 | — | 137 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 154 | — | 226 | (126 | ) | 254 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 68 | — | 68 | |||||||||||||||
Other operating expenses | 176 | — | 544 | (329 | ) | 391 | ||||||||||||||
Total noninterest expense | 330 | — | 838 | (455 | ) | 713 | ||||||||||||||
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income of subsidiaries | (498 | ) | — | 911 | (121 | ) | 292 | |||||||||||||
Income tax (benefit) expense from continuing operations | (114 | ) | — | 208 | — | 94 | ||||||||||||||
Net (loss) income from continuing operations | (384 | ) | — | 703 | (121 | ) | 198 | |||||||||||||
Income from discontinued operations, net of tax | 29 | — | — | — | 29 | |||||||||||||||
Undistributed income of subsidiaries | ||||||||||||||||||||
Bank subsidiary | 239 | 239 | — | (478 | ) | — | ||||||||||||||
Nonbank subsidiaries | 343 | 1 | — | (344 | ) | — | ||||||||||||||
Net income | 227 | 240 | 703 | (943 | ) | 227 | ||||||||||||||
Other comprehensive income, net of tax | 92 | 69 | 86 | (155 | ) | 92 | ||||||||||||||
Comprehensive income | $ | 319 | $ | 309 | $ | 789 | $ | (1,098 | ) | $ | 319 |
March 31, 2015 ($ in millions) | Parent (a) | Guarantors | Nonguarantors (a) | Consolidating adjustments | Ally consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Noninterest-bearing | $ | 945 | $ | — | $ | 607 | $ | — | $ | 1,552 | ||||||||||
Interest-bearing | 1,700 | — | 4,384 | — | 6,084 | |||||||||||||||
Interest-bearing — intercompany | — | — | 617 | (617 | ) | — | ||||||||||||||
Total cash and cash equivalents | 2,645 | — | 5,608 | (617 | ) | 7,636 | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | — | — | 50 | — | 50 | |||||||||||||||
Investment securities | — | — | 17,829 | — | 17,829 | |||||||||||||||
Loans held-for-sale, net | — | — | 1,559 | — | 1,559 | |||||||||||||||
Finance receivables and loans, net | ||||||||||||||||||||
Finance receivables and loans, net | 6,034 | — | 93,823 | — | 99,857 | |||||||||||||||
Intercompany loans to | ||||||||||||||||||||
Bank subsidiary | 700 | — | — | (700 | ) | — | ||||||||||||||
Nonbank subsidiaries | 1,745 | — | 1,566 | (3,311 | ) | — | ||||||||||||||
Allowance for loan losses | (129 | ) | — | (804 | ) | — | (933 | ) | ||||||||||||
Total finance receivables and loans, net | 8,350 | — | 94,585 | (4,011 | ) | 98,924 | ||||||||||||||
Investment in operating leases, net | — | — | 19,021 | — | 19,021 | |||||||||||||||
Intercompany receivables from | ||||||||||||||||||||
Bank subsidiary | 493 | — | — | (493 | ) | — | ||||||||||||||
Nonbank subsidiaries | 254 | — | 406 | (660 | ) | — | ||||||||||||||
Investment in subsidiaries | ||||||||||||||||||||
Bank subsidiary | 16,171 | 16,171 | — | (32,342 | ) | — | ||||||||||||||
Nonbank subsidiaries | 11,255 | 12 | — | (11,267 | ) | — | ||||||||||||||
Premiums receivable and other insurance assets | — | — | 1,742 | (20 | ) | 1,722 | ||||||||||||||
Other assets | 4,835 | — | 4,662 | (2,714 | ) | 6,783 | ||||||||||||||
Total assets | $ | 44,003 | $ | 16,183 | $ | 145,462 | $ | (52,124 | ) | $ | 153,524 | |||||||||
Liabilities | ||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||
Noninterest-bearing | $ | — | $ | — | $ | 79 | $ | — | $ | 79 | ||||||||||
Interest-bearing | 310 | — | 60,486 | — | 60,796 | |||||||||||||||
Total deposit liabilities | 310 | — | 60,565 | — | 60,875 | |||||||||||||||
Short-term borrowings | 3,481 | — | 2,966 | — | 6,447 | |||||||||||||||
Long-term debt | 20,774 | — | 44,986 | — | 65,760 | |||||||||||||||
Intercompany debt to | ||||||||||||||||||||
Nonbank subsidiaries | 2,183 | — | 2,445 | (4,628 | ) | — | ||||||||||||||
Intercompany payables to | ||||||||||||||||||||
Bank subsidiary | 187 | — | — | (187 | ) | — | ||||||||||||||
Nonbank subsidiaries | 437 | — | 550 | (987 | ) | — | ||||||||||||||
Interest payable | 227 | — | 213 | — | 440 | |||||||||||||||
Unearned insurance premiums and service revenue | — | — | 2,374 | — | 2,374 | |||||||||||||||
Accrued expenses and other liabilities | 470 | 82 | 3,856 | (2,714 | ) | 1,694 | ||||||||||||||
Total liabilities | 28,069 | 82 | 117,955 | (8,516 | ) | 137,590 | ||||||||||||||
Total equity | 15,934 | 16,101 | 27,507 | (43,608 | ) | 15,934 | ||||||||||||||
Total liabilities and equity | $ | 44,003 | $ | 16,183 | $ | 145,462 | $ | (52,124 | ) | $ | 153,524 |
(a) | Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership. |
December 31, 2014 ($ in millions) | Parent (a) | Guarantors | Nonguarantors (a) | Consolidating adjustments | Ally consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Noninterest-bearing | $ | 986 | $ | — | $ | 362 | $ | — | $ | 1,348 | ||||||||||
Interest-bearing | 1,300 | — | 2,928 | — | 4,228 | |||||||||||||||
Interest-bearing — intercompany | — | — | 615 | (615 | ) | — | ||||||||||||||
Total cash and cash equivalents | 2,286 | — | 3,905 | (615 | ) | 5,576 | ||||||||||||||
Investment securities | — | — | 16,137 | — | 16,137 | |||||||||||||||
Loans held-for-sale, net | 3 | — | 2,000 | — | 2,003 | |||||||||||||||
Finance receivables and loans, net | ||||||||||||||||||||
Finance receivables and loans, net | 4,225 | — | 95,723 | — | 99,948 | |||||||||||||||
Intercompany loans to | ||||||||||||||||||||
Bank subsidiary | 625 | — | — | (625 | ) | — | ||||||||||||||
Nonbank subsidiaries | 3,500 | — | 1,770 | (5,270 | ) | — | ||||||||||||||
Allowance for loan losses | (102 | ) | — | (875 | ) | — | (977 | ) | ||||||||||||
Total finance receivables and loans, net | 8,248 | — | 96,618 | (5,895 | ) | 98,971 | ||||||||||||||
Investment in operating leases, net | — | — | 19,510 | — | 19,510 | |||||||||||||||
Intercompany receivables from | ||||||||||||||||||||
Bank subsidiary | 219 | — | — | (219 | ) | — | ||||||||||||||
Nonbank subsidiaries | 267 | — | 393 | (660 | ) | — | ||||||||||||||
Investment in subsidiaries | ||||||||||||||||||||
Bank subsidiary | 15,967 | 15,967 | — | (31,934 | ) | — | ||||||||||||||
Nonbank subsidiaries | 11,559 | 12 | — | (11,571 | ) | — | ||||||||||||||
Premiums receivable and other insurance assets | — | — | 1,717 | (22 | ) | 1,695 | ||||||||||||||
Other assets | 4,889 | — | 4,879 | (2,466 | ) | 7,302 | ||||||||||||||
Assets of operations held-for-sale | 634 | — | — | — | 634 | |||||||||||||||
Total assets | $ | 44,072 | $ | 15,979 | $ | 145,159 | $ | (53,382 | ) | $ | 151,828 | |||||||||
Liabilities | ||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||
Noninterest-bearing | $ | — | $ | — | $ | 64 | $ | — | $ | 64 | ||||||||||
Interest-bearing | 319 | — | 57,839 | — | 58,158 | |||||||||||||||
Total deposit liabilities | 319 | — | 57,903 | — | 58,222 | |||||||||||||||
Short-term borrowings | 3,338 | — | 3,724 | — | 7,062 | |||||||||||||||
Long-term debt | 21,199 | — | 45,359 | — | 66,558 | |||||||||||||||
Intercompany debt to | ||||||||||||||||||||
Nonbank subsidiaries | 2,385 | — | 4,125 | (6,510 | ) | — | ||||||||||||||
Intercompany payables to | ||||||||||||||||||||
Bank subsidiary | 94 | — | — | (94 | ) | — | ||||||||||||||
Nonbank subsidiaries | 454 | — | 354 | (808 | ) | — | ||||||||||||||
Interest payable | 316 | — | 161 | — | 477 | |||||||||||||||
Unearned insurance premiums and service revenue | — | — | 2,375 | — | 2,375 | |||||||||||||||
Accrued expenses and other liabilities | 568 | 82 | 3,551 | (2,466 | ) | 1,735 | ||||||||||||||
Total liabilities | 28,673 | 82 | 117,552 | (9,878 | ) | 136,429 | ||||||||||||||
Total equity | 15,399 | 15,897 | 27,607 | (43,504 | ) | 15,399 | ||||||||||||||
Total liabilities and equity | $ | 44,072 | $ | 15,979 | $ | 145,159 | $ | (53,382 | ) | $ | 151,828 |
(a) | Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership. |
Three months ended March 31, 2015 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Operating activities | ||||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (189 | ) | $ | 125 | $ | 799 | $ | (488 | ) | $ | 247 | ||||||||
Investing activities | ||||||||||||||||||||
Net change in federal funds sold and securities purchased under resale agreements | — | — | (50 | ) | — | (50 | ) | |||||||||||||
Purchases of available-for-sale securities | — | — | (4,023 | ) | — | (4,023 | ) | |||||||||||||
Proceeds from sales of available-for-sale securities | — | — | 1,523 | — | 1,523 | |||||||||||||||
Proceeds from maturities and repayments of available-for-sale securities | — | — | 914 | — | 914 | |||||||||||||||
Net (increase) decrease in finance receivables and loans | (242 | ) | — | 197 | — | (45 | ) | |||||||||||||
Proceeds from sales of finance receivables and loans | — | — | 1,577 | — | 1,577 | |||||||||||||||
Net decrease in loans — intercompany | 374 | — | 205 | (579 | ) | — | ||||||||||||||
Net increase in operating lease assets | — | — | (110 | ) | — | (110 | ) | |||||||||||||
Capital contributions to subsidiaries | (24 | ) | — | — | 24 | — | ||||||||||||||
Returns of contributed capital | 222 | — | — | (222 | ) | — | ||||||||||||||
Proceeds from sale of business units, net | 1,049 | — | — | — | 1,049 | |||||||||||||||
Net change in restricted cash | — | — | (121 | ) | — | (121 | ) | |||||||||||||
Other, net | (1 | ) | — | 92 | — | 91 | ||||||||||||||
Net cash provided by investing activities | 1,378 | — | 204 | (777 | ) | 805 | ||||||||||||||
Financing activities | ||||||||||||||||||||
Net change in short-term borrowings — third party | 142 | — | (760 | ) | — | (618 | ) | |||||||||||||
Net (decrease) increase in deposits | (9 | ) | — | 2,661 | — | 2,652 | ||||||||||||||
Proceeds from issuance of long-term debt — third party | 2,467 | — | 6,353 | — | 8,820 | |||||||||||||||
Repayments of long-term debt — third party | (3,161 | ) | — | (6,617 | ) | — | (9,778 | ) | ||||||||||||
Net change in debt — intercompany | (202 | ) | — | (374 | ) | 576 | — | |||||||||||||
Dividends paid — third party | (67 | ) | — | — | — | (67 | ) | |||||||||||||
