This morning, Ally Financial Inc. (ALLY:NYSE) announced non-GAAP Q2/19 revenue and earnings that pleased the market, sending the shares to an intraday 52-week high price in mid-morning trading. The earnings release indicates quarterly year-over-year increases in many key areas including earnings per share (EPS) of $1.46 in Q2/19, representing an 80% increase over Q2/18. The Q2/19 Adjusted EPS was up 17% at $0.97 versus $0.80 in Q2/18. The company explained in the footnotes of the report that "the adjustment was due to significant discrete tax items that do not relate to the operating performance of the core businesses adding that the Q2/19 effective tax rate was impacted primarily due to a release of valuation allowance on foreign tax credit carry forwards during Q2/19."
The firm reported that Total Net Revenues in Q2/19 were $1.55 billion, up 6% over Q2/18, and Net Income of $582 million for Q2/19. Total deposits grew $17.6 billion to $116.3 billion in Q2/19. The company highlighted that it completed $9.7 billion in auto originations sourced from a record 3.3 million applications and it achieved Ally's highest ever quarterly total of $0.6 billion in direct-to-consumer mortgage originations. Additionally, Corporate Finance held-for-investment balances were up 15% year-over-year as well as Self-directed net funded accounts at Ally Invest, which were up 24% year-over-year.
Ally's CEO Jeffrey Brown commented, "In Q2/19 we delivered high quality financial and operational results that reflect our relentless focus on providing industry-leading financial products and services to our more than seven million customers. . .We posted the highest second quarter of retail deposit growth since the inception of Ally Bank, with retail balances increasing $3.2 billion, and total deposits exceeding $116 billion. Importantly, our value proposition continued to resonate in the marketplace, as we welcomed 220,000 new deposit customers to Ally during H1/19."
Ally Financial, which is a member of the FDIC, describes itself as a leading digital financial services company and a top-25 U.S. financial holding company offering financial products for consumers, businesses, automotive dealers and corporate clients. It states that its competitive strengths and lines of business are in the areas of Online Banking with over $116 billion in total deposits; Vehicle Financing & Dealer Services serving more than 4 million customers through 18,000 auto dealers nationwide; Investing & Wealth Management with a variety of self-directed and managed investment products with some of the industry's lowest fees; Commercial Financing with transactions ranging from $15–250 million plus; and Home Loans including fixed and adjustable rate products for home purchase and refinance options.
The firm's shares have traded greater than 5% higher today on the news. Shares opened up modestly higher today at $31.85/share over yesterday's close of $31.45, but are currently trading at $33.19 (+$1.74, +5.53%) after hitting a 52-week intraday high of $33.37 earlier in the day.
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