Dividends paid and returns of contributed capital — intercompany | — | (125 | ) | (586 | ) | 711 | — | |||||||||||||
Capital contributions from parent | — | — | 24 | (24 | ) | — | ||||||||||||||
Net cash (used in) provided by financing activities | (830 | ) | (125 | ) | 701 | 1,263 | 1,009 | |||||||||||||
Effect of exchange-rate changes on cash and cash equivalents | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Net increase in cash and cash equivalents | 359 | — | 1,703 | (2 | ) | 2,060 | ||||||||||||||
Cash and cash equivalents at beginning of year | 2,286 | — | 3,905 | (615 | ) | 5,576 | ||||||||||||||
Cash and cash equivalents at March 31 | $ | 2,645 | $ | — | $ | 5,608 | $ | (617 | ) | $ | 7,636 |
Three months ended March 31, 2014 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Operating activities | ||||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (207 | ) | $ | (11 | ) | $ | 1,271 | $ | (121 | ) | $ | 932 | |||||||
Investing activities | ||||||||||||||||||||
Purchases of available-for-sale securities | — | — | (907 | ) | — | (907 | ) | |||||||||||||
Proceeds from sales of available-for-sale securities | — | — | 1,354 | — | 1,354 | |||||||||||||||
Proceeds from maturities and repayments of available-for-sale securities | — | — | 592 | — | 592 | |||||||||||||||
Net decrease (increase) in finance receivables and loans | 1,918 | — | (1,426 | ) | — | 492 | ||||||||||||||
Net decrease (increase) in loans — intercompany | 702 | — | (84 | ) | (618 | ) | — | |||||||||||||
Net decrease (increase) in operating lease assets | 563 | — | (1,638 | ) | — | (1,075 | ) | |||||||||||||
Capital contributions to subsidiaries | (651 | ) | — | — | 651 | — | ||||||||||||||
Returns of contributed capital | 295 | — | — | (295 | ) | — | ||||||||||||||
Net change in restricted cash | — | — | 1,580 | — | 1,580 | |||||||||||||||
Other, net | (1 | ) | — | 112 | — | 111 | ||||||||||||||
Net cash provided by (used in) investing activities | 2,826 | — | (417 | ) | (262 | ) | 2,147 | |||||||||||||
Financing activities | ||||||||||||||||||||
Net change in short-term borrowings — third party | 179 | — | (3,563 | ) | — | (3,384 | ) | |||||||||||||
Net (decrease) increase in deposits | (19 | ) | — | 2,036 | — | 2,017 | ||||||||||||||
Proceeds from issuance of long-term debt — third party | 1,269 | — | 8,133 | — | 9,402 | |||||||||||||||
Repayments of long-term debt — third party | (4,635 | ) | — | (6,048 | ) | — | (10,683 | ) | ||||||||||||
Net change in debt — intercompany | 85 | — | (702 | ) | 617 | — | ||||||||||||||
Dividends paid — third party | (68 | ) | — | — | — | (68 | ) | |||||||||||||
Dividends paid and returns of contributed capital — intercompany | — | — | (416 | ) | 416 | — | ||||||||||||||
Capital contributions from parent | — | — | 651 | (651 | ) | — | ||||||||||||||
Net cash (used in) provided by financing activities | (3,189 | ) | — | 91 | 382 | (2,716 | ) | |||||||||||||
Effect of exchange-rate changes on cash and cash equivalents | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Net (decrease) increase in cash and cash equivalents | (570 | ) | (11 | ) | 944 | (1 | ) | 362 | ||||||||||||
Cash and cash equivalents at beginning of year | 2,930 | 37 | 2,974 | (410 | ) | 5,531 | ||||||||||||||
Cash and cash equivalents at March 31 | $ | 2,360 | $ | 26 | $ | 3,918 | $ | (411 | ) | $ | 5,893 |
Three months ended March 31, | ||||||||
($ in millions, except per share data) | 2015 | 2014 | ||||||
Total financing revenue and other interest income | $ | 2,084 | $ | 2,075 | ||||
Total interest expense | 612 | 712 | ||||||
Depreciation expense on operating lease assets | 622 | 542 | ||||||
Net financing revenue | 850 | 821 | ||||||
Total other revenue | 243 | 321 | ||||||
Total net revenue | 1,093 | 1,142 | ||||||
Provision for loan losses | 116 | 137 | ||||||
Total noninterest expense | 695 | 713 | ||||||
Income from continuing operations before income tax expense | 282 | 292 | ||||||
Income tax expense from continuing operations | 103 | 94 | ||||||
Net income from continuing operations | 179 | 198 | ||||||
Income from discontinued operations, net of tax | 397 | 29 | ||||||
Net income | $ | 576 | $ | 227 | ||||
Basic and diluted earnings per common share: | ||||||||
Net income from continuing operations | $ | 0.23 | $ | 0.27 | ||||
Net income | 1.06 | 0.33 | ||||||
Market price per common share: | ||||||||
High closing | $ | 23.88 | ||||||
Low closing | 18.71 | |||||||
Period end closing | 20.98 |
At and for the three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Selected period-end balance sheet data: | ||||||||
Total assets | $ | 153,524 | $ | 148,452 | ||||
Long-term debt | $ | 65,760 | $ | 68,295 | ||||
Preferred stock | $ | 1,255 | $ | 1,255 | ||||
Total equity | $ | 15,934 | $ | 14,459 | ||||
Financial ratios: | ||||||||
Return on average assets (a) | 1.55 | % | 0.61 | % | ||||
Return on average equity (a) | 14.88 | % | 6.43 | % | ||||
Return on average tangible common equity (non-GAAP) (b) | 14.16 | % | 4.86 | % | ||||
Equity to assets (a) | 10.38 | % | 9.54 | % | ||||
Net interest spread (a)(c) | 2.31 | % | 2.27 | % | ||||
Net interest spread excluding original issue discount (a)(c) | 2.36 | % | 2.43 | % | ||||
Net yield on interest-earning assets (a)(d) | 2.44 | % | 2.40 | % | ||||
Net yield on interest-earning assets excluding original issue discount (a)(d) | 2.47 | % | 2.53 | % |
(a) | The ratios were based on average assets and average equity using a combination of monthly and daily average methodologies. |
(b) | Return on average tangible common equity represents GAAP net income available to common shareholders divided by a two-period average of tangible common equity, which is total shareholder's equity less preferred stock. |
(c) | Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities, excluding discontinued operations for the periods shown. |
(d) | Net yield on interest-earning assets represents net financing revenue as a percentage of total interest-earning assets. |
Under Basel III | Under Basel I | |||||||||||
Transitional | Fully Phased-in | |||||||||||
($ in millions) | March 31, 2015 | March 31, 2014 | ||||||||||
Common Equity Tier 1 capital ratio (a)(b) | 10.94 | % | 10.36 | % | 9.14 | % | ||||||
Tier 1 capital ratio (c) | 13.16 | % | 13.04 | % | 12.12 | % | ||||||
Total capital ratio (d) | 14.11 | % | 14.03 | % | 13.02 | % | ||||||
Tier 1 leverage (to adjusted quarterly average assets) (e) | 11.43 | % | 11.39 | % | 10.39 | % | ||||||
Total equity | $ | 15,934 | $ | 15,934 | $ | 14,459 | ||||||
Preferred stock | (1,255 | ) | (1,255 | ) | (1,255 | ) | ||||||
Goodwill and certain other intangibles | (27 | ) | (27 | ) | (27 | ) | ||||||
Unrealized gains and other adjustments | (412 | ) | (1,089 | ) | (1,498 | ) | ||||||
Common Equity Tier 1 capital (non-GAAP) (a) | 14,240 | 13,563 | 11,679 | |||||||||
Preferred stock | 1,080 | 1,021 | 1,255 | |||||||||
Trust preferred securities | 2,546 | 2,546 | 2,545 | |||||||||
Other adjustments | (735 | ) | (58 | ) | — | |||||||
Tier 1 capital (c) | $ | 17,131 | $ | 17,072 | $ | 15,479 | ||||||
Risk-weighted assets (f) | $ | 130,142 | $ | 130,907 | $ | 127,734 |
(a) | Common Equity Tier 1 Capital generally consists of common stock (plus any related surplus and net of any treasury stock), retained earnings, accumulated other comprehensive income, and minority interests in the common equity of consolidated subsidiaries, together subject to certain adjustments and deductions. At March 31, 2014, the capital ratio presented reflects the Tier 1 common ratio, the closest analogue under U.S. Basel I to the Common Equity Tier 1 capital ratio introduced by U.S. Basel III. We consider various measures when evaluating capital utilization and adequacy, including the Common Equity Tier 1 Capital ratio. Because GAAP does not include capital ratio measures, we believe there are no comparable GAAP financial measures to these ratios. Common Equity Tier 1 Capital is not formally defined by GAAP and, therefore, is considered to be a non-GAAP financial measure. We believe the Common Equity Tier 1 Capital is important because we believe analysts and banking regulators may assess our capital adequacy using this ratio. Additionally, presentation of this measure allows readers to compare certain aspects of our capital adequacy on the same basis to other companies in the industry. |
(b) | Our redemption on April 10, 2015, of 1,288,300 shares of our outstanding Series G Preferred Stock, with an aggregate liquidation preference of approximately $1.3 billion would have resulted in a fully phased-in Common Equity Tier 1 Capital ratio of 9.47% as of March 31, 2015. |
(c) | Tier 1 capital generally consists of common equity, minority interests, qualifying noncumulative preferred stock, and the fixed rate cumulative preferred stock sold to the U.S. Department of the Treasury (Treasury) under the Troubled Asset Relief Program, less goodwill and other adjustments. |
(d) | Total capital is the sum of Tier 1 and Tier 2 capital. Tier 2 capital generally consists of preferred stock not qualifying as Tier 1 capital, limited amounts of subordinated debt and the allowance for loan losses, and other adjustments. |
(e) | Tier 1 leverage equals Tier 1 capital divided by adjusted quarterly average total assets (which reflects adjustments for disallowed goodwill and certain intangible assets). |
(f) | Risk-weighted assets are defined by regulation and are determined by allocating assets and specified off-balance sheet financial instruments into several broad risk categories. |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Total net revenue (loss) | ||||||||||
Dealer Financial Services | ||||||||||
Automotive Finance operations | $ | 861 | $ | 884 | (3) | |||||
Insurance operations | 280 | 287 | (2) | |||||||
Mortgage operations | 83 | 18 | n/m | |||||||
Corporate and Other | (131 | ) | (47 | ) | (179) | |||||
Total | $ | 1,093 | $ | 1,142 | (4) | |||||
Income (loss) from continuing operations before income tax expense | ||||||||||
Dealer Financial Services | ||||||||||
Automotive Finance operations | $ | 331 | $ | 339 | (2) | |||||
Insurance operations | 78 | 74 | 5 | |||||||
Mortgage operations | 69 | 17 | n/m | |||||||
Corporate and Other | (196 | ) | (138 | ) | (42) | |||||
Total | $ | 282 | $ | 292 | (3) |
• | Our Dealer Financial Services operations offer a wide range of financial services and products to retail automotive consumers and automotive dealerships. Our Dealer Financial Services consist of two separate reportable segments — Automotive Finance and Insurance operations. Our automotive finance services include providing retail installment sales financing, loans, and leases; offering term loans to dealers, financing dealer floorplans and other lines of credit to dealers; fleet financing, and vehicle remarketing services. |
• | Our ongoing Mortgage operations are limited to the management of our held-for-investment and held-for-sale mortgage loan portfolios, and include the execution of bulk purchases of high-quality jumbo mortgage loans originated by third parties. During the first quarter of 2015, we continued to execute bulk purchases of mortgage loans that were originated by third parties. Year-to-date purchases have totaled $654 million. We expect this activity to continue in support of our treasury asset liability management (ALM) activities and diversification. Further, we executed the sale of a portfolio of troubled debt restructured (TDR) loans totaling $614 million of unpaid principal balance during the three months ended March 31, 2015. |
• | Corporate and Other primarily consists of Corporate Finance, centralized corporate treasury activities, such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with debt issuances and bond exchanges, and the residual impacts of our corporate funds-transfer pricing (FTP) and treasury ALM activities. Corporate and Other also includes certain equity investments, reclassifications and eliminations between the reportable operating segments, and overhead that was previously allocated to operations that have since been sold or classified as discontinued operations. Corporate Finance provides senior secured commercial-lending products to primarily U.S.-based middle market companies. Effective May 1, 2014, Corporate Finance was aligned under Ally Bank, allowing this business to have a more competitive source of funding. |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Net financing revenue | ||||||||||
Total financing revenue and other interest income | $ | 2,084 | $ | 2,075 | — | |||||
Total interest expense | 612 | 712 | 14 | |||||||
Depreciation expense on operating lease assets | 622 | 542 | (15) | |||||||
Net financing revenue | 850 | 821 | 4 | |||||||
Other revenue | ||||||||||
Servicing fees | 10 | 9 | 11 | |||||||
Insurance premiums and service revenue earned | 233 | 241 | (3) | |||||||
Gain on mortgage and automotive loans, net | 46 | — | n/m | |||||||
Loss on extinguishment of debt | (198 | ) | (39 | ) | n/m | |||||
Other gain on investments, net | 55 | 43 | 28 | |||||||
Other income, net of losses | 97 | 67 | 45 | |||||||
Total other revenue | 243 | 321 | (24) | |||||||
Total net revenue | 1,093 | 1,142 | (4) | |||||||
Provision for loan losses | 116 | 137 | 15 | |||||||
Noninterest expense | ||||||||||
Compensation and benefits expense | 255 | 254 | — | |||||||
Insurance losses and loss adjustment expenses | 56 | 68 | 18 | |||||||
Other operating expenses | 384 | 391 | 2 | |||||||
Total noninterest expense | 695 | 713 | 3 | |||||||
Income from continuing operations before income tax expense | 282 | 292 | (3) | |||||||
Income tax expense from continuing operations | 103 | 94 | (10) | |||||||
Net income from continuing operations | $ | 179 | $ | 198 | (10) |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Net financing revenue | ||||||||||
Consumer | $ | 745 | $ | 739 | 1 | |||||
Commercial | 238 | 264 | (10) | |||||||
Loans held-for-sale | 19 | — | n/m | |||||||
Operating leases | 896 | 870 | 3 | |||||||
Other interest income | 2 | 3 | (33) | |||||||
Total financing revenue and other interest income | 1,900 | 1,876 | 1 | |||||||
Interest expense | 469 | 514 | 9 | |||||||
Depreciation expense on operating lease assets | 622 | 542 | (15) | |||||||
Net financing revenue | 809 | 820 | (1) | |||||||
Other revenue | ||||||||||
Servicing fees | 10 | 9 | 11 | |||||||
Loss on automotive loans, net | (15 | ) | — | n/m | ||||||
Other income | 57 | 55 | 4 | |||||||
Total other revenue | 52 | 64 | (19) | |||||||
Total net revenue | 861 | 884 | (3) | |||||||
Provision for loan losses | 127 | 159 | 20 | |||||||
Noninterest expense | ||||||||||
Compensation and benefits expense | 126 | 123 | (2) | |||||||
Other operating expenses | 277 | 263 | (5) | |||||||
Total noninterest expense | 403 | 386 | (4) | |||||||
Income from continuing operations before income tax expense | $ | 331 | $ | 339 | (2) | |||||
Total assets | $ | 111,149 | $ | 109,307 | 2 |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Net operating lease revenue | ||||||||||
Operating lease revenue | $ | 896 | $ | 870 | 3 | |||||
Depreciation expense | ||||||||||
Depreciation expense on operating lease assets (excluding remarketing gains) | 691 | 651 | (6) | |||||||
Remarketing gains | (69 | ) | (109 | ) | (37) | |||||
Total depreciation expense on operating lease assets | 622 | 542 | (15) | |||||||
Total net operating lease revenue | $ | 274 | $ | 328 | (16) |
Consumer automotive financing originations | % Share of Ally originations | |||||||||||
Three months ended March 31, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM | ||||||||||||
New retail standard | $ | 2,047 | $ | 1,528 | 21 | 17 | ||||||
New retail subvented | 524 | 860 | 5 | 9 | ||||||||
Lease | 1,142 | 2,332 | 12 | 25 | ||||||||
Used | 1,417 | 1,320 | 14 | 14 | ||||||||
Total GM vehicle originations | 5,130 | 6,040 | 52 | 66 | ||||||||
Chrysler | ||||||||||||
New retail standard | 1,033 | 708 | 10 | 8 | ||||||||
Lease | 394 | 257 | 4 | 3 | ||||||||
Used | 543 | 403 | 6 | 4 | ||||||||
Total Chrysler vehicle originations | 1,970 | 1,368 | 20 | 15 | ||||||||
Non-GM/Chrysler | ||||||||||||
New retail vehicles | 1,011 | 632 | 10 | 7 | ||||||||
Lease | 107 | 82 | 1 | 1 | ||||||||
Used | 1,626 | 1,070 | 17 | 12 | ||||||||
Total Non-GM/Chrysler vehicle originations | 2,744 | 1,784 | 28 | 19 | ||||||||
Total consumer automotive financing originations | $ | 9,844 | $ | 9,192 |
Average balance | % Share of manufacturer franchise dealer inventory | |||||||||||
Three months ended March 31, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM new vehicles (a) | $ | 15,537 | $ | 16,716 | 63 | 64 | ||||||
Chrysler new vehicles (a) | 8,202 | 8,015 | 45 | 46 | ||||||||
Non-GM/Chrysler new vehicles | 3,432 | 3,077 | ||||||||||
Used vehicles | 3,320 | 2,978 | ||||||||||
Total commercial wholesale finance receivables | $ | 30,491 | $ | 30,786 |
(a) | Share of dealer inventory based on a 4-point average of dealer inventory (excludes in-transit units). |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Insurance premiums and other income | ||||||||||
Insurance premiums and service revenue earned | $ | 233 | $ | 241 | (3) | |||||
Investment income, net (a) | 43 | 43 | — | |||||||
Other income | 4 | 3 | 33 | |||||||
Total insurance premiums and other income | 280 | 287 | (2) | |||||||
Expense | ||||||||||
Insurance losses and loss adjustment expenses | 56 | 68 | 18 | |||||||
Acquisition and underwriting expense | ||||||||||
Compensation and benefits expense | 19 | 16 | (19) | |||||||
Insurance commissions expense | 93 | 90 | (3) | |||||||
Other expenses | 34 | 39 | 13 | |||||||
Total acquisition and underwriting expense | 146 | 145 | (1) | |||||||
Total expense | 202 | 213 | 5 | |||||||
Income from continuing operations before income tax expense | $ | 78 | $ | 74 | 5 | |||||
Total assets | $ | 7,242 | $ | 7,184 | 1 | |||||
Insurance premiums and service revenue written | $ | 239 | $ | 244 | (2) | |||||
Combined ratio (b) | 85.9 | % | 87.9 | % |
(a) | Includes gain on investments of $33 million and $29 million for the three months ended March 31, 2015 and 2014, respectively; and interest expense of $13 million and $14 million for the three months ended March 31, 2015 and 2014, respectively. |
(b) | Management uses a combined ratio as a primary measure of underwriting profitability. Underwriting profitability is indicated by a combined ratio under 100% and is calculated as the sum of all incurred losses and expenses (excluding interest and income tax expense) divided by the total of premiums and service revenues earned and other fee income. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Vehicle service contracts | ||||||||
New retail | $ | 97 | $ | 95 | ||||
Used retail | 130 | 127 | ||||||
Reinsurance | (40 | ) | (35 | ) | ||||
Total vehicle service contracts | 187 | 187 | ||||||
Wholesale | 37 | 44 | ||||||
Other finance and insurance (a) | 15 | 13 | ||||||
Total | $ | 239 | $ | 244 |
(a) | Other finance and insurance includes GAP coverage, excess wear and tear, and other ancillary products. |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Cash | ||||||||
Noninterest-bearing cash | $ | 162 | $ | 239 | ||||
Interest-bearing cash | 1,171 | 1,289 | ||||||
Total cash | 1,333 | 1,528 | ||||||
Available-for-sale securities | ||||||||
Debt securities | ||||||||
U.S. Treasury and federal agencies | 473 | 392 | ||||||
U.S. States and political subdivisions | 504 | 406 | ||||||
Foreign government | 215 | 232 | ||||||
Mortgage-backed | 1,077 | 1,097 | ||||||
Asset-backed | 6 | 6 | ||||||
Corporate debt | 752 | 746 | ||||||
Total debt securities | 3,027 | 2,879 | ||||||
Equity securities | 967 | 906 | ||||||
Total available-for-sale securities | 3,994 | 3,785 | ||||||
Total cash and securities | $ | 5,327 | $ | 5,313 |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Net financing revenue | ||||||||||
Total financing revenue and other interest income | $ | 70 | $ | 76 | (8) | |||||
Total interest expense | 55 | 62 | 11 | |||||||
Net financing revenue | 15 | 14 | 7 | |||||||
Gain on mortgage loans, net | 66 | — | n/m | |||||||
Other income, net of losses | 2 | 4 | (50) | |||||||
Total other revenue | 68 | 4 | n/m | |||||||
Total net revenue | 83 | 18 | n/m | |||||||
Provision for loan losses | (5 | ) | (23 | ) | (78) | |||||
Total noninterest expense | 19 | 24 | 21 | |||||||
Income from continuing operations before income tax expense | $ | 69 | $ | 17 | n/m | |||||
Total assets | $ | 7,694 | $ | 7,937 | (3) |
Three months ended March 31, | ||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | |||||||
Net financing revenue (loss) | ||||||||||
Total financing revenue and other interest income | $ | 89 | $ | 94 | (5) | |||||
Interest expense | ||||||||||
Original issue discount amortization | 14 | 48 | 71 | |||||||
Other interest expense | 61 | 74 | 18 | |||||||
Total interest expense | 75 | 122 | 39 | |||||||
Net financing revenue (loss) (a) | 14 | (28 | ) | 150 | ||||||
Other (expense) revenue | ||||||||||
Loss on extinguishment of debt | (198 | ) | (39 | ) | n/m | |||||
Other gain on investments, net | 22 | 14 | 57 | |||||||
Other income, net of losses | 31 | 6 | n/m | |||||||
Total other expense | (145 | ) | (19 | ) | n/m | |||||
Total net loss | (131 | ) | (47 | ) | (179) | |||||
Provision for loan losses | (6 | ) | 1 | n/m | ||||||
Total noninterest expense (b) | 71 | 90 | 21 | |||||||
Loss from continuing operations before income tax expense | $ | (196 | ) | $ | (138 | ) | (42) | |||
Total assets | $ | 27,439 | $ | 24,024 | 14 |
(a) | Refer to the table that follows for further details on the components of net financing revenue (loss). |
(b) | Includes a reduction of $181 million for the three months ended March 31, 2015 and $185 million for the three months ended March 31, 2014, related to the allocation of corporate overhead expenses to other segments. The receiving segments record their allocation of corporate overhead expense within other operating expense. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Original issue discount amortization (a) | $ | (14 | ) | $ | (48 | ) | ||
Net impact of the funds-transfer pricing methodology | 4 | 3 | ||||||
Other (including Corporate Finance net financing revenue) | 24 | 17 | ||||||
Total net financing revenue (loss) for Corporate and Other | $ | 14 | $ | (28 | ) | |||
Outstanding original issue discount balance | $ | 1,425 | $ | 1,548 |
(a) | Amortization is included as interest on long-term debt in the Condensed Consolidated Statement of Comprehensive Income. |
Year ended December 31, ($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 and thereafter (a) | Total | |||||||||||||||||||||
Original issue discount | ||||||||||||||||||||||||||||
Outstanding balance | $ | 1,378 | $ | 1,306 | $ | 1,222 | $ | 1,126 | $ | 1,091 | $ | 1,057 | ||||||||||||||||
Total amortization (b) | 47 | 72 | 84 | 96 | 35 | 1,091 | $ | 1,425 |
(a) | The maximum annual scheduled amortization for any individual year is $158 million in 2030. |
(b) | The amortization is included as interest on long-term debt on the Condensed Consolidated Statement of Comprehensive Income. |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Cash | ||||||||
Noninterest-bearing cash | $ | 1,363 | $ | 1,083 | ||||
Interest-bearing cash | 4,956 | 2,933 | ||||||
Total cash | 6,319 | 4,016 | ||||||
Available-for-sale securities | ||||||||
Debt securities | ||||||||
U.S. Treasury and federal agencies | 2,215 | 786 | ||||||
U.S. States and political subdivisions | 20 | — | ||||||
Mortgage-backed | 9,540 | 9,581 | ||||||
Asset-backed | 2,060 | 1,985 | ||||||
Total debt securities | 13,835 | 12,352 | ||||||
Total cash and securities | $ | 20,154 | $ | 16,368 |
($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Finance receivables and loans | ||||||||
Automotive Finance operations | $ | 90,200 | $ | 90,592 | ||||
Mortgage operations | 7,653 | 7,474 | ||||||
Corporate and Other | 2,004 | 1,882 | ||||||
Total finance receivables and loans | 99,857 | 99,948 | ||||||
Loans held-for-sale | ||||||||
Automotive Finance operations | 1,500 | 1,515 | ||||||
Mortgage operations | 42 | 452 | ||||||
Corporate and Other | 17 | 36 | ||||||
Total loans held-for-sale | 1,559 | 2,003 | ||||||
Total on-balance sheet loans | $ | 101,416 | $ | 101,951 | ||||
Off-balance sheet securitized loans | ||||||||
Automotive Finance operations | $ | 2,500 | $ | 2,801 | ||||
Total off-balance sheet securitized loans | $ | 2,500 | $ | 2,801 | ||||
Operating lease assets | ||||||||
Automotive Finance operations | $ | 19,021 | $ | 19,510 | ||||
Total operating lease assets | $ | 19,021 | $ | 19,510 | ||||
Serviced loans and leases | ||||||||
Automotive Finance operations | $ | 114,950 | $ | 115,391 | ||||
Mortgage operations | 7,695 | 7,926 | ||||||
Corporate and Other | 1,388 | 1,347 | ||||||
Total serviced loans and leases | $ | 124,033 | $ | 124,664 |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more (b) | ||||||||||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||||||||
Consumer | ||||||||||||||||||||||||
Finance receivables and loans | ||||||||||||||||||||||||
Loans at historical cost | $ | 65,099 | $ | 64,043 | $ | 528 | $ | 563 | $ | — | $ | — | ||||||||||||
Loans at fair value | 1 | 1 | — | — | — | — | ||||||||||||||||||
Total finance receivables and loans | 65,100 | 64,044 | 528 | 563 | — | — | ||||||||||||||||||
Loans held-for-sale | 1,542 | 1,967 | 6 | 8 | — | — | ||||||||||||||||||
Total consumer loans (c) | 66,642 | 66,011 | 534 | 571 | — | — | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Finance receivables and loans | ||||||||||||||||||||||||
Loans at historical cost | 34,757 | 35,904 | 65 | 82 | — | — | ||||||||||||||||||
Loans held for sale | 17 | 36 | — | — | — | — | ||||||||||||||||||
Total commercial loans | 34,774 | 35,940 | 65 | 82 | — | — | ||||||||||||||||||
Total on-balance sheet loans | $ | 101,416 | $ | 101,951 | $ | 599 | $ | 653 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $239 million and $281 million at March 31, 2015, and December 31, 2014, respectively. |
(b) | Generally, loans that are 90 days past due and still accruing represent loans with government guarantees. There were no TDR loans classified as 90 days past due and still accruing at March 31, 2015 and December 31, 2014. |
(c) | Includes outstanding loans from our Commercial Services Group (CSG) of $5.5 billion and $5.2 billion at March 31, 2015 and December 31, 2014, respectively, and recreational vehicle loans of $1.2 billion at both March 31, 2015 and December 31, 2014. |
Three months ended March 31, | ||||||||||||||
Net charge-offs (recoveries) | Net charge-off ratios (a) | |||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Consumer | ||||||||||||||
Finance receivables and loans at historical cost | $ | 151 | $ | 133 | 0.9 | % | 0.8 | % | ||||||
Commercial | ||||||||||||||
Finance receivables and loans at historical cost | (1 | ) | — | — | — | |||||||||
Total finance receivables and loans at historical cost | $ | 150 | $ | 133 | 0.6 | % | 0.5 | % |
(a) | Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more (b) | ||||||||||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||||||||
Consumer automotive (c) (d) | $ | 57,447 | $ | 56,570 | $ | 377 | $ | 386 | $ | — | $ | — | ||||||||||||
Consumer mortgage | 7,652 | 7,473 | 151 | 177 | — | — | ||||||||||||||||||
Total consumer finance receivables and loans | $ | 65,099 | $ | 64,043 | $ | 528 | $ | 563 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $209 million and $216 million at March 31, 2015, and December 31, 2014, respectively. |
(b) | There were no TDR loans classified as 90 days past due and still accruing at both March 31, 2015, and December 31, 2014. |
(c) | Includes $68 million and $35 million of fair value adjustment for loans in hedge accounting relationships at March 31, 2015 and December 31, 2014, respectively. Refer to Note 20 to the Condensed Consolidated Financial Statements for additional information. |
(d) | Includes outstanding CSG loans of $5.2 billion and $5.0 billion at March 31, 2015, and December 31, 2014, respectively, and RV loans of $1.2 billion at both March 31, 2015, and December 31, 2014. |
Three months ended March 31, | ||||||||||||||
Net charge-offs | Net charge-off ratios (a) | |||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Consumer automotive | $ | 132 | $ | 121 | 0.9 | % | 0.9 | % | ||||||
Consumer mortgage | 19 | 12 | 1.0 | 0.6 | ||||||||||
Total consumer finance receivables and loans | $ | 151 | $ | 133 | 0.9 | % | 0.8 | % |
(a) | Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Consumer automotive (a) | $ | 8,201 | $ | 6,521 | ||||
Total consumer loan originations | $ | 8,201 | $ | 6,521 |
(a) | Includes $1.2 billion of loans originated as held-for-sale. |
March 31, 2015 (a) | December 31, 2014 | |||||||||||
Automotive | Mortgage | Automotive | Mortgage | |||||||||
Texas | 13.7 | % | 6.0 | % | 13.6 | % | 6.0 | % | ||||
California | 6.5 | 31.4 | 6.2 | 30.8 | ||||||||
Florida | 7.4 | 3.9 | 7.3 | 3.7 | ||||||||
Pennsylvania | 5.2 | 1.7 | 5.3 | 1.6 | ||||||||
Illinois | 4.4 | 4.1 | 4.4 | 4.2 | ||||||||
Georgia | 4.3 | 2.1 | 4.2 | 2.1 | ||||||||
New York | 3.8 | 1.8 | 4.0 | 1.9 | ||||||||
Ohio | 3.9 | 0.6 | 3.9 | 0.6 | ||||||||
Michigan | 3.6 | 2.9 | 3.8 | 3.1 | ||||||||
North Carolina | 3.6 | 1.9 | 3.5 | 1.9 | ||||||||
Other United States | 43.6 | 43.6 | 43.8 | 44.1 | ||||||||
Total consumer loans | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(a) | Presentation is in descending order as a percentage of total consumer finance receivables and loans at March 31, 2015. |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more (b) | ||||||||||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | $ | 29,544 | $ | 30,871 | $ | 35 | $ | 32 | $ | — | $ | — | ||||||||||||
Other (c) | 2,004 | 1,882 | 26 | 46 | — | — | ||||||||||||||||||
Commercial real estate — Automotive | 3,209 | 3,151 | 4 | 4 | — | — | ||||||||||||||||||
Total commercial finance receivables and loans | $ | 34,757 | $ | 35,904 | $ | 65 | $ | 82 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $26 million and $59 million at March 31, 2015, and December 31, 2014, respectively. |
(b) | There were no TDR loans classified as 90 days past due and still accruing at March 31, 2015 and December 31, 2014. |
(c) | Other commercial primarily includes senior secured commercial lending. |
Three months ended March 31, | ||||||||||||||
Net (recoveries) charge-offs | Net charge-off ratios (a) | |||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Commercial and industrial | ||||||||||||||
Automotive | $ | (1 | ) | $ | — | — | % | — | % | |||||
Total commercial finance receivables and loans | $ | (1 | ) | $ | — | — | % | — | % |
(a) | Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
March 31, 2015 | December 31, 2014 | |||||
Texas | 14.8 | % | 13.8 | % | ||
Florida | 11.8 | 12.3 | ||||
Michigan | 10.2 | 9.9 | ||||
California | 8.5 | 9.0 | ||||
Virginia | 4.0 | 4.1 | ||||
North Carolina | 4.0 | 3.9 | ||||
Pennsylvania | 3.9 | 3.8 | ||||
New York | 3.7 | 3.9 | ||||
Georgia | 3.7 | 3.7 | ||||
Illinois | 2.8 | 2.7 | ||||
Other United States | 32.6 | 32.9 | ||||
Total commercial real estate finance receivables and loans | 100.0 | % | 100.0 | % |
March 31, 2015 | December 31, 2014 | |||||
Industry | ||||||
Automotive | 81.1 | % | 87.3 | % | ||
Electronics | 3.4 | 2.9 | ||||
Services | 3.3 | 2.0 | ||||
Other | 12.2 | 7.8 | ||||
Total commercial criticized finance receivables and loans | 100.0 | % | 100.0 | % |
Three months ended March 31, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at January 1, 2015 | $ | 685 | $ | 152 | $ | 837 | $ | 140 | $ | 977 | ||||||||||
Charge-offs | (193 | ) | (22 | ) | (215 | ) | — | (215 | ) | |||||||||||
Recoveries | 61 | 3 | 64 | 1 | 65 | |||||||||||||||
Net charge-offs | (132 | ) | (19 | ) | (151 | ) | 1 | (150 | ) | |||||||||||
Provision for loan losses | 158 | (5 | ) | 153 | (37 | ) | 116 | |||||||||||||
Other (a) | — | (9 | ) | (9 | ) | (1 | ) | (10 | ) | |||||||||||
Allowance at March 31, 2015 | $ | 711 | $ | 119 | $ | 830 | $ | 103 | $ | 933 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at March 31, 2015 (b) | 1.2 | % | 1.6 | % | 1.3 | % | 0.3 | % | 0.9 | % | ||||||||||
Net charge-offs to average finance receivables and loans outstanding at March 31, 2015 (b) | 0.9 | % | 1.0 | % | 0.9 | % | — | % | 0.6 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at March 31, 2015 (b) | 188.8 | % | 78.8 | % | 157.3 | % | 159.1 | % | 157.5 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at March 31, 2015 | 1.3 | 1.5 | 1.4 | (26.8 | ) | 1.6 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
Three months ended March 31, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at January 1, 2014 | $ | 673 | $ | 389 | $ | 1,062 | $ | 146 | $ | 1,208 | ||||||||||
Charge-offs | (180 | ) | (15 | ) | (195 | ) | (1 | ) | (196 | ) | ||||||||||
Recoveries | 59 | 3 | 62 | 1 | 63 | |||||||||||||||
Net charge-offs | (121 | ) | (12 | ) | (133 | ) | — | (133 | ) | |||||||||||
Provision for loan losses | 163 | (23 | ) | 140 | (3 | ) | 137 | |||||||||||||
Other (a) | — | (21 | ) | (21 | ) | 1 | (20 | ) | ||||||||||||
Allowance at March 31, 2014 | $ | 715 | $ | 333 | $ | 1,048 | $ | 144 | $ | 1,192 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at March 31, 2014 (b) | 1.3 | % | 4.1 | % | 1.6 | % | 0.4 | % | 1.2 | % | ||||||||||
Net charge-offs to average finance receivables and loans outstanding at March 31, 2014 (b) | 0.9 | % | 0.6 | % | 0.8 | % | — | % | 0.5 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at March 31, 2014 (b) | 217.7 | % | 160.1 | % | 195.3 | % | 82.9 | % | 167.9 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at March 31, 2014 | 1.5 | 6.8 | 2.0 | — | 2.2 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
2015 | 2014 | |||||||||||||||||||
March 31, ($ in millions) | Allowance for loan losses | Allowance as a % of loans outstanding | Allowance as a % of allowance for loan losses | Allowance for loan losses | Allowance as a % of loans outstanding | Allowance as a % of allowance for loan losses | ||||||||||||||
Consumer | ||||||||||||||||||||
Consumer automotive | $ | 711 | 1.2 | % | 76.1 | % | $ | 715 | 1.3 | % | 60.0 | % | ||||||||
Consumer mortgage | 119 | 1.6 | 12.8 | 333 | 4.1 | 27.9 | ||||||||||||||
Total consumer loans | 830 | 1.3 | 88.9 | 1,048 | 1.6 | 87.9 | ||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 44 | 0.1 | 4.7 | 64 | 0.2 | 5.4 | ||||||||||||||
Other | 36 | 1.8 | 3.9 | 50 | 2.9 | 4.2 | ||||||||||||||
Commercial real estate — Automotive | 23 | 0.7 | 2.5 | 30 | 1.0 | 2.5 | ||||||||||||||
Total commercial loans | 103 | 0.3 | 11.1 | 144 | 0.4 | 12.1 | ||||||||||||||
Total allowance for loan losses | $ | 933 | 0.9 | % | 100.0 | % | $ | 1,192 | 1.2 | % | 100.0 | % |
Three months ended March 31, | ||||||||
($ in millions) | 2015 | 2014 | ||||||
Consumer | ||||||||
Consumer automotive | $ | 158 | $ | 163 | ||||
Consumer mortgage | (5 | ) | (23 | ) | ||||
Total consumer loans | 153 | 140 | ||||||
Commercial | ||||||||
Commercial and industrial | ||||||||
Automotive | (22 | ) | (4 | ) | ||||
Other | (6 | ) | 1 | |||||
Commercial real estate — Automotive | (9 | ) | — | |||||
Total commercial loans | (37 | ) | (3 | ) | ||||
Total provision for loan losses | $ | 116 | $ | 137 |
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Off-lease vehicles terminated (in units) | 65,060 | 61,001 | ||||||
Average gain per vehicle ($ per unit) | $ | 1,067 | $ | 1,791 | ||||
Method of vehicle sales | ||||||||
Auction (internet and physical) | 63 | % | 59 | % | ||||
Sale to dealer, lessee, and other | 37 | 41 |
March 31, | 2015 | 2014 | ||||
Car | 39 | % | 42 | % | ||
Truck | 13 | 11 | ||||
Sport utility vehicle | 48 | 47 |
Instantaneous Change in Interest Rates as of ($ in millions) | March 31, 2015 | December 31, 2014 | ||||||
Parallel rate shifts (relative to the base forward-curve) | ||||||||
-100 basis points | $ | 31 | $ | 78 | ||||
+100 basis points | (89 | ) | (130 | ) | ||||
+200 basis points | (191 | ) | (215 | ) |
($ in millions) | 1st Quarter 2015 | 4th Quarter 2014 | 3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | ||||||||||
Number of retail accounts | 1,818,770 | 1,731,105 | 1,698,585 | 1,641,327 | 1,589,441 | ||||||||||
Deposits | |||||||||||||||
Retail | $ | 50,633 | $ | 47,954 | $ | 46,718 | $ | 45,934 | $ | 45,193 | |||||
Brokered | 9,853 | 9,885 | 9,692 | 9,684 | 9,683 | ||||||||||
Other (a) | 79 | 64 | 73 | 75 | 70 | ||||||||||
Total deposits | $ | 60,565 | $ | 57,903 | $ | 56,483 | $ | 55,693 | $ | 54,946 |
(a) | Other deposits include mortgage escrow and other deposits (excluding intercompany deposits). |
• | Ally Financial Inc. renewed, increased, and/or extended $12.5 billion in U.S. credit facilities. The automotive credit facility renewal amount includes the March 2015 refinancing of $12.5 billion in credit facilities at both the parent company and Ally Bank with a syndicate of eighteen lenders. The $12.5 billion capacity is secured by retail, lease, and dealer floorplan automotive assets and is allocated to two separate facilities; one is an $8.0 billion facility which is available to the parent company, while the other is a $4.5 billion facility available to Ally Bank. Both facilities mature in March 2017. |
• | Ally Financial Inc. continued to access the public and private term asset-backed securitization markets completing four U.S. transactions that raised $2.7 billion, with $1.4 billion and $1.3 billion raised by Ally Bank and the parent company, respectively. In addition, Ally Bank raised $1.0 billion related to a whole-loan sale comprised of retail automotive loans. |
• | Ally Financial Inc. accessed the unsecured debt capital markets in the first quarter of 2015 and raised $2.5 billion. |
• | Ally Financial Inc. completed a tender offer to buy back $950 million of its high-coupon debt in the first quarter of 2015. |
($ in millions) | Bank | Parent | Total | % | ||||||||||
March 31, 2015 | ||||||||||||||
Secured financings | $ | 23,803 | $ | 23,076 | $ | 46,879 | 35 | |||||||
Institutional term debt | — | 21,030 | 21,030 | 16 | ||||||||||
Retail debt programs (a) | — | 3,822 | 3,822 | 3 | ||||||||||
Total debt (b) | 23,803 | 47,928 | 71,731 | 54 | ||||||||||
Deposits (c) | 60,565 | 310 | 60,875 | 46 | ||||||||||
Total on-balance sheet funding | $ | 84,368 | $ | 48,238 | $ | 132,606 | 100 | |||||||
December 31, 2014 | ||||||||||||||
Secured financings | $ | 27,135 | $ | 20,732 | $ | 47,867 | 36 | |||||||
Institutional term debt | — | 21,628 | 21,628 | 17 | ||||||||||
Retail debt programs (a) | — | 3,673 | 3,673 | 3 | ||||||||||
Total debt (b) | 27,135 | 46,033 | 73,168 | 56 | ||||||||||
Deposits (c) | 57,903 | 319 | 58,222 | 44 | ||||||||||
Total on-balance sheet funding | $ | 85,038 | $ | 46,352 | $ | 131,390 | 100 |
(a) | Includes $341 million and $335 million of Retail Term Notes at March 31, 2015 and December 31, 2014, respectively. |
(b) | Excludes fair value adjustment as described in Note 22 to the Condensed Consolidated Financial Statements. |
(c) | Bank deposits include retail, brokered, and other deposits. Parent deposits include dealer deposits. Intercompany deposits are not included. |
Outstanding | Unused capacity (a) | Total capacity | ||||||||||||||||||||||
($ in millions) | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | March 31, 2015 | December 31, 2014 | ||||||||||||||||||
Bank funding | ||||||||||||||||||||||||
Secured | $ | 3,015 | $ | 3,250 | $ | 1,485 | $ | 250 | $ | 4,500 | $ | 3,500 | ||||||||||||
Parent funding | ||||||||||||||||||||||||
Secured | 15,191 | 15,030 | 2,940 | 3,425 | 18,131 | 18,455 | ||||||||||||||||||
Total committed facilities | $ | 18,206 | $ | 18,280 | $ | 4,425 | $ | 3,675 | $ | 22,631 | $ | 21,955 |
(a) | Funding from committed secured facilities is available on request in the event excess collateral resides in certain facilities or is available to the extent incremental collateral is available and contributed to the facilities. |
Rating agency | Short-term | Senior debt | Outlook | Date of last action | ||||
Fitch | B | BB+ | Stable | April 8, 2015 (a) | ||||
Moody’s | Not Prime | B1 | Positive | July 14, 2014 (b) | ||||
S&P | B | BB+ | Stable | December 12, 2014 (c) | ||||
DBRS | R-4 | BB | Positive | September 17, 2014 (d) |
(a) | Fitch affirmed our senior debt rating of BB+, affirmed our short term rating of B and maintained a Stable outlook on April 8, 2015. |
(b) | Moody's affirmed our corporate family rating of Ba3, senior debt rating of B1, and short-term rating of Not Prime and changed the outlook to Positive on July 14, 2014. Effective December 1, 2014, we determined to not renew our contractual arrangement with Moody's related to their providing of our corporate family, senior debt, and short-term ratings. Notwithstanding this, Moody's has determined to continue to provide these ratings on a discretionary basis. However, Moody's has no obligation to continue to provide these ratings, and could cease doing so at any time. |
(c) | Standard & Poor's upgraded our senior debt rating to BB+ from BB and affirmed our short term rating of B on December 12, 2014. |
(d) | DBRS confirmed our senior debt rating of BB, confirmed our short term rating of R-4, and changed the trend on Ally's senior debt to Positive on September 17, 2014. |
• | Allowance for loan losses |
• | Valuation of automotive lease assets and residuals |
• | Fair value of financial instruments |
• | Legal and regulatory reserves |
• | Determination of provision for income taxes |
2015 | 2014 | (Decrease) increase due to (a) | ||||||||||||||||||||||||||||||||
Three months ended March 31, ($ in millions) | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Volume | Yield/rate | Total | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||
Interest-bearing cash and cash equivalents | $ | 4,402 | $ | 2 | 0.18 | % | $ | 5,304 | $ | 3 | 0.23 | % | $ | — | $ | (1 | ) | $ | (1 | ) | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | 7 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Investment securities (c) | 15,904 | 83 | 2.12 | 15,714 | 90 | 2.32 | 1 | (8 | ) | (7 | ) | |||||||||||||||||||||||
Loans held-for-sale, net | 1,947 | 24 | 5.00 | 11 | — | — | 24 | — | 24 | |||||||||||||||||||||||||
Finance receivables and loans, net (d) (e) | 98,843 | 1,074 | 4.41 | 99,048 | 1,107 | 4.53 | (2 | ) | (31 | ) | (33 | ) | ||||||||||||||||||||||
Investment in operating leases, net (f) | 19,405 | 274 | 5.73 | 17,998 | 328 | 7.39 | 24 | (78 | ) | (54 | ) | |||||||||||||||||||||||
Total interest-earning assets | 140,508 | 1,457 | 4.21 | 138,075 | 1,528 | 4.49 | 47 | (118 | ) | (71 | ) | |||||||||||||||||||||||
Noninterest-bearing cash and cash equivalents | 1,825 | 1,441 | ||||||||||||||||||||||||||||||||
Other assets (g) | 9,793 | 11,888 | ||||||||||||||||||||||||||||||||
Allowance for loan losses | (969 | ) | (1,206 | ) | ||||||||||||||||||||||||||||||
Total assets | $ | 151,157 | $ | 150,198 | ||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||
Interest-bearing deposit liabilities | $ | 59,391 | $ | 172 | 1.17 | % | $ | 54,203 | $ | 163 | 1.22 | % | 15 | (6 | ) | 9 | ||||||||||||||||||
Short-term borrowings | 6,280 | 11 | 0.71 | 6,643 | 15 | 0.92 | (1 | ) | (3 | ) | (4 | ) | ||||||||||||||||||||||
Long-term debt (e) (h) (i) | 65,168 | 429 | 2.67 | 69,030 | 534 | 3.14 | (28 | ) | (77 | ) | (105 | ) | ||||||||||||||||||||||
Total interest-bearing liabilities (h) (j) | 130,839 | 612 | 1.90 | 129,876 | 712 | 2.22 | (14 | ) | (86 | ) | (100 | ) | ||||||||||||||||||||||
Noninterest-bearing deposit liabilities | 73 | 66 | ||||||||||||||||||||||||||||||||
Total funding sources (h) (k) | 130,912 | 612 | 1.90 | 129,942 | 712 | 2.22 | ||||||||||||||||||||||||||||
Other liabilities (l) | 4,548 | 5,933 | ||||||||||||||||||||||||||||||||
Total liabilities | 135,460 | 135,875 | ||||||||||||||||||||||||||||||||
Total equity | 15,697 | 14,323 | ||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 151,157 | $ | 150,198 | ||||||||||||||||||||||||||||||
Net financing revenue | $ | 845 | $ | 816 | $ | 61 | $ | (32 | ) | $ | 29 | |||||||||||||||||||||||
Net interest spread (m) | 2.31 | % | 2.27 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount (m) | 2.36 | % | 2.43 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount and including noninterest-bearing deposit liabilities (m) | 2.36 | % | 2.43 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets (n) | 2.44 | % | 2.40 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets excluding original issue discount (n) | 2.47 | % | 2.53 | % |
(a) | Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate. |
(b) | Average balances are calculated using a combination of monthly and daily average methodologies. |
(c) | Excludes equity investments with an average balance of $848 million and $925 million at March 31, 2015 and 2014, respectively, and related income on equity investments of $5 million during the three months ended March 31, 2015 and 2014, respectively. Yields on available-for-sale debt securities are based on fair value as opposed to historical cost. |
(d) | Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming status, refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K. |
(e) | Includes the effects of derivative financial instruments designated as hedges. |
(f) | Includes remarketing gains of $69 million and $109 million during the three months ended March 31, 2015 and 2014, respectively. Excluding these gains on sale, the annualized yield would be 4.28% and 4.93% at March 31, 2015 and 2014, respectively. |
(g) | Includes average balances of assets of discontinued operations. |
(h) | Average balance includes $1,345 million and $1,510 million related to original issue discount (OID) at March 31, 2015 and 2014, respectively. Interest expense includes OID amortization of $10 million and $44 million during the three months ended March 31, 2015 and 2014, respectively. |
(i) | Excluding OID, the rate on long-term debt was 2.55% and 2.82% at March 31, 2015 and 2014, respectively. |
(j) | Excluding OID, the rate on total interest-bearing liabilities was 1.85% and 2.06% at March 31, 2015 and 2014, respectively. |
(k) | Excluding OID, the rate on total funding sources was 1.85% and 2.06% at March 31, 2015 and 2014, respectively. |
(l) | Includes average balances of liabilities of discontinued operations. |
(m) | Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities. |
(n) | Net yield on interest-earning assets represents net financing revenue as a percentage of total interest-earning assets. |
Three months ended March 31, 2015 | Total number of shares repurchased | Weighted-average price paid per share | |||||
January 2015 | 631,217 | $ | 19.85 | ||||
February 2015 | 118,668 | 19.67 | |||||
March 2015 | 1,066 | 21.02 | |||||
Total | 750,951 | $ | 19.82 |
Ally Financial Inc. (Registrant) | |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy Chief Financial Officer |
/S/ DAVID J. DEBRUNNER | |
David J. DeBrunner Vice President, Chief Accounting Officer, and Corporate Controller |
Exhibit | Description | Method of Filing |
10.1 | Release Agreement between Ally Financial Inc. and Barbara A. Yastine, dated March 18, 2015 | Filed herewith. |
10.2 | Letter Agreement between Ally Financial Inc. and Michael A. Carpenter, dated April 7, 2015 | Filed herewith. |
12 | Computation of Ratio of Earnings to Fixed Charges | Filed herewith. |
31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) | Filed herewith. |
31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) | Filed herewith. |
32 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 | Filed herewith. |
101 | Interactive Data File | Filed herewith. |
1. | Provided that this signed and notarized document is received by James J. Duffy, Ally Financial Inc. Group Vice President and Chief Human Resources Officer, 1177 Avenue of the Americas, New York, NY 10036, no later than March 31, 2015 and not revoked in accordance with Paragraph 18, Employee’s termination of employment will be reflected as a Mutually Satisfactory Separation effective June 19, 2015. Until then, effective on the date the seven (7) day revocation period referred to in Paragraph 18 of this Release Agreement expires, Employee will resign from her positions as Chairperson, CEO, and President of Ally Bank, and all related board positions, and commence a transitional assignment as an advisor to the Company CEO and Board of Directors as requested. Except as required to perform such requested tasks, Employee shall have no obligation to be present in Company’s business offices. During this transition, she will receive cash compensation equal to her 2014 total direct compensation rate of $425,000 per month (“Transition Compensation Rate”) |
2. | The Company and Employee have agreed on the wording of the announcement of Employee’s separation, which has been appended to this Release Agreement as Exhibit 1. The parties agree that the public disclosure and discussion about Employee’s employment and separation will be consistent with this announcement. |
3. | Employee agrees that the separation status, compensation, and consideration referred to in Paragraph 1 are more than the Company is required to provide under its normal policies and procedures. Employee agrees to remain actively employed in good standing and meet the specific objectives required of her transitional assignment until June 19, 2015. Notwithstanding the above, if Employee wishes to terminate her employment prior to June 19, 2015, she will provide the Company with two (2) weeks advance notice, at which point the Company may agree to a new separation date and pay Employee her Transition Compensation Rate (but no benefits) as if she remained employed through June 19, 2015. If the Company does not agree to the new separation date, which agreement will not be unreasonably withheld, Employee’s separation will be deemed a Voluntarily Resignation effective two (2) weeks from the date of her notice, and Employee will forfeit any right to continued payment of the Transition Compensation Rate or Company benefits under this Release Agreement as of her separation date. Under either scenario, the release language contained in Paragraph 4 will remain in full force and effect. |
4. | Employee for herself, family, heirs and representatives further agrees that, by entering into this Release Agreement, she releases the Company from all claims or demands she may have based on her employment with the Company, this Release Agreement, or the termination of her employment. This release specifically includes, without limitation, a release of any rights or claims she may have under: |
• | the Employee Retirement Income Security Act of 1974, as amended, which regulates employee benefit plans; |
• | Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights and Women’s Equity Act of 1991, as amended, and the Equal Pay Act of 1963, as amended, which prohibit discrimination in employment based on race, color, national origin, religion, or sex; |
• | the Age Discrimination in Employment Act, which prohibits discrimination based on age; |
• | the Rehabilitation Act of 1973, as amended, and the Americans with Disabilities Act, as amended, which prohibit discrimination based on disability; |
• | the Family Medical Leave Act, as amended; |
• | the Worker Adjustment and Retraining Notification Act (WARN), as amended; |
• | the National Labor Relations Act, as amended; |
• | state fair employment practices or civil rights laws; |
• | the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and Sarbanes-Oxley Act of 2002, as amended, which govern whistleblower claims by financial services employees; and |
• | any other federal, state, or local laws, or regulations, or any common law actions relating to employment, or employment discrimination. |
5. | Employee understands and agrees that she is not eligible for severance benefits under the Ally Financial Inc. Severance Plan – any claim to which Employee expressly waives by signing this Release Agreement. |
6. | The Company makes this Release Agreement to avoid the cost of defending against any possible lawsuit or claims. By making this Release Agreement, the Company does not admit that it has done anything wrong. |
7. | If the Company successfully asserts this Release Agreement as a defense against a future lawsuit or claim of Employee, Employee will pay for all costs incurred by the Company, including reasonable attorney’s fees, in defending against her claim, unless such lawsuit or claim is brought by Employee for purposes of enforcing this Release Agreement. |
8. | Employee is advised to consult with an attorney before signing this Release Agreement. Employee understands that whether or not she does so is her decision. Employee will have until March 31, 2015 to accept or reject this Release Agreement. |
9. | For purposes of clarity, Employee understands that, following her June 19, 2015 separation, she has no right to reemployment with Company and any reemployment decision is solely within the Company’s discretion. |
10. | Employee agrees and acknowledges that, during the course of her employment with the Company, she had access and was privy to information, documents, and materials relating to the Company that are of a confidential or proprietary nature or which constitute or contain trade secrets, privileged information, or matters subject to an attorney-client privilege or which are related work product, the disclosure of which will cause irreparable harm to the Company. As part of this Agreement, Employee affirms her legal duties regarding this information and agrees to return such information which is in her possession or which has been given to others, and agrees that she will not discuss or disclose to any person or entity any trade secret, confidential and/or proprietary information, or matters subject to an attorney-client privilege or which are related work product without the expressed permission of the Company. Nothing in this Agreement prohibits Employee or her attorney from initiating communications directly with, or responding to any inquiry from or providing testimony before, the SEC, FINRA, or any other self-regulatory organization or any other state or federal regulatory authority or responding to any subpoena or other legal process. Employee acknowledges that a breach of this Paragraph 10 will entitle Company to legal and equitable relief. |
11. | Employee acknowledges that she is able to work and suffers from no disability that would preclude her from doing her regularly assigned job. |
12. | Employee understands and agrees that the existence and terms of this Release Agreement may be publicly disclosed in accordance with applicable law; provided however, that the negotiations, discussions, and proceedings leading up to this Release Agreement are confidential, and that neither she, nor her attorney, nor any individual |
13. | Employee agrees to cooperate with the Company and its legal counsel on any matters relating to the conduct of any administrative or judicial litigation, claim, suit, investigation or proceeding involving the Company in connection with any facts or circumstances occurring during her employment with the Company. The Company agrees to cooperate in scheduling such obligations at a mutually agreeable time and place, and shall reimburse Employee for all reasonable associated expenses. |
14. | Employee will retain all rights to be indemnified by the Company pursuant to Company policy in connection with any third-party claims, investigations or proceedings. |
15. | Employee affirms that she has returned all Company property, including, but not limited to, computer laptops, cell phones, Company credit and telephone cards, ID cards, building passes, keys and any other item or items that were either issued or purchased by the Company. |
16. | Employee shall be permitted to remove from Ally premises her personal papers and personal electronic files, personal contact lists, files of nonproprietary third-party research and media articles, and personal effects from her office, subject to whatever oversight Ally deems necessary to be confident that such files and effects to not contain Company property or contain information that is confidential or other classification described in paragraph 10. |
17. | Employee understands that she has been given a period of at least twenty-one (21) days to review and consider this Release Agreement before signing it. She further |
18. | Employee may revoke this Release Agreement within seven (7) days of her signing it. Revocation can be made by delivering a written notice to James J. Duffy. For this revocation to be effective, written notice must be received by James J. Duffy no later than the seventh (7th) day after she signs this Release Agreement. If she revokes this Release Agreement, it shall not be effective or enforceable and Employee will not receive the benefits described in Paragraph 1. |
19. | This Agreement will be interpreted in accordance with the laws of New York without regard to its conflict of laws provision. For purposes of enforcement of the terms of this Agreement, Employee agrees to submit to the jurisdiction of any federal or state court in New York. Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, only such provision will be affected, leaving the remainder of this Agreement in full force and effect. |
20. | This is the entire agreement between Employee and Company with respect to the termination of Employee’s employment with the Company. The Company has made no promises to Employee other than those in this Release Agreement. |
Sincerely, | |
Ally Financial Inc. | |
By | /s/ James J. Duffy |
Chief Human Resources Officer |
Accepted and Agreed: | |
/s/ Michael A. Carpenter | |
Michael A. Carpenter | |
Date: | April 7, 2015 |
(a) | any rights I have under the Letter Agreement, including any right to enforce any of the terms thereof, and any Claim arising from a breach of any of the terms thereof, and any rights I have under this Release, including any right to enforce the terms thereof; |
(b) | any Claim for payments, benefits or other entitlements, to which I have or will be entitled under the terms of any compensation or benefit plan, program or other arrangement maintained by the Company or any affiliate, including without limitation any incentive or deferred compensation plan, any pension plan or benefits under any welfare benefit plan (other than the Ally Financial Inc. Severance Plan and any other severance benefit plan, provided that the Company does not commit a material breach of the Letter Agreement or the Release); |
(c) | any Claim for indemnification I may have under applicable laws, under the applicable constituent documents (including bylaws and certificates of incorporation) of the Company, under any applicable insurance policy the Company may maintain, or under any other agreement with the Company, with respect to any liability, costs or expenses the I incur or have incurred as a director, officer or employee of the Company or any affiliate; |
(d) | any Claim I may have to obtain contribution as permitted by law in the event of entry of judgment against me as a result of any act or failure to act for which I and the Company, or any affiliate of the Company, are jointly liable; |
(e) | any Claim that by law may not be released by private agreement without judicial or governmental review and approval; and |
(f) | any Claim that arises after April 7, 2015 (excluding, for the avoidance of doubt, any Claim relating to the Ally Financial Inc. Severance Plan and any other severance benefit plan, provided that the Company does not commit a material breach of the Letter Agreement or the Release); and |
(g) | any Claim I have against any of the Company Released Parties solely in my capacity as a shareholder of the Company. |
(i) | any Company Claim arising from a breach by you of the terms of the Letter Agreement or the terms of this Release including any right to enforce the terms of the Letter Agreement and this Release; |
(ii) | any Company Claim that by law may not be released by private agreement without judicial or governmental review and approval; |
(iii) | any Company Claim that arises after April 7, 2015; |
(iv) | any Company Claim that the Company or any affiliate may have to obtain contributions as permitted by law in the event of entry of payment against the Company or such affiliate as a result of any act or failure to act for which such company and you are jointly liable; and |
Michael A. Carpenter |
Three months ended March 31, | Year ended December, | |||||||||||||||||||
($ in millions) | 2015 (a) | 2014 (a) | 2013 (a) | 2012 (a) | 2011 (a) | 2010 (a) | ||||||||||||||
Earnings | ||||||||||||||||||||
Consolidated net income (loss) from continuing operations | $ | 179 | $ | 925 | $ | 416 | $ | 1,370 | $ | (219 | ) | $ | (334 | ) | ||||||
Income tax expense (benefit) from continuing operations | 103 | 321 | (59 | ) | (856 | ) | 42 | 97 | ||||||||||||
Equity-method investee earnings | (33 | ) | (18 | ) | (15 | ) | (6 | ) | (7 | ) | (8 | ) | ||||||||
Minority interest expense | — | — | — | 1 | 1 | 1 | ||||||||||||||
Consolidated income (loss) from continuing operations before income taxes, minority interest, and income or loss from equity investees | 249 | 1,228 | 342 | 509 | (183 | ) | (244 | ) | ||||||||||||
Fixed charges | 623 | 2,826 | 3,344 | 4,031 | 4,668 | 4,880 | ||||||||||||||
Earnings available for fixed charges | $ | 872 | $ | 4,054 | $ | 3,686 | $ | 4,540 | $ | 4,485 | $ | 4,636 | ||||||||
Fixed charges | ||||||||||||||||||||
Interest, discount, and issuance expense on debt | $ | 619 | $ | 2,810 | $ | 3,330 | $ | 4,014 | $ | 4,652 | $ | 4,862 | ||||||||
Portion of rentals representative of the interest factor | 4 | 16 | 15 | 17 | 16 | 18 | ||||||||||||||
Total fixed charges | 623 | 2,826 | 3,345 | 4,031 | 4,668 | 4,880 | ||||||||||||||
Preferred dividend requirements (b) | 105 | 361 | 1,049 | 801 | 763 | 1,860 | ||||||||||||||
Total fixed charges and preferred dividend requirements | $ | 728 | $ | 3,187 | $ | 4,394 | $ | 4,832 | $ | 5,431 | $ | 6,740 | ||||||||
Ratio of earnings to fixed charges (c) | 1.40 | 1.43 | 1.10 | 1.13 | 0.96 | 0.95 | ||||||||||||||
Ratio of earnings to fixed charges and preferred dividend requirements (d) | 1.20 | 1.27 | 0.84 | 0.94 | 0.83 | 0.69 |
(a) | During 2013 and 2012, certain disposal groups met the criteria to be presented as discontinued operations. For all periods presented, the operating results for these operations have been removed from continuing operations. We report these businesses separately as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 to the Condensed Consolidated Financial Statements for further discussion of our discontinued operations. All reported periods of the calculation of the ratio of earnings to fixed charges exclude discontinued operations. |
(b) | Amount for 2013 includes a $240 million reduction to retained earnings (accumulated deficit) related to a repurchase of mandatorily convertible preferred stock held by U.S. Department of Treasury and elimination of share adjustment right on November 20, 2013. Amount for 2010 includes a $616 million reduction to retained earnings (accumulated deficit) related to a conversion of preferred stock and related amendment that occurred on December 30, 2010. |
(c) | The ratio indicates a less than one-to-one coverage for the years ended December 31, 2011 and 2010. Earnings available for fixed charges for the years ended December 31, 2011 and 2010 were inadequate to cover fixed charges. The deficient amounts for the ratio were $183 million and $244 million for the years ended December 31, 2011 and 2010, respectively. |
(d) | The ratio indicates a less than one-to-one coverage for the years ended December 31, 2013, 2012, 2011, and 2010. Earnings available for fixed charges and preferred dividend requirements for the years ended December 31, 2013, 2012, 2011, and 2010 were inadequate to cover total fixed charges and preferred dividend requirements. The deficient amounts for the ratio were $708 million, $292 million, $946 million, and $2,104 million for the years ended December 31, 2013, 2012, 2011, and 2010, respectively. |
1. | I have reviewed this report on Form 10-Q of Ally Financial Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ JEFFREY J. BROWN | |
Jeffrey J. Brown Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Ally Financial Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy Chief Financial Officer |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ JEFFREY J. BROWN | |
Jeffrey J. Brown | |
Chief Executive Officer | |
May 1, 2015 | |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy | |
Chief Financial Officer | |
May 1, 2015 |
Investment Securities (Tables)
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Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | Our portfolio of securities includes bonds, equity securities, asset- and mortgage-backed securities, interests in securitization trusts, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale securities were as follows.
December 31, 2014, respectively.
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Investments Classified by Contractual Maturity Date [Table Text Block] | The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from scheduled maturities.
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Investment Income [Table Text Block] | The following table presents interest and dividends on available-for-sale securities.
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Schedule of Realized Gain (Loss) [Table Text Block] | The following table presents gross gains and losses realized upon the sales of available-for-sale securities and other-than-temporary impairment.
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Schedule of Unrealized Loss on Investments [Table Text Block] | The table below summarizes available-for-sale securities in an unrealized loss position in accumulated other comprehensive income. Based on the methodology that was applied to these securities, we believe that the unrealized losses relate to factors other than credit losses in the current market environment. As of March 31, 2015, we did not have the intent to sell the debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As of March 31, 2015, we had the ability and intent to hold equity securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss position in accumulated other comprehensive income are not considered to be other-than-temporarily impaired at March 31, 2015. Refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K for additional information related to investment securities and our methodology for evaluating potential other-than-temporary impairments.
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Derivative Instruments and Hedging Activities (Tables)
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Amounts of Derivative Instruments Reported On Our Condensed Consolidated Balance Sheet [Table Text Block] | The following table summarizes the fair value amounts of derivative instruments reported on our Condensed Consolidated Balance Sheet. The fair value amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories. Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.
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Gains and Losses On Derivative Instruments Reported in Statement of Comprehensive Income [Table Text Block] | The following table summarizes the location and amounts of gains and losses on derivative instruments reported in our Condensed Consolidated Statement of Comprehensive Income.
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Derivative Instruments Used in Cash Flow and Net Investment Hedge Accounting Relationships [Table Text Block] | The following table summarizes derivative instruments used in net investment hedge accounting relationships.
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Long-Term Debt (Tables)
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Mar. 31, 2015
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt Portfolio [Table Text Block] | The following table presents the composition of our long-term debt portfolio.
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Scheduled Remaining Maturity of Long-term Debt [Table Text Block] | The following table presents the scheduled remaining maturity of long-term debt, assuming no early redemptions will occur. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.
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Pledged assets for the payment of the related secured borrowings and repurchase agreements [Table Text Block] | The following summarizes assets restricted as collateral for the payment of the related debt obligation primarily arising from securitization transactions accounted for as secured borrowings and repurchase agreements.
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Schedule Of Committed Funding Facilities [Table Text Block] |
